Transformation: Beyond Control
Transformation: Beyond Control
The majority of digital transformations are failing. It's not because people don't understand Scrum but because they are failing to transform their heads and their hearts as they approach new ways of working.
In this session Pete Anderson of U.S Bank will look at some core Product Values and their practical impacts on each of the layers of the Enterprise.
So, about 30 years ago, I graduated from college with a studio art major and the last thing I thought - it would be that - that major would equip me to do transformational change at Fortune 500 companies but that's exactly what it did.
And I'd love to draw the parallel for you and start first with the Transformation definition. So, for me, transformation basically means taking the status quo of something and adding or subtracting different elements that ultimately result in something that's new, when it's all said and done. And so, for me, the practical example from the pottery studio that I did for part of my ceramic’s degree, I was taking a lump of clay and converting it into something like this as a small shallow bowl that's then decorated with in this case early 1900s printing press letters. In order to create a whole different surface texture and to provide both a functional piece as well as something that communicated a message. And then ultimately it goes through a firing process where it goes into a kiln and it gets heated up and turned into something hard that I can then glaze. So, I sprayed glazes, I'd wore face masks back before they were cool and ultimately fired again upwards of 2000-2100 degrees somewhere in there and you ended up with this finished piece and so you've transitioned from literally a lump of clay to something that's entirely new and so that I learned a lot from that process.
To start with, I learned that practice is the key to ongoing success, essentially. It's the only way to hone your craft. I learned that perseverance and patience are tied together and that when you're doing something that can push the edges and maybe pushing the clay a little bit further than you want it to go, you can fail and in the pottery sense, it's having those things collapse on the wheel for you and basically, be throwaway clay and obviously there are parallels in transformation as far as the failures that we have from day to day as we try to drive change and then last but not least patience. Essentially, I learned that patiently experimenting and getting feedback from folks that had more experienced than myself was absolutely critical for the process of becoming better and better at my craft. And then last but not least, I learned how to give up a little bit of control you look at a piece like this and it actually looks like it's pretty well controlled but in actuality, we always called the kiln, the keeper of the kilning gods, where essentially we do all this work on a piece, you put it in the kiln and depending upon where it sits in the kiln, it could get a little bit hotter, a little bit cooler depending upon the amount of glaze that you put on it. Maybe a little bit too thin, maybe a little bit too thick. It can result in a very, very different piece and often very different than... This particular piece was made about 15 years ago, somewhere in that ballpark, maybe 10 and if you look at it, it looks like there's three different glazes on it. The black glaze on the interior, the orange glaze on the top and the white on the bottom. In actuality there are only two glazes here that the orange and white are the same glaze in different thicknesses. And so, what I designed was not what resulted from the process, however, it was an outcome that I loved. It was a balanced piece of the white kind of gives it a pedestal for the rest of the piece to kind of float on top of and ultimately it turned out well. So, I could control a portion of it when I couldn't control it all.
And so, if we fast forward to today, I've been working in two Fortune 125 companies over the past five years to help change how they work and essentially in the industry, we call it digital transformation. At the end of the day, it's the same goals, take the status quo, add and subtract some different things into the mix and then ultimately end up with something that's significantly different than it was in the beginning and something that's valuable and beautiful. For me, that beauty and this one is an orchestra of thousands working in new ways and learning new things that ultimately produces better outcomes for the business that we're working with.
In short, there are about five different reasons, the significant things that we have to go through in order to make this happen and they're not easy to do. Number one, we just have to convince our senior leaders to change how they fund all of the technology work normally in the north of billions of dollars then we have to figure out how to reorganize the organization into a more of a cross functional team. We have to politely invite a portion of the workforce to leave the company most often and we have to retool those that remain. We have to convince folks that have been used to working on a checklist that thinking for themselves and working within a framework or with some guidance is how they want to operate in the future. And we also have to talk them into collaborating with each other in ways that they haven't in the past. And all the cool kids are actually doing it. It's amazing. If you look at some of the data international data corporation in 2019 released a study that indicated $2 trillion were spent on digital transformation just last year and with COVID and so on. I'm sure that number is actually going up this year. And about 87% of companies researched by Deloitte in 2019, indicated that they expect it to be disrupted by a digital competitor and only 44% of them thought they were ready. And last but not least both Bain and McKinsey have done work to quantify the success rates of these digital transformations or Agile transformations in many cases as well. The numbers are pretty staggering. Bain's study in 2017, came back with about 5% success rate. McKinsey came back with 3% success rate with only 14% of those 3% sustaining the positive change that they took, that they were able to adopt from their changes. And so, what's going on? We've got all the money in the world. We've got senior leaders that are willing to support change and probably even command the troops to make it. So, why aren't they succeeding? My hypothesis is that essentially we're missing out on the head and the heart of transformation and that the majority of transformations that I see and that I've talked to people that are a part of tend to overemphasize the tactics and they replace one prescriptive checklist in the form of a traditional waterfall solution development life cycle with a new checklist based on scrum and based on the ceremonies that correspond with them or based on the scaling framework and so on. What we glaze over no clay pun intended on that one. When we glaze over it are the people that are involved with making this change real. And so, we have to make sure that the people that are involved understand why we're actually pursuing the change. They understand the benefit of the change for them personally. And they also have to be really, really clear on the fact that their unique skills. Their unique mindset, their unique experiences all weigh into the success of the transformation. And so, we need their authentic selves at the table and we need all of their experience to come with them. We also need them to understand that what they've learned in the past does not define them. What defines them is their ability to learn in the future. We need to build resilience within the folks that are going through this change in the middle of it, it feels like a storm. It feels like a tornado. And so ultimately we have to be able to let them know that it's all worth it as we go through some of the tougher parts of change and last but not least, we have to make sure that they know that it's okay to hurt in the middle of this, it's not always an easy process to go through transformation. And it truly is okay to have an emotional response.
The parallel that I like to draw actually goes back to when I was a wee kid here, I'm the little guy that's being held up by my dad in this photo. And this was my first experience with transformative change as a youngin. My dad was great, he did the best that he could as a parent but for a variety of reasons, a couple of years after this photo was taken, he was no longer in the family and so if you think about the operating model that I had as a kid with two parents, a brother and myself that got blown up whether I wanted it to or not, our relationships were changed. There were new stresses, there were new roles that I took on and basically the norm, the status quo had changed pretty dramatically. And I share that story, not to have some big pity party. My parents both found other people to marry and we appreciate both of them. My brother and I have turned out to be contributing citizens in our different ways. So, that story ends well, when it's all said and done, however, the experience of going right through it was incredibly difficult for all involved. And so, I want to draw the parallel back to those that are going through transformation in the corporate world.
We take a look at it through their eyes for a second. You start to understand why some of those failures may happen. So, if I'm a project manager that's been doing great work for 20 years and delivering on time under budget with the appropriate scope, be a waterfall process. I'm going to see coaches coming in and saying, "You're doing it wrong. That's how we used to do it. There's not a value in working that way anymore." And all those relationships that you've built over the years at this company while they're valuable about a third of you need to exit the company and you don't get to choose who walks out the door. And at the end of the day you're on the hook for this change whether you like it or not. And so, you need to be able to embrace it. You need to be able to learn and you need to be able to go forward. All of a sudden, the success rates to me feel relatively logical. If I'm super focused on the tactics and I'm not thinking about the impact that I have on the people it becomes difficult to help them change.
And so, in response to that type of issue, I've been working on a set of values that can either be referred to as transformation values or product values but I've been working on these for about six years and they've truly evolved over that timeframe. And I use these to help establish a foundation for mindset and culture. Before I dig into tactics of how people work from day to day. And I start with humility and ultimately if we can and assume that we're wrong until we're proven right. It completely transforms how we think about things and I'll talk about some of the practical behaviors that are impacted by these values in just a second. But that humility component is critical because it impacts all of our behaviors as we go forward. The head and heart empathy, passion and curiosity. All of those things basically enable us to connect with our customers, connect with each other, pursue a growth mindset and ultimately create better products for our customers. And from a delivery perspective, I having a bias toward action, working with people that we truly care about is family and having the ability to make decisions and say no to some things that feel important in the moment but that maybe aren't the most important things to focus on at any given time. These basically are the foundation for change and the foundation for establishing that connection with the head and the heart, the blue line beneath these seven circles is trust and that is truly beneath all of these and requires us to trust those around us and to enable them to do their jobs, to empower them, to do their jobs to trust that that decisions can be made without everybody having to be in the room at the time and so on. But if we just took these values and left it at that, it's a little fluffy, right? I don't think any of you would say, "Pete, you're insane. This humility thing is ridiculous." Empathy, passion, curiosity. I disagree with all of that. Most of the time, it's pretty tough to disagree with these types of statements. But it's also difficult to make them real. And so, here's some work I've been doing over the last quarter or two. I've been basically taking those values and starting to break them down into actionable things or responsibilities or behaviors for different parts of the organization. On one side, I've got the senior executive team in the center. I've got kind of middle management where I kind of set those directors, senior director kinds of folks, and then ultimately individual contributors or lower level management. And so for each of them, these values have practical implications and practical next steps for senior executives looking at humility, it's really all about them providing crystal clear vision and Northstar for where we're headed as a company and getting super focused on what are the outcomes that we're trying to accomplish here and how are you and then measure success before it's all said and done. And then from a tactical perspective, we've got to defer that down to the next layer at a minimum sometimes even further. For that middle management crew, it's all about building diverse teams and driving a growth mindset for continuous learning and providing safety for our individual teams to go off and do the work to learn and to come back with what they've learned. And for our individual contributors, it's about getting customer centric. If I'm humble and I recognize that my ideas aren't all the perfect ideas. I'm going to go talk to the people that I actually serve to make sure that I'm doing the right thing. I'm going to focus on continuous improvement all the time, because I've never arrived if I'm humble and then I fall in love with the problem instead of the solutions that I come up with and that ties into the customer centric routines and so on.
Every now and again, I do get somebody that gets concerned about leading with humility because they have this sense that there's weakness in that word or there's a lack of confidence in that word. And the way I like to describe it as that humility is realistic wisdom. It's being smart enough to know that you're not right all the time. Marty Cagan another speaker at this week's event, talks about how a really good one product manager succeeds less than half of the time with their product ideas. If we accept that as truth humility is the only thing that makes sense versus when compared to an arrogance type of mindset.
Next up, we have the head and heart and kind of how those translate back for senior execs, again, we were talking about building out full stack teams. So, getting rid of the organizational silos, there are very few people in an organization that can truly support changing the org structure and those senior executives are those folks. And so, we need them to be able to buy into the fact that now it's not about the business and technology and maybe some other design folks, it's about a shared team or a team that has a shared goal that they're pursuing and we want them to be focused on what the teams are learning. And we also want them to start bringing in some of the folks from the front lines to help drive strategy for the company as a whole. We want senior execs that are a little bit detached by nature to be able to be informed by those that are closest to our customers. With middle management, we want to make sure that they're solid at translating and that they can clearly articulate the goals that have been articulated to them from senior executives while also inviting opposing views and rewarding outcomes of those individual contributors. So, as opposed to saying, "Hey, you completed your project on time and under budget." They're going to ask questions about what we've accomplished whether it's an increase in sales or it's an efficiency play or a customer satisfaction play. We're going to focus almost exclusively on those outcomes as opposed to the features that we're building. And then for individual contributors, it's how do I have empathy and passion and curiosity with all of the people that I interact with, both the internal product community and the external product community. How do I make sure that I have empathy with folks that have different skills as we co-create items together? And then how do I make sure that I really know my stuff when it comes to the domain that I work in, the type of work that I bring to the table, et cetera. And so, these changes that we talk about at an enterprise level don't happen all at once and you can't control the whole enterprise. What I've seen quite a bit over the last six years is folks that use, ‘The I can't change some big thing for the enterprise’ as the excuse to not change something for themselves and these values are intended to drive behaviors that show you that you can actually make changes to the areas that you can influence. And that ultimately, if we all do that locally, we will have an enterprise change before it's all said and done.
From a delivery perspective our senior executives need to support the teams by managing their own work in progress. And by limiting the number of unique strategies that we're pursuing at any given time by doing that, it's actually a small step. It's not eliminated reading strategies. It's making them visible when it's most appropriate to have them be visible. We want them thinking big but we want them being able to support small scale work to prove out our strategies. And this is a big one, we want them to be able to, to rethink how we fund our work. We want them to fund human beings, not projects. So, fund people that own business capabilities but not necessarily the individual features of those capabilities. Set a goal for them, funded the run rate for those teams over time. But don't get hung up on the gory details of how they're going to solve for their problems. For middle management from a delivery perspective, this is about providing routines and ways of working. I'll show you an example of that in just a minute. It's also about protecting your teams from distraction and from a command and control environment, if that pops up in a different subset of your organization. And it's also about prioritizing learning and making sure that people have their own development plans as they go forward. For individual contributors, this is about operating with urgency and accountability. It's about becoming experiment designers. So, how do I challenge my ideas but don't spend months analyzing it, challenge your idea, design and experiment to either prove or disprove what you're thinking and move forward quickly and then really be excellent for and to each other, as teammates. It's absolutely critical for us to maintain the trust that we need. And speaking of which a few of the things that I just mentioned, all support that trust component. When I'm hiring, I hire for people that are aligned with these values and obviously have the aptitude to do the work but honestly, it's values first because I truly believe that most folks have the aptitude to learn the skills that we're talking about here. I'm all about guardrails instead of governance. So, I'll talk about that in just a second with our toolkit and then ultimately self-organizing teams. This one is a cliche in many settings, but I know for myself, I have a team of 13 that will likely grow to almost 20 by the end of the year. And if I "manage them", there's no way that I can manage 20 people. I can lead 20 people. I can provide a destination for them, a vision something that they can pursue and then allow them to self-organize around that but the sheer size of my team is forcing me into new behaviors as a leader. I ended it ultimately, we talked about accountability and basically having clear accountability for the outcomes that we're pursuing.
All right. Next up, we've got a product toolkit. So, when I talk about guardrails, this is a good example of just that. This is nothing more than curated content intended to support product owners, scrum, masters and coaches that are helping change how the organization works the goal is to get aligned on language, it's to enable flexibility but to still give people enough structure that they understand, if they're headed down the right path. It's not prescriptive. I know there are arrows, forgive me, on this particular slide that show kind of a logical order but in actuality, this work is happening simultaneously across the team all the time and so if you stop and think about this, this is also not the end all right. There are other activities that you can do but this is kind of the bare minimum that we want all of our teams to be thinking about. As we define our work, we have a charter to say why we're here. We have personas to say who we're serving. We have OKRs' just to measure success for us or to define how we will measure success. And we have a product outlook that balances the learning that we have to do with the delivery commitments that we're making is like a traditional roadmap. The big difference in mindset as we transform is really around this idea backlog. So, shifting from a spot where we just define what we want to build and go build it. In this case, we're saying all of our ideas are just guesses. So, we need to prove or disprove those things as quickly as possible. And that's where some of these discovery tactics come in. I give a bunch of credit to Jeff Patton for his influence in this space where we use his opportunity campus, and some of the story mapping functions that he describes in his book, User Story Mapping., for opportunity canvas is to establish a customer and business value for a feature or set of features. And for story mapping it's to provide context for the customer's experience as they go from end to end. We try to make sure that we're prototyping things as opposed to just taking them straight in to build them. And so, we'll prototype, we'll get those in front of customers. We'll learn from that and cycle through that discovery cycle a time or two before we decide whether or not to trash an idea or recycle it to use it later or if we're confident enough in our direction that we take it forward to delivery. Once in delivery, we use all those modern dev practices to deliver into production and on the tail end of that, we look at the impact of the work that we've done and we measure it from a user perspective, from a technology perspective whether or not it went as planned and regardless we can learn from it and either feed it into more discovery work or feed it into a more or I should say new ideas essentially for our backlog when it was all said and done.
And so, this type of tool is used across our company and ultimately, the goals are spelled out here on this slide for you. We want people thinking for themselves. I don't want them to say this is step one, step two, step three. I want them to actually be able to take a scenario and say how can I apply the toolkit to these particular scenarios? And so, you should do that in workshop form as well and provide them to learn more about the toolkit in that space, in a safe space. And then just a couple more slides. One of one of which is just to show, show the actual outcomes of leveraging these values, as well as the toolkit.
In that first fortune 50 retailer that I've worked for, we literally doubled productivity while decreasing the number of people at HQ by 35%. We increased engagement for the folks that were still there and we ultimately doubled the stock price of the organization or the company. It's not all about stock price but obviously if we're in business to make money and solve problems, it's definitely part of it. And so, we believed that, myself and some peers from that company really do believe that it can be done again and that the tools that we used and the approach that we used is applicable across industries and it's applicable in our new company. And so, there are a handful of us that came over to US Bank a little bit less than two years ago now. And we're doing our darndest to do the exact same thing here, different contexts, some slightly different problems to solved. But if you squint at it, it looks a lot alike.
And so, in closing, I just want to basically summarize for you first and foremost focus on craftsmanship in all that you do and persevere through the tough work of transformation. Remember that those that you're seeking to transform are human beings with feelings and relationships that have history and a future use a concrete set of values that you can all gain alignment around. You don't have to use the ones that I've pitched you here, you can come up with your own. But for us, these are ones that we can get aligned around and basically align our behaviors to. And then ultimately provide guidance for folks as they try to change so that they understand if their behaviors are in line with those values as you go forward and then ultimately, remember that you can't control your way to change if you're doing a transformation and it's nothing more than a linear project plan and you're conducting your transformation in the same way that you used to do projects, it's probably not going to work for you when it's all said and done. I would love to talk to you about these topics and more related to product management and related to transformation. So, please feel free to reach out to me at any time here in the PDF form, you'll have an active link to get to my LinkedIn profile or you can drop me an email.
You have an appendix that has some additional drawings and they're there just for your reference as I've explored the seven values that are there, both for myself personally and professionally. I go back to that art major every now and again, and start digging into the next layers of detail and that's actually where a lot of the content that we're in the tables and the slides earlier came from.
I hope you enjoyed the time and I look forward to talking to you. Thank you.