How to create High-Performance Teams?
Where to start? There are three things every team member can start doing immediately to foster team building:
1. Frame the work as a learning problem, not an execution problem.
2. Acknowledge your own fallibility.
3. Model curiosity and ask lots of questions.
This is a great place to start. If you are interested in more detailed and longer approach, continue reading.
Two perspectives to building high-performing teams
Google researchers believe people can do more working together than alone. Here is their proposal of the characteristics of a high performing team.
According to Patrick Lencioni there are 5 hierarchical levels of dysfunction that might be blocking the way of the team being high-performing. (Patrick Lencioni, 5 Dysfunction of a Team )
The levels are objects that prevent the team from reaching their full potential. In other words, by winning all of these barriers, teams are able to scale their performance almost infinitely and in a sustainable way!
In my experience fixing the absence of trust is “the 20% of work which you get 80% of results”.
Absence Of Trust, Level 1
We trust who we know.
How well do you know your work colleagues? Their hobbies, ambitions or personal background? Forming closer connections with your team members, leads to improved team collaboration. You’ll learn what fires their ambition and keeps them motivated.
– Personal Maps, Improving team collaboration
Absence of trust is the first of five significant factors which prevents teams from reaching their full potential and the high-performance state. It is caused by people are unable to show their weakness and true self in front of others.
Absence of trust causes:
- Time, resources and energy are wasted because of people are building “protective shields”.
- There is a huge barrier to ask or even give help inside the team.
- People feel the need to be invulnerable.
- Team meetings (all) are ineffective.
- People are trying to hide mistakes.
What happens when trust is achieved?
- Innovations are enabled! People aren’t afraid to speak their thoughts and there is no need to be afraid of being mocked by anyone on team.
- Cooperation improves radically.
- Psychological safety is reached.
- Failures and mistakes are shared openly and they are used as opportunities to learn.
How to reach mutual trust?
To practice vulnerability and to improve team spirit can be easily done with the Personal Map method. Personal Map helps team members to share experiences while everyone gets to know each other better (goals, passion, worries and so on). Psychological safety is prerequisite for teams to be proactive. Without trust and safety team members cannot trust that working for team goals also helps them to reach their own goals. Without trust and safety team members will set their own interest before teams interests when making decisions.
Trust is knowing that when a team member does push you, they’re doing it because they care about the team – Lencioni.
Here is how to create a Personal Map (Absence of Trust)
A) Personal map for the whole team
Use this in a team building or retrospectives. Any mind map tool can be used, but I prefer using tools like Miro or Mural. Here is a link to anonymous Mural login: team map. Please contact me, if there are any problems with the Mural.
You need to have an account to use Miro. If you prefer Miro over Mural, here is a team map for you.
Follow these steps when using the team map:
- Create copies of an empty Personal Map for every team member.
- Split the team into 2 person groups (or any other suitable group).
- Randomly give 2 team member names to teams where they are not part of.
- Fill Personal Maps for persons whose name you got.
- Time cap 20min (10min/person)
- Use Post-Its to fill Personal Maps.
- Fill everything you know about the target person in your group.
- Important thing is that in this phase target person is not allowed to participate in filling Personal Map information.
- After Personal Maps have been filled
- Group by group present your Personal Map to target person and rest of the team.
- Target person can fill “gaps” in a way he/she wants.
- Target person can reveal as much or as little information as he/she likes.
- Go through every Personal Map
- This will take time about 5-10min/person.
- That’s it!
- Main point in Personal Map is that it is first created by other team members (that way teams find out how little they know about other team members)
- After that anyone can reveal as much as they like from themselves.
Note! Save your team’s Personal Maps to a common place where anyone can access them if needed.
B) One Person at a time
This is useful when a new member joins the team. The same links and instructions work with this option. The most important thing is that target person is not allowed to participate filling of their own Personal Map. Other team members must do it first. After the Personal Map has been presented to the new member, they can fill in the gaps.
There are also other tools that you can utilize to create psychological safety. Check them out in here.
“A team feels psychologically safe to its members when they share the belief that within the team they will not be exposed to interpersonal or social threats to their self or identity, their status or standing and to their career or employment, when engaging in learning behaviors such as asking for help, seeking feedback, admitting errors or lack of knowledge, trying something new or voicing work-related dissenting views.” – Amy Edmondson
The Personal Map is a very easy method to implement with any team. It is suitable for introverts and extroverts as you can reveal as much as you like from yourself. Do you know how you can grow the feeling of relatedness in your team in order to achieve trust and flow state within a team?
Technical Project Manager (Scrum Master, Agile Coach)
Some ten years ago I took part in training about agile software production methods. There were about two dozen information technology professionals present and again I was the only woman – a situation I’ve become very accustomed to, working in a male-dominated field. Along the years, I’ve called my experience the Smurfette feeling.
You remember the Smurfs? They are the small, blue, apparently male creatures, all dressed in a white hat and trousers. They live in Smurf village and they all seem to lack a personal identity and personality. And then there’s Smurfette. Smurfette has long blond hair and a white dress, and she’s the only female Smurf.
Our trainer gave us a group assignment that required innovation. We were divided into four groups, and each group was given a number. Then the trainer wrote a number on a piece of paper and put it aside, saying that this was the group that would win.
Our group, the one with the only woman (me, Smurfette) was by far the fastest and most efficient. And in the end, we found out that the trainer was right about the winning team, explaining that having been training people around the world it had become clear that if a male-dominated group has a team with at least one woman, that’s the team that will almost always win. The trainer had understood a key lesson: diversity feeds creativity. Being a woman was not the magic word. Similarly, in a female-dominated group, a team with a man in it is probably going to be the most efficient. The winning team may be diverse also ethnically or in terms of the age distribution. The team that represents the most different viewpoints and approaches regarding the problem will be the most innovative and efficient.
Later I have noticed that international studies have confirmed this phenomenon over and over again. Diversity feeds creativity and increases productivity and the number of innovations. Different people find different angles and new approaches to problems. And it’s not just about diversity helping to find new angles, it also forces you to be better prepared, explain your own point of view better and in all ways take your team members better into account. What’s more, the experience of equality that is the requirement of genuine diversity makes people enjoy their work better and also feel safer. It also makes people more committed.
Hearing out all viewpoints is important not only in order to increase productivity and innovation, but also for the sake of being just and equal. In terms of social fairness, it is not insignificant which challenges we begin to solve, whose problems are considered such that mental capacity and resources are invested to solve them and what is the direction we should be taking our world.
The society of the future will be digital. It is based on solutions provided by information technology. This is why we, experts in digitalisation, have a large role to play and also shoulder much of the responsibility of what kind of society and services will be built. And it’s not insignificant who the people are that are involved in this building work.
In order for diversity to work, we not only offer everyone the same opportunities, but also take into account any special needs people may have. The needs of a young single person in a wheelchair are probably different from those of a sole parent with three children. A person recently moved to Finland for work probably needs different kind of attention than a Finnish, semi-retired person with lots of experience. Each individual will also bring their own, unique strengths into the equation. A good employer will spot these strengths and provide the best conditions for their development. And this palette also changes during each person’s life cycle, sometimes quite abruptly.
Neither must we be blind to the fact how our old structures and operating culture may feed the success of certain people at the expense of other groups. We are often so accustomed to these structures that we need a proper shake-up to step into the shoes of another person to realise that things could also be done differently.
I would also challenge Smurf village totalitarianism in which the blue Smurf with a white hat is the norm and anyone deviating from it is only seen as a representative of their own special group, as a person that doesn’t fit in with the rest. In reality, almost every individual represents, seen from a specific viewpoint, at least one minority, and more often several. So the blue and white uniformity of the Smurf village may actually be a mirage, hiding many different colours, personalities and individual opinions. Recognising them and expressing your viewpoint clearly and respectfully of others will open the door to enriching interaction.
During the past two years, I had the luxury to be a part of a large-scale program that involved several development teams across the world. As an agile coach and scrum master of one of the teams, together with my colleagues, we built a development team that ended up being one of the best crews I’ve been working with so far. However, we didn’t get it right on the first – or even on the second try. There were some important lessons to be learned. In this posting, I’ve listed my three most important takeaways.
Encourage active and respectful face-to-face communication
Ideally, all the teams should be co-located. There is no better way than to simply walk to another person and to start asking those questions. This overcomes any other means of communication. However, in a global environment, this is not always possible. Thus, it’s crucial that, if there are multiple teams in different locations, you really need to go out there and meet those people. Or, alternatively, fly them over to your country and make them feel comfortable. This is a must and we learned it the hard way. If you don’t have the travel budget, pick it from your own pocket – I can assure you it will be one of your best investments for the project.
After you have made acquittances, use video conferencing tools as much as possible in everyday communication. It might feel awkward in the beginning, but again, it will improve how the teams communicate. If the other team does not have the equipment, it’s a great idea to buy them a proper webcam as a gift when you pay a visit.
Meeting people in person, having a laugh and working together, side-by-side makes all the difference. This will also enable people to establish common rules for working together more easily. Different cultures have different customs and e.g. ways of saying things. Like it or not, we also all have sub-conscious stereotypes of different countries and cultures. If the people you’re interacting with daily are mere virtual icons in your teleconferencing tool it easily becomes “us and them”. This is definitively not the setup to be in when you have to deal with more difficult issues.
So, in essence,
- Co-locate the teams, or fly them over to visit as soon as you can
- Get to know people, then use video conferencing tools and encourage relaxed communication
- Beware of “us and them”
Enable the team to evolve and remember to have a safety net
Preferably, the team’s composition should not change too often. Effective communication within the team, building an identity and your sense of humor will take some time, so be patient. Yet, setting the team composition in stone from day one might be problematic. The skillset the team needs at the very beginning of the project is usually different from the skills team members require over a longer period of time. In the beginning, you may need to have more specialists working with, say, concepting and service design. Later on, as the product evolves, the team might gravitate more towards operations or security-related topics.
An experienced team can identify these needs themselves, but it’s worth making this clear from the very beginning: changing the composition of the team is natural as the project evolves and everyone should keep their eye on whether the team has the best fit to deliver at a given time. Of course, the team is usually very capable of learning new things and sharing skills, as long as there is a decent time frame for this. Sudden changes will affect the psychological safety of the team, so avoid hasty decisions – involve the team, they know best what is required.
The chemistry within the team is something to look after. Even the brightest minds don’t work well together if the way of working simply does not match each other. Active discussion and even strong opinions are quite all right, as long as the team can work things out. However, very strong personalities can sometimes dictate discussion, even unintentionally. In this case, there’s a great danger of losing valuable insights and ideas. To overcome this, the team can take advantage of a plethora of tools available ranging from online anonymous feedback systems to tools used in retrospectives. Also, having an external coach to facilitate these discussions can prove to be valuable. The team should be coached towards non-violent communication and you should lead the example. As a last resort, don’t be afraid to make changes to the team. Having a fruitful working environment weighs more in the longer run, even in the case where the team might temporarily lose some technical talent.
Lastly, the team should take care of easy and fast onboarding processes. You will never know when one of your team members finds the love of her life or even a better job opportunity – which is on the other side of the world. For a highly efficient team, it’s a great safety net to make sure that whenever new team members are joining, they will get going as quickly as possible. It will improve the ability of a team to get back in the normal pace and reduces the anxiety of a new member of the team starting anew. Make sure everyone knows how to get started, where to obtain credentials and access rights, where to look for introductory tutorials and so on. And when the new team member joins the team, her insights and perceptions of the project might prove very valuable – especially with regards to the on-boarding process, but also on the project in general. The team might be blind to things and habits that have lost their value a long time ago.
Three key points regarding team evolution:
- Encourage people to step outside their comfort zones to learn new things – remember that changing the team composition should not be the first choice
- However, the skills needed in the project might change over time – involve the team to determine what is required at a given moment and then proceed
- Even the best teams will also face unexpected attrition, so be prepared
Be curious, challenge the status quo and empower the team
The same way as a newcomer to the team can see things differently, so the whole team can see the new project in a different light. There might be something very evident blocking the team on its way to success, which the team can immediately spot. So, challenging existing structures and the status quo should be encouraged.
When it comes to these blockers, there are many sayings, such as “it’s better to beg for forgiveness than to ask for permission”. With this kind of thinking it is often tempting to start from a clean slate. “Things would be so much easier and more fun if we simply ditched this box here and recreated it ourselves”. Sound familiar? Honestly, if you don’t need it, get rid of it. Still, it’s good to think twice before blindly overhauling all the existing processes and tools already in place. They usually are there for a reason. Before making any big changes, the team needs to understand how the underlying system of work works.
The other point of view is that a fresh team does not yet carry the weight of the organization. Hopefully, the team is free of any strong opinions regarding other departments in the organization. As no bridges have yet burned, the team might be able to approach different parts of the organization in a more neutral way and thus learn more this way. This should be encouraged.
The point is to actively seek the actual users of the system, even if (and especially when) it has not been the custom, or when there is a proxy entity representing actual end-users. What are the users really trying to do – do they actually need this system? This is often overlooked, or users are misrepresented by some other entity. There might be existing tools or structures, parts of the system, that are then, once again, recreated. But the team can easily go on for a long time before really understanding what it is actually building and for whom – or does it even make sense? Once the team really understands the real needs, it should be empowered to make even bold decisions regarding what really should be done next.
In the end, it comes back to active communication. Perhaps it’s about pointing out the elephant in the room no-one else is willing to see. Then, having the right people expressing themselves in a polite but decisive manner – and at the same time being able to express and reason themselves clearly – will make a world of difference.
- A new team has “fresh eyes” – try to benefit from it
- There might be existing structures that, in the end, serve no real meaning
- Understanding the system, i.e. what users are trying to achieve, is the key thing
From my experiences, I can guarantee that building a highly-effective team from scratch is challenging and will require some trial and error. If you work with a global customer and with different cultures and time zones, things will not get any easier.
There are many things to keep in mind, but always make sure that you communicate your intentions, what the team is currently doing and where you are heading next in the clearest and concise way possible.
Do your best to find the most suitable composition for the team. Try to keep changes to a minimum, but always remember to think ahead and have a plan B ready, if and when you are forced to change the team.
Encourage the team actively to seek a better way. Usually, things are in place for a reason and they can always be done differently. The trick is to know whether the features the team is implementing are actually taking the product forward from the real customer’s point of view or are they merely feats of engineering. And finally, always remember to ask why.
Digitalization is helping organizations and individuals build and expand their networks which leads to meaningful cooperation. Increasingly these networks are sharing time, insights and information and co-creating new business models and services. Business rules are in such constant change that regulators are struggling to keep up. To be resilient and stay relevant in this networked world, organizations need to constantly innovate new meaningful ways to communicate, interact and form relations with different participants. This does not happen from inside the company.
Understanding the wider scope, systems, value streams and relationships and how they work is a key element in driving innovations in this networked world. Many organizations claim to be customer centric however if you ask their customers the answer might be quite different. Customer surveys or ‘Happy or Not’ buttons at checkouts might give a quick impression of the organisation’s concern but this can be a false impression. Truly customer centric organizations curiously explore their customers’ holistic experiences in their world and changing contexts. To understand these, design methods such as observation techniques and contextual participatory methods are required.
The same can be said for understanding employees within the organisation. Employees know best what happens at the intersections with the external network participants they work with. Companies should never outsource their eyes and ears. Innovations do not flourish in an environment that does not listen to both their internal and external network participants.
Making the shift from company centric to customer and network-centric
Value in co-creation needs to be mutually beneficial whether it is monetary, experiential, environmental or societal. Meaningful innovations require a radical mindset shift in organizations – from company centric to customer centric and all the way to network centric. To drive innovations that are meaningful to different participants, real network centric organizations build their innovations around experiences. They try to understand people’s activities, practices and experiences in their world and in a context that extends beyond the organisation’s products and services. That is only possible when understanding individual behaviour and that isn’t easy.
People might be end-users, citizens, consumers, customers, employees, clients, partners or contributors and you need to observe them and listen to their stories, find out what is important to them in their world and in changing contexts, and find out why.
Are you company-centric or network-centric?
Using Design Thinking to facilitate constant change
Organizations that fearlessly withstand uncertainty and trust non-linear and iterative innovation processes driven by people-centric data have an advantage. The Design Thinking approach drives valuable innovations that are new to a specific context and time, creating value for all collaborative participants in a meaningful way. Innovations ultimately always need to be aligned with actual network participants’ unsatisfied and important jobs, pains and gains if they are going to be successful. This means that if an organisation`s innovation intent is not people driven, but technology and business driven, those innovations need to be validated with evidence that people really care about the innovation intent.
The powerful mindsets of design thinking guide the whole organization to break down silos and build an open, transparent and trust-building atmosphere that supports collaboration and the sharing of information and knowledge. This helps to cultivate an innovation culture that embraces the experiences of employees and external network participants.
The world in which we are living, and the future may seem foggy, but when you go out and observe the world with an open mind and with empathy, everything becomes clearer. The future does not just arrive – it is co-created within networks.
Read the extended version of this blog from our publication: Recoding change (pages 106-111)
Do you believe in positive change? That our actions can change this world for the better? Read more in our pubilication, recoding change (NOTE: Booklet is written mostly in finnish): Recoding change
The latest X-Road Community Event was a huge success. With 150+ participants from 22 countries, it is evident that the interest and tangible actions for enabling digital societies are hot topics among the nations worldwide.
The event was organised by the Nordic Institute for Interoperability Solutions (NIIS) who are developing and managing an open source data exchange solution called X-Road. X-Road is the basis for data exchange in the public administration in Estonia and Finland, both of whom are founding members of the organisation. Lately, Iceland and the Faroe Islands have also joined as partners – and various countries and regions in Europe, Africa, the Americas and Asia have run trials and adapted X-Road for their use. See the X-Road world map for details:
Currently, Gofore is the sole developer of the X-Road core for NIIS through a public procurement.
X-Road version 6 is deployed in Finland and Estonia, and Iceland will follow suit shortly. The Faroe Islands and some other countries are preparing to migrate their platform from version 5 to 6.
At the event plans for the development of the next version of the software, X-Road 7 Unicorn, were introduced and presented in various workshops by experts from Gofore, the Finnish Population Register Centre (VRK) and the Estonian State Information System Authority (RIA). NIIS CTO Petteri Kivimäki stated: “X-Road is not developed for us [NIIS] but for you [nations and organisations]”, so it is evident that close collaboration between the development of the core and existing and planned local installations is highly valued. The MIT-licensed open source software enables maximum utilisation and all users are welcomed to contribute and create pull requests for additional required features.
Planning to utilise X-Road?
If your country or organisation has various data sources and siloed services, taking X-Road into use will enable a fluent, fully secured and easily manageable solution to exchange data between sources. Such fluent data exchange enables endless possibilities for derivative machine-to-machine applications and easy cross-border data exchange between countries. Of course the ultimate target are smooth human-centric services for citizens, which often require additional trusted digital identity management system to be build alongside information systems connected by X-Road.
Gofore has experience and deep expertise in all layers of X-Road and digital identity design, development and deployment and we are looking to support their utilisation at an international scale.
If you want to hear more, please contact the author or download the leaflet below – it will provide more detail on why, what and how X-Road would help to achieve a digital society in your context.
Interested in reliable, secure and easy to use integrations for digital services? X-road provides this and more. Download our X-road leaflet to learn more about how this could be utilised in your business: X-road leaflet
Data and information are or will be, inevitable prerequisites for success, no matter what your business is. Data is said to be the new fuel, new services, new tools, new professions (very sexy ones), etc. Data is also said to be risky, vulnerable, unsafe, out of control, etc. All these statements are true and at the same time very confusing. This post gives some guidelines on how to tackle the ever-growing data and information overload.
Problem or opportunity?
The ever-growing amount of information can be seen as a problem or as an opportunity. Both these options are, not good or bad, but dependent on the relevant approach to data and information. By selecting your approach, you might even select your future career. Cybersecurity professionals love to solve technical data privacy problems whilst business development people see endless opportunities for new services and platforms. So even viewing information as a problem might be a business opportunity.
Bring the data together
Data and technologies become more and more complicated and diverse all the time. And sad to say, too often data and solutions are very isolated and siloed. Silos are a very big problem. Successful organizations are transparent. This means you need to get rid of data silos, especially mentally, and bring data together in one platform. This applies not only to your own data but to all data which might belong to other departments, other companies or to publicly available data.
Technically this is not a problem, there are a huge number of tools and platforms which enable you to put data in one place and to combine and integrate it. Usually the problem lies in people’s thinking and in organizational cultures. There can also be some legal restrictions, but still it is often possible to have some elements of the data transparently available.
Don’t try this alone
It is impossible for a single person, and in most cases even for a single organization, to do everything alone. You need a team, people for certain roles. On the football pitch, you cannot be the goalkeeper, midfielder and forward at the same time. In realizing the opportunities lying within your data you need people for different roles, e.g. data engineer, data scientist, developer, business analyst, security expert, etc.
The roles in your team depend on the approach you take and what you are trying to achieve. Tackling information problems requires engineering, security, quality skills, etc. Grabbing information opportunities requires e.g. experimenting, prototyping, visualization, AI, design and sales roles. To be successful in the long run you need to assess both problem and opportunity approaches. Like Tom Davenport says, “Great data teams play both offence and defence”.
The way forward
The glue between data, the development team, the production team and the technological platform is the way of working. You might say these are the processes, but they represent a strict and siloed way of working. The nature of data related development whether it is dashboard building, advanced analytics, AI model development, etc. is such that when you start, you don’t know where, and with what results you will end up with. In addition, new requirements will very probably emerge during the work. Traditional project methods for development are not capable of handling these ever-changing situations fast enough.
The line between development and production is very vague in the field of data and analytics. The transition from development to deployment and to everyday use must be seamless and continuous. You must understand constantly changing needs and constantly increasing data. Agile and experimental ways of working are the key. You must be able to show results, iterate them and adjust your direction continuously with your clients in ever-shortening cycles.
Execution brings results, prepare for change
The problems very often lie in the execution. Not only ready-made solutions but also small and more ‘academic’ experiments should be taken into use and deployed into production. If you don’t try them in production with real data, you don’t know what they bring to you. Another aspect of execution is actions. No solution or information is useful if it is not used or no actions are based on it. Usually, it is most effective, also cost-wise, to build up and kick-start new solutions with help from a partner(s), even in this case you need to take care of the action-part. When new solutions are deployed and new ways of working have become business as usual, then you can rethink what resources and competencies you need to have yourself and how you continue with partnerships.
The field of data & AI, like many others, is in constant development and transition. And like all development, it is not only about tools and technologies. People, competencies, ways of working and organizational culture are key parts of success. New development drives constant change, and in order to succeed in a changing environment, you, or at least your thinking, must also change!
In the past, companies have addressed changes in business situations by adding more control. Control has been seen as the tool to gather and process more information about change and thus to gain a better understanding of the situation. This has led to a hierarchical organization with unnecessary organizational layers and structural resistance to change. But ‘change has changed’ and the dominant industrial thinking model based on a hierarchical organization is outdated. Organizations have become inefficient, incorrectly structured and complex to manage.
It is not that companies’ leadership and management have been lazy and stupid, but the business at large, and society have changed towards something new, which is called digital. The change is evolutionary, comes in waves and has gained momentum since 2000. At the same time, current legacy management is based on industrial thinking characterized by concepts like static operations, manufacturing, raw materials, products, markets, economies of scale, value chain, shareholder value, and asymmetrical information. These are things that are more concrete and based on business models ignorant to environmental and social issues. Anyhow the industrial era has produced plenty of wealth, growth, health and societal good.
Companies are getting more profitable, but at the same time, there are challenges to create growth by introducing new services and products. Digital technologies generate efficiency gains through automation and improved situational awareness by improving existing solutions. Companies can get stuck between industrial and digital. The more you apply digital technologies to existing products and production, the more efficient a company becomes, but that doesn’t necessarily create growth.
What does the digital era look like? We don’t know exactly and we are afraid to admit that our society is entering a totally different era. A similar magnitude of change was witnessed 200 years ago when the industrial era started. The future comes in small pieces, not all in one go. The small pieces that characterize the future are the digitalization of products to services, vast data and advanced analytics, customer centricity vs. product, economies of flow vs. scale, individual homogenous needs vs. markets, dynamics vs. statics, ecosystems vs. value chains, IoT devices vs dump devices and stakeholder value vs shareholder value. The information which caused the change is so vast and volatile that hierarchical organizations can be too slow to react. There is a need for new ways to organize collaboration.
The challenge with company growth is the balance between legacy and renewal, resilience and adaptation of new ways of working. The root cause seems to be industrial-organizational thinking, where a company is seen as one hierarchical organization. Contemporary thinking is nothing like emphasizing companies systemic, adaptive, self-organizing and intelligent characteristics. Companies are not just organizations that react to external events, they also change all the time because people want to do what they see is right.
Companies are good to react when their existence is threatened. The danger with digital transformation is the evolutionary nature. It doesn’t create immediate urgency, results just become harder to achieve. Also, the transformation process is seen as ‘One Model Fits all’, instead of fit for purpose and against customer demand where parts of the company are transformed individually.
So there is a struggle with the past, and the future looks distant and different. The situation often presents itself differently from that which you were expecting. The past says that there is no need for change, the future says total change. From a company point of view making sense is a customer demand related topic. A company has several futures depending on their customers’ true needs. Company resilience is the sum of the resilience of the customer serving parts. This is also the reason why there is no need for ‘One Model fits all’ transformations because there is no ‘One Model’. In the past, management expected and wanted to create a trust to ‘One Model’. Now the flow of trust is reversed. Management needs to trust that autonomous units know their customer needs and will act in the best interest of customer and company.
The challenge with company growth is the balance between legacy and renewal, resilience and dynamic new ways of working. Resiliency is an organizational capability that is needed when the times are good, bad and between. Resiliency is good for company stakeholders.
The role of organisations has been under heavy discussion over the last years. Recently more and more organisations tend to choose a new approach regarding their management control; self-management. This blog post looks at how one local Finnish service company has developed its way of finding a balance between employees’ autonomy and accountability.
Hello networked organisation
Organisations are designed to be stable and predictable environments. They have been very good at processing information, optimising processes and producing outputs. But over time, things change: customers want different services, new competitors and business models arrive, and the organisation might scale rapidly. This greater overall complexity forces organisations to fundamentally rethink their whole organisation model.
In the networked organisation model, the organisation operates as a network of small, self-directed pods that are connected by a common purpose and supported by a platform. A platform is a structure that increases the effectiveness of a community. The networked organisation cannot fit on a traditional organisation chart and is optimised by information speed and people pods.
The networked organisation enables a whole a level of flexibility and adaptiveness, that would never be possible in a divisional organisation. It can respond dynamically to change and can learn and adapt to the environment continuously. This will help the organisation to faster identify and capitalise on opportunities.
Networked organisations are also very resilient. It distributes the workload across a wider area by allowing each pod to focus on goals rather than on steps or stages. If one connection breaks, pods can still continue to work.
Networked organisation in action
Gofore plc. has around 600 employees and provides consultancy services in the fields of software development, design, management consulting and cloud. Gofore wanted to keep its organisation as simple as possible even though the growth has been rapid. The next chapters explain briefly how the networked organisation model functions at Gofore.
Gofore’s business model is consulting, so the company is eager to find new customers and deals. In this typical example, a sales person discovers an interesting invitation for tender. He contacts another sales person to discuss the details. After discussion they decide to create a bid.
The invitation to tender requires proof of concept and a team of three developers. Sales person A discusses with the sales person B and uses Gofore’s internal services to find a suitable UX-designer and a software developer for the project. Sales person B leaves the pod.
The UX-designer and software developer A start designing proof of concept. Software developer A invites two more developers B and C who would be right for the project. Sales person A also invites a legal advisor to help prepare the bid.
Software developers A, B and C fill needed resumes and help the UX-designer to finish proof of concept. The legal advisor advises software developer B on details of her resume. Sales person A and the legal advisor finalise the bid. Sales person A sends the bid to the client. Finally, the pod disappears, and people return to other pods.
A notable thing in this example is that people might not have met before. There were also no managers or a standard process of how to proceed. The pod shares the common goal to “finish the bid”. In other words, the whole pod is accountable for doing all the needed actions in order to reach the goal.
Most of the communication happens in one Slack channel and the pod might be active for only a couple of weeks. The pod goal can be everything from a small marketing event to a large strategic acquisition and it can contain employees, partners and customers. Size and activeness of the pod also varies over time. Sometimes the pod has one facilitator and sometimes multiple members are the driving forces. Occasionally, a pod fails to reach its target. Then people from the pod sometimes gather to reflect on what went wrong.
Theoretically, people can jump into different pods and take different roles at any time. On the practical level, people have varying expertise and responsibilities that restrict mobility. People who have more sales or recruitment responsibilities for example tend be more active than a single customer project focusing expert. There are also more static structures at Gofore, such as the executive management team and human resources function. Despite this, most “goforeans” are members of multiple pods simultaneously.
Every model has side effects and the networked system is no exception. Gofore has numerous pods active every day. This might cause a situation where two pods are working on the same topic without knowing the others’ plans. Thus, a pod might be operating on an activity that has previously been done, or is already planned to be done. In my experience, this sub-optimisation risk hasn’t been a major challenge at Gofore so far.
If an employee belongs to too many pods at the same time, context switching might generate overhead and frustration. The other challenge is that people become bottlenecks – people struggle to say no for new pods and activities, even when their schedules are fully booked. For these reasons, employees need to know how a self-organising organisation works. Gofore has created internal “People Person” and “Coach” services that support employees in their self-management and personal development skills.
Some people might also miss long-term teamwork and traditional supervisors, where decision making is slower and more predictable. Gofore’s customer projects are typically long lasting which helps to create a more stable environment. Some pods such as “Guilds” and “Capabilities“ are also more durable by their nature at Gofore.
Control your own fate
This blog post offers a glimpse into Gofore’s operational level. It is important to understand that when the organisation is adaptive and learning, structures and culture also evolves continuously. Hopefully organisations understand this paradigm change and let go of the legacy of Taylorism.
The Connected Company by Dave Gray
A business model is known as a plan of how to execute an organization’s strategy. It can also be a summary of an organization’s business logic. Understanding the target domain is often required in order to model a business, for example, to gain a common understanding where the participants are a cross-functional team. To model these plans or summaries there are many tools, templates or frameworks available. In many cases, they use graphics to create a more understandable way to ensure that different perspectives are considered.
One of these templates which is easy to access is called the Business Model Canvas (BMC). An objective of the BMC is to create a commonly known way to clearly picture the ontology around the target domain. The BMC offers you pre-defined building blocks to divide your business domain or a single product/service – it works in a very scalable way because it fits both small and larger target domains. The BMC consists of nine building blocks which contain points of view from a value proposition, customer thinking, business infrastructure and economics.
The Value proposition building block is in the middle of the canvas. The value proposition defines the value or benefits customers get from using the organization’s products or services. For example, the service’s value proposition is to provide a faster and reliable connection between users.
The Customer segments building block defines the customer groups for whom value will be produced. Customer segments can be sorted with different criteria, for example, according to age, county or industry.
Customer relationships answers questions such as: what kind of relationships the organization has with different customer segments and how are they maintained. For example, how to create relationships with new customers, how to maintain existing customer-relationship or how to develop relationships with potential customers in the future.
The Channels building block represents all the defined ways to reach customers or how the value propositions are distributed for customers. For example, an item bought from an online shop will be delivered via the post office, but a local store can sell the item locally.
The Key resources building block defines all the resources required to produce and provide a value proposition. Resources can be divided for example according to the material (human, IT-infrastructure) and immaterial (patents, brand) resources.
The Key activities building block answers the question: what are the main tasks or functions to deliver the value proposition. For example, activities can be divided according to manufacturing lines, services, or problems to be solved.
The Key partners building block defines the most important stakeholders to complete all the necessary key activities.
The Revenue streams building block defines the price for the value proposition. Different types of prices can be defined according to the customer segment.
The Cost structure defines all the costs of the activities to produce and achieve the value proposition. For example, these can be costs of marketing, distributing and manufacturing. Cost structures can be sorted with fixed and variable costs.
One developed version of the BMC is called Service Logic Business Model Canvas, that especially points out customer thinking in these building blocks. For example, the value proposition considers what are the problems that customers are about to solve with a product or a service. Or what are the specific features that specific customer segments are looking for from the value proposition.
Towards a common understanding
Designing with graphical tools helps to understand the target domain from a different starting point. For instance, project members from different sectors might see the result in a very different way. The BMC-template offers a fast and effective way to begin brainstorming and especially to collect and compare ideas. All you need is a printed BMC-template and lots of Post-it notes. Collecting something concrete on a wall makes it possible to begin discussions with each other and promote the business model to the next level.
Finally, a couple of tips for effective teamwork with the BMC:
- By using different sizes and different colours of post-it notes you can highlight or easily split ideas into groups
- You may use multiple notes to write down words or paint pictures: tell a story while placing them onto the canvas (good stories are remembered for a long time)
- Be open-minded while having conversations about ideas – it’s dangerous to fall in love with your own ideas.
- It might be necessary to go through multiple rounds before getting a satisfying solution. It’s important to evaluate iteratively which ideas work better and which ones do not.
- It might be a good idea to split a larger group of participants into smaller groups and compare their outputs – finally collect the best ideas together.
Example of using Service Logic Business Model Canvas:
Business Model Generation: A Handbook For Visionaries, Game Changers, And Challengers (2010) http://businessmodelgeneration.com/book?_ga=1.248258951.1869965398.1467892617
Osterwalder, Alexander et al. “The business model ontology: A proposition in a design science approach.” (2004). http://www.hec.unil.ch/aosterwa/PhD/Osterwalder_PhD_BM_Ontology.pdf
In the business of digital services, the customer is the boss, and the value the customer sees, feels, and perceives is the only metric that matters. But what does it take for a traditional product business to turn into a customer value-driven service provider?
Bad services come into the bargain with products. Great services replace the need to buy them – or make them obsolete altogether.
When products no longer satisfy
Traditional B2B product companies are struggling to stay relevant. Research & Development pushes out new technology faster than ever, and every step of the manufacturing process to logistics has been fine-tuned to perfection to offer the best quality-price ratio to customers.
The products have never been better, yet the sales forecasts are looking grim: traditional businesses are losing more deals every year while those businesses that manage to listen and react on their customers’ needs the quickest, flourish. What’s going on?
Traditional product business relies on technical excellence. The customers are passive consumers of the product.
The day the customers changed their minds
Meet Maria, the plant manager at Industry Inc., a mid-sized manufacturing company.
On an average Monday, Maria continues working on the newest tender for the plant. With the help of her team, she’s already narrowed the options down to two. It’s time to make the final call.
Option 1 is a trusted, familiar dealer, offering an excellent product. History has shown that it’s a good choice, and the price is the same as always.
In Option 2, the provider is offering a partnership focusing on improving the plant’s process performance. The product itself is one component of the service and is included in the monthly invoice. With the service, the provider promises to remove a few of the manager’s, engineers’ and the operators’ manual tasks. “These sure are tedious and time-consuming tasks,” she notes. “I wouldn’t lose anything important and could focus my efforts into more strategic questions.” “Actually, with these key figures, we’d be able to plan our budgets six months in advance. That’d make our jobs a lot easier.”
Option 2 sounds like a better choice, but also more expensive. But after adding up the benefits, Maria comes to the conclusion that the true potential is in the long game.
“Maybe we should give it a try. If everything fails, we can always go back to the good old Option 1,” she decides.
And they never go back to Option 1.
Hard numbers drive the discussion, but perceived value tips the scales
In B2B, direct cost is always a major criterion in decision-making, but certainly not the only one. The technical excellence of the products is already taken for granted by the customers – in the end, what really makes the difference is the total value the customer feels like they are getting.
How much do you value removing the mundane tasks you dislike? What about being able to consult experts in decision-making when needed? Sharing the risks with someone? Or making you feel like a better professional at your job?
We all choose the best option for ourselves, and for the context in which we live. People value things differently, and these values are rarely visible to the naked eye.
Knowing the people behind the billing address
No business can afford to create something their customers don’t accept. But who exactly do we mean when we say ‘the customers’?
In the digital service business, customers are not passive entities that consume what the business offers – they are people with different roles, needs, and motivations of their own.
Find out who your customers are, and what they need and value. Focus your efforts on doing the most important bits for them. (it’s worth mentioning that customer needs and wants are two different things – customer-centricity doesn’t mean you have to say ‘yes’ to every customer wish!)
When true customer insight starts driving decision-making, customers become the new objective setters for your business. Those objectives start driving the technical excellence of your business. The whole current changes direction.
The digital service business relies on customer insight. Answering to the needs of the customers drives the objectives of the whole organization.
Getting out of the black box
Creating something new never comes without risk, but you can avoid flying blind.
You need to learn how to collaborate with your customers’ key people. You need to be able to test your assumptions and ideas with them before they’re built.
It takes courage to challenge your own assumptions and approach customers with hypothetical scenarios and prototypes. Nobody likes having their ideas shot down, but it’s always better to fail with a two-month-old concept than with a launched service that’s been developed over years.
“But can we do that? What will our customers think?”
You’ll be surprised how eagerly people reserve an hour of their time to help create something that will, in the end, make their own lives easier. They’ll appreciate the opportunity to get their voices heard and make a difference. If you’re well prepared and have the right professionals to do it, people will want to pitch in. Or, at the very least they’ll appreciate that they were asked.
With the resulting, rich insight, you’ll notice that it’s much easier to make decisions on where to head next, what to change, and what to keep.
Playing the long game
Services are never ready. The service provider’s responsibility does not end when the first version is out and the first deal is won. That’s where the real acid test begins.
With services, the strength of the customer relationship is put to a test every single day. Even the best customer insight stales with time: customer needs and priorities change, and the service needs to be able to evolve with them.
Meeting and exceeding customer expectations demands resources, commitment, and, most importantly, continuous development. But the work pays off with strong and honest relationships that last. Such relationships create long-term value for both parties.
Fortune favours those who are driven by customer value
In the game of customer experience, fortune favours those who truly know and collaborate with the people behind the customer accounts, anticipate and react quickly to changes in the environment, and keep delivering their promises day after day.
Find out who your customers are and figure out what they find meaningful. Be prepared to challenge your own assumptions. Find the courage to test concepts with your customers’ key roles before they are built.
It takes courage, a change of mindset, and realignment in the way the business operates internally. But at the turn of the tide, that’s the price of staying afloat.