Agile Culture Category
My presentation at LAST Conference 2016 titled “Agile Innovation and Thinking Like a Startup” is available on Slideshare.
Many enterprises are struggling to innovate whilst smaller startups are disrupting the market. Existing organisational business models work well in a known and predictable environment. However, these approaches fail when applied to an uncertain and changing environment.
In this session I will discuss the different approaches and how an organisation can balance a portfolio that both can exploit existing opportunities while enable the exploration of new opportunities.
I will draw on my experience working with some innovation teams in an enterprise and how we are re-focusing agile back to its roots and thinking like a startup to evolve the way we work.
Participants will also gain an understanding how Design Thinking/Human Centred Design, Lean Startup, Agile and Business Model Innovation can blended together to transform the way you work to enable innovation within larger enterprises.
Here are some of the tweets from the session:
Self-organising teams is the antithesis to hierarchical structures that exist in many organisations. Traditional leadership required a strong leader to take control, attract followers and make it happen. Modern leadership is about leaders giving control and creating leaders.
Self-organisation requires autonomy and control to be given to teams. This includes trusting individuals to figure out how to solve problems, make decisions and how to best get work done. With knowledge work the best decisions are those in teams who are closest to the information and customers. However, structure, policies, processes and hierarchy often take the decision making away from these teams.
In his book, Turn The Ship Around!, nuclear submarine Commander David Marquet describes how control was given to the ship’s crew. It required each member of the team to improve his or her technical competence and have a clear understanding and clarity of the organisation’s driving purpose:
Competence: Provide teams with the tools and technical competence to get the job done; create the environment for thinking.
Clarity: Define and communicate the organisational intent so everyone is clear on the vision, goals & objectives. Everyone understands what is the right thing to do.
As a leader you trust the teams are competent and have clarity of vision. Individuals have the freedom to adjust actions and make decisions in line with the vision and intent.
So what does this mean for a leader in today’s ever fast changing world?
As a leader your job is to ensure people have clarity of vision and the competency needed to succeed.
If leaders don’t believe individuals can understand the vision or pick up the skills, why did the leader bring them in the first place? And if there is a competency gap, why did the leaders not mentor or provide training? We all have the extraordinary meta-skill to learn and acquire new skills. If people do not have the competence, the role of leaders is to mentor, give people training and provide the environment for learning.
A bad system will beat a good person every time.
– W. Edwards Deming.
I believe that everyone does their best given the context and environment at hand. I subscribe to Deming’s views that it is the organisation as a system, not the people working in the system that determines the organisation’s performance. The other view is that the people, not the process or the organistation, is the source of low performance.
Due to the inherent complexity and variability of product development it is often difficult that the scope, details, or effort commitments estimates are certain. When things fall behind schedule (or finish ahead of schedule for that matter), it assumes that the original plan was correct in the first place, but this is often not the case. Plans often over-simplify the complexity of human interactions and creativity. Many of the challenges faced by teams today isn’t necessarily related to technology but can be described as a social problem – product development teams is a complex adaptive system that requires collaborative actions and shows complex behaviour as it adapts in and evolves with a changing environment.
So when there is a performance gap (actual performance vs desired/planned performance), there are generally 3 options that are considered:
- Add more people (or resources)
- Work harder
- Improve performance
Option One of adding additional people may make things later as described in The Mythical Man-Month Is Not A Myth. This option is also has budgetary and financial constraints and managers are reluctant to go down this path.
So when there is a performance gap, there is pressure for managers to close this gap to meet the original commitments by pressuring people to spend more time and energy doing work by working harder often in the form of overtime (Option Two). This is played for an apparent short-term win. This quick-fix reaction results in shortcuts which have a relatively long-delayed and indirect impact – it may be sometime before the decline in performance or capability is known. This is one way how technical debt occurs and requires more effort to maintain a level of performance. This technical debt often never gets rectified as managers deal with the next performance gap problem, and things get worse reinforcing the downward spiral. This option is a popular strategy as it solves today’s problems and meets the immediate KPIs.
The Third Option is improve performance through investment in training, applying agile and lean-thinking strategy of removing waste to improve the flow of value and experimenting with new ideas. Time spent on improving the capability of a process typically yields the more enduring change 1. An hour spent working produces an extra hour’s worth of output, while an hour spent on improvement may improve the productivity of every subsequent hour dedicated to product development.
In an MIT supported paper by Repenning and Sterman they observed that working harder (eg overtime) wasn’t merely a means to deal with isolated incidents, but is instead standard operating procedure. I have frequently overhead team members say “that is normal, we are used to it” when presented with overtime work. Agile Manifesto Principle #8 states that
Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a constant pace indefinitely.
Some overtime work may be justified but don’t rely on constant overtime to salvage a plan.
When the focus is constantly on production work people are often “too busy delivering”, and working overtime and harder quickly becomes routine, we have no time to improve or learn. Capability starts to decay and as a result, the performance gaps increases forcing the need for heroic efforts (that are rewarded) and people to work harder and longer hours which takes them further away from improvement. This is sometimes called being in a constant “fire-fighting” or reactive mode.
Increasing pressure to do work (delivery) leads people to spend less time on non-work activities like breaks and to put in overtime. For knowledge workers such overtime is often unpaid and spills into nights and weekends, stealing time from family and community activities. There are, however, obvious limits to long hours. After a while there is simply no more time. If the performance gap remains, workers have no choice but to reduce the time they spend on improvement as they strive to meet their ever increasing objectives. -Repenning and Sterman
A key principle of Lean and Agile is to continuously inspect and adapt the way we work so we can improve the way we deliver to our customers. Agile Manifesto Principle #12 is about making improvements to the way you work continuously,
At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.
One way to improve is to do regular retrospectives and operation reviews and then spend some time on the identified improvement activities. Kaizen, the Japanese word for continuous improvement, was popularised by the Toyota Production System. The culture of Kaizen is one of the reasons why Toyota has been more successful than many of the Western firms. Kaizen is about making small improvements continuously, so we can get 1% better every day. Just like compound interest on your savings account, overtime these 1% improvements can provide significant performance gains. As the performance gap falls, workers have even more time to devote to improvement, creating a virtuous cycle of improved capability and increasing attention to improvement.
However, there sometimes can be a delay before the benefits from the improvement efforts will be realised, so you need to have a strategic view and an emphasis of investing in improvements. Treat each improvement activity as an experiment and learn from your mistakes.
As illustrated below, working harder results in an immediate performance impact at the expense of improvement work but has a delayed capability trade-off in the long run. Whilst working smarter requires some investment in improvement that will require a short-term negative performance impact before things improve but has a longer lasting productivity gain. In reality, both of these continuously reinforce each other with each decision loop either having a virtuous cycle of reinforcing the performance curve positively (working smarter) or a vicious cycle lowering performance (working harder). Which one will you choose?
Note about the ‘Too Busy To Improve?’ image:
This image has been adapted from Hakan Forss’ work. His ‘Too Busy To Improve’ image is not free to use so I have adapted his image which can be shared under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International license. Whilst this image is not as evident as Hakan Forss’, it hopefully still convey’s the same theme. You may share my image but you cannot create a derivative of it to respect Hakan Forss’ intellectual property. I would like to thank Hakan Forss for allowing me to adapt his work.
1 Nobody Ever Gets Credit for Fixing Problems that Never Happened, Repenning & Sterman, California Management Review, 2001
[Thanks to Daniel Prager (@agilejitsu) for passing on this paper]
Recently I was posed the question “how can we shape organisations to be successful in an environment of digital disruption?”
The convergence of technologies, such as cloud, social, mobile and information (the Nexus of Forces) …. are driving the Digital Industrial Revolution (Gartner). The convergence of these technologies has formed what Fred Wilson has described as the Golden Triangle:
“The three current big megatrends in the web/tech sector are mobile, social, and real-time.”
However, technology is just one part of the digital disruption equation. You can forget about digital disruption if you don’t disrupt your existing (traditional) business models.
Over the years oragnisations have updated their technology roadmaps and invested in new technologies to support their business strategies. Yet organisations have retained their legacy processes and policies and have not adapted new ways of working to compete effectively. Most organisations are built to sustain their existing business models which are not geared towards creating digital experiences for customers. Existing governance structures are often too slow, too siloed, stifles innovation, adds bureaucracy and all too inconsistent.
Increasingly organisations are embracing new paradigms and principles in the way they work in the era of digital. Many of these incidentally come from Agile and its related areas such Lean, Kanban, Design Thinking, Systems Thinking, and Lean Startup. Take for example the U.S. Digital Services Playbook:
- Understand what people need
- Address the whole experience, from start to finish
- Make it simple and intuitive
- Build the service using agile and iterative practices
- Structure budgets and contracts to support delivery
- Assign one leader and hold that person accountable
- Bring in experienced teams
- Choose a modern technology stack
- Deploy in a flexible hosting environment
- Automate testing and deployments
- Manage security and privacy through reusable processes
- Use data to drive decisions
- Default to open
and the UK Government Digital Services Design Principles:
- Start with (user) needs
- Do less
- Design with data
- Do the hard work to make it simple
- Iterate. Then iterate again.
- Build for inclusion
- Understand context
- Build digital services, not websites
- Be consistent, not uniform
- Make things open: it makes things better
Adoption of an Agile models, Lean Principles, a lean way to create a business model and a way to continuously innovate is vital if you want to compete effectively. These (modern) delivery models and principles no longer play a supporting role, but are center stage – it is becoming essential to the success of businesses in the age of digital disruption.
None of the principles and policies by the U.S. Digital Services and UK Government Digital Services is about technology. They are more about how work and business is to be done. The companies that will be successful in the disruptive digital era will be those who look beyond technology solutions but also disrupt their traditional organisation and governance structures and invest in new business models.
The digital disruption is forcing businesses to change how business is done. This requires a business transformation that uses technology to create digital experiences for customers AND equally adapt or introduces new processes and systems to successfully compete. Through evolution of work design, organisations need to adapt and change processes and policies (and we are not just talking changes in IT only). This will be BIG – it means changing one way of being to another. A butterfly is nothing like a caterpillar.
 W. Edward Deming defines a system as a network of interdependent components that work together to try to accomplish the aim of the system. In this case the system is not an IT system, but the organisation as a system.
“One of the big success factors at Spotify is the Agile Engineering Culture.” – Henrik Kniberg
Spotify started as a Scrum company in 2008 but the standard Scrum practices were getting in the way as they grew, so they made them optional. Here’s an awesome video how Spotify scaled their Agile Engineering Culture. They decided that:
- Agile matters more than Scrum
- Agile Principles matters more than any specific Practices
- Agile Coach is needed rather than ScrumMaster (Servant Leaders more than Process Masters)
Last week I attended the LAST Conference (Lean, Agile, Systems Thinking) held at Swinburne University. The LAST Conference is a big departure from the Agile Australia 2012 conference I attended earlier this year. There was no fanfare, no big build up, little corporate advertising and significantly less people. It was also only $50 for the whole day but still contained lots of learning opportunities. It lived up to the advertised “low cost, grassroots mini-conference” message.
The conference schedule contained 5 parallel tracks so it was hard to attend all of it. I found myself at times wandering between sessions to get sound bites of what people where talking about. Being held at a uni one thing I definitely liked was the university lecture theatre style of some of the sessions – it felt right compared to sitting in a large conference center. Unfortunately, I couldn’t stay for the last sessions as I needed to head back into work.
I didn’t take any detailed notes, but here are my takeaways (in no particular order):
- Systems Thinking is the opposite of scientific thinking. Systems Thinking is not:
- Rocket Science
- Sea of Systems a handy guide to Systems Thinking
- Invention is the process of discovering something new or come up with an idea. Innovation is the act of of introducing that idea into the market and commercializing it
- Played some neat games that help with agile learning.
- Stages of learning:
- Unconscious incompetence
- Conscious incompetence
- Conscious competence
- Unconscious incompetence
- I had lots of fun in the Visual Collaboration session fine tuning my sketching skills. Use Wong-Baker Faces to visually represent levels of pain.
- Lots of interesting tidbits some of which I already knew but others just heard of in Edgy Agile things.
Here’s a selection of twitter posts on the conference (#LASTconf):
- @RonicaRoth: #LASTconf motto: you are not an attendee. Excited to participate!
- @lynnecazaly: Story structure: people + place + trouble …people want to know why, why this, why different #lastconf @unorder
- @hwiputra: A good storyteller uses concrete words not abstract words #LASTconf
- @hwiputra: Be comfortable with silence when getting stories out #LASTconf
- @AgileRenee: #LASTconf how to measure value? IRACIS – improved revenue, avoid costs, improved service
- @AgileRenee: #LASTconf my answer: the biggest waste in software dev today is doing the wrong work (benefits to cost don’t stack up)
- @libodyssey: culture is the product of behaviour #lastconf
- @ScrumMasterNZ: Work towards “Decision Meetings” and not “Status Meetings” #LASTConf #agile #lean
- @jodiem: Eg this guy has 3 levels of backlog – team-product , release-quarterly and sprint… #confused #lastconf
- @CEPitchford: The motivation for #offshore at REA was not cost it was talent! #win @hwiputra @frankmt #LASTconf
- @CEPitchford: Standup with #offshore team via Skype was hard. We couldn’t understand each other @hwiputra @frankmt #LASTconf
- @CEPitchford: Was hard for Chinese #offshore team to get visas to come to OZ @frankmt @hwiputra #LASTconf
- @CEPitchford: The whole local OZ dev team went to china for 3 weeks to handover to the #offshore team #LASTconf
- @AgileRenee: Find I’m mentally disagreeing with a lot said in the offshoring session in #LASTconf we have talent and should invest in building it locally
- @jodiem: Self service test environments… Where QA env is exactly the same as production env. Cool #devops #lastconf
- @antomarsh: Team rotation from Aus to China critical #LASTconf
- @gusbalbontin: Words such as “framework” and “governance” should never be in the same sentence as the word innovation. #LASTconf
- IrithWilliams: #Lastconf the real job at a standup is to ‘listen, inspect, adapt’
- @magia3e: Too many context changes slows down the #scrum team. Focus on getting to-do done #LASTconf
- @rooosterboy: How is #LASTconf different to #agileaus ? Seriously.
- @magia3e: If u don’t have some sort of continuous integration toolset/capability it will limit your velocity #LASTconf
- @c2reflexions: @AgileRenee doing a song and dance at #LASTconf
- @magia3e: Document the right stuff, but don’t waffle it out. Cut to the essence of it. communicate it with the right collaborative tools #LASTconf
- @CEPitchford: More control from management = less innovation from empowered teams #LASTconf @frankmt
- @CEPitchford: It’s not about execution anymore. It is about learning. #organizationalchange #LASTconf @frankmt
- @CEPitchford: Change programs: do we actually want to change? Or adapt, innovate and LEARN? #purpose #LASTconf @frankmt
- @CEPitchford: The way we still run companies was invented by people who lived in the last century @frankmt #LASTconf
- @CEPitchford: Project schedules and budgets are a work of fiction anyway @brown_note #LASTconf #fishbowl
- @hwiputra: All good leaders believe in their teams. #LASTconf
- @Drew_1609: Best value and most fun conference attended in a long time #lastconf
- @njhoughton: MVP … what’s the minimum thing to go-live … hold this as a meta-frame as you sprint … my examples are #foresight and #Innovation #lastconf
The visual recordings by @lynnecazaly were done using the iPad Brushes app. I have downloaded the app and now I just need to brush up (no pun intended) my skills. Thanks Lynne for the inspiration to try visually recording my notes.
Thanks to the organisers, Craig and Ed for putting together this great event. Snaps!
Nordstrom is one of USA’s leading fashion specialty retailers and is a Fortune 500 company (2011 – ranked 254). When I think of a fashion retail company, innovation isn’t the first thing that comes to mind. So how does a large retail company like Nordstrom innovate? Through the creation of a Lean Startup team, called Innovation Labs. According to their website,
The Nordstrom Innovation Lab is a new, and growing, team. We act like a startup inside of a large company: we move through ideas quickly, using whichever technologies make sense. We also walk the agile walk: the lab is a collaborative workspace with stickies and note cards everywhere, and we follow agile engineering practices like pairing and test-driven development. On the customer-facing side, we use ideas from both lean manufacturing and lean startup, and test our experiments with customers using human-centered design strategies and tactics.
The below video is a brilliant case study on how the innovation lab uses Lean UX and human centered design to build an iPad application (to help customers select a sunglass) incrementally and getting customer feedback in real-time as they work, so they were never working on anything that wasn’t valued by the customer. They were only doing things that was delivering value.
The innovation lab manager, JB Brown states:
Somebody will have an idea and we will find a way to prove that the idea will work.
We really don’t know what the features are yet. We are going to use customer feedback as we go along in order to build the best thing. Building a feature and testing it until we get to the point where we have something that is good enough.
Building the iPad application isn’t complex and the cycle time to develop a feature wouldn’t take long. But what the innovation labs team has done is cut down the feedback loop times. If this application was built in an office away from the customer, getting feedback would have been much longer. And by getting feedback directly from the end users rather than a user proxy, they have reduced the risk of developing the wrong features.
The innovation lab uses a concept called ‘flash build’, a variation of a flash mob, where a software team shows up at a surprise location to build a minimal viable product application so they can get direct customer feedback in real-time.
It is awesome to see innovation and the use of lean and agile principles and practices in action within a large company.
In the book Switch: How to Change Things When Change Is Hard by Chip Heath & Dan Heath, the authors described the results of a study to answer the question: Would people with bigger popcorn buckets eat more at the movie cinema?
As part of the study, it was carefully engineered to serve the popcorn five days stale. Some people received medium sized buckets and others got a large bucket. The results were stunning:
People with the large buckets ate 53 percent more popcorn than people with the medium size. That’s the equivalent of 173 more calories and approximately 21 extra hand-dips into the bucket.
The book further states that other popcorn studies were always the same:
It didn’t matter if our moviegoers were in Pennsylvania, Illinois, or Iowa, and it didn’t matter what kind of movie was showing; all of our popcorn studies led to the same conclusion. People eat more when you give them a bigger container.”
No other theory explains the behavior. These people weren’t eating for pleasure. (The popcorn was so stale it squeaked!) They weren’t driven by a desire to finish their portion. (Both buckets were too big to finish.) It didn’t matter whether they were hungry or full. The equation is unyielding: Bigger container = more eating.
Recently in To Change Culture, Change the System David Joyce says:
Deming learned it’s not a problem of the people it’s a problem of the system that people work within. He found that if you want to change behaviour, then you need to change the system, and change management thinking that creates it. Doing so, culture change is then free.
To change someone’s behaviour, you’ve got to change that person’s situation.
Kaizen (改善), Japanese for “improvement”, or “change for the better” refers to philosophy or practices that focus upon continuous improvement of processes.
Teams I coach frequently ask me for “best practices”. Do not assume that “best practices” in previous projects will be equally successful in another project. In some cases, “best practices” from one context can be counter-productive in another context. Practices and processes from previous projects should be used for learning and improvement. No practice or process is both complete and optimal – once we master it at one level, we see deficiencies that were previously hidden and the cycle of improvement begins again. You should always challenge yourself to experiement and find better ways of doing things and beating your own standards for excellence –
Improvement usually means doing something that we have never done before.
— Shigeo Shingo
Mistakes are a part of being human. Mistakes are not a sign of failure. Appreciate mistakes mistakes for what they are – precious life lessons that are used for learning and for others to learn form. Part of continuous improvement is learning from mistakes. The only failure is the failure of not learning from your mistakes.
Insanity: doing the same thing over and over again and expecting different results.
— Albert Einstein
James Hird, the coach of the Essendon Football Club (a team in the Australian Football League (AFL)) took over the coaching of a team this year that was struggling to win games in recent years. A priority for Hird was improvement in the team – “We’re trying to push for continual improvement.”
The club started the season well winning several games, however, they also made many mistakes along the way and had some big losses. The club learnt many valuable lessons from those demoralising losses which enabled it to obtain an all-important victory against the best team in the competition. One of the team players said:
“The coaches were never too up when we won and they were never too down when we lost.”
“The coaches are all just about learning, evolving and improving.”
Even when the team won games and making the finals was in sight, it was still about improvement and getting better. Hird is solely focused on continuing to develop his team – “improvement first, finals second.” Through continuous improvement, Hird believes they will build a good team that can compete effectively and achieve the goal of winning a finals premiership:
“Whether or not we make the finals this year… in 18 months time we want to keep coaching and teaching so we do become a good team.”
“Our team is not built on superstars it is built on all-round effort across the board.”
In a previous post, IDEO had a fail safe culture and which allowed them to fail often in order to succeed sooner:
Enlightened trial and error succeeds over the planning of the lone genius.
It is important organizations foster continuous learning so teams constantly get better at everything they do—improving their work, making decisions, holding good meetings. That’s why successful teams emphasize continuous learning, always going over what they’ve done, identifying what went well and what didn’t, and finding ways to get better the next time around.
The following from Gemba Panta Rei highlights the importance of learning from mistakes through continuous improvemment:
Here are three important lessons from Irish novelist and playwright, winner of the Nobel Prize for Literature, and wicked wit George Bernard Shaw:
“A life spent making mistakes is not only more honorable, but more useful than a life spent doing nothing.”
We often say that continuous improvement depends on the ability of people to experiment, make mistakes, reflect and learn from the mistakes. It is truly honorable when leaders create an environment in which it is safe for people to experiment, fail and learn. In fact it may take more courage to allow others to make mistakes than to make mistakes oneself. The good results of these experiments we call kaizen, and the learning that occurs from poor results we call development of human potential. When we achieve good results free of mistakes we call it competence, but mostly it is luck.
“The power of accurate observation is commonly called cynicism by those who have not got it.”
While opinions and ideologies can be had and held with only minimal effort from our armchairs, facts require that we put forth some mental and physical effort. The act of observation requires presence and attention, the accuracy thereof open-mindedness and the will to release held opinions when they conflict with observed fact. Seeing the truth can be uncomfortable. Having truth that conflicts with one’s belief can be even more so. Pointing out the misconceptions in the minds of others can result in being called cynical or worse. Accurate observation must be preceded by and paired with education, alignment and commitment to act to improve a situation, regardless of our preconceived notions in order for continuous improvement to take root.
“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.”