Why Enterprises Need to Think Like Startups
The past 3 years, I have used the word ‘Agile’ so often that it sometimes makes me want to stop using the word. Everyone talks about Agility; most don’t really know what we speak about. Everyone wants to become Agile; most don’t know why and how. Consultants preach Agile Agile Agile; most hold different notions and confuse people (I am guilty of that too sometimes). Agile came about in the IT space; today we have agile for about anything (marketing, enterprise, software development, finance, etc).
The interesting thing is that most people equate Agile with Scrum initially. They believe it’s about project management, working in cross functional teams and iteratively delivering value. While that’s true, it’s only a fraction of what Agile is really about.
Google tells us two things:
What most people see as Agile is the second definition. Although most often used in software development, this ‘project management method’ is also used outside IT on a big scale today. The first definition is what I believe Agile is really about: Monkeys.
I love Monkeys. We even made monkeys as our company mascot and hand them out to customers.
The two reasons I believe monkeys are important in Agile:
- Monkeys need to stay on the shoulder they belong to
- Monkeys move very fast and flexible
Self organization and monkeys
The mascot monkey of Ekipa has a t-shirt saying ‘don’t tell me what to do, I am self organized’. We got this idea from an old management book, written by Ken Blanchard, ‘the one minute manager meets the monkey’:
The One Minute Manager Meets the Monkey is a humorous and highly effective way to learn how to start delegating business tasks.
When a person goes to the boss with a problem and the boss agrees to do something about it, the monkey is off his back and onto the boss’s. How can managers avoid these leaping monkeys? Here is priceless advice from three famous business experts: how managers can meet their own priorities, give back other people’s monkeys, and let them solve their own problems.
If you are overwhelmed by monkeys—projects and problems that don’t belong to you—then you need this book. Learn the three impositions on your time, four rules for caring and feeding monkeys, and two monkey insurance policies that will lead to your success in making the next move.
To me, this is one of the most crucial things in becoming Agile. Agile is about teams doing work together. And those teams are self organized. In the old industrial way of organizing work, individuals did work. They were held accountable for their own performance. KPI’s show whether they perform or not. A manager controls those individuals and ‘pushes’ them to achieve more.
The challenge in this new way of organizing teams is accountability and self organization. Most people are not educated that way. We’re used to having a father, a teacher or a boss who tells us what to do. And now suddenly that boss steps aside and says ‘now you figure it out yourself’. That is….IF the boss knows how to do that.
The boss is used to giving orders. This gives him power and authority and he likes that. He doesn’t want to get his hands dirty, prefers others to do that for him. If someone asks him for help, he does want to help, because that adds to his sense of authority and power. He gladly takes the monkey and solves it.
Now in an agile ‘system’, we want people to keep the monkey on their shoulder. We want people to fix their own problems. And we want bosses to keep those monkeys on the right shoulder. We want bosses to coach and assist, but not to ‘fix’ or ‘give instructions’. Monkeys help people to express this change. Hang ‘m around your office, put them on shoulders for real. This makes everyone aware of the change towards self organization.
Fast Moving And Flexible Monkeys
Now comes the difficult part.
Agile is most popular among large enterprises. Here’s why.
The past century was the age of the dinosaurs. Large enterprises came into being. People worked in those enterprises a big part of their lives. They had big resources and could acquire ‘threats’ (smaller competitors disrupting their existence). That era is over.
In the end of the 20th century, startups became a ‘thing’. With the advent of the internet, the power of computers, mobile phones, big data, sensors and other technologies, it became very easy and cheap to start a new company. Large amounts of capital are available to fund those companies too. And with that, companies like Facebook, Amazon, Uber, Alibaba created companies with values bigger than the centuries old enterprises.
Today, we have startup ecosystems everywhere. Technology keeps moving forward and everything becomes technology. Banks are not physical offices anymore, they are or will be digital institutions (if they survive at all). Insurance companies won’t be offices that you send your claims to, which are then handled with forms and letters by an individual. That will all be automated, online and mobile.
Now, this is probably common wisdom to you. You see it happen all around you. The problem, however, is that this all happens at a daunting speed. Thomas Friedman shows an interesting graph in his book ‘thank you for being late’. This graph shows the speed of technological change compared to the speed at which we humans can ‘absorb’ this change:
What’s interesting here is that we’re past the point of being able to catch up with the speed of technological change. You’d need to read the book to understand the big picture here. In short, Friedman describes that around the year 2007, we made a big leap forward. In that year, some very large things came about:
- The iPhone was launched
- Facebook took off
- Twitter took off
- Hadoop enabled processing big data
- Airbnb started
- The Kindle was launched
- IBM started working on Watson
- Google launched Android
Here is a four minute video where he explains it himself (things went too fast for him, he broke his arm!):
In short: the changes in technology and the marketplace accelerate. People can’t understand the implications of technology; before they understand, something new comes up.
The Age of The Startup
Enterprises are designed for the 20th century. Most have hierarchical structures with a lot of layers, based on command and control. They use traditional strategic planning cycles. Put a dot on the horizon, translate that to a plan 3-5 years out. Then derive a strategy on how to get to those 3-5 year outcomes. Plot it into one year and quarterly plans and get the right people on the job.
That worked before. Today it doesn’t. If things outside change faster than we can process in our brains, we cannot plan 5 years ahead. We can maybe not even plan 1 year ahead.
Startups are different. Here are some characteristics of a startup as defined by Steve Blank:
- A startup is an organization formed to search for a repeatable and scalable business model.
- The goal of your early business model can be revenue, or profits, or users, or click-throughs – whatever you and your investors have agreed upon.
- Customer and Agile Development is the way for startups to quickly iterate and test their hypotheses about their business model
- Most startups change their business model multiple times.
The keywords here are ‘search’, ‘iterate’ and ‘change’. This is what Agile is about. Instead of fixing those long term plans, we iterate in order to find the business model that sticks.
If you walk into a startup, you see people moving around. You see a lot of (transparent) walls with sticky notes on it. You see young, energized people who want to improve the world. You don’t see many bosses, because they’re outside talking to partner, customers and investors. It breathes energy. I think I don’t need to describe how the average corporate office compares to that?
Startups are designed to explore that rapidly changing technology. They see the technology and try to find a business model that works. Startups employ smart, young people who actually understand the implications of that technology. People who are faster than average in understanding what it all means for our lives. Startups are agile by nature.
Because of this fast, agile nature, they disrupt industries. They find new business models faster than the dinosaurs. Whatsapp disrupted the cash cow of Telcos; SMS. Uber, Grab and Go-Jek disrupt the taxi industry. Airbnb disrupts the hotel industry. Blockchain will disrupt the financial industry.
An everyday example in my own life is Go-Jek. In Indonesia, everyone knows and uses them. In Jakarta, I wouldn’t be able to meet 6-7 people a day without them. For many years, Bluebird taxi was the main mode of transportation. And then there were Ojeks; people waiting on the street to bring you from A to B. Ojeks are still there, but because they charge 5-10 times what Go-Jek charges, they stand idle most of the time.
Bluebird is still everywhere and I often use them. I haven’t seen the financial reports of the company, but I’m sure there’s a small dent in their income somewhere. Bluebird didn’t see the change of crowdsourced drivers coming (although the rising popularity of Uber could have made that visible to them). And they still don’t change fast enough. When I get into a Go-Car, the driver has a sparkling clean, big car. He knows where I need to go. I don’t need to worry about the rate, because it’s fixed. And he’s got Google Maps to flawlessly drive me to my destination. I get out and I paid automatically. When I get into a Bluebird, the driver still doesn’t have a navigation system! I need to pay in cash (unless I use their app, which I believe doesn’t work if I spontaneously stop a cab on the street).
(Some) enterprises see things change faster than their old bureaucratic organizations can cope with. They see startups and realize they need to adapt the model of the startup. But many don’t see it yet. The ones who see it, wonder how to change their organizations to fit the market speed. And that’s where Agile comes in. This article is about ‘why Agile’. In a future article, I will describe more about the ‘how to become Agile’. The short answer is monkeys; self organized teams where people keep their monkeys stuck on their own shoulder. Iterative work in cycles, which enables the self organized teams to adapt their focus to the changes in the marketplace.
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