How to Break the Rules • Dan North • GOTO 2017

[Music] good afternoon okay so I'm doing three really dumb things the first thing I'm doing is a Katherine asked me to to be on a track she's talking about like IT technology and society and how society kind of relates to technology and how we apply it and all of that I thought that sounds like a fascinating topic I have no idea what I'm going to talk about so so I thought I'll need to put a new talk together so this is a new tool something I'm doing the second dumb thing I'm doing is following Linda rising so if you're in Linda risings talk that was amazing and the third dumb thing I'm doing is standing between a roomful of Dutch people and beer right so so I know I've ended that couple of other dumb things which I'll introduce as we go but let's start there first a word from our sponsor here we go there's an aptly last question throughout session and then I would of course run out of time at the end so you answer any of them but at least you get them with a wonderful internal glow of having posted the question okay I might tweet some answers later so this talk then um I was thinking about particularly with technology in society how we as society how we as human beings adopt technology and there's something that fascinated me recently probably in the last year or so um Chuck called Ellie Goldratt Eliyahu Goldratt died a few years ago sadly massive brain very very smart guy so he was a physicist and he was also probably one of the most significant management thinkers of the 20th century and he wrote a a seminal book in 1984 called the goal and this it was one of a around that time there a couple of books came out there's this one and a book called zen and the art of motorcycle maintenance by an English teacher philosopher called Robert Pirsig and they were novels so like business books philosophy books presented as novels and they had real trouble getting them published so so Goldratt was quite a successful business consultant by this point and he wrote this this novel and it's about a guy called Alex who works in a factory actually runs a factory and the factory is going down the tubes and a legit Alex his marriage is on the rocks and it's all doom and gloom for Alex and he meets up with an old school teacher called Jonah and Jonah kind of coaches Alex in terms of figuring out why the organisation's not working terribly well and it all ends up OK in the end so don't worry ok this is not a depressing story um so and it led it kind of led the led the groundwork for a whole load of you get a lot of these sort of business novels now so the most obvious one is a Phoenix project which was written as a direct homage to the gold that kind of brought forward 30 years to the devops world well there's a whole load of these business books now things like five dysfunctions of a team where you start with like a fable and then it unpacks a fable so the goal was a really significant book and it introduced this idea of Theory of Constraints and theory of constraints is about how is it's it's how you can apply lean operations and lean thinking to improvement in the organization I don't want to talk about that today I met a chap called Kevin bear who's one of the co-authors of the Phoenix project a few years ago very very smart very personable human being and he said to me if you like the goal because I'm you know bouncing around and massively into this whole Theory of Constraints thing he said if you like the goal you're going to really like beyond the goal I was beyond the goal I mean so well it's a I went when he told me I thought I heard book but it's a series of lectures there's eight lectures that Goldratt gave 21 years later so he's written this book you know soso Theory of Constraints lean operations isn't eating the world 20 years later and he's a little bit perplexed by that so if you look in fact this version of the goal the latest version of the goal has a wonderful extended interview with him in the back who talks a bit about that but so beyond the goal is this series of lectures that he gave and again he dies like six years later this is towards the end of his life and oh my word if you think the goal is like everyone has who's ready to go this is going to have okay so about 10% of you in this room everyone else your homework is to go and read the goal it is wonderful it's life-affirming it's brilliant once you've read the goal in about two years time once you've really internalized it then you're probably ready for beyond ago so the only goal is and he's an old Jewish guy and so he speaks like an old Jewish guy which basically means he's amazing at telling stories because old Jewish guys are amazing at telling stories and he laughs at his own jokes because he does he's got a very kind of life into humor and it was little just cheeky kind of you know indulging himself laughing it's joyful to listen to and so what he does in about the first five seconds of this of this first lecture is he drops a bombshell and you think I'm quite good at this stuff and then you listen to him and your brain explodes or my brain exploded and I said I'm just going to make a statement and he makes his statement he says he says technology can bring benefits if and only if it diminishes a limitation he says all I'll say it again this is oh but I'm not very good at judgement voices B so I'll say it again technology can bring benefit if and only if it diminishes a limitation and then he proceeded to spend the next like two lectures two hours of this eight-hour thing unpacking that sentence and what happened with my brain melted and I realized what he's doing is he's articulating beautifully why we really struggle to adopt technology and so what I want to do today is try and unpack some of that for you so what I've done is he uses two examples which I want to give you I've been added another two so I basically doubled the amount of content I'm going to try and do that in about a half the time which means I'm going to speak quickly ok tell I'm English and that's what I do so if you struggle with me speaking English quickly do you put your hand up I'll ignore you but at least you'll know that you know you put your hand up so technology can bring benefits if and only if it diminishes a limitation so let's take a look what does technology what is technology so of course I did what anyone does I jumped on the googles that's a dictionary calm that Sumerian words and technology is a really big paragraph about stuff okay it's quite hard to describe um however both of these things have a few keywords in common they both talk about knowledge so technology is about knowledge and most importantly it's about the application of knowledge so if I just study something that's philosophy okay if I then apply that knowledge to something that's technology okay so the practical application of knowledge accomplishing a task using knowledge into relation of knowledge with life so you're actually applying it to do stuff so okay here's what I concluded from listening to Ellie Goldratt for a couple of hours we're really really bad at adopting new technology okay that's generally my conclude in fact that's not strictly true we're great at adopting new technology we love new technology we've got this whole the lovely adoption curve of you know early adopters and pioneers jumping on these things and then the early majority come along a bit later the thing we're really bad at is exploiting new technology okay we're rubbish at exploiting new technology what does that mean what I want to do is give you a series of examples of technology advances over the last probably 50 years and unpack those a bit and essentially what what Goldratt says is this is he says when we have a new technology there's four questions we need to ask ourselves in order to figure out how to exploit that technology and we need to ask these questions in order and we need to answer these questions in order and if we don't do that we will not get the benefit from the technology so these four questions unpack see if and only if ok so you're going to write anything down this is the stuff to write now the first thing is this what is the power of the technology what does it do and he says this is the easy one because there's people selling it over listen read the sales brochures watch the advert so that's what it does ok it makes your wipes a new bluey wipe that'll hold up against the window or it makes sure car go faster or it makes the journey smooth or it makes whatever it is it's a phone but without any buttons because what we need is a phone with fewer buttons okay the power of so technology what what benefit does it give us then he says well this is the a fun Ania fit what limitation does the technology diminish if we can't identify what limitation the technology diminishes all the other bets are off so there needs to be a specific thing that says right now we have this limitation this thing that's weak with us that's a problem for us and we have to be able to demonstrate that this technology diminishes that limitation this is surprisingly difficult and the reason this is surprisingly difficult is because mostly those limitations are hiding in plain sight we've gotten used to them it's like arts going to fish house the water and fish is like water water yeah because it's in it's around it all the time and again as I said I want to give you a few examples and unpack that a little bit so what limitation does a technology diminish now it gets interesting because now we ask ourselves what rules enabled us to manage that limitation we've had that limitation we've always had that limitation we need rules in order to manage that limitation so what are those rules because if we don't dismantle those rules we don't get any of the benefit of the technology because we're still constraining ourselves by rules that work right now for the thing we used to have a few people nodding already yeah it's sort of trying to apply this what the problem with any Goldratt is he says these things and they hit you like a punch in the stomach going to hit like a sack of sand and you suddenly and it might be confirmation bias but you suddenly see it everywhere you know one of the things that a lot of the work I do is going into organizations and helping them see things differently ok the amount of constraints I run into that are exactly this we have rules that enable us to manage the limitation and we are wedded to those rules and finally well we've introduced this new technology and it's going to give us some new capability ok we're going to need some new rules we're going to need some new rules that enable us to manage this new thing okay so and these new rules aren't usually they're not of the existing rules they're different things so this means we have some work to do so I can't just go today here's a new technology his electricity now you just go and electricity all the things and you'll be fine yeah the agricultural revolution is farming right well so if you approach farming the same way approach hunting and gathering ain't gonna work out so well you need to think about things differently and likewise if we go into the Industrial Age which we did thinking it was just like the pre-industrial age everything was really difficult for ages well we figured stuff out then we industrialized and then we got very much into your scientific knowledge management from the early 20th century yeah Frederick Winslow Taylor and Henry Ganz and Henry Ford and all those very guys with very big brains and then post-industrial were carried on using those models okay so this is how you adopt a new technology let's take a look at some examples who's heard of MRP this is an age test who's heard of MRP okay two hands was two more than I was expecting okay this is probably one of the first applications of computer technology in business or certainly one of the first widespread applications of computer software packages in business MRP these materials requirements planning is what it stands for if you're in a factory if you're in any manufacturing context and you build stuff for customers then you have an order book and you have customers and you need to build those orders you need to fulfill those orders in order to fulfill those orders you need material now if you over order material you have a sunk cost problem okay you have an inventory problem if you under order you have a resource starvation problem so getting the right amount of materials is absolutely critical to running a safe cash flow well running manufacturing business and this was a huge huge while still is occasional this was a huge deal in the mostly manufacturing late twentieth century so fifties and sixties and seventies in the Western world particularly so what we have is in a typical factory you might have 20% of the workforce work very very smart highly paid number crunchers and they would be off in losses somewhere doing the materials resource plan there's material requirements and the material requirements plan may well take a week to calculate the material requirements for the next month okay and so what we did is we did it every month and it would take a week to to calculate painstakingly because it was error-prone it was manual and all those things that the material requirements for the following month if you got it wrong you either had way more spend than you needed or you suddenly were unable to fulfill orders both of those are really really dangerous especially in a low margin manufacturing scenario so then a bunch of clever folks said we can make a computer do this and so they did and so they invented this in the MRP software that was the first wave of like package software and DuPont was one of the first the very early adopters of this and DuPont went this is awesome right we can now literally run our MRP calculation overnight and because they could run overnight they become one of the became one of the largest manufacturing firms in the world certainly in the u.s. over they were huge still are pretty significant and so then what happened was loads of other companies went well look we need to compete with the likes of DuPont what's their secret and they said Oh MRP you should get some MRP software know what brilliant and they all adopted is MRP software and they're like nothing's happening we put the pixie dust on it nothing's happening why is nothing happening and so you can look at this scenario this is before my time it is an le Goldratt story I have my own stories but he said he lived through this and he was consulting in two firms while this was going on and he didn't recognize this it's only in retrospect this is like 20 odd years after this has all happened he's going I get it I see it now he says let's unpack this MRP scenario using these four questions so the first question then what is the power that MRP systems provide what is the power of that technology what does it allow me to do right we've really really complicated calculations I can do them overnight which is amazing right and carry out complex MRP calculation and they're done by the following morning okay so what limitation then what limitation does this diminish yeah so the limitation it diminishes is right now it takes an entire week for a skilled team to calculate MRP for just for the next month yeah it's time-consuming it's expensive its error-prone I probably have teams doubling up on calculations because there's lots and lots and lots of paperwork involved so then what are the existing rules that made it possible for me to do materials resource requirements planning in a large factory what rules did I have that said this is what we're going to do are the rules here we can only plan monthly that's one of the rules right planning more than monthly right is risky okay but planning less than month is too expensive I can't do it yeah so monthly is about the right cadence if I'm selling a week a month that's probably about right anyone who's using scrum right spending like one of the people I was working with on recently and I said oh you know how you finding with agile stuff is all using scrum he said instead of doing my head in I said why I said all the meetings I'm like but it's it's agile you don't have meetings it goes I don't call them meetings yeah you call them stand up and retrospectives and sprint planning and backlog grooming and if the word meeting isn't in there but all meetings and you know a significant chunk of my week is in meetings I'm like yeah you nailed it you're absolutely right so that means that you can't have shorter Sprint's than that because it's just too expensive they figured out the same thing okay takes a week a month to do the planning and we need to buy a big enough batches I need to order big enough batches to last me a month so these were the rules that I had in place so now what new rules are going to enable us to exploit this technology enables to benefit from this technology and and so well the first thing is we need to replan frequently so Dupont realize that if I could make these calculations overnight I could basically order overnight which is pretty cool I could certain the order much more frequently and also I can order in shorter timeframes which means I can order sure smaller batches which means say there's something wrong with the batch there's less goods to send back so I start creating this win-win-win a smaller batch size this is an accident a happy accident but then that means a bunch of things in order to exploit this technology we need to change the relationship with our suppliers right and with our customers in terms of our suppliers I need to say can you deliver smaller batches more frequently right now you have a massive series of trucks that turn up every you know 30th of the month or whatever you know - my goods for the next month what I actually want now is can you send like very small vans every couple of days and for a lot of their supply chain that was completely mind blowing for them they had to retool and rethink a lot of things and a lot and said no we can't okay and don't forget is only DuPont they're doing this and everyone else isn't then basically the markets pretty flat there's no ones no one's at risk because they're not keeping up it's only as you cross that chasm and now some of the earlier the early majority late majority start adopting these systems that the laggards are now exposed as not being able to respond and I can also change a relationship with my customers hey customer you can change your mind you can order in smaller amount so you want less value at risk you've got less sunk cost okay as you realize whether your customers are but your customers are buying product or not you can change the size the configuration all of that kind of stuff yeah in the late eighties early 90s Dell computing created a multi-billion dollar business model around this so up until Dell you basically when you bought a computer it was it was the Henry Ford you know any color you like as long as it's black yeah HP Compaq all the big vendors IBM are saying this is what a computer looks like and Dell were like how much memory do you want how large of a hard drive how big of a screen all the other configurations and you just had sliders and used Moodle the sliders Newman chip and it would arrive and Italy arrives before your order would arrive anyway from the other guys so they had this whole supply chain thing down and they became you know Michael Dell became a billionaire because he could work in smaller batches right so we need to change a relationship with our supplies and our customers once we do that we can outmaneuver our competitors this is pretty cool but until we do that we are basically constrained by exactly the same rules we were using before and this is what was wrong footing all of DuPont competitors as they were using these systems and they were still doing their MRP calculations every month every month they would run them overnight and then the following month they'd run them overnight again so they were getting this so Bret is much cheaper we've got a huge cost saving we don't need these rooms full of very expensive calculating human beings anymore but we're getting none of the business benefit we've managed to save a few bucks on salary brilliant our du Pont's busy changing how manufacturing works yeah because they were still clinging to their old rules so the first kind of takeaway I got from this is this all those rules that we use for coping they become policy and once those rules are policy it's really hard to unpick those rules okay because different people own those rules and different people kind of collect around those rules so the policy is we plan monthly there's a monthly meeting that we have that's policy big enough batches is policy so you got run who works in the warehouse and he's used to the trucks coming in and you know what he's quite slow-moving and quite ponderous and very thorough and always check the paperwork you've got vans coming every couple of days he's really unhappy about that okay so we need to bring wrong with us as well and if idea that we need to change the relationship with our suppliers and their customers if we don't think to do that again we get none of the benefit oh okay so let's take another example ERP so who who's heard of ERP all the variegate so that's a generational thing right that's seventies and eighties and nineties okay so a lot of people in this room grew up with very big very slow moving ERP system ERP was another seismic shift in enterprise certainly ERP was the idea that organizations have data and that is usually in silos and because that data is in silos it's expensive and slow to obtain that data and so then we kind of shore up our world and say well we can't really move quickly what we'll do is we'll make the best decisions we can given what we know so the sales silo makes a sales policy decisions and the manufacturing of engineering silo makes engineering decisions and the production silo and the sale so all these different silos are all busy doing their thing ok ERP comes along and says in much the same way as MRP install this systems you can now have access to real-time data about stocks about sales about utilization about people about movement of staff everything all your business metrics that allow you to make good commercial decisions good operational decisions are at your fingertips you just need to pave you know 15 million euros and get out a data center and have you know 28 ASAP consultants in your building for the next four years and the rest is grazie it's easy yeah Wow I want some of that but start 12 million euros I stand to save a hundred million euros this is chump change your go and then of course story after story of organizations who took on it's huge systems and huge transformations and nothing really changed and they're like oh ok we've sunk 12 million in and current calculations always saved 489 euros and supply chain yeah great and how much did you spend on that yes yes basically the farm right so ok we can unpack this in terms of how do those four questions land so the first question what's the power of ERP I can now collect I can process I can present information across the enterprise all three of those activities are really hard collecting data in any kind of real-time is really really hard in a big organization manually ok and also people make stuff up right because they tell you what you want to hear rather than what you've watched you should really hit and across the enterprise is now we're going across silos that was a huge deal so ok what limitation then does this ish right what's that what's the sales pitch what's the benefits case well so the real limitation is ignorance it's ignorance of what other groups in the enterprise are doing and so I need to make local decisions so what kinds of things did we do before ERP this is a really tough question because the answer is all the things all the things you do in an organization that are around process governance oversight program management you name anything you do that's about information which in knowledge work is most of the things yeah and in fact enterprise is most of the things are about having to make decisions so the most obvious one means we focus on utilization okay Donald Reinertsen says wonderfully so the bad models better than no model so the model we're going to go with is utilization over all these expensive people I hope they're expensive right all these expensive people and and I need to well - I need to sweat my assets right I need to keep them all busy so what I want it for all of you to do a timesheet and I want you to tell me exactly how you're spending every single minute of your day you know and then one of the things that you notice over time is that 20% of people's time it gets allocated to filling in timesheets yeah but so I need to know where my spend is going okay and so I want to check utilization and then we invent a thing called cost accounting we invented that I didn't use figure this it's not an enormously intuitive thing yeah cost accounting says if I can maximize utilization for my assets then I'm getting the most value I possibly can from my assets so I think of the world is static and largely hierarchical and if I have someone who's a head of sales and he's responsible for my sales activities and he says okay well you need to maximize your sales assets and he has a bunch of sales managers and they need to maximize their teams right away down yes to the plebs on the ground and then she she's my production manager and she's got exactly the same thing for my production people so that's what cost accounting does it says I need to make decisions I don't know what sales is up to on production I don't know what sales is up to I don't know what this batch is up to I don't know what marketing is up to because I doesn't have access to that information I can ask my peers but that informations in a weeks or months out of date by the time it filters up the chain of command so I need to make local decisions and I do that using a whole bunch of modern models called cost accounting and so that means now that we start getting this really perverse organizational thing where anything that isn't sales is a cost center okay so IT is a cost center engineering of the cost center production is a cost center anything that doesn't involve someone actually transacting cash coming into the business is seen as a cost center and so because I don't understand how value works in my organization the only lever I've got is cost so I Drive that down and what happens when you drive that down all the bad things so now what can I do what new rules do I need with the new rules I need are about a thing called throughput accounting so again only Goldratt describes this in the goal there are only three numbers you need to run a business there are only three accounting numbers you need to run a business the first is called inventory inventory is how much money have I spent on things that I intend to sell so all the bits I've bought that I'm then going to do stuff to and sell that's my inventory okay throughput is sales write throughput is I've now built all these things and I'm shipping all these things and people are paying me money so throughput is all your revenue and whatever else and the other number operating expense so operating expense is how much does it cost me to turn my inventory into Troopa it sounds incredibly simple because it is right the problem with it is you need to be able to see the whole system in order to be able to answer those questions if the system is for people sitting in a garage is easy to calculate inventory operating expense and Trouper if the organization is 3,000 people it is well nigh impossible so you've already do is you fall back on a bad model you fall back on cost accounting and we want to measure flow of value so that means how work is happening and how it helped happy providing value we need to do that holistically across the whole organization that's the first thing we need to do weirdly and this is countercultural okay we need to collaborate and oh right salespeople talking to engineering people into production people talking but that hasn't happen there different tribes they have different language yeah there's a lovely one my favorite Swedish phrases when you're talking to farmers use farmers words yeah and the whole version is and when you're speaking to students speak Latin and then Toby the farmers use farmer's word so when I'm talking to accountants I should be talking about numbers but I don't I'm a software engineer and I'm agile so I talk about story points and sprints and burn up and burn down and they go yeah right yeah right show me the money like oh no if I'm delivering value so we need to collaborate across divisions across silos and the weird thing is all parts of the organization are seen as value creation because they are once I can start connecting all the pieces up I can see that some software written here enabled some business capability over here which made us some money or increased customers or reduced churn or did something move some business dial and because I can equate now I can associate the work with the value I've now got two levers I've got the cost lever and the value lever okay so so what so this then sorta led me to my second insight which is rules for coping aren't just policy rules for coping become law okay there's a set of practices called GARP generally accepted accounting practices and got is how businesses how listed companies have to do their math it's how they have to present their results to the market so that all of the companies can be measured equally and Garf is entirely based on cost accounting principles and so that means that GARP like the law literally the law says I cannot use throughput accounting unless I also jump through some hoops to make up the equivalent cost accounting figures all right so just Dez off famously just through that of in he said that if you want a call to these shareholder blah blah blah go invest in something else cuz I'm obsessing about customers and I'm obsessing about making customers happy and then in 2003 he opened up a part of his organization's internal acquisition of servers and things like how I as an Amazon team get a server and he opened that up for the world and called it Amazon Web Services and created a billion dollar industry overnight smart lad yeah so because he's obsessing about the value chain and he's obsessing out the flow of value to the customer rather than cost accounting loads and loads of other companies are trying to replicate this and they can't because they're stuck in the existing rules that keeping it in place oh dear so then is well one of the most fun things about putting this talk together was finding word clouds I challenge you to Google for cloud word cloud and find a word cloud about cloud in less than about two hours because this really hard anyway here is here is a slightly doctored word cloud about cloud so cloud my first real encounter with and I guess really its virtualization so much as cloud so cloud is probably the most significant shift in IT I think in technology in the last decade it flipped the whole model on its head I remember I was working at a a well-known bank in the UK in 2007 so I was still at footwork then and and they had like they were one of the early adopters of VM so you had this VM farms and they were they're repurposing some of their old mainframes as VMs which is pretty cool and and so we said are great so and we're going to need to get a VM and they said oh you're going to need to fill in a form for that so what kind of form it was a procurement form for a server like like the server's already there what we want is for you to just let us offer on it ah procurement it's a fervor of like this is really silly it wasn't as silly as once we got our server with our one gig of memory and I wanted to have two gigs of memory and I went ask for human the memory is already in the machine you need to turn it up no no you're gonna need to fill out this form have you filled in your TPS sheets right it was clearly bonkers yeah mmm so there's interesting that there's a number of theories around whether or who who can claim to have invented cloud computing or first proposed it there's a chap called Linklater who was one of the original darf a team that invented the ARPANET and he was talking about in a networked from so that you didn't really know where they were we didn't have to know where they were John McCarthy famously inventor of Lisp and a whole bunch of other things one of my favorite observations recently there's a guy called Thomas J Watson who was the original CEO of IBM so he was a nineteen fourteen he took over IBM he was going in 1940 it wasn't called IBM then he renamed it to International Business Machines and he was a CEO there until like the 50s actually died in 1957 and he famously said sometime in the forties he said the world will never need more than five or six computers I can envisage that the world will never see more and I always been you know one of those schoolboy schoolgirl kind of chuckling moments ago I wanted computers I only look around and you've got Amazon Asia Google bluemix right we're probably going to end up with five or six computers they're just really big computers I reckon he was about a half a century ahead of his time this multi-core thing multi-core can supercomputer beast in my pocket is merely an access portal to the real computers we are going to end up with about five or six computers so yeah this has been weird trying to get dissing on some kind of cloud you know public cloud transition thing in their work at the moment right keep your hand off as it's going well Wow if you haven't stayed up fantastic that's great most got most organizations are really struggling with this so let's take a look at this then well the first thing is clearly is on demand compute power right that's the first thing I want can i if this is the power that cloud gives me is on demand computing that's never existed before so what limitation does that diminish this is a little bit more subtle the limitation it diminishes is the cost and risk of running your own data center now this is a trade-off because there's a lot of upside to running your own data center as well if you're dealing with latest latency sensitive things and whatever else or high security things then you may well want your own data center but it's very typically very costly very risky to run your own data center and also you've got physical 10 and physical 10 days by physicality by buying and selling and shifting and moving things around if it's someone else's 10 its virtualized completely and it's public cloud I have a lot more options so what were the rules then that were enabling us to deal with this limitation with this without public cloud without with our data center limitation which things like procurement maintenance decommissioning the whole lifecycle of hardware the whole the whole management of Hardware all of those things are expensive that's one of the rules right be aware that hardware is expensive don't just go chucking it around so you okay them or that mean computer hardware requires lots of people to look after it lots of different kinds of people so you've got data center engineers networking infrastructure security there's a whole raft of different people and again remember we're still in our cost accounted welds are they're in silos and they don't collaborate very much because see previous slide and so we need a lot of people okay to look after it and all of this means that these decisions around hardware which we think of a capex capital expenditure writes money it's amortized value and all that they're expensive and they require lots of governance okay so lots of ceremony and that's the world we live in and so here we go well let's assume none of that was true anymore if we unpack all those rules what kind of things I'm really need to speed up a lot what kind of things are we are going to help us then work in this new world well the first thing the first new rule is I can explore ideas really quickly really inexpensively ok all of our processes in most organizations are not set up to support that kind of working there's a huge shift at the moment lots of organizations are on this transformational journey or whatever they might call it to try and suck less at doing small things quickly yeah here's a mad idea once I've bought something I can switch it off right I can reduce this compute power as easily as I can increase it it's a dial it's literally utility it's insane and so all of my thinking about because part of this is optionality so I'm thinking options I bought this thing my options now I sell it at a massive loss right or keep it and try and force people to use it and add more time whatever the cost of use but if I can reduce computer power as easily as increasing it means that those decisions are now much more reversible the cost of making a bad decision is much lower the cost of reversing that decision is much lower I'm renting compute power that's my mental model I'm renting to do power are not buying service and that's a whole different lot of thinking that we do so now again mm-hmm this is where these rules start really impacting things because now they become structure they become how the organization works so we've got lots of people and these people are specialists ok and they're expensive and we have governance and ceremony and all that kind of thing these people I'm not going to say to cede their power quickly so this is in direct conflict with this idea of reducing compute power yeah well if it's hi ceremony I don't want it to be easy to undo these things I don't want to believe it's easy to undo these things and then finally very briefly continuous delivery so a lot of people here I hope of practicing continuous delivery are on their way there so again what does it give us it gives us the ability to eliminate simplify automates releasing software by the way you should do it in that order so I look at my process and I say what parts of this process can I eliminate what parts of vestigial then given what's left that I have to do how can I simplify that and finally then what of that simplified process can I automate so that's the offer that's the deal okay so what limitation does that diminish it means I don't have high risk releases it means I don't have tried transaction cost releases anymore which means I can release smaller things that's kind of cool I reduces bottlenecks specialist so I have all these gates that I have sign offs of what's it called change board cabs and I have various things that have the word Authority after them so design authorities and security authorities and and a bunch of other high status people who walk around the building and typically in suits saying no none shall pass so the rules I currently have of this fixing mistakes will be expensive and time-consuming so I front-load the risk if I don't front like the risk bad things are going to happen and we've all lived bad things okay we've all been there or there do the more gnarly of you at the tie-in over the crow's feet around your eyes have done those two three four a.m. Saturday night releases right where it didn't go right the first three times and you couldn't eat any more pizza okay so fixating that's going to be expensive and time-consuming managing the risk then requires specialists to check things manually because that's what we do we pour through these things so what new rules am I going to need well I'm going to need to entrain specialist knowledge rather than having it trapped in the heads of specialists what I want is I want self evidencing processes in other words by doing this it has to be secured by doing this it has to be compliant okay look up as a fun thing I was 18 F which is an organization in the state that was assembled very quickly to fix the healthcare.gov disaster billions of dollars health care system could deal with about 14 concurrent users rather than 320 million and then a bunch of jokers rebuilt the whole thing in about eight weeks because it's a website and and what they've figured on the way through was the they've really waded through this sea of documents around different compliance things and boxes I had to check and they managed to automate almost all of it it's a great great story so you create them make the process self evidencing by the time I come to release I'm already compliant secure scalable all those other things I can't not be I can't not have got this stage and B it means like in slice work into small valuable increments right the transaction cost comes down I can release things smaller I can release things more valuable I can get feedback faster it's all win here's a fun thing everyone needs to learn how to automate right we're all programmers now yeah so everyone in the organization is thinking how can I simplify eliminate automate the work I need to do so now the rules become culture and this is where it gets really really tough to unpick these things okay if we believe and act as though fixing mistakes is expensive and time-consuming and these specialists are somehow elevated holy people and then we're saying well actually anyone can pick this stuff up go learn Python you'll be fine right and by the way we've interested we made tools that mean that most of your specialist knowledge is now enshrined in those tools so we need you to make sure the tools are okay but you don't get to do the nun shell fasting anymore you get to be advisors rather than gatekeepers and some people are like yeah we can get work done and a lot of people like no I lose my status okay so then what can we do how can we break the rules let's go through this quickly the first thing it needs we need to understand the power of a new technology so all I've done is I've taken gold rats for questions when I flip them into statement okay he's asking what is the power of the internal urges we need to understand it so we need to ask some questions what does it do how does it work think of this as a checklist right will it work for us is this going to work the same way for us or is this just blurb yeah and how can we exploit this technology it's cool but is it actually useful is it going to be valuable in our world or is it just interesting looking and then we want to recognize the limitation that the technology will diminish because if we can't see that we can't know whether the things working yeah so how can I prove that the limitation is holding me back what could you do what experiment could you set up to prove that the limitations holding you back is it just a what's it called a limiting belief right and so for instance one organization I'm working in absolutely convinced that they need to increase the size of the teams that they have because their problem is capacity and then we did a bit of work with a value stream mapping and it turns out there's three significant pieces of work that are backed up at release because the past alive is really really bumpy and manual and error-prone and so each of those things has to go through one at a time slowly and so if we doubled capacity for development we now have six things waiting unable to be released yeah rather than ramping up a small army let's take some of those people and point them at the past alive problem let's understand and this is Theory of Constraints again it's understand where the system is constrained and wider than that constraint and so that limitation of the ability of being able to deliver stuff faster got our great let's let's adopt this technology it's not going to help us we managed to prove that that limitation it is a limited it will eventually be a limitation but right now it's not the narrows part of the pipe how would you know if we adopted this technology that that limitation was diminishing how would you know things are getting better what could you measure so let's get into metrics and flow and some of those kind of things right how what what experiments can we set up to say let's adopt this technology let's adopt this idea and see whether it helps us and what our control group maybe it's just a fluke right maybe we're going to try this experiment and then do you know what happened things got better yeah there's there's I company of the guy's name it'll come to me in a second but a whole series of experiments in the nineteen twenties and a factory you remember the factory and it was a the Hawthorne Thank You Hawthorne effect this chap Hawthorne and he was in the saturated measuring thing he said right so let's figure out how we can get people in this factory to work better and so they tried dropping the temperature by a couple of degrees and people's work rate increase so they went all making the room colder people work faster and then but they noticed it tailed off no no and so they try making it warmer a couple of degrees and people work fast women oh wait wall the rooms make people work faster oh and then it's held off and then it said what if when you change the lighting and the light emits slightly dimmer and people work faster that our people work better in low light what was actually happening was this every time you mucked around with the environment the people there going are they're watching again oh it's the bosses up in the galley oh we're on it old areas ha ha better keep at it right think you can't that's not sustainable so eventually you slow down and go back to so this thing where you muck around with the system and you think you've made an improvement yeah what's your control group do you have a control group if not how can you counter for some of those sampling biases and other measurement biases sophistical biases we need to identify the existing rules these to manage the limitations this is generally really hard is what I'll say because they're hiding in plain sight they're just what we do the word just appears a lot when you're looking for these limit paper we just do that just anyone does that why would you not do that well because right so how will those rules get in the way so what assumptions are those rules making that are true of the existing system that the new technology going to break those assumptions how do we challenge those assumptions in particular let's look at ownership now now I'm gonna start like indicate grade C I'm going to start saying who might be threatened by dismantling those existing structures because those structures have people and people have status and peoples of status is emotionally attached to some of that stuff if we're going to dismantle that how do we do that in a safe way how do we find our our strong and weak support and how do you find our strongly composition and how do we start working with those different communities to to make sense of that if you don't understand what I mean by strong and weak support or strong a weak opposition then come on to Kate gray and Chris Young's talk tomorrow he says plugging it which I suspect is going to look at that and it's a very very powerful model how can we make it safe to change right if someone wants to come on the journey how do we help them on the journey if they don't we need to give them a graceful exit how do we make it okay to say you know that X million quid that I felt thought was going to X million euros that I thought was going to be great to spend on that thing not so much yeah but now I lose face by doing that so how do we say well that was a great idea then let's see what's beyond that how do we create graceful exits for people and finally how do we identify and implement the new rules and this is where all of Linda's fearless change stuff starts to appear right so how do we safely exploit this new technology I want to use this thing but it needs to be safe and there's a community safety thing as well as a technical safety thing how do we make it safe for the organization like Maslow's hierarchy of needs kind of safe to try these things out and what contraindication should I be looking for right what things what unexpected side effects might I have because if I'm looking at where I expect it to be this is my confirmation bias again I'm not looking over here at this thing blowing up and even if I notice it blowing up at the corner of my eye it's not me it's the coincidence right I happen to do this and this thing happens to blow up could it happen to anyone right and so finally then how do we interested you introduce and how do we institutionalize these new rules because we want to make these things normal who's going to own these new rules okay so there are some ways to break the rules some things to think about the breaking the rules what's the new technology what power does it have what limitation does it diminish what rules are we going to need to dismantle and what new rules are we going to need to introduce an institutionalize if we can go through that sequence we have a fighting chance of really exploiting that new technology if we don't it will fail and will blame the technology that's what we usually do I actual fact we blame the people who brought us the technology we kick them out because we're a tribe and we close ranks yeah so there's an awful lot to this statement technology can bring benefit if and only if it diminishes a limitation I would say very much I would encourage those who've read the goal to go and listen to beyond the goal is wonderful wonderful series of lectures but if you haven't read the goal start there it's a fantastic story in the meantime don't break some rules thank you [Applause]

Channel: GOTO Conferences

Views: 23,844

Rating: 4.8060608 out of 5

Keywords: GOTO, GOTOcon, GOTO Conference, GOTO (Software Conference), Videos for Developers, Computer Science, GOTOams, GOTO Amsterdam, Dan North, Break Rules, Rules, Rules in IT, IT & Society, soft-skills

Id: hZFShSjAhlQ

Length: 49min 55sec (2995 seconds)

Published: Thu Jul 06 2017