Within the realm of technology and diverse thinking frameworks, it is essential to acknowledge and remember that humans possess the ultimate authority in making decisions in all situations and contexts. While technologies and frameworks serve as support and enablers, it is our intelligence and creativity that define their purpose and potential.
I increasingly believe that we should emphasize and elevate our own role as humans in deciding what, how, and when to act. There seems to be a growing tendency to prioritize and revere technology over ourselves, leading to a situation where we rely on technology to solve all our problems, from environmental issues to personal and professional challenges. By acknowledging that we are the main driving force behind all technologies and innovations, we enable ourselves to utilize their capabilities in a responsible and ethical manner and respecting ourselves.
This is why I have been lately looking at these two images a lot. I am drawn to the simplicity of the pictures and particularly appreciate the wisdom they convey:
Understanding the meaning conveyed in these images is straightforward and intuitive, yet grasping the fundamental messages embedded in the functions and perspective of an organization can be challenging. The image illustrates that for the entire system to operate effectively, it requires structures, understanding of promised solutions, customer, direction, people, values, communication, and collaboration both horizontally and vertically. So, impactful and meaningful working life and delivering solutions are never about just technologies, technical solutions as a product or management system or about tools and methods. Ignoring this broader context will always lead to systemic inertia, often normalized and accepted as 'business as usual' or 'the way we do things.'
I am adamant about one thing: organizations should not tolerate systemic inertia. Never. There are no valid reasons for it: it's just an excuse. However, we must also show compassion towards all organizations (and this is really, really important). The rationale is simple: no organization is flawless or completely free from challenges in creating value efficiently. Research indicates that it is typical for 40% - 80% of employees' time in an organization to be spent on non-value-adding tasks. Essentially, it is almost a universal occurrence and phenomena that over half of the time spent in organizations is wasted, a fact that can be easily dismissed or overlooked under the guise of 'our business is unique, so it's just the way things are.'
The key question here is simple: is this good enough?
If yes, then there is no reason to act differently. Just do what You have always done.
But if this is not good enough and is hampering Your employee experience, customer experience, and profit, then there might be a reason to act differently and start to design Your adaptability as a whole system. When there is a realization that an organization truly needs outcome and efficacy-driven adaptability, the best way is to create, design, and tailor it Yourselves, involving and empowering all Your staff. If adaptability is truly the demand of Your value creation due to its explorative nature, starting from the problem the customer is really facing is crucial. This is why discovery and requirement capture are essential for adaptability.
If the product or service is inherently predictable and exploitative, then follow a waterfall approach: maintain a smooth and repetitive flow with clear process steps, distinct functions, standardized daily tasks, efficiency-focused practices, optimization of current solutions and capabilities, and prioritize refining the existing process. Waterfall is not a bad word, it is effective and valuable in the appropriate context with the right value creation requirements.
It is so important to clearly understand what is Your purpose and what is the logic of Your organizations value creation. First question always is that is Your value creation…:
continuous,
predictable,
or not predictable,
impactful,
or efficiency-driven?
The question regarding the type of value creation is essential. This importance stems from its role in defining and comprehending the Operating Model required to meet and enable varying value creation needs. Recognizing the dynamics of customer demands in value creation also provides a framework for the overall organizational structure, which I refer to as 'Organizational Architecture'.
Organizations often have multiple value propositions and various approaches to creating value. For instance, some value creation processes may be entirely iterative and unpredictable, making it impractical to follow a rigid waterfall methodology with standardized processes based on specific competencies or functions. This standardized approach is suitable for scenarios where solutions are predictable, clear specifications are available, and customers have specific demands for well-known products or services (such as bread, phones, jeans, or coffee). There are approximately four distinct types of logic and dynamics governing value creation and solution delivery:
A. Automation. Automate everything that is possible and reasonable. This will enable employees to focus on more complex and explorative work, developing new solutions and capabilities. Key characteristics: Low level of resource demands, mature demand, low level of modifications.
B. Standardize. When value creation is predictable and exploitative in nature, create key processes, steps, information flow, decision points, capacity planning, roles and responsibilities, and functions based on competence/capability with clearly agreed standard work. Key characteristics: Specification/Service Blueprint, focus on process, work ownership, predictability of output, utilization, and efficiency. Standardized processes and key tasks, clear RACI and role descriptions.
C. Sense & Adapt. When value creation is unpredictable and cannot be defined before the solution creation as a standardized service/product, define an agile way of working. Focus on solution efficacy, discovery, and flexible organizing around value creation. Key characteristics: Self-organizing around value creation, autonomy of teams, psychological safety, opportunity platforms, low level of fixed role descriptions, shared leadership, high degree of freedom.
D. Innovation. When value creation is unclear or unknown and requires asking fundamental questions about what needs to be discovered and what needs to be asked to understand the unknown unknowns, establish forums with a high level of psychological safety and methodologies that enable future-driven thinking. Focus on exploring possible future scenarios, sensing changes in human behavior, societal trends, sustainability, and even megatrends, like climate change. Key characteristics: Proactive exploration, high level of self-organizing and team adaptability, scenario planning, adaptive strategies, continuous learning, strategic foresight.
The image illustrates the significance of Organizational Architecture in providing a visual, reality-based representation of the entire structure, with a specific emphasis on its crucial role in creating adaptable value. It depicts the progression from "The Promise" at the top, through "EPIC," to "Value Creation" within "Business Processes / Functions / Capabilities," underscoring the vital importance of "Tech. Enablers / Platforms" as essential components. The target is also to highlight the difference between the traditional waterfall-method approach and the adaptable/agile approach, which all are good options. The image also emphasizes the importance of independence among layers for adaptability when there are requirements for iterative and unpredictable value creation.
Essentially, my goal is to emphasize the significance of how a company can organize itself and its products to enhance adaptability and true agility. Additionally, I want to draw attention to a specific aspect concerning the diagram shown at the start of this document, which delves into 'Team Topologies' and the idea of a 'Platform Team'. This concept is reinforced by the concept of an 'Enabling Platform' illustrated in the image below:
The main goal of enabling platforms and the concept of 'Platform Engineering' is to create tools and processes that empower developers with self-service access to infrastructure. A quality platform as its nature should aim to minimize dependencies and unnecessary limitations. It should offer services that can be accessed without the need for raising tickets or assigning work. Self-service is an essential element in defining an efficient platform in general. In particular, the platform must enable self-service provisioning, application interface, configuration, tools, services, knowledge, and the optimal organization of management and operational support as an internal product. This allows autonomous delivery teams to utilize the platform for quicker product feature delivery, with less need for coordination. This empowers platform users to operate more independently, reducing the need to wait for approvals from infrastructure administrators and allowing them more time to be spent on developing and adding new features to Your product.
The idea of platforms is essential for enabling fluent value creation, regardless of the logic of value creation. If platform development is not synchronized and timed properly, and needed capabilities and interfaces are not ready when required, organizations are forced to develop end-solutions that are more like ‘half-solutions.’ These solutions cannot be inspected, sensed, responded to, released on time, or learned from due to the inability to bring them to the final environment or delivered to the end-customer. Consequently, real-time and true feedback becomes impossible, increasing the amount of work-in-progress without knowing if the solutions are fulfilling customer or end-user demands.
So, Organizational Architecture as holistic approach helps organizations reduce and even eliminate dependencies, and define the necessary depth and competence demands for different teams based on the logic of value creation for each:
The primary objective of establishing a transparent and well-defined Organizational Architecture is to provide an clear and unbiased context for selecting the most suitable and optimal technologies, platforms, application interfaces, networks, team configurations, methodologies, tools, and operational frameworks. It also enables the integrations of fundamental values and a customer-focused value creation across the organization. As I wrote in this text, context is the key:
Establishing clear and commonly accepted structures helps organizations develop, grow, and adapt to business changes.
Effective organizational architecture supports a sustainable and adaptable Operating Model.
It lays the foundation for customer centricity, efficient information management, shared decision-making, data reliability, and software development, including, for example, the utilization of artificial intelligence, application development, solution architectures, integrations, and knowledge management.
By providing a safe and clear framework for developing customer-driven ideas, organizations can stay ahead of market changes and technological advancements.
Organizational architecture is a basement for outcome-driven, adaptable value creation, reduction of dependencies, learning-based evolving strategy, continuous learning, shared leadership, and embodying organizational values.
Creating a flexible and adaptable organization necessitates a significant emphasis on the Operating Model, which serves as the core entity of the Organizational Architecture. This framework is crucial in steering strategic planning and providing solutions and real-time value to customers, playing a vital role in guaranteeing impactful value creation as it acts as the engine for solution deliveries:
This example shows that it is entirely possible to combine different logics of value creation within the same value stream and teams. Sometimes, it is even necessary for the same teams to handle repetitive tasks, maintenance, predictive work, and unpredictable solution creation. And this is just fine. In this scenario, teams worked with a wide range of demands and found true adaptability by clearly distinguishing between:
A. just-do-it,
B. waterfall, and
C. agile approaches.
This solution as Operating Model is a result of truly understanding the voice of the customer and recognizing that different logics of value creation truly demands different approaches. Key enabler is seeing the whole (eco)system as Organizational Architecture with its networks, layers and capabilities. And same time it is little bit sad that it has become painfully obvious that several organizations have faced difficulties and frustration when this division of different value creation has not been clear enough. It is just insane to force teams, for example, to create user stories or perform sprint planning for work that is clear, specified, and predictable, and could be completed without unnecessary hassle, just because the framework dictates it. True adaptability and agility exist when teams can define the appropriate method, needed allocations and needed time for value creation and do only what is necessary for making customer happy, using an approach that is sufficient and fit-for-purpose.
It’s somewhat disheartening to see that the concept of ‘Digital Transformation’ has become synonymous with a standardized approach everywhere. It begins with making technology decisions and implementing new software to perform the same tasks as before. This is followed by the adoption of tools like JIRA, Confluence, Slack, Miro, Mural, Teams, or similar. Then, the functions are then renamed to ‘Tribe’ or ‘Collective’ or other trendy names dictated by the Doctrine and then there is a of agile coaching where teams only learn to ask questions without the possibility to answer any of those questions due to an increased amount of dependencies, or making any decisions, because authority is somewhere else (and You need to schedule a meeting for this from the decision maker’s calendar). Next, all teams are assembled with similar and standardized Agile Industry-driven adoption of backlogs, cadence, agendas, ceremonies, and increased coordination among fragmented teams, which are far away from the value stream and core business and for fixing this, new roles are established, causing just increased inertia, slowing down releases and deliveries, and resulting in declining profits.
Adaptability and agility are about human behavior and context — about who we are, why we are herein this organization, and what we aim to accomplish together. Adaptability, agility, and value creation are not just emerging through technology or sourcing decisions; no technology or certified framework can make an organization adaptable or agile simply by placing an order and then waiting for delivery. None.
Humans make critical decisions about technologies and ways of working, and it is humans who understand the voice of the customer. Understanding this human-behavior aspect allows us to make informed decisions about necessary technologies and platforms, a sufficient set of tools, competences, capabilities, and needed methods and frameworks, thereby enabling the desired impact for customers, end-users, and even society. And please be aware: there are plenty of really cool and useful technologies, tools, methods, ideas, principles, and frameworks to be used when aiming for impactful value creation. If You are building a house and a hammer is needed, buy the hammer; do not invent it again.
But still, to make this decision about hammer, there must be knowledge about what is needed and desired, there must be architectural drawings and engineered solutions, there must be a foundation for the house before hitting any nails, and there must be a clear idea of what is valued and why. Before choosing tools, You need to understand what kind of house You are building. And if You don’t even have a plot of land, access roads, building permits from authorities, or a sewage system yet, it would be quite strange to start building the house anyway. And if You start to build the house without having prerequisites like groundwork done first as a platform for the house, You start to create half-ready stuff, waiting for other decisions and other work, without knowing if there will even be a match between the work performed at different times. And if You still decide to use the hammer even if it is not necessary needed just because Your chosen Right Doctrine says so, then the focus is not on customer demands at all; the focus has shifted to Your own process, Your own status quo, and Your own interests.
Technologies, methods, and tools could and should support our future-driven, value-creation activities, but they won’t dictate our aims and promises to customers and our own employees. It’s about us and our organization’s unique context, unique nature, and unique networks. Only us and our own organizations can design this all. It cannot be outsourced or bought from a shop.
The main question is always: how will we enable our purpose? Understanding this context will ensure that the correct technical, organizational, and cultural decisions are made, guaranteeing that they are fit-for-purpose. Technologies and frameworks are not the masters; we, as humans, are.
And how to do this all…? Well, that is an another story.
Gladly, there will be the webinar to open up this topic, at 18.10.2024. It will be in Finnish, and the idea is to go through the path for adaptability. And as always with complex and not-so-predictive work, there are no plug-and-play solutions; even the tactics need to be defined by the organization, by the team, by the humans.
And here is the material from the Webinar with some extra slides:
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