The Art of Business Transformation presented by Stacey Louie

This video delves into the essence of business transformation through the lens of the agile industry, uncovering how embracing agile methodologies can revolutionize your approach to growth and innovation.

Business Transformation in the Agile Industry

Business transformation in the agile industry is not merely a shift in strategy, but a fundamental reimagining of how companies operate. It begins with adopting agile principles—emphasizing customer collaboration, adaptability, and iterative progress.

By breaking down complex initiatives into manageable increments and fostering cross-functional teams, agile empowers organizations to respond swiftly to market shifts and deliver value consistently.

Moreover, fostering a culture of continuous improvement and leadership support ensures sustained success in navigating today’s competitive landscape.

Join us as we unravel the strategies, tools, and transformative power of agile methodologies in The Art of Business Transformation, and discover how your organization can thrive in an era defined by agility, innovation, and customer-centricity.

Transcription

Speaker 1
(0:13) Welcome. (0:14) My name is Stacy Louie and I’m the CEO of Hyperdrive. (0:17) I’m so glad to be here to spend this time and believe it or not, I think this is only like the second time I’ve ever presented for this Lunch&Learn in the last 10, 15 years as long as we’ve been around.
(0:29) So I hope that you guys remain engaged and challenge me, challenge the ideas. (0:35) I love that. (0:36) If you know me, it’s like, gosh, you really want to get into this stuff.
(0:39) And today is about the art of business transformation. (0:42) And I’ll talk about some of the things we’ve been doing and the lessons we’ve been learning from our clients. (0:48) So we’ve learned a lot working with clients in Silicon Valley.
(0:51) That’s where we hail from, but our clients are all around the world. (0:55) So some of the cases I’ll talk about are from here in North America, and also extend to some of our clients who have operations in the UK and in Asia, as well as some experiences down in South America. (1:11) So hopefully pick up some of the cultural nuances of things.
(1:18) And just to go over what we’re covering on the series, and I don’t have all the series here, but I’ve got a good number. (1:26) Today we’re going to talk about the art of business transformation, kind of an introduction to business transformation. (1:31) If you haven’t heard that term.
(1:33) The next few are going to cover strategy and OKRs and going to prioritization. (1:39) And the reason why we bring these areas up are mainly because our clients are very attentive to these areas. (1:49) And with today’s introduction, I’ll kind of show you why that’s happening and give you maybe a different language that you can experience.
(1:57) Because I think a lot of us came from the agile world. (2:03) And this is an opportunity for us to maybe grow outside of that agile world and get ourselves a little bit exposed to the rest of the world. (2:11) Things that our clients have been asking for, and our clients that we’ve engaged with start at the C level, and they go all the way through kind of the team and program level.
(2:21) But I think the stories about what C level is asking for are going to be actually much more relevant to our conversation today and probably the next several steps of our series.(2:34) The last is exploiting the operating model. (2:37) Now this is kind of something I threw in.
(2:40) I think this is where we’re going to get more into the nuances of, OK, well, if we’re talking about transformation and strategy and OKRs and portfolio management, how about the rest of the stuff that we’re experts in, like agile, what happens with that? (2:53) So we’re going to fold that in. (2:54) So a ton of new content coming up in the next six months.
(2:59) All right, where are we headed? (3:01) I’m going to, you know, of course, being in Silicon Valley, we’re all about tech here. (3:07) And having insights into AI and having done AI in my career, I thought it might be kind of interesting to talk about where are we headed?
(3:17) So to give you some background in artificial intelligence, we’re just going to spend a couple of minutes in AI and then we’re going to go into the business transformation. (3:26) I’d been working with Xerox PARC back in the day, and we were working on developing AI for the DOD, the defense department, as well as other types of clients. (3:38) And that was only, gosh, that was only 20 years ago that we started working heavy in AI and where all these entities were starting to discover what AI could do.
(3:49) And I’d like to share with you kind of a recent announcement that a company called Figure had come up with. (3:56) So I apologize if you’ve already seen this video before, I think almost two million people have seen this video, but it’s well worth your time. (4:02) So we’re going to take a couple of minutes, we’re going to talk about where things might be headed and just give an idea of the world around us.
(4:10) So I invite you to just sit back and listen to this.

Speaker 8
(4:23) Hey, Figure 1, what do you see right now?

Speaker 5
(4:29) I see a red apple on a plate in the center of the table, a drying rack with cups and a plate, and you standing nearby with your hand on the table.

Speaker 8
(4:39) Great. (4:39) Can I have something to eat?

Speaker 5
(4:44) Sure thing.

Speaker 8
(4:52) Great. (4:53) Can you explain why you did what you just did while you pick up this trash?

Speaker 5
(5:02) On it. (5:02) So I gave you the apple because it’s the only edible item I could provide you with from the table.
Speaker 8
(5:15) Great. (5:16) So based on the scene right now, where do you think the dishes in front of you go next?
Speaker 5
(5:27) The dishes on the table, like that plate and cup, are likely to go into the drying rack next.
Speaker 8
(5:33) Great. (5:33) Can you put them there?
Speaker 5
(5:38) Of course.
Speaker 8
(5:56) All right. (5:56) So how do you think you did?
Speaker 5
(6:01) I, I think I did pretty well. (6:04) The apple found its new owner, the trash is gone, and the tableware is right where it belongs.
Speaker 8
(6:10) I agree. (6:11) Thanks, Figure 1.
Speaker 5
(6:15) You’re welcome. (6:16) If there’s anything else you need help with, just let me know.
Speaker 1
(6:39) All right. (6:44) I’m gonna pause right there. (6:46) Um, did I stop sharing?
(6:49) Back to that.
Speaker 7
(6:56) All right.
Speaker 1
(7:01) So with this, I just want to pause. (7:04) Okay. (7:05) In the chat, if, who, who on this call is a little bit freaked out about this?
(7:10) Honestly, we have robots who can detect, um, what’s going on in a room. (7:17) Is it?(7:19) Yeah, exactly, Sam.
(7:20) It, this is so crazy. (7:22) This is so crazy. (7:23) In fact, I robot is exactly the statement.
(7:26) So Tesla is actually working on another technology. (7:29) So imagine how this robot was able to pick up an apple. (7:34) Tesla’s robot can not only pick up an apple, it can pick up an egg.
(7:39) So it understands just with the context and the feeling, how hard to grip the egg. (7:45) It’s got so many sensors in the fingers. (7:49) So robotics, as we see it today is starting to change things.
(7:53) I think it’s a good illustration of how the world’s changed. (7:55) Now imagine this is where we’re at today. (7:57) This is, this is published a week ago.
(7:59) Okay. (8:00) So think back, where were we five years ago? (8:07) Was even TikTok around five years ago?
(8:09) Let’s think about what we use every day. (8:12) Um, certainly we didn’t have as many electric cars. (8:15) We didn’t have electronic car structures.
(8:19) Um, now take, give us some thought. (8:22) Where are we going? (8:22) Where are we going to be in five years from today?
(8:25) Where’s this robot going to be? (8:27) How many of us will be hiring robots or buying robots, right? (8:31) So if you can imagine this, imagine what it’s like to be in the boardroom and you’re sitting with, with your stockholders and your stakeholders and your board members, and you’re the CEO and you’re responsible for your company.
(8:45) What question do you think they’re asking? (8:48) They’re asking, Hey, what are you doing with this whole AI thing? (8:52) And not that we have to have an answer by any means, but how are we, what’s our journey going to be like?
(8:57) How are we going to get to the next step? (8:59) What’s what’s ahead of us? (9:04) So I don’t have a poll set up, but just chime in on the chat.
(9:09) How many of you have been in a transformation of some sort? (9:13) In fact, let’s just say, um, with a raise of hands, if you want to use your, your, your, your voting mechanism, how many of you have been in some sort of transformation? (9:27) Oh my gosh, a ton of you.
(9:29) And some of them have been business transformation. (9:32) Some of them has been, have been agile transformations. (9:35) I remember Andy, um, remember our transformation over at StubHub?
(9:40) Wasn’t that something? (9:41) Uh, and you guys did a phenomenal job and I understand and seeing how many people have led transformations. (9:47) Um, and it, the idea is, well, gosh, if, if you’ve got this transformation, so what’s so, what’s the big deal with business transformation?
(9:57) And Stacey, why are you talking about business transformation and what makes it different from like an agile transformation or digital transformation? (10:05) And the premise that I’ll, I’ll offer is when we go into clients today, we’re finding fewer and fewer organizations who, who want an agile transformation. (10:16) And I’ll share with you the reason why is they feel like agile transformation may not be enough.
(10:22) They’re trying to answer these questions that are happening in the organization.(10:26) Trying to answer the, the, the board members questions of, gosh, how are you guys going to get to the next step? (10:32) What, what are you going to do to leapfrog to the other side?
(10:35) And so having, having worked with these companies through the pandemic and up to even today, when we start talking with clients, agile transformation is interesting and it’s important, but it’s not the only thing. (10:48) In fact, we’ve been told that digital, digital transformation, which has been the rage for the past five years, that’s not enough. (10:56) So if you look back, agile has been around pop it with a lot of popularity within the last 10, 10 years, digital transformation comes in for the last five years, but now what’s being talked about in organizations are the likes of business transformation.
(11:13) And a lot of folks that are operational excellence have been talking about this. (11:18) So when we start talking about business transformation, we are talking about, about, um, growing and expanding in different ways. (11:27) So instead of having the conversation around agile, these days, we’re finding that we’re having broader discussions.
(11:35) In fact, most of our conversations today, and it’s something to reflect on, especially for us agile coaches and those who are in, in scrum and project management is we don’t talk about agile. (11:47) It’s kind of like fight club talk about fight club. (11:51) Yeah, we’ll do it.
(11:51) But we actually talk about the process of fundamentally changing systems, process and behaviors, and even technology to accomplish superior results. (12:00) Period. (12:01) This is what our clients have been asking us to do.
(12:04) And one of our clients who we’re engaged with right now, they actually came in thinking that they needed just agile. (12:12) And if we just answer that agile question, how much will we have missed? (12:16) Because what we realized that they actually didn’t necessarily have the behaviors and the engagement.
(12:21) Now, those of you who are agile coaches, you see this all the time, right? (12:24) You see that, gosh, you know, these leaders are acting one way or, or these, these team members are behaving a different way, so it’s like, well, wait a second, do we, what do we do to fix that? (12:35) And we start seeing the agile code community really kind of embracing it.
(12:39) But we still held on to this, this idea about, oh, well, we’re here to do an agile transformation. (12:45) My challenge to you, my challenge to the industry is, well, maybe the agile transformation isn’t the right thing to do. (12:52) Maybe it’s really the business transformation and what’s that look like?
(12:56) So having said that, I’ll share with you some of the failure rates that we’re seeing in transformation across the board. (13:06) And everybody’s got a number. (13:08) Harvard’s got a number, Gartner’s got theirs, McKinsey’s got theirs.
(13:12) I mean, everybody’s got a number about how many, how, what the percentage rates are of failure. (13:19) And I would say that the failure rates are because of a number of reasons. (13:23) I think one of them has to do with embracing what the client wants and really meeting clients where they’re at.
(13:31) All right. (13:31) So, so those of you who are in professional coaching understand this.(13:34) And what, and through this, what we’ve done in working with our clients is we’ve kind of come up with like the seven step approach that seems to be really working and it’s kind of our secret sauce, but I’m here to kind of share that with you guys.
(13:46) So I hope you don’t mind me sharing. (13:49) Of course, with this, you guys have seen this, all models are wrong, but some are useful by George Box. (13:58) I’ll take it a step further.
(14:00) Many of you have seen this quote. (14:01) Let me give you the full quote. (14:04) All models are approximations.
(14:07) Essentially all models are wrong, but some are useful. (14:09) However, approximate nature of the model must always be born in mind. (14:13) So the things I’m going to show you aren’t perfect.
(14:16) And may not work everywhere, but I think they’re applicable and you can take these and nuance them through. (14:22) So these are kind of our seven steps of what, what we’ve experienced and be open to, to having conversations about these if you’ve got questions in the meanwhile, okay, so I’ll step right through. (14:34) I’ll pause right now.
(14:35) Are there any questions? (14:39) All right, let’s move on. (14:41) All right.
(14:42) So when we start thinking about transformations, I, we, we, by definition, because I’m an agilist, I go into organizing structures. (14:51) Okay. (14:51) So what am I trying to do?
(14:53) And you guys will see, this is familiar. (14:55) When we go into an agile transformation, the things that we’re thinking about is, gosh, does the company have a vision? (15:00) Does it have a mission?
(15:02) Do they have a clear strategy? (15:05) Do they have a portfolio of products? (15:08) What’s that portfolio look like and what the products look like?
(15:11) And do they have teams? (15:12) These are the structures that we work with in an agile space. (15:16) And even for those spaces that aren’t agile, we still look at these.
(15:20) So imagine when we start talking about people like Simon Sinek, who are asking, Hey, you know, do you understand your why? (15:27) What they’re really asking for is, do you have clarity on the vision and mission of the organization? (15:31) Because that’s driving everything.
(15:33) And even at Hyperdrive, we just went through an exercise on our own, eating our own steak, if you will, to kind of think about, what is our vision? (15:42) What’s our mission? (15:43) Why are we here?
(15:44) And we found that other companies haven’t done that themselves. (15:48) So when we start talking about organizing structures, we hit these areas up through strategy, helping decompound the strategy and the portfolio. (15:57) And the portfolio is important.
(15:59) So if you take one and two, the vision and mission, we would call this the strategic layers. (16:06) Okay. (16:07) The strategic layers.
(16:08) If you look at four and five, these are kind of the tactical layers. (16:12) These are like, we’re teams working on products, getting the tactical work done in the binding agent between the two ends up being portfolio. (16:20) So you might ask, well, gosh, why portfolio is so important.
(16:25) Portfolio is where we start selecting budgets. (16:29) We start selecting our priority projects. (16:33) We start understanding the products that we have to invest in.
(16:36) The portfolio is actually a budgeting function and it’s a reflection of our priorities.(16:42) So if you can imagine you’ve got senior level management worried about vision and mission and strategy, and they’re carving out, Hey, this is what we want to do in the future, teams need to respond to that with tactics. (16:52) The portfolio is that translation layer.
(16:55) It’s that glue that keeps them all together. (16:58) So in an agile world, this is what we used to look at. (17:00) We just call that maybe an operating model.
(17:03) And for operating model, we would call that agile practices. (17:06) Now, here’s the things that we’ve added onto that. (17:09) And we do this as a normal practice for our organization.
(17:14) We start talking about goals and in agile, we kind of talk about goals, but we really don’t get too deep into that per se. (17:22) We ask our clients, do you have goals? (17:24) What are you really trying to accomplish?
(17:26) And what we’ve come up with is like, well, we’re finding and discovering that OKRs is a natural language to talk about those goals. (17:33) And just like the operating model hits every layer of the structure, so do OKRs. (17:40) Just caveat, OKRs goes down to teams.
(17:42) We wouldn’t go into individuals on that. (17:44) That’s for another conversation. (17:46) But you want to tie in your objectives and key results, the goal setting, division, strategy, portfolio and products.
(17:54) The next thing we do is we talk about metrics. (17:57) And so every level also has to have a level of KPIs. (18:01) How do we measure success?
(18:03) And how is that different from OKRs? (18:05) Well, OKRs are about the objectives and key results, but KPIs are a reflection of how you’re actually performing as an organization in the moment. (18:14) Now, some of the KPIs you might have to research and discover might be things that are more finance related.
(18:21) So how would you have an OKR at a strategic level? (18:25) But then let’s imagine you’re trying to shoot for branching across the business. (18:31) KPIs are going to be that vehicle.
(18:33) It’s going to be that conversation. (18:35) So it might be things like, hey, if you’re working with finance, what are KPIs for cash flow? (18:43) What are KPIs for managing or cycle time for getting paid?
(18:49) Those sorts of things might be a different set of metrics. (18:51) But those are things that the organization actually has to be thinking about when they go through the vision, mission, strategy, portfolio and products. (19:00) The last two things I want to I want to share with you.
(19:04) Is skills and expertise, how do they build capabilities in the agile world? (19:09) We always talked about capabilities as being things like our technologists, or do we understand product or do we understand innovation? (19:18) Well, that’s one part of it, and it’s absolutely true.
(19:21) So our conversation with the CEO is actually beyond those things. (19:25) And we talk about innovation, but we also talk about capabilities beyond that. (19:29) We talk about product development capabilities, but we also talk about financial capabilities, marketing capabilities and sales capabilities.
(19:36) Again, this is a new language, but this is a structure that the organization now can start absorbing that that a transformation affects more than just agile and more than just a bunch of practices. (19:47) It’s about capabilities development. (19:50) We might even in this capabilities branch out to even performance management.
(19:55) And you might have heard of agile performance management. (19:58) That’s where agile performance management lie as well. (20:01) And finally, engagement, and this is leadership filler.
(20:06) How do we engage and help with decision making? (20:10) OK, so I want to pause here. (20:12) I would really invite you to take a look at the structure.
(20:16) We start talking about the organizing structure behind business transformation.(20:21) Here are the things that we’re really trying to do. (20:23) This is in a language that anybody in the organization can understand.
(20:27) And I think people who are outside of technology start to understand, oh, this is how agile kind of fits in the world. (20:34) And this is how we set goals and metrics. (20:37) This is a great conversation starter.
(20:40) So that’s the organization structure. (20:42) The steps I’m going to take you through are going to feed into the structure. (20:46) And this is what the steps I have are there to help amplify the clarity behind the structure as we start formulating the transformation.
(20:58) So some of you might know what this picture is and where it was taken. (21:04) Hence, it’s near my own backyard. (21:08) But the step here is establish a strategic execution team.
(21:14) So any guesses on who this is or where it’s come from? (21:19) And if you get the guess right, I will celebrate you. (21:23) I’ll clap.
Speaker 9
(21:24) Is that Toyota?
Speaker 7
(21:27) You’re so close. (21:29) Keep going.
Speaker 3
(21:35) Nissan.
Speaker 7
(21:36) Uh, you’re, you’re, you’re further away. (21:38) You’re getting colder, but Bruce, that was, what’s that? (21:43) Mitsubishi.
(21:45) Oh, you’re, you’re getting colder still. (21:47) You’re like, you’re so red hot.
Speaker 1
(21:50) Check this out. (21:52) This photo was taken in, um, Fremont, California at a, at a GM plant. (22:00) Now that GM plant stopped being a GM plant and technically Bruce did win.
(22:06) So yay Bruce with his first guest, because that GM plant in Fremont stopped being a GM plant and turned into a Toyota manufacturing facility. (22:17) But here’s the thing. (22:19) This is actually called the NUMMI plant.
(22:22) N-U-M-M-I. (22:24) If any of you are familiar with the NUMMI plant, you’ll understand that GM actually had that plant before for years, and it was literally run, um, by, by the employees who really didn’t really have motivation to, uh, to perform. (22:43) This organization, uh, was actually the worst plant in GM.
(22:49) And it got so bad, they had to shut down the plant. (22:52) And this is during the eighties and they shut down the plant. (22:55) And with the plant shut down, it sat there, um, hundreds, thousands of people were out of work.
(23:02) Um, and, um, and so Toyota came up to them and said, Hey, we, we’d really love to build the Corolla out here. (23:10) Um, but how do we, you know, it’s a great plant. (23:14) We’d love to do that.
(23:15) And, and so they agreed with GM, let’s go ahead and open up the facility for Toyota and Toyota to run it. (23:21) But the challenge is they couldn’t run it unless I hired back the past employees. (23:29) So the past employees who operated the worst performing plant are now going to become these Toyota production workers.
(23:36) How’s that work? (23:37) Well, it turns out they had to bring back 85% of the workforce. (23:41) And, um, after a lot of training, a lot of culture development, they turned that to be one of the top plants in the world.
(23:48) So before we’re in the GM plant, you’d open a GM car door and it was not unreasonable to find an empty beer can in the door itself to something that’s Toyota rated.(24:02) So what happened? (24:03) What’d they do?
(24:04) They actually had to form a strategic execution team with leadership on both sides, but both combined with Toyota and combined with, with GM and plant workers and really got them on board. (24:15) And so you, you might also recognize this from Cotter’s, uh, Cotter’s approach of like build, build your volunteer army. (24:23) It’s the same thing here.
(24:24) Every transformation needs that strategic execution team. (24:27) What we tell our clients, um, are there there’s, I don’t know. (24:32) I don’t know if there’s a real law, please correct me if there’s a real law.
(24:35) I’m just call it Louie’s law. (24:36) I don’t know. (24:37) Uh, but what I’ve, what I’ve identified in, in the last two decades of transformations, transformation will only happen at the highest level of whoever your stakeholder is.
(24:52) So that stakeholder is the CEO. (24:56) It’s going to happen with the CEO and everybody below the CEO on a heart, on an organizational chart. (25:02) If it’s a CIO, it’s everybody underneath the CIO.
(25:05) It’s never to the side. (25:07) Those side conversations are very difficult to come by.(25:10) So you actually have to take, um, you have to take the highest person you can to help, not just be, um, the voice of it, but to really be involved.
(25:20) And I know Andy’s online and, and, um, Andy, I think during our transformation over at, um, over at StubHub, it was, it was Chris who was the president of the company. (25:30) He said, Hey, this is what we’re going to do. (25:32) And guess what?
(25:33) Everybody fell in line. (25:34) If we look at examples like PayPal, I think Max is on, um, over at PayPal, when we did that transformation, we started out with the CTO, James Barresi, and that started going down. (25:46) And the big thing that shifted is at some point, James was able to get the ear of David Marcus, who’s the CEO at the time and said, Hey, David, you know, we should try doing this in other areas.
(25:57) And all of a sudden what started happening is, um, other organizations started to adopt, uh, agility. (26:05) Okay. (26:06) So Louie’s law transformations will only affect change below the most senior engaged person.
(26:15) That makes sense. (26:17) All right, I’ll move on. (26:20) The second step is integrated business and technology decisioning.
(26:25) So we talk a lot about this in agile, but here’s what this really means. (26:29) It’s is if you’re, if you’re accustomed to having technology, run these transformations, um, it ought to be business driven. (26:36) Um, so if you’re sponsored by an organization like this, uh, like an IT or product development, that’s great, but it will only go so far.
(26:49) Um, in your, and it’ll only be tied to technology itself. (26:54) The first thing that you want to do is once you have your strategic team in place, how do you get the, how do you get engaged with the most senior business person? (27:02) So who’s gotten most at stake.
(27:04) It might be the person who’s in charge of product. (27:06) It might be the person who’s in charge of finances. (27:09) Um, one of our transformations that we did, uh, a couple of years ago, the CFO was sitting in the room and she started listening to the feedback from the team and this feedback was, you know, what we normally would hear in, in a sprint review, and you could tell that it was just falling on deaf ears.
(27:27) What really changed her mind was she heard someone talk about how much money, uh, that they were able to save. (27:34) And she thought about it and she said, gosh, you know, you’re saying we saved a million dollars on this project over the course of three months. (27:41) And then she started unpacking the finances a little bit more and her team started talking about finances a little bit more.
(27:48) The next thing, you know, she’s like, gosh, if this saved us a million dollars, then what can help us save another million? (27:55) All of a sudden this conversation that started out with Scrum and started talking about agile shifted. (28:01) It shifted gears big time because her eyes lit up and she said, you just help, you just help me solve a business problem of saving, uh, saving money on our budget.
(28:11) That enables us to do the following projects. (28:14) So integrating that conversation with business and technology is really, really important and get to the point of, of, of how you calibrate decisioning. (28:23) One other client that we have, um, they’re a clothing manufacturer.
(28:28) And, um, we, we had a conversation about who makes the decisions for enterprise IT.(28:36) If you’re an enterprise IT, who do you think makes the priority decisions or who do you, yeah, who makes them now? (28:42) Just a quick guess, a shout out.
(28:44) If you’re an enterprise IT in, in whatever company you’ve been involved with, who makes the final decision on, on investments? (28:53) CEO, finance, finance, CFO, finance.(28:58) Yeah.
(28:59) Because they’re good. (28:59) They’re the ones who have the budget. (29:02) Now, if they run the budget, who picks the projects?
Speaker 3
(29:09) It depends. (29:10) And usually not the right person. (29:12) Pam, tell us more Pamela.
(29:15) Oh, I just remember, uh, sorry. (29:17) I’ll put my video on here. (29:19) Um, I sat in a, in a room once, I think it was Cigna.
(29:22) And we were all coming together and we were doing transformation stuff. (29:26) And the guy basically from finance stood up and said, I’m going to make all these decisions.(29:30) You put in your forms and we’ll see what you get.
(29:33) Right. (29:34) And they’re absolutely zero to do with what the key priorities were for the company, but this guy was basically telling everybody what to do, and it’s not the only time I’ve seen this happen, but that was just kind of like, holy moly. (29:50) Well, we’re not going to get very far.
Speaker 1
(29:52) Exactly. (29:54) It’s challenging. (29:55) Like, so on the feedback that, that you’re sharing, I mean, the, the titles are CIO, product group, CTO.
(30:02) Um, I like Max, Max feedback, the board, um, CFO. (30:07) So in general, it boils down to this. (30:11) A lot of times there’s going to be a single person who makes this decision.
(30:15) That person is by definition, the bad person, the bad guy, the bad gal. (30:22) Um, this person ends up being, being the one who holds the responsibility. (30:26) So if something doesn’t get done and the CEO comes in pounding their fists on the table, like that never happens, right.
(30:34) Um, screaming out loud saying, Hey, how come this project didn’t get done? (30:39) It’s always going to be one person’s fault. (30:42) It’s not going to be the person who funded it.
(30:44) It’s going to be the person who had to make the decision on what was the, what was the thing to build. (30:49) And that’s where you find the opportunity. (30:53) Um, the opportunity is this.
(30:56) If, if you are in a position or you see a person in the position, you have to make that decision, that person shouldn’t have to make that decision alone. (31:03) In fact, when I was a CIO, I learned very quickly that I became the bad guy for every project I wanted to fund.(31:11) So someone will come in, sales would come in and say, we need to build this product.
(31:16) So I’d build that product. (31:17) And sure enough, I would hear something from, um, from customer service saying we have too many bugs. (31:22) How can we didn’t fund fixing the bugs?
(31:25) And then if I fix the bugs, I would hear another voice and it’s coming from, from operations. (31:30) And they’re like, Hey, we need to, we need to work on, keep the lights on projects because our servers are getting old and we need to replace them or we need to replace that. (31:40) So no matter what I chose, I was always wrong.
(31:45) So what we’ve been coaching our, our, our, um, clients are this. (31:50) If you’re in that position, don’t be in that position. (31:52) We started using techniques to get us out of that position.
(31:55) Now we kind of like, you guys might know us, like I I’ve been at SPC since 2011.(32:02) And this way to charge job first, as many of you guys know, is actually a really (32:07) good way to figure out what the value, the business value of, of, uh, of a given (32:13) item might be, so if you can imagine weighted shortest job first, uh, help, (32:19) help me out who remembers the calculus behind that what’s, what’s the formula (32:23) for what this job, what is shortest job first for gosh, I know, you know,
Speaker 3
(32:30) I have to look it up. (32:31) I’m sorry.
Speaker 1
(32:33) Yeah. (32:34) Oh, that’s good, Pam. (32:36) Well, you, you want to be able to help identify what the business value or the user value is, is for a certain project.
(32:45) And then you calculate that against your, your time, like how urgent is the time?(32:51) And you divide that by how much time it’s going to take you to, um, to, um, uh, to, to develop that dump sites. (33:01) Is that about right for gosh?
(33:03) Yes. (33:03) Yes. (33:05) So we use that, but then guess what?
(33:08) That was still wasn’t good enough. (33:09) And I’ll show you, share with you how we use it. (33:11) What we would do is we would do this blindly.
(33:13) Like we would give each executive who had, who, who had pieces of projects in, in the portfolio. (33:20) So the head of marketing, the head of sales, the head of operations, the CFO, they would all come up with their, their weighted shortest job first calculations on every major initiative. (33:31) And then we come up with the calculus and we’d say, okay, we’ll try to try to help them, um, understand where their differences were and why they chose certain ratings and why the W so basically help them align their WSJF scores, but that fell short.
(33:46) We then borrowed an idea that I learned from Luke Coleman and it’s called by a feature. (33:52) If you don’t know by features, phenomenal. (33:54) What you do is you get the projects that you want done, and there’s a certain cost to those projects.
(34:02) Imagine it’s monopoly money. (34:05) Everybody would, everybody in that group would have allocated a certain amount of money and then they could buy whichever project they thought was more, more, more important. (34:14) The importance of this is if you use WSJF as just one way to go through, uh, your, your prioritization, um, that’s only part of the, part of the question.
(34:25) You haven’t answered what people really want and what people are willing to team up together to buy. (34:30) So using both are really important. (34:33) Okay.
(34:33) So I’ll, I’ll, if you want more information, I’ll, I’ll, I’ll chat with you more about that stuff, but that’s something we did, I do want to move on to our next slide.
Speaker 10
(34:41) Okay. (34:41) Actually WSJF also includes the opportunity enablement and risk.(34:46) Yes.
Speaker 7
(34:47) Oh, E and risk, risk reduction. (34:49) Good call out.
Speaker 1
(34:50) Thank you for gosh. (34:52) Good call. (34:53) Um, the strategic operating model.
(34:55) Okay. (34:56) So step three, we call it the strategic operating model. (34:59) What this really is, is this is all things like, how are you going to, what are your working agreements?
(35:03) How are you going to, um, put together your, um, how are you going to work? (35:07) So this goes into like, are you going to work in waterfall? (35:09) Are you going to work in agile?
(35:10) Are you going to work in Kanban? (35:11) Are you going to, are you going to use a combination of these things? (35:14) How are you going to engage with each other?
(35:16) How is your portfolio is going to look and how do you actually build your team of teams? (35:20) This is all the stuff that agile coaches are experts in. (35:23) All of you are experts in this area.
(35:25) So step three is where we actually establish what that looks like. (35:29) Okay. (35:29) We want to set that structure up.
(35:32) Um, and of course that includes training. (35:35) Now the next is step four. (35:37) Once we set up the structures, we start working on goal planning.
(35:40) This is essential because we need to have a conversation with, with the executives and what’s, what’s that conversation. (35:47) How does that get, how does that get translated to the team members? (35:50) So what this looks like is if I’m, if I’m talking with the CEO, the first things I start asking are, or her, um, tell me what your goals are.
(36:02) And then we translate that into what’s your objectives, right? (36:06) So what’s your, what’s your, what, what kind of, uh, objectives are you trying to achieve? (36:11) And then we start going to having conversation about key results.
(36:14) And this is why we’re going to talk about this in a later series that do a deep dive on objectives and key results and goal planning. (36:21) Because this is the voice of management at the very top when we first established the OKRs. (36:27) That conversation needs to be carried down to the team.
(36:30) So how do you do that? (36:32) Well, if you have a way to scale or cascade those OKRs all the way into the program level, all the way to the product level, all the way down to the teams, you’re going to start getting clear alignment for if you’re a CEO, who’s working on what and how does what they’re working on fill your strategy? (36:51) The second thing that you’re going to get is if you’re on the team, you have clear line of sight about the work that you’re doing, how that fulfills a strategy.
(37:00) So if I’m going to have a conversation with my manager about what my role is and what I’m doing, what I’m prioritizing, I have responsibility and accountability for the things that I do to line up with one of their strategies. (37:14) Okay. (37:15) That’s where scaled OKRs hits its power swing.
(37:20) It’s going to be about a shared language of objectives. (37:23) No longer are we talking about sprints with executives. (37:26) We’re actually talking about how did we achieve our results?
(37:29) And really, that’s what they all they care about. (37:32) They might be somewhat interested in the details about PI planning. (37:37) If you do that, you know, program increment planning, or they might even be interested about your cycle times if you calculate that.
(37:46) But what really matters are, hey, how is the work you’re doing building a key result, which helps solve for an objective? (37:54) And again, this is all at the very beginning that we’re working with the executives on the fifth thing, customer centric backlogs. (38:02) So as we start to identify the work, this is where the portfolio starts building, building strength.
(38:08) This is that center part. (38:09) Remember that glue that I talked with you about?(38:11) That glue now starts becoming the lever for product management.
(38:17) Okay. (38:17) It’s because they’re now seeing the strategies and they now need to fulfill them. (38:22) So as they’re building their product roadmaps, they should be working with customers directly, so working on new innovation, but balancing that with other things like keep the lights on work, things that have to sustain the organization.
(38:35) So develop customer centric backlogs is going to be a center conversation of every portfolio discussion and every product discussion and should be every team discussion.(38:46) How are we fulfilling those customer needs? (38:48) And what things do we need to be investing in to fulfill those needs?
(38:55) Number six, our agile based operating flow. (38:59) Now these are talk about rhythms. (39:00) When we talk about agile, I always love to talk about cadence.
(39:04) So we operate in the cadence, but how do we really inspect and adapt continuously?(39:09) Now we have to build these things in, and this is where not only do we, do we go through the agile structures, but we start working on the agile events, if you will. (39:18) Like, how do we iterate?
(39:19) How do we plan every three months, if you will, and then how do we make our pivots?(39:23) So it’s all about the inspect and adapt mechanisms within agile and following that operating flow. (39:30) And as we operate that on the tactical level, that’s when we start coaching up into the organization and start talking about how they start shifting potentially to OKRs, because if you’re now doing OKRs, you have a language to pivot.
(39:47) If you’re just working on roadmaps and you want to pivot a roadmap, what’s the executive going to say? (39:53) What? (39:54) You’re wrong?
(39:55) That’s terrible, right? (39:57) Then it becomes a judgment, and we want to eliminate that conversation. (40:01) It’s going to be like, hey, you know what, executive?
(40:04) It’s been three months. (40:06) It’s time for us to review our OKRs. (40:08) Are we going to continue, make a decision to continue, or are we going to make a decision to pivot, or are we going to make a decision to stop?
(40:15) All of a sudden, this agile-based operating flow and OKRs become that shared language of, hey, are we doing the right thing or not? (40:23) And then if you structure this well, then the entire organization is talking about going in the right direction. (40:31) And the last thing is implement those meaningful business metrics.
(40:35) Again, there’s nothing wrong with cycle time. (40:38) That’s great. (40:38) But what’s the most important business metric is, a coach shared this with me, and she said, you know, Stacey, it’s got to be about the cash.
(40:47) And I think she’s right, because most organizations that are business-driven are about the cash. (40:53) And if you’re a government organization, so for example, if you’re the FBI or Defense Department, you may not be worried about what money you’re going to make, but you’re certainly interested in how soon is it going to be for you to implement something or to solve a problem, because time becomes that money factor. (41:11) So what are the most meaningful business metrics as opposed to the traditional vanity metrics that we might see in agile?
(41:19) So I’ll assure you, I don’t talk about velocity with the CEO and neither should you, and they wouldn’t want to know that, but they would love to go back to their common language of how do we get the key results? (41:34) So all together, take a screenshot of this. (41:37) This is kind of what we do.
(41:39) Step one to seven. (41:40) I invite you to use it, consider it, and on how it could help your existing programs that you’re working on. (41:48) And then as you’re working in your programs, let’s go back to the organizing structure and think about how are you setting up your goals?
(41:56) You may not use OKRs. (41:57) If you don’t use OKRs, it’s okay. (42:00) It’s going to be all right.
(42:02) The question to your management team is going to be like, how do we set our goals and are the goals clear at every level of the organization all the way from getting clear goals on what’s it mean to make our vision happen versus what’s it mean to make our teams successful? (42:17) You know, what are those goals and what are the metrics behind that?(42:20) Of course, it’s already said the operating model transcends all levels, but so the skills and expertise.
(42:26) How are we investing in our people to make sure that we have the right capabilities to build up our team for products and portfolio and to make the strategy happen? (42:34) And last, leadership, we’ve seen a rapid increase investment in leadership training and which is great news. (42:44) We have seen in the past that there hasn’t been a lot of investment in developing leaders.
(42:50) So I think what the market’s saying is, gosh, these are skills that we need to embrace and learning leadership skills is important, but also understanding that we should be learning other capabilities. (43:03) Like if I’m an agile coach today or I’m in project management, I should be very good at being able to explain a balance sheet or a cashflow statement or have those conversations with the finance heads or with the marketing folks. (43:21) So whatever language your clients are using, how do you dive into that head first and learn what they’re doing?
(43:26) So a lot of you reaching out to them and helping build your leadership through them, through their insights on how they run their business. (43:40) So I’ll kind of pause there.(43:42) As you can kind of see, we’ll be diving into more hardcore business strategy in the next conversation.
(43:49) And this is going to be, we’ll talk a little bit about agility and agile, but we’re going to talk about how that feeds business strategy and how do you hold the conversation with your executives on that, because the more you can have that conversation as an agilist, the more trust you’re going to build, help them solve their problems, right? (44:07) Because we’re not about implementing agile anymore. (44:09) That might’ve been popular 10 years ago.
(44:11) We’re really trying to solve those business problems. (44:14) And if we can be in service to do that, we’re going to be much powerful, much more powerful as coaches.(44:19) And then you’ll see us talk about the strategic OKRs and how that fills strategy.
(44:24) And then we’re going to talk about prioritization through lean portfolio management.(44:28) I would say definitely, if you can make that one, you definitely need to spend time on lean portfolio management. (44:36) It’s a great conversation.
(44:37) It’s, in my opinion, it’s like getting an MBA all in a small amount of time. (44:44) It’s a lot of strategy and techniques in there. (44:47) And of course, how do we exploit the operating model?
(44:50) So with that, if you’ve got questions, put them in chat or just shout them out. (44:56) And no question is a dumb question.
Speaker 4
(45:04) Hey, Stacey, in the beginning, you talked about, I guess, what Steve was going to present. (45:10) You piqued, it sounded so exciting to learn that. (45:14) Do you think you might be able to get back to that at maybe another meetup?
Speaker 1
(45:21) Absolutely. (45:21) In fact, I’ll put that down and we might just have a special meetup.(45:26) I would say it’s probably one of the most powerful tools that I’ve seen happen, like used in a boardroom.
(45:35) I’ll share with you that the tool itself and their approach, we did this at a very large event in Florida, and we had several senior coaches with very deep backgrounds and one of them approached me and said, Stacey, this is probably the only tool I need going forward when I walk into the room to facilitate conversation.
Speaker 4
(46:00) Is this like a mural or a mirror kind of thingy dingy?
Speaker 1
(46:04) Yeah. (46:04) In fact, what we’ll do is we could do it on a mural and you can see it and you’ll get the technique, how we use it. (46:13) And yeah, yeah, for sure.
(46:14) Awesome. (46:15) Thank you.
Speaker 4
(46:15) And the way you just have me so anticipated for the next meetup.
Speaker 1
(46:21) It’s great. (46:22) It’s fantastic. (46:24) And every CEO that we’ve shown, they don’t say, hey, this is great because they just think that’s what we do, which is what we do.
(46:32) What they say is, we’ve never had this conversation like this before. (46:37) And that’s the aha moment. (46:39) And it becomes a conversation that drives action, which they love.
(46:44) Like CEOs at the end of the day, they love action. (46:47) So it drives action, but in a way that the people feel like they have ownership over it and yeah, it’s, it’s, it’s, it’s incredible. (46:54) Awesome.
(46:55) Yeah. (46:55) It’s called solution focused, a solution focused approach.
Speaker 3
(47:01) Um, and, um, Stacey, I’m just like, um, using this British word gobsmacked. (47:07) It’s kind of like, I’ve lived in the product world. (47:10) I’ve lived in the transformation world and this kind of builds all those bridges.
(47:13) So, um, fascinating. (47:16) It’s, it’s, it’s excellent. (47:18) Thank you.
(47:19) It, it, it solves the problem of when you start talking about, you know, we need planning meetings with CEOs and they just glaze over, you know, they don’t get it.
Speaker 4
(47:28) Yeah. (47:29) Yeah.
Speaker 1
(47:29) Thank you, Pamela.
Speaker 4
(47:31) This is the anti pattern, right? (47:33) Stacey, you know, like when we got together, whatever, 15 years ago, right. (47:38) And we were, you know, starting, you know, agile meetups.
(47:41) Um, this is the evolution of agile because there’s just certain things that haven’t worked, right. (47:48) That haven’t connected. (47:49) And I think this is just like the natural progression, right.
(47:53) It makes so much sense. (47:55) It’s exactly what I’ve been thinking as well.
Speaker 2
(47:58) Yeah. (47:58) Yeah. (47:58) So it’s an evolution.
(48:00) Yeah. (48:01) You know, it’s, it’s interesting to see how much Angela has changed.(48:04) Um, and it’s something that I’ve been kind of watching in the past 10 years and I’m seeing an accelerated rate of evolution just in the past three years.
(48:15) And Stacey, you nailed it right on the money. (48:17) I was asking myself, um, just about last month or so ago when we went to the, uh, agile meetup that they had out in San Ramon. (48:27) And, uh, one of the key things that they brought up over there was really interesting is, you know, where the hell is agile?
(48:32) And I was like, oh, this is interesting. (48:34) Um, that’s a really good question. (48:35) Where the heck is agile?
(48:37) Is agile dead? (48:38) Was one of the topics that they brought up. (48:40) And you know, what I got out of that was that, no, it’s not dead.
(48:43) It’s transforming itself. (48:46) And what’s, what’s incredible about this that you brought up is it’s just perfect timing, Stacey, is that what we did with agile 10 years ago, it’s not, it’s so different now because this is what leaders are looking at for, for agile. (49:03) And so I really appreciate you bringing this up because it gives me, uh, a new foundation and a spark of light in where agile is going to go.
(49:12) So thank you so much.
Speaker 1
(49:15) You’re welcome, Steve. (49:16) Thank you for sharing. (49:17) Thank you for sharing and Brad.
(49:19) Hey, I shout out to Brad and Sam. (49:21) Thank you for, um, for your comments.(49:23) They’re very valuable.
(49:25) And, uh, Brad, you’re right. (49:26) You have, um, not every person can buy the feature on their own. (49:31) And the purpose is to help the help, uh, executives.
(49:34) So I talked about by a feature, it’s a fork forcing function to have executives have conversations. (49:40) They all can’t buy it with one, with one person just can’t buy it all.
Speaker 9
(49:45) No, you’re, you’re absolutely, you’re, you’re, you’re totally awesome in your presentation. (49:49) Um, just to touch upon those tools is, is, uh, very insightful. (49:53) And, um, I’m just trying to keep people on the straight and narrow to support you.
(49:57) Good stuff.
Speaker 1
(49:58) Thank you. (49:58) Thank you. (49:59) It is a great comment.
(50:00) Yeah. (50:00) Well said Brad.
Speaker 6
(50:03) Yeah. (50:04) That by a feature, um, uh, that you mentioned earlier really does work in a very simple, elegant way. (50:11) Um, I’ve seen, uh, with his shortest job first try to be implemented and the comp it’s, it’s a simple enough idea, but it’s more complicated than by a feature.
(50:21) When you get by a feature engagement goes up, you know, real, not only the real conversations happen, but they’re much more intense and that’s all you want. (50:32) Do you want to bring it out and bring it out as simply as possible?
Speaker 1
(50:36) Yeah. (50:36) The, the, the conversations start happening. (50:39) And if, for those of you who don’t know by a feature, because you’re literally buying the feature, here’s what can happen in a buy a feature conversation.
(50:46) If you’ve prioritized project A, B, and C in that sequence, a couple of people can get together and say, Hey, you know what I know project is the most important thing on its own.(50:59) But you know, B and C together are much more valuable than a by itself. (51:06) So I’ll buy B if you can help me buy B and we’ll buy C together.
(51:11) What do you think? (51:12) And we’ll do B and C first. (51:14) That’s the power behind by a feature.
(51:16) So all of a sudden this recognition that yes, A is so important. (51:21) If you did it serially, but knowing that B and C together can actually be much more powerful for the organization, the executives can have a hand in making that decision and it’s much more collaborative, so good comments, Andy. (51:36) Thank you.
(51:38) We are at the top of the hour. (51:40) I want to respect your schedule and your time.(51:42) Thank you so much, everybody for joining.
(51:45) If you’ve got other questions, feel free to hit me up on LinkedIn. (51:51) Here’s my email and you can hit me up at slui at hyperdriveagile.com. (51:59) As most of you know, email, I might be a little slow at, but definitely LinkedIn.
(52:05) And I know a few of you have my phone number, which I’m not going to publish.(52:08) Feel free to hit me up by text. (52:11) It’s been great having you guys here and thank you for all the great messages.
(52:15) You guys are wonderful.
Speaker 10
(52:21) Thanks again.
Speaker 3
(52:22) Bye.
Speaker 10
(52:24) Thank you, Stacy. (52:25) Very good. (52:26) Excellent.
Speaker 1
(52:27) Thanks Prakash. (52:28) Great seeing you.
Speaker 10
(52:29) Yeah. (52:30) I’ll contact you otherwise.
Speaker 7
(52:33) Yeah. (52:33) You’re looking good, man. (52:35) You’re staying in shape.
(52:38) Thank you. (52:40) Yeah. (52:40) I love it.
(52:41) I love it.