Tag Archives: organisation

Organizational Debt

Organizational DebtEveryone knows what debt is. If you are in or around the software development community you probably also know the term technical dept. For others:

Technical debt is a concept in programming that reflects the extra development work that arises when code that is easy to implement in the short run is used instead of applying the best overall solution.

Or as Ward Cunningham describes it:

“Shipping first-time code is like going into debt. A little debt speeds development so long as it is paid back promptly with a rewrite … The danger occurs when the debt is not repaid. Every minute spent on not-quite-right code counts as interest on that debt. Entire engineering organisations can be brought to a stand-still under the debt load of an unconsolidated implementation.”

But there is a third kind of debt: Organizational Debt. Here we pay interest on bad decisions of decisions that we put off. This, of course, has a strong impact on organisations.

Some definitions of Organizational Debt

In organizational debt is like technical debt but worse Steve Blank gives this definition:

Organizational debt is all the people/culture compromises made to “just get it done” in the early stages of a startup.

However, I think that organisational debt isn’t a startup thing. It is worse in other organisations since there is a large accumulation of bad decisions and decisions not taken. Besides that larger and/or older organisations tend to have more rules to work around.

That is why I like the shorter description offered by Scoot Belsky in Avoiding Organizational Debt:

Organisational debt is the accumulation of changes that leaders should have made but didn’t.

Another interesting description is given by Aaron Dignan in How to eliminate organizational debt

The interest companies pay when their structure and policies stay fixed and/or accumulate as the world changes.

This one really goes from the VUCA point. The ever changing world in which organizations have to adapt or are to be extinct.

Scrum guide is updated

Scrum Guide Scrum Values Just last week the latest update of the Scrum Guide was released. In this latest version of the Scrum Guide the five values of scrum play a more important role than in previous versions. In my 4 year old Scrum Guide Mind Map these values aren’t around.

These values amplify the power of Scrum by providing a compass for decision making. They help teams adopt Scrum and deliver amazing software for their customers. They also prove fundamental to create a great place to work.

Scrum values

The Scrum values are:

  • Courage – Being transparent, but willing to change even if that means accepting that you are wrong, or that your opinion is not the direction that the team is going.
  • Focus – focus on what’s most important now without being bothered by considerations of what at some point in time might stand a chance to become important.
  • Commitment – commitment is about dedication and applies to the actions, the effort, not the final result.
  • Openness – Highlighting when you have challenges and problems that are stopping you from success. The empiricism of Scrum requires transparency, openness. We want to inspect reality in order to make sensible adaptations.
  • Respect – Helping people to learn the things that you are good at and not judging the things that others aren’t good at.

There is an interesting post on these values by Gunther Verheyen.

Experiences with Holacracy

There is a growing number of books on holacracy. One of the first on this subject without even coining the term was Eckart’s Notes. Also the ones on Semco (like Semco style and Maverick!) are gaining popularity. These all describe case studies, where Reinventing Organisations shows development stages in organization. These in turn are based on literature and case studies like the one that is described in Eckart’s Notes.

Since we are experimenting with holacracy at Bol.com I recently read Getting Teams Done. It gives a great introductions and offers a practical approach.

Holacracy cases

Recently there were some case studies and testimonials of the use of holacracy published at Medium.
Path to holacracy

The Dutch design company Concept7 has experimented with a number of ‘management styles’ over the years. Their objective has always been clear: to foster freedom and empowerment in their employees. The entire staff has been working with holacracy for a few years now. Lauren shares her story.

The founder of Voys, Mark Vetter, has always believed in self-organisation. He claims holacracy has brought us accountability, entrepreneurship, and faster evolution. Check Mark’s story on getting things done in a company. The Voys way is published in a book on the way they are organised.

The founders of the Dutch ‘user experience’ company Valsplat believe it is utmost important to bring your whole self to work, or even express or develop your talents. Nils claims holacracy has provided me with tools that help me focus. He states:

Holacracy helps us to become the best possible version of ourselves

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.

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.