At the recent Agile Australia InfoQ spoke to Nigel Dalton about social experiments in modern management, applying Lean, Agile and Systems Thinking to workplaces, disruptive innovation and his goal of "20 by 2020" - having 20% of organisations using agile management approaches by 2020.
InfoQ: We are here at Agile Australia talking to Nigel Dalton. Would you mind just briefly introducing yourself for the readers?
Nigel: I could go quite a long way back, which I may not want to do, because I have recently turned 50 (it could take a long time). I graduated from Waikato University, I am a farm boy from Raglan New Zealand, and I unexpectedly find myself in one of the most fun and stressful CIO roles in the Australian economy as the CIO of realestate.com and the REA group. I have always been a lover of tech, but I’m an economist by training. Having worked all around the world, I have settled in Melbourne and I am setting out on my mission to make our economies much more Agile..
InfoQ: And you also blog at LunaTractor.com
Nigel: I do occasionally. It is a company that James Pierce and I started up after we finished up at Lonely Planet - which is not one of the great stories of my career, having applied Agile, but not getting a good business outcome unfortunately. But I can tell you that the DNA of that exercise at Lonely Planet was here at the conference in the last two days. I think I’ve met 50-60 people, all spread to the winds now in different companies.
We started LunaTractor afterwards, which we readily admit was an oddly named company. It is all about the Russian vehicles that went to the moon in the 1960s. When America set the mission as “a man on the moon by the end of the decade, and safely home again”; the Russians, with no money and lots of constraints, just sat back and asked the question in a different way. They concluded that the real question here was “What is on the moon?” not “Can we get someone there and get him back again?” So they built robots, all sorts of robots that could take rock samples, that could drive around, and that is the Lunokhod or the Lunar Rover, perhaps Moon Walker.
So, we called the company Luna Tractor. We figured that – and in fact Kiwis and Aussies are good at doing this - we can’t answer that question, but here is another question that might get closer to the real problem.
InfoQ: Answer the right problem.
Nigel: Correct.
InfoQ: You are very focused in the areas of Lean and Agile and systems thinking.
Nigel:
Yes, if somebody hadn’t got all over the ‘LAST’ (lean, agile, systems thinking) brand with quite the same marketing extent. I would use that a lot more, but, you know, there is a LAST conference here and good luck to them. It is great to bring those people together.
Lean is proving very, very insightful to the REA Group - some of the Toyota planning tools are now really hot property in our place. So, we have given away PowerPoint and spreadsheets and use A3 reporting, - the John Shook ‘Managing to Learn’ stuff. I have bought 70 copies of that book in the last three months! It is not a course, we have a ‘guild’ (like Spotify) of learners at our place who are very keen to learn and teach. It is incredible in terms of changing the way you think about solving problems, and reporting about what is going on. We even have salespeople, who instead of preparing sales plans, put them on an A3 with context, counter measures, and outcomes. I hope John Shook would be proud.
So, that is the Lean legacy for us - picking up tools like Gemba Walk and A3 reporting.
Systems thinking – I am a Seddon fan (as much as he is probably the only agilest slightly more eccentric than me), and his thinking is fabulous. The method of dealing with waste – the failure-demand, he calls it – we chase that down in our place, is a big inspiration. We have done a very big project with our call center based on this kind of thinking and the Agile stuff: you can read it online here.
I guess we finally got around to being comfortable with the word Agile. We were not comfortable with it for a while there, where it was sort of the answer to everything, but nothing in particular. So, we moved away from it. Now people realize it is a collection of practices. We probably pick our philosophies from Lean and our practices from Agile.
InfoQ: When we were chatting earlier, you used a phrase that intrigued me, that what you are doing at REA group is very much a social experiment in modern management techniques. Do you want to tell us a little bit more about that?
Nigel:
It is. We have had a really interesting time. It has just become apparent to me that some of the origins of the experiment were presented in Geoff Apps’ Zappos talk on holacracy today at the conference. They used some similar words to us, and I am wondering if I have picked those up along the way. I am the Chief Information Officer, we do have a functional organization, I am an officer of the company and was hired that way, but I spend a great deal of my time as the steward of what we call a “line of business”.
The company is divided into a set of teams focused on a kind of consumer ecosystem where each one is discreet from the others – commercial property owners is mine, which is the smallest one. Residential property owners, their agents and people looking for properties is another; finally property developers and people who are our advertising clients – with a billion page views a month it is a good place to advertise if you are a bank.
So what we have understood that it is kind of a ‘unique customer experience’ in each one of those ecosystems. What if we put a full multidisciplinary team on those and we chose a collective group to manage it? Thus, I am not the general manager of commercial real estate, there isn’t one. I am the steward or coach of a group of seven people who are IT, sales, marketing, product, legal, finance, and human-resources. Young managers in their thirties who’ve got every competency to work as a team and run that 40 million dollar business. I am there as their coach and all the Agile techniques come in under that. It is pretty self-contained and self-directed, it has its purpose and goals that flow down from the main company purpose, and we have replicated that across the company - this is the primary structure.
We built that looking at Spotify’s organization structure (which has become quite popular now) with the tribes, and the squads and guilds and chapters. So we have taken a bit of that, a little bit of Kyocera’s Amoeba management and a little bit of Gore with his way it is working (150 people maximum etc).
We have been running that experiment for a year and tremendous results. Some of the simple ones are: there is no internal customer any more. Everyone focuses on that consumer at the end of the chain; wherever you are in that chain, whether you’re in our finance team providing the resources to do it, or closer to the customer - you may be a real estate agent - you are sharing the property seeker as a focus. We all focus on them. If they are happy, the property owner is happy, the agent is happy, the bank is happy, the lawyer is happy and so on. You work right back through the value stream, which is some of that Lean thinking from John Shook’s stuff in Learning to See (one of the most impenetrable books on Lean I have ever read - I do not think my brain is big enough!).
This approach has been a tremendous success. Moving fast, communicating. All of the Agile tools - stand ups, transparency of work, etcetera play into that, and I am delighted to say that experiment is working very well.
InfoQ: The theme with this conference is disruptive innovation. What is happening there? In the digital space, certainly in real estate and property there are a lot of disruptions going on.
Nigel:
Phenomenal. I attribute some of our strengths to our attitude to dealing with disruption. We have a Board of Directors who have been some of the most disrupted media industries in Australia for the last 15 years – especially in terms of Newscorp. So their attitude to doing something about it is pretty damn good.
What we are facing is disruption in some really interesting ways. We are starting to see what happened to seek.com, with LinkedIn effectively directly connecting the job seeker and the employer. We are starting to see that happen in the property markets as well, with small and lightweight disruptions. If you look at a web site theloop.com.au – a very successful Australian community site of designers, videographers, developers, a place where they can pitch for work, put their resume, those kinds of things. There is a new tab on there with property on it and they are connecting with each other, with: “I have this spare three or four desks. Would anybody like to rent them for a period of time?” or “We have a spare back office. We can actually give you six months lease on that”. Or somebody seeking a place for a project, it is a photography project. The community has got together themselves - there is not one real estate agent or property portal on that. We are starting to see the peer-to-peer economy, the equivalent of the social lending stuff which Rachel Botsman talked about, happening in property now, and we are facing probably one startup up in that space at a month. Liquidspace got a mention on one of Rachel’s slides, and we are going “This sharing economy thing is real!”.
So we are now a ‘traditional’ media model. We are a paid advertising model in the current framework, but our strategy is to start moving towards being a player in a larger property ecosystem. We believe there is room for somebody who gets technology and gets digital, comes to the table and adds value to that ecosystem. There are all sorts of players in that: there are agents, banks, utility companies, property owners, property managers, tenants, prospective tenants, councils, lawyers.
Probably one of the biggest breakthroughs for us last year was getting a really crisp statement of purpose for the company and it is “empowering people by making the property process, simple, efficient and stress free”. Everyone who has worked for us has had a complex, inefficient and stressful property experience - whether it was renting an apartment, a share flat, or whether it was buying, or going to an auction, or otherwise. It is thus pretty easy to get a few hundred people aligned around that as a purpose.
What we see disruptive competitors doing is honing in on something that is complex or inefficient. Or with an emotional stress – you are perhaps about to spend $650.000 in 10 minutes on a property at an auction. You do not get more stressful than that, I think.
It’s about winding all those strings together and thinking of new ways of tackling that. The challenge becomes, when you run some really large web sites, breaking out of that digital operational mindset and realizing we also have to care about these new startups.
InfoQ: Within the teams, within the organizations, you do some internal innovation activities such as hack-days
Nigel: Yes, they are really important because the risk with Agile is that it can become quite routine. I see teams who burn out. It is not something you can build and hold static, but a lot of people try to.
We get a lot of change and innovation within the teams, but we rely on a quarterly two-day hackathon, or hack-day experience to just connect all the creative juices of the company. We started three years ago, and they used to be just 20 techies coming together and solving a problem with a code repository or database or make something cool. It is 350 people from all parts of the company now, and they are building an amazing array of solutions and of course, it is in the Cloud, AWS, Heroku or whatever you are going to use. You can probably get that in production in two days, and the things they are making now are just remarkable.
It has been truly fascinating to watch. The hot property for your hack team right now? A sales person. Not a UX designer or a coder or anything like that. It is a sales person. For two reasons: one – they are closer to the customer, they have actually got the insights on what would be a cool problem to solve; number two – we run our voting on a Town Hall kind of basis, so it is like a big market place. Everyone sets up a stand, demonstrates their software or their hardware – we got a lot of hardware hacks lately – and you have to sell it. We all go round as investors with our three coins and we invest in the ones we like. So sales people are absolutely the hot property. The pitch for teams is the most fun.
InfoQ: So, some interesting stuff coming out of it. Anything that you can point us to?
Nigel:
Yes, you know, the other thing we are doing is reaching out with hack-days. So, it is not an internal thing so much anymore. We have been in hack-day with Bankwest and Seek. We are looking for partners to go and spread this with. We got over ourselves in terms of thinking “Oh, my God. They are going to steal our staff!” or “They are going to steal our way of working!” This is bigger than that. This is Australia, tand his is New Zealand getting away from being a mining and dairy center of the planet and into being an innovative kind of world, and hacking is definitely the way to do it, and we’re going from there.
We have had some fun with other companies in doing hack-days and the next hack-day is a really special one. That will be at the beginning of October and we called it Hack-it-forward. The teams there are going to be formed earlier, we are going to have an Iteration Zero and you have to choose a charity. So you have to find a charity to solve a problem for, and that is great if they are around areas we align with - such as homelessness, and some particular streams of that problem. We do a lot work with homelessness that is a result of domestic violence - we think we can make a big difference to that issue. But there are many charities that people are interested in and so that is it: you find to find a charity and you have to build a hack for them, and that is something people are very excited about. We always learn, and I do not think it is about the money, I think it is about learning, creativity and in this case some social good.
InfoQ: Autonomy, mastery & purpose from Dan Pink’s work?
Nigel: Oh, completely. No truer three things were said. This is my connection I am seeing at the conference – especially the holacracy stuff today. It really is so many threads of thinking coming together now, and autonomy, mastery and purpose clearly link closely to what holacracy means in terms of extreme autonomy. Really, within that slightly weird structure in the company, the mastery piece for my technical family is my responsibility. It is enabling them to have mastery that still is a functional thing within the predominately line of business tribal structure.
InfoQ: The last thing: we were talking earlier and you mentioned your wild idea: 20 by 2020.Tell us about that.
Nigel: I have been working in an Agile over 14 years now, and I can actually see my way in my life to 2020, and I think this is a fair goal. I see the difference it is making to businesses becoming Agile. We saw it today with the Commonwealth Bank. I can see it in REA - you must see it every day in your work Shane. If we can get 20% of Australian and New Zealand businesses, small and large, working in Agile ways by 2020, I think we would make significant difference to the next generation’s options. I have a 13 year old and am not that keen on him becoming some unemployed third-world worker because all the coal is gone, and all the iron ore is gone. I want him working in an Agile way, with creative multi-disciplinary teams. By 2020, 20% of businesses – can we do it?
InfoQ: It should be achievable.
Nigel: : It is hard to benchmark now, but my intuition is 5% or less of Australian businesses work this way. A lot of the smaller businesses do it intuitively. When they get big, they falter. The bigger businesses are coming downtown and for me that means to stop being cynical about some of the big businesses, which has been very easy for the Agilists to do. For me, when the Telstra domino tips in Australia we will have Suncorp and we will have critical mass – thousands of people who are familiar with the benefits of this way of working and I think there is going to be another generation who is coming through now, the thirty something year olds, moving in and they will toss old buggers like me out of their jobs. They will only want to work Agile and that gives us a much better economic future.
InfoQ: Inspiring stuff. Nigel, thank you for taking the time to talk to us today. It was really good to catch up and I am looking forward to seeing where this goes.
Nigel: Always a pleasure to see you Shane.
About the Interviewee
Nigel Dalton is Chief Information Officer at the REA Group in Melbourne.
A veteran Agile evangelist with over 14 years of experience applying Agile principles to IT and product development in the USA, Australia and NZ. Nigel was also the co-founder of Luna Tractor, a business consultancy company taking Agile and lean thinking beyond software development to all areas of business and organisations. Luna Tractor leveraged the experience gained in the transformation of Lonely Planet between 2007 and 2011, with over 20 teams running variants of Agile, kanban and lean methods to support their aim to make amazing guides in all formats for customers.
At REA-Group Nigel takes a strong interest in broad application of lean, agile and systems thinking approaches around the workplace.