The Responsive EnterpriseHow do you make a large organization just as quick on its feet and effective as a start-up?

Pattern 4: Client(s) in the driver’s seat

By Vikram Kapoor and Rini van Solingen

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How do you make a large organization just as quick on its feet and effective as a start-up?Large enterprises have often lost much of their responsiveness in comparison to smaller enterprises or start-ups. This despite the fact that today, being responsive might be the most important quality an enterprise can have, as the ability to swiftly respond to changes can help an enterprise survive in the long term. This whitepaper covers one of the nine patterns from the book The Responsive Enterprise, written by Vikram Kapoor and Rini van Solingen. In this book, the authors explain the nine patterns – each of which have four sub-patterns – that help to greatly increase responsiveness. The story is written as a dialogue between two main characters, Mark and Ron. A separate whitepaper, containing concrete tips for implementation and areas for attention, has been written for each of these patterns. Responsiveness is a journey that doesn’t end once the nine patterns in this book have been implemented. The world will continue to change and, as a result, so will responsiveness. There is no reason to put off becoming faster and more responsive. Start today by making client impact a priority and using mini-companies to experiment in order to realize your higher goal.

Pattern 4: Client(s) in the driver’s seatPutting clients in the driver’s seat is an important precondition for responsiveness, as client impact ensures growth and continuity. Everything should focus on client value. This means that input and feedback from clients will provide the direction, as will the employees with direct client contact.

This whitepaper is part of the book “The Responsive Enterprise” by Rini van Solingen and Vikram Kapoor, and offers additional details and information for practical implementation.

The essence of pattern 4

1. The goal is to deliver value through spontaneously developed solutions, working in close cooperation with the client.

2. Because they are best-informed, employees with direct client contact will make their own decisions.

3. Delivering client value at all times, even when there’s no profit in it (yet).

4. The client patterns will be made explicit and are geared towards trust, success and impact.

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Arriving at the fourth hole, Ron and Mark get into a bit of a fight. Mark implies that he feels like he’s just a number to Ron’s company. Ron claims that his company has better things to do than pursue close contact with its clients. This goes against all Mark’s patterns; he goes looking for confrontation by calling his friend “arrogant”. What could be more important than your customer? As emotions start to settle down Mark starts explaining that his views are client-centric, that he even tries to get the client “behind the wheel”. He does this by asking for intensive feedback and through the co-creation of new services. Ron points out that Mark has it easier because he has a smaller company with fewer clients. Mark counters by saying that fewer clients means that it is also harder for him to get a clear perspective on his clients. Together, they conclude that Ron has more possibilities open to him because he has more clients. He will just have to increase his coffee tolerance. If you don’t talk to your clients, like over a cup of coffee, you can’t hear what they have to say.

The four underlying patterns of Client(s) in the driver’s seat

The dialogue about Client(s) in the driver’s seat in the book The Responsive Enterprise

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The goal is to deliver value through spontaneously developed solutions, working in close cooperation with the client. A Responsive Enterprise puts the client, and their present and future needs, first. Frequent feedback and interaction are necessary to gain an effective picture of their current level of satisfaction and their future needs. Delivering value tends to be all about the “now”; in a fast and dynamic market, the ability to change direction quickly is crucial. That’s why new solutions and propositions are created, spontaneously and through experimentation, for and with the client. This involves locating new and additional added value together, and then translating that into other markets and clients. Therefore, discovery and experimentation with clients in a short feedback loop is a top priority. In order to put this into action, it will be necessary to organize this interaction according to a certain rhythm. This means a regular, recurring interval for receiving feedback, looking for improvement and exploring new solutions should be integrated into the rhythm of the organization itself. Preferably, these moments will occur with all (or in any case multiple) clients present to allow for direct cross-pollination and evaluation.

Employees with direct client contact will make their own decisions because they are best-informed. To allow them to change direction quickly, those employees with direct client contact will be encouraged to make their own decisions. After all, they have the best information, know the client the best and are best able to estimate what is and is not feasible. That they apply common sense is the only real rule in that regard – although, naturally, extra tools will also be used to support these decisions. For example, it is important that employees are clear on the mission, vision and tactical guidelines, so that they know whether a decision they are considering is a perfect fit for these things, or if it deviates drastically from them instead. The boundaries of their freedom of action—whether legal, financial or risk-management-related—must be made clear as well. This will allow them to judge for themselves if an action is a good fit or whether they should ask for assistance in making a decision. It is a short feedback cycle with the employees who help the client, in which the clients’ impact and experience are discussed and agreements are made on how to further enhance these aspects.

Always deliver client value – even when the client isn’t paying for it (yet). Close, long-term relationships with clients are the basis for sustained cooperation over the long term. Making a positive impact on behalf of the client should therefore be the first priority, from day one. Delivering results and creating impact are ways to help build trust in the cooperative efforts and in their positive effects. This means that delivering value and sharing knowledge should never be put off for later. The cooperation is based on reciprocity; value should not be held back if it can be delivered quickly and relatively cheaply. As a result, people in sales or business development positions will need to make a special effort to offer recommendations from the client’s perspective. The relationship with the client will be built on a foundation of value, impact, trust and sharing.

The client patterns will be made explicit and are geared towards trust, success and impact. Exceeding client expectations is an important basis for long-term relationships and future growth. The core value of “delighting customers” is at the heart of why a company is in business – the underlying patterns of that goal will be made explicit, discussed regularly and communicated to others. It should be absolutely clear to everyone in the organization what is expected with regard to the client experience, and what will be necessary to meet those expectations. To continuously exceed client expectations in the long run, the relationship must be based on impact, trust and quantifiable results. Cooperation and the ability to quickly identify valuable solutions together will lead to long-term client satisfaction.

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Step 1: Make a habit of regular client meetings which all employees must attend.

• Make sure clients regularly stop by to offer feedback on what can be improved and what is going well. Try to focus not only on their tips for improvement: the reason why a client has chosen to work with you is equally important. Getting better at the things you are doing well often has a greater pay-off then removing minor points of frustration. Always try to translate their feedback into action – it’s the only way to show customers that you listen and that their input is of value to the company. This feeling of being heard will give the clients a reason to come back.

• Make sure contact between you and the client becomes part of a recurring rhythm (for example, schedule it every first Tuesday of the month between 18.00 and 20.00). This will ensure that everyone can work their schedules around these meetings. And if people are unable to attend one month, they know when the next meeting will be. Always try to get multiple clients together. This ensures interaction between clients but also helps you determine whether multiple clients agree or if something is just one client’s opinion.

• Try to include as many employees as possible in these meetings. That way, the employees get to hear the feedback first-hand, which is always preferable to passing on the information. Secondly, it is an easier way to develop personal relationships between employees and clients – even those in the finance department, as you never know when it might come in handy. Thirdly, and maybe most importantly, it’s impossible to over-emphasize the importance of your customers. Show them that they are indeed behind the wheel. You want each of them to be happy in the driver’s seat. Don’t limit your focus to obtaining feedback: put effort into discovering new paths and undiscovered values. Go looking for value in uncharted areas, such as by monitoring a client issue or case file. You could also consider some kind of a “Dragon’s Den” session; let the customers point out where they would like to invest, or things they are reluctant to invest in and why.

Case study 1: Your most critical clients keep you on your toesIn an organization with plenty of clients, there was one particular client who regularly complained. This client had been a client from the beginning; he was loyal, but also the first to point out where changes had to be made. In their first year of business, this particular client was the organization’s biggest client. But as the years went by, more – and bigger – clients came along. Today, this client’s director is your conversation partner and is explaining his discontent. Your organization is getting too large; productivity is starting to suffer and that one problem (that he has been specifically pointing out for the last couple of years) still hasn’t been taken care of. You understand that this client is feeling less and less appreciated, and receiving less attention than he did in the company’s first years.

What action would you take after this conversation? Going on the defensive would be pointless; focusing on the past is equally ineffective. So, what do you do?

Consider and reflect on your own actions before you continue reading.

A loyal client is an important client. This client has stayed loyal through the growth and change of your company. More importantly, he has been there from the beginning, and has therefore had a hand in your growth. That deserves a reward. What’s to say this client can’t play the same role in the future?

Here’s what happened: During this conversation, more concentrate attention was paid to the client’s specific complaint, which had been ongoing for years. Together, service provider and client assembled a plan of action to resolve this problem. The client was allowed to take the wheel and was in control, meaning he got the attention he deserved. At the same time, it was also an experiment to see if the issue could be structurally resolved. Perhaps not, but the experience is still educational. Maybe the problem can be solved – which would mean the solution is worth trying out with other customers. Put your client behind the wheel, make sure they themselves have the time (and money) to invest, and see if it works. No matter the outcome, you will always learn from the experience and – in the process – have given the client the attention they deserve.

How can you achieve this?

How do you make this happen?

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Step 2: For each client, list which patterns of their expectations are being surpassed.

• Create patterns to act as guidelines in surpassing clients’ expectations. Elaborate these patterns, discuss them and adapt them accordingly. Clients will only become ambassadors if you maintain a focus on getting them excited. Making patterns explicit offers everyone the opportunity to decide for themselves what should be done, without constantly having to ask for permission.

• These principles should be aimed at the future and based on trust: trust that clients have the best interest of the company and themselves in mind, and trust that effective cooperation always leads to growth for both parties. Distrust and control are just stepping stones you can transform and use to build positive relationships. The patterns that act as guidelines for exceeding clients’ expectations must be based on sharing, giving, trust and a future-oriented perspective.

• Don’t keep the patterns to yourself. Make them transparent, communicate them and be open to feedback (including from clients) in order to make the patterns even better. Your ultimate goal is to put the clients behind the wheel; it only makes sense that the patterns you use as tools to get there should be part of that direction.

Step 3: Make it clear to employees how much individual decision-making space is available and when they should seek approval.

• Create clarity regarding individual freedom of action. It’s best that everyone knows the exact limits of their own decision-making space: when to ask for approval and when to decide on their own. There is no need to ask for approval for actions within the boundaries of a coworker’s decision-making space, either. This involves no change in the decision-making process, only the temporary transfer of responsibility. Each employee should make their own decisions and should be willing to consider accepting help from others when the decision seems too big or important to make by themselves.

• Make sure these decision frameworks/boundaries are transparent. That way, there is no room for doubt concerning their existence and to whom they apply.

• Regularly repeat the idea that these boundaries are merely guidelines. In the end, a decision should be made by the person with the best overview and understanding of the situation and/or client. After all, the person with the most information is the most qualified to decide. While common sense should be the most important guideline, it should also be clear within which context this applies and when one should avoid making individual decisions.

Case study 2: the beginning of Prowareness Prowareness itself is a creation of customer research. Putting the customer first is carved in the DNA of the company. Prowareness is actually a fork of iSense. This started when a graduate student at iSense conducted a research to the most important themes among the customers of iSense. At the time those themes where: speed and agility. The research showed that the customers were looking for faster ways of developing software and additionally to the Agile methods, especially Scrum. Therefore iSense created a number of knowledge sessions and started putting their first developers in Scrum teams. The small Department of iSense dealing with Scrum and Agile teams, was then split off as an independent company. This independent company is what we now know as Prowareness and in 6 years it grew from 10 employees to more than 300 employees and went from a single client to dozens of loyal customers.

And the graduate student in question? He is now working for Prowareness, has grown to be a partner and is now working to convert his own teams into mini-companies whom can function independently.

Oblige and adapt to their changing wishes: client service is the central point in their mission statement.

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1. Ensure broad client involvement. There are many people involved on the client’s end. They have the necessary experience and their own opinions. Make sure that it’s not only the most important contact person or client who is asked to provide feedback. When expanding relationships with clients, it’s smart to gather information from multiple sources. Even “that one guy in Purchasing who’s always such a pain in the neck” is a suitable source of feedback. Or the head of that one struggling department who can tell you’re having a positive impact but isn’t all that enthusiastic. Try to look at the whole range of people and don’t limit yourself to talking to that one enthusiastic representative.

2. Offer important clients an additional degree of control. Don’t give unequal clients equal priority – there’s no law saying you have to treat everybody alike. The more important a client is, whether it’s in the current situation or predicted in the future, the more control they should be allowed to exert. At the end of the day, you will advance together with your clients: the client that is most crucial to this advancement should rightfully have an extra bit of influence. It can be useful to have a list ranking your clients by priority, or a list of criteria that make certain clients more important than others. But it’s not strictly necessary. Sit down regularly to talk about which clients are more important than others, strategically and tactically, and why.

3. Provide employees with enough space to act. Give the employees who have direct contact with clients enough space to make their own decisions. Of course, you need to have some guidelines in place, but if these are overly strict they will be more likely to hinder the employees than facilitate their work. Sometimes, apologizing afterwards is good enough, too. Or make it clear how much space is entirely free for the taking (green), which space you should ask your manager about using (orange) and which space is off-limits without explicit permission (red). But apart from the structure, it’s mainly important that the boundaries are specified and made public. Nothing is worse than running into trouble after the fact. Taking action should be, and remain, a matter of individual choice.

4. Establish boundaries through joint decision-making. The extent of an employee’s decision-making space can be handed down from the executive level. It generally works better, however, when this is determined in consultation with one another. When you do, you can discuss potential scenarios in advance and so gain a shared picture of what is and is not permitted. In truth, it is in this kind of conversation that principles are established for guiding how freedoms are both granted and used. And in order to communicate these discussions to others, it is useful to make such principles explicit and transparent.

5. Integrate measurement into your experimentation. Never forget to experiment and to combine trying new things with measurement. The most important reason for doing this is that when you try something new, you want to find out how well it works. It’s very difficult to justify that “how well” afterwards using only your gut feeling or personal opinion. It can also be useful to talk about the “why” of your experiment, and what value you hope to gain, beforehand. Having measurements to use as a basis for that conversation is extremely helpful. In addition, you want to be able to translate your results to other circumstances and other clients – which means you need data. For that reason, be wary of trying things too quickly, without being certain if it is working or not. The question is really: how well does it work – how effective is it – and what should you measure to find out.

6. Asking for money: free always means less valuable. Evaluation starts from the very first moment. That applies when developing new products or services as well. You will ultimately be charging money for these things, so don’t wait too long. There is no better way to evaluate the expected value of something than to see whether people are willing to pay for it. It can seem really exciting to just make new things, without getting into the question of coin. But that means you are also delaying the moment of truth: will clients want to pay you for it? It works the other way around as well – the less something costs, the less it must be worth. After all, if it was highly valuable, they’d ask real money for it!

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Summary of the book

The Responsive EnterpriseIf they are to effectively cope with the speed of change in the future and the ever-more-dynamic marketplace, the responsiveness of businesses will need to increase. In those terms, responsiveness is a characteristic or skill an organization possesses. A Responsive Enterprise is capable of managing delivery and innovation at the same time. This kind of environment is able to achieve results and finish tasks quickly – meaning they have time left to make adjustments when necessary.

The patterns and principles that play an important role in responsiveness have been expressed in The Responsive Enterprise by means of a narrative. They can be summarized in the adjacent model.

The client comes first: everything the company does is in service to the top priorities of client impact and client value. Alongside those efforts, employees use experimentation to identify new solutions. The learning interval is the most important indicator: the faster employees are able to learn, the faster they can create solutions (and the better those solutions will be). This means that instead of standing around thinking and planning, they must try new things without hesitation – and then see what works, and how. The cycle goes: Sketch, Make, Learn and Respond. It’s not like chess, where a player must try to think six steps ahead—and hope his or her opponent does what is anticipated—in fact, it’s the complete opposite. Think of Angry Birds: let them fly and see what happens. Try, learn and begin again.

• Setting up teams that are autonomous to the point of being mini-companies and are self-guided in serving a fixed client group (as determined by geography, for example).

• Ensuring an ambitious higher goal to inspire employees.

• Examining real data and attempting to automate as many aspects as possible, in order to scale up and grow quickly.

• Working in a fixed rhythm of delivery that effectively sets the tempo for the organization.

• Implementing a culture of total openness and extreme transparency.

• Making individual mastery and entrepreneurship concrete aspects and areas of constant growth.

And finally, we come to the outermost layer: anchoring the organization via a self-scaling culture propagated at the group level by teams through the growth and division of these teams. This enables culture, points of view, attitudes and behavior to be passed on in a scaleable fashion and at a group level.

Self-scaling Culture

Self-scaling Culture

ClientImpact

Rapid learning

Experimentation

Make

Sketch

Learn

Respond

and

Mas

tery

ExtremeRhythm

and Data

higher goal

(Mini-co

mpanies)En

trep

rene

ursh

ip

transparency

Software

AmbtiousAu

tonomous Teams

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1. Form autonomous teams (mini-companies)

• Everything is built around cross-functional teams with end-to-end (P&L) responsibility.

• The key concepts are client impact, client satisfaction and a focus on the client.

• A clearly demarcated client area for each mini-company prevents them from competing with one another over clients.

• Mini-companies compete in achieving performance targets along a simple KPI ladder.

2. Set an ambitious higher goal

• Attempting to reach a higher, valuable goal that is both ambitious and inspiring.

• Working together with the very best people to achieve complex and valuable objectives.

• Growing side-by-side with a permanent, stable team: experiencing growth both individually and as a team.

• Celebrating successes and learning moments with great frequency.

3. Make every aspect extremely transparent

• A culture of complete transparency, without secrets and where no question is out of line.

• Clear, unambiguous performance measurements that are publicly available to all.

• An infrastructure for the transparent exchange of information is in place and is kept up to date.

• Finding fun and energy in ownership and accepting responsibility.

4. Put the client(s) behind the wheel

• The goal is to deliver value through spontaneously developed solutions, working in close cooperation with the client.

• Because they are best-informed, employees with direct client contact will make their own decisions.

• Delivering client value at all times, even when there’s no profit in it (yet).

• The client principles will be made explicit and are geared towards trust, success and impact.

5. Conduct plenty of experiments

• Managers should focus constantly on removing fears: on any subject and from every employee.

• Decisions should be made based on data gained from experimentation and actual use.

• The organization should design an infrastructure in

The nine components of the model, and the four underlying patterns for each of them:

which employees can experiment with ease.• They should nurture a healthy tension between

innovation and profit.

6. Encourage individual entrepreneurship and mastery

• Each individual person is an entrepreneur and has the right to achieve personal success.

• Entrepreneurship knows no boundaries and grows right along with a person’s success and impact.

• Personal mastery is directly linked to client impact and operating results.

• Freedom, space and the desire to be the best: these things are both a right and a duty.

7. Create a self-scaling culture

• Values and principles are explicit, pro-active and client-focused.

• It uses autonomous teams that grow and develop on their own and can split off like bee colonies.

• Models for operations and growth are highly elaborated and aimed at self-direction.

• The goal is growth as a necessary precondition for energy.

8. Design a strict rhythm for delivery

• The daily rhythm comes from delivering valuable results in short cycles.

• Finishing tasks quickly is key: deliver results, learn from them and start over again.

• A structured rhythm that is able to accommodate unexpected developments.

• In other words, a heart that beats in short cycles, much faster than that of the market or the clients.

9. Make your business software-centric and data-driven

• The most valuable products and/or services must become fully automated.

• Design an infrastructure to support the automated delivery of products and services.

• Log all data involving client behavior and system usage and apply comprehensive data-driven monitoring.

• Focus on solutions that offer the most impact and pose the greatest technical challenge.

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Where to find more?• Steve Denning – The Leader’s Guide to Radical Management:

• Reinventing the workplace for the 21st century, Jossey-Bass, 2010 David Marquet - Turn the Ship Around! A True Story of

• Building Leaders by Breaking the Rules, Penguin Putnam, 2013 Eric Ries - De Lean startup: Hoe voortdurend innoveren tot

• een succesvolle business leidt, Pearson Education, 2013 John Kotter - Versnellen! Hoe je tegelijk kunt consolideren en

• innoveren, Business Contact, 2014 Jurgen Appelo – Managing for Happiness: Games, Tools, and

• Practices to Motivate Any Team, Wiley, 2016

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Did you enjoy reading this whitepaper? There are eight more: for each of the nine patterns from the book The Responsive Enterprise, there is a separate whitepaper.

Curious about the conversations between Ron and Mark on the green? Do you want to know their thoughts and understand their arguments? Buy the book! The Responsive Enterprise is available through all the usual channels including Bol.com, managementboek.nl or your local bookstore. It is also available in Dutch, German and e-book format.

About the authors

Vikram Kapoor CEO of Agile Cockpit

Rini van Solingen CTO of Agile Cockpit

Vikram Kapoor is a born entrepreneur. As founder and CEO of Prowareness, he helps large and well-known organizations to become software-driven Responsive Enterprises. Prowareness is growing rapidly and currently operates in the Netherlands, India, Germany and the United States. Growth is important to Vikram; he prefers to work on the outer frontiers – in “no man’s land”, as he puts it. As a serial entrepreneur, Vikram is always in search of new business ideas. Before starting Prowareness, he founded two other companies and made them successful: Silverside and iSense.

In 2013, Vikram was selected “CEO of the Year” by the readers of Computable web platform. He has also published several books as a result of his work with Prowareness and his previous enterprise, iSense. The Cheerleading principle, for example, is about how a team is influenced by culture. Responsibility, self-development and trust are important aspects within a team. This book gives tips on how to achieve those things. Kapoor’s second book, Engaging offshore teams is child’s play, focuses on the cultural differences that can affect the offshoring process.

Vikram enjoys providing those around him with opportunities to develop as entrepreneurs. He invests in a number of businesses and has created some remarkable possibilities within Prowareness, including the possibility for employees to become partners in the company. The culture at Prowareness is energetic and challenging. Making mistakes and providing feedback are encouraged: according to Vikram, these are ideal opportunities for growth. If you would like to exchange thoughts or ask Vikram a question, don’t hesitate! He enjoys sharing his ideas with others. You can e-mail him at:

v.kapoor@prowareness.nl

Dr Rini van Solingen is CTO at Prowareness and part-time professor at the Delft University of Technology. At TU Delft, he leads teaching and research concerning globally-distributed software teams. In his work at Prowareness, he helps clients’ organizations to deliver valuable software that works in a fast and agile manner. Leading large-scale transformations to extensive responsiveness and designing Agile operations on a major scale, involving dozens to hundreds of teams, are his areas of expertise. To that end, he also provides training and consultancy to management teams and executive boards. See his master class, for example: www.leading-agile-transformations.com

Rini published the book The Power of Scrum together with Eelco Rustenburg in 2010. The book, which became a bestseller, describes the principles of Scrum in the form of a novel. In 2014, together with Rob van Lanen, Rini wrote Scrum for Managers; this second book was aimed at helping managers guide their Agile organizations effectively. His latest book—De Bijenherder (The Bee Shepherd) — is about providing leadership to self-steering, responsive teams and is currently in its third edition.

Feel free to e-mail Rini with questions or to discuss his work. He enjoys sharing his ideas with others. If you really want to do him a favor, invite him to give a reading, training course or workshop at your company: those activities are where his passion truly lies.

r.vansolingen@prowareness.nl

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