Agile business transformation what it takes to succeed

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scrum is a team-based project management

style it’s arguably the fastest

and leanest or simplest way to manage

teams in a company of any size

and any number of teams it’s a scaled

method for team management

agile is the idea of splitting really

long

projects into many many many really

small projects

and giving them to the real customer

really

fast and then changing what the next

project will be

so whereas a lot of us think of project

management

as a sequence of phases towards a

ultimate deliverable

agile is a different mindset where you

have a sequence of small

deliverables that refine each other add

up to become

an even larger impact that has a faster

feedback loop

putting those together you have many

teams working together

to deliver a series of tiny highly

effective focused projects

immediately wow so and this is something

that is

fairly broadly being adopted now by

businesses in all sectors

around the world do you have any metrics

on how rapidly it’s being adopted

by which different sectors with what

level of success

at this point when we look in

automotive which is where i play now uh

we see bmw saying they have a four to

five year plan to get

agile we see bosch starting

four years ago saying we must get agile

and they have some agile and they want

to increase it

and then you see agile native companies

like tesla

which create the pressure as they’re now

far and away the most

valuable automotive company in the

planet in fact if you add up most of the

other players

they’re still thought to be less

valuable than tesla

so you see in most industries it’s

similar to automotive

where you have a company that’s full

agile they’re agile natives and they’re

far and away more successful than all

the others then

all the others are at various stages of

their transformation they have some

business units working effectively in

the method they have some business units

that are still trying to figure out

what this is or they’re still saying it

doesn’t apply to us

so with those ranges of adoption

uh and really you’re talking about a

sprint methodology that’s applied with a

certain kind of team-based structure

team-based project teams

how are you seeing when that starts to

influence a specific case maybe you

could talk through an example

of what that process looks like

uh can you give us give us one or two

examples

yeah well every aspect of managing the

company

it’s going to be modified from this

mindset if we want it to happen

team based means we have

cross-functional teams

so the idea of an engineering group

separate from a software group separate

from a design group separate from a test

group

that concept of the business structure

does change

because now we have cross-functional

teams where all those people are

together on a mixed team

so that changes the funding model

changes because we’re no longer making

an annual budgeting plan

i mean there is an annual budgeting

trend to do the finances

but it’s not locked in or what it’s

going to build it’s instead

we’re going to make 52 releases one a

week this year of hardware and software

and we’ll figure out what they are in

real time so we will budget the company

to make 52 releases of hardware and

software

very different budgeting so budgeting

changes

legal support evolves because we don’t

have a ip protection

phase anymore every week we have updates

of what is potentially

protectable patentable best for open

source etc

every aspect of the company has a tweak

a modification

and really it’s a mindset how we

approach the company is going to evolve

additional management loops many layers

of hierarchy were fast enough

now it doesn’t keep up with week long

releases

having the management coalition on the

topic meet every other week

has no effect on projects that ship in

less than a week

so all management decisions

need to be prioritized differently in a

less than our feedback loop

which is a highly different way to run a

company so that changes too

so you know you’ve given an example of

how tesla

and 3m collaborated and

just because the magnitude of that is so

substantial

and the rate of change seems so dramatic

in such a short period of time

could you talk us in a you know a

summarized way through

how that happened you know mindful that

you know many business people

are accustomed to multi-year changes and

to your

to our audience i’ll just say this may

come across as a bit surprising but

stay with it and um and can you give us

give us that example

in a little depth yeah so uh elon musk

the ceo of tesla and spacex and neural

link and the boring company and open ai

which are all becoming the most

effective

and uh most followed and financially

successful companies in all of their

respective sectors

he calls the 3m ceo the ceo of 3m at

that time with

inga thulin and

elon says you are fantastic at making

privacy

films for screens you’re fantastic at

making solar cells

what i’d like you to do is put privacy

filters

on your solar cells so when looked at

from an extreme angle from the ground

if it’s on a roof it looks like black or

terracotta tile or

beautiful reflective glass but from the

sun’s perspective looking almost

straight down at the solar panel

it sees straight through the privacy

filter and sees the solar

film to create the voltaic effect to

make electricity

and you also make highly uv stable

adhesives to hold these two layers

together for many many many many years

of harsh element wide temperature range

use

i’d like you to make a solar roof for us

and inga thulin says elon i’m so

impressed you know

our product stack and our technology

strengths so well that you can propose a

new

product that is right in our wheelhouse

that we hadn’t even thought of

that’s amazing i’d love to do it

great we’ll we’ll launch we’ll put the

product in our queue immediately it’ll

go through our new product

introduction phase after our new product

development phase and you will have your

prototype

and right about seven years elon says

great will start installing it on homes

in seven weeks and he hangs up the phone

knowing the thulin has a choice hinga

can queue up the new product development

and the new product introduction phases

the way they normally do and lose the

business not get any of this business

not get the halo effect of working with

the mosque companies it all goes away

or inga can work in a way that is 4 to

3m

outside the new product innovation and

product development process they’re

defined

and inga decides to run an agile project

and like

all agile initiatives they’re far more

effective if we ask who wants to join

the energetic people so he says who

would like to join

and he gets hundreds of responses and he

says who

can put all your other work on someone

else you can shift it to another area of

the company or you can outsource it or

you can stop it

so this is the only thing you do and he

gets a very small number of people that

says yes we can

then those people sit in one room

together full time

and they all work in pairs no one’s no

one works alone they have one

big projector screen and a lot of the

time they’re doing laptop work

procurement chemical mix ideas

drawings talking to vendors only one

person is allowed to type at once

everyone sees it on the screen they all

point and talk

it’s real time conversation they’re a

team they all work on one thing together

at once

when they need to make a prototype they

all go to the factory together

and they make it on the line together or

they watch it made together and they fly

back with the prototype

they finish early it set records all

across 3m

this is agile it’s the team-based

management of scrum

which just makes it really simple and

lean to work with many teams at once

and it’s the agile idea of instead of

just phases

you make a small project although a

solar roof isn’t that small

an incredibly short cycle

so you were able to get a

to see the significant result in a

matter of weeks that

in normal methodology would have taken

years

in some respects is that accurate

it was seven years to five weeks yeah

and

how large was this team that did the

kind of core work

for developing this it was four people

they added a fifth person in the last

two weeks

to help file patents and open source

as fast as possible and and as a result

3m did they continue to use this agile

methodology or

was this just a one-off experiment

as a result they did the financial

calculations what would happen if more

of their projects ran that way

and uh they flew me in to

do team launches where we trained people

and then launched

these scrum teams uh 50 people at a time

in a group

and that we did waves for a year and a

half

two years it ended up being thousands of

people

and the stock price jumped to its

all-time high

and how would you say that uh acceptance

of this new mindset or new culture

um was it difficult for that to

be embraced at 3m or did it happen

easily what was that like

from your perspective of what you saw

phil this is this is the billion dollar

question um i i really think this

is maybe billion is selling it too short

a lot of people want to make an impact

in a company

and the real crux of this seems to be

how beaten down have they been until

they’ve disengaged

as as horrible as that is and i really

think this is the crux of it i think the

core of this good work

is finding ways to lovingly nurture each

other

so that we re-engage and then this agile

stuff makes great sense

it plugs in very naturally very easily

kids do this this is how children play

before they’ve been told by their

teacher i don’t want to talk to you

right now i don’t want to listen to you

right now i want you to sit down and

focus on this and only this alone

once that’s become a pattern this agile

stuff becomes foreign and we have to

relearn this natural collaboration

method that

is super intuitive to to all living

things or at least humans

here’s what happens someone says i have

a great idea

and manager is busy and manager says

not right now or submit it to the system

or

look you have a 15-minute break you can

do it on your break instead of going to

the bathroom and having a coffee if you

want

and that person says oh i see my ideas

not valued i’m valued for my hands and

not my mind

they have a choice they can either pump

up and fight the system

or they can relax and then the next time

they see

an improvement opportunity that they’re

now

conditioned to say well ask my boss

you know they’ve been told don’t engage

me well if that’s been happening for two

three four thirty years it’s going to be

super hard

to invite that person onto a scrum team

they’ve built up self-defense mechanisms

to avoid shame which are super healthy

given the situation they’ve been in

now if you get someone fresh or someone

who’s been in these agile companies

already

they know that they are a powerful force

on the planet and they create the

situation around them

and they’ll leave if their managers tell

them i don’t want your engagement so

then it’s supernatural

so here’s what actually seems to happen

we go into a massive company like 3m

and we say who would like to try this

scrum thing after giving a 45-minute

keynote

on what the scrum thing is and you get a

set of

hands and those are people who are

either at midlife crisis

so they’re reevaluating themselves or

they’re new or they’re about to retire

so in all cases they say change is cool

and they opt in and you have a huge mass

of other people

who say no not right now

not right now not unless the system

really changes and i’m told that

my whole humanity is valued at work uh

and so that’s the culture side of change

and it’s super real and that’s why it’s

way easier to do this in a startup even

with the same employees the same ones

who have been

not invited to bring their whole selves

to work for 20

30 years it’s regardless of age but it’s

a new company

so they know it’s new the ground rules

are different they got to figure out

what they are

and you say let’s try agile it’s super

easy

with all new hires the same people uh

tesla famously did this they took the

new me plant which had extremely low

quality under gm

and toyota had increased the quality but

the rate of innovation was

tragically low tesla took it made

world-class innovation with even higher

quality the quality had to ramp but now

it’s even higher

it’s the same people it’s the same

people working there

i was meeting with the head of lean he’s

been there 20 years through gm

toyota and tesla and it is now the

highest profit company

uh the highest stock value company on

the planet in automotive and trending to

be maybe the top value

company of any type maybe and he’s been

there it’s the same person it’s the same

people working there

it’s the system that changed and the

culture change point

was done effectively so

change is a key element here and you

know we may be in a world where it’s not

only that change is cool

but certainly with covet and with a lot

of the ways processes are changing

changes maybe even the rule in this

environment where people are doing more

distance based work

how does agile fit into that

it seems to be more natural phil um

when you and i work together now doing

this um

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the idea that we can zoom in and

task on a window because that means a

lot of what we’re doing is is

screen based zoom in on a window and i

have my team here

and we disengage re-engage near

seamlessly

in less than a second hey joe yes phil

it it seems to fit really nicely

now there’s this thing called the agile

manifesto written in 2001

that was before zoom that was before

google meet

that was before azure devops and

microsoft stack that supports

this that’s when we had 9 600 baud

modems and text

and it was really hard to do it not in

the same room

it’s pretty easy to do now with modern

collaborative tools

now i’m involved in manufacturing

luckily

if we’re moving atoms that means robots

if we’re moving electrons

that means people so people move

electrons that’s super easy to do remote

robots move atoms that’s super easy to

monitor observe and cheer on remote and

i use those words very intentionally

if we are telling the robot specifically

where to move

our company is going to die and it’s

dying now

the robot needs to be running a machine

learning stack

and what we’re doing is curating the

data and making sure it has a valid data

stack running to it

i mean we’re symbiotes full-on

in hardware my right arm is

a dur robot my my left arm is

a funac robot that’s that’s how this

works and

humans move electrons robots move

molecules

awesome and so um we’re coming

close to a needing to end this part of

the interview i would love to delve into

the robotics elements and all the others

um for businesses in other sectors

uh beyond automotives you know certainly

software has adopted agile to a great

degree

what other fields are you seeing uh

riposte for agile

and what would be the great first step

for them to take

if they are ready or who’s wanting to

explore

medical and and i use that huge blanket

term intentionally

it started in pharma and now emergency

room care

and children room uh pediatrics

and now the entire stack the financial

system

is racing towards this as fast as they

can

uh that industry has experienced as much

of a people as any

in terms of funding model and in terms

of what resources are available and

effective to use

so that’s a whole business stack that is

sprinting to this right now as fast as

they can

fintech jumped on board uh right around

the bitcoin

ramp up so fintech is now basically

agile native there’s not much fintech

that’s not

agile and that brought most of the

banking and finance with it

legal seems late to the party but legal

is asking to

defend and arbitrate between agile

businesses so they’re trying to wrap

their heads around what this means

so most legal business legal uh

groups when they propose contracts they

don’t even apply they’re getting thrown

out all the time

so you have agile teams writing their

own contracts and legals sitting at the

sidelines saying no wait what about us

so that seems to be a catch-up point

media has been on short clocks with

cross-functional teams

since there was media because they had

tight timelines to meet

but the respect for people aspects of

agility that there’s this whole system

that makes it sustainable

has not reached media at all and uh

there’s a real rescue opportunity

that i don’t know if media is aware of

yet they might be

closer to legal in that regard because

they’re already fast

so they don’t feel the pain that legal’s

starting to feel where they’re just

being cut out of the loop

um there’s high turnover and

they don’t i think know that agile has a

has a solution stack that may

may be useful manufacturing

everyone in manufacturing knows this is

the thing and where it’s going

most people feel clueless and they’re

saying i just hope i retire

before it disrupts my factory and

they they feel it’s impossible it seems

too too high a mountain to climb

so we’ll see where that goes either

ninety percent of hardware companies are

going to go under

or we’re going to have a title change in

that

so i’m sorry or we’re going to have a

title change can you say that again

or either about 90

of manufacturing and hardware operations

are going to go under or we’re going to

have a title change

to agility in about the next 18 months

wow well you heard it here first um joe

thank you so much for taking the time

um you know any final final thoughts or

final words

of encouragement or a suggestion this is

super fun

the the scrum thing is only 11 rules you

can practice those for two days and have

it down

uh the agile thing is the mindset but

write some poems

try to bring your whole self to work

re-engage with your passion itself and

supernatural

kids do it all the time play at a

preschool and

it’s basically montessori preschool at

work and it’s incredibly effective so

you’ll love it um start painting do

something for fun

and the thing that i wish happened more

often in the world

to save those 90 companies i just talked

about

most companies think their core systems

are about the same as they were 20 or 40

years ago but

control systems and control equipment

has

changed a thousand

x in the last four years that’s how much

built built-up opportunity there

is in your company so every time you

look at for example robotics

like the potential is so high