Designing an agile Digital Enterprise

My mission is coming at the end of a fascinating project. My customer asked me to train and certify a dozen managers and trainers to become agile coaches. Agile Coach is a professional title that requires a lot of experience and mostly in organizational development. 

Besides the training, I delivered small coaching support that highlighted the missing point: where to go, and how does it look like when completed? If the purpose is unclear, you are wasting your investment and confusing the people around you.

The corporation was deeply inspired by a model called NextGen from the consulting company Stern Steward. Multi-sided digital platform strategies sincerely encourage that model. An example of such a platform is Airbnb. The company is providing a platform allowing buyers and sellers to interact autonomously through deals under the umbrella of clear rules.

NextGen

NextGen has a similar approach while providing a platform, a plexus and swarms. The aim of that model is “A holistic management approach that provides a lean and entrepreneurial management structure – integrating the two completely opposing elements “stability” and “flexibility“.” When you take a more in-depth look in that model, you can see the Lean behind it, even the Six Sigma:

The entrepreneurial plexus controls the platform and project swarms with specific instruments and aligns them with the company goal.” Plexus is governance with portfolio working as a venture capital while valuing internal ventures, investing through clear and shared strategy.

The platform is managing the usual transactions that every company has. The target of NextGen is to automatize most of these transactions.

Swarms are the third layer of the concept. It concerns any projects or programs which are not standard. From experience, you all know that projects and programs are never standard. If it’s standard, it is a task.

“The platform and project swarms separate stability and flexibility from an organizational standpoint. “

PLEXUS

Aligning the pieces on a common goal 

Giving the staff a common meaning, culture and leadership 

Providing a clearer and simplified management structure and governance 

Defining hurdles for self-control and delegation of decision power 

As a consequence, a deep transformation and development program for executives is crucial.”

From an AO (agile org model), platform refers to organization development and governance.

Governance principles (NexGen):

  1. From… function and process focus …to clear priority on process perspective in the platform —> unbundling the matrix (AO)
  2. From… fully-fledged matrix set-up …to clearer hierarchies (e.g. division vs country) in go-to-market —> AO paradigm switches
  3. From… complex RACI tables per activity …to practical LoA for core decisions. (RACI = Responsible, Accountable, Consulted, Informed LoA = Limits of Authority) —> Requisite Agility, not Requisite Organization, OX
  4. From… many structural sub-hierarchies …to high business proximity through delayering —> AO
  5. From… fragmented functional silos …to increased managerial impact via higher span of control —> improving the aim of control away to shared accountability and controlled boundaries (safe-to-fail containers)
  6. From… high number of fully fledged P&Ls …to cost steering at the source —> from a cost centre to a profit centre (AO). 

PLATFORM

“Stable, structured and highly efficient 

Highly structured and standardized process organization 

Deployment of greatest possible 

robotics / artificial intelligence Leveraging scale, scope, skills and speed 

The platform should be organized consistently through end-to-end processes.”

  • From an AO (agile org model), platform refers to “structure”.

PROJECT SWARM 

“Agile project and network organization 

Residence of agility, flexibility and adaption 

For complex, temporary, innovative and diffuse solution approaches 

Agile crowd, self-control and open-source principle 

Project tasks and resources are taken out of the administrative functions and go-to-market units and then merged into a new structure.”

From an AO (agile org model), swarms refer to “organization”.

With this information, the Digital Enterprise might look like the picture below:

On the top of the organization, the Plexus is in charge of strategy, budget. It keeps the boundaries of the organization.

The platform, because of its automatized nature, should not take that much space from people and budget perspective. Swarms might represent most of the activities.

It is an evolution of NextGen while quantifying the three elements.

Having this in mind, my proposal as an organizational roadmap was like that:


201920202021
Plexus (Board)10 %10 %10 %
Platform89 %70 %50 %
Swarms1 %20 %40 %

Please take into account that the organization is worldwide and 4500 people big.

The Stern Steward model in AO words.

pastedGraphic_2.png
agile NextGen through AO
  • Swarms are addressing custom development. I call it CX or customer experience.
  • The Platform is addressing some standard processes. I call it SX or service experience.
  • Responsive organizations will have CX> SX.
  • Automatised or digitized organizations will have SX>CX
  • CX is addressing directly a customer who pays for an outcome.
  • SX is a result of CX that we can industrialize through an on-demand service as an example.
  • Plexus is addressing EX
  • The OX or “Agile Enterprise” will have an organic growth where Platform refers to the necessary structure (RA) and swarms have to be time-boxed highly responsive.
pastedGraphic_4.png
Digital Finance Working Model

The organisational process through AO dynamics

AO system organizational model

The core concept of the agile system’s dynamics is to try to be as organic as possible, as opposed to a methodology centric approach. The organizational model follows the flocking behaviour theory:

The figure represents the concept from a single team — Swarm of system perspective.

  • Separation is that people are leaving the matrix (platform) to dedicate their attention to the swarm. Once the swarm has reached its goals, it dissolves in a second separation. It means that once the project is complete, the team members have the option to leave the team. A consequence of that approach is that swarm supports value creation and not it’s own.
  • Alignment: alignment is crucial and is a massive part of Hoshin Kanri (strategy alignment and deployment) and that the goal of every agile meeting from extensive roadmap planning to daily sessions.
  • Cohesion means that we have a team. It is a system and not a collection of individuals. A team cannot be virtual. Sticking together as a team helps to reduce fear. It works for the birds and the fishes, it also works for humans.
  • Avoidance: teams proceeds end-to-end, without impediments or hints. They are flying in the same direction and not spreading out.
pastedGraphic_6.png
Multiple systems crowd model

A larger organization behaves like a small one with a different pace. In AO, the natural speed for large organizations from any size is always three months.

From the swarm theory, you find types of birds: sallies and gleaners. In AO, team members or developers are sallies. Gleaners or floaters are people from the platform helping from time to time the sallies. They are contributing, not performing.

From an AO perspective or if you prefer an Agile version of NextGen, rules are like the following:

  • Team dynamics: people change their positions relative to six of seven agents directly surrounding them (Pizza teams).
  • Self organization
  • Emergence: behaviour and values are emerging from swarming behaviour
  • Stigmergy: yesterday’s weather, continuous improvement
  • No need for planning or control: “sprint planning” focuses on alignment. 
  • Sufficient collaboration: only agile meetings.
  • Goals
    • collective behaviour
    • emerging intelligence
  • Platform & Swarms are a group of people collaborating without centralized direction
    • upgraded transmission of thoughts mechanisms 
    • emerging patterns of connections
  • Moving closer reduces danger: unite appearance emerging from uncoordinated behaviour of self-serving individuals —> have teams.
pastedGraphic_7.png
Structural changes in Agile

What’s the challenge?

Organization deployment strategy

pastedGraphic_8.png
Deployment strategy
  • Organisation (plexus) gives the company true north (Vision) and share the expected goals
  • The crowd gathers to draw how to transform these goals in a Roadmap for the next three months
  • The group distributes the purposes into the three workstreams:
    • Value: what is feasible in the short term (swarms)
    • R&D: detect opportunities and analysis (swarms)
    • BAU: commodities (Platform)
    • Every month, the crowd meets and inspect and adapt the results of each team
      • “value” shows outcomes
      • “R&D” shows new ideas, opportunities that “value” can pick up
      • “BAU” share news activities or improvements to reduce transactional work

Backlog of Portfolios

During the last decade, we discover that the “single” product backlog of scrum teams has evolved to team backlog. It has become a collection of work that the team has to deliver in a specific time. It includes the development of new solutions as the support of the older once. It seems easy, but the reality is that you are increasing the complexity of work (lack of coherence) by accepting all kinds of jobs into team feet (lack of prioritisation).

In that order, a team backlog contains three main workflows: 

  • Value: produced of development activities and support of the last version delivered
  • R&D: includes all the events not related to the sprint goal or post sprint activities (for the next sprints) like technical spikes, business analysis, or testing (technical, functional, UAT)
  • BAU: are all the activities which are neither R&D nor Value. Usually, the BAU are “acceptable impediments” like information meetings, or time-sheet management, recruiting, etc…

This approach allows the team to allocated themselves what capacity on what stream and that daily (daily scrum).

When Sprint is over, at the review, the team highlight their achievements, discoveries according to their portfolio.

The Organisation Portfolio is just the consolidation of all team portfolios. Its mission is:

  • to align all portfolio according to organisation true north or goals
  • drive the banking stream to allocate budget.

Banking Track

The budget should be able to support business agility and funding is a quite uncomfortable yearly political fight.

The Banking Track is working like a Bank where you can ask budget and resource at the end of each monthly cycle. Banking Track is part of the monthly release update meeting or Cycle review.

The Banking Track is managed in a BAU stream and takes these basic rules into account:

  • teams are stable during at least a month cycle
  • exceptions are possible for R&D due to their specific purposes
  • the budgeting do not accept contingencies nor buffers
  • teams can provide savings
  • teams are the only responsible for their budget or their product owners or scrum masters: budgeting is the team’s game

10 principles to distill agile

  1. Value: deliver what customer needs early and often
  2. Transparency: make “performance” visible
  3. Coherence: match demand with capacity
  4. Coherence: doers take decisions, ask the team
  5. Innovate: be flexible by standardising
  6. Innovate: embrace problems
  7. Transparency: communicate results, be open and learn
  8. Mastery: strengthen your people’s skills
  9. Communicate: give an take constructive feedback
  10. Coherence: Share and align the vision
pastedGraphic_9.png
Meetings organization template

#2 platform vision

All line of businesses are using Lean Kanban: 

  • to visualise their work
  • to improve their working mode
  • to discover services to automatise
  • to collaborate

The activity board of each team (backlog) is a measurable portfolio of activities

  • Avoids duplicates
  • Work becomes explicit
  • Communication between team members increases
  • Teams control value creation and optimise costs
pastedGraphic_10.png
Initial Kanban board for platform

Once the team visualize all the work, some services (classes of services) are emerging on the board.

The team will then have the ability to optimize their work and discover opportunities to automatize repetitive tasks.

On the example above, the team discovered that most of their activities are linked to Order-to-cash, demand-to-fulfil, transactions-to-report and strategy-to-portfolio. As the platform team also works as an agile team, every Friday morning, they are having a retrospective together to improve their processes.

Tools and templates

pastedGraphic_11.png
source Enterprise Scrum
pastedGraphic_12.png
source Enteprise Scrum
pastedGraphic_13.png
source Enteprise Scrum

Posted in: AO method, Examples

Tagged as: ,

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.