Monday, August 29, 2011

Collaboration Work-Thru: Tapping the Knowledge of Your People

"We don't want to do Scrum." In the room were about 16 middle-managers. I had presented them Scrum on three different occasions, answered their questions, done Food, showed them (I thought) what Scrum would do for them, and applied (I thought) all the tools of the trade to motivate these people to do Scrum. The debate was endless. For every argument, there was always a "Yes, but..." to answer it. And all those 'buts' added up to 'No'.

What to do now? 'OK, if not Scrum, what do you want to do?' I reminded the assembled managers that the CEO would be back in the room in three hours, and he expected to find how how they want to proceed. I asked them to split into two groups. Each group should create a flip chart showing how they would like to organize product development. After two hours the groups came back together to review and understand each others proposals.

Three hours later the CEO came back, got a presentation on the two alternatives, and picked one of them. To everyone surprise, off they went! The middle management, with the support of their top management, implemented the new plan quickly and effectively. Two months later, the 'adaption' of the organization was mostly completed and 75% of the people involved thought the adaption was a good thing.

Rod Collins
I had stumbled upon a simple form of Rod Collins' 'Collaboration Work-Thru.' I met Rod at the Washington Radical Management Gathering last May where he worked the participants through his collaborative problem solving process. It was a 'Eureka!' Moment. This is a way to leverage the knowledge of the entire company, identify viable solutions (and potential impediments that need to be solved), gain commitment for the implementation while de-emphasizing the issues that people cannot yet agree on. It reminds me a lot of a heartbeat retrospective, except 1) it can be used to solve a wider range of problems and 2) it can be used with much larger groups (15 to 60 is a good number -- I've done variations with groups as small as 3 and Rod has worked with groups of up to 200 people!).

I plan to describe in more detail how to do a Collaboration Work-Thru in a future article, but first I'd like Rod to explain the Collaboration Work-Thru in his own words:

Peter Stevens: What problem did you face when you created the Collaboration Work-Thru?

Rod Collins: In 1997, when I was with the Blue Cross Blue Shield Federal Employee Program (FEP), I was asked to lead the operations of the business. FEP is a unique business arrangement in that it’s an alliance of the 39 independent Blue Cross Blue Shield companies to provide a seamless national health insurance product to 4.5 million federal employees and family members across the United States. At the time, FEP had endured two decades of low growth and low performance, having lost over 23 points in market share in the mid-1970’s and recovering only four points of that lost share over the 20 year period. Our challenge was to transform our business into high growth and high performance. And in order to meet that challenge, we recognized that we needed to change the way we conducted meetings when we brought the different companies together. We had to stop the endless and fruitless debates and find a way to find common ground and reach real closure on our most important business issues. The result is what is now known today as the Collaboration Work-Thru.

PS: What is the essence of a Collaboration Work-Thru?

RC: A Collaboration Work-Thru is a facilitated meeting process that enables a diverse group of individuals to quickly co-create a shared understanding and a clear consensus about the core elements of strategy and the key drivers of execution. The shared understanding assures that everyone is on the right page and the same page, which, in turn, creates a highly unusual level of collaboration and productivity that often results in a leap to extraordinary performance. The key to the success of Work-Thrus is that the process doesn’t allow for the usual debates that render the typical meeting so ineffective; instead the facilitated process engenders a discussion where differing ideas are brought together and integrated to identify creative or breakthrough solutions that work for all the members of the group.

PS: As a facilitator, how do you lead a Collaboration Work-Thru?

RC: The most important rule for facilitating a Collaboration Work-Thru is that the facilitator has to “check his or her own opinions at the door.” Even if asked, a facilitator never gives his or her opinion about the topic under discussion. The facilitator’s prime role is to guide the group in uncovering its own collective intelligence. Sometimes that means the facilitator recedes into the background if the group is making its own progress on an emerging solution. At other times, the facilitator may play a very active role in helping the group to probe a very difficult issue. But at no time does the facilitator attempt to move the group to a pre-determined outcome. The only outcome that matters is whatever solution emerges from the collective wisdom of the group.

PS: What place does debating have in a group’s discovery of its own collective knowledge?

RC: Debate has no place at all. In fact, if a debate begins to break out in a Collaboration Work-Thru, the facilitator will move the group into an appropriate exercise designed to foster a blending rather than a battle of ideas. Perhaps the most important lesson that I have personally learned over 15 years of facilitating Work-Thrus is that there is no such thing as a healthy debate. Debates are about who’s right and who’s wrong, and they tend to further reinforce the entrenched positions of widely disparate views, making the discovery of common ground virtually impossible. Advocates become riveted on taking control of the message so they can advance their own point of view, even if it means imposing their thinking on those who disagree. When one side is able to wrestle control and exert its will, there are always winners and losers. That’s because these verbal jousts often enable coercion by either the majority or the powerful. And in those instances where debates are able to bring together all sides, it’s usually because none of the parties could amass either the numbers or the power to get its way. So, both sides are forced by circumstances to agree to a compromise that represents nothing more than a least common denominator solution. It is often said that a good compromise is one in which everyone walks away unhappy. When debate is the primary process for bringing closure to different opinions, that’s usually the best that anyone can hope for. The problem with debates is that they are fundamentally about getting control, and thus, are poor processes for creating the large consensus necessary for discovering the best or the most innovative solutions.

PS: What kind of discussion is useful during a Collaboration Work-Thru?

RC: The best discussions happen in the small group exercises and in the facilitated large group discussions. Small groups promote greater participation by everyone in the group and provider greater opportunities for everyone’s voice to be heard. Well-facilitated large group discussions enable the group to effectively blend ideas, identify innovate solutions, and create a shared understanding in which all the participants have a stake. These dynamics are what make Collaboration Work-Thrus so powerful.

PS: What results can you expect from a Collaboration Work-Thru?

RC: You can expect to make a leap to extraordinary performance. The most untapped – and often the richest - resource in almost every organization is the collective knowledge of its own people. What organizations usually lack are the processes to aggregate and leverage this powerful resource. When we instituted the Collaboration Work-Thrus in FEP, we made an incredible leap to extraordinary performance. Within two years of incorporating Work-Thrus as the foundation for our management discipline, our operational performance indices made a huge jump from below threshold to record high performance levels, and over the ten-year period from 1997 – 2007, we steadily grew our market share by 16 points.

PS: Thank you Rod!

What happened to my managers who didn't want to do Scrum? Their ideal organization was organized around the different products that they develop. Each product group had an interdisciplinary team that was responsible for the entire product (e.g. marketing, sales, development), and had one person able to make decisions and responsible for dealing with the many other stakeholders. In short, it looked a lot like Scrum, and a few months later, they were training their first Scrum team.

And: Do these challenges resemble those your company? What to make it better?  Join us for the Zurich Gathering For C-Suite Leaders with Steve Denning and myself: Zurich, Sep 12, 2011

Monday, August 22, 2011

Recognition, Committment and the CSM

Scott Ambler recently launched (yet another) attack on the CSM program, pointing out the problems with the CSM program and the lack of identification and commitment of the CSM holders, and challenges the Scrum Alliance to do better.

As Ken Schwaber explained to me once over cheese fondue, the CSM program arose as a tactical response to a concrete problem. "My HR department will only pay for the training if it leads to a certification." "OK, after the completing the course you're a certified Scrum master." The guy got his participation funded, and so the CSM was born.

Since then, the CSM Program has been very successful, but also a victim of its own success.

Those who say the glass is half full will argue this made it much easier to get people into Scrum trainings and disseminate the practice. Those who say the glass is half empty will argue that this was good for selling courses.  The half-full types will now point out the positive effects of having a working business model behind spreading the philosophy. Half-empty: it created a monopoly of trainers, created a dogma around Scrum and much division in the Agile community.

None of these arguments are false. As a non-certified Scrum trainer, I see how much higher the demand is for the trainings from my CST partners, even though my prices are lower. I also see that the participants in a CSM course today, especially a company in-house course, are different then the people Schwaber was training.

Back then, the participants were evangelists and early adopters. I always thought the main purpose of a CSM course was to open your eyes to a new way of thinking about how to do projects. Peer-to-peer not command and control. The course opened a door, and most participants choose to go through it (or had already gone through it, and were looking for ways to bring the passion forwards).

The CSM was a good thing back then, but today most participants are somewhere between early and late majority, and some are even laggards. The volumes are much higher. The expectations on a 'Certificate-holder' are higher.  A certification really needs to certify something, which is not possible in the scope of a two or three day course. So what to do? What would be useful to the participants, useful to the trainers, useful to the market, not encourage dogma or entrench monopolies, but still spread the word?

Branding is largely about recognition, people know what they want and how to ask for it. And CSM is also about recognition for the person who took the course. As a CSM, I have better chances of being employed. The conflict arises when the "certification" promises something it can't really deliver. (And despite Ken Schwabers claims to the contrary, I don't believe passing a written test on juggling proves you can in fact juggle).

What is the alternative? Recognition and Commitment.

'Recognized' simply means that you have done something which the community considers significant to learn about Scrum, e.g. taken a course (e.g. from a recognized Scrum trainer) or passed a test (sponsored by a recognized organization) or perhaps even some form self study. Important is that some sort of community (which itself is recognized) recognize validity of the effort.

'Committed' means that you really believe in the values and principles of Scrum. This could be demonstrated by signing a public affirmation that you really believe in Scrum. This could be like signing the Agile Manifesto, but I would have a weakness for paper and pen - a real signature.

So if you take a Scrum Master course, and sign the affirmation, you would become a 'Recognized and Committed Scrum Master' or perhaps 'Recognized and Committed Scrum Journeyman'. Through experience, training, contributions to the community etc, you could qualify for higher levels of 'Recognized and Committed.'

I think this approach would be a truer statement about what each individual has achieved. It would be something that customers and employers could ask for: 'e.g. I want a Recognized and Committed Scrum Practitioner.' People who don't believe in Scrum would not sign the commitment. They might be Recognized, but not Committed.

Since nothing is being "certified," I think this approach will be less subject to dogma and monopoly. Certainly the people who bootstrap the recognition process will need to create an 'open DNA' and enable multiple paths to 'Recognition.' At the same time, some form of trademarking will be necessary, so that 'Recognized and Committed Scrum Masters' actually have been recognized as Scrum Masters and have actually committed themselves to the values and principles of Scrum.

Postscript: 'Recognized and Committed Scrum Master' could become 'Recognized CSM', a convenient backronym.

Friday, August 19, 2011

Swisscom - On the Road to Good Profits?

Good profits are the result of value that you generate for your customer. Bad profits are value that you extract from your customer.

Long contract durations, automatic rollovers, and cancellation windows (pay an exorbitant fee if you cancel too early, prolong for a year if you cancel too late) are classic examples of bad profits.  Bad products are seductive, because they seem like easy money. But nothing encourages your customers to leave like being shaken down for bad profits. Nothing inhibits your ability to move into a new market like bad profits in your home market. In short, nothing is long-term more dangerous to your profitability than a culture of raking in bad profits.

According to numerous reports, [Six: SCMN] announced that they are eliminating an important source of bad profits - the year-to-year automatic rollover for cell phone contracts. From now on, they have a 60 day notice period once the initial contract length has expired. (And yes, I think it is fair that if they sponsor your telephone, then you should stay with them for a certain period).

Is this move just a tactic, or does it represent a deeper change? Time will tell. We'll have chance at an inside look at how Swisscom thinks when Urs Geiser comes to the Scrum Breakfast in Zürich to talk about the creation of Vivo Casa, Swisscom's Digital TV offering.

What should Swisscom do next? The should take an inventory of their good profits and bad profits. Their good profits should be an example and foundation for the future. And the bad profits? Roaming fees, and especially international data roaming fees, would be high on my list of bad profits. Anything which smells of bad profits should be transformed if possible or simply eliminated.

A good start Swisscom! Weiter so...

Tuesday, August 16, 2011

Thinking every day - Thoughts for July 2011

I thought putting out a radical management thought for the day (#RMtftD) would be a cool thing to do. It would attract attention, stimulate conversations, and improve my own learning. If there was one part that I underestimated, it was the last point. It is a challenge to come up with something interesting to say every day. So I have been reading more and reflecting more on what happens around me.

BTW - the RMTftD has also been a winner on the first two points. I now have over 210 followers, up from 140 when I started two months ago. I have gotten really encouraging feedback from my early retweeters, and stimulated some interesting conversations, like this July's discussion on why management innovation is so difficult.

On good profits, bad profits and the power of market position 

These tweets were largely inspired by Fred Reichheld, The Ultimate Question:
  • Dominant players have economic advantage. If this is not used to make customers :-), position and advantage will not last
  • When a customer feels mislead, mistreated ignored or coerced, then profits from that customer are bad.
  • Bad Profits are about extracting value from the customers, not creating value.
  • Bad profits work their damage by creating detractors - people who will avoid your product if they can and warn others away
  • When did you last recommend a product or company? When did you last warn a friend away from a product or company? Why?
  • How do customers react when upset? They can get even like never before! How many banks delight their customers?
On change innovation and management

These tweets were largely inspired by Don Reinertsen, Second Generation Lean Product Development:
  • Does sensible behaviour prevail against dysfunctional formal process? Maybe for a while. Long term, process "wins."
  • Risk aversion drives innovation from the development process. Middle management is risk adverse. What happens to innovation?
  • A slow innovation process becomes an imitation process. How long does your company need to bring something new to market?
  • The average product developer begins design when 50% of requirements are known. They simply do not publicize this to management.
General cool stuff to stimulate thinking
  • The radical CEO: If management is distant, people wait for orders. My Goal: People think 4 themselves.
  • If you are out of fresh ideas, read a book.
  • More proof that interdisciplinary teams are better: Want a smarter team? Add women.
  • Charisma is the result, not the goal, of leadership. 
  • So many experts tell us management is broken. Why is management innovation so hard to apply?
Why is management innovation so hard to apply?

This last tweet sparked several an interesting twitter exchange with Steve Denning and Don Reinertsen and several blog entries including:
More musings
  • If you want to be read, have something meaningful to say, say it often, and have a catchy title.
  • Scrum and Kanban fans in the same forum? Result: More heat than light. I am a fan of open intellectual systems.
  • In order to achieve speed you must first slow down. Why is slow faster? You don't break things.
  • When you are on vacation, be on vacation. The #RMTftD is taking a break until August 8.
Again, I would like to thank Don for what I think is the most important of all these thoughts: "I am a fan of open intellectual systems." There is no one single right way of doing things, but many right ways. Perhaps there is a best way for you and I am sure you will find it by learning from what is out there and building on it to meet your needs.

Monday, August 15, 2011

Summer Pricing on CSM & CSPO Courses

We at the DasScrumTeam are offering a summer special on CSM and CSPO course in August. We've extended the early bird price for both courses to August 19 (Friday). You can register online:

Thursday, August 11, 2011

Layoffs, Banks and the Blond: A radical approach to reacting to bad results

The scene: A college bar. A group of young men are sitting around a table when a group of young women, led by an especially attractive (blond) young lady enters the room. The men, all budding economists, start planning their strategies to win the attention of the blond - 'remember Adam Smith! Every man for himself and every actor acting in his own best interests (and the losers drink with their friends)!'

One of the young men, John Forbes Nash, realized that every-man-for-himself is suboptimal. The best strategy, the strategy in which each of the young men has the best outcome, is achieved when the group members work both in their own and in their collective best interests. His strategy: "Ignore the Blond!"

Governing Dynamics - "Ignore the Blonde"

Long bicycle races, like the Tour de France, may look like an individual sport, but actually cycling is a team sport. Even though there is a single winner, an individual without a team has no chance. A corporate career is treated like a individual sport, but actually it's a team sport as well.

Last month, both UBS (NYSE: UBS) and Credit Suisse (NYSE: CS) announced layoffs. Together, they only made 1.6 Billion CHF last quarter, so they need to lay off up to 7'000 employees -- between 4 and 7% of the total staff worldwide.

What's happening now as a result of the layoffs?

Everybody is scrambling to maintain their position. People are worried about their own careers, not about the issues of the bank, are certainly not the wishes of the customers. Some people will get laid off, taking their know-how with them. Management is moving people around, teams are getting split up, and Know-how is getting lost.

Even those who stay are afraid of making mistakes, so raising issues is dangerous, decisions get postponed, and innovation has no chance. (Bonus question: How is this different from the situation before the latest round of layoffs?) Result: stagnation at best.

What does stagnation mean? You can see it in the stock price. Except for the bad profits generated by investment banking leading up to the financial meltdown and which were destroyed in 2008-2009 meltdown, these stocks have gone nowhere for the last 10 years (even ignoring the tremors of the last few days).

UBS and CS New York relative Share Prices, 2001-2010

This latest move is nothing they haven't already done before. It will provide short term benefit (maybe), but does not really solve their problems.

What should UBS and CS be doing? Radically managed companies have an open flow of information with quick feedback loops. They have a climate of trust, not fear, so that problems can be identified and rapidly addressed. And mostly, they are focused on the their customers, not on themselves. (People experienced with Agile, Scrum or genuine Lean will recognize these characteristics!)

What do UBS and CS need to do to get back on track? A partial answer is people in these banks need to think like a team, not just a collection of individuals. They need to transform their organization into a team sport so people can work to a common goal with pleasure,  enthusiasm and confidence in the future. They need to eliminate the climate of fear.

How can they do this? Here are a couple of places to start:
  1. Commit to keeping their staff on board and create an atmosphere of confidence.
  2. Change their bonus to systems to reward not personal success (and infighting) but rather team success (and customer delight), especially at the top. More than anyone else, top management needs to work as a team.
  3. Update their concept of management by the numbers to focus not on financial success but rather on customer delight.

P.S. Does this situation resemble your company? What to make it better?  Join us for the Zurich Gathering For C-Suite Leaders with Steve Denning and myself: Zurich, Sep 12, 2011

Tuesday, August 9, 2011

Managing by the Numbers in the 21st Century

According to Radical Management, the primary purpose of a company is to delight its customers.

Managing based on customer delight really is a radical change. Today, corporations are "managed by the numbers", i.e. financial results.  Why is customer delight now more important than financial numbers. And how do you know if your customers are delighted?

Delighting the customer is essential because customers can go elsewhere. Never before has it been so easy to compare the features of different products, compare prices or share information about a company’s products, services and support. Nor has it ever been easier for new competitors to enter a market. The cable company is now a telephone company and vice-verse. In short, customers have more power than ever before. So your relationship with your customers is more important than ever before.

Some might say customer satisfaction is enough. What does satisfied mean? It means that the customer has nothing to complain about, but nothing to write home about either. So if your customer is merely satisfied, while he is unlikely to say bad things about you, he is unlikely to encourage friends and colleagues to do business with you either.

It's the customer, stupid!

Others might say, returning a profit to the shareholders (or more immediately, satisfying the boss) is more important than delighting customers. Who is the ultimate source of money in the company? Not the shareholders, the customers! Profits and growth are a side effect of producing genuine value for your customers.

If you are focused on anything but your customers, profits and growth will suffer. If you doubt this statement, think about companies that make you happy: Apple (AAPL) is probably near the top of this list. Look at their profitability and share price over the last 10 years. Then go look at the stocks that make up the DJIA, SMI or most other important indexes. The few companies that are doing well are those that delight their customers! These are not the companies managed according to the classical rules of management. Everyone else is stagnating or worse.

So how do you quantify and measure customer delight?

One of the grandfathers of Radical Management is Fred Reichheld, author of ‘The Ultimate Question’. Based on one simple question, he could classify customers according to their enthusiasm for the company: Promoters, Detractors and Passives. The question was, “On a scale from 0 to 10, how likely are you to recommend this company to someone else”. Promoters answer 9 or 10. Detractors answer 6 or less. His index is called the Net Promoter Score (NPS). You can calculate your NPS with this simple formula:
NPS = %Promoters - % Detractors

An NPS close to 100% mean virtually all of your customers love you and would buy again from you. A score near 0 means your customers don’t care about you. Of course a score much below zero means your customers are warning their friends away from you.

Reichheld discovered that that best growth engines, e.g. Amazon (AMZN), Intuit (INTU), eBay (EBAY), or Costco (COST) had NPS scores on the order of 50 to 80%. Most companies slog along at 5 to 10% and many companies, indeed some entire industries had negative NPS scores. He found that these abysmal scores explained the inability of companies to deliver profitable, sustainable growth.

Scrum, Customer Delight and the Net Promoter Score

What struck me was that many of Reichheld's references are Scrum or Lean references too. Intuit was a featured case study at the Scrum Gathering in Stockholm. Southwest is case study from Leading Lean Software Development from Tom and Mary Poppendieck. And even Enterprise Rent-a-Car featured small teams, daily stand-up meetings and measured NPS monthly at the branch level, in a process very similar to Scrum (with a single entry in the sprint backlog: improve customer delight). BTW privately held Enterprise overtook market leaders Hertz and Avis and is now twice the size of its nearest competitor.

Managing by Customer Delight trumps the classical managing by the (financial) numbers. Scrum, Kanban, Lean (in all its flavors), these are all part of much larger transformation of our economy. A transition to a radically better form of management.

P.S. Want to make your organization a better place to be? Join us for the Zurich Gathering For C-Suite Leaders with Steve Denning and myself: Zurich, Sep 12, 2011 

Monday, August 8, 2011

How to chill your company

Does anything do more damage to motivation and morale than a severe reprimand? Is anything more critical to a company's ability to innovate than motivation and morale? Can you be innovative in a climate of fear?

During my last trip to the States I heard various stories of people being called on the carpet by their management. Here's a typical story: John (name changed), a senior engineer with a passion for his organization's mission, had been building informal contacts across the organizational silos to improve cooperation, collaboration and innovation in his organization. The organization was losing the interest of its customers, and everybody felt an urgency to get the organization going again. Over time, many people become interested in John's idea and so they decided to have a little gathering.

The organization's top manager had been avoiding the topic and had cancelled every meeting John had tried to schedule with him to discuss this issue. When John sent out the invitations for the larger event, he neglected to invite said manager. What happened next is not exactly clear, but two days after the invite, this manager was quite upset. He called John into his office, chewed him out for over an hour and forbade John to ever raise the issue again. While John was not issued a formal reprimand, he left the meeting wondering what his future was at the organization.

What happened? John was "out of control" and the command-and-control hierarchy reasserted itself.

Do things like this happen often? I asked this question to an agile coach at large bank here in Zurich. His response: "Are you kidding!? All the time! Most recently at yesterday's sprint review! It's part of the culture."

Have you (or someone you know) been chewed out on job?  What impact does that have on you and your coworkers? Sound out on twitter! #chewedout

P.S. Want to make your organization a better place to be? Join us for the Zurich Gathering For C-Suite Leaders with Steve Denning and myself: Zurich, Sep 12, 2011