Here are my live notes of the Lift Conference session “The Agile Enterprise: Rethinking what it means to manage”. Keep an eye open for mistakes, inaccuracies, and other flakiness due to live-blogging.
Dave Gray
Average lifespan of fortune 500 companies is decreasing. Also, as companies grow, average profit per employee decreases (=> less productive).
Shell: The Living Company. 100+ year life span, huge, and oil might run out: major shift, ordered a study on companies in parallel situations.
– decentralization: tolerate different activities on the edges (pods)
– platforms: strong identity, aloes, culture, beliefs (focus on that so the company doesn’t explode)
Evolutionary biology applied to companies: fitness. Fitness landscape: 3D diagram with tradeoffs on x and y and fitness on z.
One example of tradeoff: agility vs. efficiency (hummingbird vs. albatross)
First efforts are often clumsy. First planes were neither 747 of fighter jets.
First few tradeoffs, huge boost of fitness. But as you increase tradeoffs and optimize, the less your fitness increases, until it starts decreasing (you become vulnerable). So peak fitness is somewhere in the middle between perfect chaos and perfect order.
Too hot (chaos): Enron
Too cold (perfect order): Kodak — 1972, invented digital camera, and reaction was “why would I want to watch my photos on my TV?!” Didn’t manage to capitalize on that because the company was too cold.
You want to be in the middle, in the “just right” zone.
How do you build a flexible organization?
Traditional multidivisional organization is hierarchical. Popular organization: is networked, bubbles inside bubbles instead of a tree. Some organizing principles in the middle but semi-autonomous teams inside.
Pods. Morning Star turn tomatoes into tomato paste, that’s all they do. Marketplace of mutual accountability. P2P negotiation of contracts. No hierarchy or managers. Somewhat democratic government for resolving disputes. So every single person is a startup within the organization.
Whole Foods. Pods (teams inside teams inside teams) that are autonomous. Teams that are profitable can make the choice to grow or just keep the money. Team leaders run the store, store leaders run the region, etc. All the pods are relatively small teams.
Semco: every month the numbers are shared for open dialogue and debate. Employees share about 30% (check) of the profits. Book: 7-day week-end.
Platforms: shared services, finance, standards and protocols, culture. Providing some level of consistency across a popular organisation.
IBM: 90s, profit margin below zero. In deep trouble. Lou Gerstner new CEO. Ex-customer with a lot of frustrations as a customer. The very values that made IBM successful for so long are those that are holding the company back as the environment changes.
– excellence in everything we do: became an obsession for perfection
– superior customer service: became administrative, like a passionless marriage
– respect for the individual: became “anybody in the company can do pretty much anything without accountability”
Change the landscape by changing the platform/values. Very painful, but it worked.
Xplane, Dave’s company since 93. Dotcom boom, bust, financial crisis. 2006 major changes to go through. Infographics for change management. Created a culture map.
Whenever there was a decision to make they would look at the map. *steph-note: might be an interesting exercise to do for the individual too*
Can we do something like the BMG business model tool for culture?
Not ready for sharing yet… but soon!