Transcript of Create an Agile Culture, from the Free Webinar Series to Create an Agile Organisation, on 21st October 2019. Presented by Laura Re Turner, Director, Future Focus Coaching & Development, and Phil Summerfield, Executive Coach.
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Today’s webinar is being recorded and it finishes at 1 o’clock. As always the recordings are available afterward on website and if you haven’t seen the website yet https://futurefocuscoaching.org/webinar-series-recordings/ there’s quite a lot of material there. As I said this is the fourth in the series and the last one, “Do we need self-organising teams” is planned for the 11th of November.
Your Hosts – Laura Re Turner, Phil Summerfield
So most of you know me Laura Re Turner, I’m an accredited Executive Coach, certified Agile Coach and a Trainer. I help leaders and their teams develop an agile mind-set, behaviours and skills to succeed in the very complex and uncertain business environments that we’re operating in today. And you may have heard that yes, I’m writing a book “Becoming Agile, Coaching Behavioural Change for Business Results” going to be published next year by Open University Press; yes it is as much work as it sounds.
I’m also very, very happy today to have my friend and colleague and fellow coach Phil Summerfield with us today; he’ll be co-presenting. Phil coaches successful C-Level Directors, VPs and Leadership teams to enable them to maximise their personal and professional potential and that of their business. His focus includes executive and team coaching, leadership development, business coaching and transformation and change management. I’ve known Phil for quite a few years, it’s great to have him here today.
So a little bit of an introduction. The topic of the webinar was inspired by questions that we’ve heard so many times from our clients while we’re working with them onsite or during training courses. Some of the things that we’ve heard from people are things like well what beliefs and mind-set do we really need to have here in order to be successful with agile methods? You know, if we’re going to be successful with Scrum, what is it you know, that we really need to do at the most fundamental level underneath the processes and tools, the mind-set, the behaviours; what do we really need to do here?
How do we change the mindset of others? How do we get other people to come along with us and how should we measure success? If what’s really important in agile is the mindset and the culture, how do we measure that and what can we change now? How do we realign our organisation structure, which is a question that we get asked all the time and you’ll see by the end of the webinar is only part of the picture.
What is organisational culture?
So without further ado, what is organisational culture? It’s such a big topic and when looking into it we found out that most organisations think about culture as how we get things done around here. That’s the definition that’s given most often. In fact, when we really read the literature on organisational culture specifically Edgar Schein, we found out that how we get things done around here typically only points to the visible signs of culture. It’s things that are visible; for example, we’ve reorganised our teams into squads or scrum teams. That one comes up an awful lot or you walk into a client’s office and they say we put the team’s work on to a Kanban. It’s an indication that things are changing but it really doesn’t get right to the heart of the organisation’s culture; not yet anyway.
Also things that we can observe are things like in team meetings, the team leader tends to do most of the talking. We don’t know why, we don’t know the reasoning behind some of these action plans or artefacts or visible things that organisations do but they tend to indicate a certain culture but they don’t tell the whole story just the tip of the iceberg. Schein describes another level of culture which isn’t as obvious as things like putting our work on a Kanban board. He calls this level two espoused values and beliefs, he calls this ‘what we say, we believe when asked what’s important to us here,’ and these things may not be true all the time in practice.
These are things we’ve heard before but I’ve just come up with a few examples and I think everyone can relate to some of these. For example, we believe in transparency here. We probably do believe in transparency and we may not have transparency all the time. We believe in the values and principles of the manifesto for Agile software development. Our company values are printed on the wall of every one of our meeting rooms; we’ve all seen that and then when asked people say, oh, I know it’s on the wall, and I can’t remember what it says.
Now when we get right down to the bottom of it Schein says that company culture is really influenced by the unconscious beliefs and assumptions that we have about the best ways to work here, the ways of working that have helped us succeed in the past and therefore are taken for granted unquestioned even though some of these ways of working may no longer be useful. And the technical term for that is tacit assumptions.
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Here are just a few examples:
We develop a comprehensive business case and detailed product requirements before starting any product development work because that’s what we’ve always done here. Here’s another one; we provide a workplace that allows human beings to work in comfort and safety because that’s important to us, it’s always been important to us and having a workplace that’s physically comfortable and safe to work has always worked for us so we will always continue to do it. We never question it, we never questioned it.
Another one all decisions about whether to release a major version of the platform must go through the Change Advisory Board for approval because something about the way the organisation worked in the past meant that major changes needed to have major approval. That may or may no longer be suitable for an organisation that’s operating in a very complex changing environment with competition and external change.
Uncertain and changing business environment
That’s really what we wanted to have a look at next is looking at the influences of change coming from the external business environment. This is where I would love to hand over to my Friend Phil and bear with me a moment while I plug in his microphone so that he can talk to you today and take over with the PESTLE model and the uncertain and changing business environment.
Phil: So looking at uncertainty that’s a strange thing in the world today and very different to the way it used to be maybe 100 years ago certainly and not there I remember that but it is quite a big change and the speed of change is accelerating. So I’m going to look at something called PESTLE:
I’m going to use the UK and Apple as examples. What I suggest you might want to do is just note down any thoughts about your own organisation while we’re going through this.
Political– a current one, I won’t go into any detail, changes in our regional trade agreements. You may have your own views on those and using Apple as an example more global how they’re operating in China and the factors that are changing for them there.
Economic– are new tariffs on goods imported into the UK or there could be for a company like Capo as China which does a lot of its development most of it as the society increases or improves rather, the labour costs will increase. How will that affect their business? That’s a massive impact on them there.
Social– the different working expectations of the younger generations these days it’s really starting to have an impact on business because it’s not a job for life anymore so people think and behave in different ways and have different expectations. In the case of Apple, they’re looking at third world use of technology. Is that a dramatically big new market for them or maybe they’re not so interested in it.
Technological– that’s a big thing these days. The disruption caused by new innovations, new ways of working and very relevant to what we’re talking about today. With a company like Apple, well that could flip itself over because my phone it’s also a computer; nearly everyone’s these days. It can be as good as my Laptop or notepad. Does that mean that Apple will start selling far less as more and more the different products look very similar?
Legal changes– how those affect your business national local laws or global laws. In the case of Apple, they’re moving heavily into automotive, how does that affect their insurance and regulatory costs and what happens if my Apple based Satnav directs me in the wrong place? Who do I sue? Do I sue Apple for that? So the question they’re facing there.
Environmental– that’s manufacturing processes are changing, government laws environmental laws are saying some materials we’ve used in the past are no longer acceptable because they’re a danger to society. In the case of a company like Apple, disposal of lithium batteries for instance very, very expensive. So there’s another way of looking the thermal fuse the PESTLE example here. You can also look at some new acronym of hookah, which is volatile uncertain complex and ambiguous. I guess you probably all recognise that as the business world of today.
Handy’s Culture Model
So if we can move on to the next slide please. Laura thank you. So here we’re looking at culture model. This was developed by an Irishman called Charles Handy who you probably all heard of; he’s written lots of books on organisational development in particular and very well thought of in that point of view. He developed or came up with four different cultural behaviours that organisations he looked at exhibited.
- Power, which is centralised top-down power and influence.
- The role culture and this is bureaucratic run by strict procedures and very narrowly define both roles and powers.
- Task-based, this is small teams results based and results-oriented and it’s narrowed by flexibility adaptability and empowerment.
- Person culture, which is based on the individual. It’s the people are the most important thing and even the behaviours and processes are geared towards individual success.
So just looking in a bit more detail about those going back to person. It’s really a cluster of stars successful people and the individual is the focal point. If there is any structure there, it’s only there to serve and assist individuals so it’s all about the individual here.
Task-based the emphasis here, well the focus is on the individual expertise and it’s highly, highly valued. The emphasis is getting the job done and the culture brings together the right resources, people and at the right level and at the right time to actually get the success they want which could be completing a project or a program quite common here these days. It depends totally on teamwork – totally. The teams can be formed and then reformed or abandoned where the team can decide to abandon it. So the point there is that the team has the power; they don’t need to go upstairs to actually get decisions about what they’re doing.
Alright, has everyone had a chance to vote? It looks like everyone on the webinar voted. Thank you so much for that. Let’s end with the poll now and see what we thought. Can everyone see the results? So a lot of people said that a task culture was an agile culture, some people said that it was more about individuals and people and nobody said it was about power. And then someone also said that it was about role.
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Role-based, this is really focusing on the allocation of work within roles. It’s really focused on very stable environments where the markets steady, predictable or controllable or perceived to be. So a good example here would have been the bank’s I guess and insurance companies very slow to change and very slow to see the need to change and they’re having major problems these days because they are role-based.
And finally the power-based organisations. This can be very successful but maybe these days for the wrong reasons. They are very successful because somebody at the centre of power like a spider in a web controls everything. The closer you are to the sense of the web the more power you’ve got and if this can feel sometimes quite unpleasant for the people working within it tough and abrasive and lead to low morale and high turnover.
Just thinking about those, Laura were you going to ask people what they thought in terms of which of these might fit or not fit the agile environment?
Laura: Absolutely, you know, I love to ask people what they think and so to that end I have a poll; I have a poll for everybody. The poll should be appearing now on your screen and we’re asking you to think about which one of the four types of organisation culture in Handy’s Culture Model that Phil described aligned most closely to what we understand as being agile? Which of the four types of organisation culture that we just heard described by Phil aligned most closely to what we understand as being agile?
Just a quick recap that person is about the individual and the culture only exist to serve and assist individuals. Task is about bringing together appropriate resources and the right people at the right level. It is characterised by environments where we need flexibility and adaptability. Role really depends on a kind of a rationality about the allocation of work. It’s likely to be successful in a stable environment where the market is steady, predictable or controllable. Power; for organisations with a power culture can respond quickly but they’re heavily dependent on charismatic leaders and people at the centre and they can sometimes feel tough and abrasive.
I realised that every company culture is different and what we’re looking for here is really the one that most characterises what we mean by an agile culture. You may be surprised or not to find out that of the four types of culture described by Charles handy and by Phil that task is the one most closely associated with an agile culture. The giveaway is there and the definition is that we’re bringing together the right resources at the right time in order to complete a project, we’re depending on teamwork there, appropriate when flexibility and sensitivity to the market environment are important because we’re responding to change that, we cannot control in the external business environment. So I hope you found that interesting and I’d like to stop sharing the poll and thank you very much for doing that. I found that very interesting.
Mckinsey 7S Framework
Just to carry on from that a little bit, I’d like to expand now our thinking about culture and about agile culture in particular using a model that I use quite a lot in my coaching and consulting work called McKinsey 7S. As you probably figured out it has 7 aspects in each of them starts with an “S”.
- Shared values.
A group of McKinsey consultants in 1980 decided that they were leading so many organisational change programs, that there needed to be a holistic way of approaching change and they found that most organisations wanted to focus on the so-called hard aspects of organisational culture more than the others. So of these I think we can guess which of the hard aspects strategy, structure and systems and people wanted to look at these aspects, the more visible or hard aspects of culture in order to make the changes that were required to help a company move forward.
It is probably no surprise by now those of you who know me and my company’s work and the focus of the webinar so far that in order to be successful with any kind of culture change we need to also focus on the softer aspects and those are of course staff, leadership style and shared values. So in order to broaden our idea of what an agile culture means I’d like to take each of these aspects of the 7S framework one by one. I’d like to give you the vanilla definition from the McKinsey Consultants from 1980 and then also give you an example of what we mean by an agile culture for each of those.
Strategy – the plan devised to maintain and build competitive advantage corporate strategy and an agile adaptation of that would look like a long-term strategy is created and can be revised, should be revised based on anything that we learn about the market as we go. In other words because of the change in external business environment our strategy doesn’t stay static. We’re learning as we go.
Staff – the employees and their general capabilities and what that means for us in an agile environment is that employees are trusted and empowered to get the job done according to their own judgment. That also means they self-organise and take on the roles that they need to in a task culture based on a specific project work or product development work that they have.
Skills – the actual skills and competencies of the employees working for the company. They self-organised to build solutions that create knowledge sharing networks as needed based on the current challenges and problems and opportunities that they’re working on in order to increase their capability. So learning is a huge part of organisations where there’s lots of uncertainty.
Shared values – the core values of the company today that are evidenced in the corporate culture and the general work ethic. Examples from the Scrum framework which are very well-known, openness, commitment to respect, courage and focus. We could quite easily point two values and any of the other Agile Frameworks because in Agile we know that values are important but Scrum is probably the best known example of those.
Systems – the daily activities and procedures that staff members engage in to get the job done. So anyone who’s been on a course with me and I think that’s a few of you, know that iterative and incremental development is the heart of all that frameworks, whether it’s Scrum or DSDM or Extreme Programming. Teams’ work iteratively seeking feedback in short development iterations, short cycles to improve the product and the teams’ internal capabilities through retrospectives.
Structure – the way the organisation is structured and who reports to whom. We tend to have flatter organisations with cross-functional teams that are formed to address specific project or initiative.
Leadership style adopted really more facilitative leadership than command and control. Some people also describe servant leadership, which is certainly one of the definitions of the Scrum master and Scrum. A coaching culture to support employees’ ability to think for themselves. So empowering people to think for themselves and moving away from this hub-and-spoke type of management environment to allow people to be able to work more tightly with each other rather than reporting to a single manager.
I hope that some of that has helped to get the juices flowing and we’re starting to think of questions now. And before we move into the questions, I wanted to mention that there are a couple success factors for changing culture. Number one, definitely challenge your organisation’s tacit assumptions, the level 3, the unconscious, ways that we work that have worked for us in the past which may no longer work for us going forward in the future. Remember to think about those unconscious culture like we put all the work on a Kanban board, why haven’t we changed the culture? And second examine all aspects of an organisation not just the organisational structure. This is why the McKinsey S7 framework is so useful for this to help us stay on track.
So, I wonder what questions we have. I know that there was a lot of content today and we may not get around to answering all your questions, however, as always I have the Q&A panel open to see your questions and I’m very curious to know what’s coming to mind. If you want to get in touch with us after the webinar you’re very, very welcome and I’d love to start a conversation with you about some of the things happening in your own organisation. So let’s give you a minute to start to submit some questions. You guys are usually full of questions so I’m surprised that there are no questions today.
Here’s a lovely question. How do you convince an experienced and traditional program director to give up his power? This is so interesting. I think that there’s some work for us as Agile Coaches and coaches to find out the underlying reasons why a program director doesn’t want to give up his or her power. It always has to do with how the person has been successful in the past. Remember that’s what these level 3 tacit assumptions are all about that something about the way the Program Director has been successful in the past has led them to continue to work in this way.
For me, if I’ve stepped into the shoes of the Program Director, I might be thinking I spend an awful lot of time working at the detailed level with my direct reports and I have no time for myself to think about strategy and longer-term planning and visioning for the organisation. So in order to show the benefits to the Program Director of letting go of some of his or her power and delegating to his direct reports, I might show the benefits of freeing up some of his time and thinking to be able to think about the long-term.
Now the questions are really coming in – to thank you. Here’s another question; how can you deal with staff members with a controlling ego who upsets the team? Interesting. Again I always want to step into that person’s shoes and understand what’s behind that, what’s behind the behaviour and that’s one that I think I’m going to take away and answer a little bit more completely as we’re running out of time.
Here’s another great question; in our opinion can a highly regulated organisation be agile? What a fantastic question; what new skills are needed to be more agile in business nowadays? Well, we know that every business – thank you for your comments they’re fantastic. We know that every business has different pressures and impacts coming from the external business environment and when thinking about what skills we really need to be more agile we’re thinking about more change and more uncertainty equals less upfront planning and more adaptability and more open to learning.
One of these things that I’ve seen over and over again with my clients is people who are afraid to be wrong or who espouse the belief that we need to be right the first time. These are things that we used to work for us in the past when we had long lead times and very low risk of change in the external business environment. These are the attitudes and cultures that will need to change. The highly regulated organisation to become agile is a really good one and I would love to summarise all of your questions and them into an email and as you know, I always follow up with an email after the webinar and I’ll send you a fuller description of all of the answers.
It’s been such a joy having all of you on the webinar today. If you’re interested in doing more of this type of work in your own organisation, I want to tell you about a workshop that I put together with Claire Winter on “Influencing Culture change” in order to help organisations think more deeply about exactly these questions that are specific to your own workplace.