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 Yet, these corporate functions are working with operating models that have become outdated.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?

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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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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

 

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.

 

 

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.

One of the real highlights of 2019 for me was launch the Adaptive Leadership Collective.  The ALC has been an ambition of mine for many years and it was an honour to be able to draw together business leaders in one space to support one another with modernising our businesses.

Continue reading “The Adaptive Leadership Collective”

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.

Throughout my career I have helped many leaders adapt their style to one that better supports teams reach a high-performing state. Across a wide range of different industries the patterns of high-performing teams, and how leaders help shape them, have some striking consistencies.

I can clearly recall one of the highest performing teams I ever worked in. It was during my first career as a chef. The Head Chef quit, and the owner of The Ruptured Duck (yes, that was the pizzeria name) asked me if I would take over. I was only 23 years old and felt totally daunted, but figured I had nothing to lose so gave it a go.

Throughout the following two years, I somehow helped shape an incredible team of people who felt they could literally achieve anything. The lines between work and fun blurred. We were all “in the zone” – that incredible space where everything around you seems to fade into the distance and you are utterly present. We were somehow there nearly 100% of the time.

The team could handle massive, unpredictable waves of customers and work under incredibly intense pressure for prolonged periods of time, often during extremely trying conditions. Yet we consistently delivered an incredible experience and regularly had customers commenting how obvious it was that we all loved what we were doing. I would regularly have staff coming to work early, working unpaid, just because they liked being there.

How on earth did we achieve this?

Reflecting back, I can see some clear patterns:

  1. Goal: We had a clear objective – to provide the most awesome casual dining experience in Christchurch in a friendly, fun environment.
  2. Leadership: at 23 years old, with less than a year of practical chef experience under my belt, I was not in a position to tell others what to do. I had never done this before, so how could I? All I could do was lead by example. I worked hard and expected others to also. We were largely self-managing.
  3. Culture: we created a culture of extreme teamwork by always having each other’s backs. If the chefs got a lull in work, we helped the front of house staff, and vice versa. This was never questioned. It was how we rolled. When introducing new staff, we’d focus on the team culture and would only introduce one or two new people at a time. It created trust and courage as a core group value.
  4. Continual improvement: we would hold what I would now call a retrospective every night. We’d have a couple of beers and talk through how the evening had gone, what worked, what hadn’t and what we could do better.
  5. Transparency: the entire operation, kitchen, dishes and all, could be viewed by the public the entire time. Nothing was hidden.
  6. Rapid experimentation – we would constantly try new ideas as “specials”, gaining valuable customer feedback as we went.
  7. Fun – we had a lot of fun together as group.

The result was a team that could turn over an 80-seat restaurant 6 or more times in a single evening without a glitch. That’s close to 500 people and we could do this 7 days a week if needed.

Agile Ways of Working

Fast forward to my current world: helping knowledge workers achieve similar outcomes. Radically is helping organisations transform the way they work, applying new ways of working, autonomous teams, a high-performance culture and a relentless focus on customer value.

While the setting is different, the themes are the same. High-performing teams have those same characteristics: goals, appropriate leadership, culture, continual improvement, rapid experimentation, transparency, trust, courage and fun.

A key aspect of this is helping organisations unlearn last centuries management practices.

Ivy league business schools and the big management consulting firms pushed these practices for decades. “Good management” was based on planning, hierarchy and control. The mindset was that the top layers of the organisation would come up with the right strategy, and then the troops would execute. The focus was on coming up with the best strategy (which of course you would need help with) and on execution excellence, namely conformance to plan (i.e. control).

However, with business increasingly operating in a world of unknown unknowns, this approach increases risk, reduces responsiveness and ultimately results in the organisation becoming fragile. To adapt, we have to acknowledge the approach we have used for the last 30 years doesn’t work in all contexts, and then explore alternative approaches.

Instead, at Radically we help leaders focus on establishing a clear, compelling vision and then re-thinking how their organisations deliver on this, largely through the exact same characteristics as my Ruptured Duck team. It isn’t about Agile. It is about the mindset, the environment and the culture required for high performance.

Autonomous Teams

Autonomous teams are self-managing. Self-management requires two critical ingredients:

An absence of traditional management.
A light set of constraints. Constraints help balance autonomy with accountability. Constraints might be an iteration, a Sprint Review, a social contract or a facilitated meeting.

An absence of management is important as people cannot self-manage when they have a manager telling them what to do.

For many managers, creating an absence of management is truly frightening. How can you be accountable when the teams manage themselves? How does a manager approach this situation? Do they just let go of everything and hope for the best? We are seeing a lot of people struggle with this.

The art of it is choosing how much space to leave by actively stepping out, in order to allow others space to step in. You can’t just walk away, leaving a gaping hole, and expect everyone to magically self-manage. Yet if you don’t leave enough space, you will prevent them from self-managing.

We ask leaders to move their focus away from telling others how to do the work, to the following three areas (leveraging David Marquet’s experiences captaining a nuclear submarine with no knowledge of how it worked):

  1. Clarity – what do you seek? What difference does it make and to who? Why is this important? What does success look like?
  2. Competence – does the team/individual have the competence to deal with this situation (or at least the growth mind-set to learn what is required). Does the structure support them in their level of competence? What help might they need?
  3. Control – delegate control to the people doing the work, once the platform of Clarity and Competence is in place.

This is precisely what I unwittingly established all those years ago as a chef at The Ruptured Duck!

Leadership and Culture

I believe one of the most critical factors for a high performing culture is leadership. The agile community has pushed servant leadership as the answer, but I don’t believe this is correct. I believe situation-appropriate leadership is the right answer.

To help organisations discover what this means, we prefer a discovery-based approach.

We use the Cynefin framework to first establish context. Collectively, we work through what it feels like to work in each of the four domains, what is different about each, and which approaches might work best for each domain. We then work through what sort of culture and leadership style would be required to support this way of working in each domain. Then, we review how we all currently think and lead compared to this.

The results can be quite profound.

These are some of my experiences helping create high-performing teams. What are yours? Have you ever worked in a high-performing team? What was it like? How did it compare to my pizzeria team? What was the predominant leadership style?

“Leading is not the same as being the leader. Being the leader means you hold the highest rank, either by earning it, good fortune or navigating internal politics. Leading, however, means that others willingly follow you—not because they have to, not because they are paid to, but because they want to.” – Simon Sinek

If your employees were all volunteers, would they still follow you, or would they up and leave? The days of leading from position are long-gone – it’s not enough to have title, rank or authority as a platform to lead. As the battle for talent takes center stage in this digital age, leaders have to actively grow and intentionally practice their leadership skills if they are to thrive and succeed. A good test for this is to ask yourself, would your team follow you if they didn’t have to?

It goes without saying, that in order to be a leader, you have to have followers – A leader has followers if they truly believe that their leader has their best interests at heart. For this to happen, employees have to feel safe to be who they truly are. Then, and only then, will they trust, follow and fully throw themselves into their leader’s cause. This is true follower-ship.

With disruption in technology today, there is also an exponential rise of confusion within leaders, many of whom find it difficult to connect with a changing digital workforce. This culture can be impatient, fast paced, ever-changing, experimentation driven and information rich. While this could be mistaken as the millennial effect, a recent Forbes article which surveyed leading millennials, gives us an insight that regardless of generation and environment, common sense leadership principles prevailed.

The article captures four key principles to leading millennials:

  1. Empower your team
  2. Think long term
  3. Acknowledge what they do
  4. Treat them as individuals

What is interesting is that the principles above aren’t at all unique to the environment or types of employees being led. Distilled to its core, the type of leadership required in a digital organization is simply genuine leadership. Despite the changing times, the core skills of leadership have not changed. Employees will follow leaders who have their interests at heart, understand them as individuals and sometimes even make decisions at their cost.

What we see is a rise in employees who are hyper-sensitive to genuine leadership. We often hear employees don’t leave organizations, they leave managers. This couldn’t be more true. It is this that showcases the vital role genuine leadership plays when finding and retaining great talent, which can make or break your organization.

So what makes a Genuine Leader? Here are four characteristics to reflect on,

Genuine Leaders take time to understand the individual as a whole

So much of who we are, how we think and behave is shaped by our past experience and how we have grown up. A conversation I had with my CEO recently went like this:

“Hearing how you grew up in Singapore and the environment there, helped me understand how you make decisions and what you are influenced and shaped by”

It’s easy to fall into the trap of focusing on the tasks at hand, simply working through what needs to be done with employees. The problem with this is that when conflict arises, most of the time it’s due to individuals looking at a situation through different perspectives. Their perspectives are shaped by who they are, and we often don’t take time to understand those who we lead fully, in order to stand in their shoes and see their perspective.

How often have you been in the situation where you can’t seem to get through to someone and no matter how many times you try, they just don’t seem to be on the same page? In these situations, we can be tempted to resort to leading with authority out of frustration.

Take time to understand individuals as a whole – we expect them to bring their whole selves to work, so why not take the time to know them as a whole?

Genuine Leaders are front-stage and back-stage leaders

It’s easy to spot leaders who aren’t genuinely for the individuals in their team. In front of an audience, they say and do the right things, but behind the scenes when the individual isn’t there, their actions reflect different intentions.

Being a leader is not about prestige, nor should it be a status symbol – simply put, leadership is a choice, and that choice comes with a weight of responsibility. Individuals that follow you believe you will create a safe environment for them, and have a desire to add value to add to them. When leaders see their job at hand as a weighted burden, their perspective changes from “How can I get Bob to do what I want him to do”, to “How do I help Mary be the best she can be”.

When leaders adopt that kind of mindset, their actions naturally reflect that positive intent regardless whether they are in front of a stage, or whether they are working behind the scenes.

Genuine Leaders understand that people learn at their individual pace

Giving feedback is an important part of leadership. People should never be uncertain of how they are performing, good or bad. At General Electric a culture of candor was an important part of who they were, so much so that if you saw your manager in the bathroom, it would be normal to have a quick chat around performance and progress. It was not seen as a formal thing that happened once a year, rather something natural that represented who they are.

That said – giving effective feedback is a skill, and sometimes giving direct feedback too early can rob individuals from getting true value out it. In my time leading, I’ve found that the timing of giving feedback is just as important as giving the feedback itself. Sometimes the time-pressures of a day leads leaders into feeling that giving feedback is a task to tick off. Genuine leaders take time to understand the growth journey of an individual, and understand that individuals might not change immediately not because they don’t respect or want to listen to your feedback, but simply because change is hard!

This is where understanding the individual as a whole is so important – sometimes coaching over a longer period of time is much more effective, and you’ll find that when the individual realizes their blind spot, they end up “getting it”, being a bit embarrassed, and become exponentially more committed to real change.

Genuine Leaders give context, understanding that why is more important than what

I’ve seen leaders fixated on the “what” – a decision or outcome that they want their teams to buy into, and forgetting to communicate the “why”. When we are focused on the outcome, we tend to focus on the “what”, but when we focus on leading the individual, we take a more holistic view and focus on “why”.

This is why conversations are often more important than the actual outcome. Two leaders deliver the same message, with totally different responses – one with high-performers in their team feeling demotivated, and the other who created buy-in and support from employees. Whether it be policies, constraints to work within, or simply a difficult task at hand, genuine leaders who focus on leading the individual naturally focus on the “why” and not the “what”.

If you are leading from a place of authority of position, it’s likely you’re communicating “what” you want employees to do. The next time you are struggling to get buy-in, take a step back and reflect on the conversation. Try leading with “why” before giving direction and keep your focus on genuinely leading the individual.

In a time where more and more buzz words are being created to tackle the fast changing nature of adapting to a rise in being digital, it’s important for us to understand that leading in a digital culture isn’t all that digital.

Whilst new digital tools may aid us, nothing beats genuine, authentic and real leadership.