The reframing techniques you learned earlier allow people to change perspectives more easily, consequently improving their ability to adapt. But specific skills are required to scale up a resource, skill, technique, or work style to turn exponential.
Think about how you empower people. If they see you as a manager pushing a change, you’re not on the right track. If your products become exponential, you’ll be unable to handle the consequent increase in requirements. Hiring additional managers or leaders might not be feasible if the growth is excessive. For this reason, teams should self-organize around their work and perceive their leader as the promoter of the change vision proposed by the sponsor.
The leader should also be seen as a mentor who teaches the practices that will replace linear methods of delivery and help these become exponential habits.
In the early stages of the initiative, you must clarify the new roles for the leader and the team members. This can be done by meeting with those affected by the change and talking about their expectations, challenges, opportunities, rights, and obligations in an exponential environment.
Gather the teams in a room and form pairs. Ask them to write down what they think their rights, obligations, challenges, opportunities, and expectations are during the coming change initiative. Then have each pair share and discuss the similarities and differences of what was written between teams. This dynamic can help people improve their alignment with the rest of the company, as well as their expectations, as they take on the responsibilities of an ever-changing environment.
Exhaustive detail for each role isn’t necessary, but the participants should be clear about the differential value they will bring during the change, as well as how an exponential strategy will be supported. This may include tasks that begin to involve process automation, artificial intelligence, Big Data, and adapting how you engage employees and customers.
You must also reinforce the vision on “why we are doing this” on a recurring basis. It may seem like common sense, but in a company undergoing constant change, many lose sight of their impact on the value stream.
Having a clear understanding of why things are done, connecting with the purpose, and reaffirming this purpose help individuals and groups make better decisions and act more assertively in unforeseen situations.
Some time ago, I visited the development teams of a leading tourism company. They understood their roles perfectly and had been using the Scrum framework for a few months. Everyone understood the vision of change, its objectives, and the direction of its products. Despite their good functioning, a severe restriction blocked the growth of the organization.
The barrier was rooted in the great dependence between front-end applications and their respective back-end services. Managers were constantly trying to manage and remove those dependencies, but the tasks became increasingly daunting. The company’s exponentiality made changes more frequent, and the problem was exacerbated because different parts of the same product could be developed by different groups of individuals. If a front-end team needed an unavailable back-end service to feed their application, they had to wait until the service was made public by their “owners.” This was true even when the front-end team had the ability and skills to implement the back-end service.
A few weeks later, I facilitated several coaching sessions so that people could create a set of explicit values and principles for their interactions. The sessions focused on using different perspectives to establish new agreements that would govern how the teams interacted when a situation blocked exponential growth.
Following the new values and principles, the two sides began to share information in real time about the dependencies, and anyone was allowed to implement a back-end service. They acquired new social responsibilities, such as capturing collective intelligence and alerting the original author of the component about the change.
In turn, healthier actions or habits were also taken whenever there was a blockade. The new approaches or habits included automated testing, DevOps, and peer review of a new code.
Thanks to these new ways of working, the teams had more time to focus on limited-resource areas such as software architecture or specific knowledge. They could also focus on new goals that were gradually discovered because of the characteristics of exponential growth. This resulted in automating processes, abandoning linear methods of product delivery, and evolving existing processes daily.
The change quickly freed managers and employees, reduced process complexity, and made it much easier to multiply the delivered business value, thereby increasing everyone’s motivation.
Within weeks, teams began to use communities of practice to learn from experience and spread knowledge to the rest of the organization.
You can learn more about Communities of Practice and their benefits in Etienne Wenger’s paper: Communities of Practice and Social Learning Systems. en.Innova1st.com/50A
One of the decisions with the greatest impact was adding real-time metrics, which clearly changed the relationship with the client because they could observe daily trends such as user satisfaction or NPS (Net Promoter Score), percentage of retention, and monetization.
But being exponential also requires that we “take advantage” of the network of minds within reach of the company. Clients not only provide feedback. They can also help the organization think, and this is a requirement for any exponential company: using every network of “minds” to solve existing problems.
This can be achieved by transferring processes to clients or other networks through gamification, contests, or any other dynamic that solves problems the company is facing.
Every exponential enterprise must work in the following areas:
Act as activists of a social movement led by a vision of change and of a product, where they self-organize to define clear patterns of interaction. This leads to a focus on creating a network of people and knowledge that results in an acceleration of shared knowledge and the rapid evolution of the best processes, methodologies, and architecture.
Reaffirm why work is being done and the impact you want to achieve. Connect it with the purpose and goals of the business.
Use short work iterations and experimentation cycles to promote fast learning.
Use cloud technology to simplify the existing IT architecture (Amazon AWS cloud, Google Cloud Platform, Windows Azure, etc.)
Automate processes employing linear growth to become exponential.
Transfer problems to any existing “network of minds” so they can act as an external brain for the organization.
Adapt plans based on real-time metrics or information provided by artificial intelligence and Big Data.
Work cycles and experimentation in an exponential company may become shorter as you progress. According to Ericsson Research, within four years data networks for mobile phones will reach speeds up to five gigabytes per second. This will make it possible for information to be collected daily and analyzed by artificial intelligence to determine in real time how to improve the product by removing characteristics or correcting defects.
The result will be translated into new tasks of analysis, development, and implementation, which will be resolved by teams with unprecedented speed. We will no longer talk about work cycles of weeks or days, but of hours or minutes.
A prime example of exponentiality is Amazon, where robots have been used in their warehouses for years. Amazon knew it would be impossible to grow linearly in certain areas and that automating their most important strategic activities—data and cloud storage—would provide crucial information more quickly for their clients, enabling them to make better decisions at increased speed.
For a company to become exponential, processes for employee–customer engagement and technological replacement of limited resources must be scalable.
Expectations and Alignment
Aligning the expectations of the value stream or comp
any is the basis of strategic success when it comes to change. This is one of the secrets that enables sustainable transformation and contagious change. It requires an initial investment of time and effort to help with the alignment of shared goals and priorities. Everyone should be on the same page and move in the same direction and at the same speed.
Everyone must also ensure that the existing ways of work can function along with the new values and principles—and that no conflict is generated.
The engine of the organization has, as a single priority, to maximize the creation of business value for the client—as well as maintain its ability to quickly adapt. Many companies have diverging expectations because employees do not understand the company’s vision or change strategy, the priorities of the business value to be delivered, or the required skills or capabilities.
You should recognize that every team member must strongly align with product and change visions, values, principles, goals, and the definition of business value if they want to acquire healthy habits.
When situations are constantly changing, it’s easy to lose sight of the purpose for doing something. This is when a poor alignment is created, resulting in people who are unable to make good decisions about the cost or scope of their product.
If the workload increases and everything is given the same priority, employees will be so busy that they won’t have the time or motivation to focus on the highest-ranked tasks or even on continuous improvement.
This can lead to enormous frustration. Many companies need to learn that they can’t have everything and that, at a minimum, they must decide where to start or what to abandon.
You should collaboratively identify the departments to change first, areas with greater knowledge and a predisposition for change, and areas of linear production (with scarce resources, procedures, or techniques) that can be turned exponential.
It might be a good idea to implement the change incrementally, using any of the techniques presented in Chapter 3. You could also use a change backlog, as with the Scrum framework. This could help implement the change step by step.
You can also use great techniques to manage backlogs (for example, a clear definition of business value and good backlog refinement techniques).
The Agile mindset directs its alignment on keeping employees focused, improving processes, and delighting the client. The last can be supported by the following four areas (Figure 5.3 on the next page).
“In the absence of information about Value, of course the system optimizes for other things. Why should this surprise anyone?”
Joshua J. Arnold, Agile Consultant
FIGURE 5.3: Initial definition of business value (Source: Black Swan Solutions)
Clarifying business value allows for the validation of ideas and alignment of expectations. Have in mind that a business value definition is generally associated to a specific business portfolio. Portfolio management is a particularly difficult problem to solve as multiple products initially compete for the capacity of the organization. Solving this problem requires a clear focus on what business value is and an agreed upon the way to work together.
Subsequently, new elements can be considered in the business value equation, including the level of customer satisfaction, the impact of exponential areas or of those with scarce resources, and the weight of innovation.
Once you have adopted an initial definition of business value, ensure that it is understood by everyone involved. This will be the solid foundation over which you’ll create a good alignment.
Have you heard of the illusion of asymmetric insight? It is a bias in the way your brain processes information and knowledge. The illusion makes you believe that you know others better than they know you. As a result, you believe you know their expectations and make decisions based on that presumption, which can lead to misunderstandings and loss of alignment in the medium term. Making expectations explicit can help overcome this bias.
It’s helpful to visualize and analyze the value stream, not only to align expectations but also to understand that any activity in the organization must be improved. To achieve this goal, the Value Stream Mapping technique from the Lean mindset is of great help. Value Stream Mapping is a graphic technique that allows you to visualize processes and understand the workflow, information, and resources for creating a product or service.
Do you want to know more about Value Stream Mapping? Check the following link: en.Innova1st.com/51B
The goals must be clear and connected to a change or product vision. Depending on the change you intend to implement, it will also be necessary to consider how groups connect and align when they share the same goal. On several occasions, it will be necessary for multiple teams, with different principles and history, and who have never connected before, to actively collaborate on a complex product or service. You’ll learn more about this topic in the next chapter.
Following are recommendations to achieve a more effective alignment in high-variability environments:
Ensure you have a powerful vision and goals shared by teams belonging to the same value stream.
Constantly reaffirm the purpose of the change: Why are we doing this?
Have a clear and shared definition of business value.
Encourage people to feel comfortable verbalizing and sharing their expectations.
Use SMART goals: Specific, Measurable, Action-oriented, Realistic, and Timely.
Involve people who can positively influence the success of the initiative.
Employ very short work cycles (similar to the time-boxed Sprint used by the Scrum framework), learn, reflect, and continuously improve.
Psychological Ownership
If you’re a Formula 1 driver, during your first races you will see yourself simply as someone who drives a high-performance car. As weeks go by, your effort and time invested will instill in you a sense of ownership of the vehicle. Without realizing it, your mind takes over the car, the goals, the strategy, and anything that could influence your future—even though the vehicle doesn’t belong to you and you are only an employee of the brand.
This is what psychologists call psychological ownership. It occurs because individuals invest time and effort, contribute creatively, make decisions, and learn from what they do.
If you are curious about experiments related to the phenomenon of psychological ownership in companies, you can read the following investigation in the Journal of Organizational Behavior: en.Innova1st.com/52C
If you are a manager, you probably psychologically own the stages of the project, its successes, and its impact. You will feel strongly responsible and will expect others to possess the same level of commitment.
Until 2001, nobody had thought that there was a relationship between psychological ownership and the success of a company. From then on, many researchers began to carry out studies in traditional companies. But I want to go a step further and connect the concept of psychological ownership with Agile, digital, and exponential companies.
Software developers, for example, could take ownership of lines of code, modules they feel particularly proud of, a software infrastructure they developed, or a process or tool they created. This psychological pattern can occur even when the company clearly states that work produced during working hours is company property.
This ownership is a substantial advantage for the company. Because it does the following, it makes it possible for people to feel proud and to advance their careers by creating products of excellence:
Increases people’s commitment to their work.
Helps increase motivation.
Increases self-esteem and employee satisfaction.
Helps create higher quality products and services.
Makes those involved in a project want to continue being a part of it.
Increases the desire to participate in the decision-making process.
Helps groups set better goals and find better solutions.
Increases shared knowledge.
Decreases staff turnover.
We already know that psychological ownership is a key factor for any organization because it produces positive effects in the medium and long term. It also helps the outcomes of a change become contagious.
In many old-fashioned organizations, practices are often employed that considerably diminish psychological ownership because of the management style and excessive control (command and control), causing employees to have to ask for permission or seek approval to carry out their tasks.
In these cases, many will avoid involvement and will not aim for the continuous improvement of processes. They’ll simply do their job as laid out and stick to the 9-to-5 working day.
The Scrum framework, for example, encourages each person to self-organize. They can decide for themselves what tasks they take based on their existing workload and they can also decide how they will implement these tasks. This has a positive impact because it increases psychological ownership as a consequence of individuals choosing their own future. How can you encourage positive psychological ownership?
The results of the Ownership Culture Survey (OCS) conducted on ownership culture in companies showed that employees considered fairness as the most important factor within the company for increasing psychological ownership. Fairness means that everyone is treated fairly, with reasonable rules, without preferential treatment toward specific individuals.
Leading Exponential Change Page 16
