The Thought Leader's Voice Podcast

Andrew Newby: Hello everyone. My name is Andrew Newby and I’m hosting a series of iResearch Services podcasts over the coming weeks. These are intended to educate senior-level marketers and thought leaders as to how to address some of the more challenging and exciting issues facing them currently. Our topic today is that of agile practices and behaviors. And with that, I’d like to welcome today’s guest expert Karl Smith. Karl Smith is a fellow of the British Computer Society. Many works as an entering consultant, CIO CTO, or CXO, but also joins companies on a path [inaudible 00:30] to deliver the [inaudible 00:40]. He has a track record since 1989 of designing, launching, and delivering global and national new business models, organizational designs, professional services, capabilities, and client services, working with venture capitalists, consulting companies, or being hired directly by clients. Karl has been a non-partisan UK government advisor since 2008 and in November, 2017, spoke on a panel in the house of Lords in regard to psychology around fake news. Karl has always been fascinated by how technology can augment the lives of humans. To quote, Karl directly, “My desire was not to build things that humans already do, but to find out how technology could evolve our human experience.” Karl Smith, Karl, welcome, and thank you for sharing your insights with those things.

Karl Smith: Thank you, very nice to be here.

Andrew Newby: So just to start off. Can you give our listeners an overview of what precisely Agile principles are? You signed the agile manifesto in 2008, but you’ve been working in this area well before that, since 2003, I believe.

Karl Smith: Yeah. So agile has been around since 2001 and actually is a thought projection of how we can work better together. I think one of the things that’s really become clear over the years is that we’ve got too entrenched in what we do for a living and we’ve forgotten how to work together to be effective. And agile manifesto was really about moving away from controlled situations and systems and more into how do we get through the work quickly? How do we get through effectively? How do we deliver something? And that’s what the manifesto is focused on. So, it’s not focused on documents, it’s focused on people talking. It’s a very amazing change of direction for business and actually it really does challenge entrenched organizations. So, there are loads of principles of it.

Andrew Newby: Just getting a summary of what agile means, it puts individuals and interactions over processes and tools.

Karl Smith: Yes.

Andrew Newby: Working software over comprehensive documentation. And I’m reading some of the manifesto here. Customer collaboration over contract negotiation and responding to change over following a plan.

Karl Smith: Yes.

Andrew Newby: So, it’s not a single thing, but a set of practices and behaviors.

Karl Smith: Yeah and mindsets as well because I think the other thing is it’s very easy to say we’re going to adopt agile, but actually it means changing how we think about things and value things and that’s quite a challenge for people who’ve spent the last 40 years building a career around one set of values, and now we’re asking them to engage with a new set.

Andrew Newby: What do you think or what do you think the impact of agile will be on for the purposes of this podcast marketing and marketing departments?

Karl Smith: So I think the first thing to say is agile exists in a number of different formats and a marketing department, and may adopt agile in and for its own use i.e. to facilitate better coordination within the departments to understand and value the various different skill sets in a marketing department and to deliver its work more quickly with more transparency and therefore to gain more value and establish a better working routine than handing work from one person to the other. It will also affect marketing if the organization adopts a scaled approach to agile, which is to actually change the entire organization. I think one of the things that marketing people feel, and I don’t know if they still do or not, what they used to feel was that they spent most of the time fixing badly conceived business ideas and products. And with scaled agile, the intense then is to bring marketing along with design and engineering to the top table, not merely to talk about budgets, but to talk about what are we working on and why. And does it actually in the scope of marketing fit, the brand equity that already exists, or does it challenge it? You know, are these things that are going to be built or produced by the company, things that represent the company as it currently stands? Is it a divergent behavior? Is it something that actually shouldn’t be done or is it something that is absolutely core to how the company is understood outside? And I think that’s quite an interesting opportunity for marketing

Andrew Newby: And a challenging one. So marketing is not just a separate input into a process of product. It should be spread across an organization not just be the end bit [cross-talking 06:07].

Karl Smith: Yeah. So, I think along with other currently unique capabilities in an organization that act upon the work at a certain stage in a scaled agile environment, marketing would be involved all the way through but different kinds of marketing. You know, there is this strategic brand equity marketing discussion, which is a very senior discussion about the strategy for the organization, which then leads into the overall business strategy. But also, you know, further down once you get to programs or projects, you’re talking about suites of products, you’re talking about individual products, you’re talking about individual sets of behaviors, so talking about individual market. And as you get down to that level, it’s a different kind of marketing we’re talking about.

Andrew Newby: Right.

Karl Smith: But I think that’s the, what a lot of marketing at the moment does, is as that she is a catch organization, it catches things as it comes through instead of instigating and refining at the top level, at the portfolio level. And that’s the real opportunity that agile affords marketing is actually to be involved at the top table beyond budget discussions, and actually talk about the strategy and how it’s implemented.

Andrew Newby: Right. Is there any particular approach Karl that has the most value for marketing specifically of all sorts of frameworks and activities for agile [cross-talking 07:43]?

Karl Smith: Yeah, sorry. So, I think scaled agile offers the most opportunity, but I think its horses just for courses. I don’t think it’s fair to say that there is one panacea for an organization. That would be wrong in the strangest and hardest of sense because actually organizations are all individual, otherwise they wouldn’t need to exist. So, I think there’s a review of how agile may be adopted and what benefit or outcome values is actually going to be achieved. You know, there are some companies now who are adopting agile across the whole organization and completely re-structuring their organizations around the work. So instead of saying that we have 60 specialist organizations each focused on what they do, and we hand work from one to the other. What they’re saying is we now have the work that provides an outcome to the customers and hence a financial benefit to the business. Let’s bring in all of the people necessary to make that happen. So instead of marketing people, being in their departments away from that, there would be a couple of marketing people in that piece of work all the way through. And I think that’s an adoption of scaled agile.

I think even to the lesser component level of adopting Kanban, just to see what’s happening in the department, a huge savings can be made in terms of efforts. I often find when I’ve worked with digital agencies, that the same agency is doing the same project for 10 different clients, but because they’re so siloed, they don’t take advantage of what they’ve learned from the other pieces of work going on. And I’m assuming the same is true of marketing. There are certain things that you need to do in marketing and certain opportunities that are made available. However, they tend to be focused on a product or service and therefore making them available to all products and services would actually certainly save a lot of time and allow the creative efforts for something unique where required rather than reinventing everything every time.

Andrew Newby: I mean, we can come on to some of examples and you have many I’m sure in a minute. But just in terms of change and getting rid of the silos, I guess sort of, there’s always this element of conflict that can arise, especially when you’ve got creatives involved. So, I guess my question would be how can agile support marketing teams particularly at the moment which needs to prioritize and refocus quickly, you know, if you’re an easy jets marketing thing Yeah. How can agile support very quick change?

Karl Smith: I think one of the interesting things is, is the way we’ve built businesses is to allocate people to funds and those funds are based around an output and often organizations will continue to pay for that output, even when they know it will deliver nothing. And those people, their time will be squandered and that money will be wasted. And actually, one of the things that agile does is it rolls up to a higher level of view all the work and says what is the next thing that will add value to the organization? And there’s something called weighted shortest job first. So, you look at the weighting of the job to see how much benefit it brings the organization, and you see how quickly it will give you that benefit and you do that piece first. And that way, instead of organizing around grants plans, TV, advertising shorts, movies, or product placements, all these sorts of things. What is the thing that will give you the value you need the quickest and focus on that and focus people on that?

Now you still need to do these long-term pieces of work as well, but you have to value them against what value they bring to the organization. And it’s a much harder way to do things initially, but once you’re doing it, it’s very easy and it allows organizations to quickly refocus and it’s, what’s used in dev ops, so where you have development and operations together. So, I don’t know if there’s a marketing op view of the world, but that would be what it would be. It would be taking the opportunity to do the most valuable piece of work first and being able to flex and redirection a day, you know, something can happen in a day that can completely change the direction of a business. If you don’t know where all the moving parts are, it takes a long time to change directions like an oil tanker, you know, can you imagine an oil tanker will take hours and hours to change direction because it’s huge because it’s focused and it’s got momentum. Think of it more like agile mix makes your organization more like a speed boat. It doesn’t matter how big it is if you know where all the moving parts are, you can move them into the right focus very, very quickly.

Andrew Newby: Right. I think for the analogy of an oil tanker, I guess, if a bank or any large company. Could you perhaps sort of took it in general could you sort of just give some examples or an example from your own experience of [cross-talking 13:45] that change?

Karl Smith: So, I actually did this project with a bank, two banks, actually in the same group and the objective was to be able to change the direction of the entire bank every 30 days, every increment, if necessary. I think that’s the point of it and actually on the program increment planning, which is a 90-day ceremony, be able to say, let’s work on this, not work on that, and actually be able to drop work. Now that meant changing how finance ran in the organization that meant changing how risk was managed. It meant changing the relationship to work so that people were not in separate departments anymore but they were focused on a subject area, for instance owning a home. Owning a home requires technology because it requires forms and things. It requires very, very smart mathematical people to understand risk and insurance. And it requires lots of processing within an organization to ensure that everything is done correctly. It requires a long-term view because you’re talking sort of 30 years. It requires the release of funds. It requires transfer funds, it’s lots of complexity in there, but actually instead of having those people doing 10 different areas, say a department with 10 people that would, some of those might operate in home buying. Just the two that normally do operate full-time in-home buying, their fully committed and fully focused. That means that their time is always available and if they don’t have specific work in that area at that time, they could be doing training or research instead of being unavailable when needed. And I think that’s again about changing what is work. Work is not spending time doing things work is progressing an idea or a concept from that state of being thought into the state of being value.

Andrew Newby: It’s more than just solving a problem.

Karl Smith: Yes, it’s actually realizing value for the organization. So, it’s because a lot of companies will think about, you know, I’ve done my bit, but you haven’t finished your bit until your bit adds value to the organization. A lot of organizations are very heavy with support staff, you know, in some organizations it’s for free 10 people, seven people are support workers. There’s only three people actually making any money for the organization. Now that’s because [cross-talking 16:40]. Well, that’s just a way we have built business because we created the silos because we think that’s a better way to work. And it deals with a huge levels of risk and complexity but more and more organizations are not needing managers because actually, you know I think when that kind of structure first came about, it was so industrial revolution age, when you were getting workers from the countryside who needed someone to oversee them, to make sure they did their jobs. And we don’t really have that anymore. We’ve got professional classes of people that were used to working. They get paid to work and quite a lot of them like working. So actually having 10 managers above them to tell them to work is not really very efficient.

Andrew Newby: Yeah. What sort of time period are we talking here? Well, Karl, in terms of, I guess there are different sorts of payoff in terms of when you sort of, I know, obviously it depends on the industry and the company but is there a typical payoff period short… [Cross-Talking 17:47]?

Karl Smith: So, you should get a payoff from agile in the first two weeks.

Andrew Newby: Wow.

Karl Smith: If you’re not getting a payoff from agile in the first iteration, then you’re doing it wrong. Agile is intended to deliver value and now that value might not be up in lights value, but it will be a value and it will be a value that you set when you started, you won’t be getting unplanned outcomes, you’ll be getting planned outcomes. And as you get better at it, you’ll get more and more planned outcomes but you’ll get them every iteration. And that’s amazing. I mean, I’ve worked in software organizations. I’ve worked with one, they’d be working on something for 18 months and never had a delivery. Never, they’ve never delivered anything and they were really good workers. They didn’t have a formal way to discuss what they were working on or to define what the delivery should be. And what I did was I put in a one week, one-week iteration and within the first week we delivered. We didn’t deliver the final product, but we deliver the enough to know that we were on the right track and we delivered the final product in six weeks.

Andrew Newby: Wow. So, it really works. It isn’t just another fad.

Karl Smith: Well, I think it could be a fad for some people. I think that the thing is, as I say, it’s a lot of people, one of the artifacts of behaviors of agile is to doing stand-ups and if you do stand ups, but you don’t do points poker, I’ll explain that a bit more in a second. You’re basically declaring you don’t have a chair. So, having the behavior of doing stand-ups without having all the other bits and pieces is a waste of time and effort. Points poker is where you get all the people with the skills to deliver a product or service in a room, and you break it down by complexity so that everyone understands what firstly, what everyone else does. And it’s common in organizations people don’t actually know what other people do to add value to what the product or services. And you break it down by complexity, not time because what you’re trying to do is understand how to order things, how to prioritize things, you know, in a major program, in a bank, you might be looking at something that could take six years to deliver it in a normal process. If you did it in an agile way and broke it down into the right components or the right pieces you may get your first delivery in six weeks. But that needs to be understood relative to all of the participants in it, all of the skills that are required to deliver it.

Andrew Newby: Alright. So, making marketing, we’re talking about marketing specifically. Making it agile, it’s really about changing the whole organization and the way it’s focused, the way it prioritizes if it prioritized a ton full. So, yeah, I guess what, in concrete terms, if you’re just bearing in mind that this is a marketing podcast. What are the payoffs, what benefits should businesses be seeing? And also, what are the risks? What are the risks created? How can they can be mitigated?

Karl Smith: Okay. So, I deal with the risk first because most people think about that last. So, the risks are trying to apply it as a magic bullet and it’s not, you know, there are some pieces of work that will never be agile ever because they cannot have that level of free flow. They need to be very guarded and very controlled. So, again, sorry, working with a bank, they were doing a me fit which is a regulatory control mechanism that they have to comply with. They can’t do that in an agile way because the needs to meet certain gateways, both the regulators at the certain times. And you can’t say to the regulator, Oh, we’ll deliver it next iteration, that is not acceptable. So, it needs to have a much more structured format. Some of the benefits would be that probably all of the planning that currently exists is wrong. It’s far too padded with time because and rather than what people tend to do in these transformations, they don’t take on the whole organization. They take on a piece and they deliver that first and that shows a template how the organization can change. Anyone that says we’ll change your whole organization it’s someone that’s probably got shares in your competitor because they’re about to cripple you for life. The thing is these frameworks are really helpful, but they are not the answer. They are guidance points certainly in the transformations I’ve done so far, I’ve never applied any of them absolutely because the organizations themselves are unique and it’s the organizations that we’re trying to make agile. We’re not trying to turn them into an agile business.

They themselves have a unique offering and we need to work out which parts of that offering are the products or services, and which parts of the unique people within the organization that we need to facilitate to maintain their outputs. And that’s really important, it’s not a cookie cutter. So, I think the real value is to be able to very quickly get to the advantage of the company and very quickly actually deliver value. Pound, shillings and pens, I believe the term is although I don’t remember shillings myself but actually getting financial value. I know of, and its organization that saved 76 million pounds in eight months. So that’s not a small amount of change or financial change, but you know, it required rethinking how the work was being done. And that rethinking is based around understanding that the people who do the work are the ones that understand it better than people who are pushing the work through. So, you get them involved in defining what timelines are. How much complexity there is and what big pieces should be done when?

Andrew Newby: Right. So, a benefit as well as a risk is that, if you can identify where value is being added and where it is not that implies a certain level or complete level of transparency within an organization?

Karl Smith: Yes.

Andrew Newby: Comes back to the conflict.

Karl Smith: So, the conflicting piece is the gray area in business, and people like to hide what they do because they’re, it’s you know, I think everyone has it, that everyone has imposter syndrome. Everyone thinks that they’re an imposter for doing their actual job because maybe they’re not doing it as good as someone else is doing it and, you know, agile does expose how everything works. It doesn’t expose how people work. It exposes how long things take and how long things take is a huge amount of money for organization. And also exposes with no that thing’s been done before and no one’s employed the existing method of doing it. So, it gets rid of a lot of waste. It does create conflicts because there are people who actually want to carry on working at the old way and carry on wasting time and not doing anything that’s normal. But there are other people in an organization who see it as a breath of fresh air, who finally get to have an impact based around their passion for their work. I don’t have an answer to the conflicts. I know that, I think it was one of the big banks said that they were going to lose 13,000 people and employ 8,000 new people because they realized that when they did their agile transformation, people were intransigent and unable to change their working practices. So, they were going to get rid of all of them and start a fresh. So that’s potentially what will happen with people. It’s, we don’t own the companies we work for but people think they do and they try and stop these turns of transformations because they realize it exposes their lack of engagement and lack of work.

Andrew Newby: So, does agile always imply that in an ideal situation, a company will be quicker to market or sometimes other examples where it’s actually the optimal solution is to go slower?

Karl Smith: Yeah, so what a value is defined by the company. The value to the company may simply being having less phone calls of complaints about existing products by actually increasing the baseline quality of the existing product or service. So that may be the value. The common value is speed to markets but going back to the way it’s smallest job, it may well be that they’re focused on the wrong things. I think it’s the human frailty that people look for the great big jobs to say, look, I delivered that and you’re thinking, how much money did you make? Did you increase the profitability organization? Were you able to increase the profit margins? Was there a dividend because of the work you did or did you just spend a billion pounds and get like a hundred million back? And that’s the question for the organization. If they’re happy to blow 900 million pounds and get not much back then, that’s really for them to decide, but it’s not a great value principle. So, and I think that’s the thing is the value principle, you know, quicker to market, more engaged staff, better understanding of each other and what we do. A better understanding of how things can change and how they can be better and often those things are seen as something that HR does, but actually they should be part and parcel of how we work.

Andrew Newby: Right. Okay Karl. I have to end. We have to end the podcast here. Thank you so much for your time and insights. It’s been fascinating talking to you. Yes, and I wish you well in all your future work and the companies that you work with and…

Karl Smith: Thank you very much.

Karl Smith: Thank you.