You can find a study on ownership in the company culture here: en.Innova1st.com/53D
In the same study, the second-most-important factor was a sense of community—the connection between peers. The third was the possibility for active participation—to be able to offer opinions and be included in decisions. Have you ever considered these factors in your change initiative?
If you do not have these values in the company (fairness, community, and participation), it would be a good idea to include them in the vision of change.
A good example is what happened to me a few years ago. In a financial company quoted on the stock market, they complained that the process for releasing a product to the market was extremely long and complex. The principal hurdles were legalities, because every application had to undergo long audits and complete hundreds of steps and forms before a new version could be released. The solution required that leaders trusted the employees, and for auditors and software teams to be empowered to find their own answers.
Several seemingly unshakable rules were broken, and points of view used for years were abandoned. That break not only increased motivation, but it also helped to create innovative solutions and make everyone more engaged with their work.
Instead of waiting for the end of the cycle to perform the audit, auditors and teams began to work side by side to develop the product. This simplification reduced the time to release a new version from two weeks to two days.
Psychological Ownership in the Era of Digital and Agile Companies
Some summers back I visited a client having trouble with his digital transformation. He had spent millions of dollars on assembling training plans, adapting their offices, and redesigning their corporate image. It was July and they hadn’t even been able to meet the goals set for January. For some unexplained reason, the organizational resistance to change was enormous.
The managers were stunned. They came to think it was due to the profile of the individuals they were hiring, and they simply concluded that the hires were all useless. Managers reviewed the entire recruitment process and made several adjustments. The teams took over the candidate interviews, and this led to the implementation of a new protocol to determine if candidates matched the desired profile.
Despite this, the change initiative continued to crawl along. Still trying to improve the situation, they decided to bring in six people who worked remotely from their headquarters. This didn’t help, but it did create a better working environment because local employees brought in remote team members they already knew and worked well with.
One day, talking to employees in charge of designing a crucial part of an internal software component, I discovered something rather impressive: The teams in that department were proud of the module they’d implemented years ago, but the change plan had proposed discarding it!
Because of this, albeit subconsciously, they’d been sabotaging the company’s transformation plan. In different parts of the organization, they had created dozens of barriers that interfered with the plan.
As you can see, psychological ownership can become a headache if people are meant to create solutions they can be proud of, but are forced to discard them in a matter of months or weeks. How would you feel if you were told to give up everything you’d worked so hard for?
At Agile companies, we push to create more business value for customers and have greater commitment, but we do not teach people to get rid of their creations. Any company that requires high commitment and excellence, and provides products for exponential change markets, could put the change at risk if they don’t know how to manage such situations.
The OCS states that managers and middle managers tend to give little importance to psychological ownership. As a result, situations and strategies for people to get rid of their creations aren’t developed. Achieving this requires a systematic and safe way for employees to emotionally connect with the loss—and for this to be accomplished with transparency.
People place twice the value on anything that already belongs to them. Anything new should represent more than twice the value of what’s being left behind. It’s hard to let go of a cell phone, a house, a project you’ve worked hard on, or your role in the company.
One technique is to perform specific sessions to make the problem visible. You can use games and role-playing to allow people to discover and develop a plan of detachment with a positive attitude. I like the idea of holding celebrations when a new change plan is implemented or during the product liftoff stage. Here we explicitly praise what is being left behind and congratulate those who were part of it.
Can you see any kind of psychological ownership in your organization?
CREEP. The Five Areas to Consider
Much of what you have learned in this chapter is visible to a greater or lesser extent in your company. In some cases, you’ll simply have to amplify positive habits, while in other situations you’ll have to offer alternatives and ensure that people take ownership of them.
Organizational patterns and key psychological attitudes often have a common characteristic: They go unnoticed if we aren’t aware of them. Think about when a child is first born. Suddenly, every TV ad, radio commercial, and billboard has something to do with babies and baby products. But it’s not that this publicity wasn’t there before. It’s just that we have something in mind that brings it into focus.
Allow me to share the Baader-Meinhof phenomenon, or the frequency illusion. This illusion of frequency takes place because your brain is excited to have learned something new, and it results in selective attention.
Imagine your unconscious brain saying, “Wow, this is amazing! I’m going to look out for it without really thinking about it.” And you start to find it everywhere. Your mind creates its own confirmation bias and convinces itself—even when you’ve only seen one or two baby commercials.
The same happens when you learn a new organizational or psychological pattern. Your brain goes aha! and you begin to see the world around you differently. You might even come to new conclusions regarding actions in the past.
Here’s a trick you can perform in your company so that those around you can see the same things you do. Teach the patterns you think would have a positive impact on people and their relationships, so people around you can begin to see the patterns as well.
My personal recommendation is that, months before starting your change plan, you focus on analyzing and balancing each of the areas you have learned. Then observe the impact they have on individuals and teams. This will provide everyone with solid foundations so that the change/transformation becomes contagious.
What You Have Learned
How conflict can occur and how to find solutions.
How to enable people to incorporate different points of view (reframing)
The Robinson Crusoe technique and Perceptual Position.
The effects of exponentiality and how to prepare for it.
How team expectations can support change.
How psychological ownership affects the delivery of business value to the customer.
Any drama triangles in your company? What strategy could you use to overcome them?
What could you do in a meeting to get participants to consider a situation from different perspectives?
What are the effects of psychological ownership and how can you lessen them?
Why do shared goals improve the alignment of team expectations?
“You’re definitely a different person at different stages in your life.”
Ben Harper, Musician
At some point, your company will decide to shift strategy. This will affect how people work and interact with others, and how organizational processes scale. The change usually originates from a combination of
the following:
Challenging market situations.
A need to provide more value to the client.
A desire to enter a new market.
A need to increase revenue.
A desire to protect the existing customer base.
The possibility of avoiding additional costs.
Mergers and acquisitions.
In Chapter 5, you learned several patterns (CREEP) that everyone in the company should be aware of before embarking on a change or launching a new product. This knowledge helps establish healthy habits and continuous organizational improvement.
The result of understanding the five patterns is to develop skills to do the following:
Measure levels of conflict and develop techniques to resolve problems in times of high stress or uncertainty.
Consider various points of view, including those of individuals with diverging motivations and values, when analyzing a situation (reframing).
Recognize the impact of what is exponential in the business and the techniques for learning quickly in these environments.
Accelerate results by enabling leaders and others to maximize support from the company’s network of external minds, process automation, Cloud tools, artificial intelligence, and Big Data.
Understand psychological ownership and use strategies to help people feel passionate about what they do while still detaching from items they feel proud of.
Collectively align expectations, ensuring that goals connect with a powerful vision and a clear purpose.
Improve areas related to how people work. This can include gradually reducing batches, allowing people to self-organize around their goals, and making tasks and priorities (Backlog) visible.
In this chapter, I’ll be slightly more prescriptive, showing you specific practices and steps for transforming the company.
Many will be excited about the possibility of starting a new change strategy and change plan. Some will probably need further confirmation as to the feasibility of embarking on the new change or product initiative. To assess viability, more-traditional companies use feasibility studies prior to a change plan. For these, people spend weeks—or even months—determining the risks, initial economic investment, and other aspects to finally decide whether to go ahead or abort the plan. But in an exponential company, it’s essential to have techniques to reduce the effort and time invested and to face constant market changes.
Your organization probably has complex products that reach customers through different channels. As a result, there are different user experiences and life cycles. One of your biggest challenges will be to get departments that haven’t interacted to come together to work more effectively and produce innovative and sustainable results. This entails drastically changing interactions and habits by teaching and facilitating techniques for working side by side.
The Scrum framework and the Lean and Agile mindsets have helped make this possible. If you look around, you’ll find many practices that originated with these mindsets. However, none of these show the path for implementing a change initiative or the minimum requirements for them to be successful. It is therefore a good idea to learn effective techniques for starting a remarkable transformation.
Establishing an Initial Alignment
For a change to be sustainable, you have to involve teams and people with different backgrounds and skills, interests, and points of view. To achieve the greatest possible impact, teams must be aligned and self-organized around their objectives and tasks. It’s usually necessary to arrange collaborative sessions during the initiative’s liftoff stage, allowing individuals to learn and incorporate effective practices to adapt more quickly and techniques to connect and collaborate better.
During the development of a software product, the Scrum framework and Agile mindset focus on collaborating as much as possible. Short work cycles are used to reduce risk and uncertainty. At the beginning of an Agile initiative, change consultants generally recommend the following three stages:
Feasibility, purpose, and context of the initiative
An initial feasibility evaluation is carried out to know whether it makes sense at a strategic, economic, impact, or learning level. To determine if the change or product is viable, the reason for the opportunity, the purpose, and the expectations are analyzed and the focus is placed on creating an initial high-level alignment among executives, clients, and stakeholders. Unlike traditional companies that carry out this action at the beginning of the plan or once a year, exponential companies execute it over and over at different levels of the organization and in different ways.
Liftoff of the initiative
This stage prepares teams for the change plan or product. Some companies call this inception, consisting of group sessions lasting one to three weeks. This stage involves customers, stakeholders, change agents, developers, and all who need to know how to achieve a greater positive impact with minimum effort. This stage focuses on establishing the context and interactions between people and teams to discover what needs to be done. In some cases, the liftoff stage of an initiative is also used to “reset” existing teams so they can acquire new habits.
Planning, estimation, prioritization, and implementation
Finally, they prioritize and plan how the work will be done and what should be completed in the next days or weeks. Generally, work begins as soon as possible, establishing an initial scope and group commitment with respect to quality and expected outcomes through a Minimum Product Increment.
In Scrum, SAFe, Scrum at Scale, or LeSS, Product Planning sessions are run every couple months, while Sprint Planning sessions are held every week or two at the start of each work iteration.
In the exponential company, the feasibility of an initiative can be challenged by the information provided by Big Data, artificial intelligence, or any person in the organization, regardless of that person’s rank. Here it’s common to carry out the previous stages in a nonsequential manner and at different levels of the company. It’s also possible to change course quickly or cancel a plan when it’s no longer relevant. This allows for constant feedback loops, enabling the creation of shared understanding and purpose so that people stay aligned and can confidently change direction in moments of high uncertainty.
As mentioned in Chapter 1, the conditions of anything exponential make it impossible to see around the corner. Waiting for all the information before taking the first step is counterproductive. Everyone in the organization must act even when the information is incomplete. This presents one of the biggest differences from the way that traditional companies act.
FIGURE 6.1: First phases of an initiative
In exponential companies, the result of a feasibility assessment is no longer binary (yes/no) but consists of three possible responses:
1. Yes, we will continue with the initiative = let’s take action.
2. We will not move forward with the initiative = we learned something and will dedicate ourselves to something else.
3. We do not have the necessary information, or we do not feel safe = let’s take action—a short experiment needs to be run.
While the first two options are common in traditional organizations, the third opens the way to empirical forms of work that accelerate learning, allow for investment in stages, and enable better decision-making.
In a traditional company, during the first action, money is allocated to an initiative before any further step is taken. In this top-down approach, executives and management generally create and negotiate the budget for the coming months.
During this process, negotiations go hand in hand with traditional budgeting techniques, where the investment is more or less set in stone.
The problem is that these techniques contradict the fact that the world is changing quickly and that most of the knowledge for solving new challenges is not found in the upper hierarchies of
the organization.
Rather than trying to calculate a fixed budget for the coming months or year, exponential companies need to base their budgets on the results of short work iterations/experiments frequently released to customers. This requires setting smaller goals along shorter time frames and taking the time to reflect on how processes can be improved.
An initiative’s success can thereby be foreseen by the success of these short work cycles, and this removes the need for upfront planning and budgeting.
Using short iterations and constantly improving processes to react quicker to customers’ needs will help your team budget initiatives in a way that aligns strategic goals with reality. This works well when teams are stable, people are motivated, and you no longer think of your customers as an abstract notion of a “company” you are serving.
Following this process provides full transparency and integrates your clients into every step.
Summing up, an important distinction of exponential companies is that they allocate their budgets to initiatives that mirror the new ways in which they work—and this is why the third action—Experimentation—is so important.
Establishing new habits for experimentation helps you carry out short work iterations that regulate your actions, guiding you to take small steps, particularly when there is little information. This allows the company to gradually allocate its investment while it discovers the problem to be solved. It also allows people to better manage the effects of uncertainty.
Leading Exponential Change Page 17