Transforming a business to become more agile and lean cannot be effective without cultural change.
Regardless of business size, there’s one thing businesses with a traditional model have in common—a digital transformation. Creating a successful digital business experience for customers and employees requires innovation and technology. Digital technology continues to evolve and at a rapid speed that things get old super fast. In today’s digital landscape, agility and mobility are necessary.
Traditional companies often look to the tech companies and want to do what they are doing. They want to be as fast as Google, be innovative as Apple, and be able to understand customers like Amazon.
We’ve found that the older and more successful a company is, the slower they are to adapt to changes. Instead of maximizing speed and freedom, they minimize risk and error. And complex, departmental and bureaucratic structures often play a role.
“Their [slow by design companies] design is a vestige of an era when failure was expensive, and deliberation was a virtue” Eric Schmidt, CEO of Google, calls this “slow by design.”
Though this was a winning model and structure for many years, companies today must reconsider in order to grow and compete with the new generation of startups who practice agile methods in their business operations. How does one promote becoming agile you may ask?
Startups model consists of small groups of individuals gathered around an idea, using available technology with cheap computing, running in an absolutely agile and fast module.
Culture change fuels transformation
Most CEOs agree that digital is the easiest part of digital transformation. Large budgets allow them to hire the best teams and consultants and the most advanced tools.
The difficulty lies in innovating and scaling large projects. At CI&T, we are aware that the easy part is setting up the best innovation team. The true challenge is changing thought and organization culture among all departments and the whole company—trying to convince the legal department to speed up their evaluation or due diligence process or challenging the IT team to work on an integration project using legacy systems. Anyone who’s found themselves in these situations knows that it’s anything but simple or easy.
This is why we insist that digital transformation must be the company’s DNA. A transformation is not just about embracing new technology or incorporating startup practices or hiring Agile developers. There is a need for the company to address changes in business practices and demands. A deeper change is critical to the process—culture change within the company.
This is what happened here at CI&T. We have gone through all these steps: it started with a fascination with Agile, then we applied its principles across our business. Needless to say that we quickly discovered that Agile is not enough to change an organizational culture.
For us, the path to digital transformation lies in Lean, that management philosophy created in the 1950’s that at first glance looks like “Agile’s grandfather”, but actually brings principles and tools with much wider applicability. Lean has given us fundamental insights in our search for an agile culture.
“It´s easier to act your way to a new way of thinking than to think your way to a new way of acting”John Shook, How to Change a Culture: Lessons From Nummi, 2010, pg.66
Lean doesn’t force the adoption of principles, it promotes behaviors that support the principles. And how does one promote these behaviors? By delivering more value and encouraging people’s routines. It’s necessary to create processes that push for this idea. In learning this, we developed cornerstones processes, which are fundamental parts of our digital transformation model that we call: Lean Digital Transformation.
Building a cornerstone
Cornerstones are small steps of a macro-process that, once implemented, promote positive behaviors within an organization. Lean Digital Transformation allows to easily solve problems by finding the fastest and the best way to solve it.
As an example, consider prioritizing features that should be included in developing a software. In order to determine what should be included, we used value engineering, which is a methodology that leads people to define what is most important to generate business value with optimized costs.
“Define value first. Then define a process that provides the desired value, Then creates an organization able to operate the process” James P. Womack e Daniel T. Jones, Lean Solutions: How Companies and Customers Can Create Value and Wealth Together, 2015
Lean’s basic principles include creating value for customers and to focus on processes that continuously improve it. Perpetual learning that promotes achieving a goal, as well as, professional development within a team help drive towards success.
To apply these principles in a sustainable and consistent way across the company, we’ve created what we call “people development cornerstones”. In addition to achieving the goals, these simple processes improve team performance and engagement, which can help fuel behavioral changes across the company.
What it means to be a leader in a digital transformation
So the processes are working, the teams are engaged and working together, however, transformation flow slows down as it reaches the managers. Often trapped in traditional management, managers follow and monitor their team’s changes remotely. But if an organization wants to change, the leaders should change as well.
Just as we created the people development cornerstone, we’ve created one for the leaders that we’ve called “management cornerstones” to help our leaders be truly prepared for change. These principles help manager to carry out the transformation efficiently and effectively. Remember that good processes, when they make sense and are useful, can change ways of thinking. We apply simple Lean tools like “Gemba”, which all about engaging, observing, and improving. It aims to have the leader work along with their teams to learn, lead and investigate problems. Another tool for managers is the “A3”, which is a visual method that helps identify causes of a problem and create a plan and solution. The A3 also helps with people development using the same logic of identifying improvement opportunities.
Being closer to the work and their teams, leaders are immersed in the process and the agile techniques teams use, which enables the development of new ways to solve problems.
Our belief is that we develop our people first before developing software because it’s our people who make us great and make everything possible.