Benchmark data from multiple sources suggests that, when evaluated on a zero-to-five scale of effectiveness, many organisations would be rated between 0.5 and 1.5 (see figure).
This means they cannot reliably achieve the strategic goals set by the executive. The system of work is out of alignment with the business objectives.
Although some 75-80% of organisations perform at around the median effectiveness rating of 1.0, some 20-25% of organisations exhibit up to four or five times more effective performance than ‘the norm’. Time and again it has been demonstrated that enabling value to flow continuously throughout the end-to-end business process is the best way to organise people and work, whether your organization delivers goods or services, private or public.
The obstacles to value flow in software intensive systems are many, and the root causes are not obvious. An objective analysis of the current state of your organisation’s effectiveness will quantify the excessive cost of ‘Business As Usual’ and reveal the key performance constraints.
The Four Mindsets of Rightshifting
Bob Marshall, founder of the Rightshifting Network, has researched the relationship between organisational behaviour patterns and levels of effectiveness.
The various points along the effectiveness scale are characterised as Ad Hoc; Analytic; Synergistic; and Chaordic.
Ad Hoc: Organisations achieving effectiveness levels of 0 – 1
Left-drifted organisations typically display a chaotic, ad hoc approach to work. If you are working in this kind of organisation, life is probably extremely hectic. There will be a continual series of crisis to be dealt with, preventing any strategic focus on improvement. There is likely to be little process discipline. Results, costs and timescales for IT projects will be unpredictable. Opportunities for adding value are rarely recognised and never captured. Know-how is personal, serendipitous and unreliable. Measurement – if present – is imposed top-down and contributes little to effective performance management. There may well be an endemic blame culture. All in all, severely left-drifted organisations display neither a happy nor creative working environment. The biggest challenge facing the change agent is engaging enough key stakeholders with the will to change to get a Rightshifting initiative off the ground.
Analytic: Organisations achieving effectiveness levels of 1 – 2
Such organisations have recognised that the way work is done has some bearing on costs and the quality of results. A mechanistic, top-down approach is taken to organisational structure. Middle-managers are seen as the owners of the way the work is done, channelling executive intent, allocating work and reporting on progress within a command-and-control style regime. Organisations in the Analytic mindset typically subscribe to many management myths (such as economy of scale) since there is there is no overview of effectiveness, or of value. Work is likely to be carried out in functional silos, none of which communicate effectively with each other. There may be a plethora of metrics, but no concept of measuring value.
Analytic organisations may have engaged in an improvement programme based on one of the recognised models, and achieved some success with it. However, the success is likely to have been localised optimisation which is not demonstrably followed through into business results or customer value. The issue facing the change agent is to communicate the limitations of a top-down, process-oriented approach and create a compelling vision of a future state.
Synergistic: Organisations achieving effectiveness levels of 2 -3
Synergistic organisations display Lean and Agile characteristics. These include: respect for people; an organic, emergent, complex-adaptive-system view of organisational structure; and an organisation-wide focus on learning, flow of value, and effectiveness. Middle managers are experienced people who see their role as removing obstacles which might prevent the team achieving its goals. The Synergistic mindset recognises that individual tasks within an organisation are co-dependent and must be integrated effectively to achieve the purpose of the business.
The change agent in a Synergistic organisation will be on a continual mission to share experience with other pioneers, learn better ways of doing things, and widen the horizon further.
Chaordic. Organisations achieving effectiveness levels of >4
The chaordic organisation will attempt to operate balanced at the knife-edge of maximum effectiveness, on the optimal cusp between orderly working and chaotic collapse. Visionary entrepreneurial leadership, a highly skilled workforce capable of coping with rapid organisational change and a rapid, evidence-based decision-making process characterise the management structure. Creativity is nurtured by an endemic learning culture.
The chaordic organisation responds rapidly to opportunities and threats, because the business allows its people to deliver full value, and requires them to take responsibility for doing so.
Barriers to Rightshifting
The transition points between mindsets are typically the most painful parts of the Rightshifting journey. Old behaviours have to be unlearned. New and unfamiliar ways of working have to be introduced. Multiple stakeholders need to be convinced that clinging to the old ways will not suffice to take the company forwards.
If your organisation is at a transition point, it is very difficult to envisage the view beyond that point. An external change agent with experience of the “future state” is an essential catalyst for moving an organisation from one stage of organisational evolution to the next.
The Symptomatic Diagnostic is a short investigation by a specialist in software-intensive business systems improvement which will tell you where your organisation is on the effectiveness scale.
It tells you:-
How does your organization score on a 5-point scale of effectiveness?
Do your business initiatives achieve their strategic goals?
Do your projects comply with budgets and schedules?
How predictable are the outcomes of business projects?
Do you deliver what you promise your customers?
Does your organization have a shared corporate focus on the vital few things that matter?
Are your executive, creative and customer-facing teams pulling in the same direction?
Does your organization have the capability to deliver the results it needs to survive and grow?
How does your organization score on the four essential ingredients of effectiveness?
Is there effective leadership at all levels?
Are support and operational services organized to deliver maximum value?
Are decisions always based on evidence?
Is there an optimal match between technical solutions and your business needs and circumstances?
How sustainable is your business?
Can your business flex and respond to changing market conditions?
Can your business exploit technological developments effectively?
Can your business attract and retain key expertise?
How effectively does your organization manage and grow its knowledge capital?
The DCG-SMS Symptomatic Diagnostic can be combined with a traditional benchmark of performance and/or capability assessment to give a comprehensive baseline.