Neil Perkin’s new study of organisational transformation is absolutely packed full – both of research, and original reflections based on his own experience. It’s the sort of book I feel I could read multiple times before I absorbed it all – because it’s so densely constructed. It’s definitely one of the better books I’ve read on “agile” (though I don’t claim to be an authority!) in that it has a strong focus on the role of people and culture, and is incredibly well researched with interesting, relevant case studies peppered throughout. As a result of the plethora of research, it’s perhaps not as accessible as some of the ‘fluffier’ books that approach this subject matter, but it’s definitely worth the time investment.
The book covers the need for transformation, the workings of an agile organisation, how to manage change in this new environment, and then how to think about vision, experimentation and expansion in your transforming business. I want to look at just a few of the areas I found most interesting in this post.
The current climate – why is change necessary?
Some years ago, it was start-ups who posed the most threat to large enterprises. After technology democratised the access to data, resources and the ability to quickly release new solutions, it became easier than ever to create the next competitive product from one’s basement. Now, Perkin argues, attack is coming from all sides. Not only are start-ups jostling for pole position but incumbents are also finding new ways to innovate. And the focus now, more than ever before, is on the customer. It is the customer experience which drives sales and brand loyalty. In fact, Perkin presents findings from Walker Group that predict customer experience will be the key brand differentiator in 2020, overtaking even price. However many companies, Perkin notes, are not set up to be customer centric. Instead they are business centric, and thus their reward systems and habits are not optimised to be close to the customer or encourage customer-centric practices. In fact, as decision-making executives grow further up the ranks, they become more and more distanced from the all important customer. One of the biggest mistakes that companies make is to wait until they are failing before they start transforming. It’s when things are good that you should be innovating – if you’ve started to fail then it’s already too late. Even if you do manage to embark on your transformation program in time, however, success is not assured – since 75% of such programs fail (according to Boston Consulting). So, how do you make it count, and what needs to change?
Working in an agile environment
Perkin uses the interesting examples of insect metamorphosis to describe how different companies approach transformation. Some, like the caterpillar, emerge from the chrysalis as a different looking creature, still with the same genetic makeup but noticeably different with different looks and abilities. Some, conversely, progressively shed their skin, seeming to transform but still not really moving very far from their starting looks and abilities. One thing that can hold companies back in this ‘skin shedding’ phase is arguably excessive risk aversion. Perkin argues that risk management has to serve value creation, and that even in riskier environments the key is just to create clear parameters in which teams can safely fail.
Perkin does not promote that ‘doing agile’ is necessarily right in every part of the business. He notes three types of environment that can exist within a single company: “Explore”, “Execute” and “Extend and Exploit”. In the first two, agile can work very well, but in and Extend and Exploit environment Continuous Improvement and more classic waterfall methodologies may be more appropriate:
“Different ways of operating need to coexist in the same business. One way of working should not suffocate the other. Agile is not just a process, it is a culture. Whilst key parts of the business will need to be DOING agile, every part of the business will need to BE agile” Agile Transformation, Neil Perkin (p.135)
Moreover, Perkin argues that the process of transforming into an agile business must itself be an agile process.
The importance of people and culture
Any change manager will tell you that ‘people’ are the toughest part of any change program, but it’s often not recognised by managers and executives outside of the space. Perkin discusses that many companies approach the transformation as if it were 90% digital, and 10% human, when it’s actually the reverse. The need to engage, inspire and empower people, and bring them along on the journey with you, is absolutely pivotal.
“People want to believe,” says Perkin, “They want to do work that means something: work that matters”. Thus, when you create the vision for your transformation you need to think both about the macro and the micro level.
Will the grand vision translate into tangible actions for the individual? It’s important to allow some room for individuals to define the ‘how’ about this vision too – set a clear destination but don’t be too dictatorial about how employees need to get there. Instead, it’s important to give them space and time to be creative.
This includes by ensuring you are de-prioritising, not just being additive when it comes to workload. If a team is supposed to be focused on an agile project as well as all their old day job, this is unlikely to be productive or enjoyable. Think also about challenging the status quo – can the previously ‘essential’ tasks (hours of meetings, long management reports etc) be streamlined or removed?
It’s also important to use the data you have at your fingertips wisely, but focus on being data-informed rather than data-driven (i.e don’t be a slave to the numbers, use your intuition and dig deeper). Harnessing data should therefore not mean that people become redundant.
“Technological and organisational change rarely means forgetting all we know. More often it is helpful to frame it in that thought of combining the best of the old with the best of the new” Agile Transformation, Neil Perkin, p.139
Have you read this book? Let me know what you think? As ever, keep your recommendations for great reads coming!
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