Software Results

Genius is in the Fundamentals

noreply@blogger.com (Dave Moran) — Fri, 03 Feb 2012 11:00:00 +0000

I don’t know how this year’s Super Bowl will turn out, but being from New England I’m naturally rooting for the Patriots. And I’ll admit that the New York Giants certainly give me reason to worry… However, it should be a great game!

This will be Tom Brady’s fifth Super Bowl appearance, an indicator that he’s been playing at an elite level for quite some time now. What does it take to be one of the best? Apart from his incredible work ethic and constant study of the game, Tom Brady focuses on a superb execution of the basics.

In his article Tom Brady still listens to QB whisperer, Tim Graham talks about how Brady recognizes the need for solid mechanics and works on them constantly. Interestingly enough, Brady still relies on Tom Martinez, his personal throwing coach since before he ever made his first junior varsity start.

Why? According to Martinez, a coach discussing flaws with someone of Brady’s caliber can be intimidating to the coach because the coach isn’t as good as the player. “So they hesitate to say things,” Martinez says. “Therefore, the player gets sloppy.”

Coaches shouldn’t be afraid! It’s up to coaches and leaders to make sure that people and teams haven’t strayed away from the fundamentals before we start making a bunch of other “fixes.” And bear in mind that those who are being coached might be experts at what they do, but often lack the perspective on what is going wrong with their own performance.

This was pointed out in the book, Unusually Excellent by John Hamm. Hamm observed that some of the greatest golfers on the planet went to coaches to correct problems with their game, and he noticed that the golfers had some very strong opinions about what they felt was wrong. And what did the coaches do? The coaches “…politely and deceptively ignored that line of thought and instead insisted that the golfer begin with the most basic fundamentals of grip, stance, posture, ball position and aim.”

Why? Because, Hamm explains, “Even the best performers, in any field, will slowly—and imperceptibly—stray away from the fundamentals of their craft. This drift is almost always invisible to them. The human nature part is that losing precision in the fundamentals is exactly the last thing most accomplished people would imagine or will accept as the cause.”

Agile teams can drift in the same ways. Putting too much work in progress at one time can cause teams to finish sprints with little in the done column. Or they stop tasking User Stories out or skimp on the basics in some other way. They drift from the fundamentals – and run into problems.

If you’re a coach or ScrumMaster, keep an eye out on the basics and gently guide your team back to those basics if you see that they are running into trouble. It can be very rewarding, just like John Hamm’s golf coaching story concludes: “I can't tell you how many times I've watched these professional golfers, after an hour of a supervised, disciplined return to the basics, begin to hit the ball as well as they ever have, and predictably turn to their coach and say, ‘That was it. You're a genius.’”

Be a coaching genius and keep your team focused on the fundamentals!

You Don’t Have to be First to Market…

noreply@blogger.com (Dave Moran) — Tue, 31 Jan 2012 11:00:00 +0000

As long as you are the best.

For example, MySpace was first to market, generating an incredible following and was by all standards a huge success – THE player in what we now know and love as social media. MySpace was purchased by News Corporation and had all the advantages of professional management and financial backing to guide and fuel its continued growth. In effect, the social media market was MySpace’s to lose. And lose it did. To a company called Facebook launched by some college undergrads.

Why? Because while MySpace was an innovator, it wasn’t a leader. MySpace captured a sizeable market share by being first with a great idea – validating the existence of a market – but it failed to capitalize on its first-mover advantage. Instead, Facebook took the lead in truly learning about what customers wanted and adapting its offering, eventually taking the lead in market share.

Adam Hartung’s interesting Forbes article, How Facebook Beat Myspace, characterizes MySpace’s downfall as demonstrating the “…big fallacy of modern management. The belief that smart MBAs, with industry knowledge, will perform better. That ‘good management’ means you predict, you forecast, you plan, and then you go execute the plan.”

The danger in this, Hartung says, is that professional managers feel that you “…should be able to predict and perform without making mistakes. That once the bright folks who create the strategy set a direction, it’s all about executing the plan. That execution will lead to success. If you stumble, you need to focus harder on execution.”

In effect, MySpace lost its leadership through traditional management practices. Better execution on MySpace’s part using their current management/business practices would not have helped against Facebook. That’s because Facebook wasn’t attempting to predict the future with a “plan the work and work the plan” mindset. Far from it. As Hartung points out:

“...the brilliance of Mark Zuckerberg was his willingness to allow Facebook to go wherever the market wanted it. Farmville and other social games -- why not? Different ways to find potential friends -- go for it. The founders kept pushing the technology to do anything users wanted. If you have an idea for networking on something, Facebook pushed its tech folks to make it happen. And they kept listening. And looking within the comments for what would be the next application -- the next promotion -- the next revision that would lead to more uses, more users and more growth.”

Hartung attributes Facebook’s success to what he calls White Space management, where you don’t forecast and plan, but get to market and learn. Facebook continually tested ideas and listened to its customers. This same approach is advocated by Jim Collins and Morten T. Hansen in Great by Choice and Eric Ries in The Lean Startup.

It’s all about using a low-cost, low-distraction, low-risk, empirical learning process to discover the truth about what works. The goal, Ries says, is to generate feedback and data as quickly as possible to learn what customer likes and dislikes; to understand how many people use a feature and find it valuable.

Another term for this is business agility, where agile and Lean principles are applied to create a learning, responsive and adaptive organization – one that is focused on delighting its customers by providing an intuitive product with easy-to-use features.

MySpace initially reaped the rewards of being an innovator, but lost in the long term because Facebook took the lead in learning and adapting its offering by being closer to the customer. While most business advice tells you not to compete with an established competitor, Facebook clearly had a hidden advantage in how they conducted business. Agility has its rewards!

The Many Faces of Innovation

noreply@blogger.com (Dave Moran) — Fri, 27 Jan 2012 11:42:00 +0000

In my recent post Charting a Course for Corporate Success, I outlined three, broad categories of innovation:

Disruptive, Breakthrough Innovations.
Sustaining, High-Value Change.
Everyday Creativity and Emergent Innovation.

When it comes to leading businesses, it is important that we don’t just come up with new things; we need to innovate in ways that create value for our customers. As research by Robert Wolcott and Mohanbir Sawhney demonstrates, there are many different ways that business can innovate to achieve this outcome. They came up with twelve dimensions of innovation that we can consider:

Offerings: These are new products and services that are valued by the customer, like the iPhone.

Platform: A platform is a set of common components, assembly methods, or technologies that are building blocks that can be leveraged with a portfolio of products or services, allowing you to create a set of derivative offerings faster and easier than building them all from scratch.

Solutions: This involves creating a customized, integrated combination of products, services, and information to solve a customer’s problem. This can be an end-to-end solution that simplifies and reduces the logistics of something like procurement and delivery, for example.

Customers: The identification of new customer segments or unmet needs.

Customer Experience: This involves any and all things that a customer feels, hears, sees, and experiences in dealing with your company.

Value Capture: Innovation that discovers untapped revenue streams or expands the ability to capture value from interactions with customers.

Process: This type of innovation concentrates on the internal business activities and improving the efficiency of those processes.

Organization: This is a redesign of organizational structure and a company’s activities, possibly redesigning roles, responsibilities, and incentives of different business units and individuals.

Supply Chain: This involves re-sequencing activities and agents in the sourcing and delivery of goods and services.

Presence: This type of innovation focuses on the creation of new distribution channels or new ways of leveraging existing channels.

Networking: Innovation that concentrates on how products and services are connected to customers and how to improve and use those connections to create competitive advantage.

Brand: Brands communicates a promise to customers, and innovation in this realm involves extending the brand in some way.

The Value of Business Focus

noreply@blogger.com (Dave Moran) — Tue, 24 Jan 2012 11:00:00 +0000

The essential, underlying aspect of your company’s strategy is its distinctive competence and the perceived value of this competence by your customers. You need to articulate your purpose, and this requires a strong focus.

A great example of exquisite focus is found in the book, Good Strategy/Bad Strategy by Richard Rumelt. While I personally lack experience in manufacturing, I can certainly appreciate the example of Crown Cork & Seal and its brilliant strategy crafted by John F. Connelly in the 1960s.

Back in the day, Crown Cork and Seal was a smaller manufacturer specializing in containers for “hard-to-hold products” like aerosols and carbonated drinks. The industry was dominated by three major competitors: Continental Can, National Can, and American Can.

It was a standard industry practice of most beverage companies to maintain at least two sources of can supply, and there was always the threat that a beverage company could purchase a can line and manufacture its own cans. In response to this, the “big three” can makers often set up plants close to a customer. Thus, the big can makers became willing, captive producers in order to benefit from long production runs (because there was a large cost involved with changing lines to make one can type versus another).

The net result were low profit rates of 4 to 5 percent return on assets by the major can companies. Despite being a smaller player in a difficult industry with low returns for major players, Crown Cork & Seal managed to be fifty to sixty percent more profitable than the big three.

How did they do it? Richard Rumelt posed this question to his executive MBA Class on strategy identification. And that meant digging and thinking deeply about the situation, looking for answers beyond information that was readily at hand.

Conventional wisdom was that Crown specialized in containers for hard-to-hold products such as aerosols and carbonated drinks, but that alone does not explain Crown’s success. Someone suggested that Crown must be the low-cost producer, since putting soda into a can is not a big technical feat and that Crown wasn’t the only company able to do this. And is it turned out, Crown’s unit cost per can was actually higher, not lower, than its competitors’.

“You can’t differentiate a can.” So how did Crown profitably differentiate itself?

Rumelt steered the class towards the real answer by drawing their attention on Crown’s policies and positioning to determine its true focus. The first two policies examined were those of providing technical assistance and rapid response.

The critical observations were that large companies don’t need technical assistance, and in fact are more likely able to give it. It is the small companies need assistance. Likewise, smaller companies also have less stable demand.

Related to demand instability, companies can also produce seasonal products or introduce new products that could lead to unpredictable demand spikes. A hotter than anticipated summer with a new beer product, for example, could create a situation for rush orders.

But there was more. Crown also had a manufacturing policy. Crown’s plants were actually smaller than its competitors, and none of the plants were captive. Not only did Crown’s plants service more customers per plant than their competition, their production of cans per customer was a lot lower.

In effect, Crown’s policies were different from the industry norm. Going for the “long runs” made the majors captive, but Crown chose to play by different rules in the same industry. Crown specialized in soft drink and aerosol cans with shorter runs. The runs may be shorter because the customer is smaller, because the product is newer, or because there is a rush order to cover seasonal or unexpected demand.

By specializing on a carefully selected part of the market, Crown increased its bargaining power with respect to its buyers and generated a greater return. Crown crafted a competitive, profitable advantage for itself in a very tough industry.

I don’t do justice to the Crown story in this post -- you really should read the book for a more complete walkthrough of strategy identification (and more). I found Good Strategy/Bad Strategy to be an excellent book on business strategy.

Charting a Course for Corporate Success

noreply@blogger.com (Dave Moran) — Fri, 20 Jan 2012 11:00:00 +0000

At a time when corporate survival rates are declining, what do companies – and leaders in particular – need to do to chart a course when maps aren’t readily available? You can’t “cut your way to glory” – at some point businesses need to innovate and grow. But how do you evaluate what the right direction is for your company? Where should you focus?

This is a difficult challenge, and unfortunately, there isn’t a step-by-step cookbook available to solve this problem. I’ve culled together advice from several sources to aid in charting your own course to success. Fair warning: This isn’t a process, just a framework for thinking that provides a little orientation. I’ll admit that is a lot easier pulling this information together than applying it; the hard part is involves thinking deeply about your own situation.

Prerequistes
Profitability as a Goal is Assumed: The business exists to be profitable. There is no need to state the obvious with a “directional” statement like, “We need to maximize shareholder value.” What information or guidance does this provide to anyone in the organization? The key objective is to determine (specifically) what to do and how to it profitably.

A Customer-Centric View is the Overarching Theme: In order for companies to succeed, they must convince customers to part with their hard-earned money in exchange for something you offer as value. Customers should be delighted in what you offer and in their experiences your company. Your value should be unique – distinctive competence is an oft-used term – and protectable in some way. Furthermore, you must be able to communicate your value proposition clearly to all concerned, from potential customers to your employees.

What is Your Purpose?
Three Key Questions that Help Define and Clarify Your Purpose: In his book Good to Great, Jim Collins discusses what he calls the Hedgehog Concept, which focuses on a single, unifying concept that provides a clarifying advantage, your core competency. Answering three key questions surfaces this clarifying advantage:

What can we be the best in the world at? This is not simply an intention or a goal to be the best, but driven through an understanding of what you can be the best at.
What drives our economic engine? Even in a commoditized industry, it is still possible to be profitable, but this requires deep insight into the economics and opportunities available.
What are we deeply passionate about? Do the things that make you and those around you passionate. In a fantastic TED talk (included in my post, People Don't Buy What You Do...), Simon Sinek argues the companies should transcend simply “filling a need” to being companies who truly believe in something and “…do business with people who believe what you believe.”

Choose Between One of Three Dimensions of Excellence: In the spirit of not being all things to all people, The Discipline of Market Leaders advises us to choose one of three dimensions to excel at:

Operational Excellence. An operationally excellent organization delivers a combination of price, quality and ease of purchase to its customers. Companies that excel in this dimension are well organized, valuing stability and predictability that are captured in efficient and effective processes. These organizations tend to be risk-adverse in comparison to product leadership organizations.
Product Leadership. Product Leadership organizations deliver the best product or services to its customers, period. Companies that excel in this dimension are willing to push the envelope, to explore the boundaries into the realm of the unknown to deliver the best product or service. These organizations don’t just identify the current needs of the market; they look to the future needs of the market and work like crazy to get there first. Product leadership organizations are striving to meet needs that customers do not realize that they have.
Customer Intimacy. Organizations that are intimate with their customers understand the needs of each and every customer and provide the best total solution for each specific customer. These organizations build bonds with their customers and are not viewed as simply a “vendor,” but as a trusted advisor by their customers. These organizations remain flexible and responsive to changing customer needs, seeking to build a long-term relationship with their customers.

Choosing one does not mean disregarding the other value disciplines. Companies must choose to excel at a specific dimension, but maintain threshold standards in the other dimensions.

Choose the Right Category of Innovation: Innovation plays an important role in defining your distinctive competence and corporate growth. As the The Innovator's Solution and Disciplined Dreaming point out, one size doesn’t fit all, and the same is true for innovation. Both books categorize innovation (The Innovator’s Solution mentions two categories and Disciplined Dreaming mentions three), so consider where you need to innovate in context with the dimension you’ve chosen to excel in and your current circumstances:

Disruptive, Breakthrough Innovations. This is the most popularized form of innovation – the game-changing innovations that rewrite the rules of the game. Ford’s assembly line and the iPhone are examples. Everything doesn’t have to be about breakthrough innovations, however.
Sustaining, High-Value Change. Innovations in this category focus on making existing products or services better. Adding new, compelling features to existing products, providing add-on products to existing products, or improving the efficiency of existing processes are examples.
Everyday Creativity and Emergent Innovation. People can make small changes in the routine, everyday work that can ultimately add up to big results. I used the term emergent innovation in an article on the advantages of agile development to capture how the collaborative nature of agile development created the opportunity for small-scale innovations to occur. Examples include improving a customer experience on a service call or making a small adjustment to make a product feature a little simpler and easier to use.

Assess and Iterate. It takes a lot of time and effort to achieve a deep understanding of your industry and how your business can profitably approach that industry. As you consider your options, make sure that it is not too complicated or that the result does not become watered down as you socialize it within your organization. Your purpose should be clear, compelling and distinctive. If it isn’t, circle back and keep trying!

How Are You Going to Get There?
Define Your Strategy. Once you’ve decided what your company is all about, you need to determine how it will get there. There is overlap in what I've previously covered because strategic thinking is also involved in setting direction. For example, it’s not a good idea to compete head-to-head with an established incumbent. You need an advantage.

The book Product Strategy for High Technology Companies provides three questions that must be asked in order to have a complete, Core Strategic Vision (CSV):

Where do we want to go?
How will we get there?
Why will we be successful?

A key to a good CSV is that is aggressive and mostly likely a stretch to accomplish, but it shouldn't be impossible or unrealistic.

An essential point is that goals do not equal strategy. “20 percent growth” is a goal – an ambition for a desired target condition – but not a strategy. Good strategies must define how an organization will proceed, and in the process it should be easy to rule out a variety of other alternative actions because they aren’t applicable to the stated strategy. In the spirit of the book Switch, leaders must script the critical moves.

As Good Strategy Bad Strategy tells us, strategy should be coherent. “…the resource deployments, policies, and maneuvers that are undertaken should be consistent and coordinated. The coordination of action provides the most basic source of leverage or advantage available in strategy.”

One final quote from Good Strategy Bad Strategy puts this all together: “Good strategy is not just ‘what’ you are trying to do. It is also ‘why’ and ‘how’ you are doing it.”

What About Vision Statements and Mission Statements?
I didn’t lead with these, but once you’ve considered what your company is all about – its direction, beliefs and values – and how it will get there, producing both mission and vision statements should be a simple exercise. (It’s the thinking that’s hard!)

The basic definitions of vision and mission statements vary, but mine are as follows:

A vision statement defines an organization’s purpose, but does so by incorporating Simon Sinek’s notion of the organization’s belief, articulating the organization’s values versus measures. A vision statement contains more emotional content than a mission statement and is a longer-term view that describes how an organization contributes to the world.

A mission statement is designed to be internally-facing, defining an organization’s purpose and primary objectives along with key measures.

For some additional information and examples, see my post, Are People Buying What You’re Selling?

Book Review: Steve Jobs

noreply@blogger.com (Dave Moran) — Tue, 17 Jan 2012 11:00:00 +0000

I have to say that this book had me believing that I would dislike Steve Jobs because he came across as a spoiled (crying when he didn’t get his own way), arrogant tyrant to work for, a harsh and insensitive individual to be friends with, and a man who was distant and neglectful towards his family. However, Walter Isaacson balanced this view of Steve Jobs with a detailed treatment of the qualities that made Steve Jobs great.

One of those qualities was a sincere passion for creating great products. Steve Jobs had an overarching, personal mission to “put a dent in the universe,” and that quest led him to develop truly elegant products that delighted customers. Jobs also built highly successful companies, offering key perspectives that all of us should make note of.

Jobs felt that there were no shortcuts in building a real company. As Jobs said, “I hate it when people call themselves ‘entrepreneurs’ when what they’re really trying to do is launch a startup and then sell or go public, so they can cash in and move on. They’re unwilling to do the work it takes to build a real company, which is the hardest work in business. That’s how you really make a contribution and add to the legacy of those who went before.”

And he meant it. In talking about what went wrong with Apple after his departure, Jobs felt that chasing money for money’s sake rather than producing great products was the central issue with Apple’s decline: “Sculley destroyed Apple by bringing in corrupt people and corrupt values,” Jobs observed. “They cared about making money—for themselves mainly, and also for Apple—rather than making great products. Macintosh lost to Microsoft because Sculley insisted on milking all the profits he could get rather than improving the product and making it affordable.”

As we all know, when Steve Jobs took the helm again at Apple he re-focused on products. He also reduced Apple's bloated product line to create focus as well as eliminate confusion. He also took care not organize Apple into semiautonomous divisions. Instead, he made sure that Apple worked as one cohesive and flexible company, with one profit-and-loss bottom line. “We don’t have ‘divisions’ with their own P&L,” says Tim Cook. “We run one P&L for the company.”

Throughout his life Jobs was very outspoken, and he certainly had the courage and confidence in his beliefs to act on his beliefs – and to convince others to act. This was not always a good thing because not everything Steve Jobs touched turned into gold. Isaacson made sure to continually remind of us of something that was a constant reality when dealing with Steve Jobs: he had an intensity and magnetism to his personality that – when coupled with the courage of his convictions – created a “reality distortion field” (Bill Gates was reportedly immune).

Being drawn into Job’s “reality distortion field” meant that you were completely sold on whatever it was Steve Jobs was selling, despite any logical arguments that you may have had prior to engaging with Jobs. This was great if Jobs was right, not so good if he was wrong. This also seemed to have offset a great deal of Jobs’ weaknesses.

Love him or hate him, Steve Jobs was instrumental in building Apple and later turning it around. In between gigs with Apple, he enjoyed great success with Pixar Animation. I could go on and on quoting the insights that Steve Jobs had about creating great products and businesses, but it is better to read them for yourself in context with the situations that Steve Jobs was facing at the time.

Walter Isaacson clearly strove to provide a balanced perspective of Steve Jobs, and he certainly succeeded on that point. He left no stone unturned in chronicling the detailed history of Steve Jobs, and I didn't want for additional information! Be forewarned that this book is somewhat lengthy, and I'm sure that others will desire shorter, more entertaining biographies. I personally enjoyed the book and the balanced perspective, and Isaacson certainly left no stone unturned in chronicling the detailed history of Steve Jobs.

3 Sets of Agile Questions

noreply@blogger.com (Dave Moran) — Fri, 13 Jan 2012 11:00:00 +0000

With Scrum, there are three questions that each team member answers in the daily standup meeting:

What did I do yesterday?
What am I planning to do today?
Do I have any impediments?

These questions target the day-to-day work, but are there questions that can and should be asked as teams conduct a sprint review or a retrospective? Yes. And the right questions are a different set of questions that should explore the value that teams provide their company and the customer.

In a post, What have we LEARNED? by David :^{)} Koontz (this is two posts in a row that I’ve referenced his Agile Complexification Inverter blog!), David quoted a suggestion from Richard Cheng on what this set of questions should be:

"Let me tell you a true story. I was working with a Scrum team at a financial website. About once a month, there was a company meeting where they presented what they did to the other departments and executives. Their initial presentation contained information such story points completed, hours spent on stories/spikes/firefighting, and what they implemented. As the team really started to understand the goals of the company and the project and their place in achieving these goals, the team presented the following:

What have we done this month to help make our company profitable?

How have we excited our customers?

What we have learned?

"This is a fundamental shift from thinking about task based, to do list work to actually achieving goals and providing value. Helping your organization shift from getting value from the first set of presentations to the second set of presentations is a big part of what the Agile transformation is about."

-- Richard K Cheng, PMP, CSP

But wait, there’s more!

What about management? If we all agree with Steve Denning that delighting the customer is paramount because, “By focusing on delighting the customer, the firm makes a lot more money than they would if they set out to make money,” then we have our next set of three questions for management to be routinely asking:

What are we doing now to delight our customers?
What are we doing to help our employees profitably delight our customers?
What new or different things should we start doing—and what should we stop doing—in order to profitably delight our customers even more tomorrow?

Overcoming Monkey Business

noreply@blogger.com (Dave Moran) — Tue, 10 Jan 2012 11:00:00 +0000

In the self-managed environment of Agile development, managers can come away feeling like they have a lot less to do. After all, management no longer directly assigns and monitors the work, right? A natural follow-up question might be: with autonomous teams, why do we even need managers?

Autonomy should never mean hands-off. Even autonomous teams need a helping hand every now and then. Remember the old saying reminding us that someone, “Can’t see the forest for the trees”? We all can get so involved with the details that we lose sight of the bigger picture. Managers happen to be in a great position to provide a broader perspective to teams that can contribute to more effective day-to-day decision making of the team.

I came across another piece of information to consider in Mike Rother's book, Toyota Kata. In it, Rother cited a research paper on continuous improvement at Toyota written by Professor Koichi Shimizu of Okayama University, which contrasted improvements carried out by production operators (via quality circles, suggestion systems, etc.) and improvements carried out by team leaders or supervisory staff.

Only 10 percent of productivity and costs improvements were realized by those carried out by production operators. 90 percent, on the other hand, were realized by those carried out by team leaders and supervisory staff. Why isn’t the situation reversed, where people closest to the work able to make more—and better—changes?

As Rother says, “It is physically impossible for production operators to work fully loaded to the planned cycle time in a 1×1 production flow and simultaneously make process improvements. Furthermore, many operators are just beginning to develop their understanding of the improvement kata and their problem-solving skills.”

For any of us who have been developers, the experience of not being able to find a bug in our code—after staring at the screen for too many hours—can be frustrating. Even more so when someone else stops by and noticing that you are deep in concentration, looks over your shoulder for a minute and then asks, “How come you are doing that?” and pointing directly to the very problem that you’ve failed to see all along.

Need a stronger example? Watch the following video before continuing:

I read about the original “gorilla experiment” in Great by Choice, and David :^{)} Koontz recently referenced this same Monkey Business Illusion a post where he made the case that, Yes – You Need a Full Time Scrum Master.

Someone needs to be looking out for the bigger picture, and that picture can be the flow of the team or the flow of the business. There are complex interrelationships between the actions we all take that lead to the customer, and it helps to have a mix of people who are handling the details of execution and the oversight of our processes as a whole so that we don’t overlook important observations that will make us more effective. Managers are in an excellent position to identify issues that those directly involved with the work might be missing.

In fact, Scrum masters, Product Owners and managers can all contribute valuable perspectives to team members working hard on the important details. For team members, this means that you shouldn’t box everyone out your day. For managers, this means that you should discover how to contribute to your teams without distracting them from their work. It’s not easy, but it is possible.

Leadership, Management, and Self-Management

noreply@blogger.com (Dave Moran) — Fri, 06 Jan 2012 11:00:00 +0000

I view the basic distinction between leadership (“doing the right things”) and management (“doing things right”) as being fundamentally correct, albeit oversimplified. Various forums have raised the question of management versus leadership, with differing opinions on whether one person can be both a manager and a leader. Does this question change in an Agile context?

I believe so. With Agile, traditional lines between leadership, management, and working professionals are blurred. This is not a bad thing, but it is a different thing.

Agile development is about self-managing teams, which covers most of what Wikipedia defines as self-management: “The methods, skills, and strategies by which individuals can effectively direct their own activities toward the achievement of objectives, and includes goal setting, decision-making, focusing, planning, scheduling, task tracking, self-evaluation, self-intervention, self-development, etc.”

Of course, Agile development doesn’t go so far as to explicitly define self-evaluation, self-intervention, and self-development, but technical excellence is expected, as is reflecting on the team’s work, continuous improvement, and the learning that comes with raising and improving your game. As we move deeper into Agile adoptions and acceptance, it only makes sense that self-evaluation/intervention/development become an integral part of everyone’s repertoire.

Talk with any experienced manager and you’ll hear how certain employees don’t require any real management time at all—self-managed individuals have always existed. These employees work on the hardest problems, the most difficult challenges, and always deliver. Even when they encounter bumps in the road, these employees bring options to the table; they don’t “delegate up” and leave everything for the manager to decide. “If everyone was like this,” the manager typically says, “I’d have more time to focus on the business.”

What if self-management became a universal reality? Managers would spend less time managing and have more time available for leading. Managers could develop a deeper understanding of the customer and devote more of their time to setting business direction or aligning the business to better meet the needs of the customer. Managers could also spend more time looking ahead, guiding and preparing the organization for the needs of tomorrow.

Other types of leading can and should be distributed throughout the organization. The important distinction is that this leadership is built around a leader contributing to a desired outcome, not a reporting relationship where the work is judged by a non-participating individual who is “higher up” in the organizational hierarchy. (Reporting to someone is not necessarily the same as being led.)

Scrum, for example, has roles where a certain type of leadership is expected based of that role. Scrum masters are expected to have a deep understanding of Scrum and be able to guide and coach the team. Product Owners are expected to fully understand and represent the business, articulating the value and prioritizing the work based on delivering the greatest value first.

Leaders have followers, and those followers follow because they recognize that the leader has the knowledge and the collaborative skills to guide them in producing a successful outcome. There are people on teams who become leaders because they have expertise and collaborative skills, no title required. After working in a truly Agile context for a while, you should expect to see self-managed teams and individuals increasingly take their cues from those who establish themselves as leaders, regardless of where they are positioned within an organizational hierarchy.

For aspiring leaders, this places a premium on building relationships and the ability to work in team environment. This was recently reinforced by Right Management, who partnered with the research firm Chally Group to survey over 1,400 CEOs and human resource professionals from more than 700 companies globally to explore leadership effectiveness and development across regions and cultures.

This study found that the top reason for a leader’s failure is the inability or unwillingness to build relationships and a team environment. “What emerges from the survey analysis,” Bram Lowsky, Executive Vice President of Right Management says, “is that leadership success is increasingly dependent on getting along with others in the organization as well as with one’s own team. A leader must be able to connect, build relationships and be flexible enough to adapt to the corporate culture.”

Agility is the New Standard

noreply@blogger.com (Dave Moran) — Tue, 03 Jan 2012 11:00:00 +0000

Agile development has been increasing in popularity in recent years, and depending upon who you listen to, the following scenarios are possible in the near future:

The foothold Agile has obtained in many organizations will spread beyond software and IT, gaining acceptance in other areas of the business.
There will be an increase in failed implementations, with a subsequent backlash against Agile.
The term Agile will cease to be used to identify any set of practices; it will simply be THE way that we operate.

I think all of the scenarios are possible; the first two are really about the expansion and growth of enterprise agility and in 2012 I believe that we will see a heightened interest and activity with the rest of the business incorporating Agile practices, mostly out of necessity.

I say this because, quite bluntly, corporate survival rates are declining. Consider the following statistics from The Shift Index study by Deloitte's Center for the Edge—which examined 20,000 US firms from 1965 to date—shows a dramatic decline in the life expectancy of a firm in the Fortune 500:

Only 74 of the original 500 companies in the S&P Index are still on the list 40 years later.
The average life span of an S&P 500 company has steadily decreased from more than 50 years to fewer than 15, and trending towards 5 years.

Competitive pressures make business agility more important than Agile development, and in fact achieving true business agility will require adaptation of approaches designed for software development towards other areas such as business innovation—obviously a critical component in driving top-line growth that increases the likelihood of corporate survival. Agility is the new standard.

In terms of failed implementations, well, they will come as Agile expands. Using the wrong tool for the job is one way to drive failure. For example, I personally feel that Kanban works better for support organizations whereas something like a Scrum/XP hybrid is better suited for new product development. That’s not to say that one tool can’t work, it’s just that some tools are better suited for certain purposes than others. Force-fitting one tool for every job will invite failure.

Ignoring the people dimension is also one great way to drive failure. Pay attention to the ADKAR® model, or follow Jurgen Appelo’s advice on changing the world (building on the ADKAR® model and other research):

How to Change the World (new)

View more presentations from Jurgen Appelo

Ultimately (how many years out, I cannot say), “Agile” as a term should disappear because it will be the standard. Right now it’s a convenient term to use while we’re undergoing a sea of change that involves the stripping away of the inessentials, of driving innovation and creativity with greater speed, of learning and adapting quickly—using new approaches to our work because we can’t drive faster execution using existing approaches (at least not in a way that is sustainable).

Looking Back on this Blog...

noreply@blogger.com (Dave Moran) — Fri, 30 Dec 2011 11:15:00 +0000

I started this blog in January of 2009. At the time, I wasn't quite sure of where I was going, only that I wanted to drive my professional development and get more involved in writing. I began posting once a week, and around the second quarter of 2010 I increased my posting to twice per week.

I'll confess that I was concerned if I could maintain a twice-per-week pace with my work schedule. I was also worried that I might run out of material. As it turns out, posting twice a week keeps the heat on me to continually learn and raise my game.

I am perpetually reading about Agile development and leadership topics along with thinking about what I've read and how new information and perspectives may (or may not) apply to our situations at work. When and where they are applicable, I strive to incorporate them into my routine and our Agile execution.

I also participate periodically on LinkedIN and other forums to engage with others, learning from what they are asking about and responding with. And of course, writing means that you must take a a position on whatever it is you are writing about. I find that exploring why I have a certain position can definitely lead to deeper insights and sometimes raises questions in my own mind that lead me to fresh information and new posts.

Since it's the end of the year, and I always like to take stock on what I've read throughout the year, and I can see how what I've read has influenced my thinking. Here's my list of business and self-improvement books that I read in 2011, in no particular order:

What I'm reading right now:

My goal is to build my readership in 2012, so please, if there are any burning issues or topics that you would like to see discussed, please let me know. And have a Happy New Year!

Product Development is Learning, not Predicting

noreply@blogger.com (Dave Moran) — Tue, 27 Dec 2011 11:00:00 +0000

New products—or new businesses—should not make predictions early on, like predicting what features customers will value or how much revenue will be generated from a new product or business. These are questions that need to be validated as quickly as possible by getting in front of actual customers, not by making projections using a crystal ball.

Even if you capture “data” in a spreadsheet, it’s still wishful thinking until proven otherwise. Everything has the illusion of being real when reduced to numbers that add up in a spreadsheet. But just because the math works doesn’t mean that reality is being represented.

That’s not to say that some thinking up front isn’t helpful. You need to have a clear articulation of the problem that you believe needs solving—based on keen observation and thinking on your part—coupled with an assessment on whether there are enough potential customers in the market who are willing to part with their hard-earned money to purchase your solution to make their lives easier or better. And you need to be able to offer a solution at an attractive price point that will also make you a profit.

This is all part of your homework, but it is only one step in the full learning process. You need to make informed decisions on what to pursue, but once you start down a path, the reality is that you are heading into uncharted territory. And the information that you collect along the way may cause you to alter your course.

Metaphorically speaking, innovators are explorers that blaze new trails that settlers follow. Even if you are following, you are hopefully seeking some type of differentiation from your competition, taking an established trail up to a certain point and then splitting off from that trail.

Taking established routes allow for a greater degree of predictability, but at the point where you begin exploring, don’t waste too much time and energy attempting to predict very uncertain outcomes, like how much money you’re going to make. Likewise, excessive planning designed to exert control over your destiny to “ensure” (and predict) the success of an initiative is misguided.

Instead, invest your time and energy in discovering what those potential customers value. Use a low-cost, low-risk, fast approach to drive your learning to uncover the truth that I wrote about in How to Fire a Business Bullet. Learning obtained as a result of this discovery process may validate the direction that you were originally headed in, or it may cause you to adjust your course or it—with the benefit of leading you towards unanticipated growth and greater profitability than you originally projected.

This implies that we should follow traditional investment advice: Make what looks like a sound investment by doing your homework and invest only what you are willing to lose. Count your profits later, when you have satisfied customers who are paying you in real dollars.

Merry Christmas!

noreply@blogger.com (Dave Moran) — Fri, 23 Dec 2011 11:00:00 +0000

As we approach the Christmas holiday—and since some of us are doing some last-minute shopping—I wanted to take a moment to wish you a Merry Christmas! And thank you for reading!

Have a warm and happy holiday. -- Dave Moran

Image courtesy of: suphakit73 / FreeDigitalPhotos.net

Control Trumps Intent

noreply@blogger.com (Dave Moran) — Tue, 20 Dec 2011 11:30:00 +0000

In his book, Disciplined Dreaming (A Proven System to Drive Breakthrough Creativity), Josh Linkner describes how his company ePrize won the business of UPS—but managed to enrage this new customer by doing something stupid: they shipped the first package of sales materials related to their very first promotion via FedEx.

How did this happen? Well, the employee who had the responsibility to mail the materials responded with, “Our shipping contract is with FedEx.”

Linkner says he learned two important lessons from this experience. First, a lack of awareness has what he calls a “gravitational pull” that pulls people into a state of semi-sleepwalking. The second is “the incredible power of rules and bureaucratic processes.” Linkner observes that, “People are quick to ‘follow along,’ believing it is more important to obey than to do what is obviously the right thing to do for their company.”

We all have stories like this, where people blindly follow procedure—even when it doesn’t make sense. Many times, people have been conditioned to operate this way. In an effort to drive consistency and predictability, organizations exert a strong dose of control through processes that become THE way of doing business, with no negotiation or deviation allowed. (Granted, some rules and procedures exist for legal or regulatory purposes and aren’t negotiable.)

Even for those who strive to do the right thing—to be more productive or to serve the customer better—it can be a frustrating experience to facilitate change in many organizations. Despite saying that they welcome constructive challenges, organizations can make the experience such an uphill battle that employees don’t consider it worth the effort to push for change.

The results are predictable:

Employees aren’t as engaged in their work as they could be.
Rigid processes can and will break down.

The solution?

Spend less time enforcing procedural compliance and spend more time engaging people by involving them more in understanding the business, who the customer is, and how their work contributes to delighting the customer. It takes extra time and effort, but connecting the work of your employees as directly as possible to the customer builds that awareness that Josh Liinkner talked about.

Loosen up and eliminate rigid processes! Provide guidance and a framework to work from, but don’t seek to control every aspect of people’s day. People want to do the right thing, but too much control leads individuals towards satisfying the process as their first priority. In other words, control can trump your intent of delighting the customer.

Sometimes—particularly in large organizations—it’s best to ask who the customer being served is. I don’t subscribe to the model of serving “internal” customers. True customers pay your organization in real dollars—and that is who your organization is serving. People need to be collaborating to collectively serve those real customers; focusing on internal customers can take people’s eyes off the ball and can skew thinking.

Seek Growth, not Perfection

noreply@blogger.com (Dave Moran) — Fri, 16 Dec 2011 11:00:00 +0000

In my last post about goals, I noted that there needs to be a conversation between the employee and manager, discussing why a particular goal is important and how it will help the employee grow through a combination of experience and learning. Nurturing and growing people is definitely a good thing!

There is a difference, however, between growing people and perfecting people. I think that most of us would attest that most performance management systems in place today tend to lean in the wrong direction by spending too much time pointing out flaws that may or may not be important in the grand scheme of producing results.

After twenty or thirty years of performance reviews where individuals have had their imperfections pointed out to them repeatedly, you would think that many of us “seasoned” (yes, I’m in this category) employees would be damn near perfect by now. But we’re not. Well, I’m not anyway.

Growing people means expanding their capabilities and creating new strengths for the mutual benefit of the individual and the organization. If there is a serious flaw that is a true impediment for someone reaching a long-term goal, then by all means addressing that shortcoming is an important, near-term goal.

Growing means putting yourself in new situations where you are seeking to expand your abilities versus seeking situations where you can succeed based on your current abilities—where you are really looking for confirmation of what you can already do. This difference is the distinction between a growth mindset and a fixed mindset.

In his book Little Bets, Peter Sims describes a study by Dr. Carol Dweck, who developed the growth/fixed mindset distinction by studying how schoolchildren reacted to failures and challenges; if a student got a low grade on an exam, the student with a growth mindset reacted by saying and feeling something along the lines of, “I need to try harder next time.” The student with a fixed mindset, on the other hand, would say and feel something like, “I’m a failure.”

If you want to reach your full potential, you need a growth mindset because you are focused on the destination and not as concerned with setbacks that can and will occur along the way. And you won’t worry about whether you have “natural skill” or “innate talent.” A fixed mindset can stop you dead in your tracks and limit what you could become.

Do you have a fixed mindset or a growth mindset? In their book, Switch (How to Change Things When Change is Hard), Chip Heath and Dan Heath provide a short test for you. Read the following four sentences and determine whether you agree or disagree with each one:

You are a certain kind of person, and there is not much that can be done to really change that.
No matter what kind of person you are, you can always change substantially.
You can do things differently, but the important parts of who you are can’t really be changed.
You can always change basic things about the kind of person you are.

If you agreed with items 1 and 3, you’re someone who has a fixed mindset.

If you agreed with items 2 and 4, you tend to have a growth mindset.

If you agreed with both 1 and 2, you’re confused.

Do You Have Goals or Good Intentions?

noreply@blogger.com (Dave Moran) — Tue, 13 Dec 2011 11:00:00 +0000

It’s that time of the year when performance reviews and planning for the upcoming year are taking place, and this means that we need to talk about the goals we achieved this year (or failed to meet) and begin making commitments to new goals.

Goals are useful, they give us all something to strive for; a goal describes what we want to achieve in the future. Goals should challenge us, with the recognition that meeting these challenges won’t happen without effort on our part. Because goals are something that we agree to take on, they will not only be challenging, they will be motivating.

Goals energize us because they give us purpose; they provide meaning to what we’re doing now and they give us a sense of achievement and satisfaction when we accomplish a goal. They also inform us about how we should prioritize activities that we are performing today. If something isn’t moving us forward towards our goal, it should be a lower priority.

Have you ever had a conversation about your own performance goals that concludes something like this? “That sounds good, and I hope I have time to work on it.” If this sounds familiar, you aren’t making a commitment. You have good intentions.

Commitment is much stronger than intent, and goals that are actually committed to take more thought and work to reach an agreement on in the first place. There needs to be a discussion between the employee and manager about the actual goal, talking about why a particular goal is important to that employee and how it will help the employee grow through a combination of experience and learning.

There needs to be input from the employee about what interests them, what they want to go after. And the manager must discuss the needs of the organization and where he or she sees opportunities emerging down the road. There needs to be a negotiation that leads to a mutual agreement.

The employee and manager must also talk about when this goal will be met, the measures used, and the commitment that the both will have—the employee in pursuing the goal and the manager in supporting the employee in pursuit of the goal. A two-way commitment should exist.

As managers, we shouldn’t just assign performance expectations; we should talk about needs and expectations of the organization and have a robust dialog with our employees about those needs.

As employees we shouldn’t ask, “What do you expect of me?” We should remain observant about our organization and be active participants in those robust dialogs on how we can develop ourselves to improve our overall contribution.

How do you view your goals? Are they something that you intend to do, or are they actual commitments?

People are Unique, not Interchangeable

noreply@blogger.com (Dave Moran) — Fri, 09 Dec 2011 11:38:00 +0000

The term full-time equivalent (FTE) is a unit of measure and is as generic as you can get when talking about people. The use of terminology like FTEs or project planning exercises that allocate resources to projects (still general, but better language), coupled with standardized approaches to performance management can create a mindset that people are more interchangeable than they really are.

I’ve had experiences in the past where an “available resource” was plugged into a project to fill a hole in a project plan without regard for the skills and abilities required to actually make the project successful. Close enough was regarded as good enough. Needless to say, this never works well for the project team or the person assigned to a project.

Management is definitely an art because people are unique. Each and every one of us possesses certain knowledge, skills, experiences, perspectives, and preferences that make us unique. We have our own strengths and weaknesses; the key for management is to help people turn all of this into actual performance.

To do this, managers must talk to each individual to collaboratively shape the future based on the needs of the organization and the skills, abilities and personal preferences of each individual. I’m not big on improving weaknesses. In the long run, it takes a lot more time and effort to correct weaknesses than it does to determine how to leverage someone’s strengths. And let’s recognize one reality: Everyone lacks something in other people’s eyes. Yet these same people are finding ways to succeed.

What is most important is exploring what role is best suited to that individual based on their strengths, preferences and long-term goals. And perhaps there are intermediate roles that a person can fill on the way towards a greater role, one that allows them to learn new things, to gain new experiences and deal with fresh, new challenges that stimulate additional growth.

Another reality is that a certain mix of people work better than others. Successful projects are invariably staffed with people who have a certain diversity of skills and personalities that combine in ways that everyone’s strengths are leveraged to the greatest extent possible with the least amount of friction. Assigning people to projects and nurturing the development of the team as a whole to reach a high-performing, frictionless state is an exercise involving:

Inspiration
Commitment
Accountability
Candor
Complimentary skills
Trust

Naturally, not every assignment is a great fit, and we can’t tailor work to meet everyone’s personal preferences all of the time. Like most adult activities, there’s always compromise involved. The key is to know when you are making that compromise and to understand the impact of that compromise on the individual.

I’ve often heard that people join companies, but leave bosses. Think about it. Exit interviews can often reveal why people are leaving, and many times it is because they don’t feel valued or inspired (or both). I’m a firm believer that people want to make a difference and they want to be a part of something meaningful. They want to matter and they want what they do to matter, to make meaningful contributions. They want to learn and grow.

All of this speaks to treating people as unique individuals, not interchangeable resources. Seek to capitalize on each person’s unique capabilities. Help people to uncover how they can make a difference; the upside is tremendous.

What is the Role of Reports and Meetings in Your Organization?

noreply@blogger.com (Dave Moran) — Tue, 06 Dec 2011 11:00:00 +0000

If people are coming to work excited...if they're making mistakes freely and fearlessly...if they're having fun...if they're concentrating on doing things, rather than preparing reports and going to meetings...then somewhere you have a leader.” –- Robert Townsend

Meetings and reports are double-edged swords. Used wisely they can be effective instruments for planning and coordinating work. Unfortunately, it’s all too easy to cross the line and turn these very same things into onerous, time-consuming drains on productivity.

That line is invariably crossed when management takes the view that everyone is subject to their authority and control. This drives a demand for reports and status meetings that fills up countless hours per week.

This can be further exacerbated by the limited span of control concept because the constraint on the number of people that can be “controlled” (managed) by any one person ultimately introduces multiple layers of management into the equation that not only creates more meetings and reports. Worse, these extra layers don’t always mesh, further impeding the very cooperation and communication that organizations require to be productive.

The reality is that management exists (or should exist) to help those doing the work. Any small business that begins to grow finds that it needs others to help with all of those extraneous tasks that hinder the ability of those who started the business to serve the customers. Small business that need to expand don’t hire people thinking, “You know, we’re so busy that we really need to hire people who can come in here and add even more overhead, costs and frustration to our business. That will really help us to grow and prosper.”

Granted, established businesses that don’t have their entrepreneurial founders at the helm hire professional managers to run the business, but all too often management becomes an entity onto itself. In reality, a business should be a collaborative effort between management and the workers to produce outcomes that the customers value.

As Steve Denning says, the customer is the boss and we should focus on delighting the customer. This doesn’t mean that everyone is your customer, nor does it mean that you should try to be all things to all people. This is where management morphs into leadership (although others who aren’t necessarily in management can also be leaders). It is an organization’s leaders that must determine how the organization will succeed—and they must communicate that message to the rest of the organization and the market place. I wrote about this in Delight Your Customers through Focus and Are People Buying What You’re Selling?

Any meetings and reports should be kept as short and simple as possible. The less time and overhead involved with either, the better. Just as we should look beyond the spreadsheet, meetings and reports should be useful instruments for those doing the work and not controls from above. If meetings and reports aren’t saving time and labor for those who are producing outcomes that delight customers, they should be discarded.

Leadership Lessons from Two Boston Sports Legends

noreply@blogger.com (Dave Moran) — Fri, 02 Dec 2011 11:00:00 +0000

A title alone doesn’t make you a leader. Sports teams have coaches, and they are definitely (or should be) in charge. But sports teams have another type of leader that is driven by the recognition of one’s own peers: the title of team captain.

A captain’s job is to lead by example and to lead when the coaches aren’t around. To be effective, captains must have the respect from those they are leading. This goes beyond being genetically gifted with great athletic capabilities. You can be respected for your physical attributes, but leadership requires more.

Two examples of those who weren’t exactly known for being the most physically talented athletes in the world are Tom Brady and Larry Bird. This is not to say that they don’t have certain gifts, but neither of these two Boston sports legends have ever been regarded as being able to fun faster or jump higher than most others in their respective sports. However, they each posses leadership qualities that set them apart.

(Larry Bird is retired, but I’ll refrain from using the past tense to differentiate Larry versus Tom for the purposes of this post.)

At the core of what sets both Tom Brady and Larry Bird apart is their fierce competitive drive, but they channel that drive differently from some other athletes. Sure, they each have an ego and care about their personal statistics and their own level of play, but if the scoreboard doesn’t reflect a win at the end of a game, they aren’t happy.

Tom Brady and Larry Bird rigorously assess their own performance and the performance of the team, with a team-first mindset. They want that team victory first and foremost, and they understand they aren’t doing it alone. In fact, they understand that they can’t do it alone. But as leaders, they understand that it all starts with them.

Both Tom Brady and Larry Bird are known for their tremendous work ethic. They constantly study the game, learning new things and looking for ways to get an edge on their competition. There is a relentless quest for continuous improvement with the both of them. They apply themselves to being the best and they make others around them better as a result.

Larry Bird is known for being a great shooter, and he has made countless buzzer-beating, game-winning shots. Tom Brady has equally engineered some impressive, game-winning touchdown drives. When the pressure is on, Tom Brady and Larry Bird deliver. But they also spread the wealth.

Tom Brady engages everyone in the offense. He spreads the ball around to a variety of receivers, and if he could win a game by handing the ball off to a running back on every play, he would do it. If you as a receiver are executing your job well (running your routes), you’ll get the ball. If you aren’t, you’ll hear from Tom. The same goes for Larry Bird. He is also known as one of the great passers in the game; get yourself into position and you’ll get your shots at the hoop. But like Tom Brady, Larry Bird wants people around him to be playing hard and smart.

Tom Brady and Larry Bird ask a lot of those around them. But they are harder on themselves than anyone else, which makes it palatable to others when they ask more from them. They continually prepare themselves and their teams to execute well when the pressure is on.

It is all of that hard work and continual striving to be better in those average situations that equip themselves and their teams with the confidence to execute when the pressure is on, when the team is behind and they need to come together to win the game. Tom Brady’s and Larry Bird’s confidence emerges when others around them need to see that confidence; and because their leadership has prepared the team for these situations, they are prepared to dig a little deeper and win those tough games.

How to Identify What Needs Improvement

noreply@blogger.com (Dave Moran) — Tue, 29 Nov 2011 11:00:00 +0000

Improving the efficiency and effectiveness of your organization is at the heart – and is the art – of management. Where do you start? What are the key areas that you should focus on?

A small set of general questions can reveal problem areas at all levels of your organization. You begin at the point most applicable to you—a line manager will use these questions at a departmental level whereas an executive will focus on a division, for example.

Are you doing the right thing? Before deciding if you are doing things right, it is always better to determine if you are doing the right thing in the first place.

What market are you serving?
What value are you providing to customers in this market?
What do you believe in?

As I wrote my post, Are People Buying What You’re Selling?, there is a need for good answers to these questions for both your customers and your employees. A related question to ask is: Have external conditions changed? If they have shifted against your favor, change is necessary because you aren’t delivering as much value as you used to; doing the same things is no longer good enough.

At an individual or department level, you can ask yourself how your work aligns with the goals and objectives of the organization. How is your work contributing towards serving and delighting your customers? How much value is it providing? Are there changes that can be made to make your contributions more valuable?

What outcomes are being produced? With Agile leadership, the emphasis should always be on maximizing the performance of the whole and avoiding problems with sub-optimization. This means focusing more attention on the outcomes—the achievements of a team and the organization—and less so on intermediate, process-oriented outputs of tasks or activities. These outputs are merely stepping-stones towards accomplishing a larger goal, and sacrifices in individual performance could very well be required in order to increase the results of the team or organization overall.

I made the case that revenue per employee is the ultimate productivity metric since it is a great starting point to determine how your organization as a whole is producing outcomes that customers will value and pay for, and what it is taking you on a per-employee basis to produce that outcome. At a software team level, an intermediate output such as lines of code produced is far less important than the outcome of working software containing the most-valued business features that are frequently delivered in prioritized order.

Outcomes over outputs means that everyone not only needs to perform their jobs well, but they need to make a meaningful difference to the customer in doing so.

Where are your greatest costs being incurred? The goal is to produce more for each dollar spent, but not to cut so deeply in an effort to squeeze out a profit today that you squeeze your company out of business tomorrow. Understanding where you are spending your money—and where a greater portion is being spent is naturally worthy of investigation. There could very well be opportunities to eliminate waste or reduce costs by improving inefficient operations. As I cautioned in my post, Look Beyond the Spreadsheet!, financials should inform management, but not run the company.

And keep in mind that the goal is to optimize and synchronize the whole! Reducing costs by eliminating “waste” or maximizing the efficiency of one area may come at the expense of another area. Look deeply at the work and the impact to the organizational system as you make any change to ensure that you aren’t merely transferring that overhead and cost elsewhere.

Is there a bottleneck or is something taking too much time? Do you have places where something being delayed causes several other things to be delayed? Even when there aren’t actual delays, seek out your buffers. Bottlenecks can be buffered to keep things running smoothly, but reducing your buffer sizes to introduce “problems” in a controlled manner can help you to increase efficiency because you must optimize the workflow to compensate.

Sometimes there isn’t necessarily a bottleneck, but work is simply taking longer than it could or should. Where are you spending your most time? Asking why significant time is being spent can open up a dialog and thinking that point the way to doing things a little bit better.

Are the behaviors of your people aligned with your objectives? This is particularly important to ask if you are leveraging Agile development to drive change in your organization. The same can be said for organizations seeking continuous improvement (as Agile organizations should be). You need to do much more than implement new tools and techniques—the behaviors of people are the most critical component of all.

For example, it is possible to adopt Scrum as your Agile development framework, but if people don’t change their behaviors you can wind up with what is called Cargo Cult Scrum. This occurs when organizations adopt the practices, vocabulary, and artifacts of Scrum—mimicking the behavior without really living it. In fact, you can still be living a command-and-control, mini-waterfall world while using all the trappings and terminology of Agile development.

For managers, this means developing people in new ways. One of them is developing their own capacity to improve themselves and their team. Agile development, for example, places people in control of their work. This in turn requires that people develop an understanding of what it really means to own their work and that of the team, to learn how techniques like limiting work in process and collaborating can increase throughput, to explore and use new technical practices to increase productivity – without someone doing it for them.

I wrote a separate post about some additional team-level diagnostics that are useful behavior markers in Don’t Measure. Diagnose!

Are You Living on Past Glory?

noreply@blogger.com (Dave Moran) — Fri, 25 Nov 2011 13:00:00 +0000

While I’ve recently argued that revenue per employee is the ultimate productivity metric, I balanced this against over-using financials to run the company, urging that as leaders we must look beyond the spreadsheet. In a nutshell, my message was that you shouldn’t “cut your way to glory” today to the extent that you squeeze your company out of business tomorrow. If you are leading your organization as an ongoing, sustainable business, you need to be making investments in your future.

This implies that the revenue per employee metric can be deceiving because today’s revenue is the result of yesterday’s investment. If our goal is healthy, sustainable, long-term growth, we need to focus on innovation. What types of innovations and what levels of investment are important? Jane Stevenson and Bilal Kaafarani tell us in their book Breaking Away (How Great Leaders Create Innovation that Drives Sustainable Growth--and Why Others Fail) that we need to focus on four types of innovation.

Transformational Innovation: This is that revolutionary, breakthrough, big idea. In the early stages, it’s more of a concept that you believe has value and something that you need to explore. You will be shaping the solution and defining who the true, paying customer is over a period of time.

Category Innovation: This more evolutionary than revolutionary, typically a new application of ideas, products, or services rather than in the creation of inventions. It is putting a new spin on old ideas or combing those ideas in new ways.

Marketplace Innovation: This is about devising new ways to reach and delight the customer in engaging ways. By coming up with unique modifications for products, services, and delivery methods, its aim is to have a positive impact on people’s lives.

Operational Innovation: Operational Innovation is about being efficient, up-to-date, and innovative in your processes, operations, and relationships. Your customers should view you as fast and easy to do business with.

The type of innovation that you are working on helps to guide your efforts and where you need to spend your energy. “If it’s a Marketplace or Operational Innovation, you’ll have access to insight about your customers, who they are, and what they value. So starting there makes sense. For Category and Transformational Innovation, you might not know who your customers are for a long time, so waiting for these answers will only sidetrack your progress. With these two types of innovation, the starting point is almost always curiosity involving science, technology, or some unique way of doing things.”

The multiple types of innovations and the levels they represent follow a timeline that allows you to balance your risk and expectations. Marketplace and Operational Innovations are your lower-risk investments and can be expected to provide financial returns in the short term, say three to twelve months. Category Innovations involve greater investment and risk that are three to five years out, while Transformational Innovations are longer-term, high-risk, game-changing investments that need incubating, protection, and “funding that is not tied to traditional corporate metrics.”

If you aren’t doing any of these things—or not enough of them—you are likely living on past investments and risking the long-term viability of your business.

Look Beyond the Spreadsheet!

noreply@blogger.com (Dave Moran) — Tue, 22 Nov 2011 10:55:00 +0000

In my last post, The Ultimate Productivity Metric, I stated that while revenue per employee is an excellent gauge for understanding how much you are generating from your people, it is an incomplete measure of how well the business as a whole is operating. Costs, for one, are not taken into account.

The implication is that you can be doing very well in terms of revenue generated per employee compared to your competition, but you may be losing money in the process. When it comes to controlling costs, the big trick is to find that sweet spot where you are producing more income for each dollar spent while avoiding cutting so deep in an effort to save money that you cut away activities that generate your income.

A balance should exist between being a “responsible,” conservative business and a speculative, growth-oriented enterprise seeking to provide new products or services. The word responsible is in quotes because often times we think of being responsible as being conservative and not taking risks. When it comes to business, not taking any risks is irresponsible because the world is constantly changing and businesses must adapt to keep up.

Over-emphasizing cost-cutting now in order to squeeze out a profit today can effectively be squeezing the company out of business tomorrow. An excellent real-world example of over-zealous cost-cutting was provided in the book, What They Don't Teach You At Harvard Business School by Mark McCormack. In it, Mark tells how the Ford Motor Company almost cut themselves into oblivion at one point in their history:

Many years ago the Ford Motor Company went through a period in which the numbers people literally took over the company and were closing plants left and right in order to cut costs. They had already succeeded in shutting down plants in Massachusetts and Texas and seemed to be relishing their newfound power.

Robert McNamara, who was president of Ford at the time, called a meeting of his top executives to discuss a recommendation he had received for the closing of yet another plant. Everyone was against it, but the predictions from the accountants were so glum that no one was willing to speak up.

Finally, a salty Ford veteran by the name of Charlie Beacham said, “Why don’t we close down all the plants and then we’ll really start to save money?” Everyone cracked up. The decision was made to postpone any more closings for a while, and the bean counters went back to working for the company rather than running it.

It’s easy to cross this line; the term financial controls is often used in business to ensure legal compliance with laws and regulations and to prevent fraud. If you get too rigorous in applying financial controls and running everything by a spreadsheet, you can end up in the situation that Ford found itself in.

Outside of meeting regulatory requirements and fraud prevention—moving towards the operational side of business—financials should be viewed as constraints on the system, not controls. A business leader must make decisions on how much investment he or she is going to make in certain areas like new product development. This places a constraint on how much capital a business will make available to creating new products relative to what it allocates towards the rest of the business that is designed to sell and support existing products.

Viewing financials as constraints allows people the room to work, provided that they stay within the boundaries of those constraints. This may demand new ways of working, including how organizations go about developing new products.

Ideally, you want to try as many small ideas out as you can and avoid making one big bet that depletes your resources if that bet doesn’t work out. I wrote about how you can achieve this in How to Fire a Business Bullet, among other posts. (Check out Put Your Product Assumptions to the Test! and my book reviews on The Lean Startup and Great by Choice for additional information.)

Viewing finances as controls and extending those controls to the rest of the organization as controls is an attempt to drive greater predictability—and not everything in business is as predictable as we would like. We need to lead and manage through the sea of unpredictability, and to do that we must look beyond the spreadsheet. Financials should inform management, not run the company.

The Ultimate Productivity Metric

noreply@blogger.com (Dave Moran) — Fri, 18 Nov 2011 11:00:00 +0000

Agile leadership understands the advantage in maximizing the performance of a team as a whole, avoiding problems with sub-optimization:

“If each subsystem, regarded separately, is made to operate with maximum efficiency, the system as a whole will not operate with utmost efficiency.” - (Lars Skyttner) General Systems Theory

When dealing with complex knowledge work such as software development where there is a high degree of uniqueness and variability with each and every project—plus the need to leverage the functional skills and abilities of knowledge workers across multiple disciplines, we need to focus greater attention on outcomes, not functional outputs.

Driving the performance of the organization as a whole means that we need to connect the individuals, teams, departments, and divisions in ways that are both meaningful and in alignment with the organization’s overall goals and objectives. This requires us to focus on how well the organization is working together as a whole to produce a particular outcome.

There needs to be a clear, top-down vision and mission of what the organization wants to accomplish, and the constituent parts of the organization—right down to each individual—needs to be asking, “How are we (or how am I) contributing to the goals and objectives of the company?” In other words, what results are you generating, and are you making a difference?

An excellent test—and one that can be easily used to compare your company against other companies in the same industry—is the revenue per employee metric:

This is strictly a measure of efficiency—typically categorized in investment information as a measure of management efficiency, but it is not by itself a complete gauge on how well the business is operating. Costs, for example, are not taken into account in this metric. This means that you can be doing very well in terms of revenue generated per employee compared to your competition, but you may be losing money in the process.

This metric is all about how much you are generating from your people. It is a great starting point to determine how your organization as a whole is producing outcomes that customers value and pay for and what it is taking you on a per-employee basis to produce that outcome. It your employees are focused more on meaningless activities (outputs) versus meaningful outcomes, your number is likely to be lower than your competition. This isn’t the only metric that you should use, but it is the ultimate productivity metric, in my humble opinion.

Results-Oriented Creativity: A Separation of Concerns

noreply@blogger.com (Dave Moran) — Tue, 15 Nov 2011 11:00:00 +0000

Do you consider yourself to be creative—or know someone that is highly creative? Creativity can surface in different ways, whether it is a novel idea for a new product or a unique approach to solving a difficult problem. Creativity is a differentiator for individuals and corporations, and we all know when we see it.

But what is goes into being productively creative? And by that, I mean coming up with ideas that have merit, ideas that work. Is it better to be creative or analytical? The answer is that you need both, but you need to cleanly separate your creative and analytical mindsets.

The first step is to acknowledge whatever is challenging you, but in a constructive context. Don’t let a narrow view or definition of a problem statement stifle your thought process. Statements like, “We don’t have enough staff,” or “We don’t have a big enough budget” might be statements of fact, but the creative process needs to view these facts from a different perspective.

The creative process starts with asking how. “How might we better organize ourselves and the work? How might we get a bigger budget?” Explore the possibilities—generate ideas!

The goal is to employ divergent thinking, exploring as many possible options as possible. What you want is a lot of ideas, even if some of them turn out to be half-baked. In the words of Linus Pauling, “The best way to have good ideas is to have lots of ideas—and then throw away the bad ones.”

Generating lots of ideas one of two principles involved with brainstorming, as developed by Alex Faickney Osborn. The other is deferring judgment—since judgmental, analytical thinking tends to impair the creative process. The creative process is all about letting go, letting one idea inspire another, allowing yourself to think and explore.

So generate your ideas first. Once you have your list, employ convergent thinking to hone in on the best possible option using an analytical, judgmental approach. Analytical thinking wins the day when evaluating which ideas as the bad ones to throw away—and which ones are the winners that you want to keep and use.

I use this dual-thinking approach in creating my own editorial calendar for this blog. In fact, this past weekend I carved out a couple of early-morning hours to generate ideas by picking a broad theme and brainstorming different ideas on how to approach that theme. Some of these ideas will never be anything more than a scribbled note, while others will turn into content that you will read about between now and the end of the year.

There are times when I do some "mini-brainstorming" because I don’t have any kind of a backlog. However, I have a goal of posting twice per week, so I brainstorm a few possible topics and pick one. The winning topic based what I believe is related to existing topics, what might be of interest to my readers, and whether I can develop some angle on that topic quickly.

During this process over this past weekend, it occurred to me that my thought process itself was a good idea for a post. I’ll leave it to you to decide if this idea had any actual merit.

Do You Have a Prototype in Production?

noreply@blogger.com (Dave Moran) — Fri, 11 Nov 2011 10:45:00 +0000

The act of delivering software to the market is a continual learning process. My recent posts have been talking about bringing new products to market using fast, low-cost experiments to empirically learn about what really works—what customers will value and pay for.

If you have entrepreneurial types (and these can be intrepreneurs) driving your innovation, keep in mind that they are really experimenting and that they typically have a strong desire to get something in front of real customers to validate their learning. They also have a tendency to drive development teams for speed, and in response development teams start cutting corners on good design and technical practices that pay dividends later.

Other times, there is so much uncertainty about what really needs to be built that the entire development process can wind up being a giant learning exercise. Unfortunately, if that learning has been done under schedule pressure, you can still end up in the same place.

I call it the prototype in production problem.

A prototype in production is characterized by software that has been developed primarily for learning purposes, but is now in production. The good news is that you’ve proven your product’s viability. However, you have done so with early adopters who were forgiving of quality issues and have the capacity to fill in the blanks where features were missing or lacking. The early adopters evaluated your new product on its potential, and now that your product is moving into the mainstream there is a demand for those missing features and a higher level of quality.

The deceptive part of what happens next is the appearance that all things are well, that you are successfully building upon what you have. The development team shores up the quality and adds new features relatively quickly—at first. As time marches on, however, estimates to implement new features begin to increase almost exponentially. And it seems that every time a new feature is added or what seems to be a minor change is made, two or three other features break.

If you ignore these symptoms, sooner or later the development side of the house will start screaming, “We can’t maintain this code any longer! If you want to keep adding new features, we need to re-architect and re-write it!”

Look for situations that have a strong sense of urgency coupled with a high degree of learning going on. You could be building a prototype, not a long-term product. If you are, acknowledge the situation and invest in designing a robust platform to work from as early as possible.