Host Intro (Gene Kim)

[00:00:00.185] Let me go back to the Las Vegas conference that we had last year. One of the presenters was Barbara Arnst. She is Transformation Leader and Organizational Designer at Telenet, one of Belgium's leading telecommunications providers. She co-presented with her VP billing counterpart Johan Morrell on their multi-year journey to rewire their organization to get better outcomes.

[00:00:22.885] I thought this was one of the best presentations of the conference, and I love how their story showed how they were trying to create value and did create value for business leaders with profit and loss responsibility, actively led by their CEO. It was such a fabulous experience report on their two attempts to reorganize: one that didn't work, and their explanation of why, and the one that did, and why.

[00:00:44.705] So I'm so delighted that Barbara submitted to present again to talk about the continuation of their journey and answer some of the questions I had after watching their talk. So here's Barbara.

Barbara Arnst

01Opening and Context

[00:00:53.475] Okay. Thank you, Gene, and thank you everybody for the warm introduction. My name is Barbara Arnst and I'm a VP Transformation at Telenet, and I'm super excited to be here and continue to share the story that we started at the DevOps Summit in Vegas last year.

[00:01:12.785] In the next 20 minutes or so, I will share some of the reflections from Telenet's multi-year Agile journey, focusing in particular on the topic of leadership mindset shifts, and how we applied some of the principles from Wiring the Winning Organization to help us navigate around those. And of course, thank you everybody for tuning in and making time for these very valuable exchanges.

02Telenet's Agile Journey Starting Point

[00:01:41.055] Let's dive straight into it. To do that, I want to briefly rewind to 2018, which is the starting point of Telenet's agile journey. But first, maybe a few words about Telenet now. Telenet is a leading telco and media player in Belgium, and we are part of the bigger Liberty Global group. We employ over three and a half thousand people and serve over 3 million customers across the country, with a portfolio of mobile, fixed, and media products that we market under the Telenet and the BASE brands.

[00:02:20.805] We entered the market as a challenger 25 years ago and have since then, on numerous occasions, disrupted the market. But already in 2018, we realized that the operating model that we had in place then, very siloed, traditional waterfall-based delivery, wouldn't set us up for success beyond 2020. It was simply too slow.

[00:02:48.485] Already back then, we embarked on a journey to revamp our operating model with the aim of continuing to set us up for success in the next decade. At the time, if we rewind to 2018, as many of you will recall, the Spotify model was very popular. It provided what seemed like an easy and out-of-the-box operating model that allowed very traditional organizations like ours to inject agility into their business model.

[00:03:20.725] And boy, we jumped on that Spotify ship. Following a series of pilots, blueprinting, preparations, and with the help of consultants, we scaled agile in early 2020. That meant that we shifted 1,500 people into squads, tribes, and chapters and implemented a whole series of agile management practices.

[00:03:48.695] Two years into that model, we took stock of where we were and what we learned. First, and remember 2022 was at the tail end of the pandemic, we realized as a company that the agile business outcomes we had envisioned mattered more than ever. We had also, as an organization, embraced the agile values and really would never go back. I think it's fair to say that agile had already become part of Telenet's DNA.

[00:04:21.205] But we also faced a lot of structural frictions in the model. For example, business, digital, and tech were all still in distinct silos. We had a lot of interdependencies between teams and conflicting priorities across the tribes. This led to frustration for many of our employees, as even delivering a simple change required alignment with 30-plus teams across the company. I think we were at a stage where, for many of our employees, the summit felt far off. Even worse, some colleagues were starting to get disillusioned that we wouldn't be able to reach it.

[00:05:02.565] In 2022, our leadership decided to really take a step back and do an honest introspection. What did we learn? In our Agile 1.0, our Spotify model, we'd put a lot of emphasis on changing culture, instilling practices like daily sprints and standups, but we'd underestimated as an organization the importance of instilling a supportive system.

[00:05:36.565] For example, we hadn't been ready to break silos in areas like digital. We hadn't taken into account IT constraints as part of the model, which is why we got tangled up like the picture that you see here. So in short, we put a lot of the transformation energy more on the softer side, but underestimated tackling the harder sides like org design or decision flows.

[00:06:04.385] So in our Agile 2.0, which we started in 2023, we decided to refocus on designing, building, and operating a model system. To do that, we started, and I think that's super important of course, from our strategy, asking ourselves: what do we really want our operating model to help us achieve?

[00:06:28.985] For Telenet, this meant winning in the relationship economy, and a catchphrase of our strategy is determined to deliver and delight. This meant that we had to be really laser sharp and focused on the customer and deliver on all the ambitious customer promises we'd set. We wanted our operating model, more than anything else, to really put customer centricity instead of, say, cost at the heart of everything we do. At the same time, we wanted to remove all of the Agile 1.0 frictions so that all of our people could put their energy into customer results rather than overheads and over-alignment.

03Agile 2.0 Operating Model Design

[00:07:13.295] How did that thinking translate into an org design? We applied the system lens and wanted to create a modular architecture built around generic building blocks, which we at Telenet called tribes. Picture a tribe as a VP-level responsibility with typically 10 to 15 teams, so 150 to 250 people in each of these units.

[00:07:42.495] The first set of tribes that we defined are super important, and they are customer tribes. These tribes own a clear set of customer outputs and are empowered with all of the means to deliver on those customer outputs. Customer outputs in our telco context could be commercial, like sales offers, or more experience-based, like managing the monthly bill cycle.

[00:08:11.925] To be autonomous, we empower these tribes with all of the business, IT, software, and people assets to be successful. In designing them, unlike our first Agile 1.0, we used techniques like domain-driven design so that we could minimize interdependencies between these tribes.

[00:08:35.565] A second building block, the blue building block, is what we call the platform tribes. These tribes are organized to design, build, and manage a common platform or offer a service that can be consumed by all of the other tribes, and they're built around scale and efficiency.

[00:08:53.485] Third and last, we also have a handful of enterprise tribes who own the operating model architecture and drive alignment across the company. They act like the glue between the more autonomous and loosely coupled product and platform tribes.

[00:09:10.175] It was our belief last year that, by their sheer design, this tribe setup would remove some of the frictions we'd encountered in the Spotify model setup and allow us to better deliver on our business agility ambitions.

[00:09:27.415] This Agile 2.0 model went live early 2023, and in many ways it was radically different from what we had before. I won't go through the org charts and all of the setup of these 40 tribes in detail, but just so you get a feel for the magnitude of the change: in this model, we don't have a classical CIO function anymore. Technology instead is federated across the company. All of these 10 yellow big customer tribes have significant development resources in them and manage the full SDLC lifecycle.

[00:10:08.965] For those of you who wonder, my tribe is one of the four pink enterprise tribes, Agility and Transformation, and we define the company operating model as well as drive the transformation forward.

04Leadership Mindset Shifts

[00:10:27.195] This was about the point where our talk in Vegas ended last year. What did the rest of 2023 bring? Let's have a look at that. We are now a year into this Agile 2.0 journey, and we designed a new simplified structure that we believed would reduce frictions, increase flow, and allow everybody in the company to better experience the agile business outcomes.

[00:10:58.795] But was the redesign enough? I think it's fair to say, of course it wasn't, and more needed to come together. If we look back at the ideas behind the operating model design, they may be intuitive and deceptively simple, but I'm probably not exaggerating that it meant that our organization and our leadership needed to develop a whole new way, not quite of the world, but certainly of seeing their business, their role as leaders, and the way we work together as a company.

[00:11:37.375] All of this took time to come together. Everybody and every individual comes with their own beliefs, of course. When we started Agile 2.0, the picture was dark, and we didn't know what we were climbing. But now it looked a bit more like this, with a lot of people coming from different sides.

[00:12:00.675] What I'll do now is walk you briefly through some of these mindset shifts that our organization and our leadership went through. Each of these is a little bit like an iceberg, in the sense that it was easy to underestimate, and it wasn't always apparent what the underlying beliefs were that were shifting.

05From Managing Teams to Owning Customer Outputs

[00:12:26.265] A first one is the change of going from managing teams to really owning customer outputs. The idea behind the operating model here was quite intuitive or quite simple. We reoriented the business towards our customers and empowered these big customer tribes with end-to-end accountability and ownership of their products. They had to operate kind of like a CEO of a microenterprise, managing everything from innovation to change to BAU maintenance, and thinkers and doers were coming together in this model also from an organization perspective.

[00:13:14.345] But the beliefs that needed to change were quite profound. In the old model, our leaders had more of a mindset of following a plan, being in control, delivering what was budgeted. But in the new model, we asked them to be a lot more lean forward, embrace risk, but also balance very carefully a full spectrum of the business. Being successful wasn't just being the person who comes up with a shiny new business idea, but also doing all of the maintenance and sometimes more boring BAU stuff. That was a big mindset shift in that area.

06From Pushing Requirements to Pulling Services

[00:13:59.545] A second one is the idea of installing platform tribes with platform tribe leads. To work with that, we had to shift from pushing requirements to pulling services. Again, the idea behind this is quite intuitive, and we believed it would lead to healthier dynamics, with the more IT teams building fewer Rolls-Royces but more appreciation from the technical teams as well.

[00:14:35.375] Again, this entailed a mindset shift on both sides. The business teams were sometimes used to throwing requirements over the wall. Now it's to consume what was on offer and play by the rules set by the platform. For our leaders, it meant rewarding the fact that you are conforming to standards rather than just creating your own solution. This was a tough shift for us, especially coming out of a few years of more of the Spotify model, with its very strong, "we are autonomous" type of message. We really had to learn to do this.

07From Managing Projects to Partnering

[00:15:14.295] A third mindset shift is shifting from managing projects to partnering. Again, the idea in the operating model is intuitive in the sense that we have business tribes. They all have their own mission to accomplish, but at times they also need to collaborate on joint missions with other tribes.

[00:15:40.315] Again, this meant stepping away from a belief that success is realizing your own pet project or securing as many of your tribe's resources. Instead, success is really looking out and asking who you can partner with for the long run. We really had to learn to look left and right more than we were used to in the old model.

08From Tolerating to Architecting the Operating Model

[00:16:07.515] Last but not least, number four: we had to start to think as operating model architects. This meant that our leaders, rather than being passive in a Dilbert sense where you tolerate an operating model, had to step up and be an active architect in that system.

[00:16:28.125] This was a relatively profound shift in the sense that our leadership wasn't only expected to be visionary on the business side of things, but also really take a role in managing their ecosystem, and not just seeing their organization as a set of lines and boxes that was a given. They really had to understand the constraints and see how they could help their teams take those away, and really make time to make that happen.

09What Transformation Can Do

[00:17:04.965] As you can imagine, that was a lot that needed to come together for our organization, for our leadership, and our transformation team actually tried to actively steer that. What I'll do now is wrap up with a few learnings on how we enabled that.

[00:17:28.685] A profound learning is, of course, that our leadership and our CEO have a lot of trust in the model. We believe it's forward thinking because it brings business and IT structurally closer together. We have a lot to learn and a lot to inspect and adapt. Our journey isn't done yet, but we fundamentally believe we're on the right path.

[00:17:54.865] Second, it's been absolutely key to inspire and enable all of our leadership to adopt the right mindsets. This is where transformation also played a role.

10Slow Things Down

[00:18:10.015] One of the most important things I think we did was deliberately slow things down. Thanks to Gene and Steve, now we have a word for that as slowification. We didn't use the term at the time, but it really remains key. We really tried to bake into the very approach of the transformation creating the mind space for System 1 versus System 2 thinking of our teams.

[00:18:40.735] Just two examples of how we did that. First, if we look at each of the tribes, remember we mixed business and IT together. They all had to go through their own transformation journey and acquire new capabilities so that they could deliver together on their missions. But we really paced that journey, and we defined what we call base camps, which are a bit preset states, and allowed each team to only go one base camp at a time and really make time to pause and learn and reflect before they would acquire new capabilities. So we cut up the journey very deliberately.

[00:19:25.575] We also learned to budget time for operating model improvements. It's included in budgets in Jira, and we really try to carve this out. Rather than viewing a transformation as a project with an end date, it's something we now structurally foresee.

11Amplify the Why

[00:19:46.205] Second is focusing on the why and anchoring that message in and amplifying it in everything we do. That's where the third principle comes in. Some of the techniques we used here: here you see our CEO, who of course supports the transformation journey, but he also makes this tangible and visible. This is a picture of one of the walls near our coffee bar, and you will recognize the mountain with the base camps and all of the metrics. We're very open and transparent on where we're at. I think that's really key to get that accountability and joint sense of purpose.

[00:20:34.965] Another example is the patterns and the colors that I showed with the tribes earlier. We really use these relentlessly to imprint a mental model into everything that we do. We are very strict about that, and I think that's also super key.

12Closing

[00:20:55.455] Over the last year, without even always knowing it, I think we'd applied at the enterprise level, at the meta level, the lessons from Wiring the Winning Organization. We simplified the org model, deliberately slowed down the pace of transformation, and all the while continued to amplify the why so that that becomes the anchor of everything that we do.

[00:21:24.355] I think our CEO will testify a bit that we're in a lot stronger position than where we were before, not only with a lot more clarity on where we want to go, but also in how we want to get there.

[00:21:39.845] As I wrap up, and of course welcome any questions and feedback in the Slack channels, I would also be particularly interested to hear your experiences in how to deliberately slow down the transformation. This took a lot of effort for us, balancing that with results pressure, but for the long run, it's good. Secondly, in amplifying these leadership mindsets, if you have any experiences on that. I will stop sharing and hand it back to Gene, but thank you everybody for your attention.

Host Close (Gene Kim)

[00:22:21.795] Thank you, Barbara. And I just want to acknowledge: thank you for the galvanizing presentation last year and this. Congratulations on all your achievements.