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CTO Niel Nickolaisen and his team at OC Tanner, a $550M employee recognition and rewards company, have adopted an uncommon strategy to inspire the organization to reach its full potential as a digital business.

Five years ago I was hired as CTO to help this established manufacturing company compete more effectively with a new wave of competitors, all of whom were software companies. We had a tradition of using and building technology but the purpose of our systems was to enable us to build and ship custom awards for our clients’ employee recognition programs.

The systems I inherited were brittle, fragile and a nightmare to change. For example, our ERP has over 24,000 customizations. The staff I inherited felt abused and defeated. The attitude of the company back then was that IT was a group of order takers: the business defined it needs and how to implement them, and then ordered IT to obey and not ask questions.

Over the past five years we have done a lot of good things, and the outcomes and relationships have reversed.We now have software that is worthy to sell. We move quickly. We have mastered DevOps, cloud orchestration, micro-services / API-centric architectures, IT service management and new product development. We have a bit of a swagger and are seen as the team that is defining the company’s future. We have done a lot of good work, but one big issue remains . . .

How do we get the rest of the company to join us on our path to a digital future?

Get the Entire Company On Board with Digital

Every day we encounter people and departments who just want to be left alone. We deploy new systems and then watch as usage lags and people wait for us to customize the new thing to look like the thing we took out.

In the past, my natural inclination in situations like this was to get a bit confrontational. But I have learned through experience that confrontation does not lead others embracing change. Change is an emotional process (rather than logical) and confronting someone’s resistance to change makes them defensive, and once someone is defensive, change is impossible. As our IT teams improved we had to figure out how to avoid tension while helping the entire company move forward. But how? How could we inspire others to believe in the future we both saw and were making possible?

This was weighing on me as we started our planning for 2019. What did we need to add to our plans that would help the company change and seize our newly-developed opportunities? As I thought about this the answer started to form. What if the rest of the company wanted the same things we did but just did not know how to achieve them? Rather than being judgmental and confrontational, what if we, the IT team, could “model perfection.”

Leading by Example

What does “model perfection” mean? It means that we would compare ourselves, in a few critical areas, to the perfect state and then make the changes needed to resolve the gaps between us and perfection. We would invite the rest of the company to observe our pursuit of perfection and, just possibly, not only inspire them but show them the path forward.

My team liked the idea and so we spent some time thinking of the areas where we wanted to “model perfection.” As a group we identified the following five opportunities – each one being an area of improvement for us as well as something needed across the entire company:

1. Consistency in methods
Some teams use SCRUM and some use Kanban. But even our SCRUM is not similar among teams.

2. Consistency in culture
We not only have an IT culture but micro-cultures among the teams. And, even our IT culture might have some gaps that we want to fill.

3. A bias for action and commitment to completion
We spend a lot of time analyzing rather than doing, and we have a tendency to get much of our work about 90% complete, but the work on the last 10% seems to linger – sometimes for years.

4. An attitude of and commitment to continuous improvement
We have made significant progress but are we still improving each month, day, hour and minute?

5. A focus on the critical few
We have a lot on our plates and seem to want to deal with it all at the same time. Our list of critical, must-have projects contains about 90 projects. A couple of years ago I challenged my teams to shrink that list by 50%. In response, they restructured the critical project list so that it contained only 45 items – but each item had two parts.

Modeling Perfection Program Status Update

With our list of “areas of improvement” complete, we now needed to define (and add to our list of critical projects) the specific things we would do to get closer to perfect on each. We also communicated our plans and methods to the rest of the company and invited them to observe our efforts. Several months into this work, here is where we are:

1. Consistency in methods
We decided to train every team (not just software engineering teams) in SCRUM but with a focus on the principles that underlie all Agile methods. In parallel we started conducting reviews with each team. During the reviews we ask to see what we consider to be the critical artifacts of agility (a prioritized product backlog, a prioritized, estimated sprint backlog, the outcomes of end-of-iteration reflections, etc.)

We hold a quarterly business review with our teams so that they can indicate how their work aligns with our critical objectives and measures. This has been invaluable as it forced us to define a consistent set of objectives and measures.

2. Consistency in culture:
We have a good culture but did not feel that it was a high-performing culture. We decided to compare ourselves to high-performing organizations. We scanned the research and found a model for high-performing cultures that rang true. We then surveyed our team members to identify the gaps between our culture and the principles and values of high-performing organizations. We are now working through the changes we will make so that we can begin to match the high-performing culture model.

3. A bias for action and history of completion:
As we implemented both the focus on consistent use of Agile methods and our process for the quarterly business reviews, we agreed that both would emphasize (and we would measure) completion. Additionally, our high-performing culture model includes values and principles such as “expect leadership everywhere”, “self-responsibility” and “make decisions at the lowest levels” and we hope and expect that this will yield more bias for action (and less “analysis paralysis”) and getting things all the way done.

4. An attitude of and commitment to continuous improvement: 
Some years ago I put together a training program on Lean for IT that covers the forms of waste (lean is designed to reduce and eliminate the waste) and the four foundation tools (value stream mapping, 5S, standardized work and visual controls) that help identify and reduce the waste. To instill an attitude of continuous improvement, we delivered this training to everyone here and, as part of that training, asked each team to select a specific project that would use one of the tools to reduce waste in their lives. We are tracking the completion of those projects and will follow this with additional waves of projects until everyone feels comfortable finding and reducing waste in our work.

5. A focus on the critical few:
We continue to struggle with this one as we have much more work to do than we can reasonably get done. Even worse, as our results improve, the rest of the company trusts us to do even more. We are working closely with the members of the executive team – particularly the CEO – to enforce the notion that for each new project added to our list, something must come off the list. We are now cascading the same thought process through our teams, and holding ourselves accountable each time we are tempted to add something to our teams’ already jammed backlogs.

We will monitor our progress over time but remain committed to this approach. We agreed among ourselves that we would make our plans, progress and failures transparent with regular updates provided to the entire company. If we want to model perfection for the rest of the company we need to also model perfect transparency.

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