In the ever-evolving landscape of business, one thing has become abundantly clear: there are no universal rules for making informed decisions based on the data we collect. Whether it’s evidence-based management, telemetry data, or any other form of data, the reality is that what works in one context may not work in another. This is particularly true as we navigate a world that is increasingly complex rather than merely complicated.
Understanding Complexity
To illustrate this, let’s consider complexity theory. When we understand more about a situation, we can make informed decisions. Think of it like playing chess. Experienced players can predict the next moves based on their understanding of the game. They know the strategies, the potential pitfalls, and the winning moves. However, mistakes can happen, often due to unforeseen exchanges or miscalculations.
This analogy resonates deeply with the challenges many modern businesses face. For instance, consider a hauling company tasked with transporting goods from point A to point B. If they rely solely on off-the-shelf software that their competitors also use, they risk becoming indistinguishable from those competitors. Their business model becomes generic, and the only differentiator left is the quality of service.
The Importance of Unique Business Models
In a saturated market, where everyone is utilising the same tools and processes, the question becomes: how do you stand out? The answer lies in embracing the unknown and fostering creativity. In software engineering, for example, we are often venturing into uncharted territory. If you find yourself writing code that has been done before, it’s time to reassess your approach. Innovation thrives in environments where exploration is encouraged.
This is where concepts like red team thinking come into play. Originating from military strategy, red team thinking is about anticipating challenges and adapting to surprises. It’s a mindset that aligns perfectly with agile methodologies, which emphasise flexibility and responsiveness in the face of uncertainty.
Learning from History
Let’s take a step back and look at historical explorers. When they set sail for new lands, they had no idea what awaited them. They had to prepare for the unknown, often facing challenges like scurvy due to a lack of essential nutrients. Those who adapted—by bringing citrus fruits, for example—were the ones who succeeded. This principle of adaptation is at the heart of agility.
In today’s business environment, we must create systems that can dynamically adjust to changes. We gather emergent knowledge and data, often discovering who our customers are and what they want only after we’ve engaged with them. This iterative process of learning and adapting is crucial for maintaining a competitive edge.
The Dangers of Bureaucracy
As businesses grow, there’s a tendency to formalise processes that once worked well. We often think, “This worked once, so let’s standardise it.” However, this can lead to bureaucracy, stifling innovation and adaptability. The world is constantly changing, and what was once optimal may no longer serve its purpose.
We must cultivate a mindset that encourages us to question the status quo. If a process or practice is no longer adding value, it’s time to let it go. This is particularly relevant in organisations where departments may inadvertently inhibit value creation. For instance, a security department might impose restrictions that slow down operations, forgetting that their role is to protect the business, not hinder it.
In the realm of agile decision-making, there are numerous tools at our disposal. Techniques like the fist of five, DAKI, RACI, and lean coffee can facilitate group decision-making. However, it’s essential to remember that these tools are not one-size-fits-all solutions. Their effectiveness can diminish over time as teams evolve and grow more familiar with each other’s working styles.
The key takeaway here is to remain vigilant. If a tool or process consistently leads to poor decisions, it’s time to reassess its value. Agile decision-making is about context; there are no hard and fast rules that apply universally. Instead, we must identify the laws that govern our specific business environment and remain flexible in our approach.
Embracing Emergence
Ultimately, the essence of agility lies in our ability to adapt. Everything we do—how we engage with customers, how we structure our teams, and how we make decisions—should be emergent. As the market shifts and our environment changes, we must be ready to evolve quickly.
In conclusion, the journey towards effective decision-making in a complex world is not about finding the right rules but about fostering a culture of adaptability and continuous learning. By embracing the unknown and remaining open to change, we can navigate the challenges of modern business and thrive in an ever-competitive landscape.
If you’re looking for rules on how to make informed decisions based on the data that you’ve collected, whether it’s from evidence-based management, telemetry data, or whatever data you’re collecting, you’re not going to find it. You’re not going to find something that you can apply everywhere. In times gone by, there have been large decision-making frameworks that generally apply because we lived in a complicated world, not a complex one.
So, if you think about complexity theory, if we understand more about a thing, we’re going to go do more than we don’t know. That’s like playing chess. We understand more than we don’t know, then we can apply a bunch of rules. We know what the next move is. If you’ve ever watched a professional chess game and listened to the commentary, they know exactly what the next move is supposed to be. The only time when there’s a mistake is based on the set of exchanges, depending on how smart the commentator is, how far ahead they can think. They know who’s going to win, and then it’s does somebody make a mistake?
That’s how I think lots of modern businesses are failing. Take, for example, a non-technology example. Let’s say you’re a hauling company and you’re going to haul stuff from A to B in trucks. You have your drivers, you have your trucks, you need to do schedules, you need to do procurement for what goes in what truck and how it’s organised in the truck, and all of those kinds of things. If you go buy off-the-shelf software that everybody else uses, all your competitors are using exactly the same software to manage this, perhaps you’re buying SAP, and then having the POGE plugin and the staff management plugin and whatever stuff it has, then your business is no longer unique.
You’re filling a known niche with a known business model that works, and then the only difference between you and your competitors is probably quality. Are you on time? Did you have the right stuff? Are the right things delivered to the right place? You build a reputation around that. This is a good haul company because they mostly do the right thing. This is a bad haul company because they mostly do the bad thing, and then they’ll go out of business, and you’ll stay in business because they mostly do the wrong thing and you mostly do the right thing.
But your business models are identical, your business practices are identical because they have to be. You have to fit within the plugins, the business model plugins that you’ve brought in for SAP. But when we work in a world where we know less upfront than we discover by doing, that’s anything where we’re bringing in a creative element. Software engineering is being creative. Anything where there’s a lot of unknowns.
A great set of this is red team thinking, which is a military tool. Red team thinking comes from the military. I don’t remember if it’s the US or the British military, probably the US military. It’s a military model that is applied quite heavily in the agile space because we’re talking about the same thing. We’re talking about complexity, we’re talking about the fog. We’ve got a lot of unknowns, and how do we move forward while being able to adapt to any challenges, surprises, or opportunities as we move forward and the world reveals itself?
That’s something that the military do very well, or hopefully do very well, and we need to do very well at it because most of the stuff that we do when we’re building software, because we’re writing code, it’s never been done before. If you’re writing code that’s been done before, you’re doing it wrong. Stop doing that. When you’re building products that don’t exist yet, then we’re exploring the unknown.
Think about when the explorers went out to go somewhere new. They didn’t know what they were going to find when they got there. They didn’t know what was going to happen along the way, so they had to take into account bringing all of the things they needed. Scurvy was a problem for early explorers because they didn’t have the right vitamins. What they found was they could take citrus fruits, which lasted a long time in storage if you stored them right, and then you could provide that to your crew and they don’t get scurvy because they get the vitamins that are missing from the normal diet.
That adaptation enabled those explorers that did that to go further, and the explorers that didn’t do that all died. So, which ones came back? They did this. Let’s do more of that. That’s what we’re talking about when we talk about agile. When we talk about agility, it’s about creating a system for your way of work that adapts dynamically to those changes. We have emergent knowledge, we have emergent data, we have emergent customers. We don’t know who our customers are yet and what they’re going to want.
Then we get some of those customers and we understand what they want, so we deliver something to them, but it’s not quite right because they don’t like what we’ve delivered. So, we need to keep adapting, continuously evolving our product, our business, to fill a unique niche that we’ve created for ourselves. Perhaps we maintain that niche, but those niches don’t exist forever.
It used to be in the old days of the Industrial Revolution where there weren’t that many textile mills and there weren’t that many textile mills within selling distance. Perhaps you, as a tailor, were buying cloth from the local textile mill. You had no option. You were buying the bulk of your stuff from the local textile mill, and then maybe you could get some really expensive stuff from the fancy store, wherever you managed to get that really expensive stuff from. But that’s not for your main clientele. Your main clientele is going to be the stuff from the factory up the road.
Whereas today, you can get stuff from any factory anywhere in the world for a relatively competitive price. That market, that niche, those factories were in is largely gone. It’s not a niche anymore. There are loads of competing species within that area. The same for our companies. As competition grows, we either have to become unique in different ways or we need to be the best in that space in order to not have any of this competition come in.
As we grow as a business, this is all part of this data-driven decision-making. As we grow as a business, we have a tendency to say, “Well, this worked one time, let’s write that down and everybody does it that way.” That’s bureaucracy. That’s what we’re fighting against with agility because the next thing we do is slightly different, just a little bit, but slightly different.
So, this is not optimal anymore, but it kind of works. But time change after change after change, eventually this doesn’t work anymore. But everybody in the company still does it because that’s the way we do things. That’s the mindset we’re trying to change. We’re trying to change to a mindset that we don’t keep this longer than it’s necessary. We don’t keep this longer than it’s valuable. Any process or practice we have, emergent practices within our organisation, any process or practice can be dissolved at any time because it’s deemed to be no longer optimal or suboptimal.
This set of stories should continually change. If it’s not changed, why hasn’t it changed? Because the world will have changed, our environment will have changed, and we need to continually adapt. That’s agile decision-making. How we make decisions is emergent based on what we understand, what we’re doing, what we’re trying to achieve, and the results that we get based on that decision-making.
So, you’re also continuously looking at the data and analysing your decision. Did we make the right decision? Are we continuously making the wrong decision? If we’re continuously making the wrong decision, why are we continuously making the wrong decision? What is our decision-making process? Because it needs to change.
There are lots of tools out there that you can use. I had a quick look for agile decision-making tools and I found a few that I recognise that I have used in the past but maybe not used recently. Fist of five, if you’ve got a group of people and you need to make a decision, fist of five is a great way to make a decision. Is that going to last forever? Are you always going to do fist of five in that same group of people? Probably not, because its usefulness, as you start working together for longer as a team, you may recognise more each other’s tails, and then you don’t need that mechanism anymore.
So, stop doing it if it’s not adding value. If anything in your business is no longer adding value or it’s actively inhibiting value, stop doing it and do something different. I see this in organisation after organisation where they have a departmental model and some department has decided that you can’t do a thing in an organisation, and that thing that you can’t do inhibits all of this value over here. It either makes it slower or makes it harder for us to take advantage of opportunities.
It just makes it too hard to do business, so the people over here stop trying to do those things because it’s too hard. Usually, this is security. That department has forgotten that they work for the business. The business does not work for them. Their purpose for being is to protect the business. Perhaps that department model is a protection model, so compliance or security or those kinds of things. But they’re protecting the business within the context of the business actually functioning.
As soon as they’re inhibiting the business functioning, they are a cost, not a value. They’re supposed to figure out, “We need to do this. How do we do this so that you can be happy?” Not, “No, you can’t do this.” That’s an example of that organisational craft that rust builds up over time, inhibiting your ability to deliver value because you’re stuck in the past, even if the past was only five minutes ago.
Use whatever tools make sense within the context of the decision that you’re making, but always check. Is that tool that we’re using, so it could be fist of five, DAKI, RACI, decider protocol, consent decision-making, lean coffee, holacracy, there are loads of different ways to do that. If we use that and we have a bad decision or we use it in a bunch of decision-making and all of those decisions ended up wrong, or the majority of those ended up wrong, then stop doing it.
That’s the key to this agile process, to figuring out how to make decisions within the context. There aren’t any rules for you to go look up. There aren’t any known practices that always work, and that’s true across all of agility and all of lean. There are certain rules that we know to be true, but they’re not rules, they’re laws. Little’s law is a great example of that, queuing theory. It’s true. That’s how things work.
So, we make decisions within the context of that story. Figure out what the laws are that apply to your business, and everything else is flexible. Everything else is flexible. How you do business is flexible. How you find business, how you engage with customers is flexible. Emergent. How people do the work is emergent. How you engage with them, how you do everything that you do needs to be emergent because what you want to be able to do as a business is when the market shifts or your environment changes, you need to be able to evolve, and you need to be able to evolve as quickly as possible because you don’t want to go extinct.
