BT

What Does Company-Wide Agility Imply?

| Posted by Ben Linders Follow 18 Followers on Dec 11, 2017. Estimated reading time: 9 minutes |

A note to our readers: You asked so we have developed a set of features that allow you to reduce the noise: you can get email and web notifications for topics you are interested in. Learn more about our new features.

Key Takeaways

  • Use consent to resolve the collision between maximizing value for customers vs. maximizing for shareholders.
  • Use flexible targets and budgeting because annual budgets and fixed targets don’t adjust to changing market needs.
  • Everyone must have an equivalent voice so that self-organization and creativity can flourish.
  • Inspiration and passion (bounded by responsibility) are to projects as water is to plants.
  • Everybody must help everybody learn so that the organization as a whole continuously adapts.

Self-organization, transparency, constant customer focus, and continuous learning: these are the four values that drive company-wide agility. InfoQ interviewed Jutta Eckstein and John Buck about how to apply a combination of Beyond Budgeting, Open Space, and Sociocracy to support these agile values, and what benefits this approach can bring.

InfoQ: What are the major challenges in accomplishing company-wide agility?

Jutta Eckstein: One major challenge is to assume that company-wide agility just means applying e.g. Scrum at the organizational level. This leads to maybe the board of directors using a Daily Scrum or a backlog for organizing their work, but not to more agility company-wide. Another big challenge is to assume what works somewhere else can be adopted by the own company. Far from true - the only thing that can be adopted is the approach of continuously being aware of what’s required here and now, experimenting, and learning.

John Buck: The first challenge is knowing what agile means in a company-wide context. For example, if your business is running a big restaurant, it really doesn’t make sense to advise the chef to value “working software over comprehensive documentation” – the second principle in the Agile Manifesto. To make the manifesto more useful outside of a software context, we translated its four values as: self-organization, transparency, constant customer focus, and continuous learning. In our example, the chef, who produces food, might be as “transparent” as possible about the food, perhaps by giving samples, showing pictures, or having the glass windows to the kitchen so that patrons could see food being prepared.

InfoQ: What made you decide to combine Beyond Budgeting, Open Space, and Sociocracy- why this combination?

Buck: We surveyed every stream of development we could find. The methods we chose had to be original; more than one company had to be using the method to run the company, the method needed to say something about power and complexity, and it should not exclude potential stakeholders. For the latter reason, we excluded cooperatives (“co-ops”) because they typically don’t permit external shareholders. A co-op by definition is an association of persons who voluntarily cooperate for their mutual, social, economic, and cultural benefit.

These criteria should be obvious except, perhaps, for “power and complexity.” We noted that companies are now facing volatile, uncertain, complex, and ambiguous (VUCA) conditions. Furthermore, a company trying to adopt agile company-wide as a strategy for coping with these conditions is likely to face a struggle over power. For example, if the shareholders are pressing to maximize quarterly profits and the product owners assert from a customer focus perspective that the company should make certain long term investments that would not maximize near-term profits, the product owners tend to get over-ruled. Any system of company-wide agility has to be able to resolve this power conflict in favor of both the shareholders and the customers.

Eckstein: First we examined what do we experience as main challenges for companies today. Then we searched for existing developments that might help addressing these challenges. Next we used a ‘Goldilocks and the three bears’ approach by excluding those development streams that are rather specific implementations (i.e. Spotify) or general philosophies (i.e. Theory U) - so everything that’s either too specific or too general. And finally we preferred the original streams over derived ones like Sociocracy over Holacracy, or Beyond Budgeting over Beta Codex. OpenSpace came somewhat at a later stage into the game when we figured that none of the selected streams takes the passion of the people into account.

We’ve named the combination BOSSA nova because it synthesizes the four streams: B = Beyond Budgeting, OS = Open Space, S = Sociocracy, A = Agile. As a phrase, “BOSSA nova” has different meanings:

  • Translated from Portuguese it means “new wave” or new trend. And we think the synthesis is in some way a new wave that companies need to ride for addressing today’s challenges.
  • It is an upbeat style of music, a fusion of samba and jazz. So, like the synthesis we are proposing, the style is a musical synthesis.
  • It is an intricate dance. Dancing always means adapting both to the music and your dance partner(s) as well as initiating new steps and even new music yourself. Although one person can initiate a BOSSA nova implementation, it will quickly become a team adaption activity. And adaption means you can’t follow a recipe. BOSSA nova is not prescriptive; it flows with the situation at hand.

Buck: It may be of interest to you to see a table that we have been using in presentations to show how we mapped each of the four BOSSA nova methods onto the generalized agile values:

 Value\Stream

Beyond Budgeting

Open Space

Sociocracy

Agile

Self-

Organization

Govern through shared values, not rules.

Accountable teams for common goal.

Self-Selected teams.

Individuals follow their passion/

responsibility bound.

Common aim.

Equivalence.

Levels of abstraction.

Self-organization in achieving goal.

Transparency

Open info for self-regulation, innovation, learning.

All information is accessible by interested people.

No insurmountable barriers to getting needed info.

Progress & delivery.

Constant Customer Focus

Value centers & support service teams.

Dynamic budgets.

Relative not fixed individual objectives.

Customer focus is always combined with passion.

Common aim.

Feedback on each production step.

Include owners/ shareholders.

MVP.

User stories & personas.

Value stream analysis.

Continuous Learning

Indiv objectives not tied to bonuses.

Holistic perf evaluation.

Learn & contribute to learning of others guides all work.

Development = learning, teaching, research ⇔ aim.

Adapt plans per feedback.

Retrospectives.

InfoQ: How can you apply Beyond Budgeting to focus on customers?

Eckstein: Simply by ensuring that you’re spending your money and setting your targets in a way that benefits the customer. This means for both - budget and target - being flexible in order to take changing customer needs into account and not e.g. spending the money on something that is -meanwhile - not valuable for the customer anymore. Especially when a product is developed for a specific customer, there is some contract negotiation upfront ensuring what’s in the product. This contract informs as well the size of the budget for that product. If there happens to be a market change, which requires a different size of budget it is difficult to acknowledge that. If the market change asks for a bigger budget, there might not be any money left, because all money is already appointed to specific budget pockets. Yet, even if the market change asks for a smaller budget, often the money will be spent on the project anyway, because the project manager might be afraid of not getting the necessary amount when the next yearly budgeting time is coming up (because he is now known for “always” asking for too much.)

Buck: Various of the 12 principles of Beyond Budgeting support customer focus, especially:

  • Value centers where product creation happens, supported by service teams
  • Dynamic budgeting taking market changes into account
  • Relative, not fixed, individual objectives

InfoQ: What makes passion so important and how can you foster passion with Open Spaces?

Buck: Open space creates a container for cross-functional self-organization. In general cybernetic terms, self-organization happens when the elements of a system are equivalent and there is an outside force. The purpose of a company and its reason for existing supplies an outside force, and the very large open space container creates network-based equivalence across the company. In our observations, inspiration and passion are indicators that self-organization is occurring because self-organization always seems to be accompanied by an increase in energy. And that energy seems to correlate with creativity.

Eckstein: Open Space is based on passion bound by responsibility. This means that people are not limited by their job description but can rather flexibly follow their passion and contribute to the company’s success in ways that are beyond any job descriptions and predefined rules and regulations. However, this doesn’t mean everyone is just “dancing around”: following your passion requires self-responsibility by adhering to the company’s values and strategy.

InfoQ: How does Sociocracy support continuous learning?

Eckstein: Sociocracy asks everyone to learn by interaction. Analogous to learning best by teaching, Sociocracy promotes continuously learning by researching.

Buck: A sociocratic circle seems to catalyze a group consciousness, often experienced as a flow or an awareness that “we are thinking a lot better together than we would have been working separately.” Any form of consciousness seems to be accompanied by learning. Even lowly jellyfish and bacteria exhibit learning and development. Sociocracy encourages setting aside 5% or more of staff time for development. For example, part of a circle meeting facilitator’s job is to help others in the circle gain skills in facilitation, perhaps by giving them specific facilitation tasks and feedback afterwards.

InfoQ: Can you give examples showing how you combined Beyond Budgeting, Open Space, and Sociocracy to increase company-wide agility?

Buck: We’ve found a few companies that are combining as many as three of the four streams of development, but none adopting all four. Those companies seem to be quite effective in serving their customers. We haven’t yet found anyone who is using all four streams. We hope that our conceptual framework will provide a guide and encouragement for companies to try using all four streams of development, or rather use a “river of development.” We suggest in Part III of the book many experimental probes they may wish to try.

Eckstein: As a recent survey by McKinsey discovered: “Transforming companies to achieve organizational agility is in its early days, but yielding positive returns.” (see How to create an agile organization). Thus, because organizational (or company-wide) agility is in its early days, and the combination of all four streams is rather rare, what you can find more often is a combination of two or three of the streams. E.g. on the team level you can often see a combination of Agile, Open Space, and Sociocracy. For example, at one of my clients we used Open Space for defining the teams, by asking the staff to self-select in which team (and on which product) they would like to work on. For product creation we used Scrum and especially in meetings, where we made policy decisions (i.e. in the retrospectives), we used consent for decision-making.  Yet, often (like in the example) the budgeting and target-setting isn’t aligned, e.g. the teams strives to focus on delivering value to the customer but with the company’s rigid budgeting and target-setting process the company strives to deliver value to the shareholder which often contradicts with delivering value to the customer.

Jutta Eckstein and John Buck are writing a book about company-wide agility. Eckstein presented the keynote Company-Wide Agility with Beyond Budgeting, Open Space & Sociocracy at the annual conference of the Agile Consortium Netherlands. InfoQ is covering this conference with Q&As, summaries, and articles.

About the Interviewees

Jutta Eckstein works as an independent coach, consultant, and trainer. She focuses her work enabling agile development on the organizational level. She has helped many teams and organizations worldwide to make an agile transition.

 

 

John Buck heads a division of The Sociocracy Group, an international training and consulting organization headquartered in the Netherlands. Buck has conducted many training workshops and helped “rewire” the power structures of a variety of organizations worldwide using sociocracy principles.

Rate this Article

Adoption Stage
Style

Hello stranger!

You need to Register an InfoQ account or or login to post comments. But there's so much more behind being registered.

Get the most out of the InfoQ experience.

Tell us what you think

Allowed html: a,b,br,blockquote,i,li,pre,u,ul,p

Email me replies to any of my messages in this thread
Community comments

Allowed html: a,b,br,blockquote,i,li,pre,u,ul,p

Email me replies to any of my messages in this thread

Allowed html: a,b,br,blockquote,i,li,pre,u,ul,p

Email me replies to any of my messages in this thread

Discuss

Login to InfoQ to interact with what matters most to you.


Recover your password...

Follow

Follow your favorite topics and editors

Quick overview of most important highlights in the industry and on the site.

Like

More signal, less noise

Build your own feed by choosing topics you want to read about and editors you want to hear from.

Notifications

Stay up-to-date

Set up your notifications and don't miss out on content that matters to you

BT