I work in “the transformation business”. The Agile transformation business to be more precise. The value I aim to deliver is: Improve the internal organisation of companies so that they get better at making their dreams come true. My core activity is coaching focused on Agility, i.e. influencing people to move towards (a (higher) state of) Agile. I want to share my opinion on what makes an Agile transformation successful.
I need three things: a goal, mandate, and knowledge.
The goal is brought to me by the organisation’s leaders: They have a problem that needs to be fixed (and the solution contains Agility), or they have a dream, and Agile is the means to make it happen. Just like a Product Owner translates the company’s financial targets into a valuable product, I need to translate the desire for flexibility and speed into a new organisational design. That is obvious to me because I believe there is a strong correlation between organisational design and an organisation’s Agile abilities.
The highest ranks in the company need to give the mandate to make changes to their organisation. Organisations are set up to maintain the status quo. Changing things around will inevitably bring resistance. Influencing and teaching to align people on the new goal helps, but it’s not enough. People supporting new ideas will exert their existing power to stop me from interfering. Without top-management support enforcing my actions, my efforts are in vain.
People will need to let go of the ideas and concepts they relied on and adopt new goals and new principles. That is a difficult step to take. To help people take that step I tap into four areas of knowledge:
- I need to understand Agile and need a personal organisational design vision derived from it. Firstly, this creates “goal clarity”, the transparency that helps people understand what drives me. Secondly, I am a servant leader and cannot lead without a vision.
- To be able to connect to people, I need to know about psychology. This vast body of knowledge offers means to help me communicate more effectively (for more details, see ESL). I need this to seduce people so they are willing to adjust their mental model and start doing things differently.
- What industrialisation was in the 19th century, is Information Technology since the end of the 20th century. To effectively design new organisational structures IT knowledge is a requirement. I would like to bring Conway’s law to mind: “Any organization that designs a system (defined broadly) will produce a design whose structure is a copy of the organization’s communication structure.”— (Melvin E. Conway). In other words: The (software) interface structure of a system will reflect the social boundaries of the organizations that produced it. Bringing Agile into an organisation will change the social boundaries. We introduce concepts like self-managing teams delivering independently end-to-end customer value. (At least my kind of Agile does).
- Organisations are complex adaptive systems. To be able to make sense of it all and to navigate the transformation path as it unfolds, I need to be a systems thinker. Systems Thinking is about CAS, Distinctions, Systems, Relations and Perspectives (Read more here ). Systems Thinking enables us to maintain a holistic multi-dimensional view of the complexity inherent to transformations. Systems Thinking provides ways to understand complex problems and provide insights that will help us to define effective interventions. It will allow me to gain an understanding of how the current design optimises for goals that inhibit delivering business Agility.
The success of Agile transformations
Colleagues say measuring the success of Agile transformations is a complex thing because there are so many factors at play. I think it is not so complex.
The short-term effect of my contribution can be measured by looking at metrics such as increased time to market, employee happiness, customer satisfaction and flexibility to change direction. However, the best measurement of success (or failure) is done by looking at the (dis)continuation of the change that started when I was there, long (I suggest more than a year) after my active participation. In other words: An Agile transformation is a success when it sustains.
This brings me back to the title of this article: What does it take to create a transformation that sustains? Let me explain how I see this using the iceberg model.
In our daily work, we can observe actual events happening around us. Events happen and are observable. They are “above the surface”. Some examples of events are: “we cannot finish all work in the Sprint”, “there is a bug”, “a team member gets emotional and starts to cry”. When an event happens, we act on it. For example, We move the remaining work to the next Sprint, we fix the bug, we offer comfort and try to resolve the conflict.
When events are recurring (i.e. happening at least three times), we can start to “see” patterns. Well, we don’t actually see them, patterns are “below the surface”. We remember the same event that happened before, we interpret and categorise them. When we see patterns, we are able to predict the future behaviour of our system. Just like the weather forecast: The weather(wo)man studies meteorological events, sees recurring events, recognizes them as patterns ((s)he has experienced before) and predicts it will rain tomorrow in Amsterdam.
Patterns don’t just exist, they emerge from a deeper layer under the surface: System structures. Craig Larman nails it in his laws when he concludes: “Culture follows Structure”. The culture in larger organisations is the combination of (behaviour) patterns, spawned by underlying structures. The organisational design is a system structure. Once we understand it, we are able to (re)design it. A simple example: We set up a loans department with a manager who is responsible for an annual 10% increase in outstanding loans. In more general terms: we create a specialised department with a clear financial KPI. We assume that people will show certain behaviour to meet KPI’s. We also assume that the outcome of that behaviour will help to reach our goals. When we do not get the desired results (e.g. increase of loans), or when we get unwanted side effects (e.g. reputation damage because loans are sold to people who cannot pay them back), we redesign the system structure. We could set different KPI’s or restructure the sales department based on customer segmentation rather than product segmentation, etc.
System structures don’t just exist, they are designed by the organisation’s leaders. The (design) decisions they make are fed by their mental models of how the world works. Imagine what an organisation would look like created by a CEO who “knows” employees are lazy and cannot be trusted. And compare it to an organization led by a CEO who thinks that people need autonomy and purpose to reach goals. The organisational structure created by both CEOs will be quite different.
Influencing the mental models that drive leaders is applying a change at the base of the iceberg. If we can make leaders adopt the Agile mindset (learning), we increase the chances that they will create Agile system structures for people to work in (changing).
Many Agile change initiatives started bottom-up, initiated by teams experimenting with Agile long before leadership did. These changes hardly ever sustain. The teams feel they are rowing against the tide, they become demotivated, ultimately lose faith and give up. In Systems Thinking terms this pattern makes sense because bottom-up change without leadership support is not an effective system intervention. The change will yield short-term effects but is not sustaining. The teams can only design a new system structure locally where they are in the system. Their direct manager might support the experiment and shield them from the rest of the unchanged organisation, but his power might not reach to change the mental models of the leaders. And without it, the leaders will produce changes at some point in time that will overrule local change initiatives.
When Agile is not adopted in the hearts and minds of the people doing the work, they will do what is expected from them but deliver at best an Agile in name only (AINO) implementation or produce a cargo-cult culture. For an Agile adoption to succeed, every person in the organisation needs to get the opportunity to develop an agile mindset.
Agile adoptions can only sustain when learning happens both top-down and bottom-up. Top-down learning is needed to enable and sustain the creation of Agile system structures. Bottom-up learning is needed to be able to receive and grow the ideas that emerge from them.
We learn by observing events, seeing patterns, understanding how the system structures work and the mental models that created them. The learning starts above the surface but needs to penetrate our mental models to start producing change. This process needs to happen everywhere in the organisation to create a change that sustains.