Why, in Transformation, the Real Battle is For Hearts, not Minds

By | AgileBusiness, Culture, Leadership, Teams | No Comments

Employee engagement really is the poor relation in many digital transformation programmes and yet it couldn’t be more critical to enabling and sustaining real and lasting change. Transformation in the digital age sits at the cross-section of customer and employee experience. Happy staff in touch with their end users create great customer experiences. You can’t expect change programmes to change anything if you don’t bring your people on the journey with you.

And yet we pay so little attention to employee engagement. Gallup have long undertaken comprehensive research into this area (I use it a lot in my work with clients) which consistently demonstrates the terrible levels of staff engagement globally. Figures released only last month show that only 8% of workers in the UK for example, feel engaged or enthusiastic about their work.  73% are ‘not engaged’ (psychologically unattached, putting little energy or passion into the work), and 19% ‘actively disengaged’ (resentful that needs are not being met). And the figures for many other countries are not much better.

This is not a new story, and yet it continues to get worse. Gallup note from the UK figures, for example, that employees who were surveyed in 2016 were 20% less likely than those surveyed in 2012 to strongly agree that they have the opportunity to do what they do best at work, and were also 25% less likely to strongly agree there is someone at work who encourages their development.

This matters for many reasons but not least because it affects not just intrinsic motivation but productivity. The 2016 meta-analysis which Gallup did (covering more than 82,000 business units in 73 countries across 49 industries) found that those business units that were in the top quartile of engagements scores were 17% more productive and 21% more profitable than those in the bottom quartile.

What the Gallup work shows is that traditional approaches to work and to leadership need to change. A big clue to how they need to change comes in Bruce Daisley’s interview with Dan Cable, Professor of Organisational Behaviour at London Business School (and author of the upcoming book Alive at Work), in this recent episode of the EatSleepWorkRepeat podcast.

Dan Cable’s work focuses on the power of work environments which enable employees to bring their ‘best selves’ to work. People, he says, bring different things into the workplace. Some bring hands to do the work (where leaders write the script, come up with the game plan). Some bring brains (innovation, trying new things, emergent value). The heart (empathy, passion, desire to make a difference) is perhaps the most difficult, yet is more important than ever – empathising with a customer, taking risks to try new things, being authentic when dealing with clients, is difficult to do when you’re not feeling it yourself. It’s more critical than ever that we bring our whole self into the work environment.

Yet this clearly isn’t happening in many workplaces. Dan quotes another stark statistic from a survey that the Gallup institute undertook which covered 1.7m employees across 63 countries and 101 companies and which found that 80% of people go to work to ‘shut off’ (in other words they hide their true selves).

This has never been more important. Many of our working norms and practices come from an industrial age where standardisation and replicability was what was required. In a modern era where creativity, problem-solving and invention play a much bigger role, we need people to apply their unique strengths to tasks and problems, and we need them to feel like they don’t have to pretend to be something they’re not as soon as they get to work. We need more personalisation of work.

In the context of leadership, traditional hierarchically-driven ideas about answers only existing at the senior-most levels of the organisation gives way to leaders who are able to nurture the kind of environments in which answers can emerge. As Dan says:

‘The leader doesn’t have to have all the answers…you have to engage people to find the answers’

In the context of change, modern transformation should be less about the idea of fear-driven change from a ‘burning platform’, and more about missionaries and volunteers that can support change emerging organically. Scripted calls to arms and motivation through fear creates rigidity. And in an age when adaptability is so key, investing in people who are truly able to be their best selves allows for the kind of flexibility needed to thrive.

Dan talks about two dominant systems within our brains – the fear system and the seeking system. The former is based on cortisol and the response that we have to stressful situations, the latter is based on dopamine and is more a response to exploration, curiousity and play. When organisations create fear, that fear comes from within the group and so, just at the point when we most need different thinking and ideas, our response is to want to conform. Conformity is fine when you have the right rules but as Dan says, ‘there is no more important time to stimulate the right answer than when we don’t know the right answer’. It’s all too easy for fear to dominate, and stifle the kind of creativity, exploration and energy we need to find those right answers and survive and thrive.

There are some simple hacks that Dan talks about as ways to encourage people to bring their whole selves to work including changing the on-boarding process. He gives the example of some research they did with Wipro where enabling new employees to describe examples of when they’ve done their very best work made them 57% less likely to quit, and also resulted in customers becoming 11% happier. Greater engagement came from employees simply feeling that other people at work knew who they really were.

But this is really about the environment that we enable as leaders and the type of leadership that allows for more personalised approaches. It’s impossible for change to happen if we don’t bring our staff on the journey with us. It’s impossible to bring our staff on the journey us if they’re not engaged in their work and the direction that we’re taking. Transformation cannot happen without it. It’s time that we paid far greater attention to how we can truly change those Gallup figures. The future of your business depends on it.

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Advocacy = Authority

By | AgileBusiness, Culture, Digital Disruption, Digital Economy, Disruptive Innovation, HR, Leadership, Organisational Structure, Strategy, Teams | No Comments

Advocacy equals Authority

I recently spoke at the Wave Influence 2.0 summit in London about advocacy and authority (Brian Solis was keynote speaker and he gave an excellent presentation on Influence 2.0 – short overview from him here).

Digital Transformation and the need to develop more agile ways of working provides the perfect vehicle on which to drive employee advocacy …and employer branding.

You can download my presentation deck here Advocacy_equals_Authority.

The main points you should consider are:

  • Too many employees are either not engaged or actively disengaged
  • We’ll always have the same restrictions of lack of Budget, Time, Resource…maybe culture (behaviour)
  • You can tap into additional resource, thought leadership, and assist in changing behaviour (culture)
  • Employee Advocacy can be a competitive advantage
  • It provides those who are interested with an additional path to get involved, providing purpose and better understanding of what the organisation is trying to achieve
  • Organisations need  to increase individual engagement as part of customer centricity and customer contact, providing the right information at different parts of the decision making journey
  • Drive engagement of employee (across the org) and customer touchpoints
  • We need a Learning culture running alongside an Agile one, providing access to lessons in both success and failure…learn from everything you do as an organisation as a whole.
  • Personalised customer experiences need switching up and down between real people and artificial intelligence depending on needs at each stage, which is why customer journey analysis is fundamental
  • Ensure you involve HR and have a solid plan for on-boarding and ensure everyone understands risk and brand damage limitation and how you’ll respond in difficult situations.

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Agile Transformation at ING – A Case Study

By | AgileBusiness, Disruptive Innovation, Organisational Structure | No Comments

When I speak to leadership teams or consult on agile transformation with corporates I’m always keen to stress that there is never one all-purpose solution to what a successful digital transformation looks like. We set out a broad over-arching roadmap to transformation in our book, but also emphasise that each organisation needs to find its own path and make smart decisions about the selective application of agile structures, processes and working. Agile is not one-size-fits all, and it is just as important to think about being agile as it is about doing agile.

Yet the need for far greater organisational responsiveness and continuous and systematic (not episodic) innovation means that we do need a more fundamental rethink of the appropriateness of corporate structures that are typically dominated by functional silos and hierarchy. In order to truly take advantage of the opportunities afforded by digital technologies we need to think about resources, processes and priorities in a very different way.

In the structures work that I do I focus a lot on the potential for small, multidisciplinary teams to generate a disproportionate degree of change and value. I often use the Spotify ‘Squads, Tribes, Chapters’ model as one way of demonstrating a method for scaling agile resourcing. In reality, most companies start by deploying small, multidisciplinary teams in more focused, less scaled ways to innovate, generate new value and help support change (and there are other examples of this). But ING Bank in the Netherlands is an exception. 

Over the past couple of years ING have reinvented their organisation at their group headquarters in the Netherlands (comprising 3,500 staff) from the ground up, moving from a traditional organisational model featuring functional departments such as marketing, IT, and Product Management, to a completely agile model that shares much in common with the Spotify example.  They started with the group headquarters to show that you could begin with the core, and set an example to the rest of the business. You can get a good feel for how the transformation has been organised from this video (there’s also a good McKinsey interview with a couple of the key senior people, and a BCG one with the CEO):

Instead of organising around functional departments ING staff are organised into about 350 nine-person ‘squads’ and 13 ‘tribes’. 

The Squads are small-multidisciplinary teams (no more than nine people) that are co-located and operate with a high degree of autonomy. Each squad is focused on a specific client-related objective for which it has end-to-end responsibility. A Product Owner is responsible for co-ordinating the activities of the squad and managing the backlog and priorities but they are a squad member rather than leader. As the mission evolves, the team and the functions that are represented evolve with it. As the mission is completed, the team is dissolved.

Squads that have interconnected missions are grouped together into Tribes, and these tend not to exceed 150 people (see Dunbar’s Number). A Tribe lead helps co-ordinate priorities, budgets and is the interface with other Tribes to ensure alignment and knowledge sharing. Each Tribe also has an Agile coach to support high performance.

Functional expertise and learning is supported through cross-squad Chapters, and a chapter lead effectively represents hierarchy for the Chapter, particularly in terms of performance management, staffing and personal development.

This approach has not only improved time-to-market, but increased productivity and employee engagement.

Apart from the level of commitment to agile working and resourcing (which I think is exceptional), there is a number of aspects of this (drawing from the McKinsey interview) that I think it’s important to note and which chime well with points that we bring out in the book :

  1. When ING began the transformation there was no financial imperative to do so (they were doing well at the time), but they recognised that changing consumer behaviours and expectation could soon create significant challenges if they didn’t become more agile
  2. ING recognised that it was not a linear transition, but about becoming a different type of organisation that is itself characterised by continuous change: ‘Transformation is not just moving an organization from A to B, because once you hit B, you need to move to C, and when you arrive at C, you probably have to start thinking about D.’
  3. The re-organisation is focused on minimising obvious barriers to agility like bureaucracy and functional handovers but also on greater empowerment and autonomy to enable teams to move fast. I like the way that they describe a key objective as being to ‘build stronger, more rounded professionals out of all our people’.
  4. The fact that each squad is focused end-to-end on a particular customer objective (and a common definition of success) and includes all the key functions needed to create value (marketing, product, commercial, UX, data analysts, IT engineers) means that this is a structure that is genuinely customer-centric
  5. The new organisation is supported by a new agile performance-management model (because performance management really does need to change). Instead of manager’s salary and status being based on how much resource they control, it is now focused far more on how they deal with knowledge and deliver outputs
  6. The re-organisation began with a compelling vision about what the business could be, and drew learnings from a pilot incorporating five or six squads. Implementation involved a revamp of the working environment (you can get a feel for that here)
  7. Support functions such as HR, Finance, call centres, IT infrastructure and risk have not initially been included in the squads (and may never be) but have instead adopted agile working practices in different ways
  8. ING have been focused as much on getting the culture right as they have the structure, spending a lot of time and energy focused on role modelling the right behaviours (customer-centricity, empowerment, ownership) to support change. One example of this is a complete revamp of the on-boarding programme which not only involves new employees moving around the business to generate informal networks and learning, but every employee spending a week in the call centre taking customer calls.
  9. Meeting structure and governance – most meetings are informal, with formal ones kept to a minimum. Each squad has a clear written purpose for what they are working on, and an agreed way to measure the impact it has on customers, but has autonomy to prioritise and manage its daily activities. Mechanisms such as portfolio wall planning, Scrums and stand-ups ensure that the product owners within each Tribe keep the squads aligned. Quarterly Business Reviews (QBR) involves each Tribe notating what it achieved over the quarter, their biggest learning (from both successes and failures), its objectives for the next quarter and what they’ll need from other Tribes. These QBR documents are openly available to support transparency

The new structure has enabled ING to dramatically improve speed-to-market through more frequent releases, and increase the rate of innovation to help position them as the primary mobile bank in the Netherlands.

But it is the level of commitment to agile resourcing that is truly impressive, avoiding the common trap of adopting some agile attributes but not letting go of legacy structures, processes or governance. As Bart Schlatmann (who was the COO through the transformation) says:

‘It requires sacrifices and a willingness to give up fundamental parts of your current way of working—starting with the leaders. We gave up traditional hierarchy, formal meetings, overengineering, detailed planning, and excessive “input steering” in exchange for empowered teams, informal networks, and “output steering.” You need to look beyond your own industry and allow yourself to make mistakes and learn. The prize will be an organization ready to face any challenge.’

A great example of real agile transformation.

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