Agile Companies

Hello, and welcome to Leading Digital Transformation with Rob Llewellyn and the Digital Transformation people. In this podcast series, Rob interviews experienced practitioners, authors and thought leaders whose stories and experiences provide valuable insights for digital transformation success.

Hi, and welcome back. I'm joined today by Peter Abraham and Neil Perkin. They're the authors of the book Building the Agile Business through Digital Transformation. They wrote the book to capture and share their own experiences of digital Transformation. Project since 2009 and share it with others who might also be approaching digital transformation. And they believe digital transformation is fundamentally about agility. Let's jump into the interview with Peter and Neil to hear why. Ultimately, what you need as a business is agility to move quickly and easily to a position of advantage. So, Peter, Neil, welcome.

Rob, thank you.

Hi, guys. Before we get into the depths of what I know you're anxious to talk about with me today, you published a book. And I know we're going to cover some of the content in the book as we go through this talk, but the book's called Building the Agile Business through Digital Transformation. Tell us what inspired you to write the book.

Well, I guess if I can just kick off. Actually, I think one of the observations that had when we wrote the book was that there was lots of material out there, I think, that was focused on the why of digital transformation. So why companies need to change the kind of impact of technology, the need to become a different type of organization, but there was very little around how. Very little. So we set out really to write a book that focused on the how so, to give leaders the kind of tools and the thinking and the models and the frameworks that they needed to help them understand a way through the kind of complexity which sits around digital transformation. So much more about the how rather than the why, I think.

Yeah. And I think Neil and I had worked together quite a lot probably since about 2009 on what were kind of transformation projects. Nobody really termed it digital transformation, but it was transformation through digital. And we'd amassed quite a lot of insight. And we thought, wouldn't it be good if we could share this? Not so much as a kind of bible, but almost as a stick in the sand. Say, this is what we've seen. What are you guys seeing? Because a lot of people were still talking about technology and we thought it was definitely more about people.

I guess the other thing as well is that agile has become such a thing within companies, and clearly there was an opportunity to take the principles and apply the principles outside of just technology teams, outside of software development. And so what we were seeing in companies was very much a desire to become much more agile as a kind of way of operating. And so the opportunity to kind of scale that much more broadly across the business and drive transformation through the application of those kinds of principles, I guess is the kind of third element of that.

Yeah, as we were kind of writing it, this was another thing, was the topic of digital transformation and we, we thought actually it was more about the building an agile business, which we'll get into more so than it was about kind of digital transformation.

Neil, you mentioned that agile has become quite a thing now, which of course most people listening will agree with. What kind of response have you had since writing the book and since agile has become that thing out there, what kind of response have you had to the book?

I mean, it's been an amazing response actually. So the publishers, Coke and Page have said that it's one of their best selling books and so it's been really successful in terms of the demand for it. But I think beyond that, I think really the thing which companies are really after, I think what they want to understand, I think is the challenges, how they can navigate the challenges around a transition from more traditional ways of thinking and working and operating. So more linear, waterfall based ways of thinking which are, are so entrenched within organizations with the way in which not just you build software, but also the processes of an organization, the way in which you make business cases, the way you assess value, the way you fund projects, the way you run HR processes, It's all very linear. And of course the problem with that is that the context surrounding the organization is changing far more rapidly. So the need to become more responsive, adaptive and more agile. Companies recognize that that's where they need to be. But the challenge of making that happen is very real. You've not only got process challenges, knowledge challenges, skills challenges, but you've also got mindset challenges, cultural challenges, behavioral challenges. I think the response that we've seen is very much a desire, which is no signs of going away, I think for companies to really understand again how they can make that transition and how they can scale agile working and thinking much more broadly across their business.

Let's open the cupboard to the book a little. In the book you talk about agility equaling velocity, times focus, times flexibility. Let's start with building velocity. Talk to us about that.

So I guess here in the velocity section we're really talking really about the whole application, scaled application of agile principles and the need to shift to a far more kind of Learning iterative approach. So the ability to moving from the idea of scale, and you're leveraging scale and everything that comes from that to one where you're actually learning fast at scale. So the kind of leverage that you have is not only a factor of how long you've been in a market, the number of people that you have, the amount of budget you've got, but it's also about how you can learn and learn quickly and then apply those learnings and actually grow and change and adapt. So it's very much about taking that kind of principle of how agile works and then applying it at scale to how you need to operate differently as an organization to empower continuous experimentation, continuous innovation, not episodic innovation or experimentation, but to scale it much more broadly across the organization.

Yeah, I'd agree with that. That kind of focus on learning, the ability for organizations to become more transparent, I think that's probably one of the biggest things in terms of kind of blockers that they come up against is the ability to be more transparent, share results, particularly across global organizations. Because that's quite a hard thing.

I mean, I think it's important to say, you know, in the book, what we don't say is that Agile is suddenly the default process across the entire organization, but in general it's much more about making smart choices and decisions about where you apply more linear, focused approaches, you know, safe to fail. So where can you not fail? You need to be that's more checklist driven, that's more kind of linear, focused on, you've got to do things right in those areas. But then there's plenty of other areas of the business where you can be far more iterative, adapt, learn fast and emergent in your strategy. And so it's about understanding across a business what that looks like for you. Where you can apply more agile principles, where you can scale them, how you can scale them, but also then where you need to be more linear, where you need more efficiency based, for example. So about making smart choices. Really?

Yeah, you see people talk a lot about speed as well, and speed is probably the wrong word. You know, there's that old phrase, more haste, less speed. But yeah, I don't think that's necessarily true. It's not really about speed, it's about focus and how you maintain pace.

That's a good point about speed actually, isn't it Peter? Because I mean, I think you hear a lot of leadership teams grasp hold of Agile as a way of delivering more stuff, quicker speed to market, doing the same amount that you're doing before, but with less people. And often an output of applying agile at scale is that you do do things quicker and that you are more productive and that you are actually increasing your speed to market. But it's not the only thing. And I think the danger is that companies miss that opportunity. They have to be truly maneuverable at scale to be responsive and actually far more adaptive and fluid and flexible, so they're able to adapt to rapidly changing content very quickly.

There's been a rapid uptake of the concept of agile in the technology space. But in your observations, when you go into organizations, what's been your experience of the organization, the business side of the organization, technology aligning on their approach to agile? Particularly as I said, because the agile approach is being adopted by a lot of technology folk now. What about the business side of things? How are they aligning?

Well, it's an interesting question because I think probably there are so many different versions of agile with XP and Kanban and Scrum and different methodologies. I encourage leaders really not to get lost in the methodology because I don't think it's that helpful. And actually every company context is different and every situation is different. So it's actually more helpful, I think, to for companies to find their own version of what that looks like and then to do what works for them. And often the way that they can do that is to actually be agile about how you do agile. So you actually learn fast about the best way of doing things for you and you create processes and structures and things that actually work to apply these kind of principles at scale.

Yeah, and agile and Lean from a technology perspective is really well defined. It's been around a long time, but from a business perspective it isn't. That's why one of the first things we did, which is also in the book, is kind of outline what that Agile business manifesto is, what it actually means. So, you know, using customer experience and.

Yeah, it's easy to get lost in the methodologies, isn't it? But I mean for us, I think most of it is about just understanding the application of the basic principles of what's happening here. A lot of that is about culture, mindset, but a lot of it also is about the practice of retrospective and reflection, for example, taking your learnings as you go, the practice of reprioritization and breaking down a big thing into small things, iterating around customer and business value and regular reprioritisation of that. And all the working practices that sit around agile are just really useful ways of Driving transformation across an organization of supporting better change, doing things quicker, all the things that companies are wanting to do right now, this, I think, is a really good way of them actually scaling that more broadly across the organization.

I'd like to go back to the components that you use in your formula for building an agile business. One of those is focus. And you talk about driving focus in the book. Can you elaborate on that?

Yeah, I think one of the dangers, of course, is that when you're introducing agile at scale, you potentially have lots of small multidisciplinary teams working on different things. So you have the danger of running off in lots of different directions. And so it's quite often actually sometimes when we've done agile implementations or transformation programs in companies, you hear teams sort of saying, well, we don't need a plan because we can just be agile, we can adapt, we can just flex. And that's quite dangerous because of course, you need that sense of direction. So one of my favorite quotes about that is Jeff Bezos, who talks about stubborn on vision, flexible on details. And it's about having the balance between vision and iteration. You need that good sense of direction for where you're going. That vision has got to be compelling, it's got to be communicated well. Everybody in the business got to understand, understand what that vision is, what it means. It's got to be emotional, emotional motive, connection, to ensure people are actually really infused by the vision. But also then what you've got to do is to adapt and flex in your delivery of that vision. So you're not rigid, you're not linear, you're not taking a waterfall roadmap approach to the delivery of what you're doing.

Yeah, focus is actually is really hard because when you're, you know, quite typically, you're going to be in a smaller team, you're going to be asked to be more innovative. So you're pushing those kind of creative buttons inside your head. So to then move from that to real focus, which is the thing that kind of drives growth, is hard for most people.

We've spoken about two of the components, velocity and focus. And the third component is flexibility. And by the way, I really like the simplicity of this approach. Talk us through the third component, flexibility.

I mean, the way we position flexibility is very much about fast. And focus is really focusing on how you scale these kinds of principles wide across an organization and do it well and make smart choices about where to do it and where not to do it. But flexibility is really about creating the culture, the leadership, the resourcing that you need in order to do it at scale. So I guess you could say this is about being agile, not just doing agile. And so culture is one of the key barriers, I think, potential barriers that quite a lot of organizations bump up against when they're trying to do this sort of stuff at scale. And so, you know, there are definite ways in which you can think about promoting behaviors that really work. Leadership kind of approaches and behaviors, again, that can kind of model the right behavior, but also flexibility and fluidity of resourcing. The idea of sort of small teams driving big change in the organization and how you can flex up and down and you have that adaptability around your own resourcing as well.

Yeah, there's also the. Because that plays into the autonomy piece, giving teams and people the autonomy, which kind of translates into transparency. That's what I was saying earlier about the transparency piece. There was a piece of research came out of the U.S. i think it was about two years ago that said by 2021, 50% of the work, kind of big organization workforce would be contracted. You think of the impact of that to even HR departments, how you deal contractually with people that are coming in and out, trying to align those people with kind of vision and strategy for what you're trying to do whilst you're building these other kind of smaller components to combat disruption.

Yeah. I guess what we're saying here really, with this bit is that unless you have the kind of cultural enablers, then it's very difficult to really scale this effectively across the organization and for it to drive transformation in the way that it needs to. So you've got to have the right kind of behaviors and culture to support the working environment in which people can really do their best work, in which they can collaborate horizontally really well, in which they can actually flex. And that balance that Peter's talking about between alignment and autonomy, which is this kind of Spotify thing, is really critical. So you've got to go in the right direction. But also you need to empower enough autonomy for the teams that they can make fast decisions, that they can move quickly. And so all the things that you can do as a leader to set your teams up for success. That's what we're really talking about in that bit.

And how have you found organizations adapting to this in order to encourage that new culture? Obviously, you go into organizations with recommendations of how they can do this, but we're talking about people, human beings and behaviors, which is really difficult. How do you get these organizations to evolve their cultures and in the way which is required for Agile to work for them.

Yes.

I mean, a lot of it for me starts with the senior leadership team and the kind of behaviors and approaches that they model and the understanding that they have. A lot of people use the words that sit around Agile and it's almost to the point of being unhelpful. It's just become a thing in companies. And so we spend time making sure that leadership teams really understand what those principles mean and then how you can apply them at scale. And then actually the kind of behaviors that need to happen not just across the organization and the kind of environment you're creating, but also what are the kind of behaviors that you should be showing as a leadership team, as a senior leadership team, and then what should you be expecting? What are the kind of questions that you need to be asking? And how should you be responding to certain situations and enabling your teams to use the space that they need whilst also making sure they're going the right direction? So it's about the role of leadership and actually how the role of being a leader is in a digital native business, what that looks like, you know, it's a definite kind of behavioral, cultural thing, I think.

Well, yeah, one other way you can do it is, you know, you can actually do an assessment and show them what their kind of current culture is and then ask them what they think their culture should be. And then if you're, you know, with an organization because of that whole kind of innovation transformation thing where you've got smaller agile teams, potentially you end up with this kind of dual operating system. So you've got business as usual and then you've got these other teams kind of building the new, if you like. So being able to show them where they need to change because changing culture is a big thing. It's massive. It's a big thing. It's going to take a long time, you can't do it overnight, it takes years. But it's easier to do it in a smaller team. If your teams are smaller, the communication's faster. So what you're trying to do is to show them where they need to change. So at the moment we have this kind of framework for eight types of different behaviors that you can hone in on. A typical one is kind of lack of communication. So yeah, so that's one way.

I mean, it comes into everything really, doesn't it? It's like how you hire people, the kind of growth mindset. I'm a big fan of the kind of whole fixed and growth Mindsets from Carol Dweck. And there's this whole idea about having a growth mindset as a leader so you can work effectively horizontally and that you really have sufficient empathy to really understand the broader context of what you'. Doing. But also the whole Daniel Pink autonomy, mastery, purpose thing, I think is really key in organizations because that's really what motivates us. He's successfully shown in his book Drive. That's really what motivates people in the work environment. And so how can you empower autonomy, mastery and purpose at scale through the organization, through the culture that you have? So the empowerment of your people, the ability to take ownership for things, but also to get motivated by the autonomy that they have taken responsibility for the things that fall into their area, but also mastery, the ability to learn fast and progress and see the kind of tangible benefit of what they're doing, the impact on customers and purpose, having meaningful work that people enjoy doing, and having a good sense of direction about where you're going. There's a big role that leaders can play in actually bringing those three things to life.

So coming back to your formula for building an agile business, you've spoken about velocity, focus and flexibility, those three components. And it's great that organizations become aware of an approach that they can take to become a more agile organization. But of course, as we know, and you've addressed it really well in the book, the big challenge is moving on from being aware of that approach and making the journey. Now, as I said, you've mentioned that in the book. Can you summarize what making the journey should look like for an organization that is embarking on this journey to become more agile?

Yeah, we originally looked at the kind of framework which is in the book in chapter five. You can kind of skip and go straight to chapter five if you want to kick the journey off without kind of reading some of the. You can go back and read kind of flexity, velocity and focus later. But from an author's perspective or a screenwriter's perspective, the hero journey is quite well known. So we thought that's a really good place to start. So we looked at that and then broke it into the three components of focus, velocity, of flexibility. So you've basically got kind of three stages. You know, you're kind of, what's the situation and story? Then how do you energize and enable that? And then how do you build in flexibility and flow into that?

Yeah, I mean, essentially what you're doing is really you're taking a kind of an approach to Change management and transformation, which is in itself enables you to learn fast. So there's certain things of course, at the beginning that you need to do to establish a sense of urgency and the reason for change change, to create that kind of vision for change and what that looks like. So you're creating that kind of sense of direction about where the company's going and the need to change. But then clearly what you've got to do is to empower and enable. So you've got to remove barriers, change system structures, set up resourcing small multi disciplinary teams to start creating the new and then plan for those kind of short term wins, to start creating the successes which can create the stories to really start changing the culture of the organization. And, and then it's about scaling, but also clearly about consolidation as well.

Every organization out there is in a different position in terms of their maturity, in terms of transforming their business, adopting digital technologies and becoming more agile. Why is it important for an organization to understand maturity stages where they're actually at and where they should be aiming towards?

If you think about digital transformation itself, you think about most companies at the moment, I think a lot of them, what they have been doing is digitalization. It's not really digital transformation. The first component is that digitalization bit, then you've got a transition and then true digital transformation, which is where you basically upend the business potentially into new business models. Not a new business model, but different business models because of the change that technology brings. And I think it's good for organizations to understand the difference between where they are right now from a digital perspective and where they need to get to. And then there's a balance of kind of quick wins. So because obviously if you're driving a transformation program, you need to be able to show that you are making change through to a differentiation, which is actually about how you differentiate yourself in the market through technology. Yeah.

And I think, you know, context is important, isn't it? Right. Because it's a journey. And so, you know, any strategy needs context at the beginning to understand where you're at. Before you even start to think about where you want to get to, you need to understand your starting point, what the territory looks like. And so acknowledging the kind of level of maturity you have as a business and what you can do well, what you can't do well, what you need to stop doing, start doing all of those things, you know, are critical in order to enable you to actually then implement a strategy which is going to.

Work and you can't do it. Without looking at culture, when I say culture, what I really mean is behavior. If you try and do it from a technology perspective and you ignore what's actually happening within teams from a behavioral perspective, that's usually when things start to go off track.

And coming back to that big cultural challenge, as you've already mentioned earlier on, this takes time. This doesn't happen overnight to bring about these kind of changes when we're talking about human behaviors. So, you know, this is a journey which you've just been describing. But what can organizations do to get some quick wins that they can celebrate on this long journey that they embark upon? How can they facilitate these quick wins and what could they look like?

So I think, you know, a lot of this is about the stories you tell. You have within the business culture often grows up around the stories that business tells that exist in the company and around the behaviors that you have of leaders. I think if you can start to create the opportunity to make those quick wins and do things that actually give examples of the kind of way in which you want the organization of the future to work and operate. Simple things like, you know, doing some initiatives that have some quick wins and early results that you can point at and actually say, this is great. This is where we want to be going. Here's an example of what good looks like. And, you know, I think that's quite powerful. And actually if you're a leader in that organization and actually saying, well, I want a piece of that, and, you know, it gives you clarity, it gives you stories, just helps you understand really what good looks like.

Yeah, I mean, I'd also, the stories thing I think is fascinating because that's the communication medium. So not just kind of your internal case studies of where things are going. Right. But also, you know, what's happening in the market and kind of say that it's. It's actually okay not to succeed. I hate the word failure, but. Because what you're trying to do is minimize risk, but let people know that, you know, even if you don't succeed, you've probably learned something. So share that learning.

Peter. Neil, we're going to have to wrap it up shortly, but before we go, obviously your book is there, but tell us where people can go to learn more about this agile journey that organizations need to be on now.

Yep. So there's a site that supports the book. It's called agilebusinessmanifesto.com so on there, we irregularly blog. Neil. Probably a bit more than I do about that subject and topic. Then obviously there's our personal blogs you can look up Neil at Only Dead Fish and myself at We Are Cranks.

And of course, the book Building the Agile Business Through Digital Transformation. We'll include a link to that in the show Notes. Peter Neil, thank you so much for your time today.

Thanks very much.

Great. Thank you.

We hope you enjoyed this episode of Leading Digital Transformation with Rob Llewellyn and the Digital transformation people. Visit thedigitaltransformationpeople.com to secure the knowledge, talent and services you need for digital transformation success. To continue your journey as a Certified Transformation professional, visit rob llewellyn.com be sure to subscribe to the podcast and follow us on Twitter hedigitaltp and obertlewellyn.