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