Innovations in Change Leadership

We enter into the high tech industry wanting to be that person with an idea that changes the industry. Few have had such ideas. The industry has been changed by such ideas. Somehow, even for those who have changed the industry, we create organizations, products, processes and roles that become resistant to change.

During my career, I've held various positions where I have been responsible for leading change. A few times, my team has been on the leading edge and we were operating in a future, potential state. Change was easy because we had no past. Getting others to see our potential was the difficult part. At other times, the business was forced to change. A near death experience is a good motivator. We reacted to correct for not changing sooner. Even then, change was difficult.

The drive for change was and is something that comes naturally to me. Early in my career, I felt that logical arguments wrapped with a little passion were sufficient to lead change. But, when asked how I led change, I could not describe it well. Unconscious-competent some would say. Reading studies on how leaders affect change, helped to explain methods and effects but they failed to create a workable model to shift an entire organization from one operating model to another. I read and practiced lean software and agile development methods. I read up on situational leadership by Hersey and Blanchard. I kept seeking better constructs to plan and affect change across a large engineering organization.

I came to a company to lead change. The executives wanted to pivot the organization from years of long-cycle development processes towards faster time-to-market processes for new enterprise products. This was important as we needed new, constantly improving products for emerging markets to return us to profitable growth. Previous product efforts missed their market windows. There were other issues facing engineering: focus on product features and not on customers, focus on waterfall checkpoints with lengthy periods for architecture and design, separated implementation from testing, multiple software control/build processes, and weak engineering skills in modern development, testing and tooling practices. The engineering organization was highly resistant to change after various predecessors and projects failed. Fortunately, a new management team was already in position was demanding change.

Building the case for change was easy as one of my product projects had already been established, the market conditions were right, and the company need was clear. The difficulty was, as a new leader, I had to use the people that I had while avoiding their passive-aggressive behavior. I needed to push change along multiple dimensions in parallel for a large, geographically dispersed organization. My dilemma was how to do this?

I was concerned with potential passive-aggressive behavior along two dimensions. The first being passive-aggressive behaviors vertically within the organization and, secondly, horizontally across multiple components of the product. I decided to orient the organization along four concepts: product, architecture, process and people. I would use Hersey-Blanchard situational leadership within of these areas to cultivate new leaders and methods. I selected Scrum for a development method due to my previous experience and readily available training. I made an appeal for change due to that fundamental reason why we joined high tech, to change the industry. I made the cause for change personal to each individual.

My innovation was to create three virtual organizations where the leader of each reported directly to me for product, architecture and process. A virtual organization leader had dotted line relationships to their organization but not direct management control. I created a fourth organization with people managers who had everyone else reporting to them. A leader was responsible for their area. This prevented any one of them overpowering another without me being notified. I selected a leader for each organization who had been open to change and had a strong understanding of their respective area. This organizational model gave me visibility into issues as those issues crossed between these virtual organizational boundaries. The issues escalated to me created teaching moments. This structure also mirrored Scrum roles.

The second step was to refactor the existing organization into the new structure while leaving the development process untouched. This allowed the organization to adjust while doing work as they had previously done it. Meanwhile, I started coaching of each leader on their roles and new expectations. I described to the engineers how the new organization would function in the future. Meanwhile, we kept current projects on track.

The third step was training. On product, training was focused at the use of customer stories with goals and definitions of done, as well as, release planning with shorter horizons and smaller increments. On architecture with the lead architect, we worked on a redesigned, flexible architecture. On process, I cultivated the notions of continuous integration, use of modern build and automated testing tools, test driven design, and early devops concepts. The goal was creation of a single repository, build, test and deployment model for the product. Lastly, I worked with the people managers on training (Scrum, virtualization, automation) and self-managing-team skill development.

The next step was practice. The product owners began to state requirements and SLAs as user-stories. The architects started to redesign the current architecture to allow refactoring and better incremental, independent changes. The process team began to pull together a single tool set using open source tools and modern methods. The next release that was heading into planning signed up for the first attempt at Scrum. The approach taken by the team was actually closer to spiral development while using Scrum terms. User-stories were closer to tasks than they were user-oriented. The back end was heavily focused on final integration and testing. Meanwhile, I continued to push product owners closer to user-stories, architects closer to enabling refactoring and independent development by component, and teams towards Scrum and self-management. The process team needed the least encouragement because they were building tools for future use and had already moved into the agile development mindset. Releases continued to flow out every 4 to 5 months.

I had the teams working on new releases incrementally move components on to the new tools and to automate aspects of builds and tests. This required shifting repositories and changing tools. It required finding ways to build things that were never automated. Meanwhile, we kept raising the quality of the definition of 'done' with each release.

The last step was to do a hard shift to only user-stories with a clear goal and definition of done, to being 'done within a sprint' and 'done-done' (or customer shippable quality). This created tremendous tension with the product owners and engineers as the whole organization had to shift from fast cycle, mini waterfall development to true Scrum development. The teams and product owners pushed back. They claimed it wasn't possible. I had the visibility to influence and coach the low-level product owners. I worked with the people managers and teams directly when needed. The architecture and the process were in place to enable this critical transition. The teams did make the switch. We moved into true agile development with user stories being started and done to customer shippable quality within a sprint. Releases continued to flow out under the new process

The quality of the product from our customers’ perspective improved with each release. The teams were able to deliver both incremental features and velocity improvements with each sprint. The product owners were able to remain focused on customers’ needs and stakeholder demands. Teams were able to show stakeholders feature demonstrations earlier. Sets of teams could work independently on different work streams than were integrated and released when done. Back-end testing moved from 3 sprints to 1 clean-up sprint with the number of serious bugs found during testing dramatically lowered. For a modest investment, the team created differentiated product features ahead of the industry leaders. From a change management perspective, the organization became fully bought into Scrum, its methods and its value. They pushed themselves to improve with each sprint cycle.

Looking back, there are things that I would change on my approach. For example, I should have been more demanding of the product owners to move to user-stories earlier. This would have provided a stronger motivation to break from the mini-waterfall development within a sprint to ‘potentially shippable’ user value being done for each story multiple times within a sprint.

Beyond Development's Purview

Toyota has been dominant in applying lean (or agile) manufacturing techniques to improve product quality, lower costs, and increase responsiveness to customer needs. Other manufacturers have applied the same principles and gotten similar results. Recently, lean software techniques (Scrum, Kanban, XP) have been applied by development groups to create high quality, fast-time-to-market products focused on their customers' needs.

Now, VCs and management teams are starting to use lean techniques. I was fortunate to be invited to "Overturning Conventional Wisdom To Disrupt Industries and Markets – A Discussion On Disruptive Business Models and Innovative Approaches In Professional Sports, Software and Venture Capital" held on Thursday, October 29, 2009. Ben Nye, Managing Director of Bain Capital and Scott Maxwell, Founder and Senior Managing Director of OpenView Venture Partners shared their experiences with using Scrum to run their respective VC firm, and its use at their partner firms.

Scott met with Jeff Sutherland who started the first Scrum at Easel Corporation in 1993. Scott told Jeff that one of their partner companies was getting a 30% productivity improvement using Scrum. Jeff's response was that they must be doing something wrong if they're only getting 30%. This caught Scott's attention and Jeff is now an advisor to Scott's firm. Scott likes Scrum because it creates focus. Scott's VC firm uses a basic form of Scrum where his staff members are product owners for various Scrum teams, for example, Sales, Marketing, Finance, Investments. Each team holds daily SCRUM meetings and does weekly sprints. Scott starts with yearly company goals. The product owners break them down into quarterly goals similar to product release planning. Each Scrum team does weekly sprints to plan and do work towards the quarterly goals. Ben added that he sees benefits with agile practices: improvements to time-to-market, more at-bats, and organizational learning. Both said that software companies often bring complex products to market, use expensive direct sales and services to channel their products, and do not focus on customers' pain-points. Their guidance is to keep focused on customers' pain-points and straight-forward products by using Scrum and other lean software development techniques.

Other VC advice from Ben and Scott:

Analysis at CalPHERS showed that private equity investments made following a clear strategy provides the best ROI. Scott's strategy is to target a specific type of company, identify candidates, select companies with good, highly qualified people, provide them access to experts, and repeat the process again. His firm has marketing, sales, process, and finance experts on staff to fill partner companies' gaps.

On customers, based on the customer continuum, Consumer, SOHO, SMBs, ..., Enterprises, start with a selected customer type and work backwards to determine the go-to-market plans. Don't be slow to identify the customers. Size the market opportunity with top-down, bottoms-up, and growth drivers analysis. Get to know the customers. Things like Google Adware gets customers but without allowing the company to know them. Keep a sharp focus on customers' pain-points and products designed for the target customer. Focus go-to-market strategy on the buyer. Use web analytics to know what your customer is doing. Being early to market is the same as being wrong.

On people, debunk the 'status quo'. Risk taking means mistakes will be made. Get minds around innovation. Have great relationships with people. The 'power of question' and 'power of suggestion' are useful when advising companies. As an investor, if you fire someone, you take on their role, so act carefully.

On taking investment, choose partners well. Partnering with VCs is like a marriage, you live with them for a long time. Spend time together. Chemistry is important. Check references as much as possible. Take as little capital as possible. Capital constrained companies quickly figure out who the customer is, and channel to the customer. A high investment offer is likely from a poor VC. Customer revenue is the 'best' kind of capital investment.

Agility

I have spent the past month digging deeper into lean (or agile) software development principles and practices. I have led many successful software projects and programs that have yielded high-quality, well-received software. For various reasons during the past four years, I have led software projects using agile development. Originally, I was trained in the classic waterfall model for software development engineering and management. I have also worked with many successful senior architects who are deeply entrenched by their successes in waterfall practices.

Distinctions help me learn by having opposing views in front of me and asking why people favor one idea over the other. For this investigation, I mentally placed a miniature version of a waterfall architect on one of my shoulders and a miniature version of a lean software development proponent on the other in a similar fashion as one might imagine conscience as an angel and a devil on each shoulder. I won't assign good or evil to either because such assignments make no sense and because I have been a witness to techno-religious wars that are never resolved, for example, the still on-going emacs versus vi war. I would rather master both methods and apply the best for the job at hand.

In my mind, the waterfall architect tells me that long, deep research cycles, in-depth, insightful discussions with multiple customers, careful, precise crafting of specifications, thorough hiring of skilled and capable engineers, well-engineered components, well-planned integration cycles, construction of comprehensive testing and release engineering functions, beta testing for customer feedback and verification, and production release of the final product are needed for successful projects. I appreciate his reasoning behind this statement because of our many successes with waterfall. His challenge is: fundamentally, why does a lean, iterative, agile development process produce as good or better results compared to what we know works?

Metaphorically, I turn to the lean software proponent and raise my eye brows looking for the response. She responds to my silent inquiry with we don't know what we don't know. The architect smiles. I know that he's thinking that's why we spend time carefully thinking through every step before proceeding to the next one. She continues, therefore we need to factor that reality into a different approach by eliminating waste, amplifying learning, deciding as late as possible, delivering as fast as possible, empowering the decision makers, and building in integrity. That sounds intriguing to me. I respond, please continue.

Waste in software development takes many forms such as waiting for approvals and resources to become available, working on features that will never be used by customers, and developer context switching. Learning can be amplified by multiple iterations (think practice makes perfect), feedback, and transparency (anyone can inspect project status at anytime). Deciding as late as possible sounds counter to making decisions but it isn't. Decide on those items that must be decided on first. For those items that you don't need to initially decide upon, allow those decisions to go unmade until you have learned more. Work on items in a depth-first approach to create more information to make better decisions as you go. Delivering as fast as possible to create working versions that customers and sponsors can verify is (or isn't) meeting the need. Empower the rank and file decision makers to make the hundreds of decisions daily to be consistent with the current plan and customer feedback. Allow them to organize the work to deliver potentially shippable units of work with each iteration. Finally, build both conceptual and perceived integrity into the project such that the incremental changes and re-factoring can be done while maintaining a consistent customer experience. This can be achieved by frequent inspections and test driven design with automated test development done either prior to or concurrent with implementation. While these techniques are promising, they are relatively new, not yet applied in a consistent, repeatable fashion, and are usually engineering centric instead of being embraced by the whole organization.

I turn to the architect and ask if these seem incongruent with his perspective. His response is that in theory, there are big differences, however, in practice, many of these techniques are used in pragmatic, successful applications of waterfall. For example, waterfall development projects are often slowed down by waiting for permission and approval, so he often takes risks by proceeding on work before approval or permission is granted. His motto is, "It's better to ask for forgiveness than to ask for permission". He is often frustrated by the lack of clarity of early customer requirements, even those formally specified in contracts. He's equally frustrated by changes in requirements as the project is under development and initiates a formal change request approval process. He keeps track of all of the changes to justify the additional time needed to redesign or re-implement previously completed work. He plans on multiple implementation and integration cycles to resolve dependencies among components and enable testers' early access to functionality. He finds ways to unlink dependencies so groups can work independently. He is frustrated by the constant requests for project status and lack of insight into what's being done by the various groups. He is particularly frustrated by the 'schedule chicken' that occurs between groups. Critical bugs found during testing are problematic, especially, those that uncover issues with the specifications. In response, he asks for design and code reviews to inspect work before it is integrated. He meets with testing organizations to develop test plans in advance so he knows what they will be doing and ensures the implementations can holdup during testing. He encourages testing to make automated test environments available early so engineers can run them locally prior to putting back changes.

I, too, have used these techniques to deliver waterfall projects on time. On the other hand (or, er, shoulder) these techniques are inherent in lean software development. My next question to the architect is so why don't we just use lean software development techniques directly instead of remaining entrenched with waterfall and applying techniques to address its short comings?

He nods and smiles.

At least, he didn't glare at me like he does when someone tells him that emacs is better than his beloved vi.