Many organisations have updated their revenue-generating business units' operating models to a value-stream or product-based model, increasing the flow of customer value and creating better business outcomes. However, updating the operating model of supporting corporate functions can also unlock significant value. Designing a corporate function operating model requires careful consideration and the work often differs significantly from designing the operating model of revenue-generating business units. 

This article shares how we have approached this. We will refer to two different types of business units: 

  1. Revenue-generating Business Units - a business unit that creates products or services that generate revenue.
  2. Corporate functions - business units that support revenue-generating business units, such as People and Culture, Marketing, Procurement, Corporate Affairs and External Communication, Finance and Commercial, Risk, Assurance, Legal and Compliance, and Sustainability.

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Why are organisations focusing on corporate functions?

CEOs are looking to obtain better value from their corporate functions. According to Gartner, more value from corporate functions is one of the top three concerns of CEOs, jumping 63% among survey respondents.

There are three key reasons for this:

  1. There has been less investment in corporate functions. Many revenue-generating parts of organisations have invested to move to more end-to-end, value-stream-type operating models. The benefits they are enjoying are faster delivery, increased customer value flow, and better business outcomes.
  2. Corporate functions are not keeping up. Now that they are fast and lean, the revenue-generating business units have the same high service expectations for the corporate functions that support them. Yet, these corporate functions are working with operating models that have become outdated. The result is the creation of “shadow functions” within the revenue-generating business units as they seek greater control and faster results that are better aligned with their needs. While this short-term fix might solve their immediate issue, it does so at considerable cost to the organisation, creating inconsistency and waste. Ultimately, this can lead to confusion, politics, and organisational fragmentation.
  3. Pressure to improve organisational cost and efficiency. With less stable environments and more intense competition in many markets, there’s a mounting emphasis on performance results. At the time of writing, 75% of our customers have a cost reduction agenda. In addition, corporate profit margins are at their highest since the 1950’s, meaning there is little “headroom” for increasing revenue. One of the only places left to find profit is cost. These pressures are forcing corporate functions to:
    1. Boost operational excellence further, usually while reducing costs
    2. Consolidate and centralise duplicate roles and design engagement approaches that allow for speed and independence.
    3. Improve Governance, Planning & Prioritisation to continually ensure the most valuable work for the business is the focus and being delivered continuously.

In their attempt to achieve this, many corporate functions have flipped back and forth between centralised and decentralised models, often the result of incoming new leadership or on the advice of a consulting firm. Over time, they’ve become bloated, expensive, slow, and confused. In reaction to this, revenue-generating business units are left with little other option than to “opt-out” by creating shadow functions. 

Finally, patchwork fixes are frequently applied to solve specific problems without the proper buy-in and change management or a greater understanding of the organisational context. As a result, over time there is diminished clarity and coherence of how everything works together, low ownership to maintain and champion the change, and often an unintended increase in complexity. 

Through our work with executives and business leaders, we see recognition of the above, with increased focus on ensuring that corporate functions are set up to support organisational growth better. As a result, leaders are investing in increasing delivery speed within corporate functions.

 

Challenges

Corporate functions are often in a constant battle to balance their strategic priorities while also meeting the needs of the revenue-generating business units they serve. Tensions arise when these become imbalanced.

  • If it is more weighted towards the enterprise's strategic priorities, the BUs feel that the corporate functions are adding more work and slowing them down, and in some cases, they prefer to work in isolation.
  • If it is more weighted towards the needs of the business units, there is a lack of strategic coordination.

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Knowing how to enable the right balance is essential but hard. The struggle to find this balance lies in three key pain points:

  1. Authority and decision rights - Is the ownership and decision-making authority with the revenue-generating business unit or the corporate function? 
  2. Value definition and prioritisation—In a world where there’s always more work to be done than time or resources, it’s easy to misalign what work is valuable (and what isn’t) and whether/when/how the work is resourced. What is our definition of value?
  3. Expectations on services - Without intentional conversations and alignment, there is often a mismatch of what is expected from the revenue-generating business units (demand) and what is provided by the corporate function (supply) in terms of speed of delivery, level of expertise or contextual understanding, quality of work, level of ownership, type of engagement, etc.

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A reconfigured corporate function operating model is a holistic and systemic way to solve these challenges.
 

What is an Operating Model?

operating-model-diagram

Simply put, an operating model helps teams and individuals turn strategy into results.

It is a framework that operationalises strategic plans by translating and managing the big-picture thinking into coordinated day-to-day actions needed to achieve tangible outcomes. An organisation’s operating model defines how their capabilities are managed to achieve their strategic goals, and the success of an organisation depends on the interconnectedness of five core elements.

  1. Governance:  the framework used to plan and prioritise the work. It’s a critical process to align day-to-day work priorities with the organisational strategy so people can deliver results. It’s composed of a regular cadence of activities and events that breaks down the organisational strategy into long term objectives, then shorter term goals with tangible outcomes, then incremental plans on how to deliver. 
  2. Ways of Working: the practices, processes, methodologies, and behaviours that guide how work is planned, executed, and managed. It provides clarity and consistency to how people collaborate, communicate, and execute their tasks to achieve organisational goals. 
  3. Future Capabilities: these are the skills, processes, technologies, and structures that an organisation needs to develop or enhance in order to achieve its strategic goals and remain competitive in a changing environment. In an operating model, future capabilities act as enablers that allow an organisation to meet future challenges, seize new opportunities, and adapt to evolving market demands. 
  4. Leadership & Culture: the behaviours, values, and practices set and demonstrated by leaders and embraced by the organisation. Together, they define the tone, environment, and mindset that drive how work gets done and how employees experience the organisation.
  5. Structure: in the context of an operating model, organisational structure refers to the framework that defines how tasks are divided, coordinated, and supervised within an organisation. It outlines how people and responsibilities are organised to achieve the organisation's strategic objectives and deliver its value proposition. 

Structure brings all the elements together, and because it is also the most visible and tangible part of the operating model, it’s often easier to start with that, then integrate the other elements. However, Ways of Working are highly interconnected with Structure, so these must be front of mind during the design process.
 

Start with Strategy & Principles

An operating model starts with the strategy so this needs to be right before moving into design, and Radically often helps clients relook at their strategy as a first step. With a corporate function, because its core purpose is to enable the Business Units to achieve the organisational strategy, a highly differentiated or clearly expressed strategy doesn’t need to be a prerequisite. Instead, it can be helpful to articulate clear shifts they want to target. Below is an example.

corporate-service-operating-model-logic

 

The Radically Teaming Model

Conventional hierarchical structures make it challenging to visualise how teams and their roles align with how they engage with their internal consumers. Often, our roles are made more complex and slow due to a lack of clarity on decision rights.
The Radically Teaming Model ensures consistency in how we discuss team structures and whether they enable or hinder our ability to get work done. By introducing distinct team and interaction types, we create clarity and focus on the organisational structures.

 

What is a Teaming Model?

Teaming models refer to organisations' frameworks or structures to form, manage, and optimise teams to achieve specific goals. ​These models provide guidelines on:​

  • How teams should be composed
  • How they should operate​
  • How they should be supported to maximise their effectiveness.

Different teaming models are suited to different types of work and organisational needs. Teaming models help organisations maximise efficiency through:

  • Improved resource utilisation​
    • Optimisation of skills allocation by aligning the right skills and expertise with the right tasks​
    • Flexibility to respond quickly to changes in workload or priorities
  • Removing duplication​
    • Elimination of duplicate roles and tasks​
    • Standardised processes with clear ownership of implementation and maintenance ​
  • Faster decision-making​
    • Clear roles and responsibilities, both within the function and between the function and its consumers​
    • Decision-making authority where the work happens​
  • Increased ownership and accountability​
    • Clear ownership of tasks based on how functions engage with and support their customers​
    • Ability to build feedback loops and monitor performance

 

Why use the Radically Teaming Model?

There are three key reasons why you should use a teaming model:

  1. It provides a common language and toolkit across the organisation, which builds clarity at scale and allows leads to refine and improve the model over time.
  2. It streamlines the design process from something that would take 3-6 months to 2-4 weeks. This means significantly reducing the cost and distraction of a longer design process and the ability to benefit from the new operating model sooner.
  3. Returns 20-30% efficiency gains by improving clarity on the teams, roles, and how the service is consumed.

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Radically Teaming Model Components?

There are two components to the Radically Teaming Model:

  1. Team Types: A category of teams for individuals who are homed together based on what work they do, where they sit and who directs their work.
  2. Interaction Types: A category of interactions based on level of control by the corporate function.

 

Team Types

For Corporate Functions, the Radically Teaming Model has four different team types.

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corporate-service-operating-model

Interaction Types

The Radically Teaming Model has four interaction types, which define how the four teams above interact.

corporate-service-operating-model-interaction-types

Designing the Operating Model

We take a co-creation approach to design, leveraging the Radically Teaming Model. We believe you know your business better than anyone, and by collaborating with our highly experienced team of experts, we can co-create a model that works for your specific situation. 

Clarity on the strategy is always the starting point as an operating model brings strategy to life. Given the enabling nature of corporate functions, this can be as simple as defining how it will support the organisational strategy to achieve its goals.

While structure is often the most visible part of the operating model, its harmonisation with governance, ways of working, future capabilities, and leadership and culture determines how well the organisation’s strategy is translated into results. 

Embedding the new operating model requires focus, tenacity, and patience. With guidance, teams will mature as they build a rhythm in the new processes, gain confidence in decision-making, and feel ownership of their work. This will ultimately increase the speed of delivery and build an adaptive culture.

corporate-service-operating-model-3-step-process

If you are considering an operating model change, discuss partnering with us on your journey.

Contact edwin@radically.co.nz

 

The roles of Product Owner and Product Manager often intersect, leading to confusion and potential conflicts. These roles play a crucial part in product delivery, yet their distinctions are not always clear-cut. Understanding the nuances between a Product Owner vs Product Manager is essential for organisations to reduce friction, optimise their product development processes, and ultimately deliver high quality outcomes for the customer, faster and more reliably.

This blog aims to shed light on the key differences and similarities between these roles, exploring the challenges they face and the misunderstandings that can arise. We'll delve into the scope of their responsibilities, decision-making processes, and approaches to stakeholder management. By examining these aspects, professionals and executives will gain valuable insights to help them navigate the complexities of product development and foster more effective collaboration within their teams.


Defining the roles: Product Owner vs Product Manager

Product Owner responsibilities

Ideally, the Product Owner role is a sponsor or entrepreneur for the product, who are in charge of the business case and budget, and have the authority to make decisions. They should be invested in the product's success and have overall strategic and management responsibility.

However, in some organisations, the Product Owner's role has been reduced to that of a scribe or proxy. There's a tendency for Product Owners to take on the role of "story writer" and "project manager," adopting a project mindset of requirement order-taking and managing scope, budget, and timeline.

Product Manager responsibilities

Product Managers have their eyes set on the horizon, focusing on vision, strategy, and communication. They gather insights, understand customer needs and plans for the future of the product, whilst also maintaining the product roadmap. Their core responsibilities are to drive innovation, meet long term business objectives, and keep the organisation’s products relevant in competitive market contexts.

It's worth noting that in some organisations, especially smaller startups, one person may perform both roles simultaneously. This approach can work, but it's important to understand the core responsibilities required to ensure effective product development.

As Dan Teo, CEO & Partner of Radically puts it, “Someone needs to manage the strategy, value, and backlog of work; everything else is open for tailoring. I would start with a blank sheet and list the core things that need to be done. Then within the context see what roles are required. In a cost-constrained environment, the concept of “hats” instead of roles is a good solution.”

 

Key Differences and Challenges

While there's significant overlap between these roles, there are key differences which are sources of common tensions.

product-owner-vs-product-manager

Scope and Time horizon: Long-term vs Short-term Goals

Product Managers are responsible for setting the overall direction of the product, which involves making strategic decisions that align with the company's long-term objectives. Product Owners, on the other hand, are more concerned with short-term goals, such as delivering specific features or improvements within a sprint.

This difference in time horizons can lead to disagreements about priorities and resource allocation. Product Managers might push for initiatives that have long-term benefits but require significant investment, while Product Owners might advocate for more immediate, tangible results that satisfy current customer needs.

Decision-making: Strategies vs Tactical Focus

Product Managers typically focus on the broader product vision and strategy, while Product Owners tend to concentrate on tactical, sprint-level decisions. This difference in focus can lead to tensions, especially when responsibilities overlap. Product Managers need to maintain a long-term perspective, overseeing the entire product lifecycle and developing the product roadmap. In contrast, Product Owners often find themselves more involved in the day-to-day aspects of product development, managing the product backlog and working closely with development teams.

Stakeholder Interactions

Product Owners work closely with development teams, and act as a bridge to other stakeholders to maximise the value of the product. A key group is the customer, as they often represent their needs and translate them into product requirements. 

Product Managers have a broad scope of stakeholder interactions. They focus on the product vision and strategy, communicating with stakeholders to ensure alignment and gather insights. They oversee the entire product lifecycle, from conception to launch and beyond. Product Managers also develop and maintain the product roadmap, outlining the future direction and planned features.

Product Managers need to balance the needs of various stakeholders, including executives, customers, and development teams. They are responsible for making higher-level strategic decisions that align with the company's long-term objectives.

 

Overcoming Tensions

Establishing clear distinctions between a Product Owner and a Product Manager’s role can help with overcoming decision-making conflicts. Some useful strategies include:

  1. Role clarity: Because these roles work together closely and responsibilities can vary greatly from organisation to organisation, it’s important to clearly articulate the scope and responsibilities of each role to minimise confusion. 
  2. Regular communication: Encourage continuous open dialogue between Product Managers and Product Owners to ensure alignment on product goals and priorities.
  3. Collaborative planning: Involve both roles in strategic planning sessions to allow both the long-term vision and short-term execution needs to be surfaced and tradeoffs be worked through.
  4. Shared metrics: Establish common success metrics that both roles can work towards, balancing short-term wins with long-term objectives.

product-manager-vs-product-owner


Conclusion

The relationship between Product Owners and Product Managers has a significant impact on the success of product development initiatives. Their distinct yet overlapping roles require clear communication and collaboration to navigate the challenges of scope definition, decision-making, and stakeholder management. By understanding the value and  responsibilities of each role,  fostering an environment of mutual respect, and addressing these challenges head-on, organisations can create a more harmonious and effective product development process.

Want to learn more?

If you’d like to learn more, feel free to get in touch at tiffany@radically.co.nz

 

Developing your company's purpose is one of the most critical steps in building a meaningful and successful business. Gone are the days when work was solely about trading time for money. Today, employees seek a deeper sense of purpose, often valuing it more than financial compensation. In this blog, we explore the significance of company purpose, why it matters, and how to develop your company's purpose to inspire your team and create a basis for sound future decision-making.

When I started my career, the philosophy was that work was a transactional exchange where you performed a role in exchange for money. The assumption was that you always wanted more money and therefore would happily modify your performance and behaviour to achieve this.  Yet, as a consultant, I worked with teams that completely defied that notion. They worked for something else.

This concept fascinated me and drove me to understand what motivates people. My employer noticed this and moved into a management position. While I found this incredibly exciting, I struggled to find good role models to learn from. The system of work in which I had grown up was a leftover from the last century, devoid of good examples for a hungry mind. Thankfully, my timing was good, and work was about to undergo a seismic shift.

Fast-forward 22 years, and we have a very different world of work. It turns out that why we work (purpose) is extremely important to people—at times, more important than money.

There are a lot of different reasons for this, but the two major trends I see are:

  1. Societal shifts: People used to obtain most of their meaning and purpose outside the workplace, largely from community groups, churches, and neighbourhoods. These are now in obvious decline, and people’s need for purpose has turned to the workplace.
  2. Advances in behaviour science - we now understand a lot more about what motivates people, and what provides purpose and meaning.

 

Societal Shifts

Humans have an inherent biological need for social connection. Traditionally and instinctively, we have developed a sense of meaning and purpose through social groups. However, attendance in social groups is declining.

In Robert Putnam’s book Bowling Alone, he illustrated the decline in civic participation, from community groups to religious organisations, and its link to the breakdown of social capital. Younger generations, such as millennials and Gen Z, are significantly less likely to join local groups, further accelerating this decline.

Church attendance has steadily declined since the early 2000s, a trend confirmed by multiple surveys from reputable research institutions. In the United States, less than 50% of the public now attend church regularly - for the first time, it has dropped below 50%.

We used to find meaning and purpose in society. With that in the decline, we seek to fulfil this basic human need at work.

Behavioural Science

Neel Doshi and Lindsay McGregor's book Primed to Perform is a compelling reward on the topic of human motivation. They categorise work into two types:

  1. Tactical performance is "how effectively your organisation sticks to its strategy." Good tactical performance (rules, checklists, and standard operating procedures) is essential for certain types of work.
  2. Adaptive performance is “how well your organisation diverges from its strategy." It’ shows up as creativity, problem-solving, resilience and innovation.

Over the last century, we have excelled in tactical performance. But as our world becomes increasingly Brittle, Anxious, Non-Linear and Incomprehensible, adaptive performance is critical.

Six factors impact adaptive performance - three positive and three negative:

  • Play - when you are motivated by the work itself.
  • Purpose - you work because you value the work’s impact
  • Potential - you grow and learn from the work
  • Emotional pressure - you work because some external force threatens your identity.
  • Financial Pressure - you work to gain a reward or avoid a punishment.
  • Inertia - you dont know why you work. You go to work because you did yesterday.

It turns out that why you work affects how well you work. Purpose really matters. For a deeper dive into this see this webinar we did with Neel Doshi.

Finally, the Better Up Meaning and Purpose Report highlights a compelling and confronting statistic : 90% of people surveyed said they would sacrifice up to 23% of their future lifetime earnings for work that is more meaningful.

That is twenty-three per cent of their earnings for the rest of their lives to have meaningful work.  

If businesses haven’t clicked yet, purpose and meaning are very important.

What is Purpose?

We’ve discussed the importance of Purpose and will shortly dive into how to develop yours. But first, we need to clarify what exactly purpose is.

The purpose is the underlying reason why your company exists. It’s the broader impact your organisation aims to achieve in the world. It ignites people with the energy, passion, and motivation to get out of bed each morning.

Examples:

  • Amazon: “To be Earth's most customer-centric company.”
  • CVS Health: Helping people on their path to better health.
  • eBay: “To empower people and create economic opportunity for all.”
  • Apple’s Purpose: “To empower creative exploration and self-expression.”

A good purpose statement leaves freedom and scope on the how. As a founder, you want your people to think about new and innovative ways to achieve the company's purpose. If any of our team approached me with a new idea, I would first apply the purpose filter—“Does it help us achieve our purpose?” It needs to make sense commercially, too, but purpose comes first.

How to Develop your Company's Purpose

The work required to develop your company's purpose is significantly more challenging than you might first think. It took me over six months in my second company, Clarus, as my first attempts felt cheesy and too lofty.

What I (eventually) learned was to let go of the need to “get right.” Remember, perfect is the enemy of good.

Start with your underlying beliefs and passions. Why are you putting all this effort into a business? What is the rallying cry that will inspire others? Why should anyone care? Ponder these questions and then write down your top five ideas. Now go share them with others. Don't just read them out; tell a story about the problem this business solves and why it is important. Watch how they respond. Are they motivated by it, or are they ambivalent?

If you are an existing business looking for your purpose, try this. One of the best techniques I’ve used came at Clarus. One of the team members, Robbie May asked, “What would the world look like if Clarus disappeared tomorrow? What is the hole we would leave in the business landscape? THAT is our purpose.” I found that an excellent way of thinking about it. As a team, we could answer this immediately.

If you are a new business, your purpose will likely come from

  1. Market research -  what unmet needs or problems does your proposed business solve? Look at what your competitors are doing and understand what needs are not being addressed by their products or services.
  2. A strong understanding of your customers' needs -  it is very hard to develop a purpose statement if you dont know your customer's needs. The best way to understand these is NOT surveys and polls. Get out from behind your laptop and talk to them. You will be surprised by how much you will learn.

Start with these, understand how your business can solve a particular problem and develop a starting purpose you can then iterate on.

Example: Developing our Company Purpose at Radically

When Dan and I started Radically, we knew the problem we wanted to solve. Companies told us they needed help to modernise how they delivered work. Many of them had tried agile but failed to make any meaningful impact.

At the time, the only option was one of the Big Four consulting firms, and it was clear that firms engaged them reluctantly. Dan and I were both tired of seeing people roll their eyes and complain about these companies, and we felt we could do a much better job. In short, we wanted to show that consulting doesn't have to suck.

We also wanted to be an upstart that would challenge the status quo but had clear business acumen and the credibility to work with executives. We wanted to be alternative but corporate.

This was our starting purpose:

We help leaders transform their organisations to achieve radically better outcomes.

We started with clients who already knew us, trusted us, and worked incredibly hard to meet our purpose and started earning a good reputation. After our first year, we realised our purpose statement needed to be narrower. We pivoted to

We help businesses adapt to meet the needs of a rapidly changing world.

This worked well for us for many years, but as the company grew we knew we needed a purpose statement from our people. At a company offsite, we discussed who we are and what we believe in. Out of that came our refined purpose statement of today:

We design and build future-ready businesses by bringing together high performance and humanity.

This purpose statement now clearly defines who we are, why we exist and what we do. We passionately believe that a future-ready firm needs to be at the intersection of high performance and humanity.

Notice it also suggests what we aren’t and don't do. We dont high-performance at any cost. We dont believe in armies of soulless consultants in suits, largely made up of graduates straight out of university, billing every minute possible.

Don't get hung up trying to get it perfect. Start with what you have and iterate over time.

Summary

Humans are hardwired to come together in social groups to achieve something bigger than ourselves. Tapping into this is both ethically and commercially astute. A strong purpose drives good decision-making, aligns stakeholders, and inspires employees by providing meaning and direction.

This approach is the future of business. It creates places where people want to work and inspires belief, promise, and hope.

In my next post, I will discuss the challenges of running a purpose-driven firm. It is hard and requires a lot of new leadership skills!

If you are interested in discussing anything here (or any other lessons), please contact me over LinkedIn.

 

 

In today’s business world there is a tension between flexibility and certainty, and organisations find themselves torn between predictive and adaptive approaches. Combining Agile and Traditional Project Management has become a hot topic, as businesses try to use the best parts of both methods without compromising quality. This mix aims to blend the structured planning of the waterfall model with the adaptability and ongoing improvement of agile techniques creating a strong hybrid approach that can adjust to different project needs and hurdles.

This article explores how to blend predictive and adaptive approaches to create successful initiatives. We'll look at key considerations when putting this combined approach into action, including project type, communication strategies, and tools that support both approaches. The piece will also tackle common problems that arise when mixing these different project management philosophies and offer practical ways to solve them.

 

Integrating Predictive and Adaptive approaches for successful initiatives

The integration of traditional project management with agile methodologies has become more common in large-scale organisations. This blend brings together the organisation and planning of traditional methods with Agile's quick responses and adaptability. But setting up and operating a hybrid approach has its own challenges which require careful alignment between the project team, organisational objectives, and project implementation.

To better understand the challenges associated with implementing hybrid models, interview data was collected from eight experienced Agile coaches who have implemented Agile in non-software industries. The practical actions identified for managing these challenges can be categorised into three levels: aligning planning and delivery approaches, effective risk management, and stakeholder engagement.

agile-project-management

 

Planning and Delivery

A crucial part of combining predictive and adaptive methods involves striking the right balance between planning and delivery. Traditional project management puts emphasis on detailed planning up front, while Agile focuses on iterative delivery and adaptability. To integrate these, organisations should establish a plan that provides direction and clarity of intended outcomes, while allowing for some flexibility as more information arises with each iteration. It’s important to have a plan to forecast, predict and manage dependencies, and iterative delivery with frequent feedback loops to allow projects to navigate the uncertainty inherent in today’s projects.

At the beginning of the project it’s crucial to clarify the intended outcomes of the initiative and create at least a high level plan of how they will be achieved. The optimum level of upfront planning required will be determined by the type of work and level of certainty, but in most cases the work in the near future will be more certain than the work further in the future, and the level of granularity of planning should reflect this. There is often little value in planning every detail of a task that will happen 3 years from now because it is likely to change and can be solidified closer to the time!

Once a plan is established, the iterative delivery of adaptive methods allows for the project team to react to change by checking progress on a regular cadence and making more informed decisions as the work progresses and more information is available. Ensuring that the main project plan is continually kept updated, and transparent to team members and stakeholders is crucial to ensure alignment across the project.

Risk Management

Effective risk management is crucial when combining predictive and adaptive approaches. Traditional risk management techniques such as identification, mitigation and monitoring strategies are important, but can be complemented by the proactive risk mitigation approaches of Agile practices such as limiting work in progress and increasing transparency. Regular risk reviews and retrospectives also allow teams to identify and address potential issues promptly. By fostering open communication and encouraging proactive risk management, organisations can manage the risks they can predict and navigate the ones they can’t.

Stakeholder Engagement

Engaging stakeholders is essential for the success of hybrid projects. Traditional project management often involves formal communication channels and structured stakeholder management processes. Agile, on the other hand, emphasises frequent interaction and collaboration with stakeholders. To effectively integrate these approaches, organisations should follow the valuable traditional approach of stakeholder identification and engagement planning, but also establish clear communication protocols that facilitate regular feedback loops and stakeholder involvement. This includes conducting regular demos, showcases, and review meetings to keep stakeholders informed and aligned with project progress.

By defining and aligning planning and delivery approaches, creating effective risk management practices, and meaningfully engaging stakeholders, organisations can successfully navigate the challenges associated with implementing hybrid models. The insights gained from experienced Agile coaches provide valuable guidance for practitioners seeking to effectively combine predictive and adaptive approaches in their project management practices.

 

Key Considerations

When integrating Agile and traditional project management approaches, several key considerations need to be taken into account to ensure a successful implementation. The approach taken for any project should be based on the type of work and the problems to be solved. Generally, if work is more predictable, a traditional approach may be more suitable, while if work is more uncertain and requires more flexibility, an Agile approach may be more appropriate.

Assessing Project and Programme Type

The project and programme type and requirements play a crucial role in determining the most suitable approach. It is essential to assess the nature of the project, its complexity, and the level of uncertainty involved. This assessment helps in deciding whether a predictive, adaptive, or hybrid approach would be most effective in delivering the desired outcomes.

Evaluating Team and Organisational Culture

Another critical consideration is the team and organisational culture, as well as stakeholder expectations. Agile methodologies heavily rely on collaboration, transparency, and a willingness to embrace change. The organisation's culture should support these values to facilitate a smooth transition towards Agile practices. It is important to align stakeholder expectations with the chosen approach and ensure their buy-in and support throughout the project lifecycle.

Adapting Stakeholder Engagement

Effective stakeholder engagement is often the key success factor for initiatives and can make or break a project. To ensure stakeholders are kept informed and engaged, one must consider the current expectations and mindsets of key stakeholders and tailor the stakeholder engagement and communication approaches accordingly. For example, a key stakeholder who is accustomed to traditional reporting and governance styles will expect to be engaged in this way and these practices may be required to win their trust, but involving them in regular iteration reviews and showcases can introduce them to a different way to engage.

Tailoring the Approach

When integrating Agile and traditional project management, it is essential to consider the project and programme type, team and organisational culture, and stakeholder expectations. By carefully assessing these factors and adopting a tailored approach, organisations can successfully blend the strengths of both methodologies to deliver successful initiatives.

 

Tackling Obstacles

Integrating agile and traditional project management approaches can present several challenges that organisations must navigate to ensure successful implementation. These challenges often stem from resistance to change, misalignment of processes, and stakeholder management issues.

agile-project-management

Addressing Resistance to Change

One of the primary obstacles is the resistance to change within an organisation. Transitioning from a traditional, hierarchical structure to an agile, collaborative environment requires a significant shift in mindset and culture. Employees may be hesitant to embrace new ways of working, fearing the unknown or feeling uncomfortable with increased transparency and accountability.

To overcome this resistance, organisations must invest in the change journey for their people. Training and education programmes can help employees understand the benefits of agile methodologies, but experiencing a different way of working is often required to shift mindsets. Choosing a strategically important project to pilot Agile ways of working creates focus and dedication, but often requires external support to ensure a sound application of Agile approaches. Leadership leaning in and encouraging teams to embrace change and adapt to new ways of working is also an important success factor.

Aligning Agile and Traditional Processes

Another challenge lies in the misalignment of processes between agile and traditional approaches. Providing clarity on which approaches will be adopted, how the project will operate and how roles and teams will interact is crucial for success. Investing time at the beginning of the project to agree ways of working (project structure, roles and responsibilities, forums and cadences, etc.) will ensure that team members understand how work is done and how information flows through the project.

Managing Stakeholder Expectations

Managing stakeholder expectations can be difficult when they are accustomed to one approach over the other. To overcome this mismatch in expectations, organisations must educate stakeholders on the benefits and strengths of each approach in different contexts, and how each approach requires different stakeholder engagement and behaviour.

Ensuring that stakeholders feel engaged and updated is important to win and maintain their project support. Especially if agile methodologies are new to some stakeholders, ensure that they are involved in planning and review meetings and actively elicit their input. Creating and maintaining transparent reporting practices which clearly communicate status and progress can also be a great way to ensure stakeholders stay informed and engaged.

Managing stakeholder expectations can be difficult when they are accustomed to one approach over the other. To overcome this mismatch in expectations, organisations must educate stakeholders on the benefits and strengths of each approach in different contexts, and how each approach requires different stakeholder engagement and behaviour.

Ensuring that stakeholders feel engaged and updated is important to win and maintain their project support. Especially if agile methodologies are new to some stakeholders, ensure that they are involved in planning and review meetings and actively elicit their input. Creating and maintaining transparent reporting practices which clearly communicate status and progress can also be a great way to ensure stakeholders stay informed and engaged.

Embracing a Proactive Approach

By addressing resistance to change, aligning processes, and effectively managing stakeholders, organisations can successfully overcome the challenges associated with integrating agile and traditional project management. It requires a proactive approach, clear communication, and a willingness to adapt and continuously improve. With the right strategies and support, organisations can harness the strengths of both methodologies to deliver successful projects and drive business value.

 

Quick Recap

The integration of Agile and traditional project management approaches provides a powerful toolset to tackle complex initiatives. By blending the structure of traditional methods with the flexibility of Agile, organisations can adapt to changing requirements while maintaining a clear direction. This hybrid approach has a significant impact on project outcomes, enhancing team collaboration and stakeholder engagement throughout the project lifecycle.

As the project management landscape continues to evolve, mastering this integrated approach becomes crucial for success. Teams that embrace this methodology are better equipped to navigate challenges and deliver value consistently. By adopting a balanced perspective and continuously refining their approach, organisations can unlock new levels of efficiency and innovation in their project delivery.

Want to learn more?

If you’d like to learn more, feel free to get in touch with me at ryan@radically.co.nz

 

Many organisations have adopted agile but how many ask the obvious question: What is the ROI on our investment in Agile and how will we measure it?

There are two ways I’d like to explore this topic: from the perspective of delivering an initiative (a product or project) with agile, and from the perspective of scaling this to an entire organisational (Enterprise Agility).

The ROI of Agile Delivery

fast agile

On a project or product level, the ROI on agile is without doubt orders of magnitude greater than traditional methods. There have been a number of studies, the most notable by the University of Maryland, all of which provide extremely compelling evidence.

The University of Maryland study found that agile projects were 20 times more productive, had five times better cost and quality and had a 7 times earlier breakeven point. Furthermore, agile projects had an 11 times greater ROI, 11 times higher NPV, and a 13 times higher ROA when expressed as a percentage.

This research has been backed up by several private studies.  Without doubt, the ROI on agile projects is compelling and an order of magnitude improvement over traditional methods.

The ROI of Enterprise Agility

Naturally, this has led companies to want to scale these benefits beyond single initiatives and reap the organisation-wide benefits. Who wouldn’t want significantly improved breakeven, ROI, time to market, quality and NPV – and the ability to change course as required!

At an organisational level, the ROI becomes harder to measure. This is because Enterprise Agility is about improving the entire system for all future outcomes, not just one specific project. In other words, this is a core infrastructure investment, and these types of investments take many years to pay off.

An investment in Enterprise Agility tends to yield the following benefits:

  • Customer engagement – putting the customer front and centre of our efforts and testing the validity of our assumptions by regularly releasing work and obtaining their feedback.
  • Better solutions - when complex problems are solved by interactive, cross-functional teams, the solutions tend to be more robust and of higher quality. This is because we have taken in many different perspectives on the problem – technical, sales, marketing, quality, commercial, operational, plus we have baked quality in from the outset and tested it every iteration.
  • Culture and engagement - the research on intrinsic motivation is compelling – when teams can shape the work and work in a self-directed way, engagement, creativity and productivity go through the roof.
  • Adaptability – the ability to continually adapt our strategic direction, based on evidence of what we see in front of us. Agile brings transparency and empirical data. We can use this focus on only what is important and limit having too much work in progress, thus creating the ability to pivot.
  • Value - When the above four benefits are combined, we can focus on only delivering what is of value to both the customer and our business. While this seems obvious, what is often overlooked is our ability to cull a significant number of features we assumed customers wanted. Research into feature usage shows customers often only use 25-50% of the features delivered. Imagine if you could cut your investment in features by 50%!
  • Reduced Total Cost of Ownership – TCO accounts for the lifetime cost of the product, including maintenance, enhancement, and support. In many cases, this accounts for 60-90% of TCO, making the development cost looking minimal. By only developing features customers care about, we can repurpose investment into more product places.
  • Market share – combining all the above effectively tends to result in increased market share and eventually market dominance if done well.

Clearly, these are all long-term investments in the infrastructure of our businesses, based on designing it for agility.

ROI on this sort of investment take years to measure, not months. But this doesn’t mean we shouldn’t measure it. On the contrary.

One useful approach for measuring the ROI of Agile is Evidence Based Management (EBM). Many organisations lose sight of the real goal of agile ways of working as they get stuck focusing on improving activities and outputs instead of business outcomes.  Agile is a means to an end, not the end itself! EBM helps prevent this by focusing on the value delivered to the organisation from an investment in agile. This enables organizations to make rational, fact-based decisions, elevating conversations from preferences and opinions to empirical evidence,  logic, and insight.

If you are interested in EBM, please contact me.

Otherwise, you may find the approach and the metrics as a useful way of considering how you are going to measure your Return on Investment in agile.

Good luck!

Nobody really saw COVID-19 coming. Most people thought it would be similar to previous virus outbreaks and peter out without any meaningful impact on our daily lives. As the situation unfolded, we struggled to fully grasp the exponential nature of it.

In the business world, we continually face sudden disruption shocks in a similar way. Our senses tell us things are changing incredibly quickly, but like the COVID-19 situation, we fail to grasp the exponential nature of the change, leaving us ill-prepared to cope when it inevitably arrives.

More and more organisations are realising they need to be designed to cope with constant change. This article aims to outline 6 key principles necessary to build such a business.

  1. Structure
  2. Decentralised Decision Making
  3. Goals and Objectives
  4. Execution
  5. Alignment
  6. Leadership

Structure  

Most businesses are designed for efficiency, not adaptability. The underlying philosophy is to obtain the maximum yield for an acceptable effort and to scale this as effectively as possible. Last century’s Scientific Management is the key influence.  Such businesses, by design, are not built to suddenly change course. They are designed to do key activities efficiently.

A Traditional firm is like a freight ship - efficient but difficult to change course

In contrast, a start-up is designed to be incredibly adaptable. It’s structure is fluid as it continually pivots to find the right product-market fit in order to survive. It is fast and nimble and can easy out-manoeuvre larger organisations, but it isn’t efficient and it can’t scale.

A start-up is like a fighter jet, fast, nimble but not efficient

Companies that push through the start-up phase and scale bemoan the resulting bureaucracy and structure. The original ethos and culture of the start-up is lost as it grows.

Our clients want the benefits of both. They want the innovation, speed and agility of a start-up combined with the size and scale of a larger firm. Often they are facing some sort of disruption, hence they must be able to change direction quickly.

A business that has embraced Organisational Agility can achieve this, however it requires a profoundly different structure and operating model. It is typically structured as a collection of autonomous, adaptive units working together in unison towards a common objective. They have the scale to compete, yet the agility to suddenly change course to navigate around an obstacle without the cumbersome sluggishness of centralised control. They resemble a fleet of boats, each with a crew, a mission and autonomy to sail towards an agreed objective.

Organisational Agility looks like a fleet of yachts

If new conditions emerge, they can change course accordingly, based on the conditions each of them currently face. For instance, say a pod of whales suddenly surfaces for air. Each boat can change course to sail around the whales based on the conditions they observe. Those close to the pod might rapidly tack starboard. Those further back might take a different course of action to avoid the traffic heading starboard.

Contrast that to how a large freight ship would cope. It would struggle to change course fast enough, and likely plough straight into the whales.

A firm is similar. If we are structured as a “fleet” of smaller, independent units (teams), and something suddenly appears out of nowhere, say a new competitor, a change in regulations or a global pandemic, we can change course quickly by distributing control to the independent teams.

Structure enables agility.

Decentralised Decision Making 

If we are to structure ourselves this way, we clearly need to change how decisions are made.

In a traditional firm (the freighter), intelligence and decision making is centralised. Decisions are made at the “top” of the firm and supporting directives cascade to the people doing the tasks. When decisions need to be made, they must flow back up to the centralised control and then back down again. The delay directly prevents agility.

In an adaptive firm, authority is pushed to the people with the information. In other words, the people at the coalface are empowered to make appropriate decisions as required. If the decision requires others, they find the people required and attempt to make the decision as quickly as possible.

But if we empower teams to make their own decisions, isn’t it possible they head off in random directions? Absolutely, which is why the other principles are equally as important. Read on.

Goals and Objectives

To make sensible decisions, teams must understand the broader outcomes the organisation is aiming to achieve.  To support this, teams undertake planning collectively to break down larger objectives into ones their team can effetely own.

"Stay home to save lives" is a clear goal (although lacks measures). Set by the NZ Government for the COVID-19 crisis, it is obvious what is being asked, but more importantly, why. It turns out "why" is deeply important to humans.

The goal doesn’t have to be perfect with answers for all contingencies, but it does need to be clear, explain why, and needs to be supported by the ability for people to clarify the goal. To turn the goal into an objective, it needs to include tangible measures.

OKR's have recently become a useful way of expressing objectives.

Objectives are memorable qualitative descriptions of what you want to achieve. Objectives should be short, inspirational and engaging. An Objective should motivate and challenge the team.

Key Results are a set of metrics that measure your progress towards the Objective. For each Objective, you should have a set of 2 to 5 Key Results. More than that and no one will remember them.

The reason objectives are important is that they enable better execution.

Execution

Traditional management is based on humans being analogous to machines, whereas Organisational Agility is designed to bring out the chaotic, messy, creative brilliance of humans.

To demonstrate, let’s contrast two different organisations - Traditional Company and Modern Company.

Traditional Company

Traditional Company uses traditional management techniques. The Executive Leadership Team (ELT) develop long-range strategies and the Senior Management Team (SMT) turn those into annual plans and budgets and manage execution.

Decision-making is centralised in two different forums – the ELT for things that impact strategy and the SMT for execution-level decision making. Each forum meets fortnightly.

The culture tends to value conformance, adherence to plan and outputs. People tend to be rewarded for either tenure or delivering work on time and under budget. People have managers who allocate tasks and give appraisals of performance.

Work is usually delivered via projects. Projects break work down into smaller chunks and assign tasks resources who are managed to execute. Sometimes, resources comment that they are unsure of why they are doing the work, by just get on with the job.

If a project needs to change direction, it has to submit a change request for either the SMT or ELT fortnightly meeting. This is quite an intimidating process to go through so is generally discouraged. Sometimes the ELT discover “watermelon projects” – projects that have status reports that indicate green (everything is fine) but the project is actually red on the inside (in trouble). These projects are terminated.  Traditional Company estimates that on an average year it wastes $72M on either watermelon projects or projects that require additional funding.

Overall, people at Traditional Company reasonably happy, although staff mention they are worried about the new competitors springing up and how quickly customers jump ship given the chance. Customers also seem to be more informed than they used to, often demanding new products and services.

Modern Company

Modern Company has embraced organisational agility. The Executive Leadership Team develop long-range strategies and communicate these via outcomes they would like to see the firm achieve, expressed as OKRs.

Decision-making is pushed to as close to the people with the appropriate information as possible. Sometimes this means decision making at “tribe” level (a tribe being a collection of teams). Other times it means decisions are made by the teams themselves.

Modern Company has invested in developing its culture. It values delivering amazing customer experiences ahead of following the plan. This often requires staff to be creative. People work in teams, each with its own style of sub-culture. Across all teams though, there is a culture of constant feedback and growth. Everyone is aware of the growth areas and openly pursue opportunities to address them.

Teams obtain work as part of Modern Company’s quarterly planning sessions. They use a technique called Big Room Planning out of which comes their Team OKR for the quarter. They then break this down into a number of “Sprints” (two-week chunks) that deliver a piece of the OKR. They regularly review progress and discuss whether they need to change direction.

They’re less concerned about following plans. At first, managers were anxious about this, but when they saw the results of focusing on customer outcomes they relaxed.

They don’t have people managing them to execute, but they do have people who are dedicated to helping them learn and grow. Their key role is to help develop their competence.

Work is delivered by teams. Some teams are part of a larger group called a Tribe. Work exists in a backlog – a prioritised list of things required to achieve their OKR. Each Sprint, Teams select work from their backlog.

If Teams need to change course, they have the freedom to do so, as long as they remain committed to their OKR. If throughout the courses of their work they find the OKR needs to change, they immediately engage whoever they require to discuss and re-plan. They success based on customer value and business value delivered, not time and budget.

Overall, staff at Modern Company say they feel highly engaged. The company has a really eclectic mix of people, from analytical to creative. Staff often say they are excited about what opportunities future technologies will enable and what this might mean for their customers. Customers rate Modern Company highly, even participating in the development of new products and services.

As you can tell, these two companies execute very differently because they are designed and structured differently.

Alignment 

When work is being done by many small, autonomous teams, it is easy for them to drift off in random directions.  There are a number of techniques to keep teams aligned without reverting back to centralised control.

  • Daily alignment - a 15-minute daily meeting to inspect progress towards our goal(s) and adapt accordingly. This is an opportunity to get our heads out of the weeds to ensure we heading in the right direction.
  • Scrum of Scrums - a simple way for teams to keep across progress of other teams and order to avoid overlaps and dependencies. After each daily alignment meeting, 1-2 representatives of each team go to a Scrum of Scrums meeting and share progress, obstacles and challenges.
  • Sprint Reviews are open meetings anyone in the company can attend. Teams demonstrate tangible progress and obtain feedback. Sprint Reviews occur at the end of every single Sprint and are a powerful way for a team to ensure what it is delivering is both of value and aligned to the organisational objectives.
  • Big Room Planning is a way of all teams planning the next stage of the journey together. We take the outcomes of last period as input and together plan out what we, as a company, aim to achieve for the next quarter, including which teams will be working on what and whether they think it is achievable. It is a combination of top-down and bottom-up planning that includes teams involved. It typically results in significantly increased buy-in and engagement.

Leadership

Clearly, this type of firm requires different leadership. Thankfully, one of the most successful nuclear submarine commanders in history who ran his vessel this way wrote an outstanding book on how he achieved this and it’s enduring impacts, tried and tested in numerous mission-critical situations.

Control, clarity and competence

He shares three critical principles leaders must embrace to be successful with Organisational Agility:

  1. Clarity on the objective and why it is important
  2. Control - delegating control & decision making as much as is practical
  3. Competence - if we are going to decentralise decision making then we need to ensure the people doing the work are technically competent to make the decisions they need to make.

We’ve covered Clarity in “Goals and Objectives” above and we’ve covered Control in “Decentralised Decision Making”, “Execution” and to some extend “Alignment”. If you are interested in diving deeper on these topics, I recommend David Marquet’s website and book.

Competency

Over the years I’ve worked with many firms who have attempted to apply the principles I have outlined in this article. In my experience, one of the key reasons they fail is that they give too much control without developing competency. You cant simply transition from one culture to another overnight and expect to succeed. Building competency in people is utterly vital.

Many of us have been raised based on traditional thinking. It was the underlying principle in our schooling and careers. To work in this way we have a significant amount of re-wiring to do, which takes time. Learning new ways of working is one thing. Applying them is another. It requires patience and support from people who know what they are doing and can guide you.

Our approach is to first give a small amount of control to uncover the gaps in competence and clarity. The step is small and calculated to uncover gaps. Competence is developed through training, mentoring and coaching. If the step is too big, chaos will ensue. Equally, developing a highly trained team without giving them control will result in frustrations and departures.

Balancing Control with Competence and Clarity

The idea is to instil a culture of leadership that gives others the opportunity to grow by inviting them to the next level. For example, if someone wants to be told what to do, the best response is to ask them what they think or see, and so on.

Leadership Ladder

If you are interested in understanding this better, please contact us.

Conclusion

COVID-19 will change the world. All of us will learn from this situation and make our businesses more adaptable and responsive. This can be significantly accelerated through a fundamentally different system of work based on distributed intelligence.

Once you have stabilised, please don’t forget to invest in your organisation to help avoid learning lessons the hard and expensive way. Together, let’s build better businesses that progressively shape the world for good.

Mistakes

I love travelling and visiting different countries. Being born in Singapore, I am always fascinated when I travel back to visit family and friends at how much the country has changed and evolved in just a short period of time.

The picture below depicts how far Singapore has come as a small nation over the past 50 years, defying obstacles and constraints in order to become one of the most respected and wealthiest Asian countries in the world.

As human beings we have a bias for progress - take technology for example. It's not uncommon for new breakthroughs to be developed over many years without being accessible to the general public until many years later either due to cost, complexity, or simply feasibility.

The OLED (Organic Light Emitting Diodes) display is a really good example of technology that has fought for many years to surface to the top over other display technologies such as PLASMA, LED, CRT etc. In 1987, the world's first OLED paper was released by Kodak. I'm sure at the time when the first OLED paper was invented, I imagine that the excitement around future possibilities of this technology was buzzing around Kodak. However what is interesting is if you look at the journey of OLED over the next 30 years, its intriguing to see a few things happen.

  1. Kodak are no longer the leaders of the technology
  2. As OLED became more and more available mainstream, it became simpler and more accessible
  3. It took 20 odd years before OLED was introduced to televisions

So what does this all have to do with Agile and its application to New Zealand businesses?

Having devoted the last 2 years to building Radically, a lot of my time has been spent on getting to know the challenges of New Zealand businesses, both large and small. The common pattern across most organisations is change. While the reasons and motivators might be different from organisation to organisation, most do fit in one of the categories below:

  • Margin at risk due to declining revenues, increased market competition and pressure on costs
  • A sudden boom in the organisation, requiring significant growth in order to meet demand in orders of magnitude of +200% growth
  • Industry profitability is declining, requiring a shift in strategy to innovate and diversify for future survival

In speaking to organisations, what I've found is that most know they need a step change, and that in their current form, they would not be successful. More and more organisations are realising that improving their ways of working in the form of culture, processes and practices is a way to overcome their challenge.

Organisations that journey down the path to shift in the way they work often look for a partner to diagnose and help them start. Just like when you visit your local GP for medical expertise, organisations that face these challenges look to consulting companies and individual experts to prescribe the right medication in order to get healthier. Unfortunately instead of becoming healthier, many of these organisations end up becoming more sick than when they started. Why is this?

From talking to businesses and their leaders, I've found that the help and advice they were given was focused on an idealism and a pursuit of an outcome which often has not been translated to suit the needs of their organisation. Even worse, when asked if prescriptions such as Agile can be tailored, they were labelled anti-agile or not-agile, leading to an assumed implication that having achieved agility means you have succeeded.

This type of approach often leads to organisation seeking to be Agile as an outcome, losing focus on their original symptom, which is to increase business performance, improve delivery, or build foundations to scale.

Unlike the OLED example, where technology was developed then modernised and simplified, many in the industry have failed to simplify and make Agile digestible for businesses to adopt. The impact of this is many organisations have become resistant because they are forced to make a binary decision - "are you Agile or not?". This often ends up taking organisations down the wrong path in pursuit of an outcome to comply to an "Agile way of working", rather than simply working better so that the business thrives. Whilst I understand in application things are more complex, my challenge is that as experts of change, it is our duty to wear our expertise lightly and make it easy for organisations to embrace better ways of working, rather than make the solution the only means.

I started off this thought piece with the idea of what might be beyond Agile. My challenge is as we look beyond, that we don't think deeper and more complex as the solution. In my experience most are still at the stage where they benefit from very simple principles such as

  • Embracing try and learn
  • Delivering in iterations
  • Structuring for intentful collaboration
  • Reflect and learn often

Many of us understand that these are inherently linked to Agile practices, however they do not have to be implemented by the book. Instead, at Radically we believe organisational benefits come from making these principles so simple and practical, that they can be applied across the entire organisation. This is what better ways of working means, as opposed to achieving some kind of agility index or being the very best follower of a practice like scrum, but failing to meet your business goals.

At Radically we strive every day to draw on our diverse teams expertise, such as:

  • Delivery Experts who have managed large complex waterfall programmes
  • Agile Coaches who have helped embed new mindset and practices in organisations
  • Business leaders who have set a vision and understand the realities of running a P&L
  • People & Culture practitioners who deeply understand people, psychology and the practices required to unlock high performance

Together we are a diverse group of people who believe in partnering with organisations large and small that who want to improve their ways of working. To do this we:

  • Make the complex simple
  • Draw on a diverse background of skills and experience
  • Focus on delivering clear business outcomes

If you've been considering how you can step change your business in 2020 and want a partner that has deep expertise with the ability to simplify the complex, feel free to get in touch with myself or one of the team.

Forward thinking firms are realising that in order to thrive in a world of uncertainty they need to fundamentally rethink themselves beyond the tactical “doing” mindset (processes, frameworks and methodologies), to an adaptive mindset, based on a culture of collaboration and a team-centered approach to problem solving.

Culture, HR, intrinsic motivation & emotional EQ are converging with agile, servant leadership, the growth mindset & customer empathy to fundamentally reshape what it means to be a modern organisation.

The winners in the current climate are not just embracing modern technology; they are fundamentally redeveloping their core DNA in order to detect new opportunities. And this change is increasingly being led as a culture-first initiative.

Much of the work we are currently doing is less about responding to a particular crisis, rather it is more focused on creating new capabilities to enable our clients to continually adapt and respond to almost any situation. We call this agility. In practical terms, what does this involve?

From years of working at the coal face of adopting agile ways of working, we have learned that a holistic approach radically increases your chances of success. We therefore approach it as two interrelated pieces – Business Design and Transformation, with the overlap, validation, playing a vital role in road-testing the change.

Business Design

Business Design is about designing the business to help it best achieve its strategy. It is vital, yet in our experience many organisations skip this and leap straight into “implementing agile”. The result is a transformation with no real substance, no compelling call to action, no North Star. And firms wonder why so many transformations fail!

At Radically we take a very pragmatic view:

  • First, understand the core strategy. What space does the firm play in? What unique combination of drivers enable it to win in this space?
  • Design an Operating Model that will enable this strategy, empowering and aligning all the key business functions towards the same outcome.
  • Get explicitly clear on the target culture required to achieve this. What does it look and feel like? What will leaders do to role model this? How do we reward and recognise people demonstrating the desired behaviours?
  • Review and align the Organisational Structure to support the above. If our Operating Model is strongly agile based, then a different org structure is often required. What does this look like and what changes are required to get there?
  • Ways of Working – clearly design how we will approach our work. What work should be approached with an agile model? What work should be delivered by a traditional model? How will these interact? Who will do what? How will we measure success of this?
  • Funding & Governance – an agile enterprise tends to adopt an experimental mindset, delivering quick iterations of value that can be quickly tested with customers, resulting in continual course correction. Traditional funding and governance models tends to focus on adherence to a fixed plan. So how should a more modern funding and governance model work?
  • Leadership – given the above, what should our approach to leadership look like? How will we live the values as behaviours each and every day?

Sadly, most agile transformations we have seen in New Zealand completely fail to consider these fundamental building blocks. Instead, they tend to take an “agile practitioner” approach, focusing on frameworks, methodologies and processes. In our experience, these firms are unlikely to achieve their desired business outcomes.

Transformation

Transformation is the art of moving the business to the new model.

This is when the ‘people aspect’ of change truly kicks in. If you think about what we are actually transforming, it is people and people are the trickiest part to change; processes and models are relatively easy. The human shift must be designed with a human-centred approach. We find that by taking a leadership and mentoring approach, our job is to guide all levels through the change and build the capability and mindset within the staff to be self-sustaining into the future.

Validation

In our experience, no design is perfect. There is low value in trying to design a perfect design as no such thing exists, and secondly it will change as you implement it through transformation. Transformation validates design, yet transformation without design is folly.

 

Conclusion

In summary, we urge you to take a strategic focus when embracing agility. Are all the pieces of the firm aligned to the same vision, model and approach? Are we all completely clear why we are doing this and what outcomes we want to achieve? If you can’t answer yes to these foundational questions then it is time to re-think what you are doing.

Don’t “go agile”. Instead, design your business for agility, break the cycle of failed transformation and realise the true benefits from your investment.

Vodafone has accelerated their digital journey through the adoption of agile ways of working. In parallel, other parts of the business started to look at Agile to leverage new ways of working outside of IT with a firm focus on how to better win in the market, and better deliver strategic objectives. Vodafone engaged us to help achieve this by designing & embedding new ways of working for strategic business teams responsible for managing the key consumer products like broadband, mobile plans and pre-paid offers. In this webinar, we discuss how we use different tools, models and frameworks to help Vodafone’s business teams, along with the cultural & leadership changes needed to enable agile ways of working.

Many organisations are embracing agile ways of working in an attempt to build faster, more customer-focused and resilient organisations. They are redesigning themselves to create a culture where decision making is transitioned away from middle management towards those working with customers at the coal face. Ultimately, they seek engagement in order to create a culture where staff are empowered to truly delight customers. Autonomy is the critical ingredient; however, autonomy is often misunderstood. Many organisations think they just need to increase autonomy, however they forget to include the counter-balance of accountability, often with disastrous results.

 

Too Much Autonomy too Quickly

Recently, many senior leaders have shared with us a worrying concern. It is happening so much that it is becoming a pattern. They are telling us, often with hushed voices, that they feel they cannot ask important business questions such as “when do you think this will be done?” or “how is cost tracking?” or “will we hit our launch date?”. When they do ask these questions, they get proudly shunned and told that that these questions “aren’t agile”.

Perplexed, they feel stuck. Do they go back to their old ways and demand answers (which they know will be fabricated anyway)? Do they dare mess with the new agile culture and risk being seen as “a manager”, the evil conspirator who is secretly trying to stop agile and control everyone? Or do they try to manage the business without the vital information required to make decisions? The end result is managers on tip toes.

The problem is that they have increased autonomy without increasing accountability.

Empowerment

One firm wanted to increase autonomy by empowering their people to put forward initiatives that would be funded based on their ability to help deliver the strategy. The “how” (the execution of initiatives) would be entirely up to the proposer, giving the teams freedom and flexibility to focus on delivering the best outcome as the work progressed.

All sounds awesome right? Unfortunately, it wasn’t, as year after year they encountered the same problem: 9 months into the year they would run out of money and the entire organisation would then go into a capital freeze for the remainder of the financial year, causing significant disruption.

Why?

Firstly, those leading the initiatives were not being held accountable for actually delivering something of value. They were given a chuck of money at the beginning, based on forecast delivery of a business outcome. The intent was to give the teams autonomy, however without the counter-balance of accountability for how the investment was being spent, the teams failed to deliver.

The root cause was that they were still running a traditional governance model that didn’t understand agile. The teams weren’t being held to account to deliver “done” increments of value every iteration. This resulted in the illusion of progress (“we are doing iterations therefore we are be doing agile!”), however nothing could be shipped to the customer. The catch-up stabilisation and integration required a lot more budget.

The lesson – they decentralised decision making and control to provide autonomy but failed to establish the corresponding accountability. They went from centralised accountability, to no accountability at all.

Another firm wanted to embrace agile in order to build highly autonomous teams and attract the best talent in the market. They rapidly “delayered”, removing most middle-management positions and set the teams forth on a journey of self-organisation. Teams were taught new ways of communicating, sharing and collaborating. Each team had a facilitator – a servant leader who would help them teams as required.

Again – seems awesome doesn’t it? However, when the CEO asked how many more iterations would be required to deliver the release, she was shocked to find the teams had no idea. Nobody knew whether this was on track nor did they know cost to date and forecast completion cost. Again, they went from a small group of managers being accountable, to nobody being accountable in the new approach.

Cupcake Agile 

Sadly, we often encounter this and the frustrating thing is that this is not (in our opinion) professional agile at all. One senior leader we talked to called it “Kindergarten Agile”, another “Cupcake Agile” and yet another “Jazz-hands Agile”. It is often the result of well-meaning people who simply lack the business acumen to understand the implications of changes they are suggesting. They recommend autonomous squads, that team have lots of fun and we will measure success by team happiness.

Agile for autonomy

Balancing Autonomy with Accountability

Agile is based on transparency. When we have transparency, we can see what is going on change course accordingly. Accountability is very specific – in Scrum the Product Owner is accountable for value, the Team is accountable for delivering done increments and the Scrum Master accountable for the process.

Governance remains vitally important. It doesn’t disappear, it just changes, typically from a classical model where the focus is on schedule, scope, budget, quality and risk, towards a modern model that focuses on value, risk, learnings, and then the next optimal move.

Management remains important too. It doesn’t disappear. It just changes from a role that allocates work to people and then manages their progress, to a role that focuses on growing people, providing honest feedback and coaching them.

Business questions such as “when do you think this will be done?” or “how is cost tracking?” or “will we hit our launch date?” are completely fair and valid. The difference is that we are moving from a world where we pretended to be able to know all of this upfront and would lock it down in a plan and then govern to that plan regardless, to one where we accept we don’t know it all up front and instead forecast these factors and continually update the forecast as we progress, enabling regular changes in direction based on the information at hand.

Don’t accept Cupcake Agile. Yes, autonomy plays a critical role in reshaping our workplaces, but don’t forget to balance autonomy with accountability.