The changes Australia must make in the digitally disrupted world

If we are to keep up in the new world, I think Australia needs to change. We are besotted with the “corridor of comfort” – we don’t like tall poppies and distrust bankrupts – we like the middle too much.

We need to celebrate our successes and support those who fail. In the words of Winston Churchill: “Success is stumbling from failure to failure with no loss of enthusiasm.”

http://www.afr.com/technology/the-changes-australia-must-make-in-the-digitally-disrupted-world-20150904-gjeym9

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Risk Management in a Digital Business

I had the pleasure to have had a 6 months sting with a digital tech startup – it looks and feels very different from the previous company I was in. From the size, people, to the culture, operational priorities, they are all different. But there are common things below the surface– revenue bottom line, customer value as a key driver and back office support functions such as HR, Finance. What is fundamentally different is the pace it operates, its responsiveness, use of data and the capacity to transform concepts from ideas to products at an amazing speed (GTM).

Managing two priorities

The very nature of digital means that you constantly managing two competing priorities – constant and speedy innovation vs. the achievement of long term strategy – or as a respected CIO put it in analogy – growth pain of a teenager wanting to party hard but also grow up. While in traditional environment, balancing tactical and strategic decisions is not a new concept, in the new digital age, this must be done ‘on the fly’. Much of the short-term innovation (tacticals) actually helps solidify/confirm/reinforce the longer-term strategy and the ability to quickly pivot becomes a key ingredient for success.

This is where aspects of Agile and Lean methodology I believe is the underlying factor. And I believe it’s an irreversible trend. It helps to deal with this constant change and being agile becomes a way of thinking and way of work, rather than a simple project management methodology.

See my previous posts on How does risk management stay relevant in a fast-evolving digital world? And How does risk management stay relevant in a fast-evolving digital world? (Continued)

Trial and error and de-risk

Underneath all great innovations is a common thread, which is the meeting of a demand of a customer. Because customer needs change all the time, the ability to innovate must adapt to it. What drives the success of a tech company is this concept of minimum viable product – being able to deliver incrementally and quickly, but also shut down those not meeting the needs. Forget about elaborate planning, business casing, projection etc, get the hands dirty and trial, test, de-risk, iterate and refine.

Not all projects survive because not all of them were good ideas to start with. Baby steps and thin slices make achieving something tangible easier, make decision making easier and worst case it makes the failure feel less painful and costly. The company I was in had a half yearly ‘hack days’ where all employees are encouraged to down tools and collaborate with anyone they like and work on a mini project for whatever the problem they feel passionate about solving. The end result is one that surpasses all expectations – lots of great ideas, lots of happy employees, lots of team building and lots of commercialised products.

Agile culture and risk culture

Arguably building this sort of culture is harder to do than building a risk-aware culture – yet I believe a collaborative, transparent and agile culture will embrace concept such as risk just like anything else. I’d go further to say that digital environment will foster a risk-aware culture faster and more effective than traditional management environment.

The culture that fosters innovation ultimately is the culture that allows for experimentation and failure. Whilst superficially it sounds not so rosy and presents challenges to risk professionals – because failures actually can result from a lack of risk consideration and can mean the eventuation of the risk you want to prevent at the first place, I believe it can be managed because the ingredient of a risk aware culture is there – collaboration, transparency, value driven. In this sort of environment, its more likely that whatever the decision made is actually a risk-informed decision and the team is conscious of the risks involved in getting down to the path we chose.

Cross-functional Collaboration

Another driver behind digital success comes from a deep-rooted concept that is cross-functional collaboration. Sales, marketing, finance and aspects of IT all become part of an extended team. To bring all these personalities together is a monumental challenge. The tech teams are not motivated nor challenged in the same way that Sales or Marketing teams. I had been to standups, inceptions, townhalls and retros and everyone has something different to contribute. How does risk present itself amongst all of these dynamic people remains an interesting challenge for me. But one thing for sure. Risk people need to be physically present, and only being present you can demonstrate that you are trying to understand the problem at hand, the thinking, the approach and the solution adopted. From there, maybe a well-thought out risk advice can be provided.

Different dynamics in IT

I also happen to have spent a lot time with our IT community. My take is that IT has a totally different definition in a digital environment. Using agile, the boundary between IT and business is ever blurred. IT is ‘actually’ the enabler to execution of the strategy. Nowhere else I saw IT being so value driven and collaborate with the rest of the business community so seamlessly. Via delivery leads and technical leads, real collaboration happen and everyone focus on one common delivery goal – customer.

In many businesses the IT team are purely infrastructure and or operations as a service function. However in digitally centric businesses the IT teams are your conduits to execution. And, much like how sales and marketing staff are evolving so are these IT teams. Even within IT community itself, evolution occurs as we speak, concepts such as scaled agile framework, scrum, lean, devOps, extreme programming are being trialled, adapted and matured. Logical organisation structure such as squad, tribe and guild are created to allow for one thing – better collaboration.

Conclusion

Digital is the buzz word now and disruption to the existing business is what most fear. As many embark on the digital transformation journey, risk management can play a unique role in making sure the end objective is achieved. Having a risk view to the whole digital landscape provides a balanced view on the pros and cons. Importantly, it ensures the adoption of a technology or digital initiative is not made independent of the benefit it can provide. A conversation (risk assessment) on the ‘value’ from moving to digital can save millions on what otherwise would have been spent on just another ‘feel good’ solution. Technology is an enabler, risk professionals need to remain objective and inform management that the customers forever sit at the heart of the solution and technology is there as merely a conduit.

Applying agile to non-software development settings

“Agile” has been a buzzword in the software industry for quite some time now. These days you will be surprised to hear if an IT project is not utilizing some form of agile methodology. However, in more recent times agile has been showing up in mainstream publications touting success in various non-software project settings. The Wall Street Journal recently posted on how modern families are using agile to improve communication. Here’s a recent TED talk about again, using agile in the family. Finally recent article on Forbes about how agile is the “best kept management secret on the planet”. Clearly, people outside of software are seeing value in the ideas and principles behind agile. Culture and organisational structure  aside, what is agile that is so universally beneficial?

Let’s go back to the basic principles and philosophies behind agile and how they can be the catalyst for improvement:

  1. MVP

Minimum viable product – breaking things to manageable pieces is such a no brainer. By piece-mealing a often challenging and complex work into chunks not only improve workability, but more importantly reduce the fear and uncertainty associated with making the first step. Having something to celebrate also creates a sense of achievement, no matter how small, that boosts morale and teamwork.

  1. Feedback loops

Having key stakeholders continuously engaged is the best insurance for last minute surprises – and nobody likes surprises. Taking stakeholders along the journey also exposes them to not just the achievements but challenges faced so they understand where the time, effort and money were spent on. With a shared goal toward success, feedbacks identify all those negatives such as progress that is off track, group think, inaccurate or unrealistic requirements, poor quality delivery etc.

Agile teams do this in regular meetings called retrospectives. These meetings happen regularly (usually every 2 weeks) and the team is encouraged to talk candidly about their work and how things are going on the team. Positive things are reinforced, negative issues are discussed openly, and ideas for changes are considered and planned.

  1. Transparency

Agile teams are famous for their ‘walls’. Using a physical task board makes your team’s work more visible. Whilst tough to start this at first, creating columns for things to do, work in progress, and completed tasks can do wonders for your team’s communication and collaboration on projects. It is simple but there is something physiologically satisfying about moving a task across the board.

  1. Outcome-driven

Hands up if you intuitively think about your work in terms of output. How many features did we release? How many emails, phone calls, etc. did we make? How many ticks of approvals achieved? Us humans think about our work in terms of output because it is easy to measure (also we were told to set these measures up front, so we can call our goals ‘measurable’), but it’s not what really matters. What matters is the impact or outcome of our work – the value it creates. Maximizing the outcomes is a fundamental principle of agile and I feel it’s the most powerful.

Opposite to value is waste. One of the agile principles is around the idea of simplicity. Is the team empowered to question the value of a piece of work? Be willing to ask if and why something must be done If it is no longer valuable, be willing to see what happens if you stop doing it. Look for things that are wasteful and eliminate them. This will free you and your team up to focus on the things that drive outcomes – the things that add value.

  1. Change is constant

Eisenhower once said “Plans are worthless, once the first shot is fired, but planning is still essential” we live in a world that sees information or circumstances change at a speed never seen before. Assisted by technology, information penetrates fast and the power is squarely in the hands of consumers now. Be very cautious about making detailed long term plans that are costly to change. Getting into the rhythm and embrace changes and be agile about changing directions, requirements, deliverables, in fact, Everything.

6.  Self organsing teams

Spotify uses the principle that the ‘culture is the sum of everyone’s values and behaviours’. Thoroughbred agile lives only in an environment of empowerment and trust. I personally think there is no better way than letting the team self-organise to demonstrate the company’s commitment to empowerment and trust. People with intrinsic motivation are more committed, outcome driven, push to limited and generally happier.  Tell them the problem at hand and don’t tell people how to do things, articulate the problem, create a facilitating environment and let them surprise you with their results.

In all, these above principles and their perceived benefits I believe transcend software development projects. Be it traditional product development, BAU operations management, business improvement, incident management and problem solving, adopting some or all of these principles could change the way it sued to be and potentially deliver massive benefits with little costs.

What is your experience with agile in non IT project?