Executive Led Agile Transformation

Best Agile Articles Online Conference - Joe Justice
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Best Agile Articles 2018 is a collection of the articles from a variety of authors published on topics of all things Agile in 2018.

The Best Agile Articles book series collects the best agile articles published during a calendar year into a single volume. 

You can download your free copy of the ebook from our website or buy a paperback copy from Amazon.

On April 6 the authors of the best agile articles published in 2018 came together for a workshop, giving their talk on topics such as Agile Leadership, distributed teams, and others.

If you would like to subscribe to the soundcast of these talks, head to Soundwise.

Today Tandem Coaching Academy publishes the talk Joe Justice gave during the workshop on the topic of executive led agile transformation.


Transcript of the talk is still pending and will be posted as soon as it becomes available. Than you for your patience!

About The Speaker

Joe Justice is COO of Scrum Inc. Japan and works globally as an interim executive for agile organizations, bringing multinational companies twice the work in half the time. His teams have held 4 world records. He is a TEDx speaker, guest lecturer at both MIT and Oxford University in England, featured in Forbes 7 times to date including as owner of a “Company to watch” by Forbes Billionaire Club, cited in more than 5 business paperbacks and hardcovers, the subject of a Discovery Channel mini-documentary for his work creating the discipline Scrum@Hardware while working directly with the co-creator of Scrum, Dr. Jeff Sutherland.

Joe has worked with all of the top 3 military and defense contractors, autonomous and smart road technologies, ultra-lightweight structures, guest lectured at UC Berkeley, MIT, on behalf of Carnegie Melon, CU Denver, The University of Washington, spoken at Google, Microsoft, Zynga, Lockheed Martin, HP Labs, The Royal Bank of Canada, Pictet bank, and others. Joe’s work has been featured in Forbes, Harvard Business Review, CNN Money, the Discovery Channel, and others.

Other Best Agile Articles 2018 Posts

Transcript

Host   So we’re gonna jump into our last presentation. And this is Joe Justice, who’s going to be presenting on executive-led agile and digital transformation. So thanks, Joe, for joining us. And we’ll hand this over to you. I’m looking forward to hearing your talk.

Joe Justice  Thank you so much. I’m very glad to be here. I’d like to say the first talk of the day that Joanna gave, she shared eight principles for healthy functional distributed teams that can be high performing, and then expanded on it dramatically. Well, I did that on the first break, I rebuilt my day to be better overlap with the attendees of this conference for follow up. So I took a note from SpaceX and Tesla, where they work 12 hour shifts, and they do three one week and for the next week, three one week and for the next week, 12 hour shifts. That way you have maximum time zone coverage. So I set up my Calendly because of Joanna’s advice at this conference, to start at 10am, open for bookings pacific time, and close at 10pm. Open For Bookings Tuesday, Wednesday, Thursday. That should let me engage with everyone on this call no matter where you are in the world, because it’s a 12 hour day, which is the idea of why Tesla and SpaceX do it and why Joanne recommended it for distributed teams. With that. So thank you so much everyone for making this conference. Awesome. already. I, I’ve gotten a tremendous amount out of it. I’m sorry to be last everyone must be exhausted. I’ll try to get to the point. So folks can get the most out of it. And you can tweet me anytime; almost every slide has my Twitter, it’s @JoeJustice0. So if you want to know more about something, or see more pictures, or more the data, or a video, or ask a question about something, that’s a great public way to do it. If you need to be private for some reason, some companies still require that they’re not quite as open and transparent as others. You can email me old school, email does still work and that’s on every slide as well. It’s at joejustice0@gmail.com.

Joe Justice  Okay, let’s do it. I’m lucky enough to have spent the last six years working with almost exclusively executives, and the board of directors that hires those executives and usually holds them accountable. And in some cases, some countries have something called a board above the board and I’ve been working with those people as well. And those are usually more hands-off investor types. They’re typically retired and they have a high level of stock or passive ownership. they exert an incredibly powerful but slower authority because they meet on a slower rhythm in these non-agile traditional companies that are that are that large, and that’s part of why they’re hungry for this agile transformation. There finding it almost impossible to pivot within the legal structure of being a board and having a board above the board and some of these companies’ cases. Now that said, I’m also the creator of Scrum for Hardware and Extreme Manufacturing the technical practices that go along with that. So most of my clients are manufacturers; Bosch, Toyota, I got to work a little bit with Tesla. I’d like to more; I’ve learned a ton working with them. I learned a lot more from them than they learned from me but I am happy to say I got to share some good things.

Joe Justice  NEC, Hitachi, Fujitsu, 3M, all around the world and finance companies too…what I’ve learned working for executive lead agile transformations is we have to focus on investor return or they’re not going to be able to pay attention and act on it. Otherwise it doesn’t come out of the main budget of the company. The main budget of the company, for almost every company, is mapped exclusively to growing return on capital; for how much money is put into the company, how much money comes out. So if that’s not the end result, and if I don’t have evidence of what I’m saying is going to impact that, I don’t get invited back. If I actually want transformation, what I’ve learned is I’ve got to map everything I’m doing to increase return on capital. Now, here’s the good news for the agilists on this call, on this virtual conference, the ways to return return on capital with the original research I’ve done and then the research I’ve mined, is through implementing the values of the Agile Manifesto, and it’s 12 principles, and the five Scrum values. So it really does come back to openness, transparency, respect for people, if it’s important, make it visible, making a healthy loving and environment. And it comes to tools like excellent process automation and test driven development and the stuff that we as agilists care about. That is what creates increased return on capital. But if I don’t have data sets mapping to that, and if I don’t phrase everything in those terms, the transformation stops. So, so that’s… that’s it, it’s got to map there. I can’t come in as, “Here’s how to have happier staff.” Then, I’m only part of an HR initiative, which is a sub-budget. And you can do cool stuff that way and many people on this call, have and talked about it. But if I want an executive-led agile transformation, it’s got to be what the executives are held accountable to. Now you can see four Forbes articles that are written about my work at the bottom right of this slide. It’s super tiny, but if you google Joe Justice Forbes, you’ll find them and then CNN Money, Fortune, or the Forbes billionaire club said this is how every company should train their staffers and how Harvard Business Review as well; you see that link at the bottom. So we have the ammunition now to keep executives interested to make this happen. Some of you may have seen me from the TEDx video where we built where we designed, built, and tested and sold cars in one week sprints. That’s how I got the attention of executives. That’s how I became known. Then some of you may have seen me on the news, primetime news, building cars in a day we got down to a day, working with Lockheed Martin Space Systems, working with US Air Force, the Australian Department of Defense, etc on these large projects.

Joe Justice  Here’s my bio my contact information. I’m lucky enough to have been on Good Morning America and USA Today and Fox News. In Japan: The Asahi Shimbun and the Nikkei.  I’ve been in Forbes Harvard Business Review CNN Money. I’ve had a chance to do a TEDx talk I’m now Chair of the Agile Business Institute. The purpose of that organization is to bit by bit, evolve a master’s degree for agilus, a Masters of Business agility, I was looking to get my own master’s degree, an MBA, a Master’s of Business Administration. I don’t have one, despite the level of transformation that I’ve been doing for six years. And I couldn’t find a single program that wasn’t still majority waterfall. Now, Harvard’s includes some iterative techniques and some Agile and some Scrum, as does MIT Sloan’s. I know that because I guest lectured at MIT Sloan on this; invited in. However, the majority of the curriculum absolutely doesn’t apply in the current world to an agilist’s mind. And so, there’s no way I’m gonna waste my time on that curriculum. I haven’t been able to get a university to switch full over yet despite the guest lecturing invitations. So, what I’m doing is attempting to build up an organization as its chair to the point it’s credible enough to issue a Master’s of Business Agility. And that’s the purpose of the Agile Business Institute. I still run wikispeed as a non-for-profit to deliver hardware really fast and in – right now we’re in the days of COVID-19 – I’m working with organizations to help them deliver ventilators, new hardware, ventilator projects, masks, personal protective equipment faster. And so I like to think we’re doing work worth doing and earning ourselves non-for-profit status correctly. I landed from Tokyo 10 days ago on my six-year-old’s birthday.

Birthday Recording  “Happy birthday, Senna. It’s Papa! I just arrived in Seattle, in the United States, and I would love to see you and play with you for your birthday. Papa wants to make sure he’s not sick, so he’s going to stay, I think, at Debbie and Uncle G’s house for two weeks above their garage where he’s not so close to anybody, in case he’s sick, to not share germs. I’m making the video right now because I just landed, and right now I feel great, but I’m about to put a mask on, so nobody would even see my face.”

Joe Justice   So this COVID stuff is pretty real to me, right when I landed, I went to a medical clinic in a place in Monroe, Washington in the United States and they divide the clinic into two areas. There’s Red Zone (they suspect you might have COVID) and self-reporting that I just landed from an international flight, I was immediately put in the Red Zone and then there’s the rest of the clinic; the other half. And that already was pretty… pretty freaky. You see a picture of the Red Zone right there below. It was like the movie “Outbreak.” Then they say, “Go get back in your car, so you’re not going to contaminate people and we want you to drive up to the white tent in the parking lot and wait there”, and I did.

Joe Justice  Then the side of the tent opens, they have a heater inside like a sidewalk cafe, and someone in full protective gear, a full face mask, and then a PPE mask underneath that, and blue gloves, blue suit, blue booty covers – I could only see the woman’s eyes – swabbed my nose. It was really deep, it was really uncomfortable, and it was terrifying. The lady that did it was shaking, scared as well because what if I had COVID? And yeah, she’s wearing all that gear, and I could only see her eyes, but she was shaking. I was terrified; she was terrified. That was March 28. So, this was…this was eight days ago. This is super real to me. Because of that. I’m going to take a very different tactic with this presentation than I typically do in the boardroom or at a public conference. I’m going to mind what I promised I do in the abstract, and then do that immediately. Then we’ll see if there’s any time for anything else.

Joe Justice  So, here’s the abstract:  I have worked directly with executives -I’ll move the Zoom icon so I can read it – of many of the wealthiest, fastest growing, and highest-employing companies on the planet. I have also run one of the most famous agile startups of our time. I’m going to share executive strategy for Leaning a company while being respectful to the workforce. Okay, so I’m going to do that next, fast. Outmaneuvering company competition by releasing customer-visible value faster, and with higher perceived quality, without increasing R&D or production expense. Okay, that’s next. How to retain the top and most sought after talent without redefining HR pay grades. Okay, if we get to it, that’ll be number three. And how to increase employee voted manager effectiveness and engagement across multinational offices. This and other learnings all from real companies, and many with audited results, and all resulting in a simple ‘To Do’ list for your executive lead agile and digital transformation. All right, let’s make good time because this COVID stuff’s real, and we need to be being super safe, and we need to be pivoting our companies and helping each other. First, I promised in my abstract that I’m going to share executive strategy for Leaning a company while being respectful to the workforce. I’ll do this with tweets and I’ll expan- expound on it, That way, you can mine my Twitter if you want to read this later, if you want to share it. So if any of this resonates with you, here’s a pointer to pieces of it publicly.

Joe Justice  March 25, I wrote, How to Lay People Off in a Crisis. My answer? You don’t. You fund projects only to the extent responsible and ask the teams to help you distribute the funding across as many staff and suppliers are willing to fully dedicate to said project or goal. Here’s what I mean by this. A lot of times companies are making 10% or less of their revenue from last month. That’s real, and a lot of them are laying a lot of people off really fast. Well, what does that do to morale? It’s bad for everybody. Even the employees that aren’t laid off have low morale and productivity goes to almost zero. So what’s a better strategy? Here’s what I’ve learned:

Joe Justice  What you want to do is keep morale high, and there’s a way to do that while implementing austerity, while cutting revenue while cutting your losses financially, dramatically, and that you say, “Look, we have 10% the money we have last month.” So with that money, with that income, we have a 10% income, which is very real story for a lot of companies right now, everyone’s salary is going to be different. Now, if you’re one of the countries that had a massive government bailout, you might not have to do this because maybe your revenue didn’t drop; maybe the bailout filled in for that. Not every country has that option and even those that do not every company qualifies or knows if they’re going to qualify yet. So if you have 10%, the run rate, you say, “Staff, here’s 10% of money; here’s our three most important projects that are going to help other companies, help our suppliers not have to lay people off, and we’re not going to lay off any of you. But it’s 10% of the total money. This project gets 5% this project gets 3%. This project gets 2%. That’s it. Tell me which one you want to work on and we’re dividing that money across however many people sign up for that; that’s your salary.” This way, no one gets laid off, no one gets fired. morale stays high. people stay engaged, and they’re even more engaged to the high priority project, which might be making ventilators now or making face masks now. This is the way to pivot your company without creating morale. Second, how to cut costs and not destroy morale? Fund projects or goals, not people. So it’s not, “Hey…so-and-so, your salary is 10% of what it was.” That’s not how this works. It’s, “This project is the one important project for our company right now. This is the only supplier that’s still able to fulfill their our orders; this is the only product we can make, whatever the decision is. So this is our one project right now. It only makes this much money. We’re going to divide that across all staff” And this is going to be a two way conversation. “Staff helped me come up with a plan of how we’re going to divide this amount of money this month, across all of you.” With that two way conversation, it’s not, “Oh, my, my salary just got cut 90%” it’s, “We’re doing this important thing so our suppliers don’t go out of business and have to lay people off; and because I’m doing this, I didn’t get laid off.” It completely changes the conversation.

Joe Justice  Now only people who agree to fully dedicate themselves to the project get funding. Then, funding isn’t distributed as normal paycheck style before. If this is severe austerity, if your company needs severe austerity, and many of them do right now, several companies are going out of business right now; like, during this conference. If you’re in severe austerity, then you only release funding to be distributed across everyone who worked on it, when funding tests pass. In traditional management speak, you can call it a milestone, but like every presenter in this conference has talked about very importantly, and well said, is: it’s not a milestone that’s only the plans been made or we’ve built a module. It’s only when a test passes. Think of these each as a Lean startup. We have to have something we can test or something we can use before we can release any funds. In severe austerity, you can only fund outcomes; that’s been said more than once today. Next, if you want to go into more detail, tweet me so we can have a public conversation about it; LinkedIn is also okay. If it has to be private because of company reasons, you can email me but I far prefer to just be open that way everyone can learn together and we can all weigh in; everyone who attended this conference or spoke at it can be part of that conversation if they want to, and the whole rest of the world.

Joe Justice  Next topic. I promised, we’d talk about outmaneuvering competition by releasing customer visible value faster, and with higher perceived quality, without increasing R&D or production expense. Okay, here’s what I’ve learned. First, the public info. I tweeted, “How to respond quickly as an organization in a crisis? Well, that’s the time to go from making a decision to producing a new outcome (maybe a product, say a ventilator). The speed that happens can be called a ‘sprint’. For some businesses, a sprint is ~7 years. To shorten-” Team Wikispeed tweeted, which is also my account, “Our response cannot be faster than our supply chain. If for credit critical supplier takes four months and ideal times and 18 months in emergency times, our volume response cannot be faster than 18 months during a crisis. So practice extreme manufacturing and shorten your hardware sprints.” Note, in most companies, the decision of what supplier we use is ultimately made by procurement where the top incentive is low price and speed rework, risk reduction lose, and the crisis kills the company. This is very normal. This is happening all over the world right now. To solve this, again, this is an executive mandate and continually checked and reestablished. Here’s what I mean. If we’re in a transformation that’s not executive lead, and we have suppliers that, in a crisis are taking 18 months, we can’t fix that without an executive mandate because we need an executive mandate to change the way procurement is incentive on supplier approval. So you can’t fix it without executive intervention and that is why I’ve been working with executive teams almost exclusively the last six mont- six years. Now, a note below for people that want to get a little more hardware specific, this is my specialty. This rules out stamping and molding from design in most cases. Many ways to do both with a new design in one day, like Wikispeed, is proven. Most suppliers in crisis will queue and send you a defect mold, or dye, months late requiring sending back a second or more… more multi-month wait.

Joe Justice  The solution is you bring it in house like Tesla or SpaceX does where you make your own molds or stamps and dyes. Then. you can control the speed and the feedback loop or you prioritize suppliers not strictly only by cost, but by cost and response time, which gives a completely different supplier set. Now, working with suppliers that are far away from you geographically adds to this. If your parts are on a ship for the next four months, that’s part of your supply chain. And if those ships are now in quarantine, because the Conex containers need to be disinfected thoroughly before they’re allowed in by your government, well, you’ve indefinitely sabotaged your supply chain. So if you’re a Ford, and you want to pivot from making trucks to making ventilators and your supply chain is 18 months, you’re you’re going to fully lose all 18 months worth of money that’s already been spent, and you might die as a company. And this is happening right now all around the world with some of the biggest companies in the world. And it’s only massive government intervention that slowing down the death of these companies. So well, we’ll get to the next point the next. So that’s why executives need to be involved to solve this problem. Here are the executive practices; this this talk is on executive lead agile transformation for companies that are flailing. This is the best of what I’ve learned what you need to do, and I’m happy to learn better. Everyone in this conference, please teach me; here’s what I’ve got. Create a rhythm of making new priorities. Now this needs to be a rhythm so it’s not a panic each time. It needs to be collaborative so we don’t lose innovation from the bottom. So change or reconforming isn’t an unexpected stress. A good format is Meta Scrum as written by James Coplien. Then create a rhythm of measuring progress you can fund in a crisis a plan is not yet a solution. So if we give funding just when plans arrive, we can run out of money and not help anybody or ourselves. We need to split our Crisis Response into the smallest chunks we can reasonably ideally day sized deliver. Now this is where a lot of hardware  companies say, “Well that’s impossible! It takes us 10 years to make something like a ventilator. Well, then you need to take my Wikispeed Extreme Manufacturer class, so you can know how to deliver hardware in a day. From design, test, to deliver in a day. I’ve done it, now Tesla’s doing it and it’s public on YouTube; I’ll show that in a minute. In fact, there’s many ventilator companies and COVID test companies that are suddenly delivering in less than a week, even though they all told all their investors, “It takes at least eight years” before as part of a ploy to get more government funding. And now when we’re all in this together, all around the world, suddenly companies can deliver in less than a week in hardware and they always could and they always can. So everyone, please don’t forget that companies are delivering less than a week in hardware. Brand new products with new design, tested, even meeting FDA regulation in less than a week.

Joe Justice  Next, accelerate the solution ask, “What would speed up teams on a rhythm” so the ask is less of a disruption? See The Scrum of Scrums Pattern for this by James Coplien. Establish a leadership coalition that monotasks one of these impediments at a time until they’re fixed; Kaizen training helps here. So, executives that have been through lean training, Scrum Masters who’ve been through lean training, are incredibly valuable, even in a company in crisis under austerity situations in an executive lead agile transformation. Next, this is an impossibly high stress time, an executive activity is to reduce stress. First, that helps us the rhythm. Two: the public, clearly defined goal. These can’t be backroom conversations. These have to be billboards on a wall. These have to be everyone’s desktop backgrounds. These have to be everyone’s phone backgrounds. If they’re going to be in the company doing this in a crisis. It’s got to be complete ubiq- completely ubiquitous what the clear- clearly defined goals are. The funding paychecks need to be directly tied to results; reasonable and just even in a crisis with heavily constrained funding. Progress invisibility due to small, invaluable initiative size. So we need small goals split into small chunks, ideally day-sized, even in hardware. I know, I know, a lot of people don’t believe it but just look at what’s happening now, it happens and I did it with my company, so I’ve seen it too.

Joe Justice  Then staff buying helps reduce the stress. We do this by inviting anyone to lobby for a higher priority against the Meta Scrum pattern by James Coplien. Now this pattern is evolved a lot recently, especially in my work as the rubber is meeting the road right now, so if you want updates on how to run the meta Scrum pattern effectively in a crisis, or we’ve learned what works better in any case, because of the crisis, you can tweet me or Facebook. We can have a call with your executive team or a video chat with your executive team. We do this on a cadence and the justice of staff portioning salary for the project funding budget, knowingly funding distributed only at outcomes. Here’s what I mean by this: kindergarteners have been measured, that they become most disenfranchised, or emotionally upset, when they see an injustice and it looks like it doesn’t go away after kindergarten. It looks like this is built into humans as a species. We really care about what we think is justice. So especially when we’re talking about funding, which has to do with how our kids go to school, what we get to eat, like it affects our lives in a significant way, if we believe this is being done in an unjust way, we completely lose buy in and in a crisis, we go into panic mode where we can. So to prevent against, that to keep morale high, having the financing discussion up front, which is what I talked about in the previous section, is completely important to keep engagement up.

Joe Justice  Next, machines and engineering practices and test practices. This is where the real speed comes in. Everything else I talked about was simply refactoring the company according to an evolved version of Conway’s Law, that…I do now call Justice’s Law, because no one else has said it yet; and you can learn all about that in the full seminars when we have time together. But in any case, it’s the structure of the company that dictates the speed and the executive piece is creating that structure but that doesn’t suddenly make it fast. It allows the technical practices, the engineering practices, and the machines to do their work; to be fast. So the without the executive intervention, this can’t work but only the executive intervention doesn’t change the speed. So if the executive intervention happened, what changes the speed? That’s the machines and the technical engineering practices. It’s the same in software. You can have the best impediment-busting executive teams that had been poor empowered cross functional self organizing teams, but if the teams are still doing doing procedural code, with no end capitalization, no Object Oriented Architecture, no test driven development, no automated compile, and they’re compiling by hand, it’s gonna be slow…and that’s where a lot of hardware is right now. So for these practices, see Paolo Sammicheli’s book, Scrum for Hardware. The second half of the book chronicles exactly how to do this. The first half of the book is the story of my life and Paolo’s life. Yes, I think it’s interesting but it’s not going to make your company faster. We’re in a crisis; skip to the second half of the book. The book is available on Leanpub. The first few sections of the book are free. The second half, which has the most technical practices, it’s not in the free section; you will have to buy it. It’s going to be worth it.

Joe Justice  Simple To-Do’s, engineering practices… note, many engineering leads and design leads/leaders, leaders of these groups, managers, directors, do not have authority or autonomy to mandate the practices I’m about to talk about. And serial, slow, multi-regression stage gate processes result as the default. So these must be executive mandates and checked, reinforced, and reinstated. This is executive agility. So with that said, with me again stressing the executive role, let’s see, ‘What are the engineering practices that work?’ First, this is the first one that people throw up their hands and say, “We couldn’t do that!” and yet it’s exactly what the fast companies are doing right now. You can see what Tesla just did building a ventilator on version two in 18 days, and this is exactly what they did; it’s on YouTube right now. It is only use materials and machines that you can receive completed parts from in less than seven days. I’ll say that again. Only use machines and materials that you can receive completed tested parts from in less than seven days. Companies have built their entire existence around global supply chains with 18 month lead times, and they say, “Well, how can we ever deliver something less than 18 months?” Well with that structure, they can’t. It’s true they cannot but if you take this step, which is a real actionable, profitable step, you can deliver in less than a one week sprint. So, now let me continue. Waterjet cutting, milling, 3D printing, Arduino boards, and similar complete commercial off the shelf boards with standard interfaces, these are going to meet the lead time of less than seven days. No special coatings or processes are allowed. If it cannot, in a crisis, reliably arrive in less than seven days. That’s it. And I get all types of designers saying, “But it’s a better part if we use this coding” and I say, “That coding is only available from one supplier, and in a crisis right now they’re not responding to anyone, you’ve just compromised your entire company and you’re going to get laid off. How do you feel about that? Now…so it’s not being an engineer, as an engineering practice, who says, “But I figured out the best coding”; it’s not that. It’s, “Of the subset that we can get in less than seven days, what’s best?” that’s the agile mindset for hardware. Then we queue suppliers up to the interface of a module; people who are familiar with contract first design, Object Oriented Architecture, test-first development to the unit to the units and its interfaces…this is your world; this is your party. At some point, I will write a book on hardware patterns. I have been saying that for years; somebody please just… write it with me. We’ll do it in a series of video chats because I’ve never prioritized it and I need to; it doesn’t exist. Hardware Patterns, Hardware Interfaces is only in a series of video chats by me around the world and conferences. But it needs to be a book so people can refer to it easily and search it. But we give the suppliers the test to pass and the interface, not a detailed design. This enables their innovation and fastest response time. Next Paolo Sammicheli and you see his Twitter at the bottom, @xdatap1, he wrote twelve executive, mandateable engineering practices designed for modularity so that the organization can execute in a massively parallel fashion; architecture examples and principles are in the book. This has been demonstrated, documented, and audited to be over 1000 times faster than sequential phase gate engineering. This is known it exists but you have to re-architect the company to do that and that requires complete executive buy-in; only a few companies have been brave enough to do that so far.

Joe Justice  So here’s what it looks like. This is designing, building, and testing a car in 27 minutes. If it’s a standard operating procedure, it needs to be a robot that’s doing it. This is the what’s wrong about the E-Myth, which is taught in all businessn schools right now, so the executives that you and I are talking to, they’ve been trained in the E-Myth; all business schools do. And the idea of the E-Myth is build your company so that a 16 year old can do it. Establish standard operating procedures so someone can walk in with no training and do most of what your company does. Well, that kills innovation. It kills the agile mindset and people show up to work dead like cogs, and in a crisis, they all get laid off in the company goes under. And we’re seeing this all around the world right now. So what’s the answer? If it is a standard operating procedure that doesn’t require innovation, a robot should be doing that whether it’s a script or a physical robot depends on the thing you’re doing, but slps are not for humans. This is again, where speed comes from. Groups of humans are for all the stuff that isn’t a standard operating procedure, the design cycle. Now, they’ve got to be at the point of where the work is done and at the point of where the test is done, so they have a fast feedback loop. Virtually? Fine. Make sure they have a camera on the point of production and the point of test. Here’s Bosch; here’s the real client doing this. This is sprint one. For more detail on this take the Scrum for Hardware class so we can save time.

Joe Justice  Let me check myself on time. Okay, we don’t have that much. In Sprint 1, they built this piece of equipment that goes on in front of a train. This is one week. You can see the next four sprints. On the far left is week two. They had poor sensor performance, so they established a wiper to handle inclement weather. In week three, Sprint 3, they refactored the circuit boards inside, the embedded software, and changed the wiper for better sensor performance. In Sprint 4 they tried a 3D printed enclosure and they also got it quite a bit smaller. You can see a seam of where the 3D print line was and in- by Sprint 5 the sensors were good enough – and really it was the software compensation of the sensors that they didn’t need a window and a wiper anymore – and they were ready to go to market. That’s five sprints at market Every single sprint was tested on locomotives, real locomotives asking real customers, “Is this improving your problem or not?” This was not an MBA driven exercise, “What if?” This was going out to train yards and solving a specific problem. Again, the details are in the class when we have time to do it. Which problem is being solved here?

Joe Justice  How to retain the top and most sought after talent without redefining HR pay grades. I’ve been running into this with artificial intelligence labs where these people can basically ask for the salary they want and work anywhere they want in real time, and that’s been going on for six years, even before crisis. But now it’s happening at an even accelerated degree because of the COVID epidemic, pandemic rent. So here’s the simple To-Do’s that I’ve learned that help retain top talent without redefining HR pay grades. First…well, really the parent item is increasing engagement and fun. That’s the principle. How that’s done depends on the people and what they think is engaging as fun. Here are examples that often work. If you’re using Scrum, rotate the product owner Scrum Master and development team member roles each sprint. Everybody gets to play all three roles in turn. This keeps people engaged and excited, regardless of salary. And they say, “Well, we all get to be Product Owner”, which some of them still map as a senior position, these are all on the same level in reality. But it…this sense of equitability and justice keeps people excited. Then, run a happiness retrospective. Any of the many tools for happiness retrospectives. The online tool FunRetro helps us do that in these remote days and these quarantine days. Then, toss out suggestions that are outside the ability to implement next sprint. Now ability can be it was too expensive, or it’s outside what the company uses its norms, or it’s too difficult to implement in a sprint; any of those reasons are valid. Now what’s left are only suggestions that we all agree can be in the next sprint. Take one of those and do it in the next sprint. By doing that every sprint velocity stays high because part of the work that the team does with their same points measured with the same velocity, however you’re running your agility, your agile teams, will process that and keep morale engaged and high.

Joe Justice  How to increase employee-voted manager effectiveness engagement across multinational offices. This came from my work with John Deere. They measured themselves at 8.2 faster, and before the work we did together. So that’s 820% and their managerial effectiveness in this group in the company had previously been 1%, the bottom 1% of the company, and it went to the top 10% of the entire company and here’s what they did.

Joe Justice  Make management backlogs and KPIs and OKRs visible with names on each. So now, the employees know what the top managers are actually measured on to get promoted; if you’re even in a hierarchical company. when I work with companies that are much more flat, like parts of Bosch now or Netflix, it’s simply, “What are the KPIs and OKRs that fund the company, that keeps us getting paychecks” and it doesn’t have to be from senior leadership because they don’t have senior leadership anymore. Not the same way. In John Deere, they definitely did. So there’s a name of a manager; here’s what they’re measured against. That’s public and the KPIs and OKRs are updated as soon as there’s data; whether it’s a quarterly audit, or in some cases in real time, depending on the sensors. Ask teams to self organize around those goals. Now the managers know who their teams really are. Now, this is part of Conway’s Law. It’s not who reports to them. It’s who self organized around their objective. Now you know who your teams are. Instead of commanding they’ve pulled; you’ve created the power of pull, which was well written in the book The Power of Pull, Then run Meta Scrum patterns to refine the management backlog. Otherwise, we only have top down innovation and what we want is innovation from from every part of the company. So we invite the teams to refine the backlog, inviting new ideas from anywhere in the organization. But it’s not anarchy, it’s not everyone does only what they want. We want a very small list of prioritized missions, especially when there’s limited funding like there is now. So it’s only if the people who are making the funding decisions, and whether that’s a group vote across the entire organization, or you actually have something called a manager or whatever the structure of your group, whoever determines – whatever the mechanism for determining funding – has to determine the new idea is more important than the existing proposed ideas. So when I’m running an initiative, I bring my understanding of the highest priority items that we could do as a group, and I post them as Post-it notes on the wall, now I have to do virtually, and I say, “Everyone, if you have a better idea, give me that post it and then try to explain to me why it’s a better idea. We’re going to do the top three only,” and then we have that conversation which is part of the evolved version of the Meta Scrum pattern. I’ll add a bonus piece, how to weather a crisis. You remove all recurring expenses. If you lease buildings, those are the companies that are going out of business first. The restaurants on our lease are going out of business faster right now, all around the world, than the restaurants that owns their space and didn’t have a lease payment. I mean, that’s it. In a crisis, your run rate is how long you can make your recurring payments. So you eliminate your recurring payments. If you can buy out the things you’re renting or leasing, buy them out. If you can’t, you’ve got to get rid of them and simplify. In a crisis, that’s what you do; that’s austerity. Here’s what I did. I started living in my Tesla Model three. I put a mattress from Amazon in the back – for those of you that want to know about that, it’s an extra long twin on Amazon for $69 in the US – I put a cooler in the front seat, and a laptop and my cell phone as Wi Fi. And I drive around the world where I was. I’m in quarantine right now for another eight days; self-quarantine. My COVID test did come back negative but I’m in self-quarantine for 14 days after I got off the flight after I wasat an International Airport. So once I get out of quarantine, I’ll go back into my Tesla. And it works as a mobile office, a mobile hotel room, and before quarantine, I would go to racetracks around – in this case the US, that’s the that’s the area where my Tesla is right now – and I participate in Tesla racing series. So I’d have a crazy amount of fun and it costs nothing. The superchargers, they were free because people bought Tesla’s using my referral link. Now, I’m finally paying but it’s still like one 10th the price of gas or even less. So it’s basically free. Like driving full time…it was…$40 a month? It was…it was ridiculous. So dramatically simplify your life in a crisis.

Joe Justice  I’m Joe Justice that is Executive Led Agile Transformation. To summarize, to keep executive attention, everything we do has to be to the point of increasing return on capital. Otherwise you get laughed out of the building. That’s it. Then the company structure would actually make speed as the tools you use and the engineering practices you use. That’s all written in the book Scrum for Hardware by Paolo Sammicheli. The second half is what you want to be able to do that the structure of the company has to change a lot. And that’s the executive transformation practices that I’ve just enumerated. You can mine them on Twitter, you can see them in the Forbes articles below, and tweet me anytime, folks. Stay safe, stay healthy. This is a really interesting time and I will make a personal plea that I hope we create a new normal. The world is different right now and it will never be quite the same. I’d like us to take this time to think about what’s actually essential, because almost all of us have been deemed non-essential by the world’s governments; and we weren’t. And…so what can we do that’s essential and how can we expand our definition of essential to include things like education; things like time with your family and kids? How do we, how do we refactor that? And how do we take the best parts of what we’re learning with this new online lifestyle, to make a healthy, loving, respectful culture that’s global? And I have no patience for nationalistic response; there’s many people dying in this country, this testing, this ventilator group in this country. What we need is a global mindset period and it might be a good time to rethink currency.

Joe Justice  Here’s a question company that’s growing by innovation. This is pre-crisis. You can see quotes from their leadership team on the right and you can see they’re growing by prioritizing only how fast they can deliver cool stuff to the customer. Everything is about shortening the sprint length. This is Tesla. I’d like to compare that to the growth of a company that’s growing by continuous improvement. It looks like if you want growth, the one goal is shortening the length of your hardware sprint. That’s it, and that’s what Elon Musk says is the one goal of the company. Now what happens if you throw a crisis at it? These are the same two companies now.

Joe Justice  It’s still better. Now, here’s the timeline I’d like to end on because I think this is the serious point that matters. So first, you’ll weather a crisis better if you have shorter hardware sprints and you’ll make more money and grow faster if you have shorter sprints and it completely blows away and makes irrelevant traditional Lean continuous improvement thinking. Now traditional Lean continuous improvement thinking as part of making short sprints, but alone, it does not give growth or survivability in a crisis.

Joe Justice  So, what happens? On March 18, Elon Musk tweeted, saying “SpaceX makes life support systems, which include ventilators, and Tesla makes HVAC systems heating, ventilation and air conditioning and cooling systems that have some components that are like ventilators, maybe we can help.”

Joe Justice  On March 19, they went to the customer they use the Agile practice – this is a full agile hardware company – they went to the customers and these hospitals and said, “What do you really need?” Not, “What can we sell you?”; “What do you really need?”

Joe Justice  On March 21, there’s a discussion with the current believed-to-be best in industry on ventilators, called Medtronic, and the conversation was only, “What is the state-of-the-art. What is the best known about ventilators now?” So let’s not reinvent the wheel, let’s make something better.

Joe Justice  March 22, while other companies were saying, “We’ve reprioritized to deliver only COVID response” but they couldn’t. They had 8-month lead times with their suppliers; they made executive announcements but no impact. Already there are 50,000 masks delivered to where I am now, Washington state in the USA, and PAPR helmets. So this is three days later and there’s already volume relief while other companies are still having board meetings about it. March 23, California governor confirms ventilators are delivered and so the Musk companies bought existing metal ventilators and shipped them already in four days.

Joe Justice  March 25, ventilator in-house design begins. They say well, now we understand the state of the state-of-the-art. We’ve already bought all the existing stock and gotten it to hospitals. Now we’re going to make our own because we’re out of existing stock, we can’t buy them anymore.

Joe Justice  March 26, they started delivering ventilators that they bought while they’re designing new ones. March 27, they committed that all of those are going to be free; they’re not going to charge any money for these things. March 31, New York City hospitals received the ventilators, they bought April 3. Doctors in other areas are saying their ventilators are being received on.

Joe Justice  April 5, this was yesterday, there’s the sprint demo of the second version of their in-house-built functioning ventilator. So that project started March 25. April 5 was the second sprint demo. You see a screen capture of it in the bottom. That is the Tesla in house built ventilator and people saying we can’t have hardware projects that aren’t FDA approved in less than 10 years, 18 years – these are actual numbers I am being told by clients, sometimes 21 years – SpaceX did it, sorry, in this case, Tesla, had the version two in 18 days. How did they do it? It’s exactly what analysts have been saying the whole time. They refuse to work with any material or any machine that can’t give them a tested product in less than seven days. So that means 3D printing, waterjet cutting, commercial off the shelf parts parts they already use – you can see the screen is the touchscreen from a Tesla Model 3 because they’ve got warehouses full of these things and they know how to make them; they know how to get them fast. So it’s not that it’s the best product or the cheapest product. It’s the one that’s fast and it still ended up being cheaper than anyone else’s ventilator because of how fast they did it. You can watch the sprint demo at the link at the bottom right. I’m Joe justice. Thanks for learning about Executive Led Agile Transformation; which also included, in this special edition, COVID in a crisis. Thank you, everybody.

Host  Right. Thank you very much. So we have just two minutes left. So if someone has a question you’d like to ask, go ahead and drop it in the chat box and we’ll take the first question that comes up that way. We can get things in before the end of the session. And thanks, Joe. This was this was a really, really great presentation. A lot of fascinating information and I love that you were able to show us new ways of thinking about hardware. And…. *laughs* How do you receive mail if you live out of your Tesla?

Joe Justice  Yes, there’s a number of services. I finally found one in Japan but the US has had them for a while and I believe they exist in Europe as well. They’re mail scanning and forwarding services. So they have a P.O. Box for you, a registered post office box and  – or they can even make it an office address legally or a residence, in some states, legally. So you can use it for any type of mail that you would a house or an office. What they do is they automatically scan every piece of mail you get, and you get a text message or an email, everything. If it’s a check, they automatically deposit it, you don’t have to worry about it.

Joe Justice  It’s a package, they say, “Which pickup location do you want us to forward this to and on what date?” And you can use the locker services around the world. In some areas, you can have it delivered automatically to the trunk of your Tesla and they’ll put it in your trunk. They get a temporary passcode as the credential carrier. And when you’re back at your car, it’s already in the trunk for packages; I can even get freight that way. Large, you know, like 400 kilogram things. So we’re completely decoupled from traditional addresses now.

Host  Awesome. That’s it. That’s fascinating. Thank you very much. Well, thanks Joe, for presenting. Really appreciate your contributions to today and this concludes our Best Agile Articles of 2018 Conference and don’t forget that we have, in the chat, the feedback for Miro for the presentations, and then I’ll open, one last time, I’ll relaunch our live poll. If you could take that and give us just a quick visual of your thoughts about today’s session. And Joe, we really appreciate you hanging in there with us to be the last presentation of the day. I’m glad that I stuck around because this is fascinating. And to everyone else, thank you very much for attending and we will send out the PDFs and links to the recordings. Once those process give us a few days just because we also have other jobs that got put on hold today that we have to go back and check in on. So we’ll get those out to you as soon as we can in the next few days. And we appreciate your attendance, we’ll be doing another one of these conferences in another quarter. And we, we intend to do one each quarter on by pulling different people who are writing for the book. And we are right now working on best at all articles of 2019 and we expect that to be released somewhere… August-y; somewhere up in there, we don’t have a drop dead date but we are at this moment making selections of the articles that are going to be in that book. So thanks for joining and you all have a great week.

Joe Justice  Thanks, everybody. Take care. Stay healthy.

Host  Thank you

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