Many organisations are onboarding digital and agile transformations these years. Incentives for doing so often comes out of the need of speed, the need of providing more value – in the bare sense: the need for competitiveness. Whereas many of these are driven by achievements in technology and process improvements, fewer takes the aspects of human nature into consideration.
In the market we see a growing number of dogmatic frameworks and idealised prescriptions that promise to help you succeed with your transformation, but they often come short because organisations are intensely political places where the members are driven by own intent and ambitions. In this blogpost we claim that successful transformations must have starting point in the organisational culture and take the dynamics of human interactions into consideration. You must learn that you cannot control a transformation, but you can influence your organisation and try shaping its culture. With the starting point in complex responsive processes, we will be introduce you to several aspects of these matters.
When you think of it, what actually define how people in your organisation act?
Well, one metaphor describing organisational dynamics is the phenomena of starlings flocking. When starlings are flocking it is due to the presence of a predator and the patterns we can observe being formed are part of their defend mechanism.
How do the individual starling decide to fly in this situation? Is there a master bird orchestrating the formations by telling each and every bird how to fly? No! Each bird is actually making decisions on its own – it is probably by intuition formed through millions of years of evolution.
Simulation of the phenomena shows that how the starlings fly actually can be done through three simple rules: 1 ) Distance to the other birds, 2) fly at a constant velocity relatively to the other birds, and 3) go towards the safest place, which is the in the centre of the flock.
According to the theory of Complex Responsive Processes, this is actually how people in organisations behave. Organisations are more that hierarchies, roles and structures and therefore an organisation is not a machine that can be mechanically optimised and lubricated for maximum output. It is rather an ecosystem that needs to be nested and groomed to provide the best possible outcome.
“What happens in an organisation, happens because humans are trying to solve real problems, not because a leader has laid out a strategy”, as the thinkers behind the theory puts it. People are acting according to their understanding of the purpose and goals of their assignment, and they are doing this by following their own personal intent. You could say that what happens in an organisation is a result of the interplay of intentions among the members of the organisation. This make organisations highly political places in which it can be difficult to navigate. Leaders are particular influencers of what is happening in an organisation but not more than that. Leaders might have the illusion of control about what is going on, but it is just that: an illusion.
When observing starlings flocking, you can observe and recognise the patterns formed by the birds. But despite how hard you try; you cannot predict which pattern is the next to emerge. Again, this is similar to how organisational dynamics are. People do not act exactly the same day in and day out. There is variation. Some days the commute to work is through sunshine and everything is great. Other days the commute is by bike through rainy weather – and on the way you were struggled by a kid who did not want to go to kindergarten or school that day. You probably got much more achieved the first workday than the latter. This is what we call the un-linearity in human interactions.
Most frameworks for organisational change claim that you need to experiment to find the best possible way of doing the change. We agree. But some of them also claim that once you have a successful experiment, you have found the relationship between cause and effect, and now you can amplify the outcome of the experiment and roll out what you learned. That is actually not the case. Due to the un-linearity in human interactions a successful experiment only proved the relationship between cause and effect in this particular situation at this particular time. Repeating the exact same experiment might lead to another result and this is why most frameworks for organisational change come short.
Organisational change is first of all dealing with cultural change. So let us take a moment of addressing what organisational culture is. To say it briefly organisational culture is about how we think and how we act when doing our jobs. How we make decisions, the way we organise around tasks and so on.
Edgar Schein designed a model to address organisational culture. Like similar models it is basically wrong, but it is usable. Remember models are like maps. They are simplifications of the landscape – the only 100% accurate map is the landscape itself – but maps are great tools for finding our way despite them being incorrect. But remember as they say in the military: “If the map and the terrain differ – follow the terrain”.
This model illustrates the organisational culture as an iceberg. At the top of the iceberg, above the waterline, we see the artefacts of the organisation. This can for example be the company logo, how the offices are laid out, the dress code, the rituals and how people talk to each other. The artefacts are reflecting the culture in the organisation and your understanding of the organisational culture will grow once you begin to learn what the artifacts mean for the people in the organisation. It is not necessarily as you expected at first.
Below the waterline comes the values. Values come out of what we have learned works for us. Values are the results of our interactions, and they are constantly refined through our unconscious negotiations with each another. Although values are personal, they develop through socialisation – and the good news is that people intent to live by their values.
At the bottom we have the basic assumptions in the organisation. This is what the employees and especially the leaders actually believe. The basic assumptions define our thoughts and how we act – especially our kneejerk reactions.
The artifacts influence the values and vice versa and the values influence the basic believes and vice versa.
The challenge is if there is a mismatch between the claimed values and how you act. You might claim to have full transparency in the organisation, but significant decisions and actions are held in the dark. You might promote the practice of employees to make the decisions, but you manipulate them to choose according to your preference or you come up with an excuse for why their choice could not work anyway, so your idea is the one. If that is the case the claimed values are only decorative values with no relationship with the actual truth. This mismatch will cause confusion and demotivation in your organisation – often with the result that people end up leaving.
You can map out a snapshot of the culture of your organisation. One way to do this is through the Competing Values Framework. Again, it is a model with the incorrectness this gives, but it is a good model and the way to know this is that it has two axes crossing each other. We consultants can explain everything by the use of four quadrants.
On the horizontal axe we have how the organisation behave in the market. The more to the left, the more it is an internal focus and focus on the present. The more to the right, the more the more outlook to the market and the more focus on what can happen in the future.
The vertical axe indicates the conditions for how work is done in the organisation. At the top there is a high degree of flexibility and people focus. At the bottom, there is a system focus.
The four quadrants are named: Create, Collaborate, Control and Compete.
In the Create quadrant. This is where innovation happens. People working in such environment are driven by visions and often do what it takes to meet their goals. A lot of experimenting happens, and the desire is to get breakthroughs that will disrupt the market.
In the Collaborate quadrant the focus is primarily on people. Here it is highly important to have consensus and participation. Investing in growing people is fundamental.
In the Control quadrant the focus is on safety, predictability and quality. Here lives a zero-failure culture and compliance to standards and norms are taken quite seriously.
Finally, in the Compete quadrant the focus is on winning. Defeat the enemy is king and again, do what it takes is paramount.
There is a tension build into the model. Between the Control and the Create quadrant it is about how much innovation we want. In Control we want small steps in a controlled environment. In Create it is breakthroughs we are looking for. Between Collaborate and Compete it is the pace of the change that is in question. People in Compete thinks that Collaborate-people are moving way too slow and people in Collaborate thinks that Compete is way too fast and they are probably also a bit superficial.
It is not so that one quadrant is right, and another is wrong. You need to have a some of everything and you are not stronger than your weakest spot. We map the organisational culture by assessing how strong it is in each of the quadrants and draw the cultural profile in the model.
Doing a change is basically about changing the profile of the culture. If the context is an Agile transformation, it is usually about moving the centre of gravity towards Create while being strong in Collaborate and Compete as well.
Doing a change is challenging. There are many pitfalls and, as we addressed earlier, it is unpredictable how people in your organisation will react to your strategy and plan for the change.
In addition to that: One thing is to implement the change; another is the transition from the old to the new. In their book: Competing for the Future, Hamel and Prahalad claim that it is more important to focus on forgetting old habits than remembering the new. Old habits tend to stick while the new falls, resulting in falling back to old behaviour.
Kotter also states eight reasons why transitions fail. They include that you think you already are doing pretty well, no one taking responsibility for the change, lack of vision, not enough communication, not doing anything about blockers, no short term wins, thinking you are done too soon and ignoring the culture.
So, to succeed you first need to take leadership for the change. As we discussed in the beginning, leaders are particular influencers in the organisation – or as Schein states it: “Leadership and culture is the head and tail of the same coin”. How leaders behave does matter. You must walk the talk as we say it. Conners and Smith tells us why with their Pyramid of Results.
This states that you can get results from managing actions, but if you limit yourself to do so, you must have a continuous focus on managing actions because the best you can get out of tasking people is compliance. At best they will do what you tell them, but they will not really be taking responsibility, because it is your idea and solution.
So, we need to go deeper in and see what defines the actions people do by own initiative. Here we find their beliefs. People act according to what they believe in, and their beliefs are formed from what they have experienced.
So, to make a change, we need to provide experiences that supports the change. This will influence the beliefs that define the actions that lead to the desired results. We do this by providing leadership and being role-model. Conners and Smith’s perspective on culture is that it lays within the experiences and beliefs of people.
The organisational culture can either enable or impede the change. It all depends on how you approach the change. You can do the change in an outside-in approach, which is the most typical, or you can do it inside-out.
Doing the outside-in approach we are driven by processes. We have chosen a framework – in an Agile setup this can be Scrum, SAFe or other, we train people in the methodology and expect people to just go do afterwards. But for years we have built up layers of protection for our business. We have processes, structures and culture for that purpose. If the change is not aligned with these layers, it is going to meet friction and eventually it will hit the ceiling defined by leadership and culture. The result is that you only will have limited success with the change and most likely it will all fall back to business as usual at some point.
To get a better change the inside-out approach is more feasible. Here we start with the culture. We are not saying that we change the culture because this is beyond control, as we just learned. Instead, we are shaping the culture. You can see the culture as the shadow of the organisation. A shadow is the outcome of an object and the light source. You cannot force your shadow to change. You either have to change the light source or yourself and it is often easier to change youself than the light.
We first need to align the change to culture in order not to shake the system too much – we want to have something that is relatively well received. With leaders as particular influencers, we help them sharpen their self-awareness, because how they act has an influence on the organisation. We change the middle layer, the structure, policies and metrics so they are potential enablers instead of inhibitors. We are building agile value-based structures, policies and metrics or we are going to break some of the existing down to enable the new way of working. We are essentially going to raise the limit by changing some of the structures, policies and metrics in order to increase, grow and sustain the new way of working.
To decide what initiatives to start, we must go back to the current profile of the organisational culture and agree how we want it to change. If we for example want to move the centre of gravity from Control towards Create and Compete, while still being strong at Collaboration, we need to identify changes to structure, policies and metrics that support this progression.
We could for example change the structure by reorganising the organisation for flow optimisation rather than utilisation. In practice we do this by identifying the value chains in our organisation and form teams of employees that can live and act inside a value chain with as few dependencies to others as possible, bringing projects all the way from beginning to the end. It basically means that we form teams with employees of various skillsets like electronic engineers, mechanical engineers, firmware developers and system engineers in the same team and send them towards a shared goal of bringing the product to market. The utilisation of each individual person will be lower, because one cannot always work on what one is best at, but the flow will be higher and that is what matters.
At the same time, you will also get better solutions, because the collective knowledge and skillset of the team simply create better ideas. So, with this we are actually supporting a progression towards a more creative and a more competitive culture.
To support this progression, we need to apply a policy for T-shaped team members. That basically means that we not only want people to be experts in their own area, but also being able of filling in for colleagues with different skillset who need help. Applying a policy like this require that team members set aside time for knowledge sharing. They will primarily do this by working together on certain matters. On the short term you lose some pace, but on the long term you win. It is an investment to prevent your organisation from being fragile.
Finally, remember the old saying: “You get what you measure”. So, to get better time to market, you also need setup metrics for time to market.
When you apply the changes, the transition must happen. First, you need to provide a role-modelling behaviour that is aligned with your claimed values. This will strengthen the experiences of the employees and influence their beliefs. Next, you need to study if you get the expected results from the initiatives – do you see signs of them succeeding? If not, you need to act and adjust the initiative.
You are basically following the good old Deming Cycle of planning, doing, studying and acting founded on a context of transparency, inspection and adaptation.
Acting and navigating in a complex and unpredictable environment require constant observations, reflections and adjustments when needed. Your mindset must change from trying to manage uncertainty to coping and acting within unpredictability. Your success depends on your ability to provide leadership and clear communication about your intentions – everything else comes out of that.
Interested in learning more? Join one of our upcoming Agile Leadership Trainings