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Agility

Shaping IT Organisations: CIO Strategy Forum presentation by Nigel Dalton

By | Agile, Lean, Organisation, People | One Comment

In which the 3rd Reich*, the Catholic Church, and Monty Python are resoundly thumped by William Edwards Deming in the race to design a healthy, productive IT organisation for the 21st century.

Third Reich example of extreme flat organisation structure

By the time this is published I will have presented the results of many hours research, debate and reflection on the design of modern IT organisations. Sadly, without actions and interpretive dance, the Powerpoint slides on their own don’t add up to much more than pictures. Invite me (or James!) for lunch sometime, and we’ll happily proffer an opinion on the subject.

The pivotal moment in the thinking process came when reading the new book from JoyceThe essential deming by joyce orsini Orsini, a deftly edited collection of Deming’s lectures, missives and thoughts from 1950 to 1992. A brilliant book, it is the closest you’ll get to Deming sitting with you and giving his opinion on a wide range of important matters. Including, organisation structures!

Deming’s simple idea (quoted in a 1992 presentation to General Motors) was to avoid traditional organisation charts in the form of hierarchical pyramids, and replace them with flow diagrams (aka value stream maps), and just put the people on the flow diagram as value was pulled by a customer. So simple!

“A flow diagram is actually an organisation chart. It shows people what their jobs are. How they should interact with one another as part of a system. Anybody can see from a flow chart what their job is. Take the chart, put the names on it. You belong here. Somebody else belongs here. Then anybody can see from the chart what their job is. And their work fits in with the work of others in the system.”

Compare that to the Hitlerian view of a flat organisation (so inexplicably popular since the 1990s, with ever-expanding numbers of direct reports), with this lightly edited paragraph from Wikipedia on the organisation of the 3rd Reich. The grey bits are the changed words. If this sounds like your IT department, run!

‘The CIO often deferred making decisions, avoided clear delegation and allowed subordinates to compete with one another, especially in the recent years. Therefore, a system of governance was formed whereby leading company officials were forced to interpret the CIO’s speeches, remarks and writings on company policies and turn them into programs and strategy.

Any manager could take one of the CIO’s comments, and turn it into a new strategy, of which the CIO would casually either approve or disapprove when he finally heard about it. This became known as “working towards the the CIO“, as the executive was not a coordinated, co-operating body, but a collection of individuals each trying to gain more power and influence over the CIO. This often made IT executive meetings very convoluted and divided, especially with the CIO’s vague policy of creating a multitude of often very similar posts.’

This is also an opportunity to put the many references given in the 30 minute talk, and used in the research, in one handy place. Enjoy.

Reading List

  1. The Management Century by Walter Kiechel III, published in Harvard Business Review, November 2012.
  2. The Essential Deming: Leadership Principles from the Father of Quality (2012) by Dr Joyce Nilsson Orsini. Available as a Kindle book, this is the only place I have read Deming’s theories on organisation structures and the negative impact of org charts.
  3. Value Stream Mapping – understand the theory of this special variant of process map
  4. Management 3.0 (2011) by Jurgen Appelo.
  5. Godwin’s Law by Mike Godwin, 1990. ‘As an online discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches 1.’
  6. Scaling Agile at Spotify (2012) by Kniberg and Ivarsson.
  7. Power to the Edge (2003) by Alberts and Hayes.
  8. Here Comes Everybody (2009) by Clay Shirky.
  9. The Principles of Scientific Management (1911) by Frederick Winslow Taylor.
  10. The Theory of Business Enterprise (1904) by the Thorsten Veblen (the witty economist who invented the concept of ‘conspicuous consumption’ among other things). Best read in Wikipedia.
  11. General and Industrial Administration (1916 in French, 1946 in English) by Henri Fayol. Had Henri not been French, and writing at a tricky time in world politics, his ideas might have spread sooner. Similar to Frederick Taylor in many ways.
  12. Conway’s Law by Melvin Conway.
  13. Servant Leadership – best read about in this chaotic Wikipedia entry which features American Robert Greenleaf’s work.
  14. Peter Drucker’s contribution to management and organisational literature in the second half of the 20th century was biblical. The HBR article above does a great job at summarising his influence, or you can buy this book on Amazon.
  15. The reference to the 3rd Reich organisation structure and model can be found here in its original form (not adapted for CIOs).

Is this why your boss wants to be Agile?

By | Agile, People, Strategy | 4 Comments

There are 2 words in business more loaded with double meanings than an entire season of Benny Hill – agile, and lean.

No pointy headed boss worth their MBA (or salt) is going to ignore someone who says they would like to try to become more lean. That simply translates in their mind to ‘do more with less staff’, and focusing on cost reduction – ergo, more shareholder value and bigger bonus for the boss. If you’re not more explicit, they’ll be adjusting their Excel budget and 5 year plan PowerPoint while you’re still in their office explaining the actual guts of your idea being about changing work practices.

And in terms of agility, the PHB misinterpretation most common is that you will help them change direction in their strategy all the time. Agile = limber = flexible = ability to dance about randomly.

If you’re suffering from executive miscommunication over agile in particular, I suspect this article from the McKinsey Quarterly a few years ago (you’ll need a login to see it I’m afraid, but they’re free – search for ‘Building a nimble organization: a McKinsey Global Survey) might also be a contributor to your pain. Here’s the key issue of misinterpretation of ‘agility’ in a diagram:

Now, those things are all good, but the bottom of the ladder finishing spot of employee satisfaction and innovation is a disaster in understanding what and how agile really works. It works by creating a good system for people to work within. If you’re good at doing that, and learning in short cycles, then you might well see the benefits of higher revenues, customer satisfaction, market share and operational efficiency.

Bizarrely, if you built your organisation focusing on the stream of benefits being read in reverse order from the bottom up, I’m certain you’d have a good chance of winning. Yet these are the things CEO’s expect to be of least value in their lives.

A bad system will defeat a good employee every time. Focus on the system – people, machines, knowledge working in unison for end customers. Stop obsessing and reporting solely on revenue, efficiency and market share. They’re only a by-product of a great system.

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