There are a number of limiting factors that impact upon an organisations ability to ‘be a fast fish’
We have grouped these limiting factors into two categories:
- Market Challenges that affect ‘all’ organisations, and
- Internal Challenges that ‘may’ affect your organisation
This section focuses upon the seven internal challenges as shown below.
1.9.1 Resistance to Change
Why would someone resist a change?
The usual answer is, they don’t believe the change is right/necessary. In addition, if you are an engineer, or have an engineer in the family you may have come across this saying (‘If it’s not broken, don’t fix it, otherwise you’ll end up breaking it.’)
If someone does resist, can we force them to act?
In organisations that replicate Frederick Taylor’s command and control structure, this may be possible. But if we are forcing change from the top, can we also force the passion that is often required to make significant changes a reality?
Another example of resistance to change is when the Middle Management level of a traditional organisation is particularly apprehensive of the inherent changes caused by implementing Business Agility.
For example, the drop a performance an be expected when shifting from a tried and tested (but old fashioned) operating model, towards one focused upon high-velocity. And, whilst this drop simply represents short-term pain for long-term gain, a Middle Manager may be concerned about the expectation from Senior Leadership to achieve the same yearly performance targets.
Therefore a Middle Manager may resist the change towards Business Agility, simply because they do not agree that it’s the best way to achieve the companies targets.
In addition, the creation of self-organising, or even self-managing teams naturally reduces the number of Middle Managers we need to employ to delegate tasks, to teams.This can cause resistance to change, simply due to the threat of being unemployed.
Fortunately though, Business Agility brings new roles that create opportunities for ex-Middle Managers who are willing to adopt and adapt to a new way of working.
How to manage Resistance to Change?
Resistance to Change, can be managed by co-creating and Realising a Shared Vision.
If resistance to change is caused by people who simply don’t believe the change is right, or necessary, then the solution should be obvious.
We need to co-create change, so that everyone believes it is right, or necessary.
This approach is essential, because:
- You cannot force someone to change the way they think,
- Forced conformance, through governance does not guarantee the passion required to achieve success.
Only when everyone, or at least the majority, support a Shared Vision and The Goal is it likely to be achieved.
1.9.2 Functional Siloes
Functional Siloes represent an organisation model that is designed around specialism. This was made famous in Michael Porter’s 1985 book on Competitive Advantage, where he introduced the Value Chain model.
The Value Chain model highlights ‘activities’ that a firm executes in order to deliver value to a customer. Each activity requires a specialism, which is why many traditional organisations are setup with departments for HR, Finance, Procurement, Marketing, IT etc.
While there are many advantages to conducting a Value Chain analysis, there is one major potential drawback. By focusing too much upon on specialist ‘activities’, the broader strategic view of the Value Chain as a system can get lost.
After all, the main purpose of Value Chain analysis is to evaluate company operations, activity by activity, to increase efficiency in each area. But, Value Chain analysis does a poor job of linking each activity in the chain together.
Consequently, it’s possible to lose sight of how the activities interrelate as end-to-end Value Streams. Thus, specialists simply focus upon their own area of specialism, which inadvertently creates a silo culture.
How to manage Functional Siloes?
The negative impact of functional siloes can be managed by Maximise Autonomy within a Product/Service-based Organisation.
Shifting from functional organisation model, and culture is not something that will change overnight. Particularly culture is not even something that you can change directly.
As culture is the result of a particular, and sustained way of working. If we can change the way we work, and sustain it, eventually a new culture will emerge.
To change from a functional silo culture, we need to change the way we are organised. From activity-focused Functional Teams, towards end-to-end Product, or Service Teams.
Because a Product/Service-based organisation, is also a Matrix it comes with the same challenges of all Matrix models. That is, prioritisation.
In a traditional, Functional Matrix employees are organised by functional specialism, which is indicated by the vertical columns with solid line.
Change, in the form of projects requires cross-functional expertise which is symbolised by the horizontal rows, with the dashed-line.
The downside of this Matrix configuration, is that when prioritisation conflicts occur i.e. an employee needs to be in two places at the same time.
It is likely that the employee will prioritise their Functional obligations, higher than their Project obligations, which can cause issues with Project performance.
A Product/Service Matrix is simply a Functional Matrix, that has been rotated clockwise, by 90°. As such, the inherent problem of all Matrix models still exists, we are just shifting the problem.
Now, when we ask an employee “where are you from?” they will reply with a particular Product/Service. Thus, solving the siloed ‘functional’ culture.
However, what can suffer now due to prioritisation clashes, is the development and continuity of our functional expertise.
If not carefully managed, we may start reinventing the wheel, if solutions created in one Product/Service Team are not shared amongst the rest.
Therefore, we must be careful that our Product/Service-based organisation model does not simply create a new set of siloes.
In his 1991 book, Quality Management Software Volume 1 – Systems Thinking, Gerald Weinberg presented statistics on the time lost to context-switching.
Context-switching refers to the shift from one task to another. This is also known as multitasking, and utilisation.
As humans, it is impossible to start working on a task at 100% performance. Even champion sprinters, will take a few seconds to reach their highest speeds. This ramp up in performance, from 0% to 100%, can take a varying amount of time depending upon the individual.
Whilst the time to ramp up to 100% performance does vary, the drop back down to 0% due to an interruption (such as a phone call, email etc.), or even a planned change of task is always immediate.
This slow ramp up, and sudden drop of performance causes a saw-blade like effect, that you can see in the diagram above. The white space that is visible between the peaks, represents waste that has been introduced due to switching tasks.
The chart on the left from Carnegie-Mellon University is based upon the statistics in Gerald’s book, and aims to quantify the amount of waste introduced by context-switching.
How to manage Multitasking?
How can we manage the negative impact of context-switching aka multitasking?
The answer is, we need to focus upon a limited number of tasks to reduce waste, and Realise Value Quickly.
One way to limit the number of tasks is to explicitly state the maximum number of tasks that can be ‘in progress’ at any one time. This is referred to as a Work in Progress limit, and has been popularised in Kanban since it was introduced in the 1950’s.
As you may recall from the section on the Theory of Constraints, a bottleneck represents a constraint within a system. And, every system has at least one constraint.
In the example shown above, the performance of the system is being constrained by Team D, who as the lowest performing team is limiting the throughput of the system to 2 tasks a week.
How to manage Bottlenecks?
We can reduce bottlenecks, or Minimise the Waste caused by bottlenecks by identifying and resolving them.
One difficulty you may face in a corporate setting is how to identify where the bottleneck is.
One solution to this problem can be to visualise the flow of work using a Kanban or similar approach such as a ticketing system.
Once the bottleneck has been identified you can follow the guidance from The Theory of Constraints to resolve, or minimise the impact of the bottleneck upon your system (i.e. your Product/Service).
We may believe that we are completely objective in the way that we interpret the world around us.
The concept of Mental Models tells us that our perceived objectivity, may instead be subjectivity as our interpretation can be influenced by our upbringing, our beliefs, our role, social pressures and many more.
Our mental model can help shape our behaviour and set an approach to solving problems (similar to a personal algorithm) and doing tasks.
- Business Person = commercial viewpoint
- Scientist = theoretical viewpoint
- Engineer = practical viewpoint
Question: In decision-making, can we say that someone is wrong, simply because they share a different mental model to ourselves?
Answer: People rarely make deliberate mistakes, thus we cannot say that their perception, or decision is wrong, simply because it clashes with our own.
How to manage Mindset?
How can we manage the problems caused by a fixed mindset?
The answer is, we need to remove personal bias by using Data to Drive Decisions. As discussed previously, to build a new culture, we need to change the way we work.
Step 1: To change the way we work, we must often start at the top of the organisation i.e. leading by example.
Step 2: We need to select metrics that matter (to whom?) to ensure that we are all in alignment.
Step 3: Is to conduct experiments and collect data from Customers and employees.
Don’t just focus on the Customer, because as Richard Branson of Virgin stated “If you take care of your employees, they will take care of your customers.”
Step 4: We need to build a strong foundation in data science and data analytics, to understand the meaning of the data we are collecting.
Step 5: Make sure that wherever possible, our strategic and tactical decisions are based on visible, and verifiable data.
If we can implement and sustain these five steps, we should be well on our way to building a data-driven culture.
1.9.6 People Management
Centralised Performance Management
Centralised performance management, as popularised by Frederick Taylor in the early 20th century is often a time-consuming process, and seen as having little value by those being performance managed.
With studies showing only around 30% of employees believe that performance appraisals are open, honest and meaningful. In addition to the subjectivity of appraisals, comes the significant cost.
In large organisation, there may be an entire team with the HR department, dedicated to the annual performance management process. Annually, because it simply takes so long to complete the one cycle!
Reflecting back on our VUCA discussions, and the impact it has upon the Visible Planning Horizon, does it still make sense to work on annual cycles?
Some of the top companies in the world (that you can see on the left) believe that it does not make sense ,and have changed the way they measure and incentivise performance. From the centralised establishment of individual goals, to a decentralised model that sets team goals based upon a Shared Product/Service Vision.
The Forgetting Curve
Another problem with annual performance management, is the allocation of an annual training budget.
In a VUCA world, can we accurately predict today, what tasks we will be working on in 6 months time, and the skills/training we may require? If you attend training today, will you even remember it in 6 months time?
The chart on the right, is called the Ebbinghaus Forgetting Curve. And, it represents a natural process of forgetting, that happens to most humans, who are taught something new.
If, as deemed by a centralised process. I am sent for Product Management training today, yet I won’t apply the new competencies immediately upon my return. What is the likelihood, that I’ll still remember what I was taught, in a months time.
According to the Ebbinghaus Curve. I may have forgotten 80% of what I was taught, by the end of the first month. Which does not demonstrate a good return on investment, for this training.
How to manage People?
How can we manage the problems caused through annual performance management, and annual training budgets?
The answer is, we must Continually Develop Competencies in both specialism, and psychological safety.
Psychological safety refers to the team’s response to making mistakes along the way. As you’ll recall, in a VUCA world, we make progress through experimentation. Sometimes our experiments are successful, and we move closer to our Product/Service vision, and sometimes we do not.
A psychologically safe team, is one in which individual failure is embraced as an opportunity for the team to learn. This is an essential trait, of a high-performing, and self-managing team.
To increase the return on investment of our training time and money, we can shift from centralised training budgets to team training budgets.
This will ensure that the team has funding available, and can acquire the skills they require, just-in-time to use them.
This paired with frequent practice, helps to reduce steepness of the forgetting curve that most humans naturally have.
As a constant, it might not be clear why we do not have ‘enough time’. But in a business setting, one attitude that often results in a lack of time, is optimism.
Optimism is shared everyday, when we ask someone how long a task will take them? we typically will get the most optimistic of answers.
If you have ever created a Project Plan, did you include:
- time to make/answer phone calls?
- preparation for meetings?
- reply to emails?
- answer all the questions you get asked each day?
- or, add time for all of the unplanned meetings you are expected to attend?
Yet, all of these things will occur on a daily basis. Which means, if you are not adding buffer/slack to your Project Plan, it is a false plan from Day 1.
Whilst our plans may be false, we will still be expected to deliver on time, which means we means will need to poach the time from somewhere else.
Typically, the time we should be spending on sharing lessons, experiments and innovations. Time for workplace social activities, and even our personal time.
How to manage Time?
How can we manage the challenge of having a lack of time?
We must be strict with the way time is allocated, so that we can Learn and Have Fun Together.
- Prioritisation can help, as can avoiding ‘too-much’ context switching.
- Minimising non-value adding activities (waste) will help as well.
However, ultimately we must allocate the time, and stick to it, otherwise we can’t expect it to happen.
How many categories of tasks you have, as well as the % time allocation, is up to you to decide.
What is important is that the total time adds up to a sensible number that respects work-life balance, and is sustainable.
Distractions & interruptions will always occur. So it is prudent to allocate some time for these tasks. If you don’t, you will certainly be poaching time from other categories in the future.
In summary, the seven internal challenges are common in many traditionally designed organisations.
Some, or even all of them may be evident in your organisation today. And, all of them will limit your level of Business Agility in some way.
The seven suggestions for ‘How to Manage’ are encapsulated within the businessagility.works® framework, which we will cover in section 2.0 – Framework Overview.
|Internal Challenge||How to Manage?|
|1. Resistance to Change||1. Realise a Shared Vision|
|2. Functional Siloes||2. Maximise Autonomy|
|3. Multitasking||3. Realise Value Quickly|
|4. Bottlenecks||4. Minimise Waste|
|5. Mindset||5. Use Data to Drive Decisions|
|6. People Management||6. Continually Develop Competencies|
|7. Time||7. Learn and Have Fun Together|