Introduction Questions

1. What makes the customers of your company more successful?

2. In which way is making the customers more successful a motivation for your teams and department?

Farmdrone

Matthew founded a startup company for developing a new a sophisticated drone to help farmers in gathering insight in their crops. He wanted to support farmers so they didn’t have to travel throughout their land and check the status of the crops but could get a daily update without leaving the house. The drone would fly over the crops and gather all kinds of data. It would save time and give more accurate insight because the drone could check more land in less time than the farmer with his tractor.

He was searching for investors to realize this product. After pitching the idea, many investors weren’t enthusiastic because they couldn’t believe the drone would be either accurate enough or worth buying. Early calculations would make the drone very expensive and investors didn’t think it would be bought by farmers.

Hearing all the feedback from the investors, he started to doubt his idea. He gave it some thought and took another look at his notes. His notes were all about the technical details of the drone, the requirements of the battery, the wind speed it could deal with, the algorithm for the optimal autopilot routes, and how the drone could get regular software updates. He was pretty proud of his technical analysis. He also discussed these details with farmers, and many farmers agreed with his specifications.

So why couldn’t he convince many investors? Matthew thought about it and looked again at his problem. He made a list of why his drone was helpful.

He made a stack of seven blank pieces of paper in front of him. At the bottom he wrote “Farmdrone” (see Figure 1.3). He looked at his product from the perspective of the farmer and asked himself why the farmer would buy his product. Because it gives him Data. Why would he want to have data in a different way? Because it Saves time. What could the farmer do more quickly? It gives him quicker Insight. Why is this insight of benefit? Because he could make Decisions. Why would that help the farmer? Because it increases the production of his crops. Matthew wrote “More crops” on the piece of paper. Why would the farmer want more crops? The answer is easy: because it increases revenue and makes the farmer more successful.

He looked at the list and was pretty proud of the result. He called one of the farmers he already contacted about this idea and asked if they could have a cup of coffee and look at his results.

A few days later, he sat with the farmer. Matthew was pretty excited. He explained to the farmer what he did, but the farmer didn’t look so happy during his explanation. The farmer interrupted him and asked, do you know how we farmers make profit? Have you got any idea what it takes to make profit in the end? Matthew thought he knew, but he started to see he actually didn’t. The farmer explained: “The reason I’m interested in this Farmdrone of yours isn’t because it saves me time; it’s a totally different reason. It’s because I think I can save a lot of money on crops that won’t make it.” Matthew didn’t get it. He waited for the farmer to explain. “We farmers spend a lot of money on pesticides, watering the crops in the dry periods, and all kinds of nutrition. I expect that I can decide quicker which parts I can write off and not invest any money in. The cost will be a lot lower, while the harvest will be probably be the same.”

Together they adapted the list Matthew created earlier, and they added a few pieces of paper. Matthew thought about it, and he discovered he was focusing on the details of the drone, which are important, but he didn’t fully understood how his product would benefit the customers.

Next they brainstormed further and talked about the risks—not the risks of the product, such as whether the battery was big enough, or whether the drone was intelligent enough to find his routes. They talked about the risks for the farmer. His friend explained that he saw two important risks: would the drone gather at least the same insight in less time, and would it gather preferably better insight? So “Save time” was changed to a different type of note because it was an odd item in the overall list. And the other risk was whether the farmer would make the right decisions, based on the insight of the drone, to write off the correct crops. These two risks were actually assumptions that would hugely affect the success of the drone. Would farmers actually make better decisions that increased the overall net revenue? See Figure 1.4.

Matthew drove home and thought about the things he had discovered. He could see why his potential investors weren’t so enthusiastic about his product. It wasn’t because of an issue with the technical ingenuity, but because none of them (including Matthew) really understood the customer impact. He phoned a few of his potential investors and started to explain the customer side of his product.

While talking to one of his potential investors and brainstorming on the assumptions, the investor asked, “Is there a quicker way to validate our assumptions without building a drone?” Matthew’s immediate response was almost a big no, but then he thought about it. There are quicker ways to get the data. Why not use a dummy-drone like a big camera on a stick or use satellite data images and data? He extended his overview with some alternatives. The end result is illustrated in Figure 1.5.

Complex Customer Impact

In real life, it can be difficult to clearly understand the customer impact, especially when the customer is another company. Many teams think that they know the customer impact because they don’t know what they don’t know. To give these teams the right goals and to give them a proper KVI, it must be clear how the product delivers value to the customer. Successful agile leaders make sure that the agile teams really understand how they are beneficial for the customer.

For that, I’ve developed the Impact Ladder tool, which visualizes the customer impact and the assumptions accordingly. The Impact Ladder is partly based on the Five Whys technique.⁴

4. Serrat, O. 2017. The Five Whys Technique. In Knowledge Solutions. Springer, Singapore.

Tool 2: Impact Ladder

The Impact Ladder is a tool to make very clear how a product or service contributes to a positive impact for the customer. The Impact Ladder supports brainstorming and provides insight into the most important assumptions. The tool can be used for new and existing products and services. The Impact Ladder also makes it easier to switch between different types of users and target groups.

The Impact Ladder consists of three parts:

1. Impact levels

2. Assumptions

3. Alternatives

Schematically, the Impact Ladder looks like Figure 1.6.

Summary of Part 1—Co-Create Goals

This first part of the steering wheel explained how the agile leader can co-create goals. See the figure above for an overview of this part of the toolkit. Agile teams operate in a complex environment. Markets, technologies, competitors, and customers’ wishes change so quickly and so unpredictably that teams need a new type of goals to give them direction. In static or slow-changing markets, the performance of employees and teams can be measured relatively easily by measuring the output. An employee or team that produces more has a higher performance than others. But agile teams are different. Delivering more functionality in the app or handling more phone calls doesn’t necessarily make them more productive. Therefore, they need a different set of goals to measure their performance and give them direction. These new goals make it tangible and concrete what “winning the game” means. These goals, therefore, indicate when teams are really successful.

Agile teams need a clear and inspiring goal regarding what they need to achieve. This focuses on the overall objective and gives them the ability to change plans when unexpected things happen. For example, it is unknown in advance what the competition will do, how new technologies can be used optimally, and what the dynamics in teams will be. In order to find solutions, to embrace opportunities, and to seek synergy as a team, teams need goals for what they need to achieve. The focus is external; it should be on increasing the customer impact and thus the value for the company.

In Part 1, two practical tools were explained: the key value indicator (KVI) and the Impact Ladder. The KVI is the most important indicator for the team to find out whether they are generating value. The tool is expressed in a single number, visualized in a trend line, making the relationship between customer impact and value for the company tangible. The focus is on serving customers smarter and better, so that customers generate more value for the company—achieving more by doing less.

The Impact Ladder visualizes how products and services contribute to a positive customer impact: the tool makes the difficult and complicated customer’s situation clear.

The other three parts of the steering wheel reinforce this co-creating goals part. Part 2, “Facilitate Ownership,” will offer further practicality on how the teams can become proactive, proud, and energized. In Part 3, “Learn Faster,” we’ll discover that tools like T2L are crucial if the teams are looking at recent data. Part 4, “Design Healthy Habits,” gives the goals a healthy atmosphere and culture.

The Agile Leader as a Co-Creator of Inspiring Goals

In complex and quickly changing markets, it’s hard to know the perfect goal. Co-creating the goal with the teams serves the agile leader in three ways. First, the goal will probably be better because more people put thought into it. Second, the teams will know the “why” behind the goal, and if the goal needs to be changed or improved, the teams will come up with proposals and ideas. Last but not least, the teams will likely be more inspired to work on a goal they co-created than on a goal that is bestowed upon them. When searching for solutions, implementing improvements, and exceeding customer expectations, we expect a lot from the agile teams. It often takes a lot of energy and perseverance to grow as a team and achieve the goals. It is no longer about carrying out daily activities from 9 to 5, but rather about looking for solutions creatively. And, if these solutions initially do not work, it is about continuing to solve issues as a team. That is why it is important that the agile leader gets better and better in his role as a co-creator. That she asks for feedback in her motivational skills, she learns, and she grows. Finding and improving the inspirational environment for the teams is a discovery. Sketching a first version of the tools and learning as we go is the only way to continuously improve the tools and environment.

Knowing whether the teams have an inspiring goal, the following five Is can be used to gather feedback.

• Influence. Do the teams feel that they can influence the metric?

• Insight. Is the goal tangible and visual? Do team members update the metrics themselves and are they eager to know the latest numbers?

• Ideas. Does it cause ideas to thrive? It should stimulate out-of-the-box thinking. Teams can have a list of ideas, innovations, and disruptive features to improve.

• Intent. Is the intent behind the goal also clear? Can the team members explain the purpose or mission behind what they want to achieve?

• Impact. Does it focus on the customer?

Concrete Actions

The following are some examples of actions to put the tools, examples, and ideas from Part 1 into practice.

1. Share ambitions and dreams more often—both your own and those of others. Practice and grow in inspiring and sharing each other’s passions.

2. Ask for examples of successful customers. Did agile teams deliver concrete customer impact in recent times? If so, share. If not, work together to find ideas about how to improve.

3. Make an overview of the teams and their KVIs. This makes it known which teams have a concrete KVI and which teams still need help with this.

Notes

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