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XP2014 talk: Driving Company Evolution Using a Complex Dynamic System Approach

One of a leaders’ biggest challenges is to lead through complexity. As companies consist of formal and informal networks of people working in ever changing, uncertain technical and business environments, they can be regarded as Complex Dynamic Systems. According to Dave Snowden and his Harvard Business Review article from 2007, a good leadership/management approach to complex dynamic systems is “Probe-Sense-Respond”, i.e. experiment with the system to find advanced ways to maximize (business) value. A crucial part of this approach is to work effectively with the company’s tangible and intangible constraints. Also, Peter Senge in his book "The fifth discipline" is introducing Systems Thinking as a key to the Learning Organization. This talk will give a brief introduction into the topic of complex dynamic systems. Based on this I will introduce a tool that me and my team have developed and are experimenting with at Ericsson. The tool helps us to manage the constraints of our complex dynamic company system in a structured way. I will give practical examples of system changes we have done and how we are using the tool to further evolve our company.

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Hendrik Esser
Director, Portfolio & Technology Management
@HendrikEsser
Supporting Agile Adoption
Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 3
Why did our
agile transition
succeed?
Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 4
Our transition
People
Practices
Processes
Structures
1 23
“Our process is
not good enough”
“No Silos + Our structures
need to support
the way we work”
“Oops!
Almost forgot something!”
Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 5
Our transition: changes
People
Practices
Processes
Structures
1 23
Scrum
Kanban
Uncertainty Management
New Organization
New roles
New Governance
Wanted culture
Leadership mindset
Recruitment of leaders
Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 6
Insight:
We have addressed
the (whole?) “System”
Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 7
Manage / Lead
The company
as a System?
Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 8
Cynefin
Dave Snowden, HBR Article, Nov 2007
SIMPLE
COMPLICATEDCOMPLEX
CHAOTIC
sense-categorize-respond
sense-analyze-respondprobe-sense-respond
act-sense-respond
DISORDER
Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 9
The Learning Organization
Peter Senge, The fifth discipline
Systems
Thinking
Team Learning
Shared Vision
Mental Models
Personal Mastery
Real
World
Decision Results
Decision
Rules
Mental
Model
Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 10
How could we
(Leaders)
make use of this,
practically
Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 11
Understand the organization as a
complex dynamic adaptive system
Lead by vision + setting/managing
constraints (continuously)
Need to (continuously) align
mental models
to achieve a shared vision
Evolving an organization
Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 12
Constraints
People
Processes
Structures
Behavior
Capabilities
Interdependencies
Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 13
Basic procedure
Develop a hypothesis
on how the System
works, explaining the
observed phenomena
(Discussion  mental
model alignment)
Decide what changes you
want to trigger towards
constraints (Discussion 
shared vision)
Observe the emerging
system response and
iterate/fine-tune.
Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 14
The tool
ProcessesStructures
Behavior Capabilities
Target/
Goal/
Vision
Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 15
The tool
ProcessesStructures
Behavior Capabilities
Target/
Goal/
Vision
Behavior
Mindset/attitude
Values
Competence
Skills
# people
Hidden talent
Processes
Practices
Tools
Habits
Organization
Governance
Remuneration
Roles
(Informal) networks
XP2014 talk:  Driving Company Evolution Using a Complex Dynamic System Approach
Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 17 ProcessesStructures
Behavior Capabilities
Manage
Uncertainty
Communicate
Make uncertainty visible
Accept, that uncertainty is always there
Share views and insights
Speak up when you see something
unexpected
React constructively
on surprises
Show and discuss uncertainty in
governance meetings
Frequent meetings to
digest updates/new insights
Distributed planning on different levels
Iterative development
 feedback loop
Communication structure
Manage expectations
 anticipate expectations and address
them
Translate uncertainty into realistic
expectations (customers, internal
stakeholders)
Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 18
›Analyze/understand issues/problems/impediments
›Propose system solutions to issues/problems/impediments
›Propose system changes to achieve a goal/target/vision
›Follow-up on made implemented system changes
›Adapt to a changed goal/target/vision
›…
use cases
Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 19
XP2014 talk:  Driving Company Evolution Using a Complex Dynamic System Approach

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XP2014 talk: Driving Company Evolution Using a Complex Dynamic System Approach

  • 1. Hendrik Esser Director, Portfolio & Technology Management @HendrikEsser Supporting Agile Adoption
  • 2. Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 3 Why did our agile transition succeed?
  • 3. Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 4 Our transition People Practices Processes Structures 1 23 “Our process is not good enough” “No Silos + Our structures need to support the way we work” “Oops! Almost forgot something!”
  • 4. Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 5 Our transition: changes People Practices Processes Structures 1 23 Scrum Kanban Uncertainty Management New Organization New roles New Governance Wanted culture Leadership mindset Recruitment of leaders
  • 5. Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 6 Insight: We have addressed the (whole?) “System”
  • 6. Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 7 Manage / Lead The company as a System?
  • 7. Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 8 Cynefin Dave Snowden, HBR Article, Nov 2007 SIMPLE COMPLICATEDCOMPLEX CHAOTIC sense-categorize-respond sense-analyze-respondprobe-sense-respond act-sense-respond DISORDER
  • 8. Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 9 The Learning Organization Peter Senge, The fifth discipline Systems Thinking Team Learning Shared Vision Mental Models Personal Mastery Real World Decision Results Decision Rules Mental Model
  • 9. Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 10 How could we (Leaders) make use of this, practically
  • 10. Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 11 Understand the organization as a complex dynamic adaptive system Lead by vision + setting/managing constraints (continuously) Need to (continuously) align mental models to achieve a shared vision Evolving an organization
  • 11. Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 12 Constraints People Processes Structures Behavior Capabilities Interdependencies
  • 12. Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 13 Basic procedure Develop a hypothesis on how the System works, explaining the observed phenomena (Discussion  mental model alignment) Decide what changes you want to trigger towards constraints (Discussion  shared vision) Observe the emerging system response and iterate/fine-tune.
  • 13. Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 14 The tool ProcessesStructures Behavior Capabilities Target/ Goal/ Vision
  • 14. Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 15 The tool ProcessesStructures Behavior Capabilities Target/ Goal/ Vision Behavior Mindset/attitude Values Competence Skills # people Hidden talent Processes Practices Tools Habits Organization Governance Remuneration Roles (Informal) networks
  • 16. Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 17 ProcessesStructures Behavior Capabilities Manage Uncertainty Communicate Make uncertainty visible Accept, that uncertainty is always there Share views and insights Speak up when you see something unexpected React constructively on surprises Show and discuss uncertainty in governance meetings Frequent meetings to digest updates/new insights Distributed planning on different levels Iterative development  feedback loop Communication structure Manage expectations  anticipate expectations and address them Translate uncertainty into realistic expectations (customers, internal stakeholders)
  • 17. Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 18 ›Analyze/understand issues/problems/impediments ›Propose system solutions to issues/problems/impediments ›Propose system changes to achieve a goal/target/vision ›Follow-up on made implemented system changes ›Adapt to a changed goal/target/vision ›… use cases
  • 18. Hendrik Esser | © Ericsson AB 2014 | 2014-05-20 | Page 19