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.
For the past 10 years I have been working with various organisations to humanise the workplace, help improve the leadership capability and dampen the toxic culture that may currently exit. A recent article (28 Oct 2015) in the news has provided no relief.
The article indicated that the thinking and culture of tomorrow’s leaders being taught at school’s today still resembles ‘traditional’ management of command and control borne out of the industrial era and Taylorism. Traditional command and control is about managers telling subordinated what to do, when to do it, where to do it and how to do it. There is very little thinking required of the subordinates and very little autonomy in this hierarchical culture.
The article has quoted a student stating to some other students:
Just remember your parents work for mine, so don’t go complaining to them.
Remember to say ‘hi’ to me when I’m your boss one day.
Girls who replied to the thread were told to shut up to “let the men handle business”:
Could all woman (sic) please refrain from expressing there (sic) opinions thank you
This type of thinking is a big contrast to modern management and leadership styles of ‘Servant Leadership’ where the leader is servant to those they work with.
The student’s comment resembles Level 1 of John Maxwell’s 5 Levels of Leadership. Level 1 is more about “hierarchy” rather than “leadership”.
There is a real leadership debt in some organisations. We have too many leaders who work “in” the organisation rather than working “on” the organisation. Organisations and machines don’t build great products and services, people do. It is the collaboration and the human spirit that are at the heart and mind of great work. We need to stop viewing people as ‘resources’; treating them as robots or commodities who are easily interchangeable. We need to enable performance rather than manage performance.
Humanising the workplace is about making a work environment that puts a greater emphasis on knowledge, passion, inspiring people to collaborate towards common goals, and fostering teamwork where creativity can flourish. Leaders have a large role to play in humanising the workplace.
Effective leaders are increasingly collaboraters rather than being command and control. Effective leaders realise great outcomes from setting appropriate context, rather than trying to control people. Modern leaders provide vision and purpose that allows individuals and teams to be self-organising and self-disciplined. It’s not about “managing” people but more about “leading” people and being more facilitating.
Further to my last post, Malcolm Turnbull – The Agile Australian Government, Turnbull has said:
We need a different style of leadership. A style of leadership that respects the people’s intelligence, that explains these complex issues and then sets out the course of action we believe we should take and makes a case for it.
We need to stop accumulating more leadership debt and start erasing this debt in schools so we can survive the challenges of today and tomorrow and build better world for the future.
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]
Donald Gray has written a great and interesting article on Three Leadership Styles, based observations on managing traffic at an intersection. In the article the most successful leader is the one that sees people as “adults that most of the time they can take care of themselves, and that the role of a manager is to support these competent adults”. To be effective, the leader should not place themselves at the center of the management task so that they can be much more flexible and effective at the key management activities. A must read.
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.”
Here is an article published in The Wall Street Journal earlier this year which is very relevant to today’s rapidly changing environment and the role of managers on Agile Projects.
(Mark Hurd who was my former CEO at HP is mentioned in the article)
What is a manager?
In simplest terms, a manager is someone who organizes a group of people to accomplish a goal. It is a job as old as the human race.
As an academic discipline, management is much younger. Frederick Winslow Taylor is often cited as the founder of management studies. His 1911 book “The Principles of Scientific Management” portrays managers as organizers: they arranged cogs in the industrial machine. Their job was about increasing efficiency and productivity. For Taylor, management “studies” meant standing in a workplace with a stopwatch, measuring workers’ actions, and devising ways to eliminate “all false movements, slow movements and useless movements.”
But in the years since World War II, the nature of work has changed. Peter Drucker was the first to clearly capture the difference.
In 1959, Drucker used the phrase “knowledge worker” – referring to people whose work primarily involves the manipulation of information and knowledge, rather than manual labor. The knowledge worker’s contribution to an enterprise couldn’t be measured with a stopwatch or a punch card. It couldn’t be forced or controlled by any amount of oversight. And it couldn’t be encouraged by simple pay schemes tied to hourly output.
Carlos Ghosn, CEO of Nissan Motor Corp., explains how he got buy-in for major layoffs in Nissan’s turnaround. From an interview 11/17/09.
Drucker broke the manager’s job down into five pieces. A manager, he wrote:
Sets objectives. He or she is responsible for determining what the overall objective of the group is, sets goals for each member of the group, and decides what needs to be done to reach those goals and objectives.
Organizes. He or she divides the work into achievable chunks, and decides who must do what.
Motivates and communicates. The manager creates a team out of the workers, so that they can work together smoothly toward a common goal.
Measures. The manager creates yardsticks and targets and determines whether they are achieved.
Finally, a manager develops people. In Drucker’s world, people aren’t interchangeable cogs; they are individuals who must be trained and developed to achieve the full power of the organization.
To be a good manager in today’s world, you must also be a good leader. It is not enough to give employees directions. Managers must also give them purpose.
What exactly does that mean? In his 1989 book, author Warren Bennis listed differences between managers and leaders. Among them:
- The manager administers; the leader innovates.
- The manager focuses on systems and structure; the leader focuses on people.
- The manager relies on control; the leader inspires trust.
- The manager has a short-range view; the leader has a long-range perspective.
- The manager asks how and when; the leader asks what and why.
- The manager imitates; the leader originates.
- The manager accepts the status quo; the leader challenges it.
- The manager does things right; the leader does the right thing.
- The modern manager’s challenge is that you must do all of the above. It’s an awesome but essential task. Managing without leading is a recipe for failure.
Attempting to lead without actually managing is disastrous as well. Many managers have met their downfall by setting an ambitious vision for their organization, and then assuming someone else would execute it.
“One characteristic of the successful dreamers I think of – Francis Ford Coppola, Steve Jobs – is that they also have remarkably deep understanding of the industry they work in and the people they lead, and they often are willing to get very deep in the weeds,” writes Stanford Professor Robert Sutton. “This ability to go back and forth between the little details and the big picture is also evident in the behavior of some of the leaders I admire most,” he says, mentioning Anne Mulcahy, chairman of Xerox; Bill George, former CEO of Medtronic, and Mark Hurd, the CEO of Hewlett-Packard.
These truths don’t just apply to CEOs. They also apply to the millions of middle managers who make up the core of any large organization.
Middle managers, of course, are not masters of their own fate. Unlike a Mulcahy or a Hurd or a Jobs, they must carry out an agenda that someone else has set for them. They may bear a heavy load of responsibility, but they have limited room for freedom of action.
A decade ago, the Journal’s Jonathan Kaufman captured the challenges of modern middle management by shadowing the manager of an Au Bon Pain bakery caf named Richard Thibeault. The 46-year-old Mr. Thibeault, a former factory worker, had always thought becoming a “manager” would mean he had arrived in the world. He would sit behind a desk, work 9 to 5, and be a pillar of the community.
Instead, he found he had to rise each day at 3 a.m. to bake muffins, prepare soups and fret over his store’s falling sales. Instead of the steady hours he enjoyed in the factory, he often put in as much as 70 hours a week. His job was an odd mix of broad responsibility and limited authority. He trimmed staff in order to meet corporate cost-cutting targets, but was not allowed to cut prices in order to attract needed customers.
“Some days I think maybe I should go back to factory work,” he told Kaufman. “It was easier.”
Yet for all their frustrations, middle managers in today’s well-run organizations often find they are given surprising responsibilities. They may find themselves heading up a team whose tasks involve not just following orders, but solving a knotty problem or developing a new product. They will be asked to innovate, to challenge the status quo.
Middle managers often find themselves heading projects that involve others who don’t directly report to them. Giving orders won’t cut it. Middle managers, even more than CEOs, must exercise influence without clear authority.
They must learn, in other words, to be leaders – the topic of our next column.