Dienstag, 19. April 2016

An Alternative View on Company Structures

For years my thinking about company structures went like this: “The more structure a company has, the more it sucks.” So I was arguing against putting new structures in place, whenever I heard of such ideas. Of course I knew, that no company could exist without any sort of structures. So my credo was: Let‘s only have structures, where it is absolutely necessary. And in my mind it only became necessary when we were growing and the new size made it necessary to come up with new structures, because otherwise things break down..
Potential downsides of rigid org structures are well known: Less freedom for the workforce, and hence less engagement and less innovation; Dilbertesque policies that might make sense for some part of the organization but not for the rest of it; single points of failure due to hierarchical pyramid structures etc.

Back to my credo: “Let‘s only have structures, where it is absolutely necessary”. I still think it‘s valid, but here comes the catch: I‘ve realized that there are other things than sheer growth in headcount that can make it necessary to add more structure! Here are three things I think are worth taking into consideration: Diversity, Fairness and Health.

There‘s plenty of research (see this article for more resources) that shows how more diverse groups make better decisions. When people think about diversity, they mostly think about gender. While gender is very important and there is a lot to improve, especially in the tech industry, we should also think of diversity in terms of age, race, cultural and economic background, sexual orientation, political preferences, family situation, etc.
When I talk about diversity with my colleagues, we very often end up with the idea that we should have more structures. There are two reasons for this:
  1. If we want to have a more diverse workforce, we have to change the way we recruit and hire people. For a long time the way I did job interviews went something like: Let‘s have a coffee together and afterwards we do a thumb vote if we want to work with this person or not. If you use a process like this, you can be 100% sure, that your decision is affected by all sorts of cognitive biases and that you are biased against diversity. Like one of my colleagues put it nicely: “Having more diversity in a group feels like a grain of sand in the gear.” It feels uncomfortable. Humans are hard-wired to prefer being with people who are like them. And this is exactly what we want to avoid when we talk about diversity. One countermeasure for this are structured job interviews. Google does this rigidly, as Lazlo Bock (Head of People Operations at Google) presents in his book and this article. What are structures interviews? Not only are the questions for a job  interview formulated beforehand, but there‘s also a definition of the types of answers that are considered to be good/mediocre/bad. Or, as Bock puts it, a structured interview is “a consistent set of questions with clear criteria to assess the quality of responses”. And Google even goes one step further: The hiring decision is not made by the people, who did the interview, but by an separated committee. Sounds like a lot of structure, right? It certainly does to me and I was terrified, when I heard this for the first time. But if we take diversity and de-biasing seriously, this might be the (or at least one) way out.
  2. As soon as we become more diverse in our workforce, we might also need more structure. My colleague Boris just shared his thoughts on this with me: “If we were all clones of each other, we wouldn‘t need any structures. Everyone knew exactly what the others think, how things work and what the next steps are. But this would be zero diversity. If we have people with different backgrounds, we need more explicit structures, otherwise people get lost.” This totally makes sense to me. If all your employees are 30-year old, left-winged white male surfer dudes without kids, you probably don‘t need much structure, because their thinking might be very aligned. And if they face a problem, they will find a way to work around it easily, because every evening they‘re drinking beer together. So this scenario is very comfortable, and although it‘s intentionally exaggerated, I think a lot of start-ups work in a similar way. It might be okay, or even necessary for a small company to operate in such a way, but if the company is growing, and especially if it‘s critical to improve the quality of decisions, increasing diversity becomes very important. And that increased diversity comes with the need for more structures.
Every organization has implicit and explicit structures. And probably it‘s a good heuristic to say that the less explicit structures you have, the more important the implicit structures become. That can be considered unfair, because it favours those who are good in navigating through blurry structures. Often the best (or even the only) way to get things done in such a context might be having good personal relationships with the most influential people in the company. For new people it can be really hard to join this game, because the rules are...implicit. And it gets even worse, as soon as you get more diversity. Imagine that, for the first time, a single mother joins the company. She probably does not have the time nor the interest to hang out every other evening with her colleagues.
In this classic feminist article from the 1970s, Jo Freeman argues that so-called structure-less groups are undemocratic, because they tend to be dominated by elites, who are not accountable to the larger group: “For everyone to have the opportunity to be involved in a given group and to participate in its activities the structure must be explicit, not implicit.”
I am not very familiar with the feminist movement, and the groups Freeman talks about are political groups, not companies. Still the argument makes a lot of sense to me and made me think.

While organizations with little (explicit) structure provide a lot of opportunities, they also might make it easy for people to jeopardize their health. The reason for both, the good and the bad aspect of little structures, is what I would call “anything goes”. If responsibilities, decision-making-mechanisms, team structures, career paths etc. are unclear, the organization might be able to exploit the advantages of fast decision-making (“if it‘s not clear, who makes this decision, let‘s just decide in this group - right now”) and fluid teams (“let‘s team up and build this thing”). On the other hand, the same context might encourage people to work in an unhealthy way. By this I not only mean the sheer amount of hours they work, but also the effect of over-commitment and mental overload. Because it‘s unclear, where my responsibility ends and what the company expects from me, I might take on everything I find interesting or important. Of course I can only do so many things, but I am very ambitious, and nobody stops me from starting all these exciting things. So maybe I should start working a little bit longer every day and think about all the interesting problems at the weekends and during my holidays?

What now?
I think it‘s important to realize that structures in itself are neither good nor bad. And I am not making the case for excessive structures. Like with many things, it‘s a permanent trade-off decision we have to make. Instead of falling in the trap of binary thinking (“all structures are good/bad”) we should think about the pros and cons of adding more structure and then find a healthy balance for our context. My impression is that in the Agile/Lean community we have very much focused on the downsides of structures in the past. Maybe it‘s time now to take the upsides into consideration a little bit more.

Montag, 21. September 2015

Learning Track at LKCE15

At this year‘s LKCE15 conference (Lean Kanban Central Europe 2015) I will be chairing the learning track. Without exaggeration I can say I am more than satisfied with the five sessions in the track. What I especially like is the diversity amongst the speakers and the topics - we managed to go beyond “the usual suspects” and the well-known topics. Also most of the sessions are really hands-on from practitioners, who present their real-life experiences.

Wendy Robinson from Etsy will kick off the track. I met Wendy in New York this year, where we exchanged ideas and experences about how to best train managers. Wendy holds a Harvard degree in adult education, and she‘s awesome! Esty created a program for education 200 managers. It includes e-learning, studio groups and coaching sessions, and I‘ve rarely heard of such a sophisticated effort when it comes to in-house education. Wendy will give deeper insights on how the program works and share her experiences with the program.

The second speaker is Marian Willeke, who also has a background in adult education. In her session Cultivating the Learning Mindset she will talk about the learning needs of adults and how we can foster a learning mindset.

After lunch my colleague Eike-Marie Eiting will continue with her talk Moving desks to facilitate the in-house cultural dialogue at Jimdo Eike works as Head of Global Support at Jimdo, and she‘s totally into the Kaizen mindset. She will present her experiences with splitting a huge team into four smaller ones and relocating the teams to different floors, in order to foster inter-team communication and continuous improvement

After Eike it‘s my turn, and in my session A Salary Experiment I will talk about two experiments on remuneration we did earlier this year. We wanted to learn more about fair salary setting, transparent salaries and self-managing teams. I would say this was one of the most sophisticated things I was part of, and I am quite thrilled about what we‘ve learned - both regarding salaries and designing experiments.

Last but not least, Håkan Forss, who now is with King Games, will give his talk Experimentation is King, in which he shares his experiences on how to create a culture, which enables both continuous improvement and disruptive innovation.

The learning track is just one track, besides other tracks like leadership, strategy, and (of course) Kanban. Also I am very thrilled about the main stage sessions and the keynotes (especially the one by Chet Richard, author of Certain to Win). If you haven‘t purchased your ticket until now, I strongly recommend that you do it quickly, as fees will go up soon: Register for LKCE15

Freitag, 11. September 2015

Radical Transparency?

In the Lean and Agile community, there’s a lot of talk about the value of transparency. Often the takeaway is „the more transparency, the better“, followed by the advice to provide more transparency inside of your company: Make business numbers transparent, make salaries transparent, videotape all meetings and make them available to the whole company etc. I see all the advantages transparency brings and I agree that companies could and should be more transparent in certain areas. I disagree, however, with the notion that we should aim for radical transparency in all areas.
My main argument (of course I haven’t come up with it myself) for this is:

While transparency breeds trust, it tends to hinder innovation.

Real innovation (and I am not talking about optimizing an existing thing, but coming up with a very different thing) requires secrecy. You need to try crazy things, throw things away, and iterate on the same problem over and over again. This is a very wasteful process, the efficiency is extremely low. On the other hand, the operating system of an organization (eg most software development teams) are optimized for velocity, efficiency and high quality. Innovation and optimization can really be considered as two different worlds, they operate by different rules. Rules like „you build it, you run it“, „if you break it, will you notice?“ or „build quality in“ are proven to be really useful in the world of optimization, but they are poisonous to the world of innovation. We don’t want to write high quality code here, we don’t want to write code at all. We only use it to learn things – and only if we don’t find a way to do it cheaper than writing code. The code should be written in a quick-and-dirty-manner, and nobody should expect that it’s tested and monitored and maintained afterwards. (It should, however, be removed after the testing is over).

Now let’s look at transparency. In the world of optimization, transparency is oftentimes really helpful, because it fosters communication and collaboration and breeds trust („Oh, they have that much on their plate. I wasn’t aware of this and was wondering what they were doing the whole day.“) It also creates a certain (often healthy) tension towards accountability and getting stuff done. And this is exactly the problem in the world of innovation. You don’t want this tension here. You don’t want people focusing on getting stuff out of the door quickly. Instead, they need to feel comfortable playing around with seemingly stupid ideas, and it’s not helping when people tell them: „That’s not working, everybody knows that“ all the time.

What does this mean? The world of innovation is very different from the world of optimization – neither one is better than the other. Companies need both, but they need to be treated differently. Transparency is one of many examples where we tend to throw out the baby with the bathwater when we demand things like radical transparency. We should think about how to create healthy environments for optimization and innovation – and be aware of the fact that they will look very different. Unfortunately this comes with a tradeoff: In many cases you will trade trust for innovation. You can certainly minimize the negative effects of this, but you cannot eliminate them completely.
Another thing we need to think about is how we bridge the two worlds, because at a certain point we need to transfer innovation into the operating system of the company. And we should not do this by throwing our brilliant innovation over the fence to those who now have to implement and maintain it.

This all is not very new. 
  • My friend Markus Andrezak talks about it for years, for example in this great talk from LKCE13
  • Nonaka/Takeuchi wrote the book The Knowledge-Creating Company, which deals with the differences between the two worlds 20 years ago (thanks to Stefan Roock for pointing me to this). 
  • The concept of Skunk Works is 70 years old and does very similar things to what I was describing: Creating an environment that’s decoupled from the rest of the organization and operates by different rules. 
  • In 2004, Charles O’Reilly and Michael Tushman published an HBR article named The Ambidextrous Organization, which is – again – about the differences between the two worlds and ideas how to bridge them.
  • And there’s scientific evidence that the statement „the more transparency the better“ is plain wrong. Read for example the HBR article TheTransparency Trap by Ethan Bernstein (yes, he studied other areas than software development)
Again, I am not saying transparency is bad or we should have less transparency. What I am advocating is that we should have a closer look at different contexts and evaluate transparency according to these contexts, instead of beating the same „transparency is good“ drum over and over again.

Addendum: Christoph Poyault pointed me to this interesting (German) article So wirkt sich Lohntransparenz auf die Zufriedenheit aus

Montag, 22. Dezember 2014

The Salary Dilemma

The last couple of months my colleagues and I have been evaluating different alternatives for „Personalverantwortung“ (I’ve asked several native English speakers and it seems like there is no appropriate translation, so I will use the German term).
We’ve talked about what exactly we mean by referring to Personalverantwortung at Jimdo and we came up with seven different elements. One of these elements is, obviously, remuneration. People want to get salaries, and there needs to be some kind of mechanism in place to decide upon the salary level. The „traditional“ mechanism for doing this is some kind of line manager who does (mostly annual) performance reviews with individual salary negotiations. Perhaps that’s the best (or the least bad) solution in many contexts, but as I mentioned, we wanted to evaluate other options. So what we did was 1) read different articles on this topic (eg [1],[2],[3]), 2) talk to a lot of our teams about this topic. The conversations were very insightful in many different respects. What I found most interesting was a thought that was expressed in almost every conversation. It goes like this:

„The person/group who decides on my salary need to be very close to me, so that they can evaluate the quality of my work. At the same time this person/group cannot be on my team, because my behaviour towards this person/group will be different as soon as he/she sets my salary. Oh wait a minute...“

This is what I call the salary dilemma: Whoever decides on the salary of a person needs to be close and not close to this person at the same time.

A line manager has to deal with exactly this problem: He/she is supposed to evaluate people. In most cases he/she is either very close to the team and therefore might cause disfunctional behavior (eg people not asking for help when their annual review is close) or he/she is far enough from the team to avoid this kind of disfunction. But then the remuneration will most likely become very similar to roulette („Haven’t heard anything bad about you. What about a 3% raise?“) Both options don’t look very promising. I am not saying that it’s impossible to find a good balance, and I have seen very good managers doing a great job in creating a high-trust environment with their teams. But I believe it’s very challenging.
Of course we can replace the line manager with a different person or some kind of committee, eg a peer group. This might be better in some respect, but the dilemma stays in place.

I am aware that there are many very different models for renumeration like self-selected salaries, uniform salaries, salary formulas etc. And we’ve been thinking about ways to avoid or minimize the effects of the salary dilemma. At this point we are close to run a couple of experiments to learn more about not only remuneration, but the whole topic of Personalverantwortung. I might blog about this (and all the other insighst I’ve had so far) later.

But for now I am asking for your input:

How do you deal with the salary dilemma?

Please leave a comment or send me an email to arne[døt]roock[ät]jimdo[døt]com

P.S. I would like to thank all the smart people with whom I’ve had the opportunity to discuss this topic: Not only my great colleagues from Jimdo, but also Russell Healy, Simon Marcus, and Jim Benson. You guys rock!


Montag, 20. Oktober 2014

Lean Kanban Central Europe 2014

Only three weeks to go before the 4th edition of Lean Kanban Central Europe takes place! Although I am not involved in the organization any more, I am still part of the Board (and proud of it). As Pawel mentioned in this blog post, we are constantly experimenting with some elements of the program. This year‘s biggest change will be that we will have dedicated tracks for different topics: Kanban, Leadership, Learning, Management, and Project Management.

I chose to organize the project management track. The reason for this is that I have met many project managers who realize that the traditional way of managing projects is not sufficient any more. With LKCE we want to show them new perspectives on project managements, provide them with new tools to experiment with and create a forum for sharing experiences with their peers.

I will kick the track off with my talk The Beauty of Problems where I will show that problems are so much more than nasty things we need to get rid of. They are great opportunities for learning and improving the system. The talk will be heavily influenced by the work of Russell Ackoff and contain some of my own experiences.
After the Pecha Kuchas (Keynote style as last year), Martin Jensen will argue that Culture is THE Competetive Advantage Martin is a smart guy with a great deal of experience with change in large enterprises like Tui.com. He is also a very entertaining speaker. If you haven‘t done already, you should definitely watch his talk from last year.

Joshua Arnold will continue with his talk Value and Urgency: The Power of Quantifying the Cost of Delay Anyone who has ever heard The Don (Don Reinertsen) talk will know a little bit about the concept of Cost of Delay. Unfortunately, few people have really first-hand experience with it. Joshua is one of them. Check out his great experience report from Maersk Line.
After his fabulous keynote from last year, Troy Magennis agreed to speak again at this year‘s edition. His topic is Risk Management and Forecasting Using Un-reliable Data Troy is the guy who not only understands statistics, but also is very capable to explain it to others and to show them how it can be used in daily work without being a statistician.
Conference days are long and it can be hard to maintain attention. Shorter talks might do the trick at the end of the day, and therefore I decided to close the track with a couple of Lightning Talks (10 minutes each). Tim Lossen will talk about the Failure Culture at Wooga, and my brother Stefan will share his experiences with participatory decision making models.

Pawel, Klaus, and Markus grabbing their well-deserved Whisky ;-)

Looking at the talks I think we‘ve managed to put together a great variety of good speakers and interesting topics. Thanks to the rest of the board: Pawel, Klaus, Wolfgang, Karl and Markus. You guys rock!

See all of you in Hamburg. If you haven‘t done yet, register today: www.lkce14.com/register

P.S. In case you wonder about this year‘s keynotes: After trying for the last three years, we finally managed to get Henrik Kniberg as well as Tom and Mary Poppendieck. No further introduction required:-) The third one will be Don Reinertsen who will speak about Robustness this year.

Donnerstag, 22. Mai 2014

Stop bashing managers!

Recently I‘ve heard people say things like: „If we only could get rid of all managers, life would be good.“ Or „A truly agile organization does not have any managers.“ While I agree that many organizations do need a different kind of management, I deeply disagree with the notion of getting rid of all managers. Here’re some reasons why.

It’s insulting
At the Lean Software and Systems Conference 2012 (before being renamed to Lean Kanban North America) I saw a great Lightning Talk which startet with the following, made-up, pie chart (and as you know, I like made-up charts):

What the chart basically says is that in reality we have very much managers, like it or not. And my experience is: Most of the managers are good people. If they do what we consider bad management, it is mostly due to strange policies and bonus systems that were in place and influenced their behavior.
If we say that we need to get rid of management, we will most likely insult all these people – no matter if we intend to do so or not. They will hear things like: „These guys think that I have done a bad job in the last 10 years.“ I don’t thing this is the way to go if we want to change the world of work.

Setting missions and aligning teams
Although I consider myself a pacifist, I am a big fan of the concept of Auftragstaktik and its implications for business. If you haven’t done already, I really recommend reading the book The Art of Action by StephenBungay. You can also find a free interview with him here.
We like autonomous teams that figure out how to accomplish their mission for themselves. They experiment their way forward through unknown territory and they will figure out how to do it. But where do the missions come from? And how do we make sure the missions of our different teams are aligned with each other? Sure, in theory the teams could set their own missions and coordinate them with other teams. My experience just tells me that this is very hard (if not impossible) for teams to do.

Managing interactions  and (re-)designing the system
According to Russell Ackoff, „The performance of a system is never the sum of the performances of its parts. It’s the product of their interactions.“ If we agree with Ackoff’s statement (and I’ve seen a lot of evidence for this at different occasions) then someone has to manage the interactions of our system’s parts. In the Agile world teams are probably the most important parts of an organization. Who is responsible for managing how the teams interact with each other? Again, theoretically it could be the teams themselves. In practice I doubt that this will work very well (and I will argue why in the section about local optimization).
Another aspect that’s relevant when talking about Ackoff and Systems Thinking is the design and re-design of our system. As far as I can tell, Ackoff was not convinced that continuous improvement is always the best solution. My friend Markus Andrezak likes this quote by Ackoff very much: „To be ahead of the competition you need o leapfrog them.“ What is true for product development is also true for our processes. Ackoff’s examples of how to improve organizations contain a lot of major re-designs. Deming argues in a similar way: Because it’s the system that causes the biggest part of the performance (Hi, PawelJ I think Deming talks not only about variability here, but also about performance!), and not the individuals, we need to change the system if we want real improvement. According to Deming, this is exactly what (good) managers are there for.

Recognizing local optimization 
Agile teams are supposed to work on accomplishing their mission with a laser-focus, and thereby with great speed. That’s one of the main reasons why we set them in place. But this focus comes with a price: local optimization. The Don of Lean (Don Reinertsen) argues that we will most likely see local optimization when the benefits and the costs of an action occur at different places in the system (see this great talk by Don for deeper insights). This fits my observations with autonomous teams: They tend to sub-optimize the whole in order to optimize their team’s outcomes. Nothing to complain about here. We cannot expect teams to focus on their missions and take care of the whole company at the same time. And, again, it’s exactly what Systems Thinking tells us (you can probably tell by this post that I’ve been reading a lot of Ackoff’s stuff recently:-): „If you optimize the parts, you will sub-optimize the whole.“ If I get this right, one conclusion of this is that someone needs to have a bird’s eye view on the system to recognize when local optimization is about to happen. Yes, I do think the big picture is important (although it has become a kind of a bad word).

Russell Ackoff - read his books!

Changing the team setup
Teams are capable of doing remarkable things. I’ve seen teams that were considered to be the worst performers in the company improve dramatically and perform really well after some of their boundaries were changed. At the same time it’s true that sometimes teams are highly dysfunctional and that they won’t change without external influence. As a last resort, taking people out of the team, adding new people to an existing team, or even abolishing a team completely can be the right thing to do. Teams have a very hard time doing this without external help. In many cases they will not even realize that there is a dysfunction or, when they do, they won’t talk about it to anyone.

First of all we should not offend all the people with management titles out there.
Further more I’ve argued that we need people who are not part of our autonomous teams. They need a good standing in the organization and mus have a good understanding of our systems. They are responsible for managing the team’s interactions, re-designing the system and observing and acting upon local optimization. And sometimes they need to change the setup of a team. For me, that’s exactly what a good manager does. So let’s stop bashing managers and start working on establishing another understanding of management!

Donnerstag, 2. Januar 2014

Why I work with Jimdo now

Today was my first day with my new employer Jimdo. For the last nine years I worked with it-agile in different positions, the last three years as a coach/consultant and trainer for Kanban. I‘ve learned so much during this time and and got to know so many different companies - small startups and agencies as well as medium sized companies and some large multinational corporations. I still think it-agile is one of the coolest companies on the planet, and I am really grateful to my colleagues, especially Henning and my brother Stefan.  And if you are into Agile and like to coach and train people, I strongly recommend that you consider applying for a job there!

So why did I decide to leave it-agile then? As you can imagine, it was a very tough decision. The main reason is: I am really curious what it feels like to go to the "other side of the fence" and work with a product company long term. For me, one of the biggest upsides of working as a consultant can also be a big downside: You see a lot of different organizations and talk to so many interesting people. At the same time chances are that you leave an organization and start a new engagement when the first steps are taken (and starts becoming really interesting). And even if you are involved for a longer period of time, you will always stay an outsider - you can participate in the successes of your client, but still you are always the external consultant. So I decided that it‘s time for me to move on and start a new career as an embedded person in a product company.

Why Jimdo? I first met the Jimdo guys back in 2010. Since then we always stayed in touch and one day they asked me to do some coaching with them. So they have been my client for the last three years, and many Jimdudes became my friends quite quickly. When I first visited their office, I felt immediately that this company is special, and there were so many situations where this impression was renewed. Here are just a few examples: Having a Feelgood Manager (watch this video about Feelgood Management (German)), an architect (and I am not talking about a software architect here) and a chef working at Jimdo; a napping room and a fancy aquarium room everyone can use when he/she needs to rest; no time tracking; really self-organized and empowered teams etc.

And these are only the obvious, observable things. Even more important is the really amazing company culture! And of course a great product with a great deal of innovations to come in the future! You might have noticed, that I am quite excited about my new employer;-)

What will I do at Jimdo? Here you can see a clipping from my contract of labor.

For those of you who don‘t understand German: It says that I will be employed in my role as "Dr. Rock" from January 2014 on. What does it mean to work as "Dr. Rock?" I don‘t know exactly, and neither do the founders who hired me:-) The important thing for both parties was that we wanted to work with each other and that there was a huge amount of mutual trust. So we decided to sign the contract and figure out later what exactly my tasks would be. Now you might understand why I wrote that Jimdo is special.

And what did I do on my first day? Started my two day internship at the awesome support team. And as expected, I learned really much about our customers!

P.S. If you are interested in Jimdo, check out the blog post I wrote about the Open-Prioritization-Meeting, the support and our trip to Stockholm