The startup Echometer: Making agile transformations succeed

Corporates are changing – just read the news around VW, Volvo and the ING bank to name a few. There is a simple reason – accelerating changes in global markets makes corporates’ agility a strategic priority.

Statistics confirm that 50% of german companies have started implementing agile methods and frameworks. But here comes the problem: Roughly ⅔ of such transformations fail.

How is that? Well, according to the “State of Agile” Study 2019, the biggest blocker for successful agile transitions are cultural issues – resistance to change and inadequate management support and sponsorship.

And this is where the startup Echometer comes in. It is a company I met recently as part of my advisor role at the Founders Foundation. As a Spin-off from the psychological department of the University of Münster, the startup has a unique perspective on agile: Focusing on employees and teams mindset. Echometer helps fostering the agile mindset in two ways.

The Founders team of Echometer, currently in the Accelerator program of the Founders Foundation (Bertelsmann Stiftung): Jean Michel Diaz, Robin Roschlau & Christian Heidemeyer.

Firstly, scrum masters and agile coaches, the change agents in such agile transformations, are supported in so called “retrospectives”. Retrospectives are regular team workshops, where teams come together to continuously improve. In these retrospectives, Echometer as a “digital coach” helps developing the team using scientific findings from psychology combined with artificial intelligence.

Echometer helps adopt agile methods in teams (retrospectives) as “digital coach”. As a by-product, the progress of the teams and overall transformation becomes measurable for agile coaches and management.

Secondly, by using the tool in retrospectives, the development of the team and transformation can be made visible – not only on team, but also on organizational level. That way, Echometer ensures that agile transformations become measurable in a way that is combinable with the agile philosophy of self-responsibility. Teams and managers get specific hints and tips about how they can help their teams grow – based on the Echometers learning algorithm in the background.

The Center of excellence of a leading high-end domestic appliances manufacturer has put the use of Echometer this way: 

“We use Echometer to gain transparency about cultural developments and to enable purposeful team discussions.” Source: Echometer

Co-Founder and CEO Jean Michel Diaz adds:

“While many companies have no clue, about how the transformation is going on an operational level, our customers have real-time insights and can be sure that agile teams support the transformation with a buttom-up continuous improvement process (!) – which is even more important.” Source: Echometer

Christian Heidemeyer, organisational psychologist and one of the Co-Founders of Echometer, recently visited the Barcamp of the ING (see picture). While the bank is one of the most popular examples of a corporate implementing agile methods and frameworks company-wide (see McKinsey, 2017), they agreed that agile mindset is a huge field to continuously work on.

Keine alternative Textbeschreibung für dieses Bild vorhanden
Christian Heidemeyer, organisational psychologist and Co-Founder of Echometer, was invited as a guest to present Echometer at the ING Barcamp in January 2020.

Seems like Echometer is heading in the right direction.

If you want to learn more about Echometer, check out www.echometer.de or follow them on LinkedIn, Facebook or Twitter.

Some thoughts on “Measure What Matters”

Business goals are a dangerous animal.

On the one hand necessary for top performance, on the other can lead to increased risk taking, narrow focus, unethical behaviour.

I already blogged about the OKR system employed initially by fast-growth tech companies which implemented it to have a meaningful goal setting process and increase transparency. In that sense reading “Measure what matters” by John Doerr added a whole new dimension to my understanding and linked theory with some real-life examples and learnings.

I have put toghether my take aways in the hope that they can help others in implementing OKRs. I strongly recommend that you read the book as it is by far the best I could find on the topic.

OKR requires commitment and time

  • OKRs are a tool, not a weapon – do not use them to force on people.
  • Dare to fail – won’t work out in the beginning and probably never gonna be perfect.
  • Be patient: it takes at least some quarters to get it going.

Implementing OKR the right way

  • Ask the question: what is most important for the next 3 months, where should we concentrate our efforts?
  • Set hard goals as they drive performance more effectively than easy ones. Specific hard goals yield better output than easy ones.
  • Less is more – better have a few but well chosen objectives.
  • Set goals from the bottom up – about half of the goals should come from employees.
  • Collective agreement is essential for getting buy-in from colleagues and subordinates as no dictating is allowed.
  • An OKR can be modified or scrapped at any point in time, sometimes it takes months in the process until the right key results are identified.
  • Pairing OKRs – pairing quantity and quality results in getting key results better aligned with value creation e.g. Sales of 50M + Maintenance contracts of 10M.
  • OKR for new features could be tied to a deadline till data is available and results can be quantified.
  • Having cascading in OKRs allow employees to see the objectives up to the top management and clarifies how the objectives of employees down the hierarchy contribute to the mission of the business.
  • Implementing OKRS requires the whole organization to participate – no opt-outs are allowed. In order to ensure that one or two shepherds can be designated (e.g. for some years this task at Google was done by its SVP Jonathan Rosenberg).
  • Commited vs. aspirational goals – committed are generally goals such as revenue, users, bookings that are to be achieved in full. Aspirational are on the other side dare and future looking but with a high risk of failure.

OKR alone is not enough, you also need CFR

The introduction of OKR requires a change in HR practices where annual reviews are the standard. The alternative to annual reviews is called continuous performance management. Its tool is CFR – Conversations, Feedback, Recognition.

  • Conversations stands for regular and open exchanges between a manager and contributor.
  • Feedback: provided among peers in order to track progress and future improvements
  • Recognition: is given in 1:1 to deserving individuals for  their contribution

Interesting point around CFR is that it is decoupled from compensation unlike with annual reviews (for most companies).

CFR foresees a semiannual professional development conversation where discussion is around career trajectory.

In sum, the old practice which still rules in many companies sees goals, compensation and performance management to be tightly intertwined. The new model engages a different view, namely that 1) OKR, 2) CFR and 3) Compensation & Evaluation are separate areas with a bit of overlap.

“Culture eats strategy for breakfast”

Once said … Peter Drucker.

You get leaps in productivity when stretch for amazing. A typical example is the Google’s 10x rule whereas incremental OKRs are being replaced with exponential ones.

OKRs are usually marked with red (behind plan), green (going well) and yellow (somewhere in between). Companies often have particular strategies how to deal with tracking OKRs. They remove the yellow/orange and mark the ones in danger as red. At OKR reviews they concentrate only on the reds and discuss which objective is most important therefore should get extra attention and eventually resources. This is known as „selling the reds“.

This is what a typical OKR cycle looks like

  • Define annual OKRs and Q1 e.g start in November practically several weeks ahead of Q1.
  • Announce company-wide OKRs for the year and Q1 and e.g. mid-December.
  • Announce team Q1 OKRs – the team develops their own OKRs and shares them in meetings e.g. at the beginning of January.
  • Provide employee Q1 OKRs e.g. end of first week of January.
  • As the quarter goes, OKRs are being tracked and toward end of Q1 also being scored. In the mean time about 6 weeks before next quarter starts the brainstorming of company-wide OKRs for Q2 and the cycle repeats.

If you want to get systematized and proven guide into the world of OKRs I cannot emphasize enough the importance of laying your hands on “Measure what matters” by John Doerr. I consider it a must have in every library and will be happy to hear some funny stories from your experience.

Inside BMG – tech talk with Sebastian Hentzschel

Sebastian is Group CTO and EVP of Royalty Processing Shared Services for BMG. The Bertelsmann’s music publishing and recorded music division is headquartered in Berlin and operates in all major music markets in the world. In 2018 it turned around 545 Million Euro according to Wikipedia.

I met Sebastian not so long ago and we immediately had a click – same old, same old – technology, startups, company culture. I thought would be cool to get a sneak peak at BMG’s tech stack and here is the result – my first interview of this kind.

Sebastian, what is your technology stack?

Our primary stack is AngularJS, Java Spring, Elastic, SQL Server. The other two stacks we have is .NET for one of our key data pipelines on top of MSBI, and Hadoop/Spark for our royalty engine and data analytics platform.

What products do you work on?

We’re currently actively working on roughly 15 products. The most prominent is MyBMG, a web and mobile app our clients can use to see their realtime income earned globally from their music and can run data analytics on it. Other products include BMG’s global repertoire licensing platform our teams worldwide use for finding, pitching, quoting and licensing our 2m+ music rights to business clients in the film, TV, advertising and gaming industry. Lastly, we’re currently expanding our rights and royalties platform across all business segments, moving from traditional to big data technology for better scalability.

Which one are you most proud of? Why?

I’m proud of us as a company. We’ve built a business from the ground up, starting in 2008 with minimal revenue and three people in Berlin and growing to more than half a billion in revenues and 800+ people worldwide.

From a tech perspective, the business of music and music rights management is a very data intensive business. We started out with basic off the shelf software and quickly had to build a new technology platform from the ground up while not risking business continuity. We’ve hit new, growth driven inflection points almost every year, and we’ve been able to get through them and come out better on the other end. Also, we’ve integrated acquired companies globally very tightly on to our platform, which is something that wasn’t easy but we’re clearly benefiting from today.

Just curious – are you a Mac or Windows person?

At home I use a Mac and a ChromeBook. At work I need my Windows, mainly for its keyboard shortcuts.

Which apps you use daily?

Let me check … FT, Koyfin.com, Whatsapp, Evernote, Headspace, Teams, Jira, Confluence, Trello…  well, and Outlook & Excel, of course.

Let’s go back to tech. What is your development process like?

Our application management and product management teams are internal, software engineers are outsourced with a handful of very close development partners of ours. Most of our products are developed in agile mode. As a result of outsourcing, we have a proxy product owner on the vendor side who takes on the agile process ownership and closely collaborates with our internal product owner. Agile doesn’t fit for all projects, however. We run our royalty platform development project in waterfall with monthly releases. For us, this works better for the type of projects with zero acceptable margin of error.

Tell me about your team. What does your team structure look like?

Teams are organized under our VP of applications & infrastructure, VP of technology product, head of data analytics, as well as three regional heads of workplace services for the US/Latam, UK and Europe & Australia. Software engineers, data center infrastructure management, and data engineers are all outsourced to selected vendors, who we work together very closely. We intend to keep the relationships with those vendors consistent so as to leverage learning curves, knowledge and efficiencies. But we do retain a healthy dose of competition between them.

What is your preferred development mix (e.g. in-house, nearshore or offshore)?

Again it really depends. We operate a mix of onsite and offshore. We chose to outsource development primarily for reasons of scalability. We’ve been needing to spin up, or ramp down, new teams rather swiftly. For example, when we started to replatform our royalty engine, we needed a big data team quickly. Our partner was able to put together that team within a month. What works best though is when developers or business analysts are co-located. On the flip side, the higher the time zone difference between your product/business and development teams, the more difficult collaboration gets. Given that offshoring usually involves outsourcing to companies that have their cultural roots outside of European or Anglo-American culture, projects success requires people who understand both cultures very well and can translate between them.

What I found important to look for in a vendor is that they bring their own set of processes, best practices and innovation to the table. That’s a huge value added.

How do your scale your ops when you have to?

With the growth we’ve had as a company, capacity planning has been a challenge with data volumes growing so quickly. Initially we’ve scaled our data processing infrastructure. We’ve now moved to Hadoop/Spark based data processing. The next evolution of this is moving that to cloud platforms. Technological progress has been on our side 😉

How do you hire? Do you do brainteasers or coding challenges?

I’m trying to maintain a comfortable atmosphere so the candidate has enough space to present him or herself. I may turn up the heat a little should I notice the candidate is vague or evasive. Yes, we do case studies and brainteasers. I want to understand how a candidate thinks, the cognitive avenues they’re taking and how they manage challenges in a high-stake situation. I’ve had candidates really stepping up in these situations, or falter, not because they couldn’t find the answer right away but they wouldn’t engage fully.

What makes a candidate stand out?

For the roles we hire for, I am looking for technical experience and intuition, as well as empathy and the ability to make human connections. In product management, the ability to both be empathetic and structured is important for me. In the application dev and ops space I look for a sense of relentlessness when it comes to driving constant improvement. In any case, I look for authenticity and the candidates who stand out are those who are strong in what they know and do, but are humble at the same time.

Let’s talk architecture. How do you see your architecture in 2-3 years?

We’ve just started moving our data processing & analytics platform to PaaS (platform as a service) of one of the large cloud providers. I am very thrilled about the ability to scale up and down quickly as required by business. We are moving nearly all remaining applications to cloud services, utilizing PaaS where possible. For all commodity software we are, or will be, using SaaS offerings. Essentially we’re trying to move up the stack as much as possible to keep infrastructure management lean.

Do you measure speed and quality of delivery, and how?

What’s most important to me is that the entire team – business, business owner, product owner, proxy PO and developers – find their own groove and iterate on that. That’s the most sustainable and ultimately fastest model.

If a feature can be implemented either quick and dirty, or slow and perfect, what would you pick?

It depends. For client royalty obligation calculation it’s clearly “slow and perfect”. In other instances, we’re trying to go live quickly with a minimal viable product wherever possible. It does however depend on the readiness and willingness of the respective business function to engage with that concept.

Do you have dashboard and what metrics do you track?

Yes. My weekly capex investment and operational spend. There’s no week that goes by without me looking at it. The non-financial figures I look at are our global incident burndown as an indicator for technology health and a supply and demand balance. I’ll be introducing a weekly team barometer shortly to ensure team health for both projects and operations – previously our team was much smaller and I was able to speak with almost everyone regularly. This has changed.

What mega trends already influence your products? What is coming next?

A few things. A focus on holistic customer experience is something that influences more and more of our products, even internal ones. Big data technology is no longer a strategic vision but operational necessity. My approach is to utilize all data available and automate reporting and data analysis. We’ve also started integrating machine learning in the first product of ours. Not all problems are machine-learning problems but we have identified a few areas in front and back office that would benefit from this technology. Blockchain is something we’re looking into and experimenting with but given what we know it’s a technology that may not have the impact it has long been proclaimed it would have.

Any question I should ask you?

When is our next lunch?

Sure thing, it was a pleasure meeting you and hearing your thoughts. Looking forward to see you soon.

When is the last time you reflected on motivation and how to build lasting perfomance in your team?

Over the last years I have repeatedly encountered 3 words defining the current notion for motivation: 1. Autonomy, 2. Mastery, 3. Purpose. This notion has often appeared in presentations about tech culture, notably at Zalando (thanks Eric Bowman) but also often emerges in company cultures such as the one at Solvemate (thanks Christian Blomberg).

So I carried the notion with me till I felt urgency to go beyound the simple words. Ultimately I landed at presumably the source of it: the book “Drive” by Daniel Pink.

Without telling you too much and spoiling the read here are some of my takeaways for motivation:

  • Motivation 2.0 in the form of carrot and stick (rewards based) is inefficient and unpredicatable.
  • Motivation 3.0 defined by the 3 aforementioned words offers the ruleset for maintaining performance and job satisfaction of a present day person.
    • Meaning of Autonomy – to hold your life/job with your hands and direct it the way you deem necessary.
    • Meaning of Mastery – to constantly learn and improve on a subject that matters.
    • Meaning of Purpose – to dedicate to something bigger than our own self.
  • Motivation 3.0 seems to almost always outeprform Motivation 2.0. Even in the short term.
  • FedEx days at Atlassian. Nowadays called ShipIt this is a day long retreat for evey engineer in the company to create a new solution or fix something that annoys them. Execution matters but best idea wins.
  • The concept of ROWE – results only work environment, or else said no time keeping (check in/out).
  • Super clear and stripped down to the basics insights from Jim Collins (by the way also a great author) about self-motivation – 4 simple rules how to instigate such culture.

On the matter of ROWE quite curious how many companies run this model, it seems to be getting good traction in creative industries. Yet, wondering whether teams do not alienated by not spending time together.

Anyway, I highly recommend this book and plan to revert to it from time to time. Have you read it and what do you think?

IdeaFox – an innovation management platform for teams to co-create and implement solutions

In the process of building new digital business models I often revert to the business canvas template and generate a ton of MS Word/Excel docs and series of email threads in that process.

IdeaFox seems to deal with all that. I knew about the platform quite some years ago but got to lay my hands on it just recently (should have done earlier though). It has managed to put away most of the aforementioned overboard and gave quite an orderly look to my creative chaos.

IdeaFox is cloud based and covers all steps from collective ideation, co-creation and evaluation, to idea realization. It is simple and easy to use platform. I started a new project within minutes and is quite intuitive (whoever knows me, would sigh how rarely I actually say this).

But just in case you need a tutorial, here is one.

It can actually do more than I do with it. IdeaFox allows idea challenges, idea realization in a stage gate processes, or collection of best practices.

Typical users seems to be innovation and digitization teams (like I am), but also teams collecting ideas for operational improvements.

In sum, IdeaFox solves three needs of organizations that want to get better:

  • Get better solutions by efficiently connecting a broad group of participants
  • Improve realization of ideas and get up to 20% quicker (claim by IdeaFox)
  • Increase employee engagement and foster transparent communication

I also tend to know the two lovely people behind the platform so this is yet another argument for me to give IdeaFox a try if you need such a platform.

Meet Dörte and Aron

Looking forward to your feedback and please share your impressions.

If you want to learn more about IdeaFox, check out ideafox.io or follow them on LinkedIn or FB.

You can find the rest of my articles either on LinkedIn or on my website: https://starkfounders.com. Enjoy!