A Discussion about Agile Organizational Design

In this episode of the Scrum.org Community Podcast, Host Dave West is joined by Professional Scrum Trainers and authors of the book, Creating Agile Organizations, A Systemic Approach, Cesario Ramos and Ilia Pavlichenko.

They chat about their motivation behind the book, problems with traditional organizational design, the importance of senior management support and more.

Learn more: https://creatingagileorganizations.com/

Transcript

Dave West: 0:20

Hello, and welcome to the Scrum.org community podcast.I'm your host, Dave West CEO of scrum.org. Here in Boston,Massachusetts. I'm very fortunate today to be with two of our Professional Scrum Trainers, our PSTs Cesario Ramos and Ilia Pavlichenko. They're actually speaking to us from sunny Portugal at the moment. So I'm a little jealous about that.So we don't won't be talking about that. Welcome to the podcast, gentlemen.

Unknown: 0:52

Hello, welcome. Yeah,yeah, it's

Dave West: 0:55

great to have these two particular PSTs with us today, because they've been doing for a long time, but for the last couple of years, I've been talking to them about organizational change and Agile transformations at scale. And recently, they published a fantastic book that I got the opportunity to read before it hit the shelves, Creating Agile Organizations, a Systemic Approach, this new book really does try to codify a lot of the ideas of both the structural or hard sides of of systems change.And, and with those more soft coaching side, the people side which is, which is really special. I know, I learned lots from reading it. So before we start gentleman in delve into the book, I'd love to hear a little about the genesis scenario, maybe you should start could start, tell us why you wrote a book and what what was your sort of motivation?

Cesario Ramos: 1:53

Yes, so I think there are two, two really important reasons to share about why we wrote this book. And that the first one is a personal, a personal reason, in which we thought, No, we have all these things we do all these techniques, use all these approaches, and that we have and thinking tools. And, you know,we use them a lot. And we spend a lot of time searching in our laptops, to find the right one,when we are at a different customer again. So we said,well, if we write it down in a book, then we can just reference our own book and actually makes make our own lives a bit easier that way. And so that was a personal reason. But the main reason was that we were seeing many approaches, many organizations trying to get too big, to be more adaptable, but they were having a hard time.And we saw a lot of other approaches that we believed actually damaged, did more damage to the companies than than any good. And we're deviating from the what we think what we believe to be core,agile core Scrum. And to make a statement against that, too, to put something in the market that we believe is closer to the core, and we believe helps organizations make the next step in their adaptability journey.We, we we came to this to this to this new book.

Dave West: 3:40

And, you know, I, as I said I, I was fortunate to get this access to this. I know a few months before it was published with the intent to write a foreword, which I tried to do. And luckily, there's another Ford, that's much better, as well. So there's,there's two. But what I found that was really interesting with you know, these two, that it starts off lots of really cool techniques, lots of you know, it helped me actually deal with some of the other books I've read, providing more of a sort of grounded context for those things like systems thinking and, and the like. And then the second section is is is really talks about how you can apply it in context and really marry it up with that coaching kind of approach. So earlier, you've been, obviously changing organization trying to change your organizations, for many years. Tell me a little bit about some of those ideas in that first section that this book really codifies?

Ilia Pavlichenko: 4:38

Well, you're right that the book consists of two parts. The first part is about conceptual ideas about system thinking about flow efficiency, resource efficiency,and of course, organization design guidelines. I need to be honest, that changing and becoming an agile organization is rather hard it can take it can take you Many years, just to get rid of the waste and to breathe and to find out how to bring agility into your organization and how to make it real work in your context. And during my practice, you're going15 years, I find out that senior management are not aware of, of connection between between the organizational design and capabilities that organizational design develops. But we know that those capabilities, they are very tightly connected with a busy business goals and business strategy. And there's a gap between so many senior management are aware of the business goals and strategic goals, but they're not well aware of how they're connected with organization design, the metaphor that we take is, it's like training, a system of training, you go to the training, and you've got a coach. And if you get the incorrect training, you will not develop the right capabilities.So I think that the first part of the book is very, is extremely important for the senior management, and we got very good and a nice feedback from them. And the second part is more dedicated for Chrome Masters in Digital coaches, who actually do the adoption with their hands. But be, of course,initiated by senior management.And the first part of the book is for them. It's, we have lots of organizational design guidelines that are separate,that are split into three categories, structure, then processes and integration, and people and people practices. So this is very important. So in its core, the book is for senior management, I would say that's the primary audience.

Dave West: 6:42

And so maybe, maybe that says to my sort of bias, I found the first section particularly valuable because I've read about some of those ideas in other books. Not necessarily like I love the flow stuff, obviously, I've read Ryan Hansen's book and barely understood it, if ever understood it. And I found that the great thing about this book is it really made it very practical, very usable. And don't call me a senior manager,though, I hope but the it was very accessible. And it was interesting what you said there and I just want to pull on that for a second Delia, the the senior managers didn't really understand that the connection between the goals of agility and delivering value, etc. And the capabilities necessary to support that. Can we just dive into that a little bit more? You know, do you think that, that traditional organizations don't really have that understanding of capabilities? Do you think there's something missing in the DNA of most traditional organizations?

Ilia Pavlichenko: 7:48

Yes, of course, as we know that most of the modern organizations that follow the ideas of Taylor Taylor, those are correct areas for for the correct time. But most of the organization's,that's where we talk about flow and resource efficiency are they are optimized for some difference, things like resource efficiency, and different kinds of efficiencies, which is not compatible, sometimes with and quite often with the agility and global efficiency. And because their traditional organization design and hierarchies and functional organizations, they develop different capabilities then in in, they don't come in comfort with agility, and optimizing goals of agility,there was a different and this is counter intuitive. And so optimizing, having an incorrect organizational design that optimizes for the wrong goals,doesn't help to reach your goals. So that's the problem.And in our book, we help them to understand that.

Dave West: 8:54

And I thought that was really interesting, because ultimately, you know, there's, I kind of probably knew this anyway, but I hadn't seen it written down in this way. But the the, the optimization for a different purpose, optimizing the system for a different set of outcomes, how you manage risk, how you manage value, how you isn't just actually how you manage it. It's how you think about it. And also, what I thought was really interesting about the book was, ultimately,it really did sort of say, well,hang on a minute, it's not that any of those things are wrong.It's just that What are you trying to achieve? Those things are great for a certain moment in time and make a lot of sense,but what are you trying to achieve? If you're trying to be responsive to a market if you're trying to deliver value in in situations that are unknown if you're trying to, you know,rapidly change in response to a global pandemic or something crazy like that? Then maybe you want to think about things slightly differently and think about, you know, these take these tailor assist industrial viewpoint and so To break it up,says reo. So it sounds a bit like it's revolutionary thinking. But I didn't feel that when I read the book you want to, I mean, it is new, it is unique. But I felt that it was very usable, and took a level about the use. And that's particularly true in the second section where you really help these Scrum Masters, agile coaches, change agents, take these ideas that are brought together in the first section and make rails. So you want to talk a little bit more about that?

Cesario Ramos: 10:30

Yeah, I think so let's talk about the revolutionary work first, we don't think it's revolutionary either. But we do think that we are bringing together what is already known. But we bring it together to make a complete view on changing organizations for adaptability. There are many books and many decades of research on any type of organizational design. But we only talk about one type. So we can narrow it down and just do that. And that is organizations that want to be adaptable. And by narrowing down, we are making some thinking mistakes that people have clear. And I just want to point out one thinking mistake that we think is very important. And that is the thinking mistake that people sometimes have, in our experience that they equal agility to speed. So they say,Well, if we are flow efficient,then we are agile, and no,you're not. These are two very different things. So if you optimize for speed, and you have teams that can do, even if the teams can do end to end work for you, from idea to enhance the customer, you have many such teams. But if they only specialize on a narrow domain,you're still only fast. But if if we're overloads, that narrow domain, then the other teams cannot help because they'll they only they know the other domains. So in the first part,we make some of some also some other thinking mistakes,fundamental thinking mistakes,we make them obvious and clear,by combining all these things,which are not revolutionary, but the combination is pretty,pretty

Unknown: 12:26

powerful.

Cesario Ramos: 12:28

Now in the second part of the book, we try to make it super practical by giving lots of examples from real life.And then accompanying that by descriptions of workshop formats. So you don't view it goes from from, from the concept from the theory to Okay, give me a 12345 steps in which I can work with my group working with my team work with my senior manager to get things across to get a organization designed, for example, to get A a team structure that works. So we make it super, super practical by doing that. And we do that from from from defining product groups to defining products to launching teams to guiding the product ownership. So we will cover the things that we believe are essential for a, for a good start of your of your transformation.

Dave West: 13:37

I found that even though I wouldn't want to necessarily do some of those workshops, because they look like they'd be quite challenging. In just in terms of, you know, it actually, in terms of it makes these things very apparent some of the challenges of this Taylorist industrial viewpoint. With this over approach, I thought it was really nice that you could actually take the ideas that the first section talks about and say, okay, so get this group of people together and concentrate on these five things and use this kind of workshop. Here you go. Let's have a go. And I thought that was that was kind of that was that was fun. And I haven't seen that in other books. I've seen a lot on how to build workshops, and I've seen a lot on organization design, I'm not seeing the two combined together.

Cesario Ramos: 14:27

So I just want to add to that, that we give one example of running such a workshop. That is for people who really are doing this for the first time they can have they have this as a as a support.Yeah, but if you are more experienced, you've done many workshops that are similar than this is just one way there are of course many, many other ways to achieve the same thing. But if you're like starting out,this could be a good starting point.

Dave West: 14:59

And even if If you do end up using the actual template, what it does is it makes, it makes you think about the things that maybe you haven't thought about before,which I thought was, was was was incredibly useful. So all right,so we talked about the book,we've talked about how its structured the ideas, and thank you for that. So what do you think? I mean, somebody gets this book, what do you think the first thing that they should do?Apart from read it? Obviously,that's always handy. What do you think they should? Wait? What should be that first step after,after sort of like being inspired by this book?

Ilia Pavlichenko: 15:41

Yeah, well, I would say that, you know, when we were writing this book, and then we were in process of getting the feedback for the book, there were two audiences.So the first audience were were senior managers, and we get a pretty nice and Breeland feedback from them. They said,Wow, this is really cool. This is super cool. Now we got the guidelines, and we know how to structure our organization and the secondary audience. Were a bunch of Scrum Masters and digital coaches, and you know,that we didn't get very brilliant, super brilliant feedback from them. And why is that? Well, yeah, we were thinking about that. And we found out that, you know, there was three, the first thing you need to do after reading this book is given it to the senior manager. Because to apply all those ideas that we talked about, in the first part of the book, you need a supportive Senior Manager. For example, now I'm in UCLA, I'm in an have an engagement with a client or one eastern bank, and I'm working with senior manager there. And the scrum team is working on organization design, they are trying to redesign half of the band. And these team consists of senior managers and the manager of the board. And, and so alone,Scrum Masters, and coaches, they won't be able to do that. So just give a book to the senior manager, maybe to the board members, this is extremely important, otherwise, it won't work. It's about redesign,seriously redesigning your organization. So that's my recommendation given to senior managers.

Dave West: 17:19

Wow. That's, that's awesome. This is reo, you're going to add to that.

Cesario Ramos: 17:25

So once you have you have given the book to the senior managers, then what I would say is, and you read the book, then I would say, just start with go see, as we call it, Let's study how the work is working in your organization,and get that out in the open,get that transparent to the teams, and surely also transparent to the senior managers. Why do we we talk about senior managers because they have the power to design to turn the design nods of the arc.So once this transparency is there, and and you created this understanding together with them, they feel a little bit of ownership. And they all also feel a little bit of responsibility for the performance of their current organization. And if this performance is not what they would like it to be, if they believe that they need a different performance, they now have an understanding of how themselves contribute. So the teams and the senior managers with their policies, for example, but their design decisions, and also the teams,how they themselves contribute to this current performance. And that will be the starting point of now. Okay, now that I feel this responsibility. Now I am in New York, and he had the possibility to decide to do something about that. And that can only come after this fundamental step of seeing why it is the way it is. And acknowledging that you yourself contributed to it.

Dave West: 19:15

But obviously, not not blaming yourself, because as a potential senior manager, I obviously take no responsibility for anything of it. Well, thank you. This has been far too short. We have, you know, I wanted to delve into some of the actual some of those misunderstandings that you talked a little bit about Cesario. I want to spend more time talking about that some of those workshops, I want to spend lot more time talking about how you measure success, which is we should have talked about particularly around flow and sort of that flow efficiency stuff, but we have no time today, unfortunately. So I think there's some great opportunities for future podcasts as we unpack and unravel these ideas that are plaguing seeing the world as we wrestle with this shift from the industrial world, oil and mass production to this digital world where anything is possible, and you can build cars that drive themselves or spaceships that that land on on boats, which is which is really, really, really amazing. So thank you for spending the time today. We are here at the scrum.org community podcast. I was your host, I was fortunate enough to have Cesario Ramos and Ilia Pavlichenko. With me today. They're actually speaking to us from Lisbon,Portugal. I'm from Boston,Massachusetts. Thank you, the listeners for attending and, and hopefully there'll be future podcasts with these two hosts these two participants as we explore organizational change and trying to build that agile organization in the future.Thanks, everybody. Bye bye.