Knowledge Bank
Knowledge Bank

Why a sustainable framework is required for Business Agility | Erich R. Bühler

12.07.21 08:51 AM By Michael

Why a sustainable framework is required for Business Agility

Diagloue

and i noticed you used the word sustainable framework and that really hit home for me so why is sustainability in your framework so important so basically the idea when we are talking about sustainability is try to understand how leadership works in a company so basically let's try to go to the basics how a company works basically the company works we can use this quadrant that originally was developed for some kiwi guy was related to cost of delay but i built a framework based on this so in a standard company the company needs to do four things then first one is increase revenue that in here we try to make as much money as we can and there is no science uh behind this the second one is about protecting revenue if i have a customer or a group of customers i just try to make sure they do not disappear and i look after them uh we have two more options in this quadrant which is avoid cost uh we can see that with automation for example i try to make sure that it's something happening in the near future that i'm gonna need to invest a lot of money i try to avoid that and finally uh we have reduced cost that this is a typical thing that we really see in companies one of these um thing we can see is when companies fire employees in agile we take a different perspective every time for example we need to reduce cost we also see if we are not destroying knowledge as some companies start firing people uh just to look after the numbers and then they realize that they destroyed some um shared knowledge right so what we do here is we add a different dimension one additional dimension which is about organizational health and let me try to show you how it works and we try to see a definition of what organization and organizational health is so basically what we are going to do here is we are going to make sure that we focus on organizational health so every time we do something on this quadrant we are going to ask is this going to increase or decrease organizational health for example if we are going to reduce cost and we need to fire i don't know 100 people what's gonna happen is that in general people are going to be afraid the rest of the company people are going to be very afraid that they're going to be fired and that's going to decrease innovation and that's going to also start creating a lot of these functionalities in the company yeah it starts to destroy culture right because people get fearful people don't know who what's next there's no transparency no i totally agree and then uh something very very important here is that when we do this we get a definition so the first thing we have to make sure is that we have a clear definition in which direction we want to go and alignment is very important for companies so i created a definition of what emperor price agility is and that's my own definition this is in the book and the first part of the definition is quite the standard we we basically talk about the capacity for the company to adapt this is nothing new but the important thing is the second part which says without negative impacting on its organizational health and in here i have a very very clear definition of what organization and for me organizational health is psychologically safety how people feel if they can talk freely in the company is i you know they can just say i don't like to do that i don't like to go in this direction um it's about how how well people can flow in the company so it's psychologically safety plus the creation of sustainable business value in perpetuity and for me the the word imperpetuity is key because it means that we are going to be able to do this today and tomorrow for example if you make people work 100 hours to meet a deadline then that's not sustainable and this is something very important and it's the same way right eric when um you start this momentum of change and you're getting really good results and then one of the leaders leave and you stop changing you know what happens if you if you don't get that perpetual motion going well i think it can and i've been working with many banks and companies around the world and you can see it everywhere and i think that when we are talking about sustainability we are talking about many things first is organization and health that every decision you make has to be sustainable and have to improve organizational health but we are talking about the habits or what we call micro habits is everything we do is incorporated for example me i go to the gym every single day as a habit and i try to make sure for example i leave my mobile phone at the entrance so i really focus on training and then i try to make sure i have a routine so what happened in companies is that whenever we change something we need to make sure that we we change the culture but also we change the habits how these people work in the company and this micro habit and people incorporate it so that means that people are going to do it naturally for example if we are talking about people um trying to innovate we are talking about people challenging the culture every day asking themselves why we're going in this direction trying to make sure they understand what business value is they challenge the definition of business value and all are habits that people they need to nurture it they need to do it every single day once and again and when something is not sustainable because the leader is pushing in certain direction you can see the you know they change leadership and somehow the companies to stop moving stop moving in that direction right it is very important to have this kind of um good definition about this kind of um comprehensive definition which includes culture includes habits include leadership includes how i make decisions in the company and all these things have to be happening at the same time and has to be sustainable yeah and i i like how in your book it's more you have it when you say skills can be learnt in days uh practices and processes could be learned in weeks whereas culture is years and i quite like that little diagram you have there and it's something i've always kind of said and i probably repeated on the show quite often you could learn scrum in three minutes you could implement scrum in three weeks you could see results in three months but if you wanna and a culture change doesn't require scrum anymore it's three years so it's a long process isn't it and i like about this is you're wrapping up culture with outcomes you're not just saying i'm sprinkling seeds i'm just sprinkling the seeds and the culture's gonna grow you're saying no these are the outcomes we're looking for here's the organizational health metrics that we're measuring based on so when i test this it should impact this right so did you get like a a case study that made you had an epiphany to to do it that way like what led you to go in this direction well i've been teaching these techniques for years and there are coaches all around the world that they have been testing these techniques and and there are cases in america there are cases in europe let me tell you uh something i did in new zealand which was quite cool it was a few years ago and it's regarding this little framework i showed you and i didn't i didn't mention this in the book i did not have enough space to put all my ideas in there so one day in a company big company new zealand they wanted to expand the sap department the sub department and in order to do that they didn't have enough money they were paying 1 million new zealand dollars to this department and they wanted to hire more people unfortunately there were no sap more sap people in new zealand they had to bring them from australia and it was very very expensive so the ceo of this company said okay what i'm gonna do is i'm gonna fire people in other areas and with that money i'm gonna hire more sap people and that's something that we can see here if we do that that's going to decrease organizational health yeah definitely and and then something that is very important and i generally work with um ceos and people in other companies we make sure that we take every decision we put sometimes we can do a dynamic when we you know down what's the decision or what the future or whatever you're gonna do where in this quadrant is going to be and then you ask how that's going to improve organizational health and that decision was very bad imagine firing start you start firing people and then people start feeling fear and they feel paralyzed they don't want to go in any direction so what i say okay i have an idea let me take a look at the sap department and they told me that the people there were very busy i could not interrupt them so i did something very very simple i sent an email i don't like email but i said that asking them how many tasks they did and how many times unrelated they did in a day so how much multitasking they were doing and then we realized they were switching between four or five assists six tasks each one and they were doing a lot of multitasking and we have a lot of research microsoft did some piece of research and other big components we were able to calculate approximately how much money would they were losing or uh this high multitasking imagine for one dollar they were investing in this sap department they were losing around 58 cents more than 50 percent