This is a transcript of episode 256 of the Troubleshooting Agile podcast with Jeffrey Fredrick and Douglas Squirrel.

It is easy to see our dominant organizational structure of teams divided by roles as natural. But Jon Smart, author of the book Sooner, Safer, Happier, points out that this goes against 1.9 million years of evolution. In this podcast Jon and Jeffrey discuss the link between the outcomes we’re getting and how we organize, and thus how changing our organization can change incentives, which in turn shape behaviors to get us better outcomes. Recorded live at DevOps Enterprise Summit 2022 in Las Vegas.

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Listen to this section at 00:11

Jeffrey: Welcome back to Troubleshooting Agile. This is Jeffrey Fredrick and I’m unfortunately once again without Douglas Squirrel. I am recording live at DevOps Enterprise Summit in Las Vegas, and I am joined by Jon Smart, author of Sooner, Safer, Happier. Thanks for coming, Jon.

Jon: Thanks, Jeffrey.

Jeffrey: Can you introduce yourself to our audience? Besides than being an author of this fabulous book, tell us a little bit about your background and how you came to be involved in Agile and publishing and such.

Jon: So I’ve been an Agile and Lean practitioner since the early 1990s. In those days it was called “Lightweight Processes.” This was about seven years before the Agile Manifesto. There were lightweight processes and heavyweight processes. My first role was on the trading floor in investment banking and I was on the trading desk and we were a multidisciplinary small team. We had a form of continuous delivery with daily deployments with Unix shell scripts, in the early 1990s. So for me this is going to back to the future. Over the course of my career as I’ve taken on more responsibility and teams have moved into my area, I’ve taken teams on the journey from traditional waterfall ways of working to working with agility or agile and lean ways of working. This led up to me volunteering to lead Ways of Working across Barclays Bank, globally across 120,000 people, which I did for four years from the beginning of 2015 to the end of 2018. Learnt a lot of lessons, learnt a lot of lessons the hard way, and that’s what led to the book Sooner, Safer, Happier. The book has now led to me running my own company: “Sooner, Safer, Happier” the company, and we work with large traditional organisations to help them deliver better value sooner, safer and happier.

Jeffrey: Take them on that journey that you have taken so many other people on, that’s fantastic. I love hearing the phrase “lightweights” because I remember, I came to it more in the late nineties, but I know that at Snowbird that was one of the debates: “What are we going to call ourselves,” and that people decided they didn’t like the idea of being called lightweights. So that’s one of the reasons they ended up with Agile instead.

Jon: I understand the other word that made it to the short list was “adaptive.”

Jeffrey: Yes, which is pretty good. My consulting company is “Reflect Adapt,” so I’m a fan of that word as well. So you give a talk here at the Enterprise Summit on “Organizing for Outcomes.” Now partially that seems kind of strange. “Obviously we care about outcomes, wouldn’t we organize that way?” But clearly you must encounter a lot of people that aren’t organized that way. What’s happening in those places and how do you help them get organizing for outcomes?

Organized Against Evolution

Listen to this section at 02:54

Jon: To quote Arthur W Jones, who spent his career on the topic of org design, “Every organization is perfectly optimized to get the results it gets.” So if your organization is getting the results it wants and every single employee is satisfied and happy with the results of the ways of working, fantastic. Don’t change a thing. Please let the rest of the world know what your magic sauce is. And just to clarify, an organization can’t be static and can’t not change, because the environment around the company is changing all of the time. So if there is an organization which is always happy with the results it’s getting, it means it must be always changing. So if there is an organization that fits that category, please let me know. I haven’t yet come across an organization which is universally happy with the results that it’s getting, and the big tectonic shift that I am seeing at the moment with the privilege of working with large organizations directly and having a view across every industry sector, there is this big shift from role-based silos, which stems from 1771 and the first industrial revolution and division of labor, into multidisciplinary teams and multidisciplinary teams of teams, also known as tribes. So it’s kind of like for 1.9 million years, this is how we have operated as people. 1.9 million years is not Homo sapiens, but it is “Homo -“ as in humankind. So there’s this big tectonic shift with organizations pivoting from role-based silos with a sequential way of working, to multi-disciplinary teams. Maybe the language is squads, tribes, chapters and guilds. So that was the topic of my talk.

Jeffrey: I like that you ground this in evolution. I think part of what you’re saying here is this is the natural way for us to work. This is going back to the early days of Agile, I tell people that one of the most influential papers for me was by Alistair Cockburn, called Characterizing People as Non-Linear, First-Order Components in Software Development. Not a very humanistic title, but it was very tongue-in-cheek because, he said the whole point here is software projects use different tools and a given tool might succeed or fail, a process might succeed or fail. So if it’s not methodology and tools and process that drive success, what is it? “Oh, it might be the people! So maybe we should understand the attributes of people and take that into account with how we organize ourselves.” It sounds like that’s what you’re tapping into, the same kind of idea.

Jon: Yeah, it is obviously all about people. A central tenant to this is, Incentives drive behavior. Behavior drives outcomes.” What was the definition of stupidity?

Jeffrey: Doing the same thing again and again and expecting a different result?

Jon: So to get a different result, there has to be a change in behavior. We have to do something differently. What drives a change in behavior, incentive or threat? When I use the word incentive, I am implying both sides.

Jeffrey: Positive and negative.

Jon: Exactly. The positive side is incentive. The negative side is threat. In my personal reflections of all of the time devoted to ways of working and how we do things is that you can boil down how we humans collectively achieve a goal together to one word: incentive. You just boil it down to that. From the neuroscience perspective, our brains are still wired for survival. Our brains are still focused on avoiding being eaten by a tiger on the savanna. So the evolution of our brains has not caught up with our lifestyle and our way of working and everything else. There’s another dimension I want to come to in a second. So from a neuroscience perspective, there is incentive and there is threat. The threat response is double the strength of the incentive response. It’s twice as strong. It kicks in twice as quickly and it lasts twice as long. Cortisol. Dopamine, in terms of the incentive response, the reward response is half strength.

Jeffrey: Because you want to make sure you’re making the calculus to survive first and then get the reward.

Jon: Losing a day’s food might be more impactful to our survival than gaining a second day’s food, because losing that day’s food might result in not surviving. So therefore, there is less gain attached to me storing up three days worth of food as opposed to losing my only bitter food. And so we have a thing called loss aversion. So in terms of ways of working, in terms of changing how we do what we do, people from a neuroscience perspective are genetically wired to do nothing rather than do something and fail. Hence the importance of psychological safety. Because if there is even a whiff of a lack of psychological safety, even a whiff of threat, which means we lose our jobs, we can’t pay the mortgage, we can’t pay the bills, and so on, then we would rather nod and smile and do nothing and pretend and quiet-quitting type stuff.

Jeffrey: Which you see plenty of in organizations that are undergoing their transformation.

Jon: Head-in-the-sand, “It’ll blow over.”

Jeffrey: “We’ll just wait. This is another one of the cycle. In six months, they’ll have forgotten and all they’re going to care about will be back to business as usual.”

Jon: So the incentive has to be really, really high, because-

Jeffrey: You keep using the word incentive and I want to ask you about this. People might hear you and say, “Okay, you worked at a bank and you’re talking about incentive. Clearly, you’re talking about monetary reward. Clearly you’re talking about my bonus. That’s fine if you’re at Barclays, but for my company, we don’t get a lot of discretionary compensation. So what’s the incentive for me?”

Why You Do What You Do

Listen to this section at 09:35

Jon: Thank you for asking that question because that’s absolutely not what I mean by the word incentives, so thank you for providing the opportunity to clarify that. Incentives are both implicit and explicit. So the implicit incentives will be the group social norms such as fitting in. Ron Westrum is here and spoke yesterday on how you’re in a pathological culture, pathological, bureaucratic or generative, most people in order to survive, like a chameleon will change their color. So one minute you’re reporting to one leader and your color is blue, and then you have a change of leader and the leader has different set of values and principles and behavioral style…quite a lot of people change color because you’re incentivized. It’s not an explicit incentive, it’s not a bonus. It’s social norms and fitting in. Actually that’s a link from implicit to explicit, because by fitting in with our the person who’s going to determine our comp, promotionability, and just the security of being employed at all, there is both an implicit and an explicit incentive there to fit in and to look good with the poor way of working, where it’s one individual who is determining the pay in the promotion for people who report to them, which is typically how it works in most traditional organizations. So the implicit incentives is fitting in the behavior. The explicit would be the bonus payment, it would be the HR reward system and how it works. For example, terrible reward system: stack ranking as popularized by Jack Welch at GE. I had the misfortune of working at an organization that did stack-rank-yank. The bottom 10% were given a notice every single year just because they were the bottom 10%, not because they should have lost their jobs.

Jeffrey: This is still common. Amazon for example still has this, I’ve heard that they will hire people to fire them to make their firing quota, which is ridiculous. I heard from people, if you’re a good manager and you develop your team, it doesn’t matter. You still are required to cut people, even if they’re all perfectly adequate, better than people in their role in other departments. It doesn’t matter.

Jon: It’s inhumane treatment of people. This is what gives me purpose in life: more humane ways of working. This is what I’m really focused on. That’s an inhumane treatment of people, to behave like that. I unfortunately have been in that system and felt the pain where I quote, “All of the fat has gone. We’re now cutting into the bone.” Yeah, even that analogy is not a good analogy. So I have unfortunately worked in a system which meant that people who are doing a really good job were getting a performance appraisal which didn’t reflect that they were doing a really good job. In one particular case, we decided that she would rather be demoted to a lower grade, and then she started getting exceeds expectations, which she should have been getting anyway. But because she was being compared to her peer group, it wouldn’t have been possible to say she was doing a great job.

Jeffrey: Because you had a quota.

Jon: It’s an ill system, it’s unfit, it’s inhumane. So this is what I mean by “incentives drive behavior.” In terms of organizing for outcomes, the second big theme I want to talk about is how as we were saying, we have evolved in multi-disciplinary teams with a small number of social connections. By the way, there’s a side note here on the Dunbar number, 150 is an edge case. It’s a survival case. There’s rings to the Dunbar number, there was a 2018 article. It’s actually more like two decent-sized teams. Only in threatened villages can you get to 150 social connections in your brain. But actually a better number is about 50. Side note there on the Dunbar number. The big theme is, we’re going from the division of labor in the early 1700s, the big pivot with the first industrial revolution, the first cotton mill. Prior to that, there had never been 1000 people working together in one factory, and the division of labor was extreme, with 15 different specialties. So it went from being skilled domestic work done at home to labor so specialized it became unskilled. Which meant that children could do it, which meant that 75% of the people in this first factory were children. That way of working is still in the DNA of nearly every large organization today. However, we are now starting to see a tectonic shift back to multidisciplinary teams aligned to the flow of value, aligned to customers, with more humane ways of working. That’s the topic of my talk and that’s the topic of my focus at the moment.

Suffering is Needless

Listen to this section at 15:27

Jeffrey: This really resonates with me. I’ve said for a number of years that my motivation is reducing suffering in software development, which is maybe a strange thing, but having seen people struggling in different ways that they then come to accept suffering as normal. Then when they experience what it’s like to not suffer they never want to go back. As you say, the division of labour being part of the DNA of companies is what people expect. They get socialised somehow through media or movies or something. We have so much so many bad bosses because people grow up watching bad bosses on TV and movies because it makes more drama. The dysfunction makes a good entertainment, but it makes a terrible workplace. There’s my own personal theory about how people get socialised into poor behaviour at work.

Jon: I have a take on that which is, personally I believe it’s because that’s the system of work people join when they leave education. This is why I believe it’s important to reflect and shine a light on where we’ve come from, which is why I included it in my talk. When people leave education and start working, especially in a knowledge industry, you join a system of work and you’re joining at this entry point and you probably don’t have a view of the last 250 years and how we got here. You just join and it’s like, “Well, this is how it works.” “Oh, so this is what a big corporation is like. Okay.” You’re learning from the bad behaviour of the people around you in the company you’ve just joined. Maybe that’s then amplified by what you’re watching in films and on television, but you’re conditioned, as to your point around Stockholm Syndrome, you didn’t call it that but it is. There was one particular team that I inherited and I said to these three people, “Your system of work is so terrible, so inhumane, working unsustainable hours, really low quality and really low levels of engagement. Why haven’t you left this organisation? I would have years ago.” And the answer was “We’re united through common suffering.” Well, that was what was keeping those people there. It was a shared suffering experience. Stockholm Syndrome.

Jeffrey: Right. We would rather have people have a shared joyous experience keeping them.

Jon: Definitely.

Jeffrey: I often quote Brian Merrick’s article on the four forgotten Agile values: skill, discipline, ease, and joy. He says everyone deserves to work on projects that are so good they brag about them at cocktail parties. I’ve always loved that.

Jon: Yes, absolutely. In that context, I use the word pride. I think pride is a really important word to focus on with teams. That can include speaking at a conference like this, whether it’s an individual speaking at a conference, or whether it’s your organisation is speaking at a conference, that generates pride. “Oh we’re up on the stage, we’re talking about the journey we’re on and what we’ve learned.”

Jeffrey: This is my second question in one on ones: “are you able to do work that you’re proud of?” My view is that people have a drive for that, and if there’s something that’s holding them back, they’ll tell you. And then as a leader, it’s your job is to fix that. What is it that prevents people from doing the work they want to be proud of? This is very theory Y instead of theory X. People are internally motivated to do things, they don’t need a minder watching the clock, making sure that they’re working. It’s not an effective, humane way to work, and it’s beneficial to tap into people’s implicit drive to succeed.

Jon: That in particular was part of the whole mindset shift with the beginning of the first industrial revolution. The act of automation meant that now there were unskilled workers and that’s been a very strong part of the mindset for the last 250 years: from a manual labour, repetitive, knowable context, which is very different from knowledge work in an unknowable context. In a mass production knowable context with unskilled labor, the humans are just literally cogs in the machine repetitively doing tasks, not using their brain. That drives theory X over theory Y. Also, the system doesn’t incentivize continuous improvement. Why use your brain when there’s going to be no credit given.

Jeffrey: You’re being told not to think! No one wants to hear your ideas.

Jon: Hence then we see the example of General Motors, a well-published example. NUMMI’s This Ameican Life on the alcoholism, drug taking, unrest between the managers and the workers. It’s all to do with the culture and the behavior and how people are being treated. Same factories, same people told to come in and run it. And people are motivated because of the way people are being treated.

Jeffrey: Right. It was a remarkable episode, taking the worst performing plant and getting it to be much better with keeping the same people. That was the key thing, it was the same personnel doing it. So fantastic story and a good example of how changing the organization changes the culture, and so organizing for outcomes then can be much more effective. What’s the best way for listeners to get ahold of you?

Jon: Best way would be probably to direct message me on LinkedIn.

Jeffrey: Link’s in the show notes. Thanks, Jon!

Jon: Thanks, Jeffrey.