Principle-based Agile Implementation in Conservative Environment
Co-Authored by Chris Keller
Driven by the need for increased efficiency in operational processes a multitude of modern organizational forms are emerging that seriously question conventional organizational structures. They are the result of an unrelenting hunt for decoupling the three elements of the “magic triangle”: costs, time and quality. But if modernizing their business is so critical for them, why do especially traditional companies have trouble in introducing agile or other state of the art ways of working? The answer is deeply anchored in those company DNAs. The organizational structure as a target-oriented system and the administrative framework is shaping the processes running in a company. Even more if you manifest this structure with cost centers, functional budget planning and headcount or performance targets. Many companies react to the rising complexity of the market with increasingly complex corporate structures. Value Chains and their control gets more and more bureaucratic and with it incomprehensible.
All along working in today´s corporates simply feels wrong for so many people. Regardless of the hierarchical position or function within the company, it always appear that you have the wrong instruments and tools at hand. The “Cat Herders” video wonderfully illustrates the confusion arising when a traditional business is faced with changing demands and requirements, reacting with known behavior.
The $64,000 Question
Much more complex processes require complex network structures as well as cross functional and cross hierarchy collaboration to operate. Especially in companies which are too much relying on a central control system the result is, that the demands on coordination and system control increase exponentially, producing losses in overall effectiveness and efficiency. The sheer size of a company today is no longer a guarantee for long-term success. Companies must be prepared to completely rethink their own business and act accordingly in order to remain successful in the future. It therefore feels like the $64,000 question of modern management philosophy in digital and agile work environments:
“How do you future handle the hierarchy?”
Those organizations create inventory, waste, and loss of experience and know-how at its crossovers between functional silos, which must be considered even worse as additional work and effort is created at those interfaces decelerating product and information flow. When supplementary conflicts arise in the department or at the interfaces, the resulting errors can be fatal. In traditional enterprises it are often the informal networks, in which individuals take on the local control of a system and spontaneously provide flexibility in the processes “bypassing” the prescribed standards. In doing so, a negative and bureaucratic image is imprinted on the established processes, according to which one can only be successful if not strictly adhering to the given processes.
An example for this interface issues from Pharma: In his post about quality issues in the Pharmaceutical industry, Jerry Chapman quotes former head of quality for Merck’s NC facility Marla Phillips, who stated:
“Quality today doesn’t matter because we can’t define what we own, we use fear tactics to influence, we measure the means detached from the end, and we don’t understand the business.”Marla Phillips (found via post of Jerry Chapman)
She concludes that while the “quality department owns a term that is met with resistance”, it is viewed as a barrier by cross-functional partners. As already explained in a previous Post, those environments often do not tolerate any type of failure – mostly between the silos. Where enterprise culture dictates a clime of no-failure tolerance people are afraid of speaking and highlighting issues which leads to more risky or less efficient products. In safety critical industries this Silo-driven self-conception within value creation not just increases the amount of discussions and rework all the more but must be clearly considered a major risk for compliance. At first sight the relating conflicts might be directly perceived as functional insularity. On closer inspection it becomes obvious that they are directly related to insufficient communication and alignment between business critical players. However, there is also great potential related with this situation when starting to solve the underlying organizational causes: Every hour that can be gained by avoiding to work on conflicts at interfaces, but spending it with value added activities, helps to increase quality of products and faster create value for the customers. Thus, no stone should be left unturned to tap the full potential of our companies by breaking down silos.
From Silo to Value Orientation
The inefficient picture of process structures that many of us have must be contradicted: following a process is generally not automatically associated with inefficient and slow progress. Rather, it is the wrong and inconsistent approach to the process organization of companies. Interfaces between functional and business entities need to be improved or eliminated completely to ensure a rapid flow of products and information. It is essential for companies to transfer form functional based structures resisting product and information flow at the divisional boarders into units that organize along the value chain, so that work can flow through the system without disruptive transfers and barriers.
In the age of disruption, enterprise agility is becoming a key competence, especially in traditional business areas.Michael Bursik
For realization of the horizontal orientation, management and administration must be made more productive and aligned with the business process. In addition, the number of functional areas and persons involved in carrying out the process must be minimized. Interfaces between functional areas must be eliminated. If not repealed or generalized at all, objectives and targets must be harmonized between the functional areas. Clear responsibilities must be defined, and controls must be kept to a minimum.
Furthermore, some kind of workflow management should be introduced – and with a structured Flighlevel Kanban System this can be made visible and transparent to everyone.
From Software to Anywhere
The agile manifesto has been developed out of a pain that software developers felt. Put simply, they were annoyed by the vast amount of bureaucracy that significantly influenced their work. They wanted to create value with their work and not just to waste their energy feeding the bureaucracy monster. This agile movement has gained momentum over the past 20 years and has developed as a helpful approach far beyond the boundaries of software development. This does not surprise given the fact that the general approaches and ideas are rather new nor software specific. Dozens of references can be found in the literature describing or calling for new approaches to corporate management and radical process innovations in the 1990s – all detached from the underlying industry, but with reference to the growing complexity of markets and the speed of technology development. We refer to some examples in the appendix. But the overwhelming success of agile and lean management methods over traditional approaches in complex environment obviously seemed to have required a broad real world field study – the verification of which in software development has now apparently been sufficiently carried out.
Where to start
Start-ups have successfully made use of these methods and have thus put one or two established companies in their place. However, even in larger corporations, more and more development teams have recognized that methods such as Scrum support their demands on the underlying working methods and do not restrict them like methods from Taylor’s Scientific Management. But how do you transfer the whole bureaucratic corporate structure into a world in which speed and flexibility are the main requirements? Blueprints – such as Kanban, Scrum, SAFe, LEss or similar – seem to promise more or less quick and easy implementation. And some of the agile scaling frameworks even seem to provide an adequate answer to the above-mentioned question about the adaptation of hierarchical structures. SAFe or the Spotify Model are controversially discussed examples for that.
Don´t start with methods and tools
On our way to the Enterprise Kanban Coach Lab in Vienna back in April I had the chance to share the train with Christopher Keller, Agility Master at Deutsche Bahn (DB). Chris and I applied the same training from Sigi Kaltenegger and Klaus Leopold on Business Agility and introducing Kanban Principles on different organizational levels. But Chris and I share more than this course and the same train: We both are acting in traditional industries that are not preferentially known for their agility in business processes. And we both try to drive change in long grown conservative company cultures towards modern ways of working – from the inside of our organizations with an attitude alternating between passion and patience.
The first Snap-shot video is focused on Chris´ personal journey from Project Manager to Agility Instructor and with information around his experience of implementing Agile in conservative environment.
Chris started his current career path at DB Systel as a “classical” project manager. As he was familiar with agile methods (like Scrum) from his former assignment at one day he began to change his PM approach and run his project in DB and tried to evolutionary implement agile principles. Today his approach as a Coach is more focused on team dynamics and the interaction of people instead of simple method coaching. He has made the experience that no matter how much SAFe, Kanban, Scrum or whatever training is poured out over employees and operations, it will not achieve sufficient success. Whatever method should be used, there are people in the system who have to fill it with life. Just when the individuals in the system are aware of why a change has to start with themselves – and actively approach it – a substantial change in the overall system can be successful. Initiating this momentum of change is very difficult and much more time-consuming than concerted method training. In our opinion, there is no patent recipe for this. As said, every company has its own DNA and must take every single person into account when making changes: operational employees as well as the entire management.
There are various posts and articles around pitfalls and failed approaches to agile transformations in traditional business. We like to refer exemplary to two recently published posts: The first one is published by Forbes and written by the great Steve Denning. His post named “Understanding Fake Agile” is a wonderful compilations of misunderstandings, misconceptions and impatience in introducing agile.
Agile is a journey. No large firm is able to implement all the elements of Agile on Day One. Mastering the various facets of Agile takes time.Steve Denning
The second article is a series of (German, or better Austrian) posts written by our friend Sigi Kaltenegger. He names and explains seven prominent adversities of agility. In his own style he explains, why for many companies suddenly it’s more about being part of the trend than about using the agile approach in a targeted way.
If you want to carry out an agile transformation – don´t!Jonathan Smart
There is no way to express this any better than former Barcleys Manager Jonathan Smart did at the LKCE conference 2018 named “Better Value Sooner Happier”. If you had not yet the chance to watch, you can find it here:
Tools, Principles and Deep Change
Lately through digitalization and hyper-competition, speed becomes a business critical skill that established companies and corporations need to learn. As Chris and Jonathan pointed out, Agile is not about the methods you follow but much more on principles you apply. If you carefully read through some of them we listed and discussed in the following, you will see, that they are not limited to a special group or segment of your company. You can apply them on all levels: from your own individual activities to your enterprise wide strategy. They simply scale. And you can apply them on your own, your team, your department – everywhere.
There are of cause a lot of documented and described principles and values spread in the agile community – and this post is not about providing a comprehensive or even completely new list or another Blueprint. But while discussing our experiences with principles during our train ride, we thought some of those discussed examples might be of interest for others as well.
So, here we go with our list – in no specific order:
Whenever possible make progress in small valuable steps and aim for fast wins rather than raising the bar. Clearly define your Goals and validate and measure if you reached it. If you did, value and celebrate even small progress and achievements. If you didn´t, celebrate that you have learnt something!
Don´t show Slides – Show results!
Focus and Prioritization
When you aim for fast wins you need to consequently search and prioritize Quick Wins while considering effort vs. benefit. Prioritize finishing work in progress before starting new work. Limit the amount of parallel active or ongoing work and aim for continuous flow in your system as it unleashes unexpected potential within the team. Challenge emergencies!
Connect people! Integrate all relevant functions. Ask for help and unquestioned offer support to others. Aim for maximum diversity in your activities and value dissent in decision making. Don´t act as a functional bureaucrat rather than an advocate for customer satisfaction. Don´t complain about distributed teams but use modern technology to meet and exchange regular and openly. Be aware that when you change, your environment needs to change with you and give respect to the concerns and needs of others.
Respect for people and processes
Don´t judge but value the status quo: No process has been implemented just to annoy you. Respect people: Nobody felt his decisions based on your personal dissatisfaction. When your work begins, start where you are and value what is already there. With all roles and processes that are implemented. Learn from the past for your future!
Inspect and Adapt
While you value the status quo, observe and evaluate your processes and structures. Continuously improve by making safe-to-fail experiments to learn fast and enable a culture of courage and curiosity. Incrementally but consequently change your structures and processes if required.
Decide and act fast based on our current knowledge – which can change. Proactively ask for feedback and share observations, learnings, mistakes and achievements to allow others to learn. Be open to new ideas and other opinions. Innovate in everything – but foremost in the way you create value.
You not just have the right to learn! You have the responsibility to learn!
Make your work, results and failures transparent to others. Visualize and share what you do: your work and processes, your rules and achievements. Communicate and discuss your decisions and how you came to them. Especially in knowledge work bring people “in contact” with their work again by making it touchable.
Always aim for simplification. Always challenge if an established process is really needed. Don´t accept approvals and bureaucracy that no one can explain why it´s there. Innovate in the way you do things. Understand and improve how you create value for our customer and simplify structures and processes to do it faster and better. Automate processes whenever possible.
Enable opportunities to take Leadership on all Levels. Enlist volunteers instead of instructing subordinates. Work together, independently from hierarchical or functional levels. Create “Bubbles” for practicing Agile Leadership to give everyone in the organization the required time and occasion to develop.
References and further Information
- Davenport, T. H. (1993). Process innovation. Boston, Mass.: Harvard Business School Press.
- Schüpbach, H. (1994). Prozeßregulation in rechnerunterstützten Fertigungssystemen (Bd. 4). Zürich: Verl. der Fachvereine.
- Westphal, J. R., & Kummer, S. (2001). Komplexitätsmanagement in der Produktionslogistik (1. Aufl. Ausg.). Wiesbaden: Dt. Univ.-Verl.
- Wittlage, H. (1998). Organisatorische Effektivität und Effizienz. In H. Wittlage, Moderne Organisationskonzeptionen (S. 180–190). Wiesbaden: Vieweg+Teubner Verlag.
- Chapman, J. (13. 12 2018). Does Quality Even Matter? 10 Things Quality Departments Should Stop Doing Now. MED Device Online
- Leopold, K. (2018). Rethinking Agile: Why Agile Teams Have Nothing To Do With Business Agility. Vienna: LEANability PRESS.
- Bursik, M. (2019): Business Agility statt Business as usual. Haufe – New Management
- Denning, S. (2019) Understanding Fake Agile. Forbes
Kaltenegger, S. (2019) Die 7 Upps der Agilität. Loop Organisationsberatung
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