“We need to be more agile. CIO, make it so.”
This statement might work in Star Trek, but in the real world, it does nothing to create organisational agility and resilience. When talking to C-suite audiences about agility, it’s commonly the chief people officers (CPO) who lean into the discussions. They appreciate agility as a cultural characteristic of their whole company, not just a new approach to technology. In fact, some organisations have gone as far as retitling the CPO the “Chief Talent & Culture Officer.”
Here, I share a hypothetical letter from a CIO to their CPO. In future posts, I’ll further explore a few of these topics. I hope it inspires a closer connection between organisations’ Technology and People teams, two groups that can massively influence a company’s competitive posture as they accelerate the two Cs: cloud and culture.
Dear Chief People Officer,
I appreciated our recent candid conversation about how the relationship between HR and Technology has become very transactional. It’s too easy just to call you for the annual talent and performance reviews, or for an employee problem. Similarly, you typically call me when you’re looking for a new system or data. Rarely do we work together on foundational initiatives—and I’d like to change that.
At the AWS re:Invent conference, two executive presentations prompted my eureka moment for what you and I can achieve together. They showed that modern companies combine an explicit, empowering culture and agile ways of working with modern technology such as the cloud. Such companies adapt quickly to new opportunities and threats and consequentially wow their customers. They tap deeply into the motivation, passion, and talent of all employees, galvanising energy that allows them to get smarter, faster.
Here’s my key takeaway. There is an implicit but flawed assumption that this culture can be implemented through technology. Although we wouldn’t like to admit it publicly, like many other businesses we still use structures more akin to those designed by Frederick Taylor during the industrial revolution. You’ll recall he assumed that “workers” were, well, stupid, lazy, and incapable of judgement. The ability to make decisions about their work was stripped from them and given to a new layer of employees to enforce, “managers,” in a model that’s been dubbed “the clever and the compliant.”
Combining new technology and this new way of working profoundly improved productivity. Whilst it was an incredible leap forward in organisational thinking at the time, it’s depressing when applied to much of what we do in today’s knowledge economy. Being an HR practitioner, you’ll likely equate this approach to McGregor’s “Theory X” camp of thinking, with employees being obstinate and shirking work if they can. This is not our people. We have incredibly industrious employees who want to drive results for our business faster. They have great ideas from working directly with our customers and knowing our products better than anyone. Unfortunately, our annual company-wide employee survey shows that the majority feel disempowered and disengaged due to the management theatrics we impose on them.
What I learned from the re:Invent conference is that agile organisations shift decision-making responsibilities from managers down to the people closest to the customer. Most technology initiatives are unique developments. Attempts at predicting the future with lengthy requirements, arbitrary deadlines, and layers of governance meetings are ceremonies of futility designed to make us feel more in control. Instead, in an agile organisation, hypotheses are formulated and tested immediately with real customers. Good ideas are scaled quickly, and failed experiments are treated as learning opportunities which inform quick, cost-effective changes in direction. Agile teams cut across functional silos and are accountable end-to-end for a business outcome: from concept through to value realisation.
So why do I think the partnership with your team is so critical? Here are the headline reasons.
The unit of performance shifts from person to team. Autonomous teams working within cultural guardrails and the minimum constraints results in the teams taking ownership of business outcomes. Our projects today often involve numerous people but few feel ownership for the outcome. They either point fingers when something goes wrong, or distribute credit unevenly when something works. Motivation drops and attrition increases. The cross-functional team we assembled last year demonstrated that motivated, empowered teams can drive incredible results when organised around outcomes or value streams rather than silos. Our annual performance measurement system, goal-setting processes, and reward structures are based on individual behaviours and contributions, not on evolving team-driven outcomes. They also often only happen once a year, which causes some achievements to be overlooked. Often, those who work the most hours or those with the loudest voices get rewarded rather than those who are quietly driving our business forward.
Successful leaders are at all levels, serving and leading. Agile organisations believe leadership isn’t an organisational position. They believe that every employee is a leader regardless of their role. While this sounds like a throwaway comment, the focus of recruiting becomes whether a candidate can raise the bar on our culture and has the desire to lead and take decisions in their role. Existing leaders are taught to understand when the more traditional autocratic or bureaucratic management style is required and when a servant-leadership approach would be more appropriate. Our own leaders who do this well are accessible, create psychological safety for everyone, and nurture the culture through coaching their teams. They seek truth with their teams rather than attempt to be the omnipotent source of answers.
Agile organisations are flatter. With more accountability for decisions pushed down to teams, and less rigid oversight required due to the assumption of trust in employees, nimble organisations reduce the number of layers between the CEO and those at the proverbial bottom of the organisation. This isn’t about reducing the number of employees; it’s about making sure more of our employees’ time is invested in delivering value to our customers. AWS calls this “differentiated work,” where managers get back to managing value more than people, and less time is wasted due to dependencies and differing priorities.
Career paths and development need to appeal to, and engage, experts. When the need for traditional managers and layers is reduced, there is a compelling need to create career paths that don’t rely on so-called upwards mobility. We’ve lost too many superstars because they’ve been forced to decide between doing what they love with no promotion prospect or being promoted into management and losing their passion. In agile organisations, training is continuous and more tailored to the individual and the team they work within, from CEO on down. Career paths become more about recognising and increasing mastery and providing growth opportunities through new initiatives and exposure to different ideas. They also reinforce the culture by making transparent what “good” looks like in the context of employee performance and potential.
Culture is treated like organisational software. You’ve heard the discontentment that is occasionally directed at me: “Your software changes too slowly and costs us competitive advantage.” The same could be said about our culture. Our challenges are not that dissimilar. We both turn long-term business needs into an architecture—yours cultural and organisational, mine based on cloud-enabled technical agility. We both need to determine the right tradeoffs between factors such as cost, flexibility, standardisation, and scalability. Architectures can become dated, though, forming an impediment to rapid change. If people’s “culture software” is not constantly updated and new joiners not quickly and effectively assimilated, the culture fragments, silos form, and we lose common momentum towards important outcomes.
Culture is explicit and emergent based on a meaningful purpose. I think you get the gist: we need to be more thoughtful about our culture. Our company purpose of “being the best-value customer-centric provider in the industry” could apply to any company. It fails to inspire or guide our teams. We’ve also talked about the company’s leadership principles and values before but never made them concrete. A recent recruit from AWS talked about how their leadership principles permeate everything, including how meetings are run and who is hired. Only individuals who seem able to reinforce and improve the culture irrespective of the initial role are recruited.
Our CEO has talked about having a leadership offsite to define our culture, but you and I agree that culture can’t be set by mandate. He also expressed an interest in copying Amazon’s culture, but culture is unique and cannot just be photocopied from elsewhere. I suggest repurposing this meeting to align the leadership team on how culture change is something we do with our employees’ participation, not to them. We will also need to reassure our peers that not everything has to change and we don’t need to engage in a big-bang initiative. Let’s start small, but start quickly.
Teams who have the mastery of their domain, have the freedom to make a broad range of decisions associated with their work, and embrace their company’s vision outperform teams that lack one or more of these characteristics. I and other peers have seen a microcosm of this potential during the pandemic. Without the day-to-day micromanagement, and the almost enforced need to trust our employees, we’ve seen them rise to the challenge—and I think we can go further.
The AWS cloud is transforming how we develop software. Now I’m excited about the opportunity you and I have to become more strategic and supercharge our company by also focusing on culture.
Chief Information Officer
“Why Digital Organizations Are Principles-Based,” Mark Schwartz
“The (Delicate) Art of Bureaucracy,“ Mark Schwartz
“Why Agility Pays,” McKinsey (2015)