Destructive conflict is often rooted in perceived incompatibilities between team members....
We focus so much on teams when considering agility – but at least 60% of tasks are better performed individually in the majority of businesses.
Imagine walking into an open office. In the middle of the room there is an animated meeting of six or seven people. They are clearly working on a project together. They are an agile team empowered to achieve their stated goals. Ideas are being energetically shared, a steady stream of suggestions being offered, keyboards are enthusiastically tapped, notes made. There is a buzz of achievement, of an engaged team at work.
Your eyes then pick up a lone figure in the corner of the office. She is staring intently at her computer screen and then typing. She is a person working in finance and her job consists mainly of individual tasks. She is clearly focused, but less energetic and engaged than her colleagues, because she is suffocated by rules and policies
What do you think at this point?
Working with clients worldwide, I have repeatedly encountered similar situations where ostentatious agile teams exist alongside focused individual work. And every time I experience the same feeling: that the individual is somehow missing out on the agile buzz.
We are told teams, enhanced by agility methods like Scrum, are the route to corporate agility and agility is what companies need to compete in the fast-changing business reality. But if we focus solely on teams as a means of improving organizational agility we are missing an important point: individual work exists and will continue to exist. In fact, our experience with clients suggests that 60% or more of tasks are performed, and will continue to be better performed, individually in the majority of businesses. The lone figure in the office is not alone.
This means that achieving organizational agility requires giving serious consideration to how individual tasks are approached and controlled. And this is where there is a big problem in organizations. While teams roam free, individuals are restricted and carefully controlled. Individual tasks tend to be bogged down in rules, regulations, protocols and controls. The traditional control model is preventive, based on authorization by someone higher-up the organization and strict compliance to policies and procedures. This ‘preventive control model’ is the root cause of slowness and bureaucracy within large companies. It also has a clear and negative impact on employee engagement.
To reduce bureaucracy and improve agility, it is time for companies to start thinking about the activities and the people who don’t fit neatly into fashionable notions of team-work. Rethinking the traditional control model embedded in most policies and procedures is the way to attack the issue at the jugular. The question is how?
Few companies have a culture like Netflix, which can eliminate controls abruptly. The company is famous for not having travel and expenses and vacation policies. Instead, employees decide autonomously what is right for the company. This is a big leap. Eliminating controls is too drastic an action for most companies. A different and more implementable way forward is to innovate the control model to make agility more pervasive when it comes to tasks that are better handled by individuals. This route means that there is still some control, but it is not based on lengthy policies and preventive authorizations.
Banking provides a good example of the traditional control model at work, and also highlights ways we might innovate it. Apply for a loan in a branch and even if your application is in line with the policy and your credit score is healthy, the bank employee you are dealing with will need to find an authorized signatory — usually two or three hierarchical levels above the employee — before the loan is agreed. This appears, at first glance, to be sensible and prudent. But it effectively disem powers the employee, takes longer and creates bureaucracy.
The financial group Affinity developed this control model and reaped the dividends, eliminating a long-established and lengthy approval process. The replacement was what Affinity describes as its Member, Organization, Employee (MOE) framework to guide the decision-making process of employees in the branches.
Affinity laid out its new model like this: “No employee will ever get in trouble for doing what is right for the customer…There is only one operating guideline you ever need. Trust your feelings — if it feels right and makes sense do it on behalf of the customer. Do not consider the system capability, policy or procedure — err on doing whatever is necessary for the customer and allow your manager or supervisor to take care of the rest. Finally, be prepared to defend your decision! If your intention is to do what is right for the customer, you have the support of management and your co-workers.”
When Affinity employees use their judgment under the MOE framework and deviate from formal policies, they document their rationale for the decision and post it on the company’s internal system so that all is transparent. Affinity has moved from the traditional, bureaucracy-creating ‘preventive model’ to a ‘detection model’. When the rationale for a decision is posted on the intranet, every employee at Affinity, including the boss, can read it if they wish to do so and ask for explanations.
It works. Charge off rates for higher risk clients plummeted by almost 50% (from 1.9% to 1%). Moreover, the new control model led to the bottom-up creation of predictable decision-making norms, enabling the managers to reduce the perceived risk of a random decision-empowered employee.
Moving to a ‘detection control model’ like Affinity it is not the only possible way to innovate your traditional ‘preventive control model’. There are several types of ‘control model innovations’ to choose from, based on goals and context.
Airbnb, for example, applies a ‘peer control model’ to its coding process. In the past, Airbnb used to produce its code without a peer reviewed process in place, but just with quality testing and supervisor approval. Site stability was deteriorating. Time had come to introduce routines for peer review and innovate the control model. This change could have been enforced establishing a policy signed by the VP of Engineering with clear rules for mandatory peer review before moving the code to production. Airbnb took a different route: instead of imposing the new approach from the top down, a group of highly respected software engineers was asked to start requesting reviews. This set the example to the community of coders. The benefits of peer review were popularized and highlighted in visible meetings. Thanks to social pressure and positive reinforcement, in fewer than three months peer code reviews had become the common practice without a formal policy. Peer reviews have been particularly effective in increasing the quality of coding at Airbnb. Software engineers simply fear the judgment of their peers and community in assessing the quality of their work much more than a performance review from their boss.
Another example is the ‘social control model’ used at HCL Technologies (HCLT) in its yearly planning process. The roots of this date back to the strategic transformation initiated by Vineet Nayar when he was the CEO. In the summer of 2005, Nayar called together a group representing the 100 best and brightest people in the organization. One outcome of that meeting was the philosophy that came to be known as ‘Employees First, Customers Second’. One of the central features of this is that it transfers ownership of change within HCLT to the trenches – to the employees who directly interface with customers. That’s because the interactions between front-line employees and customers take place in what we call the ‘value zone,’ where value is created for both HCLT and its customers.
Despite the tremendously successful transformation that HCLT underwent following that 2005 meeting, the company’s business planning process stayed pretty much the same. For example, under its sales business planning process, several hundred account managers – each responsible for one or more HCLT clients – would work with their salespeople to put together a business plan for the coming year. Each of these was then reviewed in a meeting that included at least four senior executives, then approved and monitored three to four times during the year with formal review sessions with an equal high number of reviewers.
Bringing all these managers from around the world to a single location for these multiple meetings was expensive, difficult to schedule and time-consuming. In many cases, the account manager’s thoughtful rationale for sales targets and assessments of business opportunities/threats were trumped by a corporate financial plan that was agnostic about such detailed information from customer-facing employees. The number of “preventive controls” for setting the goal, reviewing them and adjusting during the year was time consuming and frustrating for the account managers and employees. Moreover, the planning process was totally at odds with the “Employee First, Customers Second” philosophy, which puts organization power into the hands of front-line employees because they are the source of insights that generate value.
The process was transformed. Account managers now work with delivery managers for their accounts to develop a plan which is posted on the MyBlueprint portal on the HCLT intranet, along with recorded spoken explanations by the account manager. These are visible to everybody. The plans are commented on-line by relevant senior executives and are also available to all HCLT employees for their input. Finally, having fully transparent plans, there is no longer a need for on-going formal review and control meetings. HCLT leverages the power of a “social control model” to incentivize account managers and sales employees to high performance much more effectively than boss authority or monetary rewards.
In conclusion, building true organizational agility requires an approach which embraces team, as well as individual tasks. Innovating the traditional “preventive control model” is key to solve the root cause of bureaucracy and to allow employees to perform individual tasks with greater autonomy and agility. Performance and engagement scores will skyrocket for all, not only for agile team participants.
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