Great Organizational Culture is Key to Thriving

Deming said that “Survival is Optional”. Organizations can change their mindset and culture or they can become extinct.

Companies are at Risk

Steven Denning  makes a great case for why companies are at risk: Only 21% of employees are fully engaged, Customers are dis-satisfied and bureaucracy is killing innovation. “Deloitte’s Shift Index shows, the average life expectancy of a Fortune 500 company has declined from around 75 years half a century ago to less than 15 years today, and heading towards 5 years if nothing is done.”

We can see new companies creating opportunity by using organizational culture as the competitive advantage. Some examples are: Zappos, Morningstar, Valve.

Choose your Level of Risk

The graph above shows that the risk of extinction for an organization depends on the rate or ability of the organization to change. As discussed about, traditional corporate culture poses a high level of risk as it only tolerates a low rate of change. Organizations that use culture as a competitive advance have a lower risk of extinction. The two lines show that different organizations have differing risk profiles based on industry and markets they are involved in.

We can think of a fitness landscape of organizations: some are very robust to environmental changes and others are brittle. The top reason to change the culture of your organization is not because of this quarter, this financial year, but to create a lasting future and avoid the extinction event that is perhaps a few years out. Sadly, few companies invest time into thinking about how can we be great and how can we go out of business – the status quo is a powerful attractor.

What Culture?

OK, let’s say I want to change my culture. Now what?

There are a number of related and complementary approaches. Stephen Denning argue that the single organizational focus needs to be Customer Delight. Senge advocates the need for a Learning Organization. The Agile mindset is about people with a shared vision collaborating and learning together. A key misunderstood value from Lean is Respect for People. There are also recent movements and ideas converging on what thriving organizations look like: Stoos Network, WorldBlu and Future of Work Manifesto.

What is best? Many are good and share common characteristics. My current investigation is to clarify and refine cultural differences between various approaches. The most important thing to remember is that: Perfection is a direction and not a target. Use KrisMap or another approach to define your ideal culture and then pursue it.

Acknowledgements

This post is inspired by conversations and a session with Saleem Saddiqui at Agile Coach Camp in Minneapolis earlier this month. It was Saleem who shared the quote “Survival is Optional” to start a great conversation. Key ideas in this post are Saleem’s – not sure what he shared and what I imagined.

(Joint post with Olaf Lewitz)

Essence of Kris

Imagine your ideal organization.
We may think of the organizational culture as the “personality” of the company.
What is the personality of this organization?

Culture is Aggregate Identity

Organizational Culture is the emergent aggregate identity of all her people.

Some questions to help you think about Her Persona:

• What is the organization like?
• What does she like?
• What does she want?
• What does she feel?
• What does she look like?
• How does she behave?

Kris (Agile Persona) is purposeful, curious and values people

• Values People: listens well, is caring and loyal
• Curious, Open and Playful
• Resilient and Flexible
• Relaxed, Happy
• Purposeful and motivated

See below photo for our very first Agile persona – Kris.

How to run the KrisMap Workshop

• Briefly explain concept of culture and personas.
• In small groups, brainstorm key personality attributes of persona. (Remember to name her).
• After cluster, select key or salient features.
• (Do not prioritise, everything might be essential. Encourage to write more attributes and add them if no one objects.)
• Share with large group. (Keep adding attributes as people get more inspired.)

Debrief

• Would you want to work with Kris?
• Would you want to hire Kris?
• Is Kris attractive to customers?
• Do you find any attribute of Kris that cannot be learned?
• (if an attribute is identified as being hard to achieve, ask if it might be easier if you have a team to help you)
• Is it your organization’s goal to be like Kris?
• Do you aspire to be like Kris?
• What examples for Kris’ attributes do you find in your current org? Share stories.

Our Key Observations/Learnings

• Kris is an aspirational model — no one can actually be Kris.
• Everyone can learn. Some attributes are easier than others. Teams help. Coaching helps.
• Diversity in the team/organization allows Kris to emerge. Not every member of an organisation needs to (or should) have all of the map’s attributes…
• Transformation of an organization occurs through the transformation of individuals.
• Transformation needs to start with the leadership team.

Laura is energetic, caring and effective

Mona is purposeful, pragmatic and always learning

How To Use This

Do this exercise with your leadership team, frame the question as “How would you love your organisation to be?”

No organisation can grow, transform or flourish faster than their leadership team and, ultimately, their CEO (given you have a hierarchical structure).

We found in five sessions that all participants agreed that all their wanted attributes can be learned. They all agreed that this learning will be easier and faster in a team. They all ultimately wanted to be that persona that they had created, they identified it as an aspirational model to strive for. A personal vision they can align with and focus on.

To ground the group (which might feel like they entered a dream state of mind during the exercise and ask puzzled questions like “how do we start to make that happen?” ask them for one more step:

Try to remember stories that happened in this very organisation where someone has shown some attempt at the behaviour you now wish you’d see. Find examples of learning, pragmatism, experiments, care, unusual effectiveness, appreciation… (use your own persona’s attributes, of course.) Let them see for themselves that the behaviour they want is already possible in the current state of the organisation, is already present in its DNA.
A Want is a baby Have…
(Michele & Jim McCarthy in Software for your Head)

Acknowledgements

“There is no Organization!” by Ari-Pekka Skarp got Olaf started to rethink his concept of organisation. Bob Marshall pushed him further in “There is no Organization, but…” which in the comments discussion inspired the idea of collaboratively creating an organisation’s persona.

At the Agile Influencers of DC meetup Michael and Olaf ran an experiment out of which this session design emerged with the help of Paul Boos, Andrea Chiou, Ken Furlong and Tucker Croft.

We re-ran the exercise at CultureCon in Philadelphia and AgileCoachCamp in Minneapolis (Laura & Mona), with great feedback (“May I use this?”) and at a first client. Thank you to all who created the context for us to emerge this.

And, yes, you may use this. Please tell us of your results.

Bob Sutton delivered an interesting and informative keynote at Agile 2012 on how to Scale and maintain excellence. The session was a grab-bag of interesting ideas that apply even if you aren’t interested in scaling. Here is my infographic on the session:

Here’s the synopsis:

• #1 More vs. Better (or Dilution) – no matter what you do, you will lose quality as you expand. So you need to chose between more and better. Starbucks expansion from 1,000 to 13,000 stores was given as an example of the drop in quality.
• #2 Alone vs. Shared – example here is Pixar that has only full-time permanent employees working together to build the product.
• #3 Catholicism vs. Buddhism – Do you create one gold standard and attempt to replicate or do you use principles and allow for localization? Sadly most Agile rollouts look like Catholicism which is contrary to the principles.
• (I lost track of numbers around here)
• Hot Cause, cool solution – Get people emotionally charged up and then give them an easy way to get started.
• Go Simple – Ideas and visuals need to be simple for them to catch-on and stick. This can drive the more detailed and complex outcomes.
• Team Size – 4 to 6 is optimal. What does this mean for Scrum where many teams are at 7, 8 or worse even larger?
• Don’t put up with bad behaviour – One bad team member can cause 30% to 40% loss in team output.

I was really impressed with Bill Joiner and Michael Hamman’s Agile 2012 session on Leadership Agility.

The key take-away is that there are three modes of thinking for a manager or change agent: problem-solving, strategic, and visionary (these are my labels). In the last week I have been able to effectively use this model to better understand how managers are interacting with their organization.

Here is the visual note I created during the session:

Expert (Problem-solver)

These folks jump into the problem, get the data and use their expertise to decide what needs to be done. They like to do the work themselves and tend to micro-manage. There is no leadership team – only hub & spoke command and control.

Achiever (Strategic)

These folks are focused on the organizational target. Typical tools will include listening to people, using systems thinking, working groups to analyze and understand. The Achiever sees herself as the leader of the team and will foster collaboration and teamwork to achieve the goal.

Catalyst (Visionary)

The catalyst is focused on nurturing and growing the organization. They carry a vision of a break-through organizational culture and work equally with others to bring about this vision. They are looking to improve the production capacity of the system by tacking fundamentals. They are seeing a deeper reality and using that as leverage.

Factory Analogy

In the top right corner, I have a factory analogy.

• The Expert is working on fixing broken machines and expediting orders
• The Achiever is looking at the whole output of the factory and working with the team to optimize it
• The Catalyst is looking at the people and the culture and how to grow their capability.

To learn more, please see Bill Joiner’s book or consider taking one of his workshops.

How this relates to Coaching

When working as a coach we also need to choose at which of the three levels to interact with a client. For example, if we notice is a team is having a problem, we can intervene at any of these three levels:

1. I can tell them what the problem is and how to fix it
2. I can lead a retrospective and guide them to a solution/mitigation
3. I can help them learn how to sense the problem and support them in resolving it on their own

I am very excited that I just published my free book - An Agile Adoption and Transformation Survival Guide: Working with Organizational Culture on InfoQ. Agile change agents will find it valuable in helping companies succeed with Agile and avoiding failure.

About the Book

Struggling with Agile? Frustrated that people don’t really get it? Tired of fighting with organizational bureaucracy? Wondering how you could have been more successful? If so, then this book is for you!

The book provides a set of essential thinking tools for understanding Agile adoption and transformation: how they differ and what you need to know to know to avoid being another statistic in the widespread adoption failure. In particular, you will learn how to use culture to work more effectively with your organization.

It is called a survival guide since so many people have found the concepts to be invaluable in understanding their experiences when working with Agile.

This book includes:

• Identification of causes of the widespread Agile adoption failure
• A model for understanding Agile, Kanban, and Software Craftsmanship culture
• An outline of key adoption and transformation approaches
• A framework to help guide when to use these these approaches with your organization
• Real-life case studies of what has worked and what hasn’t

Electronic Version is Free

You can get a PDF or ePub version of the book for free on InfoQ. Why free? My primary goal is to change the world of work, and by making it free I can best achieve this goal. Of course, I would be really happy if you bought multiple copies of the print edition to give to your friends and clients to help them succeed as well as support my work.

Thank You

“If I have seen further, it is by standing on the shoulders of giants.” – Isaac Newton

I would like to thank Henrik Kniberg who has contributed so much open source material to the Agile community and inspired me to write a free eBook to pay it forward. I also appreciate him taking the time to write one of the forewords.

I would like to thank the attendees of workshops with early incarnations of this material – XPToronto, SoCal Lean Kanban, Agile Tour Toronto, and Agile New England. Your comments, challenges and reflections have helped in immeasurable ways.

Thanks to all the people who read my blog posts throughout 2011 on this topic and provided valuable feedback.

A big thanks to Michael Spayd for first introducing me to the Schneider culture model and for conducting a survey of Agilistas.

For sure this work would not exist but for Mike Cottemeyer’s differentiation of adoption and transformation.

Thank you to the review team for feedback: Chris Williams, Irene Kuhn, Armond Mehrabian, Krishan Mathis, Bernie Jansen, Ed Willis, Eric Willeke, Karl Scotland, Sabine Canditt, Todd Charron, Bob Sarni. Olaf Lewitz in particular deserves distinction by providing an extraordinary quantity of valuable comments, questions and challenges.

I would like to thank those who directly contributed to this work as well as reviewing: Olivier Gourment for contributing a case study; Jeff Anderson, Olaf Lewitz, Jon Stahl, and Karl Scotland and Alexei Zheglov for sharing their challenges and alternate visions in the appendix.

I would also like to thank Alistair McKinnell, Jason Little, Declan Whelan for providing feedback on the Methods & Tools article that formed a chapter in this book and to John McFadyen and Dave Snowden for feedback on the Cynefin section.

I am very appreciative of Jurgen Appelo for taking time out of his busy schedule to write a foreword.

And of course a big shout out for my daughter Scarlett who provided original art with the jigsaw puzzle and butterfly transformation drawings.

Wow! Even a small book such as this benefits from so much help.

- Michael Sahota

Scott Edinger talks about how to conduct an informal 360° review for yourself: ask the people around you these four questions:

1. What are my strengths?
2. What are my fatal flaws?
3. What strengths work best for the company?
4. What strengths work best for you?

Consider Johari Window

Another great approach that is more general is the Johari Window technique. Again you are going to want to get input from others, but this time with an eye towards discovering who you are by sharing hidden perspectives.

Want a high performance team? Then have the whole team do this exercise together. And of course  Strategic Play® with Lego® SERIOUS PLAY® is a great way to explore a topic such as interpersonal perspectives.

Jon Stahl had an enlightening talk at Agile 2011 where he walked through his process for incubating transformational leadership to achieve an Agile mindset.

Confused about adoption vs. transformation?  Check out ways to make progress with Culture Gaps.

Agile Mindset – Do you want it?

Jon shows the following short video of IDEO design group to illustrate the Agile mindset and the type of servant leadership needed to support it.

After watching the video with executives who want Agile, he checks in with them:

• “Is this what you really want?”
• “Are you prepared to change your own behaviour to support this?”
• “Are you ready to go first?”

The approach outlined here is to go big or go home. Go big means to help transform an organization or division. Go home, means that rather than help adopt a few Agile practices that may disrupt the organization, to stop work and looks for clients who really want Agile.

Leaders Go First!

The remainder of the presentation is about how leaders can go first by adopting Agile principles as a management team. Jon summarizes this as:

• Live the values
• Lead by example
• Be as transparent as the teams they lead

Here are some example activities for the management team:

• Public display of values
• Visualize projects and plans
• Visual management of key information: people, technology, etc
• Daily stand-up meeting in public place

Thank you Jon, for sharing this at Agile 2011.

Barbara Fredrickson gave a great Keynote at Agile 2011 – Why care about positive emotions?

The essential message is that we can create positive environments and emotions to create an upward spiral of openness, resilience, and better performance.

This is in line with my use of Agile as a way to transform the world of work. And of getting innovation and results through play.

The flow of the diagram below is: Positive emotions –> Expand’s Awareness –> Other thinking –> Mind Meld

Dr. Fredrickson argues that Positivity is a lifestyle change that can result in a upward spiral of positivity with all the associated benefits. Masking the negative does not help, we actually need to focus on the positive – at least three positive events for every negative event.

I really appreciated Barabara’s message, however, the one part I will differ on is that in many environments we need to create trust and safety to reduce the background noise of negativity. This needs to happen in tandem with positivity.

You can learn more through Barabara’s website or book.

Update: Full Video is available on Agile Alliance Website.

I wanted to share this inspiring video on the art of possibility and how our stance in the world can change everything. Stance is very important for coaching.

This video is pretty long, but the best bits for me were in the first 12 minutes. Some great parts:

• Letter using Remember the Future for remembering why the student will have been wildly successful (3:43)
• You can give an “A” grade to anyone – to transform the relationship (4:25)
• “How Fascinating!” as a celebration of errors to maintain an available state (10:53)

Also, Benjamin Zander has a book with this title (haven’t read it yet).

Some years ago, my book of the year was, “Good to Great: Why some companies make the leap … and others don’t” by Jim Collins. It is a research-based exploration of what it takes to turn ordinary companies into great companies.

A very practical and relevant question is: how does it fit in with Agile? If we are going to the bother of undergoing a transformation, let’s at least make sure we have the right ingredients.

I make the case that an effective transformation needs to bring elements from outside of these systems in order to be great.

First, let’s consider where Good to Great principles align with cultural analysis.

Schneider Model of Good to Great

The following analysis is based on the Schneider Culture Model.

We see that the clear focus is on Cultivation and Competence cultures.

Competence. Good to Great speaks of companies that seek to be the best in the world. They get the right people on the bus. And the wrong people off the bus. Hire the best and the rest will take care of itself. Companies such as Netflix have taken this to an extreme with amazing results. Built on the people is a culture of focus and discipline to be the best.

Cultivation. Good to Great companies have a vision of being the best in something and the passion to pursue it. A sustained commitment to the vision allows such companies to work relentless year by year to build towards success. There is also a strong sense of the need to develop people, perhaps in different roles.

One of the phrases I love most from the book is: “Confront the brutal facts … yet never loose faith.” The idea here is to make visible and deal with all problems – no matter how discouraging or painful – and keep faith that success will come eventually. Faith in success is the key ingredient that allows one to examine the really tough issues.

Level 5 leadership is about unassuming leaders who build great teams around them.

Why it Matters

Agile, even XP, is completely silent on competence as an important trait in company culture. In fact, this notion is at odds with singing kumbaya and holding hands. But as Ken Schwaber said, “If you have a crappy to team, at the end of a sprint, you will get an increment of crap.” And a lot of companies I see are filled with mediocrity. So, if we really want to help build great companies, we need to stretch beyond Agile. Yup, this means firing people. “The most common failure of great managers is not firing people soon enough.”

An even more interesting notion is that the quality of a transformation is limited by the leadership. So, who’s in charge and what they want to accomplish becomes really important. To quote one CTO who wanted the benefits of Agile but was not interested in personal change: “I didn’t hire you to give me feedback on how I treat my staff.”

So, it’s a great book and helps me see the larger business context.

Or Not?

Please check out some of the great comments below – like how some of these companies crashed and burned after the book was written.