Stop setting up projects and start moving to a product based operating model

Copyright © 2010-2021 Zen Ex Machina (ZXM) Pty. Ltd. All rights reserved.
May 2021
Stop Setting up projects and
start moving to a product based
model
Mia Horrigan – Zen Ex Machina

Achillies Running Club
GLOBAL DISABILITY AWARENESS DAY MAY 2021

LEAN SYSTEMS THINKING
TELLS US TO THINKING ABOUT
THE WHOLE SYSTEM …. AND
HOW THE HUMAN SYSTEM
CONTRIBUTES TO THIS SYSTEM
ZXM’S GOAL FOR
OPERATING MODELS

"GOT FUNDING FOR AN IDEA?
GREAT LET’S SET UP A PROJECT TEAM AROUND
THE FUNDING"
• Siloed structures
• Governance at apex
• Decisions flow down hierarchy
• Disband when finished

Comparing Benefits
Traditional
Agile

The Domain of Agile Product Management
Ideas Strategic
filter
Product
Backlog Customer
feedback
metrics
Squads
(Agile Teams)
Increment
Roadmap Definition of
Done
Product
Goal
Leadership
Strategy
Stakeholder
feedback
Write User Stories
Fixed milestones and
deliverables

The Domain of Agile Product Management
Ideas Strategic
filter
Product
Backlog Customer
feedback
metrics
Squads
(Agile Teams)
Increment
Roadmap Definition of
Done
Product
Goal
Strategy Stakeholder
feedback
Make all this add
value to the
customer

We need a Network of Teams
• Hierarchy gives you structure
• But Hierarchy is slow to make decisions
• You need an operating model that helps you
make fast decisions
• You need a network
• Work is delivered through the network of
teams
• Align objectives to a single, prioritised, Program
Backlog.
• Plan, commit, and execute together.
• Produces valuable and evaluable system-level
solutions.
Source: https://www.scaledagileframework.com/business-agility/

MOVING FROM A PROJECT TO A
PRODUCT BASED OPERATING
MODEL IS VITAL FOR BUSINESS
AGILITY TO LINK STRATEGY TO THE
DETAILED ORGANISATIONAL
DESIGN

Why a New Operating Model?
Growth
We’re growing and need a better model that
supports managing the business as well as
supporting our people
Self-organisation
We want you to be self-organising, and not work in silos.
Scalability and bottlenecks
Existing model creates bottlenecks that limit the
speed at which products can be delivered and
dependencies on specialist expertise
.
Culture
We want to keep true to our values while we grow,
and support a manageable workload
Talent proposition
We need to be clear about the types of skills and
capabilities needed to achieve department and
organisational goals.
Behavioural expectations
We want clear role expectations so people can can
demonstrate through actions that they are aligning
to the values.
A new strategy needs new ways of working.

• A combination of custom talent, processes and capabilities that
dictate how the organisation works, and how people within the
organisation work together
• Serves as the vital link between company’s strategy and the
detailed organisation design that it puts in place to deliver on the
strategy
• Designed so that organisational structure, accountabilities,
governance and employee behaviours, along with the right
people, processes and technology, all work together to support
the strategic priorities
Principles of Operating Framework
GOALS
VISION OPMODEL

Strategy and Design Operating model Organisation design
Strategy Elements
• Drivers of Value
• Priority customer needs
• Critical capabilities
• Cost/profitability targets
Where to play
• Customer experience (CX)
• Product ecosystem
• Customer engagement
• Staff engagement
How to win
• Ecosystem thinking
• Product lifecycle
• Expert power
• Short lead times
• Feedback loops
• Empower others’ decision-making
Culture and Values
• Agile mindset and principles
• Transparency
• Openness
• Respect
• Focus
• Courage
• Commitment
Structure and Decision Roles
• Establishing appropriate level for decision-making
and point of accountability
• Cadence that enables cross-group processes and
interfaces to support strategic and operational
decisions
Clarity on priorities
• Transparency of product vision, roadmap and product
backlog
• Align teams around clear strategic objectives and
priorities
People , Processes, and Technology
• Talent requirements and recognition
• What information flows, technology and tools are
needed to support
• Consultation and advice on standards and optimal
industry practices
Feedback loops and key metrics
• Focus on top company priorities and the metrics for
measuring success
Cultural Dimensions
• Go beyond communicating values to being explicit
about which behaviours make for effective execution
Structure - Boundaries for lines of
business and defining shared services to
leverage scale and expertise
Accountabilities - Defining the agile
roles and responsibilities and how self
organisation will work
Talent & Capabilities - Combining
people, process and technology in a
repeatable way to deliver desired
outcomes
Governance - Executive forums and
processes that yield decisions on strategic
priorities
Metrics - Aligning around key clear
strategic objectives and priorities.
Ways of working - Expected cultural
norms for how people collaborate,
especially across the boundaries between
functions or teams
Operating Framework

Value Product Based Model - Scalable
Product Increments
Product & Release
Feedback
Metrics &
Transparency
Product
Goal
Team
Process
Continuous
Improvement
Backlog
Prioritisation
Backlog
Refinement
Delivery
Release
Planning
Executive
Metascrum
Cross-team
Self-organisation
Impediment
Removal
Scrum
Master
Cycle
Product
Owner
Cycle
Executive
Action Team
Adapted from Scrum @ scale, Scrum.inc

Strategic Drivers Outcomes and Impacts Strategic Investments Tactical Objectives Delivery
Strategic Goal
Strategic Goal
Strategic Goal
Strategic Initiative
Strategic Initiative
Product/Service
Feature
Product/Service
Feature
Product/Service
Feature
Teams and Sprints
Organisational Goals
• Measurable targets to
achieve and report progress
against strategic drivers
• What impact are we trying to
make?
• What outcome do we want to
achieve?
• Prioritised backlog of
initiatives that contribute
toward an outcome/impact
• Investment boundaries to
achieve the impact
• Made transparent in a
Portfolio Backlog
• Prioritised breakdown of
outputs that are
hypothesised to deliver the
outcome
• Made transparent in a
Program Backlog.
• Long lived cross-functional
teams
• Self-organising
• Quality and standards for
delivery defined as Definition
of Done
• Delivery using Scrum
• Cost of delay
• Market change
• User needs
• Market growth
• Sustaining current markets
• Internal capability
development
Realising strategic benefits through an agile product management framework
Strategy in a Lean Agile Enterprise

Execuitve Leadership Team
• Quarterly planning
• Reflect on outcomes achieved over the last quarter
• Assess new initiatives
• Review vision and goals
• Review service catalogue
• Apply strategic filter to incoming initiatives
• Identify capability gaps and actions to mitigate
• Agree on valued outcomes to deliver
this quarter
Product Owners (PO) Sync
• Product Owner Collaboration
• Work coming from vision/goals
• Work coming from stakeholders
• Dependencies of work between teams
• Assess relative value of incoming work
• Align local work with Strategy and Vision
• Optimise the value delivered by the team
Scrum of Scrums
• Scrum Master collaboration
• Blockers and impediments
• Risk management and transparency
• Learning and development
• Optimising the flow of work
• Continuous improvement
Daily Scrum
• Team plans their day
• Identify blockers and impediments
• Act to remove blockers/impediments
• Deliver as a Team
Continuously
• Collaboration
• Risk assessment
• Optimise flow
• Review quality
Daily
• Daily Scrum
• Completion of Stories
• Update metrics
• Feedback loops
Team Sprints (2-
weeks)
• Collaborate
• Deliver
• Reflect
• Improve
Strategy and Vision
(3-monthly)
• Vision
• Goals
• Epics
Sprint Planning
• Agree on what to deliver
• Create a two-week goal and plan
• Identify optimal delivery methods
• Integrate and refine delivery improvement practices
Sprint Review
• Inspect the Sprint outcome(s)
• Review decisions made
• Understand what is delivered and not delivered
• Understand impact on work forecast over the next two
weeks
Retrospective
• Reflect on the last Iteration/Sprint
• Reflect on metrics
• Identify opportunities to improve
• Identify opportunities to remove waste
• Create actions for improvement
Backlog Refinement
• Understand what is in the Backlog
• Size the work
• Undertake exploratory/discovery activities to ensure
work is ready for an upcoming Sprint
Planning Horizons
Program Management
(fortnightly)
• Deliver Stories of strategic capability
• Support Teams to deliver outcomes
• Align teams’ work with vision and goals
Product management
• Break Initiatives into smaller feature (projects) slices
• Deliver strategic capability Stories from Epics
• Give Stories to Teams to deliver on Epics
Horizon Planning
• Quarterly planning
• All teams get together (Big Room Planning) to create a
3 month plan to deliver strategy and vision
• Identify capability gaps and actions to mitigate
• Agree on valued outcomes to deliver
Governance Forums and Management

Agile Governance – Operations
Executive Leadership
“Project” Work
BAU Work
Program
Backlog
Agile Team
Agile Team Agile Team
Product Backlog Product Backlog Product Backlog
Product Owner Product Owner
Product Owner
Scrum Master Scrum Master Scrum Master
Team
Members
Team
Members
Team
Members
Executive
Backlog
Manage
leadership
initiatives
throughthe
executive
backlog
• Strategic goals
• Management initiatives
• Operational change
• Strategic roadmaps

“Project” Work
BAU Work
Program
Backlog
Agile Team
Product Owner
Manage
organisational
change through
the program
backlog
• New projects
• New client work
• Delegated team work
Team
Members
Team
Members
Team
Members
Executive
Backlog

“Project” Work
BAU Work
Program
Backlog
Agile Team
Product Owner
Team
Members
Team
Members
Team
Members
Manage team
work through
a team’s Product
Backlog
• Team work
• Sprint work
• BAU
• Team-based capability
development
• Team improvements
Executive
Backlog

Agile Governance – Product Owners
“Project” Work
BAU Work
Program
Backlog
Agile Team
Product Owner
Chief
Product Owner
Manage delivery
of value through
Product Owners
• Prioritise all work by
value to the organisation
Executive
Backlog
Team
Members
Team
Members
Team
Members

Agile Governance – Scrum Masters
“Project” Work
BAU Work
Program
Backlog
Agile Team
Product Owner
Chief
Scrum Master
Executive
Backlog
Team
Members
Team
Members
Team
Members
Manage
boundaries of
self-organisation
through Scrum
Masters
• Scrum
• Self-organisation
• Cross-functionality
• Impediment escalation
• Collaboration

Agile Governance – Scrum Masters
“Project” Work
BAU Work
Program
Backlog
Agile Team
Product Owner
Chief
Scrum Master
Executive
Backlog
Manage
impediments
through the
Executive
Backlog
• Impediment escalation
from Scrum Masters and
their teams
escalation
Team
Members
Team
Members
Team
Members

Agile Governance – Capability Management
“Project” Work
BAU Work
Program
Backlog
Scrum Team
Scrum Team Scrum Team
Product Owner
Executive
Backlog
Team
Members
Team
Members
Team
Members
Communitiesof
Practice
• Leads work
collaboratively across all
teams to improve
technical/skills excellence
across teams
• Don’t delegate or manage
work
Capability
Leads

“Project” Work
BAU Work
Program
Backlog
Agile Team
Product Owner
Executive
Backlog
Team
Members
Team
Members
Team
Members
Continuous
Improvement
• Contribute ideas and
skills/capability
improvement actions into
team’s Product Backlogs.
• POs align improvements
to operational
investments in capability
w/ the Chief PO
Capability
Leads

“Project” Work
BAU Work
Program
Backlog
Agile Team
Product Owner
Executive
Backlog
Team
Members
Team
Members
Team
Members
Escalate
capability
improvement
initiatives
• Escalate large capability
investments to the
Program Backlog for
prioritisation and funding
by executive
Capability
Leads

“Project” Work
BAU Work
Program
Backlog
Agile Team
Product Owner
Executive
Backlog
Team
Members
Team
Members
Team
Members
Establish quality
standards for all
teams (Definition of
Done)
• Minimum standard of
quality, compliance,
performance, NFRs.
• Review quality standards
quarterly
• Establish and improve
quality standards and
practices
Capability
Leads
Definition of Done

Clear structures – Roles at scale
SM
PO
SM
PO
SM
PO
SM
PO
SM
PO
SM
PO
PO
Chief
SM
Chief
Agile Teams
Capability (“Guild”) Leads
Scrum Master Lead
Product Owner Lead
Same scaled
structure across:
• Scrum @ Scale
• SAFe®
• LeSS
• Spotify (based on
Scrum @ scale)

Architecture
Systems hardware
Testing
Back-end development
Front-end development
Agile Team Blueprints
IT TEAM
Scrum
Team
ProductOwner
ScrumMaster
Sprint
Backlog
Increment
of“Done”work
Solution
Design
Solution
Development
Product
Development
Hypothesis
Testing
User Feedback
Scrum
events
Inspect/
adapt
System analysis
UX design
UI design
BAU Activities
Product
Backlog
Scrum
Team
WORK TYPES AGILE FRAMEWORK CAPABILITY TYPES

PROCUREMENT TEAM
Scrum
Team
ProductOwner
ScrumMaster

HR TEAM
Scrum
Team
ProductOwner
ScrumMaster

Teams
MARKETING TEAM

Transparency of skills and capability

What creates an agile organisation?
• Get everyone and all of the
organisation Sprinting
Sprinting
• Team focus
• Define agile roles and responsibilities
• Define bounded environments for
action
Self-Organisation
• Promote learning
• Invest in learning
• Make everyone’s job continuous
improvement
Continuous learning
culture
• Empiricism
• Decentralised decision-making
• Management participation
Agile Values
4 primary behaviours make
agile organisations
These are the predictors of
faster to market, lower
costs, lower risk.
AgileIQ

Conclusions
• Just setting up a teams for projects approach doesn’t change the whole
system (only at team level) as rest of the organisation still operates in a
traditional way
• To change the whole system we need top down, bottom up and from
the side approach
• A new operating model is need to meet demands of modern
organisations that is product based and aligns strategy to value based
delivery
• At the heart of the system is humans and its the network of how people
work together that leads to enterprise agility

34
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2025
includingexecutives,leadershipandteamsby
1M people
Improve the working lives of
through contemporary ways of working
www.zenexmachina.com/blog
@miahorri
Mia.Horrigan@zenexmachina.com

Achillies Running Club
HAWAII MARATHON DEC 2022 – HERE WE COME

Stop setting up projects and start moving to a product based operating model

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