Niels Pflaeging

“A real consultant doesn’t say yes, I’m telling you this shit. A real consultant says no, you don’t. First you want to understand your problem. If you had understood your problem, you wouldn’t beg me for tool or whatever hype shit.” – Neils Pflaeging

TRANSCRIPT:  

Miljan Bajic: 00:39

Niels, nice to see you. It’s been couple of years since we’ve seen each other. And I think I know who Neils is but how would you introduce yourself to my audience? Who’s Neils Pflaeging? If I pronounced your name correctly.

Neils Pflaeging: 00:59

Oh, boy. There’s so many titles that you give yourself over time, right? I would say I’m a consultant, I work on organizational development and help clients with that. I have done that for 17 years. I’ve written books. Quite a few, three.

Miljan Bajic: 01:20

Really good books by the way. Just honest opinion. I think that’s how I invited you to come to Boston and agile and yeah. 

Neils Pflaeging: 01:34

Maybe it was this book that inspired you. 

Miljan Bajic: 01:35

Yep. Yep, it was.

Neils Pflaeging: 01:37

So I write books. I also with this book, I started designing my own books. So I’m a book designer as well, I am a publisher. And, of course, I was speaking at agile main, that’s how we met. And we have this company sitting in our studio right 42 and we help organizations with transformation. And let’s say, from agile to agility, as it turns on behind you, right? [inaudible 02:03] I’ve been working for that with the beyond budgeting roundtable starting in 2003 till 2007 and then we renamed the whole thing into the beta Codex. And I found that the beta Codex network in 2008. And since then, it has been, I’ve been trying to create with others a movement around organizational transformation.

Miljan Bajic: 02:28

How did you come up with that concept of Beta? 

Neils Pflaeging: 02:32

[inaudible 02:33] We picked it up. The beyond budgeting concept, the beyond budgeting model has the same pillars, let’s say. Very similar 12 principles as well. Beta Codex has 12 principles, beyond budgeting always had 12 principles. But the problem with beyond budgeting, the brand is that it suggests so many things that beyond budgeting would never was that we always felt troubled by the brand. So in the beyond budgeting movement, we split in 2007, 2008, we split in two wings, let’s say two movements. That was the time, the opportunity, I saw the opportunity to rebaptise the concept into something that would be more contemporary, less about the roots of where it came from, which was let’s look for alternatives to budgeting and financial steering and control and more towards what do we want to create. And the idea, well, my ex-wife, she had this idea of when she came back working from Google one day and she said; at Google, everything we do is in beta. It’s in perpetual beta. And we picked up the theme that every organization should be in perpetual beta and not static, not command control. So we turned that into the beta codecs. But the idea was already developed in the beyond budgeting days, 1998 to 2003.

Miljan Bajic: 04:07

So I mean, a lot has changed since 98, 2001. I was talking to Daniel Mezick last week and you know, then well, and I mentioned, you know, a lot has changed in the last 20 years, but also a lot has not changed. Like when you look at how organizations operate from an HR perspective on how they operate from a financial perspective, in budgeting, it hasn’t really changed that much. It’s just some of the practices like at the team level, what are your thoughts on that specific…?

Neils Pflaeging: 04:40

Yes, not much has changed and command and control practices have pervaded the last realms where it didn’t exist, for example, hospitals today, management are managed just in the same crazy way as business and in an evil toxic way as businesses. Public services have also become ever more tailorized and contaminated by management practices. So, not all is good. I mean, you are an agilest. I think the Agile movement is decaying as well, let’s say falling back. I read more and more about agile leaders and agile coaches are more pervasive than agile teams these days. So one wonders what is going on and then with the whole scaling movement, I think agile has lost its virginity, it’s spirit, I think. Everything is about, it’s pretty much I think, what I see, what I can see at least. I’m not judging or condemning here, what I see is more and more about command control than it is about liberating software developers from the stranglehold of command and control. So it worries me. But you’re right, other things have changed, like attire has changed so much, right? Business attire. I think vocabulary has changed quite a bit and not just for the better. Yeah, many things have changed.

Miljan Bajic: 06:14

Yeah, you mentioned leaders. I saw in one of your posts, you describe the concept of leaders as bullshit. Could you elaborate on that?

Neils Pflaeging: 06:26

It’s from the dark side. Leaders, the concept of leaders, not leadership, by the way. Leaders, basically we rebaptised bosses into leaders to make it sound, whatever, sexy. 

Miljan Bajic: 06:42

Rebranded, yeah. 

Neils Pflaeging: 06:42

But the deal about bosses, whenever you say leaders, you mean bosses, right, you mean it. And when you say everybody can become a leader, you mean rising up the hierarchy. So still the old, evil concepts. Which is why we haven’t… I think we would notice advancement in organizations, if we would stop using terms like leaders and bosses and refer to leadership as something that is happening in the space between people and not as something being done by people. And we haven’t reached that level at all. And this is an old claim so don’t get me wrong, I’m not claiming that this is a new, completely new insight. Mary Parker Follett, she complained about that 80, 90 years ago in writing, in crisp writing. All this leadership bullshit, and the bull shit of over fantasizing about leaders at the top has a long history. So which is why it’s hard to overcome it.

Miljan Bajic: 07:44

It is and like a lot of that you talk a lot about systems and a lot of that has to do with systems. And one of the things that you have at least I came up with, I haven’t actually seen it but as I was looking for questions to ask you, I came across the word, the system and not the people. And that resonated with me. Can you talk a little bit more about that and what does that mean to you? 

Neils Pflaeging: 08:11

Yes, I think our organizations and also organizations, even organizational research and tools, and so it’s all about correcting people and also, let’s say we are walking a fine line there between blaming people and calling them heroes. It’s all about people, people, people, people, you know. We are over aggrandizing people instead of acknowledging that much of our behavior, yours, mine, as good as anybody else in organizations is about organizational context and systems. So we always behave within context, you know, Even I as a consultant, when I walk into a company, a client company, of course, I start behaving differently, because it’s just like walking through an opera or into a football stadium, we start immediately, start adapting our behaviors. Which is why whenever we observe behavior, in software development or in management or whatever it is on sales, we do not observe the person and the problem is not with being authentic or more purposeful or mindful. Although I think there’s a lot of bullshit narrative going on still in our field. And we should look more about how systems are designed and change the systems we work in. So work systems, the company systems, the way we pay, the way we manage people, or we shouldn’t, of course managed them much less, we should finally get rid of practices like budgeting, fixed targets, bonuses, performance appraisal, the travel policies and much, much more even sales departments and key accounting. I would say that and I have often said this. I think even the position defined, let’s say, definitions of positions like agile coaches is doing more harm than good.

Miljan Bajic: 10:08

I would agree.

Neils Pflaeging: 10:09

Because it creates the illusion that agile is being done by agile coaches, which is not and it is not supposed to be like that. 

Miljan Bajic: 10:15

Exactly. And I think it’s like at least I see the same thing in the industry done, right? That there is that and it is more about here’s somebody is going to come and transform us. And companies are not really taking a hard look, even at systems. You know, I work a lot with organizations and most of the people that should know how to influence, how to create systems in organizations have no clue and somehow, over the years, they’ve moved up the ranks and nothing bad with that, it’s just natural, but what I find is that they really are not fit for the job. And they’re too busy, the system is also forcing them to be too busy to not even understand what they need to know.

Neils Pflaeging: 11:05

Yes, I would like to say that I see the problem less than people and managers, I see the problem more in we are really not taking care of organizational science. For example, culture. I mean, you are in the US, I’m in Germany here, culture, I think it’s a topic now worldwide and it was popularized by great people like Ed Shine and so on who I deeply respect. However, this confusion around what culture is that it is supposedly is something that dominates organization, culture doesn’t have that, it doesn’t dominate. However, organizational culture has the power to absorb you and make you blind for even the most fundamental organizational phenomena. After a while working in an organization for example, you become blind for how ridiculous certain decision making processes are, how ridiculous certain rules are… 

Miljan Bajic: 12:00

Like annual reviews? 

Neils Pflaeging: 12:03

Exactly. And you consider it normal after a while you know, exactly. So, that is a byproduct of organization is that organizations produce culture, which is what is perceived as normal. It is not something that dominates us. But it makes us think that oh, this is normal. In our organization, this is what we sometimes call it the status quo, which is ridiculous as well. But when we call it, it’s better to call it culture. The culture is what we perceive as normal. And so, in a way, culture is like the Borg from Star Trek. It absorbs us, it has the power of persuading us that things are normal. So it becomes harder to work the system because we considered all normal, for example, consider it normal, that there are agile coaches around after a while. We consider it normal that there are bonus systems, we consider it normal that they are fixed targets or that there is a travel policy, or that there are 17 layers of hierarchy. None of that is normal. Those are apparent byproducts of two command and control systems. And in order to break up the systems or transform them, we first have to become philosophers I think. Maybe this makes the philosophy of work the system clear. We have to learn to observe systems to change for some to flip them into another state. Get rid of [inaudible 13:23]. Doing organizational hygiene, you know, get rid of the travel policy, get rid of the performance appraisal, all those are flip means flipping the system and then something different becomes normal. A good example for how culture absorbs us is that today in Germany, gay marriage is considered totally normal. 20 years ago, it wasn’t because it wasn’t the law. So once we change the law and flipped the system, other things become normal. I mean few people in Germany would even consider going back to forbidding gay marriage, it’s normal. Culture has this effect. It’s beautiful. Sometimes we look back at history and think, what did we do? Just like that in organizations, some distances needed to see the problems as they are. 

Miljan Bajic: 14:11

Yeah, so that’s really interesting, just made me think of like, how culture and mindset are your culture? Like, if you think about it, that the collective level, but mindset is also I mean, it’s almost like we lie to ourselves, right? Oh, we have certain beliefs and those beliefs, you know, could be true for us right now, but different. What is your take on the mindset? How would you look at it and how much to does mindset need to evolve or perspective that we’re looking through needs to evolve and change?

Neils Pflaeging: 14:44

I think mindsets do not even exist. You do not have a mindset; I don’t have a mindset and we certainly do not have a shared mindset. You have your concepts, your theories, your beliefs, and I have mine and you have your values, I have mine. The whole notion of mindsets I think it’s hugely overblown. I think that something like the principles of the Agile Manifesto or software development, that is something like a mindset, you know, the principles, I think 15 or so 16, all in all?

Miljan Bajic: 15:15

12 and there are four values. Yeah.

Neils Pflaeging: 15:18 

Yeah, okay. Yeah. So that is like a mindset or the principles of the beta Codex, that I think we should call that kind of sets of principles of mindset. Because it’s something that we can swear an oath upon, you know,

Miljan Bajic: 15:31

It’s definitely Yeah. Yeah, definitely. I mean, yeah, I agree in to some extent, our values and beliefs and principles define, you know, how we behave. So it’s…

Neils Pflaeging:  15:47

Yeah. It’s very personal, your values are very personal. If I tell you, hey, we have to have shared values. That would be like, a fascist notion, you know? Not good. I want you to have your values, and I have mine and we can fight about it, of course, occasionally, when they stop, because of course, our values and principles are all about ambiguity and about can we still work together even if your values are slightly different than mine? Are we capable of dealing with diversity? That’s a big question. So yeah, all these things, all these fashionable words like mindfulness, mindset, purpose, culture, we have created a lot of, it’s a lot of storms about….

Miljan Bajic:  16:36

Marketing and branding. Yeah, maybe to some extent.

Neils Pflaeging:  16:39

Yeah. A lot of bullshit really. It’s a lot bullshit. In the agile sphere as an organizational development as in lean, or whatever you call it. A lot of bullshit going on. And everybody then tries to do certification course, five-layered certification course around it, right?

Miljan Bajic:  16:54

Blame the PMI for it, right. They, I don’t know, I think.

Neils Pflaeging:  16:58

Yes. 

Miljan Bajic:  16:59

Everybody steals PMI’s ideas as far as in it. But you know, the people are, I can’t tell you how many people are coming to my classes, and most of them are just coming for certification. And, you know, I was talking to somebody else doing that. They said, that’s it. You know, if you think of history management, and you’ve talked about history, and, you know, 20 years, what has happened last 20 years is not a lot of time. So like all this crap that’s happening and things that we’re seeing is, you know, what possibly more of doing agile rather than being agile is just part of the course. Do you believe that or what are your thoughts on that? Like, just that a lot has happened in 20 years, as we said, you know, some of the things didn’t change. But if you look at 20 years is not a lot in the grand scheme of things.

Neils Pflaeging:  17:49

Yes. You interviewed Daniel Mezick recently….you know.

Miljan Bajic:  17:55

Yes, Bias Mayer, yeah and a couple others as I’m starting this, so yeah…

Neils Pflaeging:  17:58

That’s a good thing by the way. Thank for starting this. What Daniel and I have in common is that we share an interest in how to develop organizations and not just have agile practices or some Scrum practices in teams. What we really care about how to make organizations you know, transform substantially, like have this kind of systems change, you know, of which, of course, Scrum practices and patterns, and so on, are part.

Miljan Bajic:  18:31

Part of that, yeah.

Neils Pflaeging:  18:33

And quite frankly, too few agilist I think, have become honestly interested in organizational development or change or the psychology of change. And there’s a huge gap. So when we try to make Scrum happen, or agile practices happen, often we do it with coercion and force, brute force. Yeah, or we try to convince others, which is already a ridiculous notion, because you can never convince people of anything. So the really, of course, I very much believe in the overall proposition of the Agile movement, of the Agile Manifesto, if I’m going to call it like that or in Scrum, I believe that it has the say, the right, it’s the right direction. It’s of course, about creating practices that are much more robust in complexity and much more fit for software development. That is all. That is unquestioned, I think. However, the way, how to bring it about, how to Scrum about, how to bring an agile organization about. There’s a lot of crime going on and in my personal opinion, all those scale frameworks are the same. They do not lead us anywhere good. Of course [inaudible 19:51]. Which is why Dan and I are suggesting approaches that are more let’s say holistic or whole [inaudible 20:02]. Well, organic based on invitation, based on people’s liberty to design their own organizations to transform their own organizations instead of having armies of consultants. Yeah, that is why we believe these approaches are liberating and important.

Miljan Bajic:  20:20

So in order to liberate, another thing that I hear you talk about is this, you know, concept of leadership, power and structural change, what are those three words mean to you in the sense of changing the system? How do you…?

Neils Pflaeging:  20:38 are

Yeah, when, again, maybe we didn’t talk quite clearly about it, when you try to change an organization by changing the people, you will never get anywhere, because organizations are not about therapy and they not correction institutions, you know, like prisons. They shouldn’t be. So we should work the system, the context, the environment, like the way we pay people, like the way we promote people, the way we deal with the future, we shouldn’t do planning of course. The we deal with resources. Totally ignored by everybody I know in the Agile movement, nobody cares. Nobody gives a fuck about how resources are. And how our results are measured from a business perspective. There’s a total disinterest in the Agile movement about measuring from a business perspective, from a financial perspective. Sadly, which should be should be completed. In the beta Codecs network, we have a much more, much clearer understanding of that. However, the overall intent of Scrum was never to correct people but to change the system so that people as they are, can do much more in much less time and more economically and get the job done. So work the system, that’s really the future. We have a website, workthesystem.eu as well, which presents approaches like cell structure design, open space data for transformations. What was the question again?

Miljan Bajic:  22:10

That’s tough when we go back to leadership, power and structure, right. Yeah, so it’s like that power, the authority, letting go and like decentralizing right, it’s so tough for people. 

Neils Pflaeging:  22:25

Yes, because we have bad theory about leadership, power and structure. Thank you for getting me back on track here. Leadership, power and structure. Whenever we talk about leadership, power and structure, we think about hierarchy, bosses, underlings, Scrum Master at the bottom, we think about those things. Now, that’s something that I can really only recommend all your listeners to check out. About 10 years ago, Sega Hammond and I, we created a concept called arc physics. And I think that is a part of the solution really. Orgphysics says, organizations are bound by natural laws, just like physical laws. We can opinionate about it, but they won’t change, you know, accepting or not accepting, liking or disliking those natural laws won’t change the reality. And the reality of organizations is they don’t have one structure, they don’t have two, they have three structures, three, leadership’s and three…. Let’s say three origins of organizational power. One of course, is hierarchical power, the power of position. I am your boss, I can fire you, I can hire you, I can fire you. And somebody in the organization signs the annual…how is it called? The audit report and so on. That’s formal power. It exists in an organization, this structure exists in every organization in the world. Formal power otherwise, it’s not even an organization. So formal structure in which hierarchy of formal power of position resides, that’s a reality. However, there’s a second structure in formal structure and that is the power of those who are liked.

Miljan Bajic:  24:10

Influence or I guess influence could be through the other, but I think more of the influence comes to that informal.

Neils Pflaeging:  24:18

Exactly that and then on social media, for example, we call influences influences because they have no follow up power. You know, they cannot call us to you know, do something and we cannot resist. No, we can resist, but they can influence us. So, from in social structure, informal structure resides is the power of influence, hierarchy is the power from that resides in formal structure, influence resides in informal structure. Every organization has tool. Now imagine work, you can get work done neither in formal structure or informal structure, you need value creation structure, as we call it. And that is the most interesting, the most unexplored part of orgphysics, because we have a good understanding of hierarchy and organizations and some of influence as well. But value creation, it means that an organization consists of teams that create value for each other, with each other, and ultimately for an external client or the external market. And this…. 

Miljan Bajic:  25:21

And that, yeah, that goes back to the system. I mean, I see the way that you describing the value structure is the system understanding the system. Yeah. 

Neils Pflaeging:  25:28

At the shape of a value system or value creation structure has a center and the periphery and outside there’s a boundary of center periphery, the boundary binds the periphery so to say, it looks like a peach, and then outside is the market. And the periphery should be in charge, which in most organization isn’t. It isn’t the charge. The centers [inaudible 25:50] which is a terrible mistake in complex markets, you know, and this notion that ultimately, if we want to have better performance, there’s no way around improving value creation structure and of course, diminishing formal structure as much as possible. Formal power and formal structure and formal leadership and putting value creation structure first. There is a power that resides in valuation structure, which we might call reputation. Reputation power, the power of those who have mastery. You know, skill. 

Miljan Bajic: 26:25

What about the other, so you mentioned leadership power structure, they all have three dimensions kind of to them. What about the other two? Could you talk a little bit about those?

Neils Pflaeging:  26:37

The leadership?

Miljan Bajic: 26:38

The power structure, the power, like what are the three types of power and leadership because the way that…

Neils Pflaeging:  26:44

I think the three types of power or hierarchy, influence and reputation. Three kinds of power in every organization. Hierarchy, influence reputation. Of course, we over accentuate hierarchy. Many of us ignore influence and most organizations have no clue of really what to do with reputation, you know, the power of those who have mastery. Sometimes we then talk over decisions should be made at the frontline or by those who know. We approximate, you know, we find ways of trying to understand value creation structures. But the real thing about value creation structure is you end up, every organization ends up having it in form of a cell structure design, cell structure network thing. So a network of cells or teams that create value with each other for each other, and between teams. Toyota has a very good understanding of this kind of structure, Southwest Airlines, as well as another American company or WLGore. Of course, here in Europe the great companies like Hammonds Bank and DM and so on. They’re great companies that have a great understanding of this but those are the exceptions. And all others. it’s trying to create more value or improve through formal structure, which is really good. Safe, of course, is a great example of a framework that tries to improve agility through fundamentally stacking agile teams, it cannot work.

Miljan Bajic: 28:18

I have been part of several safe, what I call now installations and it just doesn’t work like after, I’ve never seen it work more than two years, or people have to evolve in and change it. It looks nothing like safe if it evolves. Another thing that you said, caught my attention, which is changes, like adding milk to coffee. And your perspective on change is like a lot of things and your perspectives are different. And that resonated with me too when I saw kind of what you thought about that. Could you share with the audience like what you mean by change is like adding milk to coffee? 

Neils Pflaeging:  29:10

Yes, that refers to what I said before that we have to become much more knowledgeable about the psychology, the dynamics of change in organizations and how it really happens, we have so much prejudice about it, which expresses itself in metaphors like change is a journey, or there’s so much resistance to change which we may deal in this or that way. Our prejudices about change are so big that we talk of things like status quo and kicking it off and programming it and blueprinting it and structuring it. The whole notion of change management is like real garbage. It’s like really waterfall applied to organizational development. It’s all bloated and busted theory and all the worst theory there is. And of course, all underlaid by a notion the prejudices against human nature, you know, that are negative. We have to motivate people to change that kind of shit. So..

Miljan Bajic: 30:05

Like there’s something wrong with people, like it’s almost like we need to fix them that type of belief. Yeah.

Neils Pflaeging:  30:14

Yes. Just like leadership itself, which often assumes that people are the problem, when we talk about change, usually we assume consciously or unconsciously that people are the problem, which they are usually not, sometimes Yes, because there are assholes in every organization, let’s face that. Assholes exists, I’m not counter arguing against that. And there are people who are sick as well, and so on. So there are many things that exist in organizations. But by and large, people are not the problem, the system is we have created the problem. So, this is how we came up with 10 years ago or so, we figured out that there is a whole, very, very small, there was a small amount of researchers and people who were saying, change, management doesn’t work. For this and that region, resistance to change doesn’t work and change cannot be planned. And we looked very deep into this and figured that normal change is more like a mental coffee. You change when you pour some milk into coffee, it never goes back. It’s forever changed. And it mixes, you don’t know how that will happen. It’s of course, this is just a metaphor, right? So…

Miljan Bajic:  31:27

Yeah, no, it’s simplified but yeah, but it’s kind of, it’s not, in a sense, it’s forced by the system that you create, which will be the I guess the constraints, they will create the cup, and then you know, it’s doing it by itself, even if you don’t steer it, you know, it’s going to mix. So, yeah.

Neils Pflaeging:  31:48

Exactly, which is an interesting, right. Even without stirring within the boundaries, that there are two liquids and they will mix, and you don’t know precisely how they going to mix,  that is chaotic actually, to be precise, scientifically is said it’s…

Miljan Bajic:  32:01

From a complexity.

Neils Pflaeging:  32:05

And it can never be repeated just the same way because it’s okay. But you know the end result will be mixed coffee with milk mixed in a cup, you know. So you know, the end result, as so often in chaotic systems, you know, the end result, but the path. And changing organizations is very much like that, we can trigger the change, we can, as we say, flip the system and then observe the consequences and flip again. We can imitate or flip systems, we can, for example, if you take a horrible bank, like Bank of America or so, take out the bonus system, the whole organization will change, you don’t know exactly how, but it will change. If you take out the travel policy and substitute it by a principle, let’s as we deal consciously with all our resources, we protect all our resources, including money and people’s time, things will change. So organizational transformation does not require blueprints, projects, programs or consultants, it requires a consciousness that actual transformation will require 700, or maybe 7000 of those interventions are several 7000 times putting a little milk into the coffee, so to speak. Yeah, little flips. These changes flipping on actually, it happens in organizations all the time. Every organization…

Miljan Bajic:  33:34

This is really like understanding the complexity management and I’m still surprised like how many people are not, especially as I said earlier, like there should understand complexity management, don’t fully understand that because those are like fundamentals of complexity management, like this is not, you know, it’s the basics. So you would think somebody that’s responsible for organizational effectiveness, organizational systems, they would know the basics of the system that they actually part of.

Neils Pflaeging:  34:10

Yeah, then they don’t as most Americans know nothing about America, American culture, because they have never been abroad, they cannot compare. That’s Oscar Wilde, I think said that once. You can only know a culture of your country if you know two.

Miljan Bajic: 34:25

Exactly.

Neils Pflaeging: 34:26

Only if you know two. Just as you grew up in Croatia, and now you live in America, I think you have a fairly good idea about what America is. I lived in Argentina and Brazil, also the US a little bit and Germany and so on. I think I have a fairly good idea about what Brazil is like, many Brazilians don’t. And that’s not because I’m intelligent, it’s just that we are blinded, blindsided by our upbringings and our own history. Again, culture is assimilate strongly, you know. But okay, you said those things should be obvious and they should be, just those notions of change or transformation that we described about, they should be natural. They are not. I think there’s a lot of education lacking, we educate people in the wrong ways about the wrong things. For example, we have leadership development programs, which are just for some, and they just get some knowledge and then they come back to systems that are totally unchanged, and they don’t have a clue how to change it. Also, as Daniel Mezick and I would promote, organizational development, organizational transformation these days should be done by all the willing, so ideally, by everyone together, not by leaders at the top. Because that makes it faster and more, you know, ingrained embedded in the, let’s say in everybody’s mind. So…

Miljan Bajic:  35:52

Yeah, the more people that the [cross-talking 35:54].

Neils Pflaeging:  37:33

More leadership development. I think the solution is less agile coaches, less consultants, like myself, less of us, and less training, conventional training, and more, you know, action research as Kurt Lavine would call it. You know, more working the system together, all at the same time, in a process that, for example, begins in open space and ends in open space as Daniel Mezick and I programmed it.

Miljan Bajic:  36:22

Yeah, and I love that concept. And I think, you know, it’s very hard. It’s simple concept but it’s very hard for people to imagine, like, I think it goes back to that, blind let’s say and cultural like, if you haven’t seen it, if you’ve been part of the open space and part of that concept or just experience, it’s like one of those things, once you see it, you know it and you see, and Dan was actually telling me about one experience with a client where, you know, somebody just showed up to make sure that his boss sees him that he showed up to the open space concept. And then when they actually became part of that, and they saw that they can actually drive the agenda, that they have a say, it was like, I want to be part of this. This is if somebody is actually valuing what I have to say, and that’s liberating in some way. So that was a really good example of, you know, we resist it to where see what it is and then once we actually experienced it, we want more of it. So what do you think? Yeah…

Neils Pflaeging:  37:33

It’s a very nice example of also that you never know when people will have this insight that this is going to be different, we are working the system together, what it means to us, these insights you cannot command them, of course, they come when they come and that’s often-surprising moments and surprising interventions or interactions.

Miljan Bajic:  37:56

Do you have any stories like that? Like, what’s the craziest, most messed up thing maybe you heard a client have done or any stories that you share over the years that you think people would enjoy hearing?

Neils Pflaeging:  38:11

I can only, well, there are so many things, because I’ve done this for 17 years. And when we found out about Daniel Mezick’s approach, open space agility, that was only three years ago, in May. By the way, the magic moment happened in Portland, Maine, that we figured out Oh shit, we could instead of just to agility with this approach, we could transform entire organizations. That was the starting point of open space, the open space-beta approach. This is just a book, you don’t have to read it if you don’t like this. A lot of it online. But this notion of transforming organizations fast, that was a shock, came as a shock to me, because I had worked for 15 years by using other approaches like William Bridges was influential in my work, he wrote a book called Managing Transitions which is about the neutral zone that we must set through to learn the new. We use the John Cutter approach, leading change or change leadership. So we put a lot of change approaches together. But then when we found this approach, okay beginning with everyone, you know, just invite everyone to do an open space thing and do the change, do the transformation work together for 90 days and then close it, let’s say to time box transformation, that it flabbergast. And of course, we did this with a couple of companies already and even the sponsor, which is one person in every organization, client organization, organization undergoing the transformation, the way the sponsor evolves throughout these let’s say, last six months all in all of transformation, that such as open space beta chapter takes that has, it’s truly flabbergasting. It’s shocking.

Miljan Bajic:  40:14

You open up any possibility, right? It’s like people almost, you know, it’s nice to see leaders open it up. It’s almost like you know, anybody has a say, anybody’s like everybody’s equal. And it can be liberating. I mean, like, if you’re in a system that’s constantly saying, shut the fuck up and do your job and then all of a sudden, you know, you actually can have a say, in what happens is others can say; yeah, I believe in that and you know, I want to do that and I want to do that, versus you know, what I’m being told. That’s liberating. 

Neils Pflaeging:  40:55

Yes, exactly. Those people inviting everyone to do this together, they learn the most, that’s what we found and they come out of this transformed because they…

Miljan Bajic:  41:12

The system is messing them up, too, right? So, you know, it’s liberating. I know, when I talk to people, they want to change the leadership, but it’s also the system is forcing them to accept ways. I remember one guy told me, you know, I was talking about exactly that, like, you know, just letting go. So the authority letting go and when you have incentives and bonuses died at the end of the year, with wrong, encouraging wrong type of behavior, they essentially came to me and said, Miljan, what do you want me to do? It’s between, you know, paying for my kids’ college, or doing the right thing in the company, what do you think I’m going to do?

Neils Pflaeging: 41:55

One through the other, both.

Miljan Bajic:  41:58

Well, a lot of times making decision and doing the right decision will not get you the bonus. And if 20% of my bonus, which is the policy within the system, then I’m going to make sure that I get the money, even though I disagree with, you know, how that might impact the organization long term or how it might impact the people in the organization because it’s first you know, my family over the organization. But the system, the policy itself is forcing the person to act that way or behaved that way.

Neils Pflaeging: 42:37

Every agilist in the world should read a great book about exactly this topic. It’s called Punished by Rewards by an American author, Alfie Cohn, I think he resides in New York, Alfie Kohn. Punished by rewards from the 1990s, I think. Excellent book about why, of course, all incentives or bonuses are toxic to not just to…they damage performance as well and they damaged human motivation. In that book, beautifully as you have children, I’ve grown kids, it also outlines why tests, of course, and judging people’s performance or behavior is totally destructive. Yeah. So those are the basics, I think every agilest should read those books. On Beta-Codexorg, we have a whole reading list, a list of I think, 70 books, and all very worthwhile from the trivial, from the beautifully trivial, like Austin Kleon’s Steal Like An Artist. Do you know that? Steal Like An Artist? Great book by American.

Miljan Bajic:  43:41

I’ll check it out, too and I’ll leave the link in the description below so people can easily access it.

Neils Pflaeging: 43:50

So we have all kinds of great books, including, of course, books by Daniel Mezick and myself, but starting with, you know, stuff about organization development systems theory and so on. So yeah… 

Miljan Bajic:  44:02

By the way, yeah, I love the, like it and you spoke about it earlier, about design of the book. I love the simplicity of your books, both Dan’s and yours, especially the last. Well, the first one got me interested, really in, you know, how I kind of get in touch with you years ago, but the simplicity of it and the way that you’re raised and explain the concept, I think is it’s not an easy thing. People think it’s probably an easy, but I know that’s the probably the hardest part. How do you explain these complex concepts in a way that people can resonate? Is that your experience or maybe it comes easy to you? I’m not sure.

Neils Pflaeging: 44:48

Well, I take years and years to figure out ways of saying things easier in my books. And but ultimately, I think this goes back to an old Einstein quote.

Miljan Bajic:  45:05

It’s something along the lines, if you can understand it or explain it in simple words, you don’t understand the concept or something like that.

Neils Pflaeging: 45:15

Exactly. And sometimes when people talk about agile or complex systems, it sounds like Okay, do I have to have a PhD for this? And that just means that the so called expert doesn’t know shit about it, or what it means in practice. I think systems theory or complexity phenomenon, in one of our books, we like to talk about the difference between the complicated and the complex, the blue and the red, you know. Every 14-year-old or 15-year-old should learn about this and understand it and wrap their heads around it. It’s not you know, rocket science as they say. Those concepts I think everybody should know them and everybody can know them and they are not banal. Because in the way those things [inaudible 46:05] organizations and collaboration, they’re not banal. For example, the power of time boxing, I think that’s one of the most beautiful things in Scrum. Timeboxing is a beautiful concept but to understand it clearly why is that? Why the sprint? And so many people talk badly about Sprint’s, I don’t see it. I think timeboxing is a beautiful idea. Philosophically, especially, you know, the notion of time, is something that easily slips away in organizational day to day activities.

Miljan Bajic:  46:35

So Daniel and I talked about and just because I think talking to both of you, understanding both of you, we have a lot in common. And the reason I started this podcast is really, to bring attention to what I believe is, you know, agility or what comes after the so much focus and agile with a big A, and understanding these patterns and I spoke with Dan and I agreed with him and it’s the next phase of this is understanding patterns like you said and understanding these, like, why do you do time boxing? It’s not like, oh, the scrum says on page 10, you know, timeboxing so I’m going to do timeboxing. And I use the example of cooks and chefs. Like chefs know ingredients at the chemical level. They know, like, if I throw this thing with this, or if I have these ingredients, I know what I can make out of it. Right? And the cooks just blindly, most of the cooks and I actually wrote an article on this on a spectrum from cooks by the book to cooks, with the unique style, cooks with innovations, and then chefs. But in organizations, we have a lot of cooks that just follow recipes blindly. And this is like following a framework like Scrum, without understanding for instance, why do you have timeboxing? Why do you have a role of a product owner Scrum Master developers. And in my gut feeling, I think the next 20 years or the last 10 years, were all about big agile and these big scaling frameworks, the next 20 years will be about understanding the patterns, understanding the complexity, management and coming up with unique recipes. Because I’ve never seen organization just blindly apply any framework and be able to do it. It’s only they have to create their own recipes with their own cooks and chefs, rather than Hey, Miljan, come in as a perceived chef and tell us what to do. So what do you think? What do you think, what comes after agile? What is the, I know, it’s hard, obviously, to predict, but what do you think the next 20 years will be about? Or at least then.

Neils Pflaeging: 48:59

Yeah, I think there’s two big topics or two big issues in this. I think what you just described relates to the tools for toolhead problem. Which every consultant, I’m a consultant, I think you should be classified as a consultant as well. And of course, when our clients come up to us, they tell us what they want. Yeah, for example, I want [unsure 49:25] or I want scrum or I want safe or I want less. They tell us what they want or maybe they say I want Lego serious play, I don’t know, all kinds of shit you know. They want all kinds of shit. And what a consultant should always reply is, No, you don’t. A real consultants doesn’t say yes, I’m selling you the shit. A real consultant says No, you don’t. First you want to understand your problem, If you had understood your problem, you wouldn’t beg me for tool or whatever hype shit. So I think we must, this is one of the problems in our industry. But let’s go back to really advising our clients instead of just selling tools, you know, certification, certification product, product, Product, Software, software, license, license, days, days of agile cultures you know. It’s very easy of course to sell products, but it is evil, I think. We must help our clients understand their problems better, you know, we must be more of an organization of philosophers for them or you know, help them become their own philosophers in their own…

Miljan Bajic:  50:32

Exactly, the way that they’ll build on the analogy they use. It’s like, we need to help clients develop their own cooks and chefs, rather than relying consultants to give them recipes, because you work with probably big consulting companies, you work to, you know, they give you a playbook, they give you and they’re like, here you go, here’s your recipe, and good luck, even though your ingredients change, and you don’t know what the heck you’re doing, good luck, because we’ve taken your money, and we’re going to move on to the next.

Neils Pflaeging: 51:01

I like to, I recently published a piece about two axes diagrams, and how they tend to confuse people into believing stuff, you know. And of course, all these diagrams are part of the bullshit as well, the tools are, much of the software is applied and then cannot be used because of course, the problems lie elsewhere, not in software or in technology. So I think when one thing that should change, and I’m not sure how it will change, is we should move away from the tool craze, and enough selling tools, tool heads, to go back and actually help solving problems, and that usually means the tools are needed afterwards. Even tight your order from Toyota wanders, I think 40 years ago that never crystallized the thinking into tools, because the tools will be void of the thinking, you know. We shall never do what the Agile movement has been doing since the Agile Manifesto if I may call it that way. So we are all in the wrong packed with tools, overwhelming fascination for tools. Tools are very seductive of course and they’re like heroin for clients and for sellers, of course. However, we can never bring about the great organization transformation or the necessary organizational transformation with tools. So this is like preaching to you. But I mean, I know we are both on board. And we still can make a living, I believe, without selling tools. But the other more important thing for agilist, I think, is the Agile Manifesto. Of course, the real name is manifesto for Agile software development, but let me call it the Agile Manifesto. It was designed to solve an immediate problem in software development, it was never designed to transform organizations. So there are some things that are woefully absent from the Agile Manifesto or even from the scrum Guide, which is also about solving team problems. And I would advocate what comes after agile, of course, agility should come after agile. But to achieve organization wide agility, we need a more robust set of principles, or as we discussed earlier, we need a different mindset, you know, set of principles that reaches economic questions, question of coordination of resources, of how to deal with people’s pay and organization and all that. These principles exist and I know I’m very self-serving here, but the beta Codex is exactly what is needed. I believe that principles of Agile software development plus principles of the beta Codex can consult out of the mess for software companies. For production companies, of course, you need to spice it up a little with Lean principles, principles from Edwards Deming and so on. So the principles are there, they are in Agile, they are in lean, they’re in the beta Codex and I think we must put together finally, and recognize that we should be a united nation of you know, organizational transformers of people striving for agility, however, we might call it.

Miljan Bajic:  54:15

Yeah, and, you know, at least what I’m seeing is in the reason that I invited you to come and share your thoughts is because I think you’re one of those leaders that’s been saying this for years, and I’m seeing more and more people aligning to those principles. And I think it’s a momentum that’s gaining and that’s what I’m seeing is going to slowly start to kind of expose itself and it’s also helping that most of these transformations are unsuccessful. And so people are realizing…

Neils Pflaeging: 54:49

People get tired of the bullshit, right? 

Miljan Bajic:  54:51

Yeah. So, it’s like, it’s a wakeup call and people can say you can no longer say let’s do this again, because you know, that hasn’t worked last three times we tried the agile transformation, yeah.

Neils Pflaeging: 55:02

Yes, you’re right. Personally, I would like to spare organizations decades of wasted, you know, transformation, reorganizations consulting projects and that kind of stuff. I would prefer seeing them doing the real stuff, open space, beta open space agility straightaway. That’s what I would like best. But it’s a question of course also of insight. And I think it’s very seductive to believe that consultants will save my problems, tools will save my problems, technology or software will save my problems, very seductive. It is very seductive to believe that by slicing and dicing the organization, I can just transform the slice and little dice or the little slice. Yet software development or production or HR, it’s very seductive. Slicing and dicing does not work. And it’s very hard, I think, it requires some tough reflection to understand that transforming an entire organization might well be more effective and much faster than trying to transform a slice.

Miljan Bajic:  56:14

Yeah. And it also like it, a lot of times they go into organizations, leaders come in, and they don’t have a lot of time. And it is like, in a sense, they’re under pressure to because the system or whatever, you know, in this instance, the board is saying, you have this much time to prove what you can do. And this is what you can do but if you start with those silos, you don’t even have time, you know, in a sense, like, you know, it’s like you’re doomed from the start.

Neils Pflaeging: 56:45

Lack of time is a byproduct or a collateral of an alpha or command control organization.

Miljan Bajic:  56:50

Exactly, exactly.

Neils Pflaeging: 56:51

Because of [inaudible 56:52] the organization to communicate from the top down to the bottom up and left and right, you need to slice your agenda into little slices that are void of thinking at the end, and so on. Which is, for example, why I educate my clients, when they get in touch with me, one of the first thing I educate them is that we don’t have to have a conversation if you have just 30 or 60 minutes. For a good conversation, it takes 90 minutes or more. It’s okay, if it takes more, but not less than 90 minutes. It’s something that a good consultant, and I hope if I’m at least becoming one, I think we have to teach this to our clients as well. No, don’t fuck with me with 20 minutes or 30 minutes. No, if we have a real, that’s not a conversation, it’s a throw up.

Miljan Bajic:  57:38

So, I think, what I’m hearing you say is like, we have to have integrity, like as consultants, as coaches like, Yeah. It’s like we have to call the bullshit, we have to be honest with ourselves because we know it, right? A lot of times I’m guilty of it too. You know, like, you know, you’re saying things that they want to hear and you’re adjusting to their system without actually you know, standing your ground and saying, this is kind of what it takes. Do you want to do it or not call me when you’re ready?

Neils Pflaeging: 58:15

Yes. I sometimes tell prospects things like this is what I know what works, I describe and discussed it, you know, if you want to do something fiddling around with it with tools and more consultants, you do it and we will probably be talking again in two years. Yeah, integrity, it’s something that must be…

Miljan Bajic:  58:43

Embraced, right? Or in some way to…

Neils Pflaeging: 58:46

It requires serious stance on what you do and taking yourself seriously. And I think you’re totally right. The agile industry overall, something that Daniel Mezick also criticizes, yeah, we have lost, we have industrialized, we have created an agile industrial complex. The same goes for the agile, the consulting industrial complex and other of these…As individuals, we always must ask ourselves, do I want the easy sell for and am I willing to do the bullshit? And then fool myself that oh Lego series play in the long run, it’s a good thing to transform, you know, it’s not, you know, if you do it at the wrong time, you know, for the cheap sales. And then, of course, there are methods that are far worse than that, and we yeah, we have to be we have to practice integrity.