KW2 Keynote 11/7/2012 12:45 PM 

       

"Adaptive Leadership: Accelerating Enterprise Agility"

   

Presented by:

Jim Highsmith ThoughtWorks, Inc.

        

Brought to you by:  

  

340 Corporate Way, Suite 300, Orange Park, FL 32073 888‐268‐8770 ∙ 904‐278‐0524 ∙ sqeinfo@sqe.com ∙ www.sqe.com

Jim Highsmith ThoughtWorks, Inc.

An executive consultant at ThoughtWorks, Inc., Jim Highsmith has more than thirty years of experience as an IT manager, product manager, project manager, consultant, and software developer. Jim is the author of Agile Project Management: Creating Innovative Products; the Jolt Award winner Adaptive Software Development: A Collaborative Approach to Managing Complex Systems; and Agile Software Development Ecosystems. He is a co-author of the Agile Manifesto, a founding member of The Agile Alliance, co-author of the Declaration of Interdependence for project leaders, and co-founder and first president of the Agile Project Leadership Network. Jim has consulted with IT and product development organizations, and software companies worldwide.

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Adaptive Leadership: Accelerating Enterprise Agility

Jim HighsmithgExecutive Consultant

Don’t micro-manage

Buy pizza andget out of the way

2

Goals of Adaptive Leaders3

Envision a Responsive Envision a Responsive Enterprise

Deliver a Continuous Stream of Value

Why Agile?

Be Agile

Do Agile

Create an Innovative Culture

©2011 ThoughtWorks, Inc.

AgileAgile

Agility is a Strategic Issue4

“88% of executives cite organisational agility as key to global success.”

“50% say that agility is not only important, but diff ti t ”a core differentiator.”

Source: The Economist, Special Report on Agility, March 2009

3

exploit the changeOpportunity

…exploit the change

5

…survive the changeDanger

Are We at an Inflection Point?

“Every decade• 2000 ‐ the Web

• 2012‐mobility (individuals), cloud (system) plus big 

Every decade or so since the beginning of the computer age there comes a 

data and social mediaplatform change...”

Source: “The Impact of Technology Mega‐Trends on Corporate IT and Business Models,” Tuck School of Business at Dartmouth.

4

Social Business is Big Business

Dell’s Social Media Command Center monitors Facebook, Twitter, and more in the blogosphere. In 13 languages, effectively in every country. “It’s really 24/7, and you can’t even take a tea break.”

Source: “The Impact of Technology Mega‐Trends on Corporate IT and Business Models,” Tuck School of Business at Dartmouth

Core Business Strategies 8

ResponsivenessEfficiency

©2011 ThoughtWorks, Inc.

5

Beyond Budgeting

Lean (lean Next Gen (startup)Management

Business Responsiveness10

6

Strategy & Continuous Delivery11

sing

Com

mitm

ent

Increasing Benefit & Investment

Incr

eas

©2011 ThoughtWorks, Inc.

The Evolution to Continuous Innovation12

Continuous Discovery

C i

Continuous Delivery

©2011 ThoughtWorks, Inc.

Continuous Development

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Two Strategic Questions13

I h d In what ways does our business need to be more responsive?

If we could deliver solutions much faster solutions much faster

via continuous design & delivery, how could we

take advantage of that?

©2011 ThoughtWorks, Inc.

Levels of Agility/Delivery14

©2011 ThoughtWorks, Inc.

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Why Adaptive Leadership?

Better Performance

Engaging Work Environment

Battle for the Future

Do Agile Be Agile

Enterprise(Adaptive TalentCustomers

Purpose

(Adaptive Leadership)

TalentCustomers

Shareholders/Financial Markets

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How Important is Health (Being)?

“Organizations that focused on performance AND health simultaneously were nearly twice as successful as those that focused on health alone, and nearly three times as successful as those that focused on performance alone.”

Beyond Performance: How Great Organizations Build Ultimate Competitive Advantage, Scott Keller & Colin Price (McKinsey & Co.)

Extensive Beyond Performance Research

Surveys: 600,000 respondents, 500 companies6 800 CEO’s & senior executives6,800 CEO s & senior executivesReviews: 900 books & academic journals

Personal interviews: 30 CEO’sData from: >100 McKinsey clients

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Agenda20

Envision a Responsive Envision a Responsive Enterprise

Deliver a Continuous Stream of Value

Why Agile?

Be Agile

Do Agile

Create an Innovative Culture

©2011 ThoughtWorks, Inc.

AgileAgile

Practices & Process

11

Managers & Key Links

Execution Levers

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Continuous Innovation

12

Lean Start Up Principles

Entrepreneurs areEntrepreneurs are everywhere

Entrepreneurship is management

Validated Learning

B ild M LBuild – Measure - Learn

Innovation Accounting

Execution Levers

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Do Less Quality

Speed to Capability Speed to Value

©2011 ThoughtWorks, Inc.

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Continuous Delivery of Value

Feature Backlog Items

RunningTested Features

V l Hi h l f

©2011 ThoughtWorks, Inc.

Value: High value featuresCycle Time: Concept to cash

Throughput: Volume of features

Do your Do your systems look

like this?

Do you think it Do you think it impacts your

agility?

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Quality Matters

Scientific Instrument Company, CanadaAverage results from 6 before and 6 after Agile projects

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Average results from 6 before- and 6 after-Agile projects

Pre-Agile Post-Agile % Improvement

Project Cost$2.8 M $1.1M 61%

Project Schedule18 months 13.5 months 24%

Cumulative Defects2,270 381 83%

Staffing18 11 39%

Source: Michael Mah, QSM Assosciates

Quality Issues (technical)

Code qualityDesign qualityAutomated testingTechnical debt reduction

Blah, blah, blah is what your business partners hear!, , y p

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Historical Dilemma29

Features Quality

BusinessOutcome

Technical Outcome

What if?30

Features ?

Business Outcome

Business Outcome

16

What if?31

Features Cycle Time

Business Outcome

Business Outcome

The Consequences of Waterfall

MaintainPlan, Develop, Build, Test, Release

12+/- monthsHundreds of featuresSerial Development

WeeksFew Features

Serial Development

Feedback from poor quality is long term

Consequences of low quality difficult to determine

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Agile & Continuous Delivery

3 6 th 3 6 th 3 6 th

Milestone 1R1 R2 R3 …

Feedback immediate, a matter of weeks

3-6 mths

Weekly Releases

Milestone 2R1 R2 R3 …

3-6 mths

Milestone 3R1 R2 R3 …

3-6 mths

Consequences of low qualityeasier to determine.

Goal Not Features, but Continuous Stream of Value!

Speed to Value34

“To create a profile of dexterous organizations, we grouped those

CEOs who recognized the value of fast decisions, an iterative approach to strategy and the ability to execute

Source: IBM—Capitalizing on Complexity: Insights from the Global Chief Executive Officer Study (2010)

to strategy, and the ability to execute with speed.”

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Speed to Value: The Agile Triangle

Value(R l bl P d )(Releasable Product)

35

Quality(Reliable, Adaptable Product)

Constraints(cost, schedule, scope)

Do Less (But Get More)36

Do the simplest thing possible that delights the delights the

customer

©2011 ThoughtWorks, Inc.

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Always7%

Do Less: Eliminate Marginal Value37

2% f d d itt

Never Used45%

Rarely Used19%

Sometimes16%

Often13%

2% of code used as written$35 Billion, DOD Software

Crosstalk Journal 2002

< 5% of code used19%

64% of code never or rarely used

Standish Group Study, reported by CEO Jim Johnson, 

XP2002

Commercial Software400 projects over 15 years IEEE

conference 2001

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“Everyone tries to do too much: solve too many problems, build products with too many features. We say ‘no’ to almost everything. If you include every decent idea that comes along, you’ll just wind up with a half-assed version of your product. What you want to do is build half a product that kicks ass.”

Quotes from the founders of 37signals in Practically Radical by William Taylor, 2011)

©2011 ThoughtWorks, Inc.

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Traditional Value Curve

Value Cost Ratio Curve (Traditional)

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2025

50

100

20

3040

5060

7080

90100

20

40

60

80

100

120e

Capt

ured

vs

Cost

Exp

ende

d

Value %Cost %

5 5 5 510

1520

1020

0

20

1 2 3 4 5 6 7 8 9 10

Development Phases

Vaul

e

©2011 ThoughtWorks, Inc.

Agile Value Curve40

Strategies

Most valuable first

Evolve features

Determine right cut-off

Value Cost Ratio Curve (Agile)

55

75

8590

95 98 100

4050

60

7080

90100

40

60

80

100

120

ured

vs

Cost

Exp

ende

d

Value %Cost %

515

30

1020

3040

0

20

40

1 2 3 4 5 6 7 8 9 10

Iteration

Vaul

e Ca

ptu

Where is the right cut-off point?©2011 ThoughtWorks, Inc.

21

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“ …innovation is not about …innovation is not about saying "yes" to everything. It's

about saying "no" to all but the most crucial features.”

©2011 ThoughtWorks, Inc.

Steve Jobs, (former CEO Apple Computer Inc)

Build Capability42

People Technology Process Culture

©2011 ThoughtWorks, Inc.

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The Possible—HP’s FutureSmart

Goal: Revamp HP LaserJet software across product lineacross product line

Common software

Adaptable

Applications

5% to 40% innovation

Cycle time from 2 months to 1 day

Reduced development costs by 40%Reduced development costs by 40%

Enterprise Agile planning & prioritization

400 people, distributed

Complex and fast changing market

3 years for transformation

Started with CI & CD!

Source: Practical Large Scale Agile, Gary Gruver, Mike Young, Pat Fulghum, Addison Wesley mid-2012

44

Build a Responsive Software Delivery Engine

WIP Value

Feature Backlog Items

RunningTested Features

M

©2011 ThoughtWorks, Inc.

Technicaldebt

DoLess

Quality

Measures:Value

Cycle TimeThroughput

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Software Delivery Evolution45

12+ months After 12+ months

MaintainBuildProject

Release 1Product Release 2 Release 3

9-12+ mths 9-12+ mths 9-12+ Mths

©2011 ThoughtWorks, Inc.

Release 1D1 D2 D3 …

Continuous Delivery

3-6 mths

Days toWeeks

Release 2D1 D2 D3 …

3-6 mths

Days to Weeks

Release 3

D1 D2 D3 …

3-6 mths

Days to Weeks

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Agenda47

Envision a Responsive Envision a Responsive Enterprise

Deliver a Continuous Stream of Value

Why Agile?

Be Agile

Do Agile

Create an Innovative Culture

©2011 ThoughtWorks, Inc.

AgileAgile

Values & Principles

Command-Control

48

Adaptive Leadership©2011 ThoughtWorks, Inc.

25

49

“Simple, clear purpose and principles give rise to complex

Simple Rules — Dee Hock

principles give rise to complex, intelligent behavior.”

“Complex rules and regulations give rise to simple, stupid behavior ”behavior.

©2011 ThoughtWorks, Inc.

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Adaptive Leadership Mindset

51

Adapting Exploring

Ridi Riding Paradox Engaging

©2011 ThoughtWorks, Inc.

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It is difficult to make predictions, especially about the future.

Yogi Berra

©2011 ThoughtWorks, Inc.

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Adapting53

A traditional manager focuses on following the plan with minimal changes, whereas an agile leader focuses on

adapting successfully to inevitable changes.

–Jim Highsmith

Predictable versus Adaptable54

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Four Tools for Adapting55

Purpose Alignment Model (Pixton, Nickolaisen, Little, & McDonald, 2009)

OODA Loop (adapted from (Boyd, 1995)

©2011 ThoughtWorks, Inc.

The Short Horizon Model

The Satir Change Model (Weinberg & Smith, 2000)

Exploring Exploring

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Engage/Inspire57

Daniel Pink, Drive: The Surprising Truth about What Motivates Us

©2011 ThoughtWorks, Inc.

Engage—Facilitating

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Create an Innovative Team Culture

AutonomySelf-organizing

TeamEngagement

Autonomy

Empowerment

Self organizing

Delegation

59©2010 Jim Highsmith

DecisionFraming

LeadershipPeer-to-Peer

Riding Paradox

Paradox

NOT =

Problem

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61Agile 101

Paradoxes for Adaptive Leaders

Yin Yang

Control Freedom

Accountability Autonomy

Top-down Hierarchy Self-organizing

Predictability Adaptability

Managers and Edicts Peers and Norms

Hi hi N kHierarchies Networks

Efficiency Responsiveness

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More Information

White paper: “Adaptive Leadership: Accelerating Enterprise Agilit ” Jim Highsmith A ailable on Enterprise Agility,” Jim Highsmith, Available on www.thoughtWorks.com. My blog: www.jimhighsmith.com.Twitter: @jimhighsmith

©2011 ThoughtWorks, Inc.