Resilient Orginisational Design for this decade (Part 1)

Richard de Kock: 0:09

Welcome to the Digital Strategy and Management Podcast with your host, Richard de Kock. It's with great excitement that I get to introduce our guest for this episode today, David J Anderson. He's known as the leader for the Kanban movement in the modern day era, but let me assure you I don't think the name gives the man justice. Now, before we begin, I would just like to give you a gentle reminder that I am a full-time Microsoft employee and that this podcast and the ideas provided by our guests are in no way affiliated with Microsoft's business practices or services. Now to meet the man himself. Hello and a big welcome, David.

David Anderson: 0:46

Hi, Richard, Thank you for having me. It's nice to be here.

Richard de Kock: 0:51

David. I mean you've been dubbed the leader of the Kanban movement in the modern day era and, if I'm not mistaken, I'd say you were sort of handed that title, or recognized as that, around 2010. Is that a fair positioning of timeframe?

David Anderson: 1:08

So when did we get the movement started? I think we recognized that as the Agile Conference in the United States in 2007, august 2007, and didn't get on the official program. No one wanted to hear about it, but they had some sort of variation of an open space where they had some facilities, including some projectors, that sort of thing. So I grabbed one of those time slots. About 25 people took up and I did my Kanban presentation and the next day, three of them, who all worked at Yahoo, butt in the corridor and said you know, we're next to the day and we've got these issues at Yahoo which we're not managing to solve. We have a certain group of teams which are not responding to the provocation that we're giving them and we need a new approach. We think your approach might be it and if we're going to do this, we need some sort of online community so we can share our results with other people who might be trying it.

David Anderson: 2:24

We got started with the ideas and movement. The book came out in 2010, in the spring of 2010. And we started to get some momentum into it. It was more of a business by that point. Back in 2007, I still had a regular job.

Richard de Kock: 2:43

Right. And I mean, since then, you're now the chairman of the David J Anderson School of Management as well as the chief executive officer of the Morveous Group. Is that? I mean, that's all correct, still, right, that's right, yeah, so let's talk about some of your publications for a minute, just to set the scene. So I mean, you've published a lot, and what I'd regard your canon if there would be agreements, that I'm not sure, but it certainly seemed like it for me was your 2010 book Kanban Successful Evolutionary Change for your Technology Business, followed by Fit for Purpose in 2018. And now we've got the Kanban maturity model at its second edition in 2020. Your earliest book that was published you're probably going to correct me here, but it was the Agile Management for Software Engineering Applying Theory of Constraints for Business Results in 2003. Not part of the canon per se, but sort of one of your initial publications. And then there's been considerable after that.

David Anderson: 3:44

There's a couple of other smaller ones. You're right, the essential Kanban condensed that I co-authored with Andy Carmichael, and the Lessons in Agile Management, which is really it's a piece of legacy archive collecting, I think, about 14 years of blog posts together and just the better ones. We weeded out a lot of lesson-reporting blog posts, but I think that's right. The first book was important for my career. It opened a lot of doors that influenced very influential people and that was important. But I don't consider it really a particularly important book looking back now in terms of, yes, the stuff in there that people might read and some of it will still find useful. However, you're right with the canon of books.

David Anderson: 4:40

The Kanban book is really a pivotal moment in the concept of evolving an organisation and turning that into pragmatic, actionable guidance and not just some kind of academic fluff that a typical manager doesn't know how to action. So the Kanban book, the Kanban maturity model book and the Fit for Purpose book they're all part of this evolutionary organization, the service-oriented ecosystem and evolving an organization to be fit for whatever purpose it's intended and whatever it's doing for its customers and therefore to have resilience and robustness and to be long lived and to be capable of reinventing itself. So those three books are the canon of knowledge, at least so far, on how to wire your organization with evolutionary DNA. And the Agile Management book is really a different type of book. In fact, while I was writing that book, I had the epiphany that I was writing the wrong book, solving the wrong problem. However, I had a contract, so I finished the manuscript. The book was published.

Richard de Kock: 6:07

Yeah, it's making happen.

David Anderson: 6:08

Yeah, exactly, and it's still an important book for my career because, as I say, really famous and influential people contacted me afterwards and said hey, you know, the publisher sent me a copy of your book. I'm really impressed with it. Why don't you come visit me at my university or talk at my conference or and so on? Those kind of things. Doors opened for me because of that book. But it was during the writing of it that I realized I needed something different. I needed to take an evolutionary approach to changing organizations. So it kicked off a thinking process that eventually led to Kanban and the rest of that canon issue.

Richard de Kock: 6:56

And following on from that question, I mean back in the early 2000s, all the way up to 2010,. I mean there was so much going on in the world of agile and software engineering. I mean we had the Agile Manifesto as sort of one of the big moments in 2001. Devops, we'd be arguing, was born in 2008,. The birds of the feather conference, Scrum, was certainly increasing in popularity and then, very close to the heart of Kanban, Lean Software Development sort of was popularized in 2003 by Mary and Tom Poppendike. But what was happening for you over this time? I mean interesting. You're saying it was during the authoring of that initial book that you started to realize, make these sort of massive realizations, that you might be writing the or fixing the wrong problem. How did you get this deep Kanban philosophy? I mean, I've always greatly respected your thinking and the deep sort of mastery you have on the topic. Where did that come from?

David Anderson: 7:54

Fundamentally it came from being a manager in a big company and being held accountable for results. So in the very early 2000s I worked at Sprint, which is a big American telephone company, and then Motorola in their mobile phone division, and during that time I was a department manager and being held accountable for results and therefore I had to get things done. And a quite exciting time in the telecom era the transition from 2G technology to 3G and the first time that sort of digital smartphones would become possible. We started to see things like cameras and phones and microphones, recording devices, the ability to play music on your phone, that phones began to become other things than phones during that period of time. And of course, the network had to be upgraded to support all of that. So it was an exciting time to be in the telecom sector and there was a sense of urgency.

David Anderson: 9:13

And as a manager who took his job seriously, I had to figure out how to get things done and it seemed like the obvious thing at the time was let's take agile software development methods and install them in the organization and move fast. Now my own department might have been 30, 35 people, something like that, a business unit maybe 350 people. So we install something in my department and it's going quite well. We're getting some things done, delivering projects people thought were impossible, the schedule was crazy or the scope was outrageous or whatever it was, but we were achieving it. And of course this would come to the attention of my vice president and I got called into the corner office to give him an explanation and after I explained to him he was like wow, why don't we do it across the whole business unit? So we started to do that. I started to work with my colleagues, other department managers, and the results were lack cluster. Looking back now, the results were actually not that bad. At a scale of about 350 people we doubled the productivity of the business unit. But in comparison to the impact I'd had in my own department where the people reported directly to me that that was lack cluster and I was disappointed. And when I went to Motorola, essentially the same history repeated itself that the people who reported to me directly improved their productivity dramatically and in other parts of the same business unit the results were lack cluster.

David Anderson: 11:04

So I came to the conclusion and it's around the time I was writing the first book the conclusion was it didn't really matter what the methodology was. People were busy trying to debate extreme programming better than Scrum, it's better than feature driven development and our crystal methods. We didn't have Kanban back then, obviously, and I came to the conclusion none of that discussion mattered because regardless of which one you picked, if you tried to install it at scale a business unit of a few hundred people you were going to get significant resistance. 80, 90% of the people would resist whatever it was, because it wasn't what they did. Now it was different, it was scary and therefore the high leverage was to find some sort of incremental approach. If you could identify the number one problem in a particular department and just focus your managerial energy on that problem and fix it, then things would get better. And then the number two problem gets promoted to number one and you repeat, and for quite a few years I felt that it's incremental. Then I realized a bit later on that evolutionary was a better word than incremental. So I really abandoned agile methods as a viable concept for large scale implementation in 2003, about the same time that my agile management book was published.

David Anderson: 12:48

Then I decided to pursue what we refer to as the alternative path to agility, which is an evolutionary approach.

David Anderson: 12:55

I start with what you do now and let's make small changes, one at a time, and gradually improve the business agility of the organization. And for me it was never a team thing, because I started out as a department manager and then a bit later I was in charge of the product unit level IT department 150 people and therefore the team level of four, five, six people, up to 12 maybe that wasn't even terribly interesting. For me, A team lead was someone who reported to me or someone who reported to someone who reported to me. So really the whole concept of scaled agile, that felt like a joke to me. It's like I've been doing that since the beginning and really we went down this path. I went down this path of evolutionary change and the alternative path to agility because in 2003, I'd already failed at scaling agile in two big American companies. So the reality is that my deep knowledge is rooted in what I would consider to be failure, but really it wasn't. It was lackluster adoption, it was disappointing results, but by my own very high standards, disappointing Well.

Richard de Kock: 14:32

I was going to just mention on that point, because that's a really important point as well. David, most would look at that and attribute that to be significant success. But looking at feedback that I've seen in some of the books that you've written and so forth and people you're very close to, they make mention of the fact that you approach things from a very scientific, fact-based perspective and I wonder, given your background and your experience, if one of the key success factors in the success that you've experienced was really just you.

David Anderson: 15:07

In other words.

Richard de Kock: 15:08

Would other people likely find the same success through just the applications of your methods, or is it your unique experience as an insight that provides the ultimate aid for success?

David Anderson: 15:20

But it's interesting. I had some folks from the very big blue IT company that used to make mainframes in one of my training classes a couple of years ago before the pandemic. They're relatively senior people. One of them was a vice president, a couple of others were maybe a rung or two below that with some sort of director title, and they were talking about rolling out our ideas in one of the big service divisions about 100,000 people, and we were talking about the Kanban maturity model and the observed improvements that we see at different levels of maturity.

David Anderson: 16:05

Going from maturity level one to two, you might see something in the order of 10 to 50% sort of productivity improvements. Average maybe 20, 25, depends, 50 wouldn't be a bad number. And he said you know, if we get a 25% productivity improvement at a scale of 100,000 people, we will declare victory Now. Therefore, that's very significant for them. But to put it in perspective, the productivity gains that we see in organizations that reach maturity level four are often at least eight times of the. They're like 800%. So they're like 32 times more than this. If you go from maturity level one to two and you see a 25% improvement, there's a 32 fold improvement still hiding in there somewhere and we see this occasionally there was a group from Accenture in Brazil posted a cumulative flow diagram on the LinkedIn feed and it actually shows an almost 20 times improvement in the productivity.

David Anderson: 17:29

And it's interesting the way they posted it, because they had marked onto the graph the points where they took Kanban University training the basic Kanban system design training and then the Kanban system improvement training and you could see that almost immediate rises in their productivity after they went back from the training and implemented what they learned. So this is by visual inspection of this graph. The same department of people were producing things 20 times faster than they had been just maybe six, nine months earlier. So when someone comes along to me and says, you know, we've improved productivity by 25%, it doesn't impress me very much. So my standards are very high because I know what's possible, and what's possible can be made to happen very easily if the leadership and the management step up and do what needs to be done.

Richard de Kock: 18:37

So if we talk about what leadership needs to do, you know, when we're meeting with leaders, I can see that they're drowning from advice from all directions. I mean, they're being told they have to transform, they have to do digital transformation, and there are here is 2000 ways for you to do that. They need to be customer centric and drive customer experiences. You know, to succeed there, you need to be in the cloud, you need to be doing DevOps, you need to be doing idle COVID, and so the list goes on. When we cut to the chase, what is it that leaders and, well, I guess everyone in the organization should be focusing on? To cut through all this noise and be you know, actually be successful.

David Anderson: 19:17

Yeah, I think fundamentally it's about customers and beyond that it's, let's say, the environment that the customer lives in. There could be a regulatory environment that's obviously the economic and political environment and so forth but fundamentally it's about the customer. People used to stick their hand up in class or at events and they'd say to me how do you know when a change is an improvement, which is a really simple little question, but it's incredibly profound when you think about it and actually nature already has a way of determining whether a change is an improvement If you have some sort of mutation and it says it's an improvement if it's fitter for its environment. Fundamentally, what we need is fitness. If we make products or we offer services, they need to be as fit for their environment as possible and they will be selected if they're fit for purpose. That's fundamentally where the title of that book came from. So if you make something or offer a service that meets a customer's needs, then why wouldn't they select it? That, fundamentally, resilience and robustness for your business is rooted in being fit for the customer's purpose. The customer will select you and they'll hopefully select you again and again and maybe recommend you to other people. So you have to focus on the customer. You need to develop a customer empathy, understand not just what the customer asked for, but why they asked for it. What's going on in their world? What do they care about? Do they care more about delivery time or do they care more about quality? And if so, in what ways? Or do they care more about certain features because of the application purpose that they have in mind? You need to understand those things.

David Anderson: 21:23

Then to drive evolutionary change, you need to put some stress in the environment. If everything's comfortable, then actually changes tend to get eliminated. If there's a mutation in the gene pool during a period of comfort, a period of equilibrium, it tends to get exterminated, it gets ostracised, it doesn't get to breed, it doesn't get to reproduce, it doesn't get to survive. But when there's a punctuation point, when there's a period of stress pandemic for example that's a very extreme example. But you inject some stress in a situation. It provokes some change and it's like basic sports coaching. Sports coaches have to push the person they're coaching a little bit out of their comfort zone in order to then teach them new techniques which enable them to step up their performance, whether they're a tennis player or a golf player, or a skier or a gymnast or whatever the sport might be. Basic sports coaching push the person out of their comfort zone, stress them a little, have a mechanism to let them reflect on how well they're doing, and then some active leadership or self-motivation perhaps in the case of individual sports people, to take them through the initial stress to the next level with a bit of coaching support.

David Anderson: 23:00

So we need a stressor, we need a reflection mechanism, we need acts of leadership. The stressors are things like metrics. If your customer cares about delivery time and the acceptable delivery time would be, say, 15 days, that needs to be the metric you're using. Now. How many things have we delivered against that target of 15 days? How predictable and reliable are we? Are we fit for purpose in terms of service delivery? So we need a reflection mechanism.

David Anderson: 23:31

We need to get together every so often and hold the mirror up to reality and say this is what we're currently capable of, this is what our customer expects. This is the gap between actual and expectation. How do we close that gap? Active leadership let's make some change. Hopefully, that change is model-driven in some fashion. Therefore, it's a high probability of being an improvement. It's not a random mutation and things get better and we just repeat that. So we have to wire the organization to have that customer empathy in the first place, check the right metrics, have the right feedback mechanism to reflect on actual versus expectation, and then inject leadership with model-driven scientific experiments to use a fancy term in order to drive changes that are going to make a real difference. And that's it basically. And you want to scale it. You do it in a service-oriented fashion.

David Anderson: 24:39

Think of your organization as an ecosystem or a network of interdependent services and for each service, you need to look at who's asking me for something, who's the customer, think of the environment around you and just do what I've already said. Who are the customers? What are their expectations? What reflection mechanism do we have in place? And do we have leadership the acts of leadership to drive the changes and that spreads out across your network and individual nodes in the network will improve. They will become fit for their environment. So you can achieve amazing things at very large scale with actually some very simple rules.

Richard de Kock: 25:29

Many thanks, david. That brings us to the end of our first part in the two-part series with David J Anderson, and we got a lot from this session. We got an overview of the key publications you can go out and read. You'll find more information about them in the transcription of the podcast at wwwthesertforclaritycom, and you can learn more about David J Anderson's approach as well as how to put it into practice through these publications as well.

Richard de Kock: 25:57

We also got a glimpse into how the Kanban movement has evolved to a tool for evolutionary change for organizations to become more resilient. And then we also got to understand how some leaders are challenged with trying to get this addressed in their organization, and David gave us some practical tips on how they could start getting more focused for success. Don't miss our next episode, where we're going to be focusing on getting a deeper insight into what the Kanban system is, as well as how the service orientation and customer experience aspects are woven together to provide that cohesive approach for organizational evolution and resilience. And then we'll get some more practical talk from David about how we can start driving this forward in organizations and getting the great results that David has been seeing in his application and implementation of these practices and other organizations. Thanks very much for joining us again and don't forget, keep the search for clarity continuing.