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Michael Stange at Agile Australia on Incrementally Transforming Organisation Structures

| Posted by Shane Hastie Follow 28 Followers on Sep 07, 2014. Estimated reading time: 11 minutes |

At the Agile Australia conference Michael Stange spoke about patterns of organisational behaviour and how to incrementally make changes to structures that enable agility

InfoQ: We’re at Agile Australia, in Melbourne and I’m talking to Michael Stange about the need for organizational change. Michael, you’re with IOOF Holdings; what do they do?

Michael: IOOF is one of Australia’s largest financial services companies that offer a full range of products and services, including financial advice, platform management and administration, investment management and trustee services. They currently service more than 650,000 customers around Australia and are one of the largest independent groups in the industry.

InfoQ: And your role there, you described yourself as a change agent?

Michael: Yes, all aspects of what I do ultimately result in some form of transformational change. In my role at IOOF as Head of Technical and Delivery Methods, my job is to help ensure we are working on the right things, through transparency, collaboration and improvement of how we prioritise and plan our work; through to how we deliver solutions both in terms of Delivery Methods - Incorporating Agile, Lean and Systems Thinking as well as Technical Methods – which is about providing the right tools, technical practices and frameworks that will in turn help teams deliver simple solutions efficiently and effectively.

InfoQ: When we were chatting earlier, you mentioned a few systemic problems that organizations you had worked with were facing and that you were able to identify similar behavioural patterns.

Michael: Yes. Interestingly, as software delivery teams get better at solving problems and delivering value frequently, technology no longer becomes a bottleneck, their agility increases and in theory we get highly effective processes and teams. So we walk the line to find the next biggest constraint and inevitably what I’m finding is that the line leads to an invisible wall representing the organizational constructs themselves. We naturally tend to optimise our own siloed view of the world within our team, or our department as anything else is deemed beyond our sphere of influence and control. When looking at process improvements, teams will often ignore anything that happened prior to receiving work and anything past the point of handoff to someone else. A customer to some teams, particularly in IT, is something that’s far removed, or a misused term to describe a stakeholder from a different part of the business.

The point I’m trying to make is that companies end up competing more against themselves than against their competitors in the market. The two key underlying causes are the way in which companies are organised around function rather than customer demand and the rigidity and rules that govern talent acquisition, growth and retention. Applying the same logic and thinking as we do with Agile teams in terms of being cross-functional and multi-disciplinary should be applied to the entire organisation. Inevitably to get anything that’s valuable to a customer done from start to finish requires collaboration and cooperation from people across different parts of the organisation. So the constructs themselves end up being our biggest constraint. As work demand and technologies change, ideally we should be able to cross skill and move people easily between teams and roles. The biggest influencer and enforcer of these constructs however are HR departments which is largely their Raison d'être so it comes as no surprise that they become inhibitors of change rather than enablers.

InfoQ: What are examples of some of these constraints that you are bumping up against? Let’s focus a little bit more on HR, what are the current constructs and what needs to happened with them?

Michael: Anything from the way we recruit, hire, remunerate and manage individual performance, to the way we promote and recognise high performance is currently very rigid. Position descriptions tend to be very specific and at times too prescriptive. Whilst this is clearly designed to assist with individual performance appraisals, career progression and fair remuneration, it not only makes it difficult to respond to changing work demands but it also limits organic and flued personal growth, organisational agility and makes changes costly, lengthy and cumbersome. Unless we can adapt and evolve our expectations from individuals to suit the needs and the requirements of the organisation, measure team outcomes rather than individual performance and allow for more flexibility and change in what people do, we’ll continue to have biased work prioritisation, use queues to park work, have multiple handoff points and consider availability as a skillset.

Even when people do recognise the need for systemic change that allows for more flexibility and agility of the workforce, the change implications run so deep and wide that they are seen as insurmountable as well as a significant threat to traditional thinking. What tends to happen is that generally most people just give up and recognise that these are fixed constraints and try and do whatever they can within that, but as far as being able to change organisationally, to bring people together, to do things that maybe traditionally were not part of their role, it is incredibly difficult.

InfoQ: How do we make those changes, how do you take somebody with that HR mindset and bring them on the journey, what does it need from a leadership perspective?

Michael: I think there are a few things. Most importantly it requires vision, determination and courage. It also requires recognition that inevitably to survive, to compete, to be valuable and relevant - we can’t keep thinking the same way as we always have. Management thinking has evolved significantly, the world of digital and social media is changing how people do business. Generational change in the workforce is influencing cultural shifts and new work patterns continue to emerge characterised by greater flexibility in working hours, location and dress code. Physical footprint is decreasing be it real-estate or infrastructure. Interactions and team dynamics are changing alongside distributed teams, globalisation enabled by communication, technology and cloud. I don’t hear anyone debating whether rapid change is real, the questions that are being asked now are about adoption and adaptation and how fast can we keep up. Yet unless we change the way we think and the way we work from a holistic and systematic organisational perspective we simply won’t keep up and fail to be competitive nor will we be able to attract the right talent that will help us get there.

The other important thing to remember is that role models don’t always exist if you limit your vision to similar companies in the same industry. Waiting for others to succeed first before deciding to take initiative and change can easily lead to a ‘Kodak’ moment. This is why leadership and courage are so important. Recognising the potential, taking small and calculated risks and doing it despite the fact that other organisations have not yet demonstrated that it can be done. How do we take people on the journey? We simply remove the barriers that are holding them back. Easier said than done especially when attempted as a big bang approach. The trick is to break it down, experiment, fail, learn and try something else. We don’t have to do things that will completely change the organisation overnight but there are some small steps we can take to encourage teams to think differently, to learn more about their work, to understand customer demand and to be more flexible. When teams are then allowed challenge processes, make changes to how they work and are encouraged to be innovative, boundaries will start to get blurred and walls will come down.

InfoQ: We’ve spoken a lot about that HR type structure, what about other aspects of organizational leadership? What are the barriers we bump up against?

Michael: Maybe the biggest issue of all is traditional management and organisational hierarchy. Managers of ‘traditional systems’ impose conditions which limit and constrain people’s behaviour, their ability to learn and perform optimally. Being prevented from doing their work to the best of their ability, and being measured through individually KPIs, people tend to become disenfranchised and demoralised. Career progression for example is seen as a linear process with titles, linked to tenure, status and pay grade. I find this to be a problem especially in technology teams - the only way to feel that you are making progress is to go up levels, if you want to be paid more for your role, you need to manage people and become a manager, that’s the only way to get recognition and to be able to get paid more.

InfoQ: So, we take the best technologist and make him or her the worst manager.

Michael: Precisely. People that potentially have never really had a drive or passion for leading people, it might not be their core strength, and they might not be natural leaders. They then become disgruntled managers who no longer get to practice the craft they were actually good at or that they enjoyed doing. The greatest impact other than to themselves is to the teams they lead and ultimately to the organisations. So that is one big problem that we have, how to recognise and reward individuals without having to change their title or status. How do we change career progression from simply being an upward facing linear change of roles? This comes back to flexibility and to a fundamental shift in thinking. Finding and retaining talent is definitely one of the biggest challenges companies have to solve. Placing people in leadership roles needs to be as a result of their leadership capability and through recognition by his or her peers that they are someone who they would choose to follow. Their role then becomes supporting rather than directing and more about modelling behaviour and fulfilling the needs of the team.

InfoQ: Isn’t this utopian thinking?

Michael: I think you have to have some sort of aspirations that you work towards that’s utopian, and then any steps that get us closer to that is good and it’s a good way to calibrate that we are heading in the right direction. Alternatively, we give up and settle for what we have now and I think that’s not really an option. Having a utopian view and aspirations is really important to keep driving towards, even if others have not yet solved these problems, experimenting and proving that some things can be done and working with similar like-minded people to come up with new ideas and new suggestions helps drive incremental progress and continuous positive change.

InfoQ: Cool. So that really is a fundamental change in the way our organizations are structured, are managed, and are lead.

Michael: It is. And it sounds overwhelming and big and people go “it’s too hard, let’s not do anything” but I think if you break that down, which in agile circles is something we like and are good at doing, if you break this big, massive problem down into small little challenges you might find some early adopters within the organisation, representation from multiple departments that feel a similar pain, who might want to experiment, say let’s take an initiative, a project and see if we can work on it differently.

Let’s bring a few people together and unite them around a common purpose despite their organisation departments and their reporting lines, let’s just unite them around a single purpose and see what happens, see how they can solve problems as a cross-representational group, whether they are from legal, from marketing, from IT, from product, from finance, and see what outcomes we get. If that works, maybe that will be enough to reconsider how we operate, even if we don’t formally change organisational structure, we can still coexist within those structures, but not have them constrain how we think and work. That’s an important point so that it doesn’t necessarily feel like a constraint anymore; you don’t have to change the world, it’s enough to change a few people and teams at a time, to work slightly differently, to have the managers of those areas agree to take some risks, to try something different. Ultimately the risk of not doing anything is by far greater than trying a few small things, failing and trying something else.

Overtime we might find the system will naturally change around to that way of working to a point where structures will be obsolete and it will just be about updating them to reflect what has emerged from experimentation, that’s all. It might not be as scary as “let’s go and completely change the way our organisation works”.

InfoQ: Michael, some great ideas there and thank you very much for sharing them with us at InfoQ.

Michael: Thank you.

About the Interviewee

Michael Stange started coaching and leading teams back in 1994. Since joining the IT industry 12 years ago, he has taken on various technical, leadership and coaching roles, focusing predominantly on building high performing teams and increasing leadership capability. In his current role as ‘Head of Technical and Delivery Methods’ at IOOF, Michaels' mission is to make ongoing systematic improvements in how work gets carried out within IT and across the business. His main goal is to help simplify and improve technology and provide better methods, tools and frameworks that enable teams to be successful.

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