by Byron Connolly

Trim your governance and get agile: CBA’s Stuart Mitchell

Jun 23, 2017
Business IntelligenceCareersEducation Industry

Organisations must trim the layers of governance built up over many years for traditional waterfall tech projects or fall victim to more agile startups, says CommBank’s senior agile coach, Stuart Mitchell.

Mitchell has told an audience at the Agile Australia conference in Sydney that governance built for traditional waterfall projects no longer works in an evolving world of Agile methodologies where “sprints” over a couple of weeks are the name of the game. He said that since the 1980s, governance has continued to grow in response to corporate disasters.

“So another layer of the tower starts getting built, and another layer and another layer. If there’s one thing that’s true it’s that very little gets taken away,” he said, quoting a Dorsey research paper in 2005 that found that up to 80 per cent of 20,000 projects between the mid-1980s and 2003 had failed.

“That is an awful lot of adding – these [projects] reached a stage and with beautiful hindsight we were able to look at this and say, ‘something is going wrong. One of two things is going wrong – our waterfall is going wrong (that can’t be going wrong) or our governance is going wrong,” he said.

“A shift has taken place. We’ve got a governance system that is full of big towers, fiefdoms. There is one major institution out there where one in ten [people] work in governance,” he said. “It’s built for big projects, for waterfall but guess what? It’s still here but we’ve got “sprints” that we want to get done. It doesn’t fit.”

Mitchell cited a quote from Jim Rankin, a CIO at FedEx, which explains the impact too much governance is having on IT: “For all the right reasons for which they were built, IT governance teams are no longer just keeping companies safe, they are by hindering the delivery also putting them at risk.”

Mitchell highlighted that governance is now less about risk mitigation and more about artifact generation, which provides an illusion of safety.

“It’s almost like a Monty Python sketch, ‘Have you got the machine that goes ping?’” he said.

The startup threat

Disrupters are coming fast and they are all over the place, which is threatening traditional business models, said Mitchell.

“Over US$40 billion has been raised over the last 9 months by 1,027 companies. Look where they are going – lending, personal finance, payments, equity finance, remittances, institutional investment, banking infrastructure – the list goes on and on.”

Disrupters are getting serious and they are after everyone, he said.

Mitchell said that at an Agile governance conference he attended in Amsterdam, a presenter from a Northern Hemisphere organisation talked about how it took his company 3 months to respond to a rate change from a bank.

“It took them 3 months to get all their documents, machinery, people trained up, and get an understanding for [how the change will affect] mortgages and loans etc. It took [a startup competitor] 3 hours,” he said.

“As companies we have to start thinking like a startup company. By 2020, 24 per cent of the [financial services] market is going to be with Fintechs,” he said. “And that percentage is going to increase and increase. Suddenly, senior managers are saying, ‘I didn’t want to change but I see it,’ – the writing is on the wall, ‘I am up against the clock now,’” he said.

Companies are also paying an “Agile tax”, said Mitchell. Managers not quite convinced about this new way of working are still asking Agile practitioners to create GANNT charts and requirements documents.

“People are being asked to create something that doesn’t naturally come out of an Agile [practice],” he said. “A lot of companies are quite comfortable paying that [tax] because there’s no major change. Don’t be afraid to take that big step hellip; we need to start ‘baking in governance.’

“You also need to have empathy – we have lost this along the line,” he said, highlighting that young people have been ‘born agile’ and older senior managers who ‘have breathed the air of waterfall’ are comfortable with it.

What does the future look like?

1. Governance will become leaner and stronger

“Governance will become stronger, I promise you – but it doesn’t mean the towers become higher,”said Mitchell. “They’ve got to become leaner because we are living through an era of intense regulation and scrutiny. If you stuff up today, there’s Facebook, there’s Twitter and all your competitors know about it.

“What is acceptable today will not be acceptable tomorrow. It’s time to go from 95 per cent to 99.99 per cent. That’s not nuclear, what that is is Formula 1 level because governance will get stronger.”

2. The bridge between concept and going to market is getting shorter

“Organisations are going to market quicker. Now, Ihave my stronger governance and the requirement to go into the marketplace quicker – these are two ‘stags’ butting heads and we have to handle this really carefully,” said Mitchell.

3. Disruptors are here to stay

“And they are getting more and coming after all of us. We need to start thinking like a disrupter; thinking like a startup,” said Mitchell.

4. DevOps will become part of your vocabulary.

“If you want to get into the marketplace quicker and safer, you have to have it,” said Mitchell.

5. Companies will change their governance or fade away

Doing nothing is what is considered to be safe, said Mitchell. But if organisations do nothing, they’ll “end up in the cupboard along with Kodak and Blockbuster,” he said.

“My competitor who evolves now becomes a ‘super powered’ competitor. In other words, they look the same but internally they have reduced their governance to an appropriate level, they’ve got engagement with the teams and they are thinking like a startup.”

6. Agile is about to take off

Gartner said in 2013:”Agile is the fast growing development methodology in the world. It is estimated that within two years, Agile will account for 80 per cent of all development projects.”

“They [Gartner] said that over four years ago. What happened? How did we take off like a plane and stabilise? We didn’t expect this. Why is this expansion not happening? Company philosophies and culture are at odds with the core philosophies of Agile, a methodology that has a single purpose of reducing risk.

Lack of management support due to cost, and a general resistance to change is holding Agile back.

“Some companies out there you any get promoted if you have a certain number of people reporting to you. Is that going to change?

“Just like fish can’t see water, sometimes you can’t articulate that it’s the governance that is slowing you down – that it’s these things that are pulling you back. If we can sort this out, Agile is going to go up,” he said.