curved line

Ep.75: Organizational change


The fourth types of digital transformation: Cultural or organizational transformation.

apple podcasts buttonspotify podcasts buttongoogle podcasts button
podcast recording


[00:00:00] Peter Maddison: Hello, and welcome to another exciting episode of Season two of definitely maybe Agile with your hosts, Peter Madison and David Sharrock. How are you doing today, Dave?

[00:00:08] Dave Sharrock: Peter, it's been a great end of the summer. I'm really doing very well. Had a chance to catch up. I think the feelings mutual.

[00:00:14] Peter Maddison: It is. It has been a very a busy time, but I've definitely been enjoying it. I'm sorry to see the summer go, but I'm excited by all the opportunities ahead.

[00:00:22] Dave Sharrock: What is it we're up to today? We really started this season out by looking at digital transformations and we'd highlighted four different types of digital transformation that are talked about. Or elements to that digital transformation that are talked about. And today we're touching on the last one, the cultural or organizational transformation.

[00:00:42] Peter Maddison: Yep, that's right. Even if you're doing any of the other types of transformation, you are going to have to go through a organizational or cultural transformation. It's just implicit in the fact that, by changing your technology, by changing how you go to market, by changing your business models, your organization is going to change.

[00:00:58] Dave Sharrock: The value in your organization is disproportionately tied up with the individuals. And those individuals are working together in that culture, the way the organization works. Any of the other transformation types that we've discussed, dovetail or come partnered with an organizational cultural transformation?

[00:01:16] Peter Maddison: I completely agree. Where do you think we should start this conversation?

[00:01:19] Dave Sharrock: There's two things that come straight to mind. One of them is, it's there whether you like it or not. We can call it an organizational transformation. We cannot call it an organizational transformation, but it's there because if we work with knowledge workers and we try to change how those knowledge workers interact with customers or their products and services. Or how they do things, you are generating an organizational cultural shift in some way, small or large. The first thing to take away is you cannot ignore it. You can't pretend it's not there. You can't say, we're not doing an organizational transformation because it's going to happen whether you like it or not. Is it going to happen in a directed, deliberate way, or are you just going to accept what happens when you try to make some of the other changes we've talked about.

[00:02:03] The second point is, this is really the domain of leadership. The other types of transformation, a bit of direction could be pulled together, and then many teams, individuals within the organization can group and implement some of those transformation goals. In the case of cultural or organizational transformations, it is almost completely driven or owned by leadership.

[00:02:29] Peter Maddison: I think it's successes. To do it well you need everybody involved in deciding how that's going to move forward, but the success of that is going to be driven by the strength of the leadership. Leadership alone can't make it. You need everybody involved in this. It's a whole organization activity. It's not going to be just the leadership, but they can break it. If you don't have that leadership, then you're not going to succeed. They are critical.

[00:02:50] Dave Sharrock: Or at least you don't know what culture, what transformation you will get on the organizational side. The really difficult bit about this is, it's so difficult to measure. If I'm changing a business model, I can put metrics in place and structures and gates, and we can look at it and see the changes.

[00:03:06] We can see the widgets being built in a different way, marketing campaigns channeling activity in certain areas. So it's much more visible and controllable. Cultural change is inherently difficult to measure. In fact, there are some perspectives out there say you can't measure culture at all. You know what it is, but it's really difficult to contain it in some sort of descriptive way.

[00:03:30] Peter Maddison: Agreed. You could say, I'm gonna map out the value streams across the organization. What are the systems of work that create a particular value? I'm going to realign my organization along those. I'm going to take and adopt organizational structures that might support those value streams, and look at long lived teams, align to long lived value streams and understand how products align to those. Go through an organizational transformation, out of which my culture is likely to change. But that's the outcome of that, not the thing that you're changing.

[00:04:02] Dave Sharrock: The conversation that we often end up having with the leadership, you're either intuitively changing culture around you because of the way you interact with your teams and your organization and your peers, or you're deliberately changing it because you think about where you want it to go, and you consciously guide the organization reinforcing the changes that you're seeking. Rather than, hands up in the air and accepting or being frustrated by the changes that you are seeing.

[00:04:29] That's a big difference between bobbing around on the change in your organization, like a cork on the ocean. Versus deliberately guiding that change in some way, through forethought and deliberate action.

[00:04:41] Peter Maddison: Agreed. Evolutionary versus revolutionary change. This idea that we come in and we're going to totally disrupt everything. We're gonna reorganize into these different organizational structures. Everyone's gotta reapply for their own jobs. That type of highly disruptive revolutionary change can be incredibly damaging and very difficult to navigate through. There's a chance you may not necessarily come out of it, and you might lose a lot of organizational knowledge along the way yet we often see organizations taking that path.

[00:05:10] Dave Sharrock: And I can see why, because I view things from a Mechanistic view. Where this cog fits with another cog and we're reshuffling how the cogs interact with one another. It's just restructuring how things are done. The challenge is the glue that holds it all together are the individuals involved, the teams involved, and they have many more facets to them, which make it much more difficult to make those changes stick.

[00:05:33] But we also have to bear in mind, a few years ago, these big transformational changes were done slowly and cautiously in the sense that they really didn't know where they were going to go. So there's that element of exploring and taking smaller steps. The evolutionary approach that you're describing. But now there's a lot of organizations coming in saying, "Hey, we've seen it work over here. How can we accelerate that adoption so that we can either catch up or overtake"? And speed becomes a factor. And when speed comes in, that's when we cut corners. We say "look, we know what the end state should be like. We want it to be like that. Let's cross that gap as fast as we can." And what we're not seeing is people need time to adopt and adjust, which is not factored in.

[00:06:15] Peter Maddison: It's the speed of unlearning. There's a speed at which people can unlearn. Context specific to what the nature of the change, is and how much people have their identity tied to what it is that's being changed. All all of these pieces tie into this. When looking at that at scale, and if you as all the cogs in that mechanistic way, a lot of that becomes invisible to you. You sometimes don't realize that the damage doing. Those gears are grinding and you don't necessarily see that happening and the damage it potentially causes.

[00:06:43] Dave Sharrock: How do you go about solving some of that? What do you look for in your leaders to do, to make that difference?

[00:06:48] Peter Maddison: From my perspective, doing this in organizations, it's the evolutionary piece. Start with one team, one area, one system, one place that you're going to change. Introduce the change there. Understand what it's going to look like. Use that as the mini snowball. Create the biggest snowball as it rolls down the hill. You've gotta find out what's working. If you're in a large enough organization, see which ones are working in different places and start to experiment and learn from that.

[00:07:15] Obviously coaching and guidance, enabling teams with new ways of working. How to think about solving different problems is obviously a valuable resource to help. That's where I see the best way of going about starting that.

[00:07:27] Dave Sharrock: I love that. It's a people thing, right? It's the narrative storytelling type of leadership that we often talk about. Experienced leaders will use narrative and storytelling and share experiences much more than they are going to be directive. Partners in leadership work around the results pyramid, argues that culture is changed by changing the experiences, which in turn changes beliefs, which in turn changes actions, which in turn changes results. I've always found that a really powerful model to discuss with leaders what the expectations are. Stop talking about the actions that we want them to change, talk about the experiences. A really great example of this is trying to get test automation on delivery teams. If I focus on test automation by telling people what we expect for them to do for test automation, that's a little bit like interacting at the actions level. But if anyone's done this with the team, that really does not work. People aren't interested in changing that. Instead, we want to find those one or two developers on the team who have an interest in it. Help them get a good experience around test automation using the tools and the practices, but then allow that to seep through like osmosis through the development teams effectively, team by team or product by product.

[00:08:39] Peter Maddison: In that specific example, it's this "Hey, we're going to install sonar cube, and we're going to set an 80% requirement for all unit tests". At which point all the teams go out and start creating tests because volume of tests is what the criteria that's been set. Now you've got people saying, "Hey, look at how great I'm getting it at automating all of my tests." but there's no thought going into the quality. Which means that you're not getting the result that you think you're getting as a consequence.

[00:09:05] Dave Sharrock: Recognition that it's a learning experience, right? The tests that you write in your first few months of doing that, you will throw away, because you are writing all the wrong tests. But you need to learn how to execute different parts of your system, where to decouple things and inject certain tests. All of that comes with time and experience and tripping over your own shoelaces basically.

[00:09:26] Peter Maddison: Yes. There's an understanding piece there too, that higher levels of code coverage doesn't necessarily mean that you actually have better testing. Two different things.

[00:09:35] Dave Sharrock: Let's try and wrap things up. So I think we've explained a little bit about various aspects of how the two of us view organizational transformations. What's the two or three things you want us to carry away from this?

[00:09:46] Peter Maddison: I think for me, the criticality of leadership is absolutely key. Your leaders have to be on board with the change. Open to the fact that they have to potentially change too, in order for this to work. All too often you can have leaders come in and say, " I'm not the problem. I don't have to change. Everybody else does." You've got to have the right leadership to make this work. Simple as that. So I think that's probably one of the, my biggest takeaways.

[00:10:12] Dave Sharrock: I'd probably add two more things. One is, it's there whether you call it out or not. I think time has to be given to the fact that some sort of organizational change is happening as you do any of the other types of transformation. And I think it's important for it to be upfront and clear.

[00:10:28] I really liked the phrase of intuitive or deliberate. There's a big difference between leaders who are intuitively changing culture versus those that thoughtfully change culture. Sit down first and think about what the outcomes are that they're seeking and take action to achieve that.

[00:10:47] Peter Maddison: Yes. Completely. That was awesome. I love the conversation as always, Dave.