Crazy times call for crazy organizations

I’ve allowed myself to name this first article on the Keepler blog after a book by Tom Peters that I read more than 20 years ago. In this book, the author describes how in a period of indifference in supply, companies that want to stand out must transform every person in the company into an entrepreneur, giving them freedom, finance and form and then encourage a revolution in the company that is not top-down but comes from the employees themselves.

After many years of status quo in business, chaos has arrived:

• Chaos in many sectors where established businesses find themselves threatened by new competitors that are smaller, more specialised and more agile.
• Chaos in demand, where access to technology is universal and expectations of clients are much more sophisticated.
• Chaos in the labour market, where there is a real shortage of people with knowledge of new technologies.

In times of chaos, it is not possible to make excuses. I have had many meetings with managers of large businesses whose excuse is simply that – that they are too big to be agile. These businesses place their confidence in client brand loyalty or in regulations that protect them. But this will not last.

Now is the hour of the pygmy (this phrase was also in the book I was speaking of earlier). It is the moment of specialisation and agility. Businesses must be or behave like a small business. The guidelines for competing in these times of chaos are those that are applied by companies such as Spotify, Zappos, Amazon, Microsoft, Google, ING, etc.

GET RID OF SILOS AND GET ORGANISED AROUND THE PRODUCT

In a project team, the cost of internal communication follows the formula links=(N*(N-1))/2. In other words, in a team of 50 people there are 1,225 possible relationships. Creation of software products must be organised in small work teams totally dedicated to the product. The optimum size for a product team follows the rule of Jeff Bezos’ two pizzas. The team must be of a size whereby all members can share two family-sized pizzas without remaining hungry. We are talking about teams of around 10 people. This model reduces communication time between people. Using the previous formula, there are only 45 possible connections.

ENCOURAGE SELF-MANAGEMENT OF TEAMS

The “product team” must comprise people who can cover all roles necessary to create new versions of the product and bring these to market. I am talking about having business and technical people in the same team, all with the same vision: the product’s success in the market. The way to ensure the alignment of objectives with all members of the team is to be supported by agile methodologies such as Scrum. Scrum encourages not only the alignment of the team with the actual needs of the market but also forces the rapid and constant launch of new functionalities and checks on market acceptance. Thus Scrum has mechanisms to scale the size of the team without renouncing the small team model.

ESTABLISH FORMAL MECHANISMS TO ENCOURAGE HOMOGENEITY AND INNOVATION

Having independent product teams is good. It brings agility but it can lead to a loss of time and money. Homogeneity is important. One only has to look at the cloud platforms that provide services to millions of users across the world using a fraction of the personnel we would think necessary to manage them. Or low-cost airlines that use the same aeroplanes across the entire fleet to avoid the need for specific pilots and mechanics for each type of aeroplane. Homogeneity is achieved through the creation of knowledge groups comprising members from the different product teams covering the same role, for example, all the data researchers. These teams are self-managing and decide which default techniques, technologies, processes etc will be applied for products. These teams will also define which training and lines of innovation are necessary.

FOSTER A DATA-ORIENTED CULTURE

Information is converted into an essential asset in companies. Data orientation is undertaken in two different ways. Sometimes a new department is created, which will own the information and serve the entire company. This is a mistake that generates operations in silos and bottlenecks that limit agility. The data lifecycle must be appropriate to each product. From the point of data discovery to data services, the whole process must be included within the product life cycle. What is the role therefore of a CDO? It is to encourage data culture and facilitate team access to company information following a common model of governance and security. Use of information allows us to create more personalised products at the optimal operational cost and price.

CREATE A MERITOCRATIC BUT GENEROUS ORGANISATION

The scarcity of specialised personnel in the marketplace is the challenge facing companies over the next decade. Universities and training centres are unable to keep up with the pace of innovation in all fields, but especially in technology. There is only one way to fill this deficiency: by means of specialised companies with current experience and thus set training objectives for internal staff. Only “boutique services” have sufficient focus on technology and the aspiration to help clients do things for themselves. As well as investing in training, they also create company dynamics which reward knowledge including learning through failure.

SET UP OPEN AND EVOLUTIONARY ORGANISATIONS

It is very difficult to build ERP better than that of SAP or clouds better than those of Microsoft, Google or Amazon. In a setting where there is a shortage of technical talent, businesses must maximise the use of a service’s technology. A clear example is the public cloud, which allows immediate and paid access to the latest technology. Another factor allowing agility is the relationship with specialised companies with differentiated capacities. Long gone is the policy of one sole service provider for everything.

Companies that have implemented all these steps have increased their market value, benefitting from:

• Access to new revenue with new products and client retention thanks to a greater alignment with the market.
• The reduction of time-to-market, resulting in very competitive businesses.

Keepler was created with the mission to accompany companies in these times of chaos, helping them to become more agile and data-centred businesses.

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