Building The Agile Business Through Digital Transformation - How To Lead Digital Transformation in Your Workplace (PDFDrive)
Building The Agile Business Through Digital Transformation - How To Lead Digital Transformation in Your Workplace (PDFDrive)
‘In times of rapid change, evolving with the new rules of consumer
engagement and leveraging digital channels is now a must for every
business in every sector. This book clearly distils key insights,
strategies, examples and advice – providing the tools for anyone
wanting to grow, advance and transform their business.’ Jeremy
Willmott, Director, Group Consumer Engagement
‘Pragmatic, yet ruthlessly visionary, this fast-paced book is a wide-
ranging and generously referenced handbook. Ideal both as a c-
suite primer and as a ready-reference for practitioners, this is a
triumph of distillation by two of our sector’s pioneers.’ Ian Jindal,
Leadership and Transformation in Multichannel Retail and
Ecommerce
Neil Perkin
Peter Abraham
Contents
Cover
Title Page
Copyright
Contents
List of figures
List of tables
Acknowledgements
Introduction
Notes
Slow by design
Why organizations become ‘sticky’
Why good ideas become battles
The arrogance of scale
Protecting against obsolete beliefs and ‘toxic assumptions’
The tyranny of rigid planning
The legacy technology problem
Marginal thinking
Culture and behaviour
Notes
Defining velocity
Notes
06 Digital-native processes
Design thinking
Agile
Lean
The principles of agile business
Developing a learning culture
The dangers of systematic survival bias
Learning to unlearn
Fixed and growth mindsets
Embedding reflection time
Notes
Empowering invention
Ingrained commercialization
Scaling, the digital-native way
Key takeouts
Notes
Defining focus
The wrong side of urgency – Nokia’s story
Notes
12 Scaling agility
15 Digital-native talent
Hiring smart
Peacocks, penguins, and pie bakers
Redefining effective leadership for the digital age
Key takeouts
Notes
Index
Backcover
List of Figures
This book would not have been possible without the support,
understanding and patience of our contributors, interviewees, co-
conspirators, and publishers. We are particularly grateful to Russell
Davies, Faris Yakob, Gareth Kay, Marco Ryan, Duncan Hammond,
Eva Appelbaum, Gerd Leonhard, John Coleman for contributing
insight from their personal experience directly to the book. We owe
a big thanks to all those who provided inspiration and insight
through sharing their thinking in interviews or via their writing,
blogs and social media, most notably: John Willshire, Tim Kastelle,
Kevin Kelly, Mark Raheja, Tracey Follows, Bud Caddell, Mel Exon,
Ben Malbon, Tim Malbon, Simon Wardley, Aaron Dignan, David
Carr, Adam Morgan, Tom Goodwin, Antony Mayfield, Toby Barnes,
Scott Brinker, Anjali Ramachandran, Mike Bracken, Dave Snowden,
Victor Newman, Matt Edgar, Paul Graham, Brian Solis, Martin
Bailie, John Battelle, Emily Webber, Tom Loosemore, Noah Brier,
Scott Gallacher, Gemma Greaves, Charles Leadbetter, Michael
Sahota, Jason Fried, Ben Thompson, Steven Anderson, Jonathan
Lovatt-Young, James Haycock, John Kotter, Stewart Brand, Charles
Duhigg, Rita Gunther MacGrath, Marc Andreesen, Clay Christensen,
Ray Kurzweil, Charles Handy, Robert Coram, Steven Johnson, Atul
Gawande, Eric Ries, Jim Collins, Carol Dweck, Steve Blank, Dave
McClure, Roger Martin, Richard Rumelt, Sir Laurence Freedman,
Amy Edmonson, Dan Pink, Ben Horowitz, Simon Sinek, Laszlo Bock,
Caroline Webb, Ashley Friedlein, Tim Harford, Ben Salmon, Seth
Godin, BJ Gallagher Hateley, Warren H Schmidt, Michael Crowe,
David Armano, Mirage Islam, Chip Heath, Dan Heath, Ben Pask, Nir
Eyal, Frederic Lloux. We thank Kogan Page for providing the
opportunity to publish what we’ve learnt in the hope others will
gain some additional insight. We thank our families for allowing us
the time and providing their patience. We know we have missed a
few people out along the way and we hope they accept our apology
for that here.
PART ONE
The digital-native organization
INTRODUCTION
Change is the process by which the future invades our lives.
Alvin Toffler1
Notes
1 Alvin Toffler, Future Shock, Introduction, Bantam Books (1990), ISBN-10: 0553277375,
ISBN-13: 978–0553277371
2 Prensky, M (2001) Digital Natives, Digital Immigrants, [Online]
http://www.marcprensky.com/writing/Prensky%20-
%20Digital%20Natives,%20Digital%20Immigrants%20-%20Part1.pdf [last accessed 16
October 2016]
01
The key forces for change
There can surely be very few businesses that do not feel the vivid
and urgent need to acquire a heightened level of agility in order to
deliver against evolving customer expectation and in response to
the challenges and opportunities brought by digital technologies.
Technologies that are impacting right across the business from
marketing and sales, to HR, finance and operations. Technologies
that show little respect for existing business models, competitive
advantage or established best practice. Technologies that are
actively rewiring the way in which entire markets operate with
unprecedented speed and comprehensiveness.
Processing capability has increased exponentially (an Apple
iPhone 5 has almost three times the processing power of the 1985
Cray-2 supercomputer)1 meaning that everyone has a
supercomputer in their pocket with access to virtually universal
information. And yet, while these changes may be driven by
technology, they are very far from just being about technology. If
we want to understand the real impact we need to consider the
behaviours that surround the technology. Similarly, if we want to
understand how best to respond to these challenges, we need to
consider not only strategies but our approaches, thinking, mindset
and behaviours.
In fact, in this book we are deliberately not focusing on
technology. Our observation before writing it was that there were
many discourses on the need for organizations to change in
response the impact of digital, but very few that gave practical
advice, models or methodologies for understanding what we need
to actually do in response to this rapidly shifting environment.
Consequently, we will focus on the ‘how’ of digital transformation
rather than the ‘why’. On the far reaching and comprehensive
change that is needed in the very fabric of how we run our
organizations. But it is also focused on the practical steps that
organizations can take to embark on their own journey towards
digital maturity.
But let us begin by summarizing some early context around the
key driving forces that are shaping this urgent requirement.
Organizations are currently sat at the centre of a perfect storm
characterized by accelerating change, and rapidly shifting
competitive, consumer and company contexts (Figure 1.1).
Figure 1.1 Characteristics of change
Varian believes that just as in the 19th century (where the elements
were standardized mechanical parts like wheels and gears) and the
20th century (internal combustion engines, electronics and,
eventually, microchips) we live now in another era of combinatorial
innovation.
Today, a large proportion of software development and
innovation on the web involves connecting standardized
components (including open source operating systems, servers,
database management systems and languages such as Linux,
Apache, MySQL, Python) in new ways. Not only are the building
blocks of innovation readily accessible, but the barriers to entry
have reduced dramatically through improved accessibility to
support infrastructure and systems such as cloud computing, data,
business, communication and content services.
As a consequence the pace of innovation has increased. The
smallest company can access the kind of infrastructure, much of it
accessible from a device in your hand, that was barely available to
even the largest companies 15 years ago, compete for best people,
work with global talent around the clock, capitalize on global
variation in knowledge, skills and wages:
Innovation has always been stimulated by international trade, and now trade in
knowledge and skills can take place far more easily than ever before.
(Varian, 2011)9
The widening gap between these two curves is perhaps the key
leadership, management and organizational challenge of our times.
A company’s ability to absorb, respond and adapt to and master
accelerating technological change is critical to its success in the
modern world yet most companies are simply too slow. Too slow in
adapting processes. Too slow in making decisions. Too slow in
reorganizing around opportunity. Too slow in identifying where
value lies and innovating to capture that value. There is a paradigm
shift required in the level of organizational agility that most
companies are currently capable of and in the very fabric of how
they work. If strategy is about linking execution and action with
purposeful choices and direction, we need a new kind of corporate
strategy. One that is altogether more suited to a digitally
empowered world.
Yet before we even begin on our journey towards becoming a
more agile business, we need to recognize some fundamental
truths: to appreciate the way in which digital disrupts so that we
might identify potential dangers and opportunity and respond
before it is too late; to develop a common way of understanding
what digital really means within the business so that we can
execute against a clear vision and provide direction; and to be
prepared to deal with the barriers and blockers that are
contributing towards inertia and preventing change from
happening.
Stories from the frontline
Gerd Leonhard, Futurist and Author: The Future of Digital Transformation
The term ‘Digital Transformation’ is well on its way to becoming overused, long before it
even has a chance of becoming a reality. It has become an expression that implies a
readiness for the future but which rarely indicates any profound change in thinking. The
kind of changed thinking necessary to equip today’s corporations for surviving the imminent
transition awaiting humanity as technology becomes truly embodied. The shifts that this will
bring, not only to the world of work but to education, retirement, our concepts of birth, life
and death mean that we must not only digitally transform, we must transform digitization.
Transforming digitization means that we must reassume the lead narrative and change
technology before it changes us utterly. Digitization must not become the vehicle to mass
layoffs and unemployment, social contract erosion or cultural collapse and resource wars.
Today, we already exist in a world where a shared economic narrative has almost
disappeared and as humans on a planet with finite resources we must master technology in
ways that we have not yet demonstrated, including socially, culturally, ethically and
environmentally.
The time for treating ethics as a public relations exercise, a nice-to-have after the
economic model has extracted maximum profit, is long gone. We are entering the age of
digital ethics. Technology now enables economic sanctioning of any brand that oversteps
the moral mark and as the world becomes ever-more networked, economic demonstrations
of discontent will become increasingly common.
The talk about digital transformation needs to move beyond the focus on efficiency and
towards wider human progress. We love to talk of exponential technologies rather than of
exponential humanism. Technology is not just removing the intermediaries in every market,
it’s tearing down the walls between public and private life, between economic survival and
moral thriving. The future is not nirvana, neither is it some kind of Hollywood dystopia. The
future, I’m afraid, is all too human. It will look and feel like today, only much faster and
hyper-connected. It will relentlessly punish any kind of outdated thinking.
Transformation means difference, not merely improvement. We need androrithms as
much as algorithms – human values of creativity and empathy that transcend the merely
mechanistic. We may be the last generation in history to live biologically organic lives.
Before this bodily marriage with technology, we should use every remaining minute to
evolve morally as much as we do economically. The next 20 years will change humanity
more than the previous 300 years.
Notes
1 Processing Power Compared, [Online] http://pages.experts-exchange.com/processing-
power-compared/ [last accessed 16 October 2016]
2 Buckminster Fuller, R (1938, 1973) Nine Chains to the Moon, Anchor Books, pp 252–59
3 Kurweil, R (2001) The Law of Accelerating Returns, [Online]
http://www.kurzweilai.net/the-law-of-accelerating-returns [last accessed 16 October
2016]
4 Innosight (2012) Creative Destruction Whips Through Corporate America, [Online]
http://www.innosight.com/innovation-resources/strategy-innovation/creative-
destruction-whips-through-corporate-america.cfm [last accessed 16 October 2016]
5 Reeves and Pueschel (2015) BCG: Die Another Day: What Leaders Can Do About the
Shrinking Life Expectancy of Corporations, [Online]
https://www.bcgperspectives.com/content/articles/strategic-planning-growth-die-
another-day/ [last accessed 16 October 2016]
6 Madeleine I G Daepp, Marcus J Hamilton, Geoffrey B West, Luís M A Bettencourt
(2015), The mortality of companies, [Online]
http://rsif.royalsocietypublishing.org/content/12/106/20150120 [last accessed 16
October 2016]
7 IBM Global C-Suite Study 2015, [Online] http://www-935.ibm.com/services/c-
suite/study/study/ [last accessed 16 October 2016]
8 Hal Varian (2011), Micromultinationals Will Run The World, [Online]
http://foreignpolicy.com/2011/08/15/micromultinationals-will-run-the-world/ [last
accessed 16 October 2016]
9 Hal Varian (2011), Micromultinationals Will Run The World, [Online]
http://foreignpolicy.com/2011/08/15/micromultinationals-will-run-the-world/ [last
accessed 16 October 2016]
10 Kevin Kelly (2014), You Are Not Late, [Online] https://medium.com/message/you-are-
not-late-b3d76f963142 [last accessed 16 October 2016]
11 Chris Dixon (2015), Full Stack Startups, [Online] http://cdixon.org/2014/03/15/full-
stack-startups/ [last accessed 16 October 2016]
12 CB Insights: The Unicorn List, [Online] https://www.cbinsights.com/research-unicorn-
companies [last accessed 16 October 2016]
13 CB Insights: Unbundling, [Online]
https://www.cbinsights.com/blog/category/disrupting-unbundling/ [last accessed 16
October 2016]
14 Rita Gunther McGrath (2013), The End of Competitive Advantage: How to keep your
strategy moving as fast as your business, Harvard Business Review Press
15 Adam Morgan, Mark Barden, (2015) A Beautiful Constraint: How to transform your
limitations into advantages, and why it’s everyone’s business, Wiley
16 Adam Morgan (2015), The Rise of Unreasonableness, Marketing Society, [Online]
https://www.marketingsociety.com/the-gym/rise-unreasonableness [last accessed 16
October 2016]
17 Jenkins, H (2006), Eight Traits of the New Media Landscape, [Online]
http://henryjenkins.org/2006/11/eight_traits_of_the_new_media.html [last accessed 16
October 2016]
18 Tom Goodwin (November 2014), 6 Trends for 2017 and Beyond, LinkedIn, [Online]
https://www.linkedin.com/pulse/20141119102703–6433797-6-trends-for-2017-and-
beyond [last accessed 16 October 2016]
19 Tom Goodwin (March 2015), The Battle Is for the Customer Interface, Techcrunch,
[Online] https://techcrunch.com/2015/03/03/in-the-age-of-disintermediation-the-
battle-is-all-for-the-customer-interface/ [last accessed 16 October 2016]
20 Events@Google: Atmosphere, [Online]
http://www.youtube.com/eventsatgoogle#p/u/5/qBaVyCcw47M [last accessed 16
October 2016]
21 EMC/IDC Digital Universe Study (2014), [Online]
http://www.emc.com/leadership/digital-universe/2014iview/index.htm [last accessed
16 October 2016]
22 Global internet users, [Online] http://www.internetlivestats.com/internet-users/ [last
accessed 16 October 2016]
23 Study: Less than 1% of the world’s data is analysed, over 80% is unprotected, The
Guardian, December 2012, [Online]
https://www.theguardian.com/news/datablog/2012/dec/19/big-data-study-digital-
universe-global-volume [last accessed 16 October 2016]
24 Data is the new oil, ANA Marketing Maestros, [Online]
http://ana.blogs.com/maestros/2006/11/data_is_the_new.html [last accessed 16
October 2016]
25 Gartner, Predictive Analytics, [Online] http://www.gartner.com/it-glossary/predictive-
analytics/ [last accessed 16 October 2016]
26 Evan Minsker, Pitchfork (March 2016), Kanye West Updates the Life of Pablo Again,
[Online] http://pitchfork.com/news/64503-kanye-west-updates-the-life-of-pablo-again/
[last accessed 16 October 2016]
27 Toby Barnes (2016), On designing everything as a service, [Online]
https://blog.prototypr.io/on-designing-everything-as-a-service-
cbae99bd15a8#.ux5k3fth0 [last accessed 16 October 2016]
28 Marc Andreesen, (August 2011), Why Software Is Eating the World, Wall Street
Journal, [Online]
http://www.wsj.com/articles/SB10001424053111903480904576512250915629460 [last
accessed 16 October 2016]
29 Ronald Coase, (9 December 1991), Lecture to the memory of Alfred Nobel,
referencing The Nature of the Firm, (1937), [Online]
http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1991/coase-
lecture.html [last accessed 16 October 2016]
30 Scott Brinker (June 2013), Martec’s Law, [Online]
http://chiefmartec.com/2013/06/martecs-law-technology-changes-exponentially-
organizations-change-logarithmically/ [accessed 16 October 2016]
02
How digital disrupts
(Evans, 2013)2
This is comparable to the theory of disruption where Clayton
Christensen argues that an industry is ripe for disruption when its
core technology (or the component in the value chain that is
essential to the nature, protection or capitalization of the industry)
is ‘stretchable’.3
Christensen uses the example of education. A teacher is a
technology, and was not stretchable in 2000, and therefore not ripe
for disruption, but with MOOCs (Massive Online Open Courses), a
plethora of digital learning resources available and even Stanford
University making course material available for digital
consumption, the shape of education is morphing into a very
different future.
As a succession of markets succumb to digital disintermediation
where incumbent mediators in sectors (media or content
businesses, retailers, brokers to name a few) are challenged,
usurped and even replaced or removed altogether, the scope of
digital disruption simply gets wider.
There are two metaphors that are valuable in relation to this. The
first comes from Dave Snowden, who describes the delicate
balancing act of understanding when it is right to focus on the new
and stop clinging to the old as akin to knowing when the moment is
right to get in the water:
… it is easier to get in just as the tide turns, you don’t want to be stranded on the beach,
but you want to minimise the energy required to get into the blue ocean.
(Snowden, 2016)7
The second comes from Clay Christensen who frames the all-too-
frequent slow organizational response to the need for innovation in
this way:
If a company has ignored investing in new businesses until it needs those new sources of
revenue and profits, it’s already too late. It’s like planting saplings when you decide you
need more shade. It’s just not possible for those trees to grow large enough to create
shade overnight. It takes years of patient nurturing to have any chance of the trees
growing tall enough to provide it.
(Christensen, 2012)8
There are not only companies but possibly entire industries that
have been guilty of this. It is one of the key innovation challenges
for just about every business. But as they say in endurance sports,
we need to eat before we are hungry and drink before we are
thirsty.
Defining digital
In this context of rapid disruption empowered by digital
technologies, it has never been more important to develop a
common language within an organization for what digital really
means.
In fact, this is as good a starting point as any for digital
transformation. Ask a hundred people to define what digital is and
you will get a hundred different responses. Developing a commonly
understood definition enables the business to align around just that
– a common understanding. Yet so few businesses actually do this.
Since digital is so broad, touching so many areas of what we do, and
since it blurs traditional boundaries between roles, functions,
departments, categorizations, having a common understanding
forms the basis for not only a shared vision and an inherently more
aligned approach, but also the foundation from which to create
change.
Many definitions often focus on aspects such as content, video,
mobile, interaction, scale, ubiquity – in other words on what digital
does rather than what digital is. Yet the simplest possible definition
is to characterize digital in terms of binary code (ones and zeros). A
method of getting information from one place to another that is not
analog.
In one sense this is helps us to get past the idea that digital is a
mysterious, amorphous, ever-changing thing that is impossible to
grasp, and instead frames it in the context of taking common needs,
wants, actions and delivering to them or applying them in a new
way. Digital technologies are radically shifting behaviours and
reinventing entire markets, but that does not mean that we should
forget everything we know about great companies, great products
and great brands.
Yet if we are to form a useful, instructive definition we should
take account of more than the technical aspects of digital. It is often
the case that within organizations there is a disproportionate focus
on the technology itself (new technology for the sake of new
technology), over all the enablers that surround the technology,
really bring it to life, and fully realize its capability (people,
behaviours, processes, skills, culture).
When the team that drove the initial digital transformation of
service delivery for the UK Government moved to do the same thing
at the Co-Op, they originated a definition that recognized that when
done well, digital means more than fundamentally redesigning
services; it also means changing the way in which we work:
Applying the culture, practices, processes and technologies of the Internet era to respond
to people’s raised expectations.
(Bracken, 2016)9
Notes
1 Michael E Porter (2008) Competitive Advantage: Creating and Sustaining Superior
Performance, Free Press; new Ed edition, ASIN: B003YCQ2O4
2 Philip Evans (November 2013) How Data Will Transform Business, TED @ BCG San
Francisco, [Online]
http://www.ted.com/talks/philip_evans_how_data_will_transform_business?
language=en [accessed 16 October 2016]
3 Clay Christensen on Disruptive Innovation, Clarendon Lectures 10 June 2013,
[Online] https://www.youtube.com/watch?v=rpkoCZ4vBSI [accessed 3 November
2016]
4 Ray Kurzweil (2004) Kurzweil’s Rules of Invention, MIT Technology Review, [Online]
https://www.technologyreview.com/s/402705/kurzweils-rules-of-invention/ [accessed
16 October 2016]
5 Proven Models, invention innovation diffusion trilogy, [Online]
http://www.provenmodels.com/14/invention-innovation-diffusion-trilogy/joseph-a.-
schumpeter [accessed 16 October 2016]
6 Charles Handy (August 1995) The Empty Raincoat, Making Sense of the Future,
Random House, ISBN-10: 0099301253
7 Dave Snowden (July 2016) Cognitive Edge, … taken at the flood, [Online]
https://cognitive-edge.com/blog/taken-at-the-flood/ [accessed 16 October 2016]
8 Clay Christensen (May 2012) How Will You Measure Your Life?, HarperCollins, ISBN-
10: 1633692566
9 Mike Bracken (June 2016) Co-op digital blog, What we mean when we say digital,
[Online] https://digital.blogs.coop/2016/06/14/what-we-mean-when-we-say-digital/
[accessed 16 October 2016]
03
What’s stopping you?
Slow by design
If we are to embark on the journey towards becoming a more agile
business, it is worth pausing to consider some of the key forces for
inertia within organizations and potential blockers to change.
The interviews conducted for this book surfaced a wide range of
barriers to progress, the most commonly cited reflecting
technology, strategy and people related reasons, including:
(Edgar, 2013)3
(Newman, 2013)4
There are some significant potential flaws that sit at its heart:
(Coppola, 2013)19
Marginal thinking
The safest road to Hell is the gradual one – the gentle slope, soft underfoot, without
sudden turnings, without milestones, without signposts.
C S Lewis
The world pulses to an exponential beat, daring companies to keep up, as Jack Welch so
famously feared. And rightly so, since most companies will fail to and will die.
That means more and more companies are failing to adapt to the exogenous changes that
either power or destroy businesses.
Why? Why is corporate change so hard?
Some answers are obvious, the well worn territory of The Innovator’s Dilemma, but
others are less well explored and just as important. In our consulting work, we have
uncovered the same barriers, again and again, at very different kinds of companies.
Formal
Legacy infrastructure, built in an industrial age, represents a massive cost base in labour,
equipment which is being amortized, software, systems and so on. Public companies cannot
abandon them and take the mark down, their Wall Street owners would never allow it. So
they must simply continue, cutting costs, to prop up share prices. Processes, once codified,
become orthodoxies instead of guidelines.
Worse, should the problem these companies solve melt away through new technologies,
they will be forced to attempt the even more difficult task of halting progress at a political
and cultural level.
The ‘Shirky Principle’: ‘Institutions will try to preserve the problem to which they are the
solution.’
Informal
Companies often hire ‘change agents’ to usher in new ideas, products and processes. This is
a death sentence, for it sets up said harbingers of the future in opposition to every other
employee. Implicit in naming change agents is the idea that change is needed and that no
current employee is bringing it. This oppositional stance makes collaboration nigh
impossible.
Perverse incentives are rife in corporations. At the board level there is a desperate
appetite for growth, which often means change, but the way it’s pushed through the system
creates inverted incentives. Ridiculous sales targets turned Wells Fargo employees into
criminals, destroying the bank’s reputation. Both the targets and the employees have been
removed.
I spent weeks working on a business and communication strategy for one of the world’s
largest telecoms companies. Our approach was to simplify the purchase process and
migrate it online. Within the recommendation was a call to close many of the call centres
taking sales calls (which the company had in every state in America) which would have saved
millions of dollars by itself. The clients loved the work in the meeting – and subsequently
killed it. Turned out one of the bosses’ bonuses was based on call volume, as a proxy for
leads.
Goodhart’s Law (named after economist Charles Goodhart): ‘When a measure becomes a
Goodhart’s Law (named after economist Charles Goodhart): ‘When a measure becomes a
target, it ceases to be a good measure.’
Conformal
Ideas can come from anywhere, says every CEO. At least in public. But there is a window of
acceptable ideas that conform to expectations, and ideas that fall outside them are ignored.
Overton Window (also known as the ‘Window of discourse’): the range of ideas the public
will accept also operates inside companies, as a barrier to innovation.
The key to addressing barriers is correctly identifying them, which is usually impossible
inside the system, since anyone working at the company is at the mercy of informal and
conformal ones. Companies that can’t work with partners are unlikely to see the end of the
broken bridge until it’s too late.
Notes
1 Eric Schmidt and Jonathan Rosenberg (September 2014) How Google Works, Grand
Central Publishing, ISBN-10: 1455582344
2 Victor Newman (2013) Power House: Strategic knowledge management, [Online]
http://www.blurb.co.uk/b/4278274-power-house
3 Matt Edgar (June 2013) Quora Answer, Why Don’t Big Companies Innovate More?
[Online] http://www.quora.com/Why-dont-big-companies-innovate-
more/answer/Matt-Edgar?srid=pJZn&share=1 [accessed 16 October 2016]
4 Victor Newman (2013) Power House: Strategic knowledge management, [Online]
http://www.blurb.co.uk/b/4278274-power-house [accessed 16 October 2016]
5 Hugh MacLeod (July 2004) Ignore Everybody, [Online]
http://gapingvoid.com/2004/07/31/ignore-everybody/ [accessed 16 October 2016]
6 John Dawes ‘Price changes and defection levels in a subscription-type market: can an
estimation model really predict defection levels?’, Journal of Services Marketing,
(18:1)
7 Adam Katz (2011) Behance, All of my good ideas are battles, [Online]
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16 October 2016]
8 About Dyson, [Online] http://www.dyson.co.uk/community/aboutdyson.aspx
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9 Arie de Geus (1999) The Living Company: Growth, learning and longevity in business,
Nicholas Brealey Publishing; New edition, ISBN-10: 1857881850
10 Nortel Study, University of Ottawa, Telfer School of Management (2014) Jonathan
Calof, Greg Richards, Laurent Mirabeau, [Online]
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[accessed 16 October 2016]
11 Nortel Study, University of Ottawa, Telfer School of Management (2014) Jonathan
Calof, Greg Richards, Laurent Mirabeau, [Online]
http://sites.telfer.uottawa.ca/nortelstudy/?_ga=1.151813053.549191806.1369078998
[accessed 16 October 2016]
12 Paul Graham (December 2014) How to Be an Expert in a Changing World, [Online]
http://paulgraham.com/ecw.html [accessed 16 October 2016]
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15 Tom Fishburne (October 2010) Waterfall Planning, [Online] https://marketoonist.
com/2010/10/waterfall-planning.html [accessed 16 October 2016]
16 Jason Fried and David Heinemeier Hansson (March 2010) Rework, Crown Business,
ISBN-10: 0307463745
17 Steve Slater and Aashika Jain (December 2013) Reuters, RBS Admits Decades of IT
Neglect, [Online] http://uk.reuters.com/article/2013/12/03/uk-rbs-technology-
idUKBRE9B10YB20131203
18 Frances Coppola (March 2013) The Legacy Systems Problem, [Online]
http://coppolacomment.blogspot.co.uk/2013/03/the-legacy-systems-problem.html
[accessed 16 October 2016]
19 Frances Coppola (March 2013) The Legacy Systems Problem, [Online]
http://coppolacomment.blogspot.co.uk/2013/03/the-legacy-systems-problem.html
[accessed 16 October 2016]
20 Clay Christensen (10 May 2012) How Will You Measure Your Life?, HarperCollins
ASIN: B006I1AE92
21 Faris Yakob (April 2015) Paid Attention: Innovative advertising for a digital world,
Kogan Page, ISBN-10: 0749473606, ISBN-13: 978–0749473600
04
Defining digital transformation
Customers
Resources
Strategy
Vision
Culture
Notes
1 Clay Christensen, Assessing Your Organization’s Capabilities, [Online]
http://cb.hbsp.harvard.edu/cbmp/product/607014-PDF-ENG
2 Altimeter, Brian Solis (2014) The State of Digital Transformation, 2014, [Online]
http://www.altimetergroup.com/2014/07/the-2014-state-of-digital-transformation/
[accessed 16 October 2016]
3 CAP Gemini/MIT Sloan (November 2012) The Digital Advantage, [Online]
http://www.capgemini.com/resources/the-digital-advantage-how-digital-leaders-
outperform-their-peers-in-every-industry [accessed 16.10.16]
PART TWO
Velocity
DEFINING VELOCITY
Velocity – Rapidity of motion or operation; swiftness; speed; tempo; the rate with
which something happens; action and reaction; heightened pace and progression
towards a specific direction of change.
(Coram, 2003)3
Thus, rather than being simply about speed, it is all about tempo
and manoeuvrability. As the tempo increases the officers on the
ground can bypass the explicit application of the ‘Orientation’ and
‘Decision’ parts of the loop to use more implicit and intuitive
understanding of a changing environment to ‘Observe’ and ‘Act’
almost simultaneously. This adaptability compresses time, enables
unexpected actions to be taken by the protagonist that in turn
confuse the enemy, which then leads to even slower decision-
making on their part, increasing the advantage even further.
One of the key notions that Boyd drew on to explain this came
from the German concept of Blitzkrieg (‘lightning war’) warfare that
involved the use of speed and surprise through concentrations of
highly mobile, motorized, armoured units that could break through
lines of defence and encircle potential larger enemy forces.
Blitzkrieg was all about a high operational tempo that was
enabled not only through mechanized units but a form of command
that empowered frontline commanders to respond faster, and was
characterized by the concepts of Schwerpunkt and
Fingerspitzengefuhl. Schwerpunkt (meaning the underlying goal,
intent or focus of effort) gave the officers on the frontline focus,
clarity of direction and objective. Fingerspitzengefuhl (meaning
fingertip feel) enabled a level of flexibility within that for officers to
make rapid, intuitive decisions on the ground in the face of fluid
situations. A frontline officer would know the intent of his superior
and understand the role of his unit in fulfilling that objective, but
the executional detail could be far more fluid and responsive.
The reduced time needed to make decisions, improved
communication and use of initiative by frontline officers, better
exploitation of emerging opportunities, and a dramatically
increased tempo through which tactics could be changed in
response to new conditions, all combined with technology (highly
mobile mechanized divisions and units) to powerful effect. Central
to this new way of thinking was the idea that whoever is able to
handle the quickest rate of change would win. Boyd stressed that
once the process begins it should only accelerate. As Coram
describes it:
Success is the greatest trap for the novice who properly implements the OODA Loop. He
is so amazed at what he has done that he pauses and looks around and waits for
reinforcements. But this is the time to exploit the confusion and to press on.
(Coram, 2003)4
Boyd’s OODA loops point the way towards a new way of working
for every business. Many of today’s large organizations still
subscribe to the ‘Bigger-Higher-Faster-Farther’ philosophy that was
so ingrained in the US Air Force. Responses to significant challenges
are often characterized by large, expensive, complex
implementations of new technology that ignore the need to be more
agile. All organizations want to move quicker but true agility is
about more than just speed.
As Boyd’s work shows us, in rapidly changing environments
advantage comes from speed of response and manoeuvrability. And
that’s about people, process and culture – enabling technology to
serve its wider purpose. As Boyd so succinctly expressed: ‘People,
ideas, hardware – in that order’. Instead of the context of
responding faster to enemy action in war, our context is the need
for every business to speed up response to changing customer
behaviour and need, and competitive and market context. Just like
Blitzkrieg, the key to this is how we balance a clear, overarching
vision, direction and objective with the autonomy to enable more
executionally oriented teams and managers to make and act on
rapidly taken, data-driven but also intuitively led decisions in
response to swiftly changing contexts. Velocity is important, but it is
the context in which it is important that matters. Modern business
advantage comes less and less from scale and more and more from
manoeuvrability, or the ability to move quickly and seamlessly
from one state to another.
Notes
1 Coram, R (15 April 2004) Boyd: The fighter pilot who changed the art of war, Back Bay
Books, Reprint edition, ISBN-13: 978–0316796880
2 Ross Johnson (21 February 2013) Antiterrorism and Threat Response, Planning and
Implementation, CRC Press, 1st edition, ISBN-10: 1466512903, ISBN-13: 978–
1466512900
3 Coram, R (15 April 2004) Boyd: The fighter pilot who changed the art of war, Back Bay
Books, Reprint edition, ISBN-13: 978–0316796880
4 Coram, R (15 April 2004) Boyd: The fighter pilot who changed the art of war, Back Bay
Books, Reprint edition, ISBN-13: 978–0316796880
05
Operating in the ‘ambiguity zone’
This policy allowed the team that worked on Post-it® notes the
space they needed to devote to a development process that had to
overcome multiple barriers over the course of 12 years before
launch and widespread success. Some of the ideas that come out of
Time to Think (six to eight projects, twice a year) are supported by
‘Genesis Grants’, which can act as research seed money of
anywhere between US$30,000 to US$75,000, enabling staff to
explore ideas outside of the rigidity of business unit budgets.
The team at the UK Government Digital Service (GDS) have
initiated a policy where for a defined period (two weeks or one
month) they give the people in the team the freedom to go off the
pre-planned roadmap and work on anything they want, as long as it
is for the good of GOV.UK – with fewer top-down commitments. The
policy, called a ’firebreak’, is seen as vital to ‘release some pressure
from the system’, minimize top-down commitments, take a step
back, reduce layers of complexity, but also to work on new ideas. As
Neil WIlliams, one of the Product Leads at GDS wrote:2
A whole team working off-roadmap for a whole month might sound reckless or
indulgent. But in fact, it would have been reckless not to … Great things can happen
when you give creative, passionate people the freedom to explore ideas.
‘Gall’s Law’, as expressed above, comes from John Gall’s 1975 book
Systemantics: How systems work and especially how they fail.19 Gall’s
work has inspired a number of authors in systems thinking but the
book actually focuses more on what we can learn from system
engineering failures and how not to design systems. The law
(although it was never expressly stated as a law in the book) is
essentially an argument in favour of under-specification (so it has a
natural affinity to agile thinking which we will discuss later) and
argues that owing to the difficulty involved in designing large
complex systems accurately, it is far better instead to design
smaller, simpler systems that can then develop incrementally based
on a continual input and measurement of user interaction and
needs.
This was, and is, a simple concept and yet it is quite profound.
Think of all the complex systems that we try to design and launch
(from large IT projects to government policy implementation) that
fail from the outset. As Josh Kaufman has pointed out in his
explanation of Gall’s Law, complex systems are full of
interdependencies and variations that are almost impossible to
anticipate but that actually play a significant role in making the
system function:
Complex systems designed from scratch will never work in the real world, since they
haven’t been subject to environmental selection forces while being designed … If you
want to build a system that works, the best approach is to build a simple system that
meets the environment’s current selection tests first, then improve it over time.20
Far better surely, to start with something simpler, easier, smaller
and evolve from there. This is why, in scenarios characterized by
complexity (such as those within which most businesses now
operate), prototypical, emergent, iterative approaches work best.
1. Simple problems are ones like baking a cake from a mix. There is a
recipe.
2. Complicated problems are ones like sending a rocket to the moon.
They can sometimes be broken down into a series of simple
problems. But there is no straightforward recipe. Success
frequently requires multiple people, often multiple teams, and
specialized expertise. Unanticipated difficulties are frequent.
Timing and coordination become serious concerns.
3. Complex problems are ones like raising a child. Once you learn
how to send a rocket to the moon, you can repeat the process with
other rockets and perfect it. One rocket is like another rocket. But
not so with raising a child, the professors point out. Every child is
unique. Although raising one child may provide experience, it does
not guarantee success with the next child. Expertise is valuable
but most certainly not sufficient. Indeed, the next child may
require an entirely different approach from the previous one. And
this brings up another feature of complex problems: their
outcomes remain highly uncertain. Yet we all know that it is
possible to raise a child well. It’s complex, that’s all.
This, say the authors, is like the old joke about the policeman who
sees a drunk man searching for something under a streetlight and
asks what the drunk has lost. He says that he has lost his keys and
so they both look under the streetlight together. After a few minutes
the policeman asks if he is sure he lost them here, and the drunk
replies, no, and that he lost them in the park. The policeman asks
why he is searching here, and the drunk replies, ‘this is where the
light is’. Our observational bias, and the sophistication of our
theories, models and language, say the authors, can be as seductive
as the lamplight. They might provide an illusion of clarity but they
can also lead to approaches that do not properly take account of
complex adaptive systems and situations.
In the context of the modern business environment, which is
more than ever characterized by complexity, it becomes essential
that we define challenges in the right way, avoid conflating the
complex with the complicated, and set about shaping the response
to those challenges in the right way.
Notes
1 3M, Time to Think, [Online] http://solutions.3m.com/innovation/en_US/stories/time-
to-think [accessed 16 October 2016]
2 Neil WIlliams (February 2015) GDS Blog, GOV.UK’s Firebreak: How and why we
spent a month working differently, [Online]
https://insidegovuk.blog.gov.uk/2015/02/06/gov-uks-firebreak-why-and-how-we-
spent-a-month-working-differently/ [accessed 16 October 2016]
3 LinkedIn, Incubator, [Online] http://blog.linkedin.com/2012/12/07/linkedin-incubator/
[accessed 16 October 2016]
4 Matthew Panzarino (November 2012) Apple Blue Sky, [Online]
http://thenextweb.com/apple/2012/11/12/apple-fires-up-its-version-of-googles-20-time-
giving-some-employees-2-weeks-for-special-projects/ [accessed 16 October 2016]
5 Henrik Knowberg (2014) Spotify Hack Weeks, [Online]
https://labs.spotify.com/2014/03/27/spotify-engineering-culture-part-1/ [accessed 16
October 2016]
6 Facebook Hackathons, [Online] https://www.facebook.com/hackathon [accessed 16
October 2016]
7 David Sacks, FastCompany (2012) Secrets of Facebook’s Legendary Hackathons
Revealed, [Online] http://www.fastcompany.com/3002845/secrets-facebooks-
legendary-hackathons-revealed [accessed 16 October 2016]
8 Joel Gascoigne, Buffer, (May 2014) How We’re Trying to Stay Innovative as a 3.5 Year
Old Startup, [Online] http://joel.is/how-were-trying-to-stay-innovative-as-a-3–5-year-
old/ [accessed 16 October 2016]
9 Reid Hoffman talks to Matt Mullenweg (February 2014) [Online]
https://www.youtube.com/watch?v=LMGb2UoNFYM [accessed 16 October 2016]
10 Martin Bailie, SXSW Themes: Startup Culture, Code and Data, [Online]
http://www.slideshare.net/martinbailie/sxsw-2013-themes-startup-culture-code-and-
data [accessed 16 October 2016]
11 John Battelle (1 December 2005) CNN Money magazine, [Online] ‘The 70 Percent
Solution: Google CEO Eric Schmidt gives us his golden rules for managing
innovation’ [accessed 16 October 2016]
12 Christian Terwiesch and Karl Ulrich (1 June 2009) Innovation Tournaments: Creating
and selecting exceptional opportunities, Harvard Business School Press, ISBN-10:
1422152227
13 Sarah Frier (2016) Facebook Revenue, Users Top Estimates as Mobile Ads Surge,
Bloomberg Technology, [Online] http://www.bloomberg.com/news/articles/2016–07-
27/facebook-sales-user-growth-top-estimates-as-mobile-ads-surge [accessed 24
October 2016]
14 What is Kaizen? Kaizen Institute, [Online] https://uk.kaizen.com/about-us/definition-
of-kaizen.html [accessed 16 October 2016] https://uk.kaizen.com/about-us/definition-
of-kaizen.html” [accessed 24/10/16]
15 Steven Johnson (30 September 2014) How We Got to Now: Six innovations that made
the modern world, Riverhead Books, ISBN-10 1594632960 ISBN-13 978–1594632969
16 Megan Gambino (30 September 2014) The World Is What It Is Today Because of
These Six Innovations, Smithsonian.com, [Online]
http://www.smithsonianmag.com/innovation/world-what-it-today-because-these-six-
innovations-180952871/?no-ist” [accessed 24 October 2016]
17 Tim Harford (2 January 2013) The Undercover Economist, Wired, [Online]
https://www.youtube.com/watch?v=7GHhmgZ0BwQ [accessed 24 October 2016]
18 Sergey Brin (2013) Founders’ Letter, Alphabet Investor Relations, [Online]
https://abc.xyz/investor/founders-letters/2013/ [accessed 24 October 2016]
19 John Gall (May 1975) Systemantics: How systems work and especially how they fail,
Times Books, ISBN-10 0812906748 ISBN-13 978–0812906745
20 Josh Kaufmann ©2005–2016 What Is ‘Gall’s Law’?, PersonalMBA.com, [Online]
https://personalmba.com/galls-law/” [accessed 24 October 2016]
21 Atul Gawande (2011) The Checklist Manifesto: How to get things right, Profile, ISBN-10
1846683149 ISBN-13 978–1846683145
22 Sholom Glouberman and Brenda Zimmerman (July 2002) Government of Canada,
Complicated and Complex Systems: What Would Successful Reform of Medicare
Look Like?, [Online] http://publications.gc.ca/collections/Collection/CP32-79–8-
2002E.pdf [accessed 24 October 2016]
23 Dave Snowden and Mary Boone (November 2007) A Leader’s Framework for
Decision Making, Harvard Business Review, [Online] https://hbr.org/2007/11/a-
leaders-framework-for-decision-making [accessed 24 October 2016]
06
Digital-native processes
Design thinking
The growing importance of design in business has become evident
from the heavy investment that companies in a number of sectors
are making in design and user experience talent. Not least of these
are consulting businesses including Deloitte, Accenture and IBM
(IBM have structured frameworks around design thinking to help
IBM-ers solve users’ problems at speed and scale)1 who have
refocused recruitment and acquisition programmes to serve a far
greater requirement for design skills and approaches.
Design thinking was really first adapted for business by David
Kelley and Tim Brown, founders of design business IDEO. Tim
Brown has defined design thinking as:
… a human-centered approach to innovation that draws from the designer’s toolkit to
integrate the needs of people, the possibilities of technology, and the requirements for
business success.2
Agile
Published in 2001, the Agile Manifesto5 arose from a meeting of
software developers at the Snowbird resort in Utah who had come
together to discuss lightweight development philosophies that had
evolved as a counterpoint to more rigid processes such as waterfall.
Although iterative, adaptive processes had been around for a
number of years, the manifesto helps capture a new way of working
that recognized some key shifts in value (‘while there is value in the
items on the right, we value the items on the left more’):
Lean
The foundation for lean thinking was established through lean
manufacturing, an approach that considered anything in a
production process outside of the creation of value for the end
customer as wastage and systematically seeks to remove it. This in
turn was inspired by the Toyota Production System (TPS) which had
identified ‘seven wastes’ including defects, inventory (minimizing
anything not in process) and overproduction (the idea of ‘just in
time’ production rather than producing ahead of demand) that
were then methodically eliminated. Lean manufacturing therefore
sought to only bring in necessary inputs to the process at the point
they were needed, and identify imperfections in output as early in
the process as possible to minimize correction time. TPS and lean
manufacturing sit alongside the Japanese practice of ‘Kaizen’
(meaning ‘improvement’) which, in the business context, relates to
the involvement of employees at all levels in the continuous
incremental improvement of the manufacturing process.
In 2008, Eric Ries took some of these ideas and combined them
with his own experience in startups to originate the lean startup,6
the product development methodology that shares some similar
overarching principles to agile. Like lean manufacturing, it seeks to
eliminate waste. Like agile, the process is iterative with continuous
product releases and customer feedback embedded as a key part of
the process. Hypotheses about customer need or product features
are successively validated through iterative releases or rapid
prototyping, thereby minimizing risk and the need for large initial
investment, and enabling continuous learning.
Ries believes that the continuous involvement of customers in the
development process enables startups (and any business developing
new products and services) to inclusively recruit early adopters and
solve real customer problems before attempting to acquire scale.
The core concepts that sit at the heart of lean are:
These principles for agile business set out a new orientation for the
digitally empowered business. They concern the very fabric of how
an organization works.
… and
If you aren’t experiencing failure, then you are making a far worse mistake: You are
being driven by the desire to avoid it.8
And he’s right. But he also said: ‘When faced with a challenge, get
smarter’. The point about failure is that we need to use every
experience, good or bad, as an opportunity to learn so that we get
continually better and smarter over time. To paraphrase the
venture capitalist Marc Andreesen:
The goal is not to fail fast. The goal is to succeed over the long run. They are not the
same thing.9
The agile business is one that is continually exploring but also one
that is continually learning. Author Jim Collins followed up the
bestselling Good to Great a decade later, with Great by Choice,10
based on nine years of research into companies that had risen to
great things from times of uncertainty. One of the key differences
he identified between these companies and others that did much
less well was the practice of what he termed ‘empirical creativity’.
This he defined with a ‘bullets’ and ‘cannonballs’ metaphor. Instead
of firing cannonballs (putting significant resources behind untested
ideas), the more successful businesses began by firing smaller
bullets (they prepared the way with lots of low cost, low risk, low
distraction tests at a far smaller scale in order to develop learnings
about what works and what doesn’t). In other words, they made lots
of small bets.
This kind of ‘empirical creativity’, he says, is a blend between
creativity and discipline, involving the habit of continually learning
from a stream of both successful and unsuccessful experiments and
initiatives. On any given day, Facebook are running hundreds of
tests concurrently.11 Each year, Google reportedly changes its
search algorithm around 500–600 times.12 When they launched the
first version of their pay-per-click advertising product AdWords in
1999 it initially was not very successful but through constant
iteration Google have built a product that is today worth billions of
dollars. But iteration doesn’t stop. Tens of thousands of quality
experiments are still run each year for both search and advertising
products.
The agile business is not one that experiments episodically, but
instead builds a culture characterized by continuous testing and
learning. Whether it is constant testing conducted at high tempo
and designed to incrementally improve existing services, or test and
learn focused on a perpetual stream of new and potentially
breakthrough initiatives, developing a learning culture it seems, is
critical not only to performance but also to survival.
Stories from the frontline
Marco Ryan, EVP, Chief Digital Officer, Wartsila Corporation (and digital transformation
veteran): Test. Learn. Optimize
Perhaps one of the hardest success factors to implement is cultural change. For many,
technology decisions, marketing budgets, investments in websites are easier to measure and
easier to understand.
But what will make the transformation stick – what will cause it to deliver the value – is
the people. And most organizations struggle with the availability and capability of their
talent, to focus on the digital transformation. This is often largely due to approaching it the
wrong way. Large-scale process re-engineering projects, tied for example to changes in an
ERP system, will absorb both the resources and their appetite for change.
An alternative, and more digital approach, is to continuously ‘test, learn and optimize’.
This allows shorter timelines, and importantly, enables unsuccessful initiatives to be halted
quickly. It is what makes the startups able to outpace the more traditional companies and it
can be applied to all parts of the business.
The approach, combined with a hypothesis, good data, the ability to create a pilot, mock-
up or prototype, to work in small cross-functional teams often without the need for
centralized IT resources, can quickly get a product, idea or service to market, in a high
fidelity state that can be tested with a trusted client, improved or perhaps halted. In a
digitally transformed company, failure is okay, providing you fail fast, learn from it and
improve the next iteration.
Too many companies are afraid to try or lack resources to mentor and coach teams
through this new way of working. This can be easily addressed through external input or
interims in the short term. But the sin is not to try.
(Bezos, 2016)13
Learning to unlearn
It makes intuitive sense that organizations that focus on continuous
learning should fair better in complex adaptive environments. But
one of the less obvious benefits of learning the new is that it helps
you to unlearn old habits and practices.
A study from the European Molecular Biology Laboratory and the
University Pablo Olavide in Sevilla, Spain, showed that our brains
actively erase memories in order to make space for new ones, a
process that seemingly only happens in learning situations.14 In
other words we forget through learning.
As we will discuss later, iterative and sprint working
methodologies are founded on principles of reflection, learning and
application through tight feedback loops from customer interaction
or team retrospectives at the end of sprints. In the context of digital
transformation the point of adopting new working structures and
processes is not only to learn new ways of working but also to help
disentangle the company from legacy thinking and practices. We
forget the old through learning the new. To quote author, inventor
and thinker Buckminster Fuller:
You never change things by fighting the existing reality. To change something, build a
new model that makes the existing model obsolete.
Good reflective practice in the agile business should not only focus
on single-loop error and correction, but more fundamental
consideration of new and improved ways of working, and
challenging and changing established norms.
Reflection is built in to agile methodologies (the last Agile
Manifesto principle is: ‘At regular intervals, the team reflects on
how to become more effective, then tunes and adjusts its behavior
accordingly’) through the practice of retrospectives. These are used
as a simple way to gather the team, typically at the end of a sprint,
and hold a (often facilitated) reflection on their work and way of
operating and how it might be improved in the next sprint. Actions
are captured, made visible and then revisited.
One of the simplest (and therefore best) frameworks for reflection
actually originated from the US military. The so-called ‘after action
review’18 would be used in de-briefs as a way of improving
performance, and features four simple questions that can be
answered after an action of some kind:
Most businesses are pretty bad at taking time out to reflect and
learn. There is always pressure to move straight on to the next
target, the next priority, the next project. Yet when it is embedded
into cultural, behavioural and process norms it is potentially one of
the most valuable ways to develop a true learning organization.
Stories from the frontline
John Coleman, agility transformation consultant, coach and trainer: Using agile processes,
and bringing people on journey
Even if a client has bought into the significance of more agile working, it’s still important to
ask ‘why agility?’. It’s critical that the organization understands what it will gain from being
more agile, and yet there will often be different answers to this question, especially from
different levels of the business. Senior support for the adoption of new working methods,
values and behaviours is key, and it’s important to address the ‘what’s in it for me?’ question,
so that everyone understands the value.
Benefit will be derived from faster delivery, being more customer focused and innovative,
but this needs to be brought to life at a personal, team and organizational level. People need
to feel like they co-designed the agility transformation that is to come, since this will help
get them through the times when change feels particularly difficult. And there will be
difficult times, since most transformation efforts require a number of ‘J-curves’19 to get
there. The initial stages of change may well create a period of disruption that can have a
short-term adverse impact on performance, before the tangible benefits start to show and
long-term gains become apparent. So people need to be aware of where they are on the J-
curve, and the fact that there may well be multiple J-curves along the journey.
Once the goal of the first J-curve (no longer than 12 months) is agreed, it’s important to
then work out the best options to achieve the positive expected outcome at the end of the
first curve, and to position yourself as best you can for the second curve. Tools such as the
DICE® framework from the Boston Consulting Group20 are useful in being able to better
predict outcomes since it uses four key elements to assess likely results: the duration of the
project (longer projects that are reviewed more frequently are often more likely to succeed
than shorter ones that are subject to a poor review process); the integrity of the team
(quality, skills, capability and configuration); the commitment to change (visible top-down
support, engagement at different levels); and the effort of stakeholders (degree of
additional demands, which should be as minimal as possible).
The key is then to select a toolbox of methods that best suit the current context, to set the
cadence and synchronization pattern that enable regular delivery of value and the mapping
of the interventions needed to achieve the medium-term outcomes, to keep your sights on
generating early benefit and managing risk, and also ‘Black Swan Farming’21 (the potential
to discover features in hindsight that are hundreds or thousands of times more valuable
than other features). There are probably several deal breakers, including the acceptance of a
half-hearted implementation (‘WaterScrumFall’ or ‘WAgile’ for example), a lack of appetite
for continuous integration and automated testing, and a lack of appetite for suitable finance
support and processes (more regular forecasting/budgeting, or ‘Lean Finance’) since this can
inhibit long-term gain and the ability to create stable, high performing teams. The main point
is to use the right method(s)/frameworks for the right context and to get into a
transformation rhythm to get regular wins, pivoting as you discover things that didn’t work
so well in practice in that context.
And keep on going! Keep it fresh by changing the transformation team by asking more key
influencers for help as you go, and as energy dwindles from one focus area and increases in
influencers for help as you go, and as energy dwindles from one focus area and increases in
the next one. Be aware of the politics, keep your forecasts on track (re-forecasting monthly
at a minimum), use positive peer pressure through informal show and tells, tell stories,
spread the word. Above all, leave a legacy so that the transformation continues.
Notes
1 IBM.com (2016) IBM Design Thinking, IBM Design, [Online]
http://www.ibm.com/design/thinking/ [accessed 24 October 2016]
2 ideou.com (2016) Design Thinking, IDEO U, [Online]
http://www.ideou.com/pages/design-thinking [accessed 24 October 2016]
3 ideou.com (2016) Design Thinking, IDEO U, [Online]
http://www.ideou.com/pages/design-thinking [accessed 24 October 2016]
4 Herbert A Simon (26 September 1996) The Sciences of the Artificial Third, MIT Press,
ASIN B002U60C7S
5 AgileManifesto.com (2001) Manifesto for Agile Software Development, [Online]
http://agilemanifesto.org/ [accessed 24 October 2016]
6 Eric Reis (2016) The Lean Startup, The Lean Startup, [Online]
http://theleanstartup.com/ [accessed 24 October 2016]
7 Eric Reis (6 October 2011) The Lean Startup: How constant innovation creates
radically successful businesses, Portfolio Penguin, ISBN-10 670921602, ISBN-13 978–
0670921607
8 Ed Catmull (8 April 2014) Creativity, Inc.: Overcoming the unseen forces that stand in
the way of true inspiration, Transworld Digital, ASIN B00GUOEMA4
9 Marc Andreessen (22 January 2015) Failure – Success is the new failure, Andreesen
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chaos and luck – why some thrive despite them all, Random House Business, ISBN-10
1847940889 ISBN-13 978–1847940889
11 Facebook Engineering (8 August 2012) Building and Testing at Facebook, Facebook
Engineering, [Online] https://www.facebook.com/notes/facebook-
engineering/building-and-testing-at-facebook/10151004157328920/ [accessed 24
October 2016]
12 Moz (2016) Google Algorithm Change History, Moz, [Online] https://moz.com/google-
algorithm-change [accessed 24 October 2016]
13 Eugene Kim (5 April 5 2016) Jeff Bezos: ‘We are the best place in the world to fail’,
Business Insider UK, [Online] http://uk.businessinsider.com/amazon-ceo-jeff-bezos-
best-place-in-the-world-to-fail-2016–4 [accessed 24 October 2016]
14 Ray Kurzweil (21 March 2016) We need to forget things to make space to learn new
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things-to-make-space-to-learn-new-things-scientists-discover [accessed 24 October
2016]
15 Dan Millman (5 May 2010) Way of the Peaceful Warrior: A book that changes lives,
Peaceful Warrior, ePublishing B003LBRISM
16 Carol Dweck (2 February 2012) Mindset: How you can fulfil your potential, Robinson,
ISBN-10 1780332009 ISBN-13 978–1780332000
17 Smith, M K (2001, 2013) Chris Argyris: theories of action, double-loop learning and
organizational learning, infed.org The encyclopedia of informal education, [Online]
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organizational-learning/ [accessed 25 October 2016]
18 Douglas Brown (2 October 2012) After Action Review: The most eye-opening business
success tool, Post University Insights, [Online] http://blog.post.edu/2012/10/after-
action-review-most-eye-opening-business-success-tool.html [accessed 25 October
2016]
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[accessed 19 October 2016]
21 Arnold, J and Yüce, Ö (no date) Black Swan Farming, [Online]
http://blackswanfarming.com/cost-of-delay/ [accessed 19 October 2016]
07
The agile innovation process
Empowering invention
Ideas from anywhere
Creativity and innovation is often considered to be driven by the
recombination of previously disparate and unconnected ideas and
concepts in new ways. Professor Andrew Hargadon (Professor of
Technology Management, UC Davis Graduate School of
Management) has described what he calls ‘technology brokering’,1
which exploits the social elements within the innovation process
and the connections between people, as a way in which people and
organizations can apply existing ideas and technologies in new
ways by bridging the gaps between existing networks from
disparate and potentially distant divisions and even industries. New
networks can then be created that can support these creative
recombinations.
This concept of empowering new connections combined with a
relentless throughput of new ideas is foundational to the innovation
process in the truly agile business. Most organizations are pretty
bad at harvesting and nurturing great ideas from their employees.
Despite its shortcomings, the practice of brainstorming has become
so entrenched within organizational behaviour that it is often the
unquestioned default protocol for the origination of new ideas and
strategy. Such sessions, alongside the convention of the board or
team strategy day, often compartmentalize creativity, boxing the
formation of ideas and strategy into a small window of time. And
yet, as Diehl and Stroebe wrote in 1991:2
Brainstorming groups produce more ideas than an individual but fewer and poorer
quality ideas than from individuals working separately. In other words, brainstorms
dilute the sum of individual efforts.
1. Configuration
a Profit Model: How you make money. Challenging sector
conventions on offering, pricing or revenue generation.
b Network: How you connect with others to create value.
Network innovations enable companies to capitalize on their
own strengths while harnessing the advantage that might be
derived from the capabilities and assets of others.
c Structure: The organization and alignment of talent, resource
and assets. Structure innovations can create unique value or
efficiencies. They can improve productivity and collaboration,
help attract talent to the company and drive performance.
d Process: Developing and implementing unique or superior
methods. Process innovations involve a significant level of
change from ‘business as usual’ that can drive greater
capability, adaptability or efficiency. The development of
unique processes can prove difficult for competitors to access
and can yield advantage for extended periods of time.
2. Offering
a Product Performance: the development of distinguishing
features and functionality. This might speak to completely
new products, or significantly improved features, qualities to
existing ones.
b Product System: the creation of complementary products and
services. This is concerned with how separate products or
services might be brought together to create new capability or
improved scalability. So things like integration, modularity
and interoperability are what matter. The development of
ecosystems that take value from one place and use it to
enhance experience at another is one example.
3. Experience
a Service: supporting and amplifying the value of your
offerings. Enhancing performance, utility and loyalty through
improved design or service provision, fixing customer pain
points and helping to ensure seamless customer journeys.
This can elevate the average into the exceptional, and create a
compelling experience.
b Channel: the way in which your offerings is brought to
customers. Channel innovations are focused on finding new
or multiple ways to bring products and services to users,
creating an extraordinary experience with minimal friction.
c Brand: the representation of your offerings and business.
Innovations in the way that consumers might recognize,
recall or associate your brand, the distinct identity and
‘promise’ of your offering. Often incorporating multiple
customer touchpoints, these can confer value, meaning and
intent to the offering.
d Customer Engagement: fostering compelling interactions. The
development of more meaningful customer connections
derived from deep understanding of customer aspirations,
needs and desires. Helping people to ‘find ways to make parts
of their lives more memorable, fulfilling, delightful – even
magical’.
1. Why did the robot stop? The circuit has overloaded, causing a
fuse to blow.
2. Why is the circuit overloaded? There was insufficient
lubrication on the bearings, so they locked up.
3. Why was there insufficient lubrication on the bearings? The oil
pump on the robot is not circulating sufficient oil.
4. Why is the pump not circulating sufficient oil? The pump intake
is clogged with metal shavings.
5. Why is the intake clogged with metal shavings? Because there is
no filter on the pump.12
For example: When an important new customer signs up, I want to be notified, so I can
start a conversation with them.14
While reasoning from analogy can help position new ideas, and
potentially give some comfort that at least some of the elements of
the innovation are founded in existing behaviour or what has
worked in the past, it still means that the starting point incorporates
existing assumptions. Solving problems in entirely new or
disruptive ways requires a lot more mental energy but also starts
with the elemental components of a problem and so is far more
likely to result in an entirely unique solution to a problem.
Too often in large organizations, the start point incorporates
assumptions that have built up over time, become embedded in
culture or practice yet have never truly been tested, or that have
become outmoded but never challenged. It is difficult to break out
of these assumed constraints when the prevailing weight of
opinion, relationship capital and organizational habits within a
company all act to support them.
In The Game Changer,18 long-time P&G CEO A G Lafley talks about
how business schools tend to focus on inductive thinking (based on
directly observable facts) and deductive thinking (logic and
analysis, typically based on past evidence) whereas design schools
emphasize abductive thinking – imagining what could be possible.
There is a good chance that as companies grow the balance between
these three dynamics becomes skewed and we need to work harder
to create more space for abductive thinking.
Google embed what they call ‘10x’ thinking into their innovation
process as a way to avoid overly focusing on incremental and
marginal innovation. At a key stage in the idea generation process
the team focus on answering the question: ‘What’s the 10x version
of this idea?’ This forces the team to re-evaluate their thinking on a
wholly different scale to identify if there is an opportunity for a
truly disruptive solution to be created.
Starting from a problem’s most basic elements, and challenging
ourselves in order to re-examine what might be possible can yield
very different results.
Ingrained commercialization
Structuring for innovation
The test of a first rate intelligence is to hold two opposed ideas in mind at the same time
and still retain the ability to function.
F Scott Fitzgerald
(Kasporov, 2004)19
Yet still the move of an early stage product from the innovation lab
into the wider business presents a key challenge. A concept might
have been rigorously tested and developed in the lab but then it is
given to a manager who is not necessarily as invested in it as those
who have been on the journey from the beginning and sees it as
additive to their already challenging commitments. Worse, the early
stage product is shackled with short-term targets and forecasts, and
dropped into business as usual where it becomes victim to
organizational silos and the drag-brake of bureaucracy. Eric Ries
describes this as akin to moving from science to astrology, and
suggests that there is a missing function of entrepreneurship in
many companies – staff who are responsible for taking ideas out of
the lab and have the ability, incentives, time and space to
commercialize them, who can manage the process from concept to
execution using a disciplined, systematic way of testing new ideas
and developments.
The shackling of early stage products with forecasts and targets
can contaminate development priorities (you build the feature that
you think will make you money rather than the feature that the
customer really wants) and eventually strangle the project as it
struggles to hit forecasts that often have little foundation in reality.
Critical to this stage in a product lifecycle, therefore, is the ability to
show progression of value towards the ultimate desired outcome –
revenue and profit. Eric Ries’s concept of innovation accounting
that we discussed earlier is one way of framing this. Another useful
framework comes from Silicon Valley entrepreneur and angel
investor Dave McClure.
Pirate Metrics
Steve Blank has described how a startup is effectively ‘an
organization built to search for a repeatable and scalable business
model.24 An early stage product, therefore, might be considered to
be a product searching for a market. Tools such as the Value
Proposition Canvas,25 and Lean Canvas26 are excellent frameworks
for establishing product-market fit in early stage products. Yet while
revenue is the desired ultimate outcome, the most important
objective in the early stages of a product lifecycle is to acquire
learning, and so solely using revenue as a measure of success can
be distracting and less than helpful.
Dave McClure’s Pirate Metrics27 defines a set of macro metrics
that can be used to model the customer lifecycle. While revenue
may be one of them, it is not the only one. Pirate Metrics is a
sequential 5 metric-model (A-A-R-R-R) designed to represent all of
the key behaviours of customers – how many users you are
acquiring, how many of them are active users, whether they come
back and use it again, whether they tell others about it, and how
much money you are able to derive from them. To paraphrase:
Fluid resourcing
APIs and platform business models are examples of how
organizations can move quickly to generate scale and respond to
shifting scenarios. In the networked world data and value flow
easily between entities in the ecosystem but as we discussed in Part
One, businesses that operate in the networked era also require a
high degree of fluidity in resourcing.
As Rita Gunther McGrath asserts (in The End of Competitive
Advantage), if sustainable competitive advantage is shifting to a
series of transient advantages then you need to organize your
company in a very different way. Towards a strategy of continuous
reconfiguration, and orienting the company around being
responsive to opportunity rather than simply focusing on efficiency
and optimization. McGrath gives the example in her book of
Infosys, who reorganize the company every two or three years in
order to avoid systemic resistance to changing the way of working.
Rather than extreme downsizing or restructuring, increased
fluidity in resourcing brings greater manoeuvrability. While
innovation labs can be a great way to hothouse early stage ideas
and introduce and catalyse new ways of working, the ultimate goal
is to reorient the wider organization around continuous learning,
increased velocity, flexibility and structural adaptivity.
In educational theory active learning is a well-known method of
schooling in which participants learn through active involvement,
experience or doing. In machine learning this is extended to
become a type of iterative supervised learning in which a learning
algorithm might interact with or query a user or data source in
order to obtain improved outputs. But the clue is in the moniker –
the key word is ‘active’. Organizations may well have digital
training programmes that go beyond specialist digital expertise to
impact the wider organization. They may even have reverse
mentoring or accreditation schemes. But if we are to put any
credence in the well-established 70/20/10 model for learning and
development32 which posits that 70 per cent of development is
derived from on-the job experiences (actually working on tasks and
problems), 20 per cent from interaction and feedback, and 10 per
cent from formal training and reading, then by far the greatest
individual (and surely therefore organizational) learning comes
from active learning: direct hands-on experience and proximity to
new ways of working. Key to developing learning and
transformation at scale, therefore, is how we extend these new
ways of working beyond the innovation lab. How employees from
the wider organization might interact with, cycle through, or work
alongside the lab and how the new thinking and methodologies
might then disseminate wider, and scale beyond the innovation
unit.
In Part Four we will consider this broader context of agile
resourcing, and some challenging but practical ways in which
organizations can structure for manoeuvrability.
Key takeouts
This Part has been focused on bringing to the organization a new
level manoeuvrability and responsiveness, a new tempo of
innovation, and a new way of working to empower continuous
adaptive learning in response to our complex adaptive
environment. Some key takeouts include:
Notes
1 Andrew Hargadon (1 July 2003) How Breakthroughs Happen: The surprising truth
about how companies innovate, Harvard Business School Press, ISBN-10 1578519047
ISBN-13 978–1578519040
2 Michael Diehl and Wolfgang Stroebe (September 1991) Productivity Loss in Idea-
generating Groups: Tracking down the blocking effect, American Psychological
Association [accessed 25 October 2016]
3 Alex F Osborn (1 June 1979) Applied Imagination, Scribner, ISBN-10 23895209 ISBN-13
978–0023895203
4 Jonah Lehrer (19 April 2012) Brainstorming: An idea past its prime, The Washington
Post, [Online] http://www.washingtonpost.com/opinions/brainstorming-an-idea-past-
its-prime/2012/04/19/gIQAhKT5TT_story.html [accessed 25 October 2016]
5 Ed Catmull (September 2008) How Pixar Fosters Collective Creativity, Harvard
Business Review, [Online] http://hbr.org/2008/09/how-pixar-fosters-collective-
creativity/ar/1 [accessed 25 October 2016]
6 Steven Johnson (29 September 2011) Where Good Ideas Come From: The seven
patterns of innovation, Penguin, ISBN-10 141033401 ISBN-13 978–0141033402
7 Walter Isaacson (5 February 2015) Steve Jobs: The exclusive biography, Abacus, ISBN-
10 034914043X ISBN-13 978–0349140438
8 Charlan Jeanne Nemeth, Marie Personnaz, Bernard Personnaz and Jack A Goncalo
(April 2003) The Liberating Role of Conflict in Group Creativity: A cross cultural
study, Institute for Research on Labor and Employment, [Online]
http://www.irle.berkeley.edu/workingpapers/90–03.pdf [accessed 25 October 2016]
9 John Hagel III, John Brown and Lang Davison (4 December 2012) The Power of Pull:
How small moves, smartly made, can set big things in motion, Basic Civitas Books,
ASIN B00XWQNRWW
10 Guillaume Fürst, Paolo Ghisletta, Todd Lubart (2 August 2014) Toward an Integrative
Model of Creativity and Personality: Theoretical suggestions and preliminary
empirical testing, Wiley Online Library, [Online]
http://onlinelibrary.wiley.com/doi/10.1002/jocb.71/abstract;jsessionid=60ACE13ABA81805AD1D0278AF
[accessed 25 October 2016]
11 Larry Keeley, Helen Walters, Ryan Pikkel and Brian Quinn (19 April 2013) Ten Types
of Innovation: The discipline of building breakthroughs, John Wiley & Sons, ISBN-10
1118504240 ISBN-13 978–1118504246
12 Taiichi Ohno (March 2006) Ask Why Five Times About Every Matter, Toyota Global,
[Online] http://www.toyota-
global.com/company/toyota_traditions/quality/mar_apr_2006.html [accessed 25
October 2016]
13 Clay Christensen (2016) Jobs to be Done, Clay Christensen Institute, [Online]
http://www.christenseninstitute.org/key-concepts/jobs-to-be-done/ [accessed 25
October 2016]
14 Paul Adams (2015) The Dribbblisation of Design, Inside Intercomm, [Online]
https://blog.intercom.io/the-dribbblisation-of-design/ [accessed 25 October 2016]
15 Kevin Rose (7 September 2012) Foundation 20 // Elon Musk, [Online]
https://www.youtube.com/watch?v=L-s_3b5fRd8 [accessed 25 October 2016]
16 Various (2016) First Principle, Wikipedia.org, [Online]
https://en.wikipedia.org/wiki/First_principle [accessed 25 October 2016]
17 Eric Ravenscraft (2013) Use Elon Musk’s ‘First Principles’ Method for Better
Brainstorming, LifeHacker.com, [Online] http://lifehacker.com/use-elon-musks-first-
principles-method-for-better-br-1476303603 [accessed 25 October 2016]
18 A G Lafley and Ram Charan (3 September 2010) The Game Changer: How every leader
can drive everyday innovation, Profile Books, ASIN B0041G68R8
19 Gary Kasporov (January 2004) The Unthinkable … and the Mundane, FastCompany,
[Online] https://www.fastcompany.com/50914/unthinkableand-mundane [accessed
25 October 2016]
20 Capgemini Consulting (23 July 2015) The Innovation Game: Why and how businesses
are investing in innovation centers, Capgemini Consulting, [Online]
https://www.capgemini-consulting.com/the-innovation-game [accessed 25 October
2016]
21 Nidhi Subbaraman (30 January 2012) Walmart Labs Brings the ‘Two-Pizza Team’
Startup Culture to Walmart Empire, FastCompany.com, [Online]
https://www.fastcompany.com/1811934/walmartlabs-brings-two-pizza-team-startup-
culture-walmart-empire [accessed 25 October 2016]
22 British Gas (15 July 2015) British Gas Makes the Connected Home a Reality With
Launch of New Products, [Online]
https://www.britishgas.co.uk/media/releases/ReleaseDetailPage.aspx?releaseId=1358
[accessed 25 October 2016]
23 Blake Masters, Peter Thiel, 18 Sept. 2014, Zero to One: Notes on start ups, or how to
build the future, Virgin Digital ASIN B00KHX0II4
24 Steve Blank (25 January 2010) What’s A Startup? First Principles, [Online]
http://steveblank.com/2010/01/25/whats-a-startup-first-principles/ [accessed 25
October 2016]
25 Strategyzer A G (2016) The Value Proposition Canvas, strategyzer.com, [Online]
https://strategyzer.com/canvas/value-proposition-canvas?url=canvas/vpc [accessed
25 October 2016]
26 LeanStack (2016) Lean Canvas, LeanStack.com, [Online] https://leanstack.com/lean-
canvas/ [accessed 25 October 2016]
27 Dave McClure (6 September 2007) Master of 500 Hats: Startup Metrics for Pirates:
AARRR!, [Online] http://500hats.typepad.com/500blogs/2007/09/startup-metrics.html
[accessed 25 October 2016]
28 Kevin Systrom (12 January 2011) What is the Genesis of Instagram? Quora.com,
[Online] https://www.quora.com/Instagram-company/What-is-the-genesis-of-
Instagram [accessed 25 October 2016]
29 Chris McCann (8 December 2015) 16 lessons on scaling from Eric Schmidt, Reid
Hoffman, Marissa Mayer, Brian Chesky, Diane Greene, Jeff Weiner, and more,
Medium.com, [Online] https://medium.com/cs183c-blitzscaling-class-collection/16-
lessons-on-scaling-from-eric-schmidt-reid-hoffman-marissa-mayer-brian-chesky-
diane-greene-3d6367e63a42#.nxecphpdl [accessed 25 October 2016]
30 Morgan Brown (2014) Airbnb: The Growth Story You Didn’t Know, Growth
Hackers.com, [Online] https://growthhackers.com/growth-studies/airbnb [accessed
25 October 2016]
31 Josh Elman (28 January 2013) What is ‘Growth Hacking’ Really? Medium.com,
[Online] https://medium.com/@joshelman/what-is-growthhacking-really-
f445b04cbd20#.f0w6cgxf4 [accessed 25 October 2016]
32 Michael M Lombardo and Robert W Eichinger, (January 2000) Career Architect
Development Planner 3rd Edition, Lominger Limited, ISBN-10 965571246 ISBN-13
978–0965571241
PART THREE
Focus
DEFINING FOCUS
Every company wants to move faster. To develop and progress at
pace. In Part One we made the case for velocity to be framed in the
context of a new kind of agility, responsiveness and
manoeuvrability. Yet velocity without focus is foolish. As Peter
Drucker said:
There is nothing quite so useless, as doing with great efficiency, something that should
not be done at all.
A positively focused urgency can create real impetus for change but
a negatively focused one might overemphasize inputs and action at
the expense of outputs. Valuing action over results can lead to
shortcuts, micromanagement, declines in proactivity, a reduction in
signal vs noise, and a danger that we might value short-term gain
over long-term vision.
Notes
1 April 2012, The Real Leadership Lessons of Steve Jobs, Harvard Business Review,
[Online] https://hbr.org/2012/04/thereal-leadership-lessons-of-steve-jobs [accessed 25
October 2016]
2 Matthew Syed (29 April 2010) Bounce: The myth of talent and the power of practice,
Fourth Estate, ASIN B003P2WJ18
3 Jocelyn K Glei (ed) (September 2013) Maximize Your Potential: Grow your expertise,
take bold risks and build an incredible career (The 99U Book Series), Amazon
Publishing, ISBN-10: 1477800891
4 Kotter International, The 8-Step Process for Leading Change, Kotter International,
[Online] http://www.kotterinternational.com/the-8-step-process-for-leading-change/
[accessed 25 October 2016]
5 Quy Huy and Timo Vuori (28 January 2016) Who Killed Nokia? Nokia Did, INSEAD
Alumni Magazine: Salamander, [Online] http://alumnimagazine.insead.edu/who-
killed-nokia-nokia-did/ [accessed 25 October 2016]
08
The role of vision and purpose
(Bezos, 2011)7
Notes
1 NOBL (2016) How to Define Your Purpose, Vision, Mission, Values, and Key
Measures, NOBL, [Online] http://futureofwork.nobl.io/futureof-work/how-to-define-
your-purpose-vision-mission-values-and-key-measures [accessed 25 October 2016]
2 Jim Collins and Jerry Porras (1 September 2005) Built To Last: Successful habits of
visionary companies, Random House Business, ISBN-10 1844135845 ISBN-13 978–
1844135844
3 EY (2015) The Business Case for Purpose, EY.com, [Online]
http://www.ey.com/Publication/vwLUAssets/ey-the-business-case-for-
purpose/$FILE/ey-the-business-case-for-purpose.pdf [accessed 25 October 2016]
4 Ben Horowitz (4 March 2014) The Hard Thing About Hard Things: Building a business
when there are no easy answers, HarperBusiness, ASIN B00DQ845EA
5 Al Ramadan, Dave Peterson, Christopher Lochhead and Kevin Maney (14 June 2016)
Play Bigger: How rebels and innovators create new categories and dominate markets,
Piatkus, ASIN B010PIF952
6 Jeff Bezos (1999, 1997) Letter to Shareholders, US Securities and Exchange
Commission, [Online]
https://www.sec.gov/Archives/edgar/data/1018724/000119312513151836/d511111dex991.htm
[accessed 25 October 2016]
7 Steven Levy (13 November 2011) Jeff Bezos Owns the Web in More Ways Than You
Think, Wired.com, [Online] https://www.wired.com/2011/11/ff_bezos/all/1 [accessed
25 October 2016]
8 Henry Blodget (14 April 2013) Amazon’s Letter To Shareholders Should Inspire Every
Company In America, Business Insider.com, [Online]
http://www.businessinsider.com/amazons-letter-to-shareholders-2013–4?IR=T
[accessed 25 October 2016]
9 Vinod Khosla (3 July 2014) Fireside Chat with Google Co-founders, Larry Page and
Sergey Brin, Khosla Ventures.com, [Online] http://www.khoslaventures.com/fireside-
chat-with-google-co-founders-larry-page-and-sergey-brin [accessed 25 October 2016]
10 Netflix (18 April 2016) Netflix’s View: Internet TV is replacing linear TV, Netflix,
[Online] https://ir.netflix.com/long-term-view.cfm [accessed 25 October 2016]
11 Jillian D’Onfro (31 January 2015) Jeff Bezos’ Brilliant Advice for Anyone Running a
Business, Business Insider.com, [Online] http://uk.businessinsider.com/jeff-bezos-
brilliant-advice-for-anyone-running-a-business-2015–1 [accessed 25 October 2016]
09
Agile strategy and planning
In the agile business, the customer is the guiding beacon for the
organizational mission, vision and strategy, but also the operational
priorities, tactics and execution. Every company believes that they
place the customer at the heart of their business, yet so often the
orientation and prioritization is derived from what is easier and
more efficient for the company, rather than better and more
effective for the customer. Businesses are frequently organized in
ways that make little sense for the customer (ever had a customer
service representative need to transfer you to another department
because they cannot action your query?). In resourcing
prioritization, too much emphasis is placed on business efficiency
over customer satisfaction. Too much customer-facing resource is
focused on dealing with a failure of the organization to do
something or do it well (failure demand), rather than helping to
create more value (value demand). Poor application of automation,
use of scripts or inflexible rules and systems make for bad customer
service (many businesses still bury contact details on their website
or even worse, charge their customers to talk to them).12 Too many
customer experiences are not joined up, resulting in duplication of
effort for the customer and missed opportunity for the company.
We have already discussed how digital-native processes such as
agile and lean are naturally customer-centric, involving the
customer along the development process. Yet real customer-
centricity stretches into every aspect of the business, from process
and strategy to culture, measures and even structure (we will
discuss more about customer-centric structures in Part Four).
Earlier we showed how Amazon takes the long view on
innovation. But they are also an exceptional exemplar for what true
customer-centricity really means (remember that the Amazon
mission is: ‘We seek to be Earth’s most customer-centric company
for four primary customer sets: consumers, sellers, enterprises, and
content creators’). This is brought to life throughout the operating
model, measures and culture. As Jeff Bezos puts it:
We’re not competitor obsessed, we’re customer obsessed. We start with what the
customer needs and we work backwards.
(Foreshew-Cain, 2016)15
This ‘organizing idea’, he says, is not about incrementally making
existing things a little better; it is about completely rethinking the
way that they work. Combining service design methodologies with
small, multidisciplinary teams working in short, iterative sprints
can bring a new breadth and depth of customer-centricity to an
organization, which can in turn lead to real transformation.
(Page, 2013)16
The next six years: this is your view on the shape of the world
six years out, taking account of how key trends and your own
actions will have changed it. This is your strategy of trajectory.
The next six months: your focus here is on your plans for
building, creating or executing things that will materially impact
on progress towards your long-term strategy. This is a rolling
timeline that can evolve so that at the end of the six months, says
Paul, you may have built 50–75 per cent of what you set out to do,
but the remaining 25 per cent is made up of new things that you
had not thought of before.
The next six weeks: the immediate plan which is known well,
and is being worked on in detail right now, and changes
iteratively as a rolling timeline every week or two.
The timescales used in the ‘666 roadmap’ are less important than
the three-timeline concept (although aligning it with the ‘number of
the beast’ no doubt creates plenty of opportunity for amusement
among product teams) which allows for a directional view on the
future, a mid-term adaptive strategy, and a highly iterative short-
term plan.
Discovery-driven planning
Processes such as agile and lean are designed to remove as many
assumptions from development as possible. With an exponential
increase in the quantity of available data, applying that data in the
service of challenging assumptions (particularly the hidden, or
‘toxic’, assumptions that go unquestioned) is an essential
requirement in helping the agile business get to the outcomes it
desires. If, alongside this, we are tracking back from our vision of
the future in order to reimagine our present priorities (rather than
extrapolating from a past which may be defined by out-of-date
assumptions) then we have a more solid basis for crafting our agile
strategy. But there are times, such as when we are entering new or
poorly defined areas, when the ratio of assumptions we are forced
to incorporate relative to the knowledge we already possess is likely
to be unusually high. Emergent, iterative strategy and planning
helps to mitigate risk, but it is still critical to identify as many
avoidable, or hidden, assumptions as possible.
Rita Gunther McGrath’s discovery-driven planning22 is a useful
concept that forces you to identify a desired outcome, and then ask
what needs to be true in order for that outcome to happen.
Conventional planning is based on a premise that future results can
be accurately extrapolated from the predictable platform of past
results and so may be useful in a stable, incremental or known
scenario. Discovery-driven planning focuses on establishing the key
truths that are needed for an outcome to be achieved and so is
much more useful for those ventures that are new, more unknown,
or characterized by a greater degree of uncertainty.
McGrath uses a great case study to illustrate the folly of using
conventional planning techniques for a new venture – the launch of
Euro Disney Resort (what is now Disneyland Paris). The launch in
1992 was something of a disaster, with numbers of visitor-days
falling far short of expectations. Two years after launch it had
accumulated losses of more than US$1 billion and only achieved its
target of 11 million admissions after a drastic drop in ticket prices.
In the planning process Disney had used assumptions based on
their extensive knowledge derived from their experience running
parks in other parts of the world (United States and Japan). There
were some pretty big assumptions around the admissions price that
punters would be prepared to pay, how European customers would
want to eat, and the type of merchandise they would buy. But the
really punishing assumption was that (based on their experience in
other markets) they had assumed that people would stay an average
of four days in the park’s hotels. And yet the average stay in the
early days was only two days. Euro Disney opened with only 15
rides, compared with 45 at Walt Disney World. People could do all
the rides in a single day and so had little reason to stay longer.
In order to avoid such outcomes, McGrath defines a number of
disciplines including: specifying a clear frame for the project
(including quantifiable goals); the importance of basing plans in
market and competitive reality; to translate strategy into specific,
implementable actions (working backwards from what you have to
deliver); to document, test and revisit assumptions; and finally
planning to learn at key milestones.
In discovery driven plans, the whole plan is organized around converting the maximum
number of assumptions to knowledge at minimum cost.
Notes
1 Richard Rumelt (9 June 2011) Good Strategy/Bad Strategy: The difference and why it
matters, Profile Books, ISBN-10 184765746X ISBN-13 978–1847657466
2 Roger Martin (21 January 2015) Roger Martin’s Unconventional Wisdom, Bridgespan
Group, [Online] http://www.bridgespan.org/publications-and-tools/strategy-
development/roger-martins-unconventional-wisdom.aspx#.VRvHoBB4r7R [accessed
25 October 2016]
3 Roger Martin (21 January 2015) Roger Martin’s Unconventional Wisdom, Bridgespan
Group, [Online] http://www.bridgespan.org/publications-and-tools/strategy-
development/roger-martins-unconventional-wisdom.aspx#.VRvHoBB4r7R [accessed
25 October 2016]
4 Roger Martin (21 January 2015) Roger Martin’s Unconventional Wisdom, Bridgespan
Group, [Online] http://www.bridgespan.org/publications-and-tools/strategy-
development/roger-martins-unconventional-wisdom.aspx#.V9ZVyJOU3-b [accessed
25 October 2016]
5 Richard Rumelt (9 June 2011) Good Strategy/Bad Strategy: The difference and why it
matters, Profile Books, ISBN-10 184765746X ISBN-13 978–1847657466
6 James Allworth, Karen Dillon and Clayton Christensen (10 May 2012) How Will You
Measure Your Life?, HarperCollins, ASIN B006I1AE92
7 Amar V Bhidé (16 October 2003) The Origin and Evolution of New Businesses, Oxford
University Press, USA, ISBN-10 195170318 ISBN-13 978–0195170313
8 John Greathouse (30 April 2013) 5 Time-Tested Success Tips From Amazon Founder
Jeff Bezos, Forbes.com [Online]
http://www.forbes.com/sites/johngreathouse/2013/04/30/5-time-tested-success-tips-
from-amazon-founder-jeff-bezos/#3ad6bc73351a [accessed 25 October 2016]
9 Major Richard Dempsey and Major Jonathan M Chavous (December 2013)
Commander’s Intent and Concept of Operations, United States Army Combined Arms
Center, [Online]
http://usacac.army.mil/CAC2/MilitaryReview/Archives/English/MilitaryReview_20131231_art011.pdf
[accessed 25 October 2016]
10 Sir Lawrence Freedman (31 October 2013) Strategy: A history, OUP USA, ISBN-10
199325154 ISBN-13 978–0199325153
11 Nick Harkaway (4 September 2008) The Gone-Away World, Cornerstone Digital, ASIN
B0031RS8JE
12 BBC (6 August 2013) Complaints Call Costs to be Capped, BBC News, [Online]
http://www.bbc.co.uk/news/uk-politics-23590778 [accessed 25 October 2016]
13 George Anders (4 April 2012) Inside Amazon’s Idea Machine: How Bezos decodes
customers, Forbes.com, [Online]
http://www.forbes.com/sites/georgeanders/2012/04/04/inside-
amazon/3/#3ec60390650f [accessed 25 October 2016]
14 Gov.UK (2016) Design Principles, Gov.uk, [Online] https://www.gov.uk/design-
principles [accessed 25 October 2016]
15 Gov.UK (2016) What GDS Is For, Gov.uk, [Online]
https://gds.blog.gov.uk/2016/06/29/what-gds-is-for/ [accessed 25 October 2016]
16 Steven Levy (17 January 2013) Google’s Larry Page on Why Moon Shots Matter,
Wired.com, [Online] https://www.wired.com/2013/01/ff-qa-larry-page/all/ [accessed
25 October 2016]
17 Tom Loosemore (5 June 2014) Government Digital Services, Slideshare.net, [Online]
http://www.slideshare.net/intscotland/tom-loosemoregovernment-digital-service
[accessed 25 October 2016]
18 Mike Murphy (11 September 2016) This French Drone Company Innovates By
Knowing When To Ignore What Consumers Want, Quartz.com, [Online]
http://qz.com/753538/how-parrot-the-french-drone-company-comes-up-with-new-
products/ [accessed 25 October 2016]
19 Clayton M Christensen (22 October 2013) The Innovator’s Dilemma: When new
technologies cause great firms to fail (Management of Innovation and Change),
Harvard Business Review Press, ASIN B00E257S86
20 Noah Brier (26 November 2014) Leadership: Strategy as Algorithm, Percolate.com,
[Online] https://blog.percolate.com/2014/11/strategy-as-algorithm/ [accessed 25
October 2016]
21 Rita Gunther McGrath and Alex Gourlay (14 May 2013) The End of Competitive
Advantage: How to keep your strategy moving as fast as your business, Harvard
Business Review Press, ASIN B00AXS5EBY
22 Rita Gunther McGrath (August 1999) Discovery Driven Planning, ritamcgrath.com,
[Online] http://ritamcgrath.com/ee/images/uploads/Discovery_Driven_Planning.pdf
[accessed 25 October 2016]
10
Linking strategy to execution
1. What are our broad aspirations and the concrete goals against
which we can track progress?
2. Across the potential field available to us, where will we choose
to play and not play?
3. How will we choose to win against the competitors in this
chosen place?
4. What capabilities do we require to win?
5. What management systems are needed to build, operate and
maintain these key capabilities?1
Rather than leadership being like the brain (making key choices,
controlling everything) and the rest of the organization being like
the body (delivering what the brain tells it to), a more useful
conception of the corporation sees cascades of the five questions
(and answers) operating at the corporate, strategic group and
individual level, all linked together to ensure strategy is tied closely
to execution (Figure 10.1).
Figure 10.1 The five questions as cascades
The key benefit to the OKR system is that it clearly aligns strategy
with execution and measurement at every level of the organization,
ensures disciplined thinking around major goals, demonstrates to
everyone very clearly what is important to the organization,
enables transparency around individual and team priorities, and
ensures regular review of objectives and motivates and tracks
progress towards them. In this way, OKRs can play a key role in
transformation, and towards becoming a more agile business.
Stories from the frontline
Duncan Hammond, Delivery Director at Guardian News & Media: Using OKRs to drive
change
In 2015 the Guardian appointed a new Editor in Chief, Katharine Viner, and a new CEO,
David Pemsel. This was the biggest leadership change in many years and it gave the
Guardian a great opportunity to take stock and review its strategic priorities.
The Guardian will be 200 years old in 2021. So Katharine and David posed a simple
question; what will the Guardian be at the age of 200? This led to a six-month strategic
review, named Project 2021, which culminated in a new three-year strategic plan designed
to change the organization and set us on a sustainable path to the future. We called our
three-year plan The Relationship Strategy.
The Project 2021 process revealed some difficult realities about the challenges facing the
Guardian, we called them The Unvarnished Truths. These truths were major blockers to
achieving sustainability.
One of the unvarnished truths stated our organization was too complex and insufficiently
agile. With complexity came a lack of clarity on what our strategic priorities were; how we
allocate our resources for the greatest impact; how we express our intent and measure
success, or failure; and how we ensure the right people are collaborating at the right time,
focused on the right things.
In the year prior to unveiling The Relationship Strategy we had been experimenting in
small pockets of the organization with the Objectives and Key Results framework, also
known as OKRs. OKRs were invented by Intel in the late 1970s and famously adopted by
Google in 2001. It’s a simple framework which introduces a consistent approach to setting
aspirational goals and measurable results to judge success (or failure). We had some
successes with OKRs in these small experiments and had aspirations to adopt them more
widely as part of our new strategy.
The first step we took was to set five organization-wide objectives (OKRs), to focus us for
the first year of the new strategy. These directly cascaded from the vision the Editor and
CEO had crafted for the Guardian. If we could deliver these five objectives, we would be on
a trajectory to deliver the Relationship Strategy successfully over the following years.
Next, we introduced the concept of huddles. Huddles are small, cross-functional teams,
focused on delivering an OKR of their own. They’re normally expected to deliver over three
months. They have the freedom to approach the challenge as they see fit, and take a test-
and-learn approach to delivering the best possible solution.
A huddle’s OKR directly cascades from one of the organization-wide objectives. This
ensures we’re focusing on the ideas that have the biggest impact on the strategy. It’s clear
how the huddle’s work fits into the bigger picture. And the huddle members should be able
to see how their day-to-day tests are impacting on the overall vision of the Guardian.
Having a common approach to setting objectives for huddles, and a shared language, has
helped democratize the quarterly process. It has forced new behaviours and encourages
teams to be more strategic in their thinking, ensuring the work they prioritize has the most
impact on our strategy. And it has enabled the organization, and our leaders, to be clearer in
their approach to prioritization and resource allocation.
The OKR framework has improved our focus and working in huddles has increased the
The OKR framework has improved our focus and working in huddles has increased the
diversity of ideas and approaches to delivering an objective. These two things alone won’t
solve all the challenges we face, but they have gone a long way to improving the way we
deliver our strategic priorities at the Guardian.
1. Day one – Understand: agree the goal and target, map the
challenge, draw in insight, analytics and research to inform.
2. Day two – Diverge: draw in inspiration, ideate, remix ideas,
envisage solutions.
3. Day three – Decide: critique solutions, converge on the best
idea, storyboard that idea.
4. Day four – Prototype: turn the storyboard into something you
can test, create the simplest possible prototype.
5. Day five – Validate: with real users wherever possible, learn
what does and doesn’t work.
Sprint working is central to the agile business and has far wider
application than simply technology and innovation teams. It is a
naturally empowering, energizing, motivating way of working that
can drive organizational momentum, invigorate innovation, and act
as a catalyst for new mindsets and behaviours that can support
greater agility and ‘transformation through doing’. Don’t keep that
confined to the technology team.
Data-driven decision-making
Typically information is defined in terms of data, knowledge in terms of information, and
wisdom in terms of knowledge.
(Jennifer Rowley)5
Start with user need – don’t start buying things until you
understand what users want.
Design with choice and flexibility in mind – offer solutions that
benefit individuals as well as teams.
Make the process transparent – ensure users and stakeholders
understand key approaches by being open about decisions and
actions.
Architect loosely coupled services – allow for greater
flexibility, less dependency and duplication (‘a key success
measure for the programme is that we should never have to do it
again’), services that can independently be replaced or swapped
in and out.
Favour short contracts – to enable flexibility in response to the
rapid change in technology capability.
Bring the best of consumer technology to the enterprise –
devices and cloud applications that intuitive and contemporary.
Make security as invisible as possible – security is important,
but it shouldn’t get in the way of user experience.
Build a long-term capability – don’t rely on a single outsource
vendor, establish necessary skills in-house to support
(‘technology delivery doesn’t end with the programme’).
Agile budgeting
A last word (for this Part) on budgeting. We can establish highly
flexible, adaptive and iterative working practices but they will fail if
not supported by suitably flexible, adaptive and iterative budgeting.
As we discussed in Part Two, traditional accounting methods may
work well for established propositions but new ventures
characterized by increased uncertainty, iterative value, and test and
learn should not be shackled to short-term targets, over-
burdensome reporting and inappropriate measures. Like Eric Ries’s
‘innovation accounting’, we need instead to focus on actionable,
early stage metrics that can show value before revenue, and
demonstrate sufficient progress towards the ultimate goals of
customer satisfaction and profit. But more broadly financial
resourcing needs to support an orientation towards
experimentation, and the fulfilment of not only short-term
objectives, but longer-term, breakthrough goals.
The politics of budgeting can act as a drag-brake on agility. Overly
hierarchical decision-making on financial controls slows progress.
Overly bureaucratic budget setting processes act as a time-suck for
management. Siloed control of financial resources reduces
flexibility and manoeuvrability. As Rita Gunther McGrath
expounds, it is about investing in flexibility:
Firms built to thrive under transient-advantage conditions handle resources differently
from firms designed for exploitation. In an exploitation-oriented firm, reliable
performance, scale, and replication of processes from one place to another make a lot of
sense because you can operate more efficiently and gain the benefits of scale. Resources,
therefore, are directed to support these goals, and changing these resource flows is
painful and difficult. A transient-advantage-oriented firm, on the other hand, allocates
resources to promote what I call deftness – the ability to reconfigure and change
processes with a certain amount of ease, quickly.10
Key takeouts
In this Part we have focused on building a heightened momentum
within the organization through enhanced velocity allied to a
reinvigorated focus, brought to life in new ways of working. Key
takeouts include:
Notes
1 Roger L Martin (May 2005) Five Questions to Build a Strategy, Harvard Business
Review, [Online] https://hbr.org/2010/05/the-five-questions-of-strategy [accessed 25
October 2016]
2 Roger L Martin (May 2005) Five Questions to Build a Strategy, Harvard Business
Review, [Online] https://hbr.org/2010/05/the-five-questions-of-strategy [accessed 25
October 2016]
3 Eli Goldratt, Rami Goldratt and Eli Abramov (2002) Strategy and Tactics, Washington
State University, [Online]
https://public.wsu.edu/~engrmgmt/holt/em534/Goldratt/Strategic-Tactic.html
[accessed 25 October 2016]
4 Google Ventures (2016) The Design Sprint, Google Ventures, [Online]
http://www.gv.com/sprint/ [accessed 25 October 2016]
5 Jennifer Rowley (April 2007) The Wisdom Hierarchy: representations of the DIKW
hierarchy, Sage Publishing.com, [Online]
http://jis.sagepub.com/content/33/2/163.abstract [accessed 25 October 2016]
6 Diya Soubra (5 July 2012) The 3Vs That Define Big Data, Data Science Central,
[Online] http://www.datasciencecentral.com/forum/topics/the-3vs-that-define-big-
data [accessed 25 October 2016]
7 John Burn-Murdoch (December 2012) Study: Less than 1% of the world’s data is
analysed, over 80% is unprotected, theguardian.com, [Online]
https://www.theguardian.com/news/datablog/2012/dec/19/big-data-study-digital-
universe-global-volume [accessed 25 October 2016]
8 Tom Read (13 November 2013) Technology at Least as Good as People Have at Home,
Gov.UK, [Online] https://cabinetofficetechnology.blog.gov.uk/2013/11/13/technology-
at-least-as-good-as-people-have-at-home/ [accessed 25 October 2016]
9 William Bruce Cameron (1963) Informal Sociology: A casual introduction to
sociological thinking, Random House, ASIN: B001A9FCWQ
10 Rita Gunther McGrath (4 June 2013) The End of Competitive Advantage: How to keep
your strategy moving as fast as your business, Harvard Business Review Press, ISBN-
10: 1422172813, ISBN-13: 978–1422172810
PART FOUR
Flexibility
DEFINING FLEXIBILITY
In 2014, author and social innovator Charles Leadbeater wrote a
paper (The London Recipe: How systems and empathy make the
city)1 that attempted to define the key facets or ingredients that
combined to create a successful city. Some of the best recipes, said
Leadbeater, comprise two key ingredients (like eggs and bacon or
fish and chips) and so it is with cities that a combination of two
factors that determine success or failure – systems and empathy:
Systems oil cities. Without effective power, transport, health and education systems,
cities fall apart. But it’s empathy that makes cities human.2
Notes
1 Charles Leadbeater (1 April 2014) The London Recipe: How systems and empathy
make the city, Centre for London.org, [Online]
http://www.centreforlondon.org/publication/london-recipe/ [accessed 25 October
2016]
2 Charles Leadbeater (29 April 2014) Charles Leadbeater: It’s small things that make
our big city what it is, Evening Standard, [Online]
http://www.standard.co.uk/comment/comment/charles-leadbeater-it-s-small-things-
that-make-our-big-city-what-it-is-9301446.html [accessed 25 October 2016]
11
Agile structures and resourcing
Legacy Agile
Centralization vs decentralization,
specialists and generalists
In a digital transformation process there are key dynamics that will
inevitably see a continually evolving balance. Our ever-more
complex, digitally enabled business environment, for example,
requires increasing levels of technical and functional specialization.
We need deep, vertical expertise in key areas to optimize specific
capability. But there is also greater value in more horizontal,
generalist roles that can bring diverse specialist expertise together
and marshal that capability towards achieving a shared goal.
Similarly, the dynamic between what resource is held at the
centre, and that which serves more localized needs or discrete
divisions and audiences is continually changing. The centralization
of digital resource, for example, can bring significant advantages in
a transformation process including improved governance,
standards and control, greater consistency, scalability and
efficiency, and more emphasis, clarity and focus. But the risks
inherent with centralization can include a lack of integration with
wider activity, and a lack of learning in the broader business. Often,
a centralized digital team will begin to devolve executional
resourcing and responsibility out to localized areas (in a ‘hub-and-
spoke’ model), and this may even eventually involve more strategic-
level decision-making. It may often be the case, for example, that
strategic direction and broad capability development sit at the
centre, while discrete strategy, plans and tactics sit locally.
Overarching governance and standards may reside centrally, but
compliance and specific rules are local. And process design is likely
to be centralized, but implementation local. But above all, there
remains a requirement for a heightened level of fluidity in
resourcing between these two areas to effectively orient resourcing
to capitalize on not just exploitation but also opportunity.
Notes
1 Rita Gunther McGrath (4 June 2013) The End of Competitive Advantage: How to keep
your strategy moving as fast as your business, Harvard Business Review Press, ISBN-
10: 1422172813, ISBN-13: 978–1422172810
2 Steven Johnson (29 September 2011) Where Good Ideas Come From: The seven
patterns of innovation, Penguin, ISBN-10 141033401 ISBN-13 978–0141033402
3 John C Camillus (May 2008) Strategy as a Wicked Problem, Harvard Business Review,
[Online] https://hbr.org/2008/05/strategy-as-a-wicked-problem [accessed 25 October
2016]
4 James Allworth, Karen Dillon and Clayton Christensen (10 May 2012) How Will You
Measure Your Life?, HarperCollins, ASIN B006I1AE92
5 Future of Small Business, Intuit, [Online] https://http-
download.intuit.com/http.intuit/CMO/intuit/futureofsmallbusiness/intuit_2020_report.pdf
[accessed 25 October 2016]
6 David M Messick and Roderick M Kramer (22 September 2004) The Psychology of
Leadership: New perspectives and research, Psychology Press, B000SMD1IS
7 J Richard Hackman (10 July 2002) Leading Teams: Setting the stage for great
performances, Harvard Business Review Press, ASIN B0106P71WI
8 Jennifer S Mueller (January 2012) Why Individuals in Larger Teams Perform Worse,
Science Direct, [Online]
http://www.sciencedirect.com/science/article/pii/S0749597811001105 [accessed 25
October 2016]
9 Russell Davies (17 April 2013) A Unit of Delivery, Russell Davies, [Online]
http://russelldavies.typepad.com/planning/2013/04/the-unit-of-delivery.html
[accessed 25 October 2016]
10 Werner Vogels (5 October 2011) Werner Vogels: Amazon and the Lean Cloud, Hack
Fwd, [Online] http://blog.hackfwd.com/post/11060764003/werner-vogels-amazon-
and-the-lean-cloud [accessed 25 October 2016]
11 Richard L Brandt (15 October 2011) Birth of a Salesman, Wall Street Journal, [Online]
http://www.wsj.com/news/articles/SB10001424052970203914304576627102996831200
[accessed 25 October 2016]
12 HolacracyOne, How It Works, Holacracy.Org, [Online]
http://www.holacracy.org/how-it-works/ [accessed 25 October 2016]
13 Frederic Laloux and Ken Wilber (9 February 2014) Reinventing Organizations: A
guide to creating organizations inspired by the next stage of human consciousness,
Nelson Parker, ASIN B00ICS9VI4
14 Eric Schmidt and Jonathan Rosenberg (12 March 2015) How Google Works, John
Murray, ISBN-10 1444792490 ISBN-13 978–1444792492
15 Tim Malbon (March 2016) The Solution to Design Thinking [Online]
https://medium.com/the-many/the-solution-to-design-thinking-
42e8f1b59022#.i117lomra [accessed 6 March 2017]
12
Scaling agility
New ways of working such as Agile, Lean, and Scrum and operating
in small, multi-disciplinary teams are not only the domain of
startups. With rapidly shifting contexts every company needs to
become more adaptive, iterative and emergent, and work to
combine functional expertise horizontally across the organization
in smarter, more fluid ways. As Silicon Valley entrepreneur and
academician Steve Blank has pointed out a startup is not a smaller
version of a large company.
As an organization scales, functional groups are an excellent way
to optimize efficiency and craft. As it scales and diversifies further
to become multi-product, divisions (which each house their own
functional groups) allow these efficiency and expertise gains to be
extended. But this comes at the expense of structuring for the
benefit of the organization, not for the customer. Customers are
horizontal. They don’t care about the differences between sales,
customer service, or marketing. They don’t care about how
company divisions are structured. They just want products that
work, and to be able to find solutions to problems easily and
quickly. So the need for more seamless customer experience and
greater agility creates a heightened horizontal tension and
obligation to counteract the constraining impact of organizational
silos. Adept collection and application of data can mitigate this
(utilizing a ‘single customer view’ in order to join up customer
touchpoints and help interaction to be more personalized and
intuitive, for example). But the organizational response needs to
stretch deeper into processes, culture and, of course, structures.
This means finding better ways to combine the benefits we can
derive from unifying expertise in functional groups (HR, finance,
sales, marketing, operations), with the ability to capitalize on the
agility and momentum that can come from small, multi-disciplinary
pods. Organizational systems and ideology are weighted heavily
towards optimizing efficiency through functional groups. We need
to find a new balance, one that reflects a greater emphasis on
learning, velocity, focus and flexibility through agile, iterative,
multi-functional pod working.
More commonly iterative methodologies and pod working seeds
first in technology teams, centralized digital units, innovation or
product development labs and incubators, or standalone catalyst
brands that are established to enable a large organization to
experiment with new approaches. But confining these ways of
working to small units or single teams misses the huge opportunity
that companies have to scale agility far more broadly across the
organization. We can represent this progression of agility through
several distinct stages:
Source The Agile Team Onion © Copyright 2016 Emily Webber @ewebber. Published as The Agile
Team Onion: A model for Agile teams in large organizations, July 2016
http://tacit.pub/agileteamonion
This isn’t just a stakeholder map, it is about bringing the organization in and having
shared responsibility for what you are creating together.
Core team
Purpose: delivery of digital services
Communication: daily (all stand-ups, retrospectives, planning,
show and tells)
Co-located: daily, all day
Types of people: product owner, scrum master, developers,
designers, etc.
Supporters
Source The Agile Team Onion © Copyright 2016 Emily Webber @ewebber. Published as The Agile
Team Onion: A model for Agile teams in large organizations, July 2016
http://tacit.pub/agileteamonion
We need to create the conditions in which each phase can feed off
the others. This is about building a systemic way to orient the
organization towards not only continuous experimentation but also
continual commercialization and scaling of early stage ideas.
While the clarity, focus and simplicity that this brings may reap
dividends for startups and small businesses, as a company scales
applying this approach to small teams rather than individuals is
likely to be easier. Clear and sensible escalation procedures also
help.
More formalized decision-making and feedback structures such
as the creation of a ‘digital board’ can, however, prove to be
extremely valuable in facilitating agile governance while providing
a crucial link to most crucial decision-making body in the company:
the main board.
A ‘digital board’ might typically comprise key main board
members (the board ‘digital champion’, or Finance Director or
perhaps even the Managing Director or CEO) and other principal
digital stakeholders, and becomes the main decision-making body
for the digital development roadmap, meeting regularly to make
key investment and strategy decisions.
This ensures the ongoing commitment, involvement and
engagement of key senior staff including the CEO, CFO, and/or the
IT and Operations Director, provides a crucial link between digital
operations and the main board, while still keeping the decision-
making process as agile possible.
Notes
1 Henrik Kniberg and Anders Ivarsson (October 2012) Scaling Agile @ Spotify, with
Tribes, Squads, Chapters and Guilds, [Online]
https://dl.dropboxusercontent.com/u/1018963/Articles/SpotifyScaling.pdf [accessed 25
October 2016]
2 Emily Webber, 14 May 2016, The Agile Team Onion. How many pizzas does it really
take to feed your team?, Emily Webber http://emilywebber.co.uk/agileteam-onion-
many-pizzas-really-take-feed-team/ [accessed 25 October 2016]
3 David Smith (26 October 2016) Effective Business Change: Right person, right place,
right time, Global Futures and Foresight, [Online]
http://thegff.com/Articles/205178/Global_Futures_and/Methods_and_tools/Effective_Business_Change.a
[accessed 25 October 2016]
4 Bethany McLean (November 2014) The Empire Reboots, Vanity Fair, [Online]
http://www.vanityfair.com/news/business/2014/11/satya-nadella-bill-gates-steve-
ballmer-microsoft [accessed 25 October 2016]
5 Robert X Cringely (4 April 1996) Accidental Empires: How the boys of Silicon Valley
make their millions, battle foreign competition and still can’t get a date, 2nd revised
edition, Penguin Books Ltd, ISBN-10 140258264 ISBN-13 978–0140258264
6 Simon Wardley (13 March 2015) On Pioneers, Settlers, Town Planners and Theft,
Gardeviance.org, [Online] http://blog.gardeviance.org/2015/03/on-pioneers-settlers-
town-planners-and.html [accessed 25 October 2016]
7 Ben Horowitz (24 April 2014) The Hard Thing About Hard Things: Building a business
when there are no easy answers, Harper Business, ISBN-10 62273205 ISBN-13 978–
0062273208
8 Adam Bryant (7 April 2012) The Phones Are Out, but the Robot Is In, New York Times,
[Online] http://www.nytimes.com/2012/04/08/business/phil-libin-of-evernote-on-its-
unusual-corporate-culture.html?pagewanted=all&_r=1 [accessed 25 October 2016]
9 Peter Thiel and Blake Masters (16 September 2014) Zero to One: Notes on startups, or
how to build the future, Crown Business, ISBN-10 804139296 ISBN-13 978–0804139298
13
Building the culture to move fast
Source Adapted from William Schneider (May 1994) Reengineering Alternative: A plan for making your
current culture work, Irwin Professional Publishing, ISBN-10: 0786301201
We’ve removed these roadblocks through our semi-annual planning cycle, thoughtful
cascading of critical information, and bi-weekly all company progress meetings. When every
employee consistently understands our strategy and key priorities, they can make better,
quicker trade-off decisions.
We also have clear owners for each of the company’s major objectives who are known
across the company. These individuals are accountable for key outcomes and metrics
related to the goals and have the autonomy to make critical decisions.
At the organizational level, we create the conditions for flexibility through strong shared
values that help guide how employees approach and complete their work. These values are
built into performance reviews, enlivened through workshops, and visible in the physical
work space. We use guiding principles when proposing a solution or course of action to
clarify what we’re optimizing for and how to think about the problem.
At the individual level, we enable velocity by helping employees feel a sense of ownership
beyond their job description and accountability through performance expectations.
beyond their job description and accountability through performance expectations.
Employees work towards clear, challenging goals and have regular discussions with their
manager about their progress.
Individual flexibility is facilitated through an emphasis on embedded reflection. We’ve put
significant investment into external coaches to work with many of our leaders (not just
executives). Coaches provide our leaders with a sounding board and structured time every
couple of weeks to reflect on how things are going and where they can improve or change
course.
Reflection is critical for all leaders but it’s been especially important for us as we’ve scaled
quickly. As the company grows, our leaders need to frequently re-assess how best to
allocate their time and invest their energy. What was the best approach six months ago will
frequently not be the best approach now. I like to use two questions to help with this kind of
reflection:
Is this the most important work I can be doing right now to make the team and company
successful?
Is the process approach strategy we used before still the most effective approach given
our current reality?
Process itself is, of course, not inherently bad for business, but there
is the kind that helps you to progress at pace and the kind that
slows you down. Netflix, for example, delineate between good
processes that help talented people to get more done (frequent
release schedules, regular strategy and context updates, budgetary
discipline), and bad processes that can creep in over time and often
try to prevent recoverable mistakes (such as overly complex sign-off
procedures, avoidable micro-management of expenditure,
unnecessarily multi-level approvals).10
If, as Chesky defines it, culture is ‘simply a shared way of doing
something with passion … a thousand things, a thousand times’,
then organizational culture in the agile business is about enabling
more intuitive decision-making and autonomy, removing
unnecessary process and hierarchy, and empowering the business
to move fast.
Goffee and Jones stress that no one of these cultures is the ‘best’
option, that there may well be advantages and disadvantages, and
that different cultures are appropriate for different business
environments.
Building on this work, and that of Amy Edmondson, we can
understand that if we desire a culture that supports agility, we need
to combine traits that support psychological safety at scale
including sociability, openness, and risk without recrimination,
while still optimizing for accountability towards a shared, common
objective (Figure 13.3).
Figure 13.3 Combining psychological safety and accountability
Combining both creates the culture and support systems for high-
performing teams to thrive in a truly agile business.
Source Adapted from Ben Thompson, (July 2013) The Uncanny Valley of a Functional Organization,
https://stratechery.com/2013/the-uncanny-valley-of-a-functional-organization/
Notes
1 Michael Sahota (25 July 2012) An Agile Adoption and Transformation Survival Guide,
Info Q, [Online] https://www.infoq.com/minibooks/agile-adoption-transformation
[accessed 25 October 2016]
2 William E Schneider (1 March 1994) Reengineering Alternative: A plan for making
your current culture work, Irwin Professional Publishing, ISBN-10 786301201 ISBN-13
978–0786301201
3 Jason Fried (13 May 2008) You Don’t Create a Culture, Signal vs Noise, [Online]
https://signalvnoise.com/posts/1022-you-dont-create-a-culture [accessed 25 October
2016]
4 Slack (13 January 2015) Building the Workplace We Want, Slack HQ.com, [Online]
https://slackhq.com/building-the-workplace-we-want-31fff8d6ffe0#.bxtx8569m
[accessed 25 October 2016]
5 Buffer, Buffer Monthly Reports, Buffer.com, [Online]
https://open.buffer.com/category/transparency/buffer-monthly-reports/
6 Joel Gascoigne (19 December 2013) Introducing Open Salaries at Buffer: Our
transparent formula and all individual salaries, [Online]
https://open.buffer.com/introducing-open-salaries-at-buffer-including-our-
transparent-formula-and-all-individual-salaries/ [accessed 25 October 2016]
7 Joel Gascoigne (21 September 2014) Why we have a core value of transparency at our
startup, and why the reasons don’t matter, [Online] http://joel.is/why-we-have-a-core-
value-of-transparency-at-our-startup/ [accessed 25 October 2016]
8 John R Childress (1 December 2013) Leverage: The CEO’s guide to corporate culture,
Principia Associates, ISBN-10 957517971 ISBN-13 978–0957517974
9 Brian Chesky (20 April 2014) Don’t Fuck Up the Culture, Medium, [Online]
https://medium.com/@bchesky/dont-fuck-up-the-culture-597cde9ee9d4#.y9qukolei
[accessed 25 October 2016]
10 Reed Hastings (1 August 2009) Netflix Culture – Freedom and Responsibility,
Slideshare.net, [Online] http://www.slideshare.net/reed2001/culture-1798664
[accessed 25 October 2016]
11 Charles Duhigg (25 February 2016) What Google Learned From Its Quest to Build the
Perfect Team, New York Times, [Online]
http://www.nytimes.com/2016/02/28/magazine/what-google-learned-from-its-quest-
to-build-the-perfect-team.html?_r=3 [accessed 25 October 2016]
12 Amy Edmondson (4 May 2014) Building a Psychologically Safe Workplace: Amy
Edmondson at TEDxHGSE, YouTube, [Online] https://www.youtube.com/watch?
v=LhoLuui9gX8 [accessed 25 October 2016]
13 Carnegie Mellon University (October 2010) New Study by Carnegie Mellon, MIT and
Union College Shows Collective Intelligence Of Groups Exceeds Cognitive Abilities of
Individual Group Members, Carnegie Mellon University, [Online]
https://www.cmu.edu/news/archive/2010/October/oct1_collectiveintelligencestudy.shtml
[accessed 25 October 2016]
14 Shana Lebowitz (20 November 2015) Google Considers This to Be the Most Critical
Trait of Successful Teams, Business Insider, [Online]
http://uk.businessinsider.com/amy-edmondson-on-psychological-safety-2015–11
[accessed 25 October 2016]
15 Rob Goffee and Gareth Jones (November 1996) What Holds the Modern Company
Together?, Harvard Business Review, [Online] https://hbr.org/1996/11/what-holds-
the-modern-company-together [accessed 25 October 2016]
16 Joe Turner (April 2016) The Building Blocks of Real Collaboration, Medium, [Online]
https://medium.com/@joeturner/the-building-blocks-of-real-collaboration-
450d1b115041#.xt7eoqk2t [accessed 25 October 2016]
17 Ben Thompson (16 July 2013) The Uncanny Valley of a Functional Organization,
stratechery.com, [Online] https://stratechery.com/2013/the-uncanny-valley-of-a-
functional-organization/ [accessed 25 October 2016]
18 Robert Coram (15 April 2004) Boyd: The fighter pilot who changed the art of war, Back
Bay Books, Reprint edition, ISBN-13: 978–0316796880
19 London Business School (7 December 2015) Two Thirds of Senior Managers Can’t
Name Their Firms’ Top Priorities, London Business School, [Online]
https://www.london.edu/news-and-events/news/two-thirds-of-senior-managers-cant-
name-their-firms-top-priorities [accessed 25 October 2016]
20 London Business School (7 December 2015) Two Thirds of Senior Managers Can’t
Name Their Firms’ Top Priorities, London Business School, [Online]
https://www.london.edu/news-and-events/news/two-thirds-of-senior-managers-cant-
name-their-firms-top-priorities [accessed 25 October 2016]
21 Matt Edgar (July 2016) Put Down All Behaviour Hurtful to Informality!, [Online]
https://blog.mattedgar.com/2016/02/07/put-down-all-behaviour-hurtful-to-
informality/ [accessed 25 October 2016]
22 Adam Bryant (30 March 2013) Want to Know Me? Just Read My User Manual, New
York Times, [Online] http://www.nytimes.com/2013/03/31/business/questbacks-lead-
strategist-on-his-user-manual.html?_r=0 [accessed 25 October 2016]
23 Inc.com (1 January 2014) To Make Your Management Style Clear, Create a User’s
Manual, [Online] http://www.inc.com/the-build-network/to-make-your-management-
style-clear-create-a-users-manual.html [accessed 25 October 2016]
14
A blueprint for flexibility:
autonomy, mastery and purpose
The research found that over the same time period companies that
had a lower average of 2.6 engaged employees for every actively
disengaged employee experienced 2 per cent lower EPS compared
with their competition. The exponential boost in earnings
attributable to a higher engagement ratio, they conclude, is a
competitive advantage that business leaders cannot afford to
ignore.
Autonomy
Knowledge workers have to manage themselves. They have to have autonomy.
Peter Drucker8
Where did it all go wrong? Data from the 2016 Edelman Trust
Barometer, a global study with over 33,000 participants,
demonstrates that one in three workers don’t trust their employer,
that trust decreases as you go down an organization’s hierarchy
(the proportion of staff who say they trust their organization at
executive level is 64 per cent of executives, at manager level is 51
per cent of managers, and rank and file level is 48 per cent), and
that for information on the company employees trust peers more
than CEOs.9 And yet, as we discussed earlier, trust is essential not
only to effective collaboration but to moving fast. A true learning
culture can only exist if employees are enabled with the right tools
and processes, and then trusted to learn from their failures as well
as their successes. Overly restrictive procedures and micro-
management kills any chance of creating a culture of ownership
and responsibility.
After flirting with a completely flat organization in 2002, Google
realized that some degree of hierarchy in the company helped in
prioritization, the communication of strategy, ensuring that
processes were aligned with objectives, and facilitating inter and
intra-team working. But they still kept that hierarchy to a
minimum. Now they have only four visible, meaningful levels:
individual contributor, manager, director and vice president.
Rather than micro-managing, managers are focused on creating the
right environment for great work and outputs. Beyond that, staff
are given autonomy to fulfil objectives in the way that they believed
would be most successful. A focus on outputs and results rather
than inputs helps to keep teams on track and support this freedom.
When Amazon established their two-pizza team model, they
structured in such a way to allow for focus through objective and
direction, autonomy in prioritization and execution, and
accountability through performance measures. Each one of those
small teams was established with a ‘fitness function’, a key business
metric agreed between the senior leadership and the team lead who
gives the team focus. This autonomy enables greater
entrepreneurialism, the opportunity for greater ownership and
growth. The value in the organization is naturally oriented towards
performance rather than presentation, great ideas and problem
solving rather than managing upwards, expertise and capability
rather than status or job title. To quote VC Ben Horowitz:
In well-run organizations people can focus on their work (as opposed to politics and
bureaucratic procedures) and have confidence that if they get their work done, good
things will happen both for the company and them personally. By contrast, in a poorly
run organization, people spend much of their time fighting organizational boundaries
and broken processes.10
Mastery
In the agile organization, mastery means empowering staff to not
only learn and improve but also to visibly see the results of their
learning. The role of data, in supporting data-driven decision-
making but also tracking individual and team progress is central to
this idea. In Part Three we looked at how using OKRs can tie
execution to strategy and provide a universal framework for
tracking objectives and performance. Making performance visible
in real-time through dashboarding is also a powerful way to
demonstrate impact and motivate improvement. As an example, the
UK Government Digital Service have created public dashboards that
show real-time performance across 803 services (just 541 of them
account for 2.4 billion completed transactions per year at time of
writing).12
A data-driven approach to employee performance and well-being
has been championed by Laszlo Bock, long-time Head of People
Operations at Google. Recognizing the paucity of data in the field of
human resourcing, he initiated a long-term study involving
thousands of Googlers in a bi-annual survey called ‘gDNA’. Bock also
established a team of people at Google, under Prasad Setty, focused
on so-called ‘People Analytics’, who are entirely devoted to
expanding a data-driven approach. Work by this team has already
led Google to evolve its recruiting practices, downplaying the
importance of college degrees in favour of ‘intellectual humility’
and other softer qualities (as discussed later in this Part).
Harvard Business School professor David Garvin has described
how the People Analytics team launched a set of research questions
which became Project Oxygen, another long-term research and
training programme that seeks to identify, measure and improve
key management behaviours.13 Through the accumulation and
analysis of multiple data points relating to management and
employee effectiveness (including employee surveys, performance
reviews, exit interviews, and interviews with high and low scoring
managers), the team leading the programme were able to show that
even small incremental improvements in manager effectiveness
had significant impacts.
Google had expanded data-driven decision-making from its
traditional areas of application (product development, marketing)
into assessing the effectiveness of management itself.
Unsurprisingly, there was a high degree of correlation between
managers that scored high on quality scores, and the satisfaction of
the employees in their teams. The team delved deeper into the data
to identify specific traits exhibited by high-scoring managers,
alighting on eight key behaviours. A good manager:
1. Is a good coach.
2. Empowers the team and does not micro-manage.
3. Expresses interest in and concern for team members’ success
and personal well-being.
4. Is productive and results-oriented.
5. Is a good communicator – listens and shares information.
6. Helps with career development.
7. Has a clear vision and strategy for the team.
8. Has key technical skills that help them advise the team.
Purpose
Much has been written about the importance of purpose to business
and brands, but perhaps one of the most compelling arguments
comes from Simon Sinek and his concept of the ‘golden circle’. Sinek
argues that people don’t buy what you do, they buy why you do it.17
If we consider the way in which the brain works, our neocortex
deals with rational and analytical thought and language, and that
aligns to the ‘what’. But we ignore the ‘why’ at our peril since this
speaks to the limbic brain, which has no capacity for language but is
central to how we feel, behave and make decisions.
This is powerful not only in attracting customers but also talented
employees. A compelling mission, cause or belief catalyses loyalty,
alignment and motivation. People who want to make a difference in
the world are attracted to organizations who themselves are setting
out to achieve what no other company can do. Shared passion
creates an imperative to do great work but also a great
environment in which to do that work. As exceptional talent
becomes more selective about where it wants to work, and
employer brands become more transparent, organizations that do
not have a compelling purpose will fail.
This clarity of purpose needs to run through the organization.
Pixar, one of the most successful film businesses of all time, has a
creative culture that relies on an interpretation of leadership firmly
routed in vision and purpose. Ed Catmull, Pixar President, has said:
We say we are director led, which implies they make all the final decisions, [but] what it
means to us is the director has to lead … and the way we can tell when they are not
leading is if people say ‘we are not following’.18
Notes
1 Gallup, State of the Global Workplace, Gallup, [Online]
http://www.gallup.com/services/178517/state-global-workplace.aspx [accessed 25
October 2016]
2 Gallup, Worldwide, 13% of Employees Are Engaged at Work, Gallup, [Online]
http://www.gallup.com/poll/165269/worldwide-employees-engaged-work.aspx
[accessed 25 October 2016]
3 Gallup, Worldwide, 13% of Employees Are Engaged at Work, Gallup, [Online]
http://www.gallup.com/poll/165269/worldwide-employees-engaged-work.aspx
[accessed 25 October 2016]
4 Gallup, FORTUNE 500 Employee Engagement Tools for Your Size Company, Gallup,
[Online] https://q12.gallup.com/ [accessed 25 October 2016]
5 Gallup (11 June 2013) How to Tackle U.S. Employees’ Stagnating Engagement, Gallup,
[Online] http://www.gallup.com/businessjournal/162953/tackle-employees-
stagnating-engagement.aspx [accessed 25 October 2016]
6 Ben Horowitz (24 April 2014) The Hard Thing About Hard Things: Building a business
when there are no easy answers, Harper Business, ISBN-10 62273205 ISBN-13 978–
0062273208
7 Daniel H Pink (13 January 2011) Drive: The surprising truth about what motivates us,
Canongate Books, ISBN-10 184767769X ISBN-13 978–1847677693
8 Rick Wartzman (October 2014) What Peter Drucker Knew About 2020, Harvard
Business Review, [Online] https://hbr.org/2014/10/what-peter-drucker-knew-about-
2020 [accessed 25 October 2016]
9 Lydia Dishman, April 2016, Why Employees Don’t Trust Their Leadership, Fast
Company, [Online] https://www.fastcompany.com/3058630/why-employees-dont-
trust-their-leadership [accessed 25 October 2016]
10 Ben Horowitz (24 April 2014) The Hard Thing About Hard Things: Building a Business
when there are no easy answers, Harper Business, ISBN-10 62273205 ISBN-13 978–
0062273208
11 Reed Hastings (1 August 2009) Netflix Culture – Freedom and Responsibility,
Slideshare.net, [Online] http://www.slideshare.net/reed2001/culture-1798664
[accessed 25 October 2016]
12 Gov UK, https://www.gov.uk/performance
13 Harvard Business Review (December 2013) How Google Sold Its Engineers on
Management, Harvard Business Review, [Online] https://hbr.org/2013/12/how-google-
sold-its-engineers-on-management [accessed 25 October 2016]
14 Rob Asghar (13 January 2014) What Millennials Want in the Workplace (and Why
You Should Start Giving it to Them), Forbes, [Online]
http://www.forbes.com/sites/robasghar/2014/01/13/what-millennials-want-in-the-
workplace-and-why-you-should-start-giving-it-to-them/#4564504f2fdf [accessed 25
October 2016]
15 Marcus Buckingham and Ashley Goodall (April 2015) Reinventing Performance
Management, Harvard Business Review, [Online]
https://hbr.org/2015/04/reinventing-performance-management [accessed 25 October
2016]
16 Peter Thiel and Blake Masters (16 September 2014) Zero to One: Notes on startups, or
how to build the future, Virgin Digital, ASIN B00KHX0II4
17 Simon Sinek (September 2009) How Great Leaders Inspire Action, TED, [Online]
https://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action?
language=en [accessed 25 October 2016]
18 Scott Burkun (19 April 2010) Inside Pixar’s Leadership, Scott Burkun, [Online]
http://scottberkun.com/2010/inside-pixars-leadership/ [accessed 25 October 2016]
19 Adam Grant (April 2013) Give and Take: A revolutionary approach to success,
Weidenfeld & Nicolson, ASIN B00CAUH7UE
15
Digital-native talent
Hiring smart
In Good to Great,1 Jim Collins’s research emphasized just what a
difference finding the right people to fill the right positions in a
company makes to that company’s performance. This intuitively
feels like something that should be obvious, and yet it is one of the
hardest things to actually get right. Not least because of the (internal
and external) pressure that often exists to fill an important position
in a timely manner.
Collins found that one of the characteristics of the leaders of ‘good
to great’ companies was that they kept searching for the right
person if they were not categorically sure that the candidates in
front of them were not absolutely right. They were also great at
ensuring that they positioned their best employees in the optimum
opportunities for growth in the business (rather than solving
everyday problems). And they focused on character, ideals, values
(that match those of the business), behaviour, work ethic as well as
(and sometimes as a higher priority than) direct experience. In
short, they valued people for who they were and not just what they
could do for you, and demonstrated attributes themselves that they
also looked for in others like a disciplined work ethic mixed with a
sense of personal responsibility, of cultivating passion and an
entrepreneurial spirit.
Earlier we discussed Eric Schmidt’s concept of ‘Smart Creatives’,
or the individuals who can combine technical knowledge, business
expertise and creativity and really transform organizational
capability (‘when you put today’s technology tools in their hands
and give them lots of freedom, they can do amazing things,
amazingly fast’). The empowerment of digital technologies is
dramatically amplifying the potential of exceptional talent to make
a difference to the business in which they work. In their research
into star performers in 21st-century organizations, Herman Aguinis
of the George Washington University and Ernest O’Boyle of the
University of Iowa, argue that the nature of modern work has led to
the emergence of a few individuals who contribute
disproportionately to outputs: ‘instead of a massive group of
average performers dominating … through sheer numbers, a small
group of elite performers (dominate) through massive
performance’.2 Instead of following a normal distribution,
individual performance follows an underlying power law
distribution.
Yet the competition around exceptional digital talent is such that
creating the environment in which such talent can thrive is
essential, not a nice-to-have. As is taking the time and space to find
them. Google front-load their people investment, spending an
unusually high proportion of money and time on attracting,
evaluating and cultivating new employees since they believe that
talent is a major pressure (‘Our greatest single constraint on growth
has always, always been our ability to find great people.’ Laszlo
Bock).3 Patrick Collison, founder of the (rapidly growing) payment
technologies company Stripe has articulated how important it has
been for them to take their time to make sure they hire the best
talent. It was six months before they had hired their first two
people, and another six months before they had hired the next few.4
Peter Thiel talks about how recruitment is a core competency for
any company and should never be outsourced.
When Laszlo Bock reviewed the outputs of Google’s extensive
employee research, he noted that school and college performance
correlated poorly with predicting ultimate performance. Instead,
Google have found that structured behavioural interviews involving
a more consistent standard for assessing people is more useful than
highly individualized interviews from different managers.
Recruiting managers are encouraged to ask candidates to give
examples of situations where they have solved difficult problems in
the past. Such questions about direct experience enables better
assessment of how candidates have reacted in a genuine situation
as well as revealing good insight into what they consider to be
difficult. While educational qualifications don’t hurt, and while
vertical or technical skills are important for a significant proportion
of roles, the importance of softer skills is really emphasized:
For every job … the No. 1 thing we look for is general cognitive ability, and it’s not I.Q.
It’s learning ability. It’s the ability to process on the fly. It’s the ability to pull together
disparate bits of information.
Key takeouts
In this Part we have discussed how human-centred flexibility in
culture, resourcing and behaviours can create the enabling factors
and environment to catalyse real change and agility. Key takeouts
include:
Notes
1 Jim Collins (4 October 2001) Good to Great, Random House Business, ISBN-10
712676090 ISBN-13 978–0712676090
2 Herman Aguinis and Ernest O’Boyle (May 2014) Star Performers in Twenty-First-
Century Organizations, Research Gate, [Online]
https://www.researchgate.net/publication/237438406_Star_Performers_in_Twenty-
First-Century_Organizations [accessed 25 October 2016]
3 Laszlo Bock (7 April 2015) Work Rules!: Insights from inside Google that will
transform how you live and lead, John Murray, ASIN B00NLHJKBE
4 Chris McCann (8 December 2015) 16 Lessons on Scaling from Eric Schmidt, Reid
Hoffman, Marissa Mayer, Brian Chesky, Diane Greene, Jeff Weiner, and more,
Medium, [Online] https://medium.com/cs183c-blitzscaling-class-collection/16-lessons-
on-scaling-from-eric-schmidt-reid-hoffman-marissa-mayer-brian-chesky-diane-
greene-3d6367e63a42#.4snhenedq [accessed 25 October 2016]
5 First Round, Mechanize Your Hiring Process to Make Better Decisions, First Round,
[Online] http://firstround.com/review/Mechanize-Your-Hiring-Process-to-Make-
Better-Decisions/ [accessed 25 October 2016]
6 John Rossman (2014) The Amazon Way: 14 leadership principles behind the world’s
most disruptive company, CreateSpace Publishing, [Online]
https://pdf.k0nsl.org/C/Computer%20and%20Internet%20Collection/
2015%20Computer%20and%20Internet%20Collection%20part%202/
CreateSpace%20Publishing%20The%20Amazon%20Way,%2014%20
Leadership%20Principles%20Behind%20the%20World’s%20Most%20
Disruptive%20Company%20(2014).pdf [accessed 25 October 2016]
7 Guy Kawasaki (3 March 2011) Enchantment: The art of changing hearts, minds and
actions, Portfolio Penguin, ASIN B004S26HB2
8 Scott E Page (11 August 2008) The Difference: How the power of diversity creates better
groups, firms, schools, and societies, Princeton University Press, ASIN B003TFELFI
9 B J Gallagher Hateley and Warren H Schmidt (1 November 2001) A Peacock in the
Land of Penguins: A fable about creativity and courage, Berrett-Koehler, ISBN-10
1576751732 ISBN-13 978–1576751732
10 Knowledge @ Wharton (6 February 2015) Is Your Leadership Style Right for the
Digital Age?, Knowledge @ Wharton, [Online]
http://knowledge.wharton.upenn.edu/article/the-right-leadership-style-for-the-digital-
age/ [accessed 25 October 2016]
11 Diana Budds (May 2016) IDEO’s CEO on How to Lead an Organization Creatively,
Fastcompany, [Online] https://www.fastcodesign.com/3059787/ideos-ceo-on-how-to-
lead-an-organization-creatively [accessed 25 October 2016]
PART FIVE
The transformation journey
These planks are supported by three sets of pillars that support and
fulfil our vision, purpose and organizing thought. These are set out
as key component blocks (captured as single words):
1. Think: from the cortex (the grey outer mass of the brain). This is
the domain of logic, reason and rational processing. The domain
of self-awareness, sense-making, the rules of social engagement.
2. Feel: from the limbic region (in the middle of the brain). This is
the domain of the senses, emotions, relationships, connections
with others, and is most closely linked to the heart. It is about
the personal, the subjective, the desire to bond and to form
groups.
3. Know: from the basal region of the brain (just above the spinal
column). This is the domain of instinct, intuition, ‘gut feel’. The
so-called ‘reptilian brain’.
Each of these areas of the brain wields its own type of influence
over our behaviour, and particular types of response may become
more dominant over time, notably in response to specific
circumstances. The thinking style, for example, might elicit the need
for structure, logical argument and clarity of thought or method.
The feeling style may make decisions based more on emotive
reasons, or be influenced more by close associates. They may be
more immediate, perceptive, creative. The knowing style are more
intuitive, using ‘gut feel’ to inform decisions, and keen to get things
done without distraction.
This is useful is a number of ways. It can be helpful in
understanding the reasons behind certain behaviours, or
empathizing with where people are coming from. It can be
advantageous to consider how a great team will naturally need a
combination of styles drawn from all three areas, and how different
people in the team might map to different roles, and combine to
greater effect. As Clive Hyland says:
… if people are developed in the right cultural environment they will inspire and energize
one another to higher levels of achievement …
It can also be fruitful as a way to understand how best to connect
with and engage others in order to bring them on the journey with
us. And it is useful as a way to understand how we might map new
behaviours to particular styles, and therefore inform what levers
we need to pull in order to affect behaviour change.
Source: Adapted from: Mobilizing Adaptive Work: Beyond Visionary Leadership, Dr Ronald Heifetz
with Donald L Laurie, in Jay A Conger, Gretchen M Spreitzer and Edward E Lawler III, The Leader’s
Change Handbook (San Francisco: Jossey-Bass, 1999), pp. 55–87
The signs that you’re exceeding the limit of tolerance are likely to
be:
Staying agile
The danger of drift
Once we have begun to create real momentum for change the work,
of course, does not stop there. A company that does not keep
pushing the drivers for change will lose momentum in the same
way that a car that runs out of petrol will coast to a stop. As we
mentioned in Part One of this book, this is not a transformation
with a beginning, middle and an end, it is journey to becoming a
new type of organization that is characterized itself by continuous
change, fluidity and rapid adaptation. Losing momentum in the
renewal process means losing performance, position and
advantage.
Analysis by Boston Consulting Group found that 75 per cent of
transformation efforts ultimately fail (only 25 per cent having
outperformed in the long term).21 Their research indicated two
common trajectories whereby a period of short-term recovery
(typically following an initial streamlining process to reduce
inefficiencies) was followed either by long-term slow decline or less
commonly by long-term reinvigoration of growth and performance.
Which ‘chapter two’ trajectory (following the ‘chapter one’
efficiency drive) a company followed was determined by their
commitment to creating lasting change, deploy, grow and innovate
around a new vision, model and/or strategy and then refine it over
a multiyear period.
Success was dependent on many of the factors that we’ve
discussed already in the book: a conscious decision to move beyond
efficiency and refocus on growth and innovation; the creation of
room for experimentation and separation of new business models
from legacy operations, coupled with a new and clear shift in
strategy; an appetite to challenge the old assumptions, ask the big
questions and reinvent business models; multi-dimensional
innovation; determination in taking the long view, sticking to the
vision over a long period of time, and persisting through internal
resistance and setbacks; evolving transformation through test and
learn, deploying a portfolio of initiatives to drive growth, and
constant adaptation of a flexible plan.
Interestingly, the research also revealed a number of key traps
from those that attempted transformation but ultimately failed. To
paraphrase:
The early-wins trap: calling victory too early, after initial gains
in efficiency, and failing to move to ‘chapter two’ and create
lasting change.
The efficiency trap: over-lengthy and enthusiastic cost-cutting
and efficiency drives.
The legacy trap: not moving on from legacy assumptions and
ways of working.
The proportionality trap: dabbling in change (eg a small-scale
series of pilots) rather than properly addressing the scale of the
challenge with a fundamental and scaled response.
The false certainty trap: sticking to a rigid transformation plan
instead of iterating and adapting continually in response to new
knowledge or contexts.
The proximity trap: keeping the new business too close to the
legacy business, and thereby undermining its chances of
survival.
The persistency trap: giving up too soon and underestimating
the amount of time needed to realize results.
What now?
Go do it!
Notes
1 Sebastian Junger (24 May 2016) Tribe: On homecoming and belonging, Twelve, ISBN-
10 1455566381 ISBN-13 978–1455566389
2 Christopher Boehm (July 2008) Conscience Origins, Sanctioning Selection, and the
Evolution of Altruism in Homo Sapiens, [Online]
https://view.officeapps.live.com/op/view.aspx?
src=https://media.eurekalert.org/aaasnewsroom/2009/FIL_000000000621/BBS%20FINAL%20July%2019
[accessed 25 October 2016]
3 Ellie Lisitsa (24 April 2013) The Four Horsemen: Criticism, Contempt, Defensiveness,
and Stonewalling, The Gottman Institute, [Online]
https://www.gottman.com/blog/the-four-horsemen-recognizing-criticism-contempt-
defensiveness-and-stonewalling/ [accessed 25 October 2016]
4 Caroline Webb (14 January 2016) How To Have A Good Day: Harness the power of
behavioural science to transform your working life, Macmillan, ASIN B00ZCCX55I
5 John P Kotter (13 November 2012) Leading Change, Harvard Business Review Press,
ISBN-10 1422186431 ISBN-13 978–1422186435
6 John P Kotter (25 February 2014) Accelerate: Building strategic agility for a faster-
moving world, Harvard Business Review Press, ISBN-10 1625271743 ISBN-13 978–
1625271747
7 B J Fogg (18 June 2016) Tiny Habits Method, tinyhabits.com, [Online]
http://tinyhabits.com/ [accessed 25 October 2016]
8 B J Fogg (2016) Behaviour Model, [Online] http://behaviormodel.org/ [accessed 25
October 2016]
9 Charles Duhigg (7 January 2014) The Power of Habit: Why we do what we do in life
and business, Random House Trade Paperbacks, ISBN-10 081298160X ISBN-13 978–
0812981605
10 David T Neal, Wendy Wood and Jeffrey M Quinn (August 2006) Habits – A Repeat
Performance, Research Gate, [Online]
http://www.researchgate.net/publication/252798940_HabitsA_Repeat_Performance
[accessed 25 October 2016]
11 Charles Duhigg, Need to Break a Bad Habit?, charlesduhigg.com, [Online]
http://charlesduhigg.com/need-to-break-a-bad-habit/ [accessed 25 October 2016]
12 Charles Duhigg, April 2012, The Right Habits, Lifehacker.com
http://lifehacker.com/5896846/the-right-habits [accessed 25 October 2016]
13 Charles Duhigg (28 April 2012) How ‘Keystone Habits’ Transformed a Corporation,
Huffington Post, [Online] http://www.huffingtonpost.com/charlesduhigg/the-power-
of-habit_b_1304550.html [accessed 25 October 2016]
14 Scott Adams (8 April 2014) How To Fail at Almost Everything and Still Win Big: Kind of
the story of my life, Brilliance Audio, ISBN-10 1491518855 ISBN-13 978–1491518854
15 Shirlaws, TFK FAQ: Compass from Shirlaws, Shirlaws, [Online]
http://www.shirlawscompass.com/tfkfaq [accessed 25 October 2016]
16 Clive Hyland (27 February 2013) Connect: Through THINK FEEL KNOW, Anoma Press
Ltd, ASIN B00BMJTTJG
17 Stewart Brand (16 March 2000) Clock of the Long Now: Time and responsibility – the
ideas behind the world’s slowest computer, Basic Books, ISBN-10 465007805 ISBN-13
978–0465007806
18 Gartner newsroom (14 February 2012) Gartner Says Adopting a Pace-Layered
Application Strategy Can Accelerate Innovation, Gartner, [Online]
http://www.gartner.com/newsroom/id/1923014 [accessed 25 October 2016]
19 Ronald A Heifetz, Martin Linsky and Alexander Grashow (1 April 2009) Practice of
Adaptive Leadership: Tools and tactics for changing your organization and the world:
A fieldbook for practitioners, Harvard Business School Press, ISBN-10 1422105768
ISBN-13 978–1422105764
20 Dr Ronald Heifetz (14 August 2011) Adaptive vs Technical – Dr. Ronald Heifetz,
YouTube, [Online] https://www.youtube.com/watch?v=UwWylIUIvmo [accessed 25
October 2016]
21 B Martin Reeves, Kaelin Goulet, Gideon Walter and Michael Shanahan (21 October
2013) Why Transformation Needs a Second Chapter Lean, but Not Yet Mean, Boston
Consulting Group, Perspectives, [Online]
https://www.bcgperspectives.com/content/articles/transformation_growth_why_transformation_needs
[accessed 25 October 2016]
22 Russell Davies, January 2015 Principle Drift, Russell Davies
http://russelldavies.typepad.com/planning/2015/01/principledrift.html [accessed 25
October 2016]
23 Paul Graham (July 2009) Maker’s Schedule, Manager’s Schedule, Paul Graham.com,
[Online] http://www.paulgraham.com/makersschedule.html [accessed 25 October
2016]
24 Noah Brier (9 June 2014) CULTURE The 6 Meeting Rules of Percolate, Percolate,
[Online] https://blog.percolate.com/2014/06/6-meeting-rules-of-percolate/ [accessed 25
October 2016]
25 Brian Rumao (9 March 2015) How LinkedIn Execs Run Meetings, Linkedin.com,
[Online] https://www.linkedin.com/pulse/how-linkedin-execs-run-meetings-brian-
rumao [accessed 25 October 2016]
26 Brad Porter, September 22, 2015, The Beauty of Amazon’s 6-Pager, Linkedin.com,
[Online] https://www.linkedin.com/pulse/beauty-amazons-6-pager-brad-porter
[accessed 25 October 2016]
27 Mihály Csíkszentmihályi (1 August 2002) Flow: The psychology of happiness: The
classic work on how to achieve happiness, Rider, ISBN-10 712657592 ISBN-13 978–
0712657594
28 Mihály Csíkszentmihályi (5 January 2004) Good Business: Leadership, flow and the
making of meaning, Hodder Paperbacks, ISBN-10 340739738 ISBN-13 978–0340739730
Index
Note: Chapter notes and ‘stories from the frontline’ are indexed as such. Page numbers in
italics indicate Figures or Tables.
Accelerate 245
Adams, P (VP of Product, Intercom) 103, 146
Adams, S 251–52
‘adapt or die’ 4–5
adaptive leadership, key challenge of 256
advanced talent networks 177, 178
agile/Agile 79–82 see also Agile Manifesto
budgeting 162–63
challenges 81–82
methodologies, key advantage of 81
‘release early and often’ principle 81
software development practices 79–81, 80
team onions 191–93, 192, 193, 248
the agile innovation process 95–117
empowering invention (and/with) 95–104
the creative organization framework 100, 100
defining the problem to solve: the ‘5 Whys’ 102–03
first principles and 10x thinking 103–04
ideas from anywhere 95–97
‘porous enterprise’ and value of fresh perspectives 98–99
the restless, curious organization 99–100
wide and deep innovation 100–102
ingrained commercialization (and) 105–09
the entrepreneurial function 107–08
pirate metrics 108–09
structuring for innovation 105–07
key takeouts 114–15
scaling, the digital-native way (by) 109–13
fluid resourcing 112–13
power of open ecosystems, growth hacking and APIs 111–12
using network effects 110
Agile Manifesto 79, 82, 83, 91, 183
agile strategy and planning (and) 132–50
balance between vision and iteration 135–37
the customer-centric organization 137–40
discovery-driven planning 147–48
emergent and deliberate strategy 134–35
key to good strategy 132–34
and key contexts: consumer, competitor, company 133
P for Prioritization 141–45, 144
strategy as ever-changing algorithm 145–46
agile structures and resourcing (and) 171–87, 172
centralization vs decentralization, specialists and generalists 178–79
composition of multi-disciplinary teams 185–86
concurrent running, co-located working 173–74, 176, 175
Holacracy 185
insourcing and outsourcing dynamic 176–77, 178
power of small teams to drive big change 179–82
self-organizing, multi-disciplinary teams 183–85
two pizza teams 182–83
agility, scaling (and/by) 188–201 see also Spotify
agile decision-making: flatter structures, quicker decisions 197–98
agile governance and the digital board 198–200
getting the right mix: pioneers, settlers, town planners 193–97, 196
managing core teams and dependencies (and) 191–93
Agile team onion model 191–93, 192, 193 see also models stages: dispersed mavericks,
focused agility, scaling agility, dispersed agility 189–90
Aguinis, H 227–28
AirBnB 9, 109–11, 207
Altimeter 51
Amazon 15, 88, 110, 120, 128–2, 138–39, 182–83, 261 see also Bezos, J
Mechanical Turk 177
one-click 13
Redshift and Aurora 229
Task Rabbit 177
two-pizza team model 219–20
view on innovation 138
Web Services 183
Anderson, S (Future Kings Ltd) 242
Andreesen, M 17, 87
Appelbaum, E 237–39
Apple 15, 68, 111, 119–20, 122
Blue Sky initiative 66
application programming interfaces (APIs) 9, 18–19, 111–12, 115, 139, 176, 182
Applied Imagination 96
Argyris, C 90
articles/papers (on)
economics (Coase, 1937) 18
The Law of Accelerating Returns (Kurzweil, 2001) 5
‘The London Recipe: How systems and empathy make the city’ (Leadbeater, C) 167
Microsoft (Vanity Fair, 2014) 195 see also Ballmer, S
‘The Nature of the Firm’ (Nobel, 1937) 18 see also Coase, R
reform in the healthcare industry (Zimmerman and Glouberman) 73
‘Why software is eating the world’ (Andreesen in Wall Street Journal, 2011) 17
AstraZeneca (and) 174–76
Digital Innovation Group and ‘wicked problems’ in healthcare 174, 175
DigitasLBi 174
autonomy, mastery and purpose (and) 217–26
autonomy 219–21
employee engagement problem 217–18 see also studies
mapping strategy and culture to motivation 218–19
mastery 221–24
purpose 224–25
and the ‘golden circle’ concept 224 see also Sinek, S
Ballmer, S 195
Barden, M 13
Barnes, T 17
barriers to progress: hindrances and problems (and) 34–49
the arrogance of scale 38–39
culture and behaviour 45–46
legacy technology problem 43–44
marginal thinking 44–45
potential flaws of rigid planning 41–43
protecting against ‘toxic assumptions’ 39–41
slow by design 34–35
why good ideas become battles 37
why organizations become ‘sticky’ 35–36
A Beautiful Constraint 13
Bezos, J 88, 110, 128–29, 130, 135, 137, 138–39, 182–83, 261
Bhidé, A 135
Bigger-Higher-Faster-Farther (US Air Force philosophy) 57, 60, 159, 163
Blank, S 106, 108
Blitzkrieg 60, 61, 220 see also Fingerspitzengefuhl and Schwerpunkt
blueprint for flexibility: autonomy, mastery and purpose 217–26 see also flexibility
autonomy 219–21
employee engagement problem 217–18 see also studies
mapping strategy and culture to motivation 218–19
mastery 221–24
and key behaviours of managers 222–23
purpose 224–25
Bock, L (Google Head of People Operations) 221–22, 223, 228
Boehm, C 241
Bogle, N 188
Boston Consulting Group 27
analysis of patterns of entry, grown and exit of US companies (2015) 5
DICE® framework 92
growth share matrix (2014) 12
Bounce 120
Boyd, J 57–61, 159, 212
and OODA loops 58–60, 212
originates EM theory of aerial combat (with T. Christie) 57
Boyd: The fighter pilot who changed the art of war 58
Bracken, M 32
brainstorming 96, 97
Brand, S 254
Brier, N (Percolate) 145, 260–61
Brinker, S 21
and Martec’s Law 21
Brown, T (IDEO founder) 78, 231
Bryant, A 214
Buffer social sharing app 66
building the culture to move fast (and) 202–16
agile as defining a culture 202–03, 203
creating the culture for real collaboration 211–12, 211
creating a user manual 214
differentiating between high-performing teams (and) 208–10, 210 see also research and
studies
four main cultural types (Goffee and Jones) 209–10
key strategies for leaders (Edmondson) 209
digital-native culture 204–07
trust and ‘productive informality’ 212–13
with the right culture 207
Built to Last 127
Calof, J 38
Cameron, W B 161
Catmull, E (President, Pixar) 85–86, 96, 97, 224
Caudill, N 204
change, five dimensions of 235–58
1: personal 235, 236–42 see also stories from the front line
building a movement for change 239–41 see also Boehm, C and Junger, S
dealing with negativity 241–42 see also Gottman, J and Webb, C
the transformation leader and the ‘hero’s journey’ 236–37, 237
2: principles: the organizing idea 235, 242, 244, 243
3: process: process and structure of digital transformation 235, 244–48, 247
4. practice 235, 248–53
change through behaviour 248–49
developing systematic change 251–52
remaking organizational habits 249–51 see also studies
think, feel, know 252–53
5: pace 235, 254–58
layering 254, 255
productive zone: balance between comfort and urgency 255–58, 257
change, key forces for (and) 3–25, 4
the agile context model 20, 20
change as relentless and accelerating 4–6
key challenge: rates of change 21–22, 21
transformed company contexts see change: transformed company contexts
transformed competitive contexts see change: transformed competitive contexts
transformed consumer contexts 13–15
‘gateway principle’ and customer interface battle 14–15
change maturity model 52–54
culture 54
customers 53
planning and processes 53
resources 53
strategy 54
vision 54
change: transformed company contexts (and) 15–20
the data explosion 15–16
the heightened impact of talent 19–20
from linear to networked dynamics 18–19
from products to services, apps and software 16–18
change: transformed competitive contexts (and) 6–12
the ‘full stack startup’ 7–10
horizontal innovation 6–7 see also studies
the shifting nature of advantage and McGrath framework 10–12
‘unicorns’ 8–9
chapter notes (for)
the agile innovation process 115–17
agile strategy and planning 148–50
agile structures and resourcing 186–87
autonomy, mastery and purpose 225–26
barriers to progress: hindrances and problems 48–49
building the culture to move fast 214–16
defining digital transformation 56
digital-native organization 2
digital-native processes 93–94
digital-native talent 232–33
flexibility 169, 225–26
focus 122–23
how digital disrupts 32–33
key forces for change 23–25
linking strategy to execution 164–65
operating in the ‘ambiguity zone’ 76–77
role of vision and purpose 131
scaling agility 200–201
the transformation journey 263–65
velocity 61
The Checklist Manifesto 72
Chesky, B (AirBnb) 109, 207
Christensen, C 27, 31, 45, 50, 51, 103, 128, 129, 134, 145, 177
and ‘jobs to be done’ concept 103
Christie, T 57
The Clock of the Long Now 254
The Cluetrain Manifesto 111
Coase, R 18
Coleman, J (agility transformation consultant) 91–93
Collins, J 86, 127, 227
Collison, P 228
Competitive Advantage: Creating and Sustaining Superior Performance 26
Constable, J (People Development at Pinterest) 205
Cook, S (Intuit CEO) 67
Coppola, F 43–44
Coram, R 58, 59, 60, 212
Cringely, R X 195
criticism 2, 241
importance of withholding 97
Csíkszentmihályi, M 262
and ‘flow’ 262
cultural types (Goffee and Jones): networked, mercenary, fragmented, communal 209–10
Kaizen 69, 82
Kasporov, G 105
Katz, A 37
Kaufman, J 71
and Gall’s Law 71
Kawasaki, G 229
Kay, G 181
Keeley, L 100–102
Kelley, D 78
Kelly, K 8
Kenyani, P 66
Kniberg, H 191
Kotter, J and his eight-step process for leading change 121, 244–45
Kroghrud, I 214
Kubler-Ross, E 236 see also models
Kurzweil, R (Head of Engineering, Google 5, 28–29 see also articles/papers and S-curves and
Law of Accelerating Returns 5
McClure, D 108–09
McGrath, R G 10–11, 113, 146, 147–48, 162–63, 171
MacLeod, H 37
Malbon, T 186
marginal thinking 45
Martec’s Law 21
Martin, R 132, 133, 151
measures, Goodhart’s Law on 47
Metcalfe’s Law 110
Millman, D 89
Mindset 89
models see also change maturity model and Kotter, J
70:20:10 approach to resourcing 68
70/20/10 approach to time and focus (Google) 67
70/20/10 for learning and development 113
70:20:10 for products and budgeting 67
the agile context 20, 20
the Agile Spiral 246–48, 247
Agile team onion 191–93, 192, 193
collaborators 192
core team 192
supporters 193
Cynefin (Snowden) 74, 75
Data, Information, Knowledge, Wisdom (DIKW) 158
for the five stages of grief (Kubler-Ross) 236
for maturity in data analytics (Gartner) 16
maturity: legacy, enabled and native stages of development 52
Schneider’s two-by-two matrix of organizational culture types 202, 203
two-pizza team (Amazon 219–20
momentum (velocity x focus) 120–21
adaptive 121
Morgan, A 13
Mueller, J 180
Musk, E (CEO, Tesla Moors) 103–04
Neal, N 249
Nemeth, C 97
Netflix 9, 130, 220–21
Newman, V 35, 36
NOBI organization design consultancy 125
O’Boyle, E 227–28
Ohno, T 102
O’Neill, P (CEO of Alcoa) 251
OODA loops 58–60 see also Boyd, J
operating in the ‘ambiguity zone’ (and/by) 63–77, 64
building velocity through continuous innovation 64–68
complex scenarios requiring emergent solutions 74–75, 74 see also models
marginal and breakthrough innovation 70
more experimentation = more opportunity 68–69
more iterative, emergent approach 70–71
the three types of problem in the world 72–74 see also Glouberman, S and Zimmerman, B
waterfall processes – key challenges 71–72
The Origin and Evolution of New Business 135
Osborn, A F 96, 97
Ovid 36
Quinn, B 100–102
Quinn, J 249
Reeves, M 5
reflection/reflective practice 90–91
research (on)
average lifespan of S&P 500 index companies (Foster, R) 5
change in nature of teams in response to more fluid world (Edmonson) 181
collective intelligence among co-operating teams (Carnegie Mellon, MIT, Union College)
208
innovation (Cap Gemini) 105–06
mapping US listed companies on growth share matrix 12
‘The mortality of companies’ (Sante Fe Institute) 5
need for change in leadership styles (Wharton University) 230–31
star performers in 21st-century organizations (Aguinis and O’Boyle) 227–28
transformation efforts (Boston Consulting Group) 258–59
weak links between strategy and execution (MIT Sloan & London Business School)
212–13
Rework 42
Ries, E 82–83, 108
and innovation accounting 162
Rosenberg, J 34–35
Rumelt, R 132, 133–34 see also definitions
Ryan, M (Wartsila Corporation) 87, 126
S-curves 28, 29–30, 30, 63, 64, 114 see also Handy, C and Kurzweil, R
Sahota, M 202
scaling agility see agility, scaling
Schmidt, E 15, 34–35, 186 see also Google
and Smart Creatives 227
Schneider, W 202, 203
Schön, D 90
Schumpeter, J 5
and definition of process of technological change 29
Schwerpunkt 60, 136, 220
Seely Brown, J 98
Setty, P (Google) 222
Seydoux, H 144–45
and Parrot technology and drone business 144
Shirlaw, D 253
Simoudis, E 106
Sinek, S 224
and golden circle concept 224
Smith, D (Global Futures and Foresight) 193–94
Snippets system 223–24
Snowden, D 30, 74, 75 see also models
Socrates 89
Spotify 66
and ‘Squads, Tribes, Chapters and Guilds’ 190–91
stories from the frontline (on)
agile strategy and planning: prioritization in digital transformation 142–43
agile structures and resourcing 181–82
barriers to progress: hindrances and problems 46–47
building the culture to move fast 205–06, 205
digital native processes 87, 91–93
The Future of Digital Transformation (Gerd Leonhard, Futurist and Author) 22–23
linking strategy to execution (using OKRs to drive change: Hammond, D) 155–56
the transformation journey and importance of resilience (Eva Appelbaum) 237–39
vision and purpose 126
strategy see agile strategy and planning and linking strategy to execution
and plan, difference between (Freedman) 136–37
Stroebe, W 96
studies (on)
brainstorming (Nemeth, C) 97
differentiating between teams (Google: Project Aristotle) 208
The Digital Advantage: How digital leaders outperform their peers in every industry
(Cap Gemini and MIT Sloan) 51
the ‘digital universe’ (EMC Digital Universe, 2014) 16
employee engagement (State of the Global Workplace: Gallup, 2013) 217–18
habits (Duke University) 36, 249–50
high-performing teams (Project Aristotle, Google) 208
IBM 2015 global C-suite study on competition and ‘horizontal innovation’ 6–7
Nortel – its failure and bankruptcy (Telfer School of Management) 38
percentage of analysis of world’s data (EMC/IDC Digital Universe, 2012) 16
predicting percentage of US workforce as independent workers by 2020 (Intuit) 177
trust in organizations (Edelman Trust Barometer, 2016) 219
unlearning to learn (European Molecular Biology Laboratory/University Pablo Olavide)
89
surveys (on)
The Business Case for Purpose (HBR/EY) 127
unicorn companies (CB Insights) 9
Syed, M 120
Systemantics: How systems work and especially how they fail 70
Systrom, K (Instagram) 109
tables
the 12 principles of agile business 84–85
key difference between legacy and agile 172
questions to workshop 20
Terwiesch, C 67
Thiel, P 107, 110, 179, 199, 207, 223, 228
Thompson, B 211, 212
three horizons thinking 67–68
Toffler, A 1
the transformation journey (and) 235–65
the five dimensions of change 235–58 see also change, five dimensions of
staying agile (and) 258–62
achieving organizational ‘flow’ 262
the danger of drift 258–59 see also research
minimum viable bureaucracy 260–62
what now? – do it! 263
Twitter 112, 154
and Odeo 135
Tyson, M 145
Uber 9, 177
‘Uber’s Children’ 13
Ulrich, K 67
unicorns 8–9
Unilever Foundry 106–7
United Kingdom (UK)
Government Cabinet Office 160
Government Digital Service (GDS) 65, 141, 159–60, 221
10 design principles of 139–40
‘X-Wing fighter’ approach to technology 160–61
United States (US) 217
Air Force ‘Bigger-Higher-Faster-Farther’ philosophy 57, 60, 159, 163
Army: Commander’s intent 136
and ‘concept of operations 136
military: ‘after action review’ 91
and report on State of the American Workplace 218
Wald, A 87–88
Walmart Labs 106, 107
Walters, H 100–101
Wardley, S 195
The Way of the Peaceful Warrior 89
Webb, C 241–42
Webber, E 191
Weinberger, D 111
Welch, J 46, 198
what’s stopping you? see barriers to progress: hindrances and problems
Where Good Ideas Come From 96
Williams, N 65 see also UK Government Digital Service
Wired 129
Wood, W 249
Yakob, F 46
Y Combinator startup incubator 40, 41, 109
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