The Agility Challenge
Build your organization into an engine of possibility – Dave Gray
I like a challenge. I guess I wouldn’t be doing what I do if I didn’t. If working with people, teams and organisations to help them deliver, learn and improve is not challenging, then I don’t know what is.
I have always been a keen observer of people, anxious to discover how they translate what they believe into what they do. This interest of mine led me to the Head of Culture role at Radtac. Since I accepted the role around 12 months ago, I have attended and spoken at a number of meetups and conferences trying to better understand what makes a difference between success and failure in today’s increasingly uncertain business environment. I also hosted two roundtable discussions at the Agile Business Conference 2015 (ABC 2015) to further explore the topic.
My conclusion is that, to be successful, a company needs to become an agile enterprise. Mike Cottmeyer said in 2008 that “being agile means you accept input from reality and respond to it”. To know which input to accept and how to respond to it requires everybody in the company to know what they are trying to achieve, understand why, be able to decide by themselves how to best do it and, most importantly, genuinely care that it gets done.
Does your organisation exhibit these traits on ongoing basis? Is it evolving in line with its environment? Are your employees able to sense and respond to external inputs without managers having to tell them what to do?
This is what I call “the agility challenge”.
My goal here is to explore what a company needs to do to rise to that challenge and what common obstacles it needs to overcome. On this quest, I will call upon my real-life experience complemented by what I’ve learned over the past year.
Let’s first look at what holds companies back, starting with ‘organisational debt’, a useful term I first encountered towards the end of 2015.
The Way of the Dinosaur
Organizational Debt is like Technical debt – but worse – Steve Blank
I believe that the term ‘organisational debt’ comes from Steve Blank, the academic, author of the Customer Development methodology and a forerunner of the Lean Startup movement. In his blog from May 2015, Steve defines organisational debt as "all of the people and culture compromises made to 'just get it done' in the early stages of a startup". As a fledgling company moves from the early ‘search’ [for the viable business model] phase into the ‘build’ phase, some of the things that used to propel it forward start to hold it back. To survive, a growing company needs to recognise and 'refactor' this organisational debt.
In reality, it is not only the startups and young, developing companies that are susceptible to this malaise. I see organisational debt as the gap between an organisation’s strategy and its delivery capability on one side, and the changing needs of its market on the other. Any organisation that doesn't change as fast as the world around it and its customers’ needs and expectations will accumulate organisational debt. The wider the gap, the more debt gets accumulated and the less responsive an organisation becomes. And it is a vicious circle: the less responsive an organisation becomes, the slower it will adapt to the market conditions and the more debt it will accumulate, until it eventually passes into oblivion. Just like dinosaurs (although in truth, they were probably extinct as a result of a large meteorite colliding with the Earth).
There are plenty of horror stories about the fall from grace of once successful companies like Kodak (that didn’t see the arrival of digital photography), Blockbuster (made irrelevant by movie streaming and smart TVs) and Nokia (that was not able to cope with iPhone setting new standards in user experience). Are you and your company paying attention to these stories or do you think you are somehow different and this cannot possibly happen to you?
Structural and Cultural Inertia
Organizations are implicitly optimised to avoid changing the status quo
– Craig Larman’s First Law of Organizational Behaviour
In an article published in The Times in September 2015, Prof. Costas Andriopoulos of Cass Business School in London provides an interesting view of what holds companies back. He compares leanness, agility and readiness to take risks characterising the new breed of tech start-ups with the inertia and predisposition to protect the status quo of the more traditional, longer-established businesses. He then goes on to talk about “structural inertia, with layers and layers of management, and cultural inertia, which is the ‘this is how things are done here’ attitude”. I agree that these two inertias are the main reason why organisational change is so difficult.
When we talk about ‘Agile change’, many organisations could be said to be “Agile by accident”. In those places, Agile mindset, principles and practices have emerged at the team or the programme level, typically within IT. If it is the IT that continues to drive the Agile initiative on its own, then it will remain the only place where Agile will be in evidence. This will usually lead to a “clash of cultures” between the emerging collaboration culture within the delivery teams, and the control culture dominant in the rest of the organisation. (Collaboration and Control are two of the four core cultures William E. Schneider writes about in “The Reengineering Alternative”.)
One of my ABC 2015 roundtable participants illustrated this well when he said: “My organisation has two faces”.
My Radtac colleague Michael Short talks about the shallow and breaking waves of unsustainable change and contrasts them with the sustainable wave where change comes as a vertical slice through the organisation. One of our financial services clients provides an interesting example. There, the drive for agility comes from a senior executive who is assisted by the adoption team and a number of internal and external Agile coaches. Each delivery team can call upon one of these coaches to support them through the transition. While the people on the ground appear keen to learn more and evolve their way of working, it is less clear if the middle managers have bought into the changes. Only time will tell if we are witnessing a breaking or a sustainable change wave here.
Management Myopia or Ostrichism
Managers don’t like messy reality. They prefer simple answers. – Anon at ABC 2015
It is much easier to be satisfied by easy answers than to ask complex questions. And what do we use to support this way of thinking? The hugely simplistic and often misleading Red/Amber/Green reports that are passed up the ranks in most of our organisations.
I call this approach “the semblance of control and illusion of progress”. Ignorance is bliss. And if things go wrong, we can always hide behind the “But you told me last month that the project was ‘green’”.
This is a result of management myopia and something that might be called ostrichism, the word I thought I invented but it turns out that it already existed. The majority of companies are still locked into the old paradigm of ‘Us’ and ‘Them’. On one side are ‘Business’ and/or ‘Management’ who ask for ‘stuff’ to be done (i.e. ‘outputs’), and on the other the people who deliver, with very little shared understanding of what can actually be delivered and why.
So, how do we get the ‘Business’ and ‘Management’ on-board and get them to recognise the opportunity of Agile? To start with, we should stop talking to them about Agile. Instead, we should discuss business outcomes and impacts. And we should explore delivery capability and the fact that there is always more of the stuff that we want to do than we can actually do.
The Customer-Centric Universe
The customer becomes the boss – Steve Denning
Most businesses still operate in line with the 20th century management paradigm of hierarchical bureaucracy organised inside-out around functional lines and based on narrow specialisation. The objective for each employee is to be the best at what they individually do. The overall goal is to make money for the shareholders and the main focus is on increasing efficiency and reducing cost. There may be some talk about being “customer centric” but the customer is usually nowhere to be seen and most customer-related decisions get made far away, by senior managers at the remote Head Office.
At the ABC 2015, Steve Denning talked about the 21st century Copernican Revolution in management thinking with the customer replacing the firm at the centre of the business ‘solar system’. This revolution brings with it the new goal for the firm: to delight its customers. The new organisation structure that supports achieving this goal enables and encourages front-line employees to make most relevant decisions in the close proximity of the customer.
With the company’s strategy aligned with the goal of delighting the customer, the tactical question “what do we do next” now has a new answer: “what do our customers need us to do next”? In other words, demand starts being driven by the customer.
The best way to find out what the customers want is not to guess what would be good for them or even to ask them. Instead, work with them to understand what they are trying to achieve and what problems they are experiencing. Make them part of your organisation. Collaborate to understand. This will also move people from the position of “I work for this manager” to “I am delivering this product” and “I am working to satisfy this customer”!
This is where Agile helps – especially its focus on early and frequent delivery, and short feedback loops. Indeed, a number of our clients regularly invite their internal and external customers to their reviews and ‘show and tells’ and provide them with early access to the products they are developing for them.
With the customer at the heart of the business, what is measured changes as well. Instead of utilisation and hours or days worked, we need to start measuring and reporting on the lead time and frequency of delivery, number of active users and the overall customer satisfaction. This will direct our attention to the customers and the value we deliver to them, and focus our efforts on identifying and alleviating anything that is impeding our delivery.
As an example, at one of the companies present at the ABC 2015, the call centre staff that receive customer calls and deal with their problems report on the following metric: “What have we done today to make things easier for our customers?”
Take Off or Landing?
The budget is not our constraint – the delivery capability is - Dan North at ABC 2015
A senior manager at one of my old clients used to measure success by the number of projects kicked off. He saw each project as “a plane in the air”. I couldn’t help but wonder how many of these planes would eventually run out of fuel and crash or maybe collide with one another.
Using the above analogy, we can better describe delivery capability as the number of planes an organisation can successfully land and, more importantly, the number of passengers and the amount of cargo that will safely reach their destination.
Every organisation should know the answers to the following questions:
- What is our delivery capability? How much can we deliver within a period of time (month, quarter or a year)?
- How flexible is our delivery capability? How quickly can we adapt to the changing demand?
Amazingly, I have worked with very few organisations that knew the answers or were even asking these questions! I wanted to validate this observation during the roundtable I participated in at the ABC 2015. Based on the feedback I got, very few, if any, senior leaders of the represented organisations knew, or were even interested, in their organisation’s delivery capability.
Why are delivery capability conversations so difficult? Why are managers and senior leaders not interested?
I believe that the reason for this is the already mentioned outdated organisational structure based on narrow specialisation. In a siloed organisation, managers are very rarely accountable for the end-to-end delivery of customer value. This is why they don’t see or talk about organisational delivery capability.
For example, if you are a manager of a narrow specialism such as say ‘front-end development’ or ‘server operations’, there is very little incentive for you to measure and manage value delivered to the customers. In fact, it would be very difficult for you to do it, even if you wanted to. Instead, you naturally focus on increasing your team’s size and improving your team’s specialist skills and the main measure you typically use is the utilisation of individuals that report to you.
Stop Starting, Start Finishing
In an agile organization the mantra should be ‘Do Less – Jim Highsmith
For those rare organisations that understand and care about their delivery capability, the next step is to respect it, which means to agree to balance the demand and delivery. This means that, instead of pushing more work into the system, the focus is on completing what is already in progress (assuming of course that work is still relevant and valuable). Which amounts to doing less!
This should apply at all levels of the firm, at the portfolio and corporate level as much as the product and team level. Do less at every level, but do what needs to be done and do it well. And fast!
This is how the client I have been working with over the last few years tried to achieve this. They started by organising into what they call ‘delivery cells’ – stable and persistent cross-functional delivery teams – within a number of programmes. They then visualised their delivery process and all of the work in progress on the two big, manually synchronised walls in their two main offices. Each programme also had their own board that showed their work in progress.
Finally they introduced a number of process policies. For example, for a product to be approved for delivery, a team had to be able to deliver it within three months or less. Any products or other items of work that were larger had to be split into smaller increments before they could be approved. Also, each team was only allowed to work on one of these items of work, which increased the team’s focus and encouraged their ownership and commitment.
To be able to do less, apart from knowing how much we can deliver, we need to know what to deliver next and why. And this is where we need to move away from the widespread “he who shouts loudest” and “highest paid person’s opinion” (HIPPO) approach towards ruthless prioritisation based on validated customer demand. In other words, we should be able to assess and assign business value to the items of work. And that appears to be one of hardest things to do, which is why people are starting to use a number of alternatives such as Cost of Delay and risk profiles.
The Way We Do Things Around Here
Our culture is collaborative but it starts slipping back towards command & control every time we take an eye off it – Anon at ABC 2015
A company can come up with a new strategy centred on its customers and change its structure in order to better support end-to-end delivery of customer value. But unfortunately, that is rarely enough – none of it will work without the change of the organisation’s culture.
William E. Schneider defines organisational culture as “The way we do things around here in order to succeed”. Marcella Bremer suggests that: “Culture is our collective comfort zone”. Whatever the definition, everybody seems to agree that culture is an invisible force that is extremely difficult to change, at least through direct action.
And it could take a considerable period of time to create a culture of agility. So what can we do?
The first useful step could be to make the invisible visible. Culture presents itself through organisational values and corresponding behaviours. So we can describe our culture by articulating the values we aspire to and the behaviours that demonstrate these values.
Let’s say that we aspire to a set of values such as the ones described in Mike Burrows’ book “Kanban from the Inside”: Transparency, Balance, Collaboration, Customer Focus, Flow, and Leadership. And let’s then define behaviours that demonstrate each of these values. For example, let’s have the following behaviours (and few other ones) for the value of ‘Balance’:
- We constantly evaluate how much work we can deliver;
- We maintain a healthy mix of work based on type, source and urgency.
Once we have our set of values and behaviours, we can assess ourselves against them. We can find out how we stack up by asking people across the organisation to assess each behaviour on the scale between “firmly established and widely and consistently evident” and “there is little evidence of it”.
Once we have gathered input from a sufficient number of people, we should be able to start identifying our strengths and potential areas for improvement. But most importantly, we can start having meaningful conversations about what matters to us and what we would like to change first.
This thinking is still evolving and as such I have no practical examples to offer yet. But anything that leads to shared understanding and provides a common starting point for change looks promising.
The Journey, Not the Destination
Knowing why we’re doing something is the key to making good decisions – Gojko Adzic
Once we have agreed which behaviours we should focus on, we can then define a number of hypothesis by way of ‘change stories’, possibly in the following form:
We believe that
[Change in behaviour (start/do more of/improve/do less of/stop)]
Will result in
We’ll know we’re succeeding when
I have recently used this approach during a programme retrospective I facilitated. I asked the participants to group around behaviour changes they considered most worthwhile and to create change stories for each. One of the outputs they came up with was the following:
We believe that
Better collaboration between teams
Will result in
Improved product quality
We will know that we are succeeding when
There are fewer defects, and
There is better balance between features and bugs.
The next step is to start to experiment and measure if the change in behaviour is having a desired effect. Once they have the results, they can decide if to continue or reassess and, if required, adjust the focus for action. Then, at some stage in the future, they may decide to revisit and possibly modify chosen values and behaviours.
I will be visiting the client referred to above in the near future to review their results and discuss the next steps.
As is usually the case, all of this is much more about the journey than about the destination. The desired outcome is not to be able to demonstrate the target set of values and behaviours but to build the capability to constantly evolve your organisation and the culture that nurtures such capability.
Who’s the Captain of This Ship?
It's easier to ask forgiveness than it is to get permission - Grace Murray Hopper
Nothing demonstrates organisational culture more clearly than its leadership style. By that, I don’t only mean how leaders behave but also who they are and where in the organisation they come from. I am not talking here about the charismatic leaders at the top of the hierarchy, CEOs or any other CXOs. These are obviously essential to articulate and communicate organisation’s purpose, create the sense of urgency and remove barriers along the way. But that is not where the leadership ends. I have only recently realised what leadership is really all about: creating space for the new leaders!
To achieve agility, there is a need for leadership at all levels in the organisation. As the leadership guru John Kotter says: “Leadership is about taking initiative and influencing those around you”, irrespective of your position or your title. Or, as David Marquet puts it in his recent interview with InfoQ, it is all about “being a leader from the position you are in”.
In a truly agile organisation, everybody has the right and the responsibility to lead. This means that anyone who identifies a problem or spots an opportunity can decide to act on it as long as they have communicated what they intend to do to their colleagues. Assuming that the suggested action is in line with organisation’s purpose and its values, and that nobody comes forward with a strong and convincing counter-argument, the person that initiated it goes ahead and implements it. Some organisations refer to this as “the advice process” and it represents a good way to develop bias towards action while remaining aligned with the purpose and values.
This is something I pay specific attention to when I am working with teams and programmes. I encourage people to be alert during daily stand-ups, team meetings or other interactions, and constantly look for opportunities to improve the way they work and their working environment. They should also keep each other honest with regards to following the agreed process and adhering to the process policies.
I have noticed again during my most recent coaching engagement that, if you provide space, create an atmosphere of trust, and lead by example, people will step in and act as leaders. It was heartening to observe the increased level of energy in meetings and daily interactions with people becoming more proactive and taking responsibility.
It is these “everyday leaders” that hold the tension between what is and what could be. Without them, the forces that pull us back to the conventional, unproductive ways of working would prevail. The newly developed good habits would not stick. The bad old habits would resurface. And we would find ourselves where we started, exhausted, bitter and demoralised.
Change, Culture and Leadership: Rising to the Agility Challenge
Change the culture, change the game - Roger Connors and Tom Smith
My colleagues, friends and even my dear wife sometimes call me idealistic and naïve for saying that I won’t be happy until I help at least one organisation to rise to the agility challenge and make a meaningful, positive and lasting change. This is my vision and I am neither optimistic nor pessimistic about achieving it. Instead, I continue to learn and do my best to help.
With only a few exceptions, my clients over the last ten years have all been large and established firms with many employees and a wide geographical spread. They all, in one way or another and potentially for different reasons, desired more agility. This may have been to support a bold strategic intent, to respond to a perceived competitive threat, to attract new talent to the company, or all of the above.
Whatever the reason, the intention to transform into an ‘agile enterprise’ for each of those companies was as challenging as a decision to run a marathon would be for an unfit and mildly overweight middle age person like myself. The accumulated organisational debt (equivalent to extra body weight) was holding them back. The layers of managers, each with imposed narrow focus (different manager for each leg?) and over-emphasis on the short-term (full-on sprint for the next 100 meters!) were in fact slowing things down.
The natural reflex of a typical incoming senior executive keen to make a mark on his/her new company is to devise a new strategy and overhaul the existing company’s structure. In other words, to bring on the revolution. The problem with revolutions though, as a friend of mine recently pointed out, is that they tend to come around again. Plus this type of revolution does not touch the one thing that holds the company back: its existing culture.
So, instead of the new strategy or another wholesale reorganisation, opt for a more evolutionary approach. Start from where you are now, by visualising current state, identify the most urgent areas for intervention and then experiment, measure, learn and evolve. And most important of all, provide space, create atmosphere of trust and lead by example to encourage leadership at all levels in the organisation. Because, as we often say at Radtac: “Agile makes organisations work; leadership makes Agile work”.
When I engage with a new client, my main desired outcome is increasingly becoming to help to build a safe environment and encourage open and honest conversations. And in addition to that, I try to galvanise at least a few individuals to act as the team’s and organisation’s conscience and become “everyday leaders”. Once this happens, it tends to spread by infecting others until there is no way back. And that is when you know that an organisation has started to rise to the agility challenge.
About the Author
Dragan Jojic has over 30 years of technology and business coaching, consulting and project management experience gained with a variety of products and services organisations. Over the past ten years, his primary focus was on Agile and business change consulting with banking, insurance, online gaming clients. His specialist area of interest is organisational agility and the culture needed to support it. Dragan is currently Head of Culture at Radtac.