In some organisations, the individual succeeds if the organisation as a whole is a success. This is often where the organisation is at risk, either a start up, an organisation in trouble, or continuity requires achieving success. In these organisations, success is only possible if all the individuals align their goals with the goals of the organisation. It is not possible for an individual to succeed if the organisation fails. A “risk managed” culture will normally emerge in this context.

In some organisation’s where continuity is guaranteed, the success of the individual is best achieved by out performing their colleagues. The individual succeeds by placing their own goals above those of the organisation. A “failure” culture will normally emerge in this context if the leadership do not act to prevent it.

In a “risk managed” culture, adoption of new values and practices will be natural and easy. In a “failure” culture, adoption of new values and practices will only occur it aligns with the goals of the individual, something that leadership has a huge impact upon.

The failureship in a failure culture is dominated by self interest. Even if the CEO is trying to improve the share price, they do not necessarily care about the long term future and health of the organisation. The goal is short term value extraction rather than long term growth. I worked at an organisation that was deeply damaged by the financial crisis and specifically the mismanagement of government. Prior to the crisis the CEO had been leveraging the strong national brand to build a trusted global brand. This was a slow and complex process of investment that would take years to evolve this centuries old institution to it next incarnation. The Crisis eventually lead to a new CEO. The new CEO retrenched and shifted to a short term national strategy and sold off the international assets to make the short term profit look good. This strategy distracted from his poor revenue figures. The CEO got their bonus at the expense of the future of the organisation.

Why does this self interest impact the quality of the developers that an organisation hires?

Consider two organisations. The first organisation hires the cheapest staff that they can find. They normally do this through a consultancy which is also driven by self interest. More later on that. The second organisation hires staff who cost twice as much but they need half the amount. The first organisation has two thousand (2,000) developers costing one (1) unit, and the second organisation has one thousand developers costing two (2) units each. Both organisations spend the same amount two thousand units (2,000) on developers. The organisations look like the following.

Although the cost of the workers is the same, the management headcount and the the cost of management have more than halved. Furthermore, if the workers are significantly more experienced, they will require much less support from management which means that those managers in Organisation 2 that have an outline could also potentially be removed. So the final result is a reduction in management headcount in the region of 50% to 75%. So if you want to understand why managers in a failure culture do not want to increase the quality of the workers, you only have to ask “Why don’t Turkeys vote for Christmas”. In a risk managed culture, management is focused on value rather than cost. The desire to move fast means that they want smaller teams of higher quality individuals.

In a failure culture, the failureship does not want to be held accountable for the quality of the workers. As a result, they do not hire directly but instead make extensive use of consultancies with a “global brand”. This also has the added advantage of reducing the quality of the workers even further which increases the demand for poor quality managers. Any decent worker can normally find their own work, either as a permanent or temporary member of staff. People join consultancies because they want to gain experience either in a skill set or in an industry. This is particularly true of graduates (that includes me) who want to get some experience in a variety of industries before deciding where they want to work. Whereas a permanent or contract individual receives 100% of the money paid by the organisation, a consultant from a “global brand” consultancy receives only 30% of the money paid for them. In effect the individual consultant is paying 70% of their fees to the “global brand” consultancy. They are paying that 70% fee for the learning experience that will eventually enable them to receive 100% of the fee. So why would the failureship pay such a huge premium for such poor quality staff? We have to remember that the motivation is self interest rather than the goals of the organisation. “Global Brand” consultancies look after their customers. In the event that a member of the failureship is fired, the “Global Brand” consultancy is incentivised to find that person another job, ideally with more authority as they are more likely to use the services again at their new organisation. Some consultancies even act as car parks for members of the failureship. Once again, asking a member of the failureship to move away from “Global Brand” consultancies to hiring competent individuals is like asking someone who is falling from an airplane to hand over their parachute.

My favourite experience of this nature was a meeting with a senior executive about Safe.

• Me: It is my strongest recommendation that we do not use SAFE because it is rubbish.
• Exec: No! We are going to use SAFE!
• Me: Why?
• Exec: Because I say so.
• Me: In that case let me introduce you to Martin (I still miss you Major Tom) who knows all the people with lots of experience with SAFE.
• Exec: No! It is more than SAFE so we are going to use the “Global Brand” Consultancy called *********
• Me: Why?
• Exec: My best friend is a partner with *********. He finishes his paternity leave next month so I want him to do it.
• Me: Is that the door? Must be going.

In this case it wasn’t even pure self interest, the executive placed the needs of his friend above the needs of the organisation… Though it always helps to keep the “Global Brand” happy in case you need them. 😉

Leaders in a “risk managed” culture would ensure the quality of each individual. They would invest in continual pipeline of high quality candidates preferring to find talent over filling roles.

A large organisation of poor quality individuals in a failure culture gives more opportunity to “leaders” in its failureship. Using “Global Brand” consultancies provides further job security.

One of the key differences between organisations with “risk managed” and “failure” cultures is the attitude towards talent. “Failure” cultures prefer large teams of “cheap” individuals who have little experience, knowledge and skill. “Failure” cultures prefer individuals with potential. “Risk managed” cultures prefer small teams of “expensive” individuals who have significant experience, knowledge and skill. “Risk managed” cultures prefer individuals with a track record.

One problem with “failure” cultures is that the failureship do not understand the difference between cheap and low cost. Consider two potential team members. One member costs one unit and delivers one piece of work. The second costs two units and delivers ten pieces of work. Which of the two individuals is cheaper? The second costs more than the first, however we need to consider the value delivered as well. The second delivers five pieces of work per unit of cost whereas the first delivers one piece of work per unit of cost. The second is cheaper than the first. One explanation is that the work or value delivered is subjective whereas the cost is fact based and defend-able if the investment fails to deliver the desired return.

“Failure” cultures gorge themselves on expensive low cost individuals whereas “Risk Managed” cultures carefully select cheap high cost individuals. I worked on a project where we had twenty developers based in London working closely with the users of the software. An executive blindly following the edict of another member of the failureship, and insisted we move the software development to an off-shore location with lower day rates, which was about one fifth of those in London (five units of cost in London, and one unit of cost for offshore developers). The London developers became product owners and fifty off-shore developers took over the development. The value delivered dropped like a stone to a quarter of previous levels ( The value delivered went from 600 to 150 ). The cost went from 100 units to 150 units. The cost of a unit of value delivered went from six ( 600 / 100 ) to one ( 150 / 150 ), an 83% reduction. The exercise was considered a success by the failureship because the average cost per developer went from five to one and a half. It is only possible to think this way if you completely ignore value.

The video below provides a wonderful illustration of this difference in the cultures.

Even though there are 100 children playing football, only a few are ever close to the ball. What are the rest doing… nothing of value to the game. This reminds me of a transformation project I worked on. A well known consultancy provided a team of twenty individuals to work on the project. We told them that we wanted to focus on delivering one or two epics (i.e. Limit Work in Progress). Very quickly sixteen epics were work in progress and we did an intervention asking why so many epics were being worked on. It turned out that the team members did not have the skills to work on the epics we wanted and so they started a new epic when someone in the team could not work on any of the other epics. They bought in an agile expert. It turned out the agile expert’s most significant experience was sitting next to a team that was using Scrum.

Each “Risk Managed” organisation I have worked for has had a ridiculously high bar for entry. At ThoughtWorks and many other high quality software organisations there is a coding test where the candidate has to write some code and then explain their design decisions in a interview with experienced developers. Thoughtworks hired one out of every one hundred applicants. A tribe lead at Spotify said that they hire one in three hundred applicants. Any developer who does not want to do a coding test because they are a well known “rock star” should not be considered a good cultural fit. As soon as one person is considered “special”, where do you draw the line. A “rock star” developer should want to share the interview experience of their colleagues rather than be important enough to be exempted. A “rock star” should be able to complete the task in an hour whereas another candidate might take a few days to complete the task. The coding tests do not just test for capability, they also test for developer culture fit.

A “Failure” culture struggles to recruit high quality talent because it does not know what good looks like. It takes several high quality individuals to recruit someone of similar quality, because we all have blind spots and it takes several of us to make sense of someone’s experience. This is particularly the case as many people now know the “words of power” used by high quality developers such as “refactoring”, “clean code” and “patterns”. If you have never done refactoring, you might be impressed by the person who “refactored” an entire system without needing any automated tests because they are just so awesome. Once a “failure” culture develops a reputation for rewarding bad behaviour and tolerating mediocrity, high quality individuals will avoid it and no amount of recruitment effort will help. One of the easiest ways to identify a tolerance for mediocrity is to look for organisations that make extensive use of low cost and expensive consultancies like Wipro, Tata Consultancy Services and Accenture rather than apply their own recruitment processes to hire individuals as either permanent or contract staff.

“Failure” cultures find it even harder to retain high quality individuals than they do to recruit them in the first place. High quality individuals want to deliver value to the customer. They quickly become frustrated in cultures that are only interested in personal survival and promotion, where helping others solve problems is not considered sensible. Things that are easy to achieve in a “risk managed” become almost impossible to get done in a “failure” culture where everyone is too busy doing their day job to have any spare capacity to help someone else fix an organisational problem. Eventually high quality talent will leave, shifting the culture even further into a “failure” culture.

The flip side is that organisations that truly embrace hiring high quality talent get a reputation and grow rapidly through word of mouth. The London Agile Developer community descended on Thoughtworks, then BNP Paribas, UBS, Sky, Springer, rapidly growing high quality teams, simply because they knew they would be able to work with similar high quality developers and they would be valued by the organisation. A cautionary tale though, at one of the organisations the leadership drifted into a failureship and all the high quality developers left. The developers who remained “knew where the bodies were buried” and quickly achieved senior positions where they prevented the adoption of practices that undermined their status, thus effectively inoculating the organisation against “risk managed” culture.

As with all leadership, deeds need to match words, or leaders need to “Walk the Talk” as some books call it. Any transformation of an organisation needs to start with building a team of cheap, high cost, high quality individuals and developing a recruitment pipeline focused on excellence. Any organisation that tries to improve by hiring a large quantity of expensive, low cost individuals from a poor quality consultancy is choosing to fail.

If its so obvious that smaller teams of high quality individuals are better, why do the failureship continue to gorge themselves on EXPENSIVE, low cost consultants? I’ll answer that question in the next blog…

Years ago I shared a table at a wedding with a primary school (Kindergarten) teacher. We were not surprised to discover that my job in technology was very similar to their job. Understanding behaviour was a big thing we had in common. One common situation they encountered was children behaving badly and the parent’s not believing them, “They are an angel at home” was the common response. The teacher explained that they would arrange for the parents to observe their child’s disruptive behaviour secretly through a window. I’m sure that often the parents would rather not know because then they would have to do something about it. And so it is in organisations. I’m sure we have all seen people behave in an aggressive and domineering manner when they perceive themselves to be the HIPPO in the room, only to assume the demeanor of a timid mouse in the presence of a bigger cat.

Failure cultures prevent access to the big boss, the hierarchy acts to prevent uncontrolled access. This benefits the person potentially behaving badly, and it also benefits their boss because they do not become aware of the bad behaviour. People who tells tales out of school are often told “to escalate through the appropriate channels”. The “appropriate channels” being those that can be used to filter the message.

The leadership in “Risk Managed” cultures spend a huge amount of effort to make sure they are accessible to everyone in their organisation. As well as making themselves accessible, they will also make the effort to reach out to people. They understand that “going to the Gemba” is not a planned royal visit with courtiers and presentations, often it means simply working near to a team for a while. As any ethnographic researcher will tell you, it takes a few days for people to drop the formality and act normally. Spending a week sitting in an area, listening to the buzz of a floor will tell you much more about the mood of the people than any survey or presentation. Leaders are better able to detect issues earlier when they sitting with the team at the Gemba.

The failureship in a “Failure Culture” are like an unruly child in the kindergarten along with their irresponsible parents who do not even want to know about the behaviour of their star child. Uncontrolled access to the big boss is to be avoided at all costs. Meetings with the big boss will be arranged by respecting the hierarchy at all times. Your superior will attend the meeting, acting as a guide to ensure you do not reveal any information that might taint the ears of the big boss. Door stepping a senior member of the failureship with a problem / issue / idea will be met with sanctions of a career limiting nature. Individuals will be given controlled access to senior members of the failureship at intimate breakfast meetings and coffee corners with a dozen of your fellow colleagues, normally those with the same rank.

This leads to a behaviour I observed in the original “Seeing Culture” article. The failureship have offices, and the leadership sit with the team. This is perhaps one of the most visible differences between a “Risk Managed” and a “Failure” culture.

“Turn the ship around” by David Marquet tells the tale of how his submarine went from a leader – follower culture to a leader – leader culture. I prefer the language of Eric Berne’s Transaction Analysis of Parent – Child to Adult – Adult relationships. In a “failure” culture, a leader – follower (parent – child) relationship means you treat your subordinates like a child and control access to the big boss. Going around your superior and violating the hierarchy is normally a career limiting move. In a “risk managed” culture, an adult – adult relationship means you treat your subordinate as an adult and respect them to make the proper judgement as to whether they need to speak to the big boss. The big boss will determine whether the contact is appropriate and will advise your subordinate accordingly, perhaps directing the person to someone else or even back to you. If the contact is inappropriate, its a learning opportunity helping them understand how to address an issue, rather than a violation of the hierarchy.

I previously wrote about how Al-Noor Ramji and JP Rangaswami reduced the power distance index at Dresdner. At Skype, Mark Gillett was even more explicit at breaking down the power distance index. I first met Mark shortly after joining Skype in the coffee area next to his office, he introduced himself and when he knew I was an Agile Coach we discussed User Stories for a few minutes. A year or so later we moved office into a state of the art office as part of the Microsoft family. A couple of years ago Mark told me about his design for the new office. Microsoft had wanted him to have a corner office but he wanted to maximise the possibility for chance encounters. The Skype office was based on three floors. Mark installed a sweeping spiral staircase to link the floors. The staircase was the easiest and quickest route between the floors and as intended by Mark, it was a great way to bump into people. Furthermore Mark installed a coffee area on the middle floor next to the staircase, complete with a professional Gaggia coffee machine with associated Barista Training. Mark’s office was situated right next to the coffee area. If you really needed to chat to Mark about something, all you needed to do was go for a coffee and hang around for a short while.

At Tesco, Jim Banister was entitled to an office. Instead of sitting in his office unable to hear what was going on, he sat out with his teams. His office was made available to his teams for meetings that were either private or would be loud and disruptive to everyone else.

By comparison I worked in a company where senior managers were entitled to an office… and they always used one. They even used an office when they visited other locations. It was common practice for them to use the building where they could have an office rather than sit in the building where their teams sat. Team members would have to travel to a different building to meet the manager visiting from an overseas location. The same company further reduced the chance of unintended access by locating senior management in separate buildings to the workers. Even in open offices with hot desking arrangements, the failureship will soon establish themselves with dedicated seating for senior staff members and reserved seating for important individuals. Nothing signals a flattening of the hierarchy than seeing a senior executive hunting around for a desk because they arrived late, and them sitting with a new group of people, or perhaps in the coffee area.

At one company I worked the executive had an office in London. They only spent one or two weeks a year in London. However, they had an executive assistant sitting at a desk outside the office with instructions that no one was to use the office. Furthermore, they had an additional window added to improve the light to the office that no one was allowed to use. As one colleague commented “I wish they would fix the toilets so that they did not flood instead of improving an office they never use.”

When I did some work at Bank of America, a number of people excitedly told me the same story. A developer was working on some code when a new joiner asked them if they could join them and do some pairing. After an hour of coding the new joiner excused themselves. The developer asked the new joiner what his job was “I’m the new Group CIO”. That story spread through the organisation like wild fire, that the head of a department of tens of thousands of people was approachable and could code!

Along with “Servant Leadership”, “Go to the Gemba” is possibly the most widely held expectation of Agile Leadership. The first rule in “Six Simple Rules” by Yves Morieux of Boston Consulting Group is “Understand What Your People Do” or “Go to the Gemba”. “Go to the Gemba” and “Sit in an office” are the easiest behaviours to spot to identify whether you have leadership or failureship, which is why they are so powerful. Nothing signals change to an organisation better than a senior member reaching out and connecting to real people in the organisation, rather than simply communicating through the hierarchy (or through McKinsey if they do not trust their hierarchy).

If you are genuinely interested in moving from failureship to leadership, move out of your office and turn it back into a team meeting room. Sit with the team but give priority to them, offering to give up your seat if someone else would benefit from it more. Move around your organisation, spending a few days with different sets of teams. If you do need to spend time with your colleagues in the leadership team, split your day between them and the real workers. You will discover so much and you will enjoy your job more.

I ran an exercise where I asked a group of executives “What is transparency?”. Take a moment, think what it means to you and say it out loud before you read the answer I gave.

Transparency is when you give someone the information they need, in the format they need so that they can make the decisions they need to make to fulfill their responsibilities.

Transparency is a collaboration. Sometimes the person asks for the information they need in the format they need. Sometimes the person with the information decides that another person needs it and works out the best format to present it. Formatting the data is often about constructing the context so that the information has meaning.

Transparency is not open kimono, the sharing of all information. It is not drinking from the fire hose, receiving huge quantities of data to be sifted and sorted. It is not the pretense of sharing everything, expecting the receiver to find Transparency in the aacennprrsTy. Transparency is the sharing of information with context to allow everyone in the organisation to achieve their goals. Sometimes the information is focused on an individual or a small group, and sometimes it is shared with the entire organisation. Sometimes it takes a great deal of effort to help someone understand that they need the information you are providing.

In “risk managed” cultures, the leadership create an environment where everyone, including themselves, share information so that others can decide and act. In “failure” cultures, the failureship create an environment where information is carefully controlled, and sharing of information can be seen as a crime against the organisation. The failureship do not want information to be freely shared as they want plausible deniability in the case where they fail to fulfill their responsibilities. Speaking truth in a “failure” culture can be career limiting or career destroying.

In “failure” cultures, information is carefully curated and filtered, often translated through several excel sheets, powerpoint decks and summaries until it presents the story that subordinates want the failureship to read… which is the story that the failureship want to read. Drilling into the information requires the failureship to navigate the reverse trail through the organisation, offering the opportunity to correct or delay access to the truth. In a “risk managed” culture, information is automatically assembled to be always available for all concerned, with alerts when appropriate. The information acts as an “invitation to the Gemba” for the leaders in the organisation. “Invitation to the Gemba” is a phrase that Jabe Bloom introduced to indicate that the leadership should not act on the information they receive but rather use it to identify the places where they should “Go to the gemba”, go to where the work is done, and see for themselves what is actually happening.

In a risk managed organisation, the leadership create the culture and environment where everyone is encouraged to provide information to those that need it. They actively work to encourage people to share information up, down and across the organisation. This requires a great deal of work on the part of leaders as they will constantly be employing new people who are used to cultures where sharing of information is forbidden, discouraged, or where information is “power”. Leaders not only send out memos or give organisation wide speeches on the subject, they also encourage it in every interaction or meeting that they attend.

All leaders ask for transparency, they all want to know what is going on. It is their behaviour when they receive information that determines how willing people are to share it. Getting people to share information requires the leadership to build trust. A second question I ask executives is “What do the RAG statuses, Red, Amber and Green” mean to you?”. The traditional meanings are:

• Green – Everything is OK
• Amber – The project might be late
• Red – The project will be late – (actually, it means someone has revealed the truth about what is going on.)

Anyone who has worked in a failure culture knows what happens when someone reports a status with “Amber” and “Red”. It is a very unpleasant process for all involved, the failureship swoop in, possibly deploying someone from outside of the project to find out what is going on, even though the failureship already know. A lot of weight is thrown around with an associated dollop of Kabuki (Japanese theatre with the players cutting all sorts of shapes on the stage) until some sort of reset is performed and the status can return to “Green”. The reset normally involves moving out the target date if it can be negotiated, or reducing the scope until it no longer delivers any real value for the customer. Normality resumes until the next RAG crisis. Everyone knows that nothing good comes from reporting status of “Amber” or “Red”. The failureship lament that most projects are “water melons”. Green on the outside, and red on the inside. They lament that they normally only find out that a project is “Red” when it is too late and they can do nothing about it. They already know what is going on. They find out it is too late because they want to find out too late and make it unpleasant for those that tell them. They do not find out too late as they already know, they are forced to acknowledge the problem publicly when the options to address it have expired.

In a “Risk Managed” culture, the RAG status have a different meaning:

• Green – We are good, and are unaware of any problems that will prevent success.
• Amber – We might need help. There are problems that we might need help addressing. We are signalling that the leadership may need to step in and help.
• Red – We need help. There are problems that we are unable to address and require the support of leadership to address them.

In a “Risk Managed” Culture, the responsibility for delivery remains with the team, including the responsibility for requesting help. No team should be green until they have completed their first end to end production delivery of value. In a “Risk Managed” culture, the leadership act as servant leaders to the team. The leadership work hard to build trust with the team so that there is no barrier to revealing the real status of the delivery. The leadership see it as their responsibility to help the teams. The crime in a “Risk Managed” culture is to sit on information that you know others need.

Transparency is not about systems and reports, it is about how the leadership behave when they encounter transparency or the lack of it.