Welcome to Modern Digital Business!
June 8, 2023

Getting What You Intend from Your Organizational Design -- Business Breakthrough 3.0 with Ken Gavranovic

On this episode of Modern Digital Business, Lee invites Ken to discuss organizational design principles and the importance of aligning teams and leaders to drive desired outcomes. The conversation covers various topics such as the Kubler-Ross change curve, company culture, and the "Valley of Despair" during a migration or transformation projects. They also share practical guidance on implementing Agile methodologies and how to articulate the value of that to higher-ups.

This episode announces the new book, Business Breakthrough 3.0, written by Lee Atchison and Ken Gavranovic. Lee and Ken emphasize the importance of effective communication within organizations.

Quotes

Creating Dynamic Organizations: "If you can really think through those patterns, not only do you build a highly profitable, fast moving organization [...] but it's also a win for the employees, because when you create that kind of dynamic organization, customers love the business, and employees simply love their job."

— Ken Gavranovic 

"Measuring Organizational Improvements: Companies often make one of three mistakes when they determine what data they want to measure. They either measure not enough data, measure too much data, or just measure the wrong things."

— Lee Atchison

The Importance of Instilling Company Values: "If you think about employees that say they're engaged, the quality of work that they do, versus somebody who feels they're just a cog on the wheel, they're just going through the motions. And the efficiencies are night and day at all scales of organizations."

— Ken Gavranovic

The Power of Subconscious Mentality: "When I think of in our own subconscious minds, the thing that comes to mind the most is when you see commercials for restaurants showing you pictures of food that make you hungry, and you're more likely to spend more money, the more, the hungrier you are."

— Lee Atchison 

"The Importance of Organizational Design: if you have poor organizational design, you're going to have poor results."

— Ken Gavranovic

"Organizational Structures: If you want to have your organization respond in a certain way, you want to organize it in a way that allows that response to occur."

— Lee Atchison 

The Importance of Instilling Company Values: "If you think about employees that say they're engaged, the quality of work that they do, versus somebody who feels they're just a cog on the wheel, they're just going through the motions. And the efficiencies are night and day at all scales of organizations."

— Ken Gavranovic

"The Valley of Despair": "But so many companies will actually stop right in the middle of that valley when things are worse than they were before and won't finish their project or won't finish the migration because they've lost track of what they really valued in the migration and frankly, why they started doing it in the first place."

— Lee Atchison

Q&A

1. What is the importance of organizational design in driving desired outcomes?

Answer: Poor organizational design can lead to unhealthy friction and frustration. Therefore, it is important to be intentional about organizational design and set up people processes to drive desired outcomes.

2. What are the consequences of lack of alignment between teams and leaders?

Answer: Lack of alignment between teams and leaders can cause friction and misalignment in the organization.

3. What is the Federated direct line reports center of Practice?

Answer: Detailed principles like Federated direct line reports center of Practice can help with organizational design.

4. Why should leaders be careful about what they measure and display?

Answer: People always do what they're incentivized to do; leaders need to be careful about what they measure and display. Measuring activity doesn't necessarily drive behaviors, and companies can fail if they focus on activity over outcomes.

5. How can companies ensure that everyone is aligned with the outcome?

Answer: Teams should be focused on outcomes and measurements should be visible to employees, so everyone knows how they're being measured. If teams are aligned with the outcome, they can work together and pivot on the strategy as long as they achieve the outcome.

6. What is the Kubler-Ross change curve?

Answer: The Kubler-Ross change curve is a model of the different stages people go through during change. These stages include shock, denial, disappointment, pivot, and acceleration, and can be applied to any transformation.

7. What is the importance of culture in a company?

Answer: Culture includes values, mission, vision, and how it's practiced in a company. Leaders who overlook toxic behavior by top performers are not living the culture and can harm the company, causing good employees to leave. It is essential to define and live culture purposefully.

8. What is the "Valley of Despair" in relation to migration or transformation projects?

Answer: The "Valley of Despair" is a period in transformation projects where the disadvantages tend to show up before the advantages, resulting in a dip in the application's performance or other negative effects. Many companies tend to lose focus and forget their objectives during this low point, which causes them to measure and focus on the wrong things.

9. What is the benefit of implementing a strong company culture?

Answer: Implementing a strong company culture can lead to a 30% to 40% increase in the efficiency of the organization and a 30% to 60% increase in employee engagement and job satisfaction.

10. Why is effective communication important in organizations?

Answer: Effective communication within organizations leads to success. Siloed mentality and walls occur when communication is not successful.

Timestamped Overview

[00:02:16] Organizations have a subconscious mentality influenced by stimuli such as food commercials leading to more spending, similar to how individuals react subconsciously.

[00:04:35] Culture needs to be purposeful, defined, and lived out, as it encompasses a company's values and how they are implemented. Failure to adhere to the culture, such as allowing toxic behavior to go unchecked, can be detrimental and cause the best people to leave.

[00:07:14] Two thirds of US employees are not engaged at work, causing both personal and company inefficiencies. Proper implementation of culture can lead to up to a 40% increase in organizational efficiency and employee engagement.

[00:09:45] Measure outcomes over activity, be careful what you measure and display, and make it visible to employees. Teams should focus on outcomes and pivot autonomously to achieve them, leading to better alignment and collaboration.

[00:14:14] Change is difficult for people and organizations, but with the right strategy and communication, it can lead to transformation, empowerment, and fulfillment. This applies to various situations, such as IT projects, personal transformations, and turnarounds in business or teams.

[00:19:44] Focusing on individual tasks without a bigger picture can lead to counterproductive results in an organization. A person's focus should be broad enough to encompass the organization's goals.

[00:21:50] The text discusses the importance of structuring teams to avoid inefficiencies and miscommunication. It includes examples of companies that struggled due to poor structural alignment and emphasizes the need for clear leadership and customer focus.

[00:25:45] Effective collaboration leads to success, discussed in book Business Breakthrough 3.0, available in a variety of formats. Expert guest Ken Garadovich thanked for his contribution to Modern Digital Business podcast.

Key Topics

Organizational Design:

- "You get what you design for"

- Lack of alignment can cause friction and misalignment

- Federated direct line reports center of Practice can help with organizational design

- Importance of being intentional about organizational design

- Outcomes over activity should be the focus

Transformation and Culture:

- Kubler Ross change curve can be applied to any transformation

- Culture includes values, mission, vision, and how it's practiced in a company

- Toxic behavior by top performers can harm the company

- Importance of defining and living the culture purposefully

- Valley of Despair in relation to migration or transformation projects

- Providing practical guidance on implementing Agile methodologies and how to articulate the value of that to higher-ups

- Two-thirds of employees in the United States are not actively engaged in work

- Implementing a strong company culture can lead to a 30%-40% increase in the efficiency of the organization

- The speaker believes that uncovering patterns of success can be crucial for a business to scale

Communication:

- Successful communication within organizations leads to success

- Siloed mentality and walls occur when communication is not successful

Book Recommendation

- "Business Breakthrough 3.0" by Lee Atchison and Ken Gavranovic talks about marketing strategies such as product-led growth and sales lead growth

- The book is available in various formats on Amazon and other platforms

Conclusion:

- The podcast host thanks Ken for being a guest and working on the project together

 

Today on Modern Digital Business

Thank you for tuning in to Modern Digital Business. We typically release new episodes on Thursdays. We also occasionally release short-topic episodes on Tuesdays, which we call Tech Tapas Tuesdays.

If you enjoy what you hear, will you please leave a review on Apple Podcasts, Podchaser, or directly on our website at mdb.fm/reviews?

If you'd like to suggest a topic for an episode or you are interested in being a guest, please contact me directly by sending me a message at mdb.fm/contact.

And if you’d like to record a quick question or comment, click the microphone icon in the lower right-hand corner of our website. Your recording might be featured on a future episode!

To ensure you get every new episode when they become available, please subscribe from your favorite podcast player. If you want to learn more from me, then check out one of my books, courses, or articles by going to leeatchison.com.

Thank you for listening, and welcome to the modern world of the modern digital business!

Useful Links

About Lee

Lee Atchison is a software architect, author, public speaker, and recognized thought leader on cloud computing and application modernization. His most recent book, Architecting for Scale (O’Reilly Media), is an essential resource for technical teams looking to maintain high availability and manage risk in their cloud environments. Lee has been widely quoted in multiple technology publications, including InfoWorld, Diginomica, IT Brief, Programmable Web, CIO Review, and DZone, and has been a featured speaker at events across the globe.

Take a look at Lee's many books, courses, and articles by going to leeatchison.com.

Looking to modernize your application organization?

Check out Architecting for Scale. Currently in it's second edition, this book, written by Lee Atchison, and published by O'Reilly Media, will help you build high scale, highly available web applications, or modernize your existing applications. Check it out! Available in paperback or on Kindle from Amazon.com or other retailers.

Don't Miss Out!

Subscribe here to catch each new episode as it becomes available.

Want more from Lee? Click here to sign up for our newsletter. You'll receive information about new episodes, new articles, new books, and courses from Lee. Don't worry, we won't send you spam, and you can unsubscribe anytime.

Mentioned in this episode:

LinkedIn Learning Courses

Are you looking to become an architect? Or perhaps are you looking to learn how to drive your organization towards better utilization of the cloud? Are you you looking for ways to help you utilize a Cloud Center of Excellence in your organization? I have a whole series of cloud and architecture courses available on LinkedIn Learning. For more information, please go to leeatchison.com/courses or mdb.fm/courses.

Courses by Lee Atchison

Atchison Academy

What do 100,000 of your peers have in common? They've all boosted their skill set and career prospects by taking one of my online courses. https://mdb.fm/courses

Transcript

Speaker:

What does your subconscious mind have to do with how

 

Speaker:

you run your business? Well, a lot more than you might

 

Speaker:

expect. We have an extra special show today.

 

Speaker:

Are you ready? Let's go.

 

Speaker:

This is the Modern Digital Business podcast, the technical

 

Speaker:

leaders guide to modernizing your applications and digital business.

 

Speaker:

Whether you're a business technology leader or a small business innovator,

 

Speaker:

keeping up with the digital business revolution is a must.

 

Speaker:

Here to help make it easier with actionable insights and recommendations,

 

Speaker:

as well as thoughtful interviews with industry experts. Lee Atchison.

 

Speaker:

My guest today is a great friend of mine. He's been a CEO,

 

Speaker:

a CPO, a CTO, and founder of his own

 

Speaker:

company that he successfully brought to an IPO.

 

Speaker:

I've worked with him for many years, and we've recently co authored

 

Speaker:

a book that talks specifically about building a better business.

 

Speaker:

He is one of my very best friends, Ken Gerardovich.

 

Speaker:

Ken. Welcome to modern digital business. Lee,

 

Speaker:

thanks for having me on. I'm really excited about our conversation and so

 

Speaker:

excited about our book. I'm so excited about this book as well, too.

 

Speaker:

So just to get everyone on the same page, ken and I

 

Speaker:

co wrote a book. It's been in the works for

 

Speaker:

about 1518 months now, and it's been

 

Speaker:

released just recently. I'm very proud to announce the

 

Speaker:

rival my latest book. Ken, your first book, business Breakthrough

 

Speaker:

3.0. Ken, how does it feel now to be a published

 

Speaker:

author? Well, it's exciting, and obviously,

 

Speaker:

I couldn't have done it without you, Lee. So it was really exciting to work

 

Speaker:

with somebody who's actually written books in the past and put

 

Speaker:

into place something that you and I have seen so

 

Speaker:

many times is companies are

 

Speaker:

really only a collection of people, and they have those entrenched patterns.

 

Speaker:

And if you can really think through those patterns, not only do you

 

Speaker:

build a highly profitable, fast moving organization, but I know

 

Speaker:

one of the key things. You and I were both excited. That's a win for

 

Speaker:

the company, but it's also a win for the employees,

 

Speaker:

because when you create that kind of dynamic organization,

 

Speaker:

customers love the business, and employees simply love their job.

 

Speaker:

Ken, when you and I first started working on the book, we focused

 

Speaker:

a lot on what we call the subconscious mentality and how

 

Speaker:

organizations have a subconscious mentality. When I think of

 

Speaker:

in our own subconscious minds, the thing that comes to mind the most is

 

Speaker:

when you see commercials for

 

Speaker:

restaurants showing you pictures of food that make you hungry,

 

Speaker:

and you're more likely to spend more money, the more,

 

Speaker:

the hungrier you are. I can actually say those words.

 

Speaker:

I really can. But the idea is, your subconscious is what's equating

 

Speaker:

the site of food with the actual increase

 

Speaker:

in hunger. It's not a real increase in hunger. It's a perceived subconscious

 

Speaker:

reaction to seeing the food. The same sort of

 

Speaker:

mentality applies to businesses as well.

 

Speaker:

Businesses have their own minds. Yeah. Well, let's go back

 

Speaker:

just to that part about us individually, because I've spent a lot of time

 

Speaker:

thinking about why I do the way things I do, why employees,

 

Speaker:

what's really the motivator? And I'm again, big believer,

 

Speaker:

aside from the business part, is we all have kind of got this subconscious

 

Speaker:

mind that's running us really based upon patterns that

 

Speaker:

are millions of years old.

 

Speaker:

We feel safety in numbers. Why? Because a long time ago, maybe a

 

Speaker:

dinosaur might have eaten us if we weren't safety in

 

Speaker:

numbers. You think about training like you've ever heard like NLP,

 

Speaker:

where our mirror matching, where if somebody has the same posture

 

Speaker:

as us, we feel more comfortable with that person. Well,

 

Speaker:

you think about businesses. Businesses are really just a collection

 

Speaker:

of people that believe in those same kind of patterns.

 

Speaker:

If you're not careful, could be running your business, could be poisoning

 

Speaker:

your business, or could be really helping your business scale. And I think that was

 

Speaker:

one of the things that we thought, like, there's something really here to uncover

 

Speaker:

because it's really the patterns of success. Yeah, that's absolutely right.

 

Speaker:

It's breaking old patterns, creation of new patterns that

 

Speaker:

make sense for your organization and rebuilding

 

Speaker:

your business essentially from the ground up. So we

 

Speaker:

talked a lot about the importance of culture and we both know that

 

Speaker:

culture is critical to every organization.

 

Speaker:

Ken, what do you think about that?

 

Speaker:

Well, I always think about we've talked about this and

 

Speaker:

worked with a lot of companies. A lot of companies. Like if you walk in

 

Speaker:

and you say, hey, culture is important, everybody will say Culture

 

Speaker:

is important. Every consultant will say, Culture is important. Every company

 

Speaker:

will say, yes, culture is important here. But what we talk about is

 

Speaker:

really being purposeful in your culture, defining it

 

Speaker:

and living it. Because again, a lot of times people have words.

 

Speaker:

But culture is really powerful because it encompasses

 

Speaker:

not only your mission, your vision, your set of core values,

 

Speaker:

but how you're living it. Like, for example, let's say that

 

Speaker:

your culture is no aholes here, just throwing it

 

Speaker:

out like raw. But you have a salesperson

 

Speaker:

or you have a leader who's fantastic at their job but treats

 

Speaker:

everybody like dirt. And leadership overlooks that

 

Speaker:

you're not living your culture. And that's like a poison in

 

Speaker:

the body, a poison in your company that just feeds in

 

Speaker:

and slowly all the people that showed up because of the culture

 

Speaker:

disappear. And usually those are your best people. And Leah,

 

Speaker:

obviously we don't name companies and all that kind of stuff, especially different experiences,

 

Speaker:

but we've seen companies where they have a culture that attracts

 

Speaker:

the best talent. Like people hear about it,

 

Speaker:

they come the top talent even if they're not getting top dollars,

 

Speaker:

join the company. And then suddenly they

 

Speaker:

don't announce that they've changed the culture, but they start to hire people that are

 

Speaker:

not aligned to that culture. And bad things happen.

 

Speaker:

Yeah. The mindset that we need to make

 

Speaker:

money or we need to solve this business problem and this person will

 

Speaker:

solve this business problem. I know they've got these

 

Speaker:

cultural issues. We'll just deal with those separately. In fact, the matter

 

Speaker:

is you don't deal with them separately and you can't deal with those

 

Speaker:

sorts of issues separately. They're part of your culture. And if you don't stay

 

Speaker:

aligned with your culture, your whole organization will fall apart.

 

Speaker:

Yeah. And that's where I like in our book, we really tried to

 

Speaker:

have actionable ideas. Like, we're talking about it here at the high level.

 

Speaker:

What is Mission Vision and how do you set about a

 

Speaker:

core values? But we also talk about how do you actually activate

 

Speaker:

that, how do you instill that in your organization?

 

Speaker:

And we talk about even some of the metrics I forgot the

 

Speaker:

exact metric. But if you think about employees that

 

Speaker:

say they're engaged, the quality of work

 

Speaker:

that they do, versus somebody who feels they're just a cog on the wheel,

 

Speaker:

they're just going through the motions. And the efficiencies are night and

 

Speaker:

day at all scales of organizations.

 

Speaker:

We know that culture is important. Yeah, that's so

 

Speaker:

true, Lee. And just think about it from a stats. I know one

 

Speaker:

of the things that really got us motivated is

 

Speaker:

this is crazy. Literally two thirds of

 

Speaker:

us. Employees are not actively engaged in work. That means

 

Speaker:

that they're going to work and they're not bringing their whole self.

 

Speaker:

Two thirds of the entire employee base

 

Speaker:

in the United States, according to one survey, are not actively

 

Speaker:

engaged. Not only is that a terrible way for them to

 

Speaker:

spend, the most important thing that they have on this planet

 

Speaker:

is their personal time. That's a waste. But that's a waste

 

Speaker:

of efficiency also for the company. So one of the things that I'm a big

 

Speaker:

believer of doing culture and some of the things that we share in the book

 

Speaker:

and doing it right is the impact it has not only

 

Speaker:

to get to the employees, but the companies. And what we're

 

Speaker:

seeing when people do it right and do some of the things we've talked about

 

Speaker:

as much as a 30% to 40% uplift

 

Speaker:

in the efficiency of the organization registered by multiple different

 

Speaker:

frameworks. But just as importantly,

 

Speaker:

I think, to both of us, is you see almost the

 

Speaker:

same amount of increase, sometimes 30, 40, 50,

 

Speaker:

60% of employees saying that they're

 

Speaker:

actively engaged in their job. In other words, they enjoy what

 

Speaker:

they're doing and they feel that they deliver value every day. So this is

 

Speaker:

a huge win, the things we're talking about. That's why I'm so excited again

 

Speaker:

to be on the podcast. And it's part of that subconscious

 

Speaker:

mindset that creates the organization. And that's

 

Speaker:

the data that makes this really a true statement.

 

Speaker:

Now we're talking about measuring here now

 

Speaker:

and the sorts of data that you can measure and should

 

Speaker:

measure in order to show that you're making improvements in the organization.

 

Speaker:

But what we're finding is that companies

 

Speaker:

often make one of three mistakes when they determine

 

Speaker:

what data they want to measure. They either measure not

 

Speaker:

enough data, they're insufficient in

 

Speaker:

determining what they're trying to measure within their organization,

 

Speaker:

or they measure too much data. They're gathering every little piece

 

Speaker:

of data and then they can't get value out of that quantity of data that's

 

Speaker:

available to them. Or they just measure the

 

Speaker:

wrong things. They're measuring something that is irrelevant

 

Speaker:

to what the real core problem is.

 

Speaker:

Ken, what's your thoughts on those three things? Well, I think we

 

Speaker:

point this out of the book. There's a couple of things I'm a big believer

 

Speaker:

is at the end of the day, people always do what

 

Speaker:

they're incentivized to do. So you got to be really careful as

 

Speaker:

a leader, as head of a company,

 

Speaker:

what you measure. And they always

 

Speaker:

say measure what matters. But I like to think about a different way.

 

Speaker:

And I think we hit this out in the book. I know you and I

 

Speaker:

are 100% aligned is outcomes over activity is

 

Speaker:

what are the key outcomes. And that goes kind of ties into some of the

 

Speaker:

frameworks, whether it be objective key results or different critical

 

Speaker:

thinking frameworks. But you need to measure the right

 

Speaker:

thing. You need to keep in mind be careful what you measure and

 

Speaker:

display. We also talk about showing it to employees. Like if you're measuring it at

 

Speaker:

the executive level and no one sees the data, you might as well not do

 

Speaker:

it. It's not going to drive any behaviors. What you want to do

 

Speaker:

is measure outcomes. So outcomes is what

 

Speaker:

you drive, not activity. Because think about how many

 

Speaker:

times we've seen a really big

 

Speaker:

400 million dollar It transformation.

 

Speaker:

Everybody has a bunch of activity. Checkmark the

 

Speaker:

project's on time, on plan, and then it fails on

 

Speaker:

delivering the outcomes. I think we

 

Speaker:

talked a little bit about this in the book. One Fortune

 

Speaker:

50 healthcare company that had done in this case a cloud

 

Speaker:

transformation, they failed and

 

Speaker:

spent I think 5100 million dollars. The first time they failed,

 

Speaker:

did 5000 million in both those times they were measuring

 

Speaker:

activity. We're going to go to the cloud and then we're going to

 

Speaker:

be more agile. Our teams are going to be more engaged,

 

Speaker:

we're going to be able to recruit better people. It wasn't until they

 

Speaker:

really focused on why are we going to the cloud, it's really to drive that

 

Speaker:

agility what are the outcomes we're trying to drive with this activity,

 

Speaker:

in this case moving to the cloud. And so I'm a big believer,

 

Speaker:

whatever it is, focus the teams. And again, I know we've got

 

Speaker:

this in the book, focus on those outcomes over activity

 

Speaker:

and then make it visible to the employees, share it with everybody so they know

 

Speaker:

how they're being measured, which is on outcomes. And teams can

 

Speaker:

pivot. I know we talk about autonomy with constraints in the book,

 

Speaker:

but if you've got your teams aligned with the outcome, then everybody's rowing in

 

Speaker:

the same direction. They're in different parts of your organization,

 

Speaker:

but they're no longer siloed. They're working together. And you give them

 

Speaker:

the autonomy because they can pivot on the strategy to get the

 

Speaker:

outcome as long as they achieve that outcome.

 

Speaker:

Yeah, that fits in really well into something that I don't think we

 

Speaker:

talk specifically about in the book, but I certainly talk a lot about.

 

Speaker:

And that's what I call the Valley of despair.

 

Speaker:

This is when you're going through a migration or a transformation project.

 

Speaker:

Inevitably, as you go through that project,

 

Speaker:

the disadvantages of the migration show up

 

Speaker:

before the advantages do. You have to put in effort.

 

Speaker:

You put in work. You're transforming your application. So your

 

Speaker:

application slows down before it speeds up. It gets more complex

 

Speaker:

before it becomes simplified. All of these sorts of things happen,

 

Speaker:

tend to happen, with the negatives starting to appear

 

Speaker:

in a large scale project before the positives do. And so

 

Speaker:

you see a dip in your application and whatever you

 

Speaker:

value within the organization before you

 

Speaker:

start seeing the ramp up at the end to the

 

Speaker:

real value you're looking for. And I call that the Valley of Despair.

 

Speaker:

That low point. I see so many companies forget

 

Speaker:

what they're striving for and why they entered this

 

Speaker:

project in the first place. When they're in this valley, all they're seeing is the

 

Speaker:

negatives. All they're seeing is the problems. Should we have started this cloud migration?

 

Speaker:

Things are more expensive now. Things are more complicated now.

 

Speaker:

Our application is slower. Why did we ever do this?

 

Speaker:

Well, we did it because of these sets of

 

Speaker:

objectives that we were trying to accomplish when we got to the cloud,

 

Speaker:

but we're not there yet. But so many companies will actually stop

 

Speaker:

right in the middle of that valley when things are worse than they

 

Speaker:

were before and won't finish their project or won't finish the

 

Speaker:

migration because they've lost track of what they really valued in the

 

Speaker:

migration and frankly, why they started doing it in the first place.

 

Speaker:

They're measuring the wrong things. They're evaluating the wrong things

 

Speaker:

they're achieving. They're focusing on the wrong objectives.

 

Speaker:

Leah I think that's so important. That valley just reminds

 

Speaker:

me going back to at the end of the day, companies are just

 

Speaker:

collection of people. And I don't know the right way to say I

 

Speaker:

think I always think about the Kubler Ross change curve. But if you

 

Speaker:

think about any type of transformation when

 

Speaker:

you're changing people because people like, we don't like change. Right.

 

Speaker:

It's uncomfortable at first. It's that shock

 

Speaker:

and denial, like, why are we even doing this? And then it's

 

Speaker:

kind of like, oh, disappointment. This isn't going to work. I don't know if this

 

Speaker:

is going to work. And then once they start to see it, then it's

 

Speaker:

that pivot, and then you've got that pivot up in acceleration.

 

Speaker:

And it's funny that you said that. Whether it be like an It project

 

Speaker:

or I've run marketing teams or sales

 

Speaker:

teams, you got to have the right strategy. And we talk a lot about in

 

Speaker:

the book is like, what are the tactical strategies to

 

Speaker:

succeed? So you have to have that, but you also have to communicate

 

Speaker:

that transformation you were just hitting is we've got a plan

 

Speaker:

in human nature. We're all going to have doubts,

 

Speaker:

but let's stay on the plan, let's focus on the outcomes,

 

Speaker:

and then we'll get past this dip and everybody will be excited. It's the

 

Speaker:

same thing. I go back to autonomy. When you first introduce

 

Speaker:

outcomes over activity into an organization,

 

Speaker:

at first it's like, wait, what? You're going to

 

Speaker:

let me make decisions? I'm going to have autonomy.

 

Speaker:

I don't know if I like that. I think I just like to do what

 

Speaker:

somebody else said or what's the boss's plan? Or oh, it's this new

 

Speaker:

transformation leader. I guess we'll do what they say and then

 

Speaker:

they flip it on you and they say, no, I want you to

 

Speaker:

drive these outcomes. And then suddenly you're sitting with it as

 

Speaker:

an individual contributor, as a manager, going through, okay, well,

 

Speaker:

wait, hold on, I'm responsible for those outcomes. So activity

 

Speaker:

is no longer success. I don't know if I feel comfortable. But then

 

Speaker:

going back to human nature, once you feel like now you're in charge of

 

Speaker:

your own destiny, you know what success is outcomes.

 

Speaker:

You've got alignment, you've been empowered to make the decisions,

 

Speaker:

then you start to get that excitement and happiness and you feel so

 

Speaker:

much more fulfilled in your job. So it's so funny how

 

Speaker:

whether it's an It project, whether it's a personal transformation,

 

Speaker:

whether it's a turnaround in the business or turnaround in a team or

 

Speaker:

new leader, it seems like we always go through that same pattern

 

Speaker:

of down, okay, is this really going to happen? And then assuming

 

Speaker:

you've got the right plan up into the right, it all.

 

Speaker:

Goes to show that a business and a human

 

Speaker:

being all have the same mentality model.

 

Speaker:

They have a mentality, they have a personality,

 

Speaker:

they have a culture that has

 

Speaker:

to be understood and has to be appreciated in order to

 

Speaker:

succeed. Yeah, I absolutely

 

Speaker:

agree. One of the other part I think that goes with that,

 

Speaker:

what's the other structures? I think we've hit on like company mission, vision,

 

Speaker:

core values, critical thinking frameworks,

 

Speaker:

what to measure. But I think the next part is really also as

 

Speaker:

far as a company and enterprise. And again, you and I

 

Speaker:

have done Fortune 50 to startups,

 

Speaker:

been all different sizes. You got to make sure

 

Speaker:

you have the organizational structure to drive successful

 

Speaker:

actions. Love to spend a few minutes on

 

Speaker:

that. Absolutely. That's the next of the

 

Speaker:

five main distinct processes we talked about. I think that's actually

 

Speaker:

number four, which is organizational structures

 

Speaker:

and how your organization

 

Speaker:

acts, the way it's structured. And if you want to have

 

Speaker:

your organization respond in a certain way, you want to

 

Speaker:

organize it in a way that allows that response to occur.

 

Speaker:

No, I totally agree. And one of the phrases a

 

Speaker:

mentor of mine used to use when he was thinking about organizational design

 

Speaker:

principles is I always like those simple phrases,

 

Speaker:

just think about this is you get what you design for.

 

Speaker:

And I've seen so many times where,

 

Speaker:

let's say one team that reports up under this person

 

Speaker:

and this leader and this other person reports under this leader

 

Speaker:

and they're not in the same page. And people lower in the organization have lots

 

Speaker:

of friction. There's just a disconnect. They're misaligned.

 

Speaker:

And people are like, why are these team members misaligned?

 

Speaker:

Well, they're doing exactly what the organization

 

Speaker:

was designed to do. If you have poor organizational

 

Speaker:

design, or again, be very intentional about

 

Speaker:

that, like sometimes from an organizational design you can create healthy

 

Speaker:

tension, which I think in many cases is good for an organization.

 

Speaker:

You've got some kind of checks and balances, but you can also,

 

Speaker:

through poor organizational design, have unhealthy friction.

 

Speaker:

And that's just where people get frustrated with each other. They're not

 

Speaker:

on the same page. So it's really important

 

Speaker:

to do that. And I know we go into some really detailed principles.

 

Speaker:

If people haven't heard of Federated direct

 

Speaker:

line reports center of Practice we go into a lot of

 

Speaker:

different people processes that you can set up from an organizational design

 

Speaker:

so that you get the outcomes that you're driving for because we can have

 

Speaker:

all the other things done right. But if you have poor organizational design you're

 

Speaker:

going to have poor results. I think back to a

 

Speaker:

rather small example, but I think a very pointed example. I think a

 

Speaker:

lot of us might relate to. My very first project out of

 

Speaker:

college. I was working at Hewlett Packard and had

 

Speaker:

a manager that there's this two person project.

 

Speaker:

There was a person who was writing the code and a person that was testing

 

Speaker:

the code. And my first job was to test this code.

 

Speaker:

I was straight out of college, wanted to do well in my job.

 

Speaker:

I wanted to know what are my requirements, what am I supposed to accomplish?

 

Speaker:

My manager said, Your job is to find as many bugs as you possibly

 

Speaker:

can. So I set out to find as many bugs as

 

Speaker:

I possibly can. And every time I found a bug, I said, I found another

 

Speaker:

one, here's another one. And I was so happy that I was doing

 

Speaker:

what I was supposed to be doing. And I was reporting to my manager saying,

 

Speaker:

look at all these bugs I found, look at all these bugs I found.

 

Speaker:

And everything was great till suddenly my coworker sat

 

Speaker:

me down one day and said, why are you celebrating so much

 

Speaker:

of the mistakes I'm making. And that's when

 

Speaker:

I realized that, no, that wasn't really what I should

 

Speaker:

have been trying to do. That's what I was directed to do. That's what I

 

Speaker:

was being rated on doing. That's what I was being graded

 

Speaker:

on doing. But that wasn't the goal. The goal was the both of us

 

Speaker:

was building something that was supposed to be high quality.

 

Speaker:

So we sat down, we figured out what we really should be judging each other

 

Speaker:

on, brought that back up to our manager, who totally

 

Speaker:

agreed and went with that. But it was just a simple example.

 

Speaker:

But that same sort of problem shows up in larger

 

Speaker:

organizations of different sizes of shapes, et cetera, is you

 

Speaker:

get what you organize for, you get what you value

 

Speaker:

within the organization. And that may be good,

 

Speaker:

that may be bad, but whatever it is that you're asking for is

 

Speaker:

what you're going to get. And that may not fit in well with the

 

Speaker:

rest of the organization and may not be actually what you're looking for. You have

 

Speaker:

to think more expansively about what you're trying to accomplish in

 

Speaker:

order to get the right goals for the organization rather than

 

Speaker:

the individual goals. No, I think that's so

 

Speaker:

spot on. Lee. And again, one of the things that I know we really try

 

Speaker:

to do in this book is really put a how to to do some of

 

Speaker:

these things because I've seen so many times where people just don't have

 

Speaker:

the experience. Or maybe not even the power to maybe they've got

 

Speaker:

the experience. But how to articulate that? Maybe to their

 

Speaker:

boss, their VP, their SVP, their CIO, their CTO, their CPO.

 

Speaker:

But these things show up repeatedly. And I'll give you just a couple

 

Speaker:

of examples. I think some of them we put in the book. There was

 

Speaker:

a company that I worked with again, private Fortune 50

 

Speaker:

company. And as part of like a cost move, they said,

 

Speaker:

you know, in Agile we don't need any project managers,

 

Speaker:

so we're going to get rid of all of them except

 

Speaker:

for this core team at the corporate location.

 

Speaker:

So we're going to take them all out of the business units immediately

 

Speaker:

because Agile is magic and you never need anybody to do any projects or coordinate

 

Speaker:

anything. And so they had this team and

 

Speaker:

these teams were assigned to

 

Speaker:

business units. So business units could say, hey, I'd like to

 

Speaker:

have this resource. But there was no

 

Speaker:

structural alignment. So they reported to somebody in kind of,

 

Speaker:

quote, corporate. And so what would happen is the

 

Speaker:

person at corporate would take people off those projects

 

Speaker:

because somebody else was louder at a different business unit.

 

Speaker:

So what happens? Again, you get what you design for.

 

Speaker:

So the business units, they had somebody that did this role. Now there's

 

Speaker:

somebody at corporate that could come or go at any time. They had no visibility.

 

Speaker:

So what did they do? They do what people naturally do. They created some

 

Speaker:

new title called something else that's not project manager that did all

 

Speaker:

of the exact same roles as before. And the inefficiency that the

 

Speaker:

organization was trying to solve for, they created even more because now they had this

 

Speaker:

central team that no one really trusted or did anything with plus

 

Speaker:

copies of all of that back in all the business units

 

Speaker:

versus and this is that term we used. Again, I know it's a lot for

 

Speaker:

those of us, maybe this is my too heavy lifting, but that term Federated or

 

Speaker:

Direct, like who's your customer? So if they would have been clear

 

Speaker:

that that central team lived to serve

 

Speaker:

the business units and were federated to the business

 

Speaker:

units leader, so who's the customer? Not that central

 

Speaker:

leader. That central leader was designed to serve the business units,

 

Speaker:

that structure would have given the company the savings they were looking for

 

Speaker:

and not have created that duplicate. So again,

 

Speaker:

super important. I just want to give one other example for the poor product

 

Speaker:

marketing people that are almost in any company I've seen this so many

 

Speaker:

times is product marketing reports to marketing

 

Speaker:

and then products frustrated with product marketing

 

Speaker:

because they're not communicating it the way the product leader sees

 

Speaker:

the vision. They're communicating it how the marketing team sees the vision.

 

Speaker:

Or if product marketing reports to product,

 

Speaker:

then marketing team is really frustrated because they're not getting all the

 

Speaker:

things that they need to share in the marketplace because

 

Speaker:

it's going according to what product thinks is important.

 

Speaker:

And in both cases, either one of those is simply

 

Speaker:

wrong. This is a really good example is you have to decide

 

Speaker:

where do you want to have the hard line report and you want to have

 

Speaker:

a dotted line. So product marketing should always have two bosses.

 

Speaker:

One, that's their HR report, which is who their

 

Speaker:

tightest aligned to, but they've got two bosses. They also have

 

Speaker:

either marketing or product. And when you do that, you not only set up

 

Speaker:

the company for success, you set up your product marketing

 

Speaker:

team for success. Otherwise it's like whack a mole with them. So for if you're

 

Speaker:

a product marketing or CPO or

 

Speaker:

a CMO, please make sure you have a Federated team be nice

 

Speaker:

to your product marketing members. That's absolutely great

 

Speaker:

advice. And whenever I've seen organizations that do

 

Speaker:

that effectively, it's been successful. And when it's

 

Speaker:

very clear when organizations aren't doing that successfully and the

 

Speaker:

walls that get created and the siloed

 

Speaker:

mentality that occurs when you do that.

 

Speaker:

Ken, this has been great. I really appreciate that. We've got a lot

 

Speaker:

more that's in the book. We haven't even begun to talk about marketing

 

Speaker:

strategies like product led growth, sales lead growth, et cetera, which we also talk

 

Speaker:

about in the book. I'll save that for maybe another

 

Speaker:

episode or for people to buy the book

 

Speaker:

and read up on it. The book again, is called

 

Speaker:

Business Breakthrough 3.0. It's written by Lee Atchison

 

Speaker:

and Ken Garadovich, and it's available on Amazon.com

 

Speaker:

and almost any other place that business or

 

Speaker:

technical books are available. It's available in a hardcover softcover

 

Speaker:

Kindle ebook version, as well as an Audible version on

 

Speaker:

Audible.com and other audiobook platforms.

 

Speaker:

Thanks, Ken. Thank you very much for coming on the Modern

 

Speaker:

Digital Business podcast. And once again, it's been

 

Speaker:

great working with you on this project and I hope we'll work on future projects

 

Speaker:

as well. Eli, if I could do just one more shout out to your audience.

 

Speaker:

I know this is important to both of us is if you take a

 

Speaker:

read through the book, it helps you, helps your team, helps your team love their

 

Speaker:

jobs more, helps your company move faster. Please send either

 

Speaker:

one of us a note. Just makes us feel great. One of the things we

 

Speaker:

both try to do is just make the world and business just a little bit

 

Speaker:

better. So send us a note and thanks, Lee.

 

Speaker:

Absolutely. And in the Show Notes, I'll make sure to have contact information,

 

Speaker:

of course, for my normal contact information, but I'll also have

 

Speaker:

Ken's contact information so you can reach out to him. And Ken,

 

Speaker:

you're available specifically for speaking engagements as well, is that correct?

 

Speaker:

What I really love doing is speaking at organizations and really helping companies

 

Speaker:

take some of the principles that we teach that we've learned

 

Speaker:

to transform their organization. So if you've got a speaking opportunity to

 

Speaker:

help your organization, please reach out. Love to talk.

 

Speaker:

Ken, thank you you so much for being on this episode.

 

Speaker:

Enjoyed it. Lee. Talk soon.

 

Speaker:

Thank you for tuning in to Modern Digital Business. This podcast

 

Speaker:

exists because of the support of you, my listeners.

 

Speaker:

If you enjoy what you hear, will you please leave a review on Apple podcasts

 

Speaker:

or directly on our website at MDB FM Reviews.

 

Speaker:

If you'd like to suggest a topic for an episode or you are interested in

 

Speaker:

becoming a guest, please contact me directly by sending me

 

Speaker:

a message at MDB Fmcontact.

 

Speaker:

And if you'd like to record a quick question or comment,

 

Speaker:

click the microphone icon in the lower right hand corner of our website.

 

Speaker:

Your recording might be featured on a future episode.

 

Speaker:

To make sure you get every new episode when they become available,

 

Speaker:

click subscribe in your favorite podcast player or check

 

Speaker:

out our website at MDB FM.

 

Speaker:

If you want to learn more from me, then check out one of my books,

 

Speaker:

courses or articles by going to Lee Atchison.com.

 

Speaker:

And all of these links are included in the Show Notes.

 

Speaker:

Thank you for listening and welcome to the world of the Modern Digital

 

 

Ken Gavranovic Profile Photo

Ken Gavranovic

CEO, CPO, CTO, EVP

There’s no limit to anyone’s potential. This is the foundational belief that has guided Ken Gavranovic throughout his career and as a leader working to empower others.

Thanks to a strong work ethic, a natural aptitude for technology, and a highly adaptable skillset, Ken found success early in his career. In 1997, he started Interland, now web.com, a pioneer in the SaaS cloud-provider space. At age 29, after growing the company to $200M+, he led its IPO.

Ever since, Ken has been responsible for hyper-growth at unicorn public businesses, gaining deep experience across various industry verticals, multiple leadership positions, and companies of all sizes. As Executive Vice President at New Relic, he helped grow revenues from $300M to $500M. As Vice President at Cox Automotive, he oversaw a $5B+ portfolio of brands, including AutoTrader, Kelly Blue Book, Manheim, and Dealertrack. In addition, he has been responsible for multiple IPO and private equity exits that generated ten to ninety times return on investment. This wide-ranging expertise has equipped him to guide businesses to scale in growth, transformation, and measurable results.