Another interesting week for studying organisational culture

As expected reactions, stories and initiatives didn’t halt just a week after the NY Times published: Inside Amazon: Wrestling Big Ideas in a Bruising Workplace. This was just the beginning of an interesting study of the culture of high demanding organisations.

Julia Cheiffetz - studying organisational cultureLast days I was moved and impressed by Julia Cheiffetz story. The Executive Editor at HarperCollins Publishers wrote about here experience at Amazon: I Had a Baby and Cancer When I Worked at Amazon. This Is My Story. If you don’t have a Medium account and don’t want to get one check the coverage and quotes on GeekWire. Julia’s story shows both upsides and downsides from the culture she experienced at Amazon. It offers a strong perspective.

Given her experience at Amazon I think she gives great feedback to Jeff Bezos in a very strong way. Feedback he asked in a reaction on the NY Times article. Julia Cheiffetz:

You asked for direct feedback. Women power your retail engine. They buy diapers. They buy books. They buy socks for their husbands on Prime. On behalf of all the people who want to speak up but can’t: Please, make Amazon a more hospitable place for women and parents. Reevaluate your parental leave policies.

And on hiding behind numbers:

You can’t claim to be a data-driven company and not release more specific numbers on how many women and people of color apply, get hired and promoted, and stay on as employees. In the absence of meaningful public data — especially retention data — all we have are stories. This is mine.

The thing here is that culture is reflected in the way you act on a daily basis. If it doesn’t show there, it is just words…

Alternative leadership principles will change the culture

Another way of providing feedback requested by Jeff Bezos, was the launch of a blog called Amazonian Manifesto. The post were published by “A Concerned Amazonian“. The text suggests that there is some collective behind this avatar.

The blog publishes alternative leadership principles for Amazon. In short they are:

  1. Obsess about the Customer
  2. Obsess about the Employee
  3. Obsess about the Partner
  4. Hire and Develop the Best
  5. Own and Fix
  6. Invent and Simplify
  7. Deliver Results

It is clear that these principles are inspired by and based on Amazon’s current leadership principles. However new dimensions are added (focus on the employee, the partner, own and fix) that are ment to heal the flaws that could lead to an unhealthy work environment. It is clear that different guidelines and measurement will lead to different results…

What if Amazon studied culture at Zappos (it owns)

Delivering Happiness - studying organisational cultureAnd what would happen if Amazon started studying organisational culture at zappos.com, a shoe and clothing shop it acquired in 2009? Zappos was founded in 1999 by among others Tony Hsieh, who wrote Delivering Happiness: A Path to Profits, Passion, and Purpose . A book that is described as:

The visionary CEO of Zappos explains how an emphasis on corporate culture can lead to unprecedented success

and features quotes like

I made a note to myself to make sure I never lost sight of the value of a tribe where people truly felt connected and cared about the well-being of one another. To me, connectedness—the number and depth of my relationships—was an important element of my happiness

Zappos culture is obsessed with customer happiness. And Tony Hsieh is for Zappos obsessed with creating a corporate culture based on connectedness and care. That creates different and great results. The book Delivering Happiness offers great insight on how to achieve this and what choices have to be made. It is a great read.

Digital Economy and Society Index (DESI) 2015

The data presented by Digital Evolution Index seems supported by data from the European Commission. The EU defined a Digital Economy and Society Index to support and measure progress on the digital agenda for Europe:

The Digital Economy and Society Index (DESI) is a composite index that summarises relevant indicators on Europe’s digital performance and tracks the evolution of EU member states in digital competitiveness.

The Digital Economy and Society Index (DESI) is based on five dimensions:

  1. Connectivity – The Connectivity dimension measures the deployment of broadband infrastructure and its quality. Access to fast broadband-enabled services is a necessary condition for competitiveness.
  2. Human Capital – The Human Capital dimension measures the skills needed to take advantage of the possibilities offered by a digital society. Such skills go from basic user skills that enable individuals to interact online and consume digital goods and services, to advanced skills that empower the workforce to take advantage of technology for enhanced productivity and economic growth.
  3. Use of Internet – The Use of Internet dimension accounts for the variety of activities performed by citizens already online. Such activities range from consumption of online content (videos, music, games, etc.) to modern communication activities or online shopping and banking.
  4. Integration of Digital Technology – The Integration of Digital Technology dimension measures the digitisation of businesses and their exploitation of the online sales channel. By adopting digital technology businesses can enhance efficiency, reduce costs and better engage customers, collaborators and business partners. Furthermore, the Internet as a sales outlet offers access to wider markets and potential for growth.
  5. Digital Public Services – The Digital Public Services dimension measures the digitisation of public services, and focuses in particular on eGovernment and eHealth. Modernisation and digitisation of public services, including eHealth, can lead to efficiency gains for the public administration, citizens and businesses alike as well as to the delivery of better services for the citizen.

Note that factors included in the Digital Evolution Index like market supply and demand, and innovation are not included in the DESI.

Same leaders

Both the Digital Evolution Index and the Digital Economy and Society Index show the same countries as leaders in the digital market in Europe.
Digital Economy and Society Index

Denmark, Sweden, The Netherlands and Finland are the highest performing countries. They are not only ahead in the EU, but they are world leaders in digital.

DESI shows progress for Europe

The Digital Economy and Society Index improved from 2014 to 2015:
Digital Economy and Society Index progress
Keep in mind that there is no benchmark to non-European countries! Besides that it is remarkable that all countries improved. Also the Digital Evolution Index didn’t show progress for the highest performing countries. I think there’s a little too much optimism here.

The Digital Economy and Society Index has a more optimistic outlook for the digital economy in Europe compare to what the Digital Evolution Index shows us. However both support the case for a digital agenda for Europe in 2020.

Nevertheless the Washington Post showed in June Europe has an acute need for harmonisation. The article states that it’s easier for Europeans to buy and sell online with non-member countries, especially the United States, which accounts for more than half of all the EU’s digital business. Which is rather unexpected for a union. So there is a lot to do for Europe if the leading countries want to keep playing at the world top level and for the other countries not to fall to far behind.

From that perspective it is remarkable that there seems to be little focus on harmonising laws and bringing down barriers for digital trade in the Digital Single Market initiative.

Links and references

Digital Evolution Index shows Western Europe is stalling

Earlier this year The Fletcher School published the Digital Evolution Index. The Digital Evolution Index analyses the key underlying drivers and barriers that govern a country’s evolution into a digital economy:

  • Demand – including consumer behaviours and trends, financial and Internet and social media savviness.
  • Supply – including access, fulfilment, and transactions infrastructure.
  • Institutional Environment – including government effectiveness and its role in business, laws and regulations and promoting the digital ecosystem.
  • and Innovation – including the entrepreneurial, technological and funding ecosystems, presence and extent of disruptive forces and the presence of a start-up culture and mindset.

The data/ scores for all 50 of the included countries (XLS) can be downloaded.

The index is developed to identify how a group of countries stack up against each other in terms of readiness for a digital economy. Based on the performance of countries on the index during the years 2008 to 2013 they are categorised to one of four trajectory zones: Stand Out, Stall Out, Break Out, and Watch Out.

  • Stand Out countries have shown high levels of digital development in the past and continue to remain on an upward trajectory.
  • Stall Out countries have achieved a high level of evolution in the past but are losing momentum and risk falling behind.
  • Break Out countries have the potential to develop strong digital economies. Though their overall score is still low, they are moving upward and are poised to become Stand Out countries in the future.
  • Watch Out countries face significant opportunities and challenges, with low scores on both current level and upward motion of their DEI. Some may be able to overcome limitations with clever innovations and stopgap measures, while others seem to be stuck.

How to read the Digital Evolution trajectory chart

Digital Evolution Index
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The Digital Evolution trajectory chart

The Digital Evolution trajectory chart
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In the example of The Netherlands, their Digital Evolution index is still top-10, however the Evolution within the Digital Ecosystem is at the bottom of the 50 included countries. Similar data is seen for more Western European countries. Of that region the United Kingdom and Ireland are just in the group of Stand Out countries.

Harvard Business Review uses the Digital Evolution Index to compare The Netherlands and Singapore:

Take, for example, Singapore and The Netherlands. Both are among the top 10 countries in present levels of digital evolution. But when we consider the momentum – i.e., the five-year rate of change from 2008 to 2013 – the two countries are far apart. Singapore has been steadily advancing in developing a world-class digital infrastructure, through public-private partnerships, to further entrench its status as a regional communications hub. Through ongoing investment, it remains an attractive destination for start-ups and for private equity and venture capital. The Netherlands, meanwhile, has been rapidly losing steam. The Dutch government’s austerity measures beginning in late 2010 reduced investment into elements of the digital ecosystem. Its stagnant, and at times slipping, consumer demand led investors to seek greener pastures.

Actions for Western Europe

The Stall Out economies of Europe, including the Netherlands, Finland, Belgium and France, could jumpstart their recovery by taking advantage of increased regional integration, selling goods across national borders to the 500+ million consumers in the wider EU.

The Washington Post is skeptical on the creation of a single European digital market. In June 2015 an article stated that it will be hard for Europe to overcome their innovation deficit. This is largely due to confusing and complex national regulations.

Besides that Stall Out countries are also tend to be “aging”. Attracting talented, young immigrants can help revive innovation.

Germany is also in the Stall Out countries but is home to a very ambitious company Rocket Internet. Their mission:

To Become the World’s Largest Internet Platform Outside the United States and China

They have been busy launching e-commerce start-ups across a wide range of emerging and frontier markets. Their companies are poised to become the Alibabas and Amazons for the rest of the world: Jumia, which operates in nine countries across Africa; Namshi in the Middle East; Lazada and Zalora in ASEAN; Jabong in India; and Kaymu in 33 markets across Africa, Asia, Europe, and the Middle East.

Links and references

Theory of constraints

The Goal - Theory of ConstraintsThink it was back in 1993 I first read The Goal by Eliyahu Moshe Goldratt. The book was one of the first and most notable in the genre of business novels. The book – The Goal – introduces the theory of constraints (TOC) process for improving organisations. The book is set in a manufacturing company. However the book provides the context for a more generic approach to continuous improvement.

Theory of constraints

The theory of constraints is a paradigm that states that the output of a process is limited by a very small number of constraints. In a process there is always at least one constraint. TOC offers a process to determine the bottleneck/constraint and than restructure either the constraint or the work around it so the constraint can deliver it’s maximum output. Since the bottleneck’s output determines the output of the business process, other optimisation are local suboptimal interventions that do not generate any real business value.

The theory of constraints boils down to:

A chain is as strong as its weakest link.

More verbose: An organisation (especially a process or a business) is only as strong or powerful as its weakest activity or person. A group of associates is only as strong as its laziest member.

Constraint

A constraint is anything that prevents the system from achieving its goal. In TOC, the constraint is used as a focusing mechanism for management of the system. The concept of the constraint is analogue to the one in mathematical optimisation. In optimisation, the constraint is written into the mathematical expressions to limit the scope of the solution (X can be no greater than 5).

Types of (internal) constraints:

  • Equipment: The way equipment is currently used, is the limit to the ability of the system to produce more saleable goods/services.
  • People: Lack of skilled people limits the system. Mental models held by people can cause behaviour that becomes a constraint.
  • Policy: A written or unwritten policy prevents the system from creating more output.

Throughput

In general the throughput is seen as the movement of inputs and outputs through a production process. Bottomline it can described as the rate at which a system generates its products or services per unit of time.

In the theory of constraints throughput is the rate at which a system achieves its goal. Mostly this is a monetary revenue and not the items or volume created to be sold or kept as inventory.

Continuous improvement

Goldratt - on-going improvementAs said before the theory of constraints offers an approach for continuous improvement. Optimising the utilisation of the constraint is an important part of the process. Of course this could lead to the discovery that another resource became the constraint. So we continu the optimisation.

As Goldratt states in The Race:

In the midst of a competitive race we should not look for an improvement, we should look to implement a process of on-going improvement.

Beyond manufacturing

IT Operations

The Phoenix Project borrows both content and genre from The Goal. It is a business novel that explains how the theory of constraints can be applied to IT operations. The Phoenix Project describes the problems that almost every IT organisation faces, and then shows the practices (based on the Theory of Constraint, Lean and more) of how to solve these problems.

Interesting days for studying organisational culture

These are interesting days for those studying organisational culture or are just interested in this field. It all started this weekend when the NY Times published: Inside Amazon: Wrestling Big Ideas in a Bruising Workplace. The newspaper that won 117 Pulitzer Prices devoted two reporters for six months to this article that is very critical on the organisation culture at Amazon.com. The article was said to be based on interviews with more than 100 current and former Amazon employees.

A lot of reactions focussed on the bias of the NY Times article. An Amazonian posted a respons on LinkedIn . This post can be seen as a a point-by-point rebuttal.

Amazon is a big company, and gets referenced often. I’ve read many articles that describe us. Some are more accurate than others. Sadly, this isn’t one of them. This particular article, has so many inaccuracies (some clearly deliberate), that, as an Amazonian, and a proud one at that, I feel compelled to respond.

The NY Times gave room for the view of Jeff Bezos and other Amazonians as it published Jeff Bezos and Amazon Employees Join Debate Over Its Culture. And of course there is an internal memo from Jeff Bezos (that can be found at the end of this page and on Medium):

Jeff Bezos:

… The NYT article prominently features anecdotes describing shockingly callous management practices, including people being treated without empathy while enduring family tragedies and serious health problems. The article doesn’t describe the Amazon I know or the caring Amazonians I work with every day. But if you know of any stories like those reported, I want you to escalate to HR. You can also email me directly atjeff@amazon.com. Even if it’s rare or isolated, our tolerance for any such lack of empathy needs to be zero. …

The case study continues

That’s were our study of organisational culture continues: Where’s the truth? Is Amazon.com the hell in Seattle? How does this large influential company really behave and does it live up to it’s values. Since the company published its leadership principles we know what it uses to judge itself (or at least says it should use).

Several articles and posts tried to discover the point of view that is closest to the truth (if there is one). GeekWire spoke with a wide range (so probably not the over 100 that NY Times did) of current and former employees to get their take on the story and their insights into the company. It offers a more balanced view. And more and more it becomes clear that perception is everything.

Journalistic questions about The Times’ exposé

And there are other questions to be asked when looking into this matter. That is just what Jeff Jarvis (known by me for his book What would Google do?, but there is more) does in his article Hacking Through Amazon’s Jungle of Coverage.

  • The NY Times article isn’t transparant to what standard is Amazon being held.
  • Another problem to Jarvis is that The Times should have presented enough of conflicting evidence so that we could weigh evidence and decide for ourselves.
  • The Times did not say until halfway down its very long piece that Amazon founder Jeff Bezos owns the Washington Post, which some say is closing in on The Times.

And as Jarvis states:

… one starts to believe The Times might have an agenda, one is left trying to suss out what it might be: against Amazon and its owner, Bezos, who is a competitor; against technology, a direction too much of media is taking…

So the discussion moves to how well the NY Times did on this article and moves away from what should be the focus: issues that arise from high demanding work / work places.

And what did it show me?

Reading all the quotes and soundbites of former and current employees I once again realised that perception is everything. It is not just the NY Times that wasn’t clear to what standards Amazon.com is being judges, none of the employees are clear on this either. What are their expectations of their employer?
And I don’t have SMART criteria either. I tend to benchmark my current employer to previous ones and to my impression of how it is like to work at other organisations. Besides that I’ve been working for smaller companies, I think that I could quite easy come up with former colleagues that were let go that would either bash the work place and it’s culture or to some level agree that there wasn’t a good enough fit.

That leaves me with the question how to deal with the issues that could arise from high demanding work places? What are the issues (in specific cases)? Are there ways of organising or designing an organisation to deal with these? Could we train people to handle the issues we can’t find counter measures for? Please share your thought in the comments…

Design for outcome-oriented teams

While developing an organisation structure for an Agile or Lean business, there is a strong focus on teams being responsible for business outcomes (outcome-oriented teams). These teams are opposed by so called activity-oriented teams (teams responsible for an activity).

To understand the why of the focus on outcome-oriented teams, we need to understand what is a business outcome. Selling a product and generating revenue is an example of a business outcome. This outcome is the result of a chain of activities, like marketing, lead generation, product development, testing and support. To achieve an outcome we often need to break the chain and define suboutcomes. These suboutcomes aren’t that valuable on their own, only in context. If the division continuous, we end up with merely contributory activities. The difference between outcomes and activities is similar to that between user stories and tasks. Activities serve outcomes, like tasks serve the purpose of a user story.

Activities that are no longer directly bound to business outcomes are more likely to be trapped in the pitfall of local optimisation. Activity optimisation is a common cause of silos and of lengthening cycle times. This is because when we organise by activity, no single team can own the outcome (since it broke the being independable requirement).

Careful splitting a business outcome

So we need to be careful how and to what extend we split outcomes. We want to keep both meaning (sense of purpose) and value. How to determine whether a division leads to a suboutcome of an activity? Good business outcomes are:

  • Testable
  • Valuable
  • Independently achievable
  • Negotiable

While splitting into suboutcomes we keep asking whether these suboutcomes remains independent and valuable business outcomes.

Is there still room for activity-oriented teams?

Some support functions in an organisation don’t own independently valuable business outcomes. They are activity-oriented teams, think of departments like HR, admin, legal, finance, controlling. Does this mean that they automatically become silos and should be disbanded?

If the realisation of an outcome is dependent on repeated successful iterations through some core value stream, these activities should not be conducted in activity-oriented teams. Activities that aren’t an integral part of a business outcome’s core value stream could be placed into separate teams without much risk.

However we should remain cautious. Activity-oriented teams tend to “standardise” their operations over time. Their focus moves away from offering custom solutions. Complaints from other teams about rule books and bureaucracy will be your signal.

Definitions

Definitions used in this post are found in Agile IT organisation design:

  • Outcome – An independently valuable and achievable business outcome.
  • Outcome-oriented team – A team that has autonomy and accountability for an outcome. For example a cross-functional product team.
  • Activity – Action that contributes to an outcome.
  • Activity-oriented team – A team that is responsible for a single activity. Usually a team of specialists (marketing, finance, testing, sales).
  • Cross-functional team – An interdisciplinary, outcome-oriented team. It may consist of hard-core specialists, generalising specialists, or generalists.
  • Value stream – A series of activities required to deliver a business outcome.
  • Silo – A unit (team, department) that tends to protect itself and doesn’t work well with other units.

Agile and lean reading list summer 2015

These are the books on agile and lean on my reading list for this summer:

Lean Enterprise

lean enterpriseThe book of the moment on innovation at scale. According to wikipedia (Lean Enterprise):

Lean enterprise is a practice focused on value creation for the end customer with minimal waste and processes. The term has historically been associated with lean manufacturing and Six Sigma due to lean principles being popularized by Toyota in the automobile manufacturing industry (TPS) and subsequently the electronics and internet software industries.

The publishers site on Lean Enterprise:

Through case studies, you’ll learn how successful enterprises have rethought everything from governance and financial management to systems architecture and organizational culture in the pursuit of radically improved performance. Adopting Lean will take time and commitment, but it’s vital for harnessing the cultural and technical forces that are accelerating the rate of innovation.

Agile IT Organization Design

Agile organisation designIn order to scale Agile, it is not enough to just replicate development practices and techniques across teams. We also need to review organization structure and management controls to see if they are in tune with what is needed for responsive IT. Unless we do so, overall IT performance is unlikely to improve. This highly recommended book provides a basis for reviewing and reshaping the IT organization to equip it better for the digital age.

Being Agile in Business

Agile in businessAgile and lean are fast and efficient methodologies you need to change the way you work. This book introduces you to the essential skills and mindsets of agile and lean and quickly encourage you to start thinking differently.

fulfillment vernieuwingen

Normaal gesproken staat het domein van fulfillment niet volop in de aandacht vanwege de nieuwe ontwikkelingen. In de afgelopen maand heeft bol.com twee fulfillment vernieuwingen aangekondigd, waar ik met mijn collega architecten een bijdrage aan heb geleverd:

Bol.com bouwt eigen fulfillment center voor groei en innovatie

Een eigen fulfilment center biedt meer ruimte om verder te groeien. Daarnaast zorgt het ervoor dat we ons assortiment en onze diensten zoals ‘Vandaag Ophalen’ en ‘Logistiek via bol.com’ kunnen blijven uitbreiden. Ook biedt het de mogelijkheid om verder te kunnen innoveren met een nog snellere en betrouwbaardere levering. Gemak voor klanten staat daarbij voorop.

fulfillment centerHet nieuwe fulfillment center, dat in 2017 zijn deuren zal openen zal bij de opening circa 50.000m2 grondoppervlakte hebben. Dat is te vergelijken is met zeven voetbalvelden. De komst van het nieuwe bol.com fulfilment center betekent voor Waalwijk en omgeving opnieuw een groei in het aantal arbeidsplaatsen.

Vandaag ophalen – Same day delivery betaalbaar

bol.com afhaalpuntDe andere fulfillment vernieuwing waar klanten direct van profiteren is Vandaag Ophalen. Vandaag ophalen is een nieuwe dienst die vandaag leveren betaalbaar en makkelijk maakt. Klanten kunnen al binnen enkele uren na bestelling hun pakketje ophalen bij Albert Heijn. Bestellingen die op werkdagen ’s morgens vóór 12.00 uur zijn gedaan, liggen nog dezelfde dag ’s middags klaar bij het afhaalpunt, uiterlijk om 17.00 uur.

Michel Schaeffer, marketingdirecteur bij bol.com:

Binnen e-commerce maken nog maar weinig consumenten gebruik van ‘same day delivery’, omdat ze meestal niet bereid zijn hoge bezorgkosten te betalen. Bij de ontwikkeling van Vandaag Ophalen hebben wij dan ook lage kosten voorop gezet. Door de bezorging van bestellingen te combineren met een dagelijkse bezigheid – boodschappen doen – hebben we de dienst niet alleen betaalbaar maar ook makkelijk gemaakt. Zo kunnen consumenten op één moment van de dag in één winkel terecht voor al hun aankopen. Hiermee maken we ‘same day delivery’ toegankelijk en bewijzen we opnieuw dat online winkelen oneindig veel mogelijkheden heeft.

Contentcuratie met expertlijsten

expertlijst boekenMet ruim 9 miljoen producten in de winkel valt er natuurlijk van alles te ontdekken in een winkel als bol.com. Om je te inspireren en wegwijs te maken in dit enorme aantal, worden er steeds meer experts en productkenners uitgenodigd om expertlijsten te maken.

Naast productspecialisten in dienst van bol.com krijgen verkopers, leveranciers en affiliate partners de mogelijkheid om selecties te maken en zo bezoekers van bol.com te inspireren met hun unieke assortimentscuratie. Uiteindelijk kan iedere gebruiker van bol.com straks zelf een selectie maken van artikelen; vanuit een bepaald thema, een hobby, een actualiteit, specifieke vakkennis of vanuit persoonlijke favorieten. Als lijstmaker kan je zelf een selectie samenstellen uit het omvangrijke assortiment.

Op dit moment loopt de pilot. Ik kreeg de kans om een aantal expertlijsten aan te maken. Je kan ze hier vinden:

Heb je opmerkingen of vragen over de expertlijsten, laat een gerust comment achter.

Meetup maart – Docker en Elasticsearch

Voor maart hebben we twee interessante bijeenkomsten gepland bij bol.com.

Docker Meetup – Deep dive into Docker storage drivers

docker_logoOp 5 maart hosten we voor de tweede keer een Docker Meetup in Utrecht. De presentaties worden verzorgd door:

  • Jérôme Petazzoni (Senior Engineer Docker)
  • Kay Davenport (Developer Evangelist ClusterHQ)

Inschrijven kan hier.

GOTO Night: Elasticsearch

elasticsearch_logoOp 25 maart hosten we voor een GOTO night over Elasticsearch. Sprekers zijn:

  • Anne Veling – Eventual Consistency with ElasticSearch in a mixed SQL/NoSQL Landscape
  • Jettro Coenradie – Elastic.on recap

Inschrijven kan hier.