Like many of my colleagues and friends I’ve becomes slightly obsessed with the War in Ukraine and “reading twitter” more than I should be!
Last month I read a twitter message series from Christopher M. Dougherty. - about the “ops-intel” failures plaguing Russian planning and execution. In this twitter series he says “At every turn, Russia fails to make good decisions quickly …and it isn't due to lack of info. Something is deeply broken in Russia's information & command processes leading to a failure to integrate intelligence into operations.”
Some of the reasons for this are analogous to the barriers companies face when trying to modernise and create an organisational structure that unlocks business agility. I will attempt to explain my thinking….
Dougherty goes on to describe how Ukraine’s ability to “to gather, process, and act on information quickly and effectively has given them a massive advantage over Russia's sclerotic centralized command structure”. He Highlights Boyd’s OODA Loop , a decision making cycle based on observe–orient–decide–act developed by military strategist and US Air Force Colonel John Boyd and foundational to Ukraine military operations after Crimea annexation in 2012.
Boyd explains how any organisation that can process this cycle quickly, observing and reacting more rapidly, can develop an advantage. It is no surprise then to find out that Boyd’s OODA Loop and Deming Cycle of Observe-Plan-Do-Check-Act (iterative design and management method used for continual improvement) are foundational to the Agile and Lean methods developed through the late 90’s and early 2000’s. The methods at the heart of an organisations ability to achieve the business agility needed to thrive in the fast paced, dynamic world we live in.
What barriers do organisations face in the quest for business agility?
There can be many - how work is funded (project vs product); engineering practises; customer focus; product management maturity; ways of working; organisational design & culture.
The latter highlighted in Dougherty’s twitter post as “sclerotic centralized command structure” is a barrier I’ve seen most in organisations attempting business and digital transformation. Let’s break these down:
Sclerotic is being too rigid or unresponsive and losing the ability to adapt
Centralised is about concentrated control of activity under a single authority
Command is about giving authoritative orders from a superior height
Organisations can get everything else right… funding products and enduring product teams who are customer focussed, powered by high quality engineering teams. But without tackling organisational structure and culture everything else will erode. It is why so many suffer with long drawn out and/or failed digital transformation initiatives.
It is the toughest area for leadership, as it most often requires change at the very top of the organisation. Most leaders see the change as something they need to impose on senior, middle managers and teams. And the reason we see so many anti-patterns:
Hiring in expensive consultants, who create great great board room presentations about the value of moving to a new target operating model
The new ops model inevitably target middle management and teams (it’s risky ££ for Consultancies to tell leaders they need to change)
And so we see organisations clutch onto ops models like SAFe as it reinforces the current command & control structure while providing the allure of being Agile - Jeff Gothelf says it brilliantly in this article titled SAFE is not Agile “SAFe gives the illusion of “adopting agile” while allowing familiar management processes to remain intact.”
I mean come on! Does this really look like a model that is adaptable, decentralised and devolves decision making to teams on the ground!
How can your organisations overcome their cultural and structural barriers
All change is hard, but cultural change is the hardest, but also critical to tackling organisational change. It requires bold, brave leadership and trust to speed up the decision making cycle of observe-orient-decide-act.
The following principles are aligned to Boyd, Deming and Agile & Lean principles and ones I've applied with some success. They are based on my experience gained while leading complex digital transformation and modernisation initiatives.
1. Hire digital savvy leaders
None of the recommendations below are possible without the right, digital savvy leadership. You need experienced leaders that know what good looks like and have experience at building or leading well structured high performing digital organisations. They need to be able to assess what capability gaps exist and know where and how to hire for them.
2. Break down organisational silos
Too often organisations still have Business & IT/Engineering as differently funded parts of the business. Business have the money, come up with ideas and “task” IT to deliver on them.
IT is seen as a cost centre, an order taker and the business funds IT projects. This model creates silo’s, builds animosity, throttles innovation (IT become risk averse) and slows down learning and decision making.
Organisations with business agility, create digital organisations and operating models, where product teams (consisting of business & IT) are funded to build and manage products, that deliver value to customers and the business.
3. Delayer the hierarchy
High performing digital organisations who employ a product operating model also find a way to to remove unnecessary layers of hierarchy that slows down decision making.
They move from a command and control structure, to a hub and spoke / adaptive model. A small leadership hub that guides, support & unblocks the product teams who operate as spokes off the central hub. Decision making and accountability is devolved to empowered teams on the (customer) front line who have the most operational knowledge (intelligence).
In my opinion this is where the SAFe model falls down, as decision making needs to flow up and down program, portfolio and leadership levels. Scrum at scale is much better model (I will go into that in a future article)
Organisations that are able to create leaner and flatter structures, will accelerate decision making, discover solutions quickly and deliver value faster.
4. Create dedicated outcome based teams
Set your teams up to be outcome based and empower them to solve real customer problems for a specific product area or value stream.
I’ve spent a number of years consulting for global award winning digital agency ustwo, where I co-developed the following product team guidelines, which have stood the test of time across several different clients and industries:
Contains all the skills (cross functional) needed to achieve its outcomes (no hand-offs)
Typically be made up of 7-12 people (full time in the team)
Has clear, measurable outcomes
Has functional bridges into relevant parts of the organisation
A practical example of these principles at work
A large and complex organisational & digital transformation: a global energy supplier
A new CEO was appointed with a powerful vision for the company and a clear strategy for how to achieve it. He knew the current org structure was outdated, and had what we at the time called the “frozen middle” - a large workforce with layers of middle management that was impenetrable and highly resistant to change.
The CEO established a completely new leadership team (with digital savvy leaders) focussed not on organisational departments (Sales, Finance, etc) but on business units (customers & products) delivering business value - break down organisational silo’s
The leadership team created a much leaner structure around customer and product business units (convenience, mobility) and value streams. The restructuring reduced 50% of the top 6 levels (senior - middle management) compared to only 28% of the workforce. Each business unit adopted an outcome based Agile product operating model with limited number of layers between leaders and the front line. - delayer the hierarchy
The business unit and teams are focussed on a scope of work that delivers clear business outcomes. Where the workflow is end to end and handovers within and outside the unit are minimised. Leadership at the hub is focussed on removing impediments and empowering squads by providing clear objectives - setup outcome based teams
The result is that since the start of the transformation initiative (mid 2018) to date, the companies share prices has increased by 117% - After 5 years of negative growth!
In summary
For leaders, DONT be Russia! DO be Ukraine! Create an organisational structure and leadership hierarchy that enables fast learning and decision making. Empower outcome based teams to solve problems through their domain understanding and direct access to the data and information. This is the secret sauce that unlocks value, drives innovation and will ensure your longevity.
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