TED@BCG Toronto
Martin Danoesastro: What are you willing to give up to change the way we work?
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What does it take to build the fast, flexible, creative teams needed to challenge entrenched work culture? For transformation expert Martin Danoesastro, it all starts with one question: "What are you willing to give up?" He shares lessons learned from companies on both sides of the innovation wave on how to structure your organization so that people at all levels are empowered to make decisions fast and respond to change.
Martin Danoesastro - Transformation expert
BCG’s Martin Danoesastro supports organizations to change their ways of working at scale, enabling them to succeed in an increasingly digital world. Full bio
BCG’s Martin Danoesastro supports organizations to change their ways of working at scale, enabling them to succeed in an increasingly digital world. Full bio
Double-click the English transcript below to play the video.
00:12
Have you ever watched
a flock of birds work together?
a flock of birds work together?
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Thousands of animals,
flying in perfect synchrony:
flying in perfect synchrony:
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Isn't it fascinating?
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What I find remarkable is that these birds
would not be able to do that
would not be able to do that
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if they all would have
to follow one leader.
to follow one leader.
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Their reaction speed
would simply be too low.
would simply be too low.
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Instead, scientists believe
that these birds are relying on
that these birds are relying on
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a few simple rules,
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allowing every single bird
to make autonomous decisions
to make autonomous decisions
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while still flying in perfect synchrony.
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Their alignment enables their autonomy,
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and their autonomy
makes them fast and flexible.
makes them fast and flexible.
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01:04
Now, what does this have to do
with any one of us?
with any one of us?
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Well, it's one way of illustrating what
I believe to be the most important change
I believe to be the most important change
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that is needed in ways of working today.
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The world is getting faster
and more complex,
and more complex,
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so we need a new way of working,
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a way that creates
alignment around purpose,
alignment around purpose,
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that takes out bureaucracy
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and that truly empowers people
to make decisions faster.
to make decisions faster.
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But the question is:
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In order to get there,
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what are we willing to give up?
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A few years ago, I was working with a bank
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that wanted to embark
on a digital transformation.
on a digital transformation.
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They wanted their offering to be simpler,
more intuitive, more relevant.
more intuitive, more relevant.
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Now, I'm not sure how many of you
have seen a bank from the inside,
have seen a bank from the inside,
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so let me try to illustrate
what many traditional banks look like.
what many traditional banks look like.
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You see lots of people in suits
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taking elevators to go
to their department,
to their department,
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marketers sitting with marketers,
engineers with engineers, etc.
engineers with engineers, etc.
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You see meetings with 20 people
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where nothing gets decided.
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Great ideas? They end up
in PowerPoint parking lots.
in PowerPoint parking lots.
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And there are endless handovers
between departments.
between departments.
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Getting anything done can take forever.
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So this bank knew
that in order to transform,
that in order to transform,
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they would have to improve
their time to market
their time to market
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by drastically changing
their ways of working as well.
their ways of working as well.
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02:46
But how?
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To get some inspiration, we decided
to go and have a look at companies
to go and have a look at companies
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that seem to be more innovative,
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like Google, Netflix, Spotify, Zappos.
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And I remember how we were walking
the halls at one of these companies
the halls at one of these companies
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in December 2014,
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a management consultant
and a team of bankers.
and a team of bankers.
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We felt like strangers in a strange land,
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surrounded by beanbags and hoodies
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and lots of smart, creative employees.
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So then we asked,
"How is your company organized?"
"How is your company organized?"
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And we expected to get an org chart.
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But instead, they used strange drawings
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with funny names like "squads"
and "chapters" and "tribes"
and "chapters" and "tribes"
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to explain how they were organized.
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So then we tried to translate
that to our own world.
that to our own world.
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We asked, "How many people
are working for you?"
are working for you?"
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"It depends."
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"Who do you report to?"
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"It depends."
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"Who decides on your priorities?"
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"It depends."
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You can imagine our surprise.
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We were asking for what we thought
were some of the basic principles
were some of the basic principles
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of organizations,
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and their answer was, "It depends."
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Now, over the course of that day,
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we gained a better
understanding of their model.
understanding of their model.
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They believed in the power
of small, autonomous teams.
of small, autonomous teams.
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Their teams were like mini-start-ups.
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They had product people
and IT engineers in the same team
and IT engineers in the same team
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so they could design, build
and test ideas with customers
and test ideas with customers
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independently of others in the company.
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They did not need handovers
between departments.
between departments.
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They had all the skills needed
right there in the team.
right there in the team.
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Now, at the end of that day,
we had a session
we had a session
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to reflect on what we had learned.
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And we had started to like their model,
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so we were already thinking of how
to apply some of these ideas to a bank.
to apply some of these ideas to a bank.
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But then, one of the hosts,
a guy who had not said a word all day,
a guy who had not said a word all day,
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he suddenly said,
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"So I see you like our model.
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But I have one question for you:
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What are you willing to give up?"
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What were we willing to give up?
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We did not have an answer immediately,
but we knew he was right.
but we knew he was right.
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Change is not only about
embracing the new;
embracing the new;
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it's about giving up
on some of the old as well.
on some of the old as well.
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Now, over the past five years,
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I have worked with companies
all over the world
all over the world
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to change their ways of working.
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And clearly, every company
has their own skeptics
has their own skeptics
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about why this is not
going to work for them.
going to work for them.
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"Our product is more complex,"
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or "They don't have
the legacy IT like we do,"
the legacy IT like we do,"
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or "Regulators just won't allow this
in our industry."
in our industry."
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But for this bank and also
for the other companies
for the other companies
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that I have worked with afterwards,
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change was possible.
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Within a year, we completely
blew up the old silos
blew up the old silos
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between marketing,
product, channels and IT.
product, channels and IT.
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Three thousand employees were reorganized
into 350 multidisciplinary teams.
into 350 multidisciplinary teams.
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So instead of product people
sitting just with product people
sitting just with product people
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and engineers with engineers,
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a product person and an engineer
were now members of the same team.
were now members of the same team.
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You could be a member of a team
responsible for account opening
responsible for account opening
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or for the mobile banking app, etc.
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At the go-live date
of that new organization,
of that new organization,
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some people were shaking hands
for the very first time,
for the very first time,
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only to find out that they had been
sitting two minutes away from each other
sitting two minutes away from each other
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but they were sending each other emails
and status reports for the last 10 years.
and status reports for the last 10 years.
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You would hear someone saying,
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"Ah, so you're the guy that I
was always chasing for answers."
was always chasing for answers."
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(Laughter)
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But now, they're having coffee
together every day.
together every day.
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If the product guy has an idea,
he can just raise it
he can just raise it
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to get input from the engineer
who is sitting right next to him.
who is sitting right next to him.
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They can decide to test
with customers immediately --
with customers immediately --
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no handovers, no PowerPoints, no red tape,
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just getting stuff done.
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Now, getting there is not easy.
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And as it turns out,
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"What are you willing to give up?"
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is exactly the right question to ask.
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Autonomous decision-making
requires multidisciplinary teams.
requires multidisciplinary teams.
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Instead of decisions going
up and down the organization,
up and down the organization,
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we want the team to decide.
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But to do so, we need all the skills
and expertise for that decision
and expertise for that decision
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in the team.
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And this brings difficult trade-offs.
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Can we physically co-locate our people
who are working in different buildings,
who are working in different buildings,
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different cities or even
different countries today?
different countries today?
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Or should we invest
in better videoconferencing?
in better videoconferencing?
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And how do we ensure consistency
in the way we do things
in the way we do things
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across these teams?
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We still need some kind
of management matrix.
of management matrix.
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Now, all these changes to structure
and process and procedure --
and process and procedure --
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they are not easy.
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But in the end,
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I found that the most
difficult thing to change
difficult thing to change
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is our own behavior.
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Let me try to illustrate.
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If we want these teams to be fast,
flexible, creative, like a mini-start-up,
flexible, creative, like a mini-start-up,
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they have to be empowered and autonomous.
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But this means we cannot have leaders
commanding their people what to do,
commanding their people what to do,
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when to do, how to do.
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No micromanagers.
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But it also means that each employee
needs to become a leader,
needs to become a leader,
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regardless of their formal title.
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It's about all of us stepping up
to take initiative.
to take initiative.
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Now obviously, we also cannot afford
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to have all these teams
running in different directions,
running in different directions,
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because that would
certainly lead to chaos.
certainly lead to chaos.
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So we need alignment and autonomy
at the same time,
at the same time,
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just like a flock of birds.
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In an organizational setting,
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this requires new behaviors,
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and with each new behavior,
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there is giving up
on something old as well.
on something old as well.
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Leaders have to make sure
that everyone in the organization
that everyone in the organization
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is aligned around
the overall purpose -- the why --
the overall purpose -- the why --
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and the overall priorities -- the what.
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But then they have to let go
and trust their teams
and trust their teams
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to make the right decisions
on how to get there.
on how to get there.
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Now, creating alignment requires
open and transparent communication.
open and transparent communication.
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But you know how they say
that information is a source of power?
that information is a source of power?
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Well, for some managers,
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sharing information may feel as if
they're giving up that source of power.
they're giving up that source of power.
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And it's not just managers.
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The teams need to communicate
openly and transparently as well.
openly and transparently as well.
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In these companies, the teams
typically work in short sprints,
typically work in short sprints,
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and at the end of every sprint,
they organize a demo session
they organize a demo session
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to share the output
of what they've done, transparently.
of what they've done, transparently.
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And every day,
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each member of the team gives an update
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of what they are working on individually.
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Now, all this transparency
can be uncomfortable for people,
can be uncomfortable for people,
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because suddenly, there is
no place to hide anymore.
no place to hide anymore.
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Everything we do
is transparent for everyone.
is transparent for everyone.
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So, alignment is not easy,
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and providing autonomy
is not so obvious, either.
is not so obvious, either.
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One executive at another company
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likes to explain how he used to be
a master of milestone-tracking.
a master of milestone-tracking.
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Now, today, to know how things are going,
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instead of looking at status reports,
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he needs to walk down to the team floors
to attend one of their sessions.
to attend one of their sessions.
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And instead of telling people what to do,
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he looks for ways to help them.
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That is radical change
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for someone who used to be
a master of milestone-tracking.
a master of milestone-tracking.
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But in the old world, this executive said,
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"I only had the illusion of control.
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In reality, many projects would run
over time and over budget, anyway.
over time and over budget, anyway.
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Now I have much more transparency,
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and I can course-correct
much earlier if needed."
much earlier if needed."
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And middle managers
need to change as well.
need to change as well.
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First of all, without the handovers
and the PowerPoint,
and the PowerPoint,
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there's less of a need
for middle managers.
for middle managers.
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And in the old world, there was
this idea of thinkers and doers.
this idea of thinkers and doers.
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Employees would just follow orders.
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But now, instead of only
managing other people,
managing other people,
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middle managers were expected
to become player-coaches.
to become player-coaches.
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So imagine, for the last 10 years,
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you have just been telling
other people what to do,
other people what to do,
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but now you're expected
to do things yourself again.
to do things yourself again.
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Clearly, this model is not for everyone,
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and some great people leave the company.
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But the result is a new culture
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with less hierarchy.
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And all of this is hard work.
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But it's worth it.
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The companies that I worked with,
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they were used to deploying
new product features a few times per year.
new product features a few times per year.
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Now they have releases every few weeks,
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and without the handovers
and the red tape,
and the red tape,
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the whole organization
becomes more efficient.
becomes more efficient.
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And finally, if you walk the halls
of these companies today,
of these companies today,
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you just feel a new energy.
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It feels as if you're walking
the halls of a very large start-up.
the halls of a very large start-up.
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Now, to be fair, these companies,
they cannot claim victory yet.
they cannot claim victory yet.
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But at least with this new model,
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they are much better prepared
to respond to change.
to respond to change.
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The world is getting faster
and more complex,
and more complex,
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so we need to reboot our way of working.
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And the hardest part of that change
is not in structure
is not in structure
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or process or procedure,
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and it's also not just
senior executives taking charge.
senior executives taking charge.
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Leaders will be all of those
in the organization
in the organization
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who embrace the change.
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We all have to lead the change.
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So the question is:
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What are you willing to give up?
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Thank you.
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(Applause)
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ABOUT THE SPEAKER
Martin Danoesastro - Transformation expertBCG’s Martin Danoesastro supports organizations to change their ways of working at scale, enabling them to succeed in an increasingly digital world.
Why you should listen
Martin Danoesastro supports organizations all over the world to come to a better way of working -- a way that creates alignment around purpose, takes out bureaucracy and empowers people to make decisions faster. He helps large, traditional organizations learn from digital innovators and replace their old departmental silos with organizations built around small, empowered, persistent, multi-disciplinary teams.
Danoesastro is a senior partner and managing director of The Boston Consulting Group, based in the firm's Amsterdam office. He leads DigitalBCG in Western Europe, Africa and South America. He holds an MBA from Kellogg School of Management and an MSc in Applied Physics from Delft University of Technology.
Martin Danoesastro | Speaker | TED.com