Management 3.0 in Action!

Case Study: One Insurance Company Takes Agile Management All the Way

Our Happy Melly team has been touching base with other teams experimenting with Jurgen Appelo’s Management 3.0 and Managing for Happiness. If you haven’t had the chance to check them out, go visit the Management 3.0 YouTube channel.

Peter_Stampfli_CSS_Management 3.0 Case StoryToday we’re switching from video to written word, in our interview with Peter Stampfli of CSS Insurance in Lucerne, Switzerland.

And we’re not just chatting about just one, Peter’s experiments run far deeper. Let’s find out what he and his team has been up to…

Louise Brace: Hey Peter! Tell us about CSS Insurance.

Peter Stampfli: CSS Insurance is the leading public and private healthcare insurance company in Switzerland with 1.7 million customers and a market share of 16 percent. The company has 3,200 employees, all dedicated to serving the needs of our customers.

Louise: And tell us about your role at CSS.

Peter: I’m head of software engineering and architecture of the insurance core applications in the IT- department. Our team is made up of 80 software engineers, who work across 12 agile scrum teams, in four units. We are all working closely within the business to improve software solutions.

Our solutions are driving the business critical core systems. It’s a high volume and high transactional environment. For example, the claims solution is processing over 14 mio medical claims documents with a straight-throughput-rate of 57% and turnover of 4.8 bCHF of medical expenses. And since the healthcare sector is highly regulated; quality and traceability is pretty much crucial for us.

Beside the business aligned scrum teams there are also the technical architecture and tools teams which are providing architecture frameworks, solutions, build infrastructure and collaboration-tools for the development scrum-teams.

Louise: How did you come into contact with Management 3.0 and Managing for Happiness?

Peter: At my previous company we were experimenting with scrum. As the pilot project was successful we decided to scale the new agile methodology into a larger program. At this point, Management 3.0 was recommended by the agile coach, Mischa Ramseyer.

At CSS Insurance I have had the opportunity to implement the Management 3.0 concepts in real-life line-organisation of software engineering and delivery teams – and it’s a very different thing, to running an agile project or program.

Core Services Leadership Team final

Louise: What ideas did you take away to apply in a real-life situation?

Peter: When I took the Management 3.0 course, I was initially looking for answers to my concrete problems. However, I realized that Management 3.0 was much more about the philosophy of a new leadership model.

It taught me about the concepts of intrinsic motivation, how to scale agile teams and the empowerment of teams. I realized I was missing a 10 step manual on how to implement Management 3.0 practices.

At the core of our agile transformation was the reorganisation of the following dimensions:

  • Functional: building x-functional teams by merging requirement, testing to one scrum-team with a product owner in the line of business
  • Hierarchical: Removing two levels of middle management, transforming the team-leader role to scrum-master
  • External-ratio: creating 40 new internal job-positions through an E2I program

During the first phase of the agile transformation, we were focusing on the process –  ensuring the delivery and system stability. Transforming the culture as the main lever for change is much more difficult and complex.

We had to consider questions like, “What does self-organisation mean?” and “How do we implement a new leadership model?”

Facing these new challenges I found that Management 3. 0 Workout, with its concrete tools and example, was extremely helpful; especially in the exchange with other participants, who were facing similar challenges.

Louise: What practices have you integrated?

Delegation Boards Management 3.0

Peter: The Delegation Board helped us to foster the self organisation of teams and we introduced Center-of-Excellences i.e. Business Guilds, as part of the new governance model.

These were particularly helpful in our discussions during the definition process, they helped to clear the mutual expectations and to empower teams.

agile goals, OKRsWe also transformed the old MBO-process to an all new agile-goals-process. Rather than breaking-down the objectives to individual goals, like in the old world; we now focus on the contribution of an individual, or team, to a strategic objective. Focusing on “What is my personal contribution?”

All personal objectives are now fully transparent and will be self-validated after shorter cycles; changing the period from one year to 3-4 months.

The overall effect is that the personal incremental goals in the new process are less abstract and linked to the team’s daily-work. The objective’s key results as the measuring point becomes more tangible and achievable.

We also introduced Ship-it Days, to develop the team’s competence in technology and methodology and to foster the innovation culture. Each team member is given four days experimenting-time.

First the teams were focusing on their daily-work and were pretty hesitant to take out time for innovation.  But now we have Team Hack-days and what I’m really happy about, is that some team members are even thinking of inviting their business partners to these sessions.

Additionally the teams created a FedEx idea-site where new ideas are presented. The idea-owner is looking for sponsorship and collaboration.

Innovation and employee engagement

For further improvement we are planning to provide a special environment with separate offices and infrastructure.

Louise: Were there any aspects that failed in introducing experiments?

Peter: We had two main challenges:

  • Because it was all pretty revolutionary stuff for our company, we had to present the ideas to senior management and we had to be very careful that the teams wouldn’t feel like guinea pigs.
  • We had to comply to the constraints and rules of the corporate governance.

Our solution was to implement a sounding board, with elected members from different teams and representatives of other disciplines, such as HR.

The role of this board is like a Change Advisory Board, to provide valuable feedback and improvement in the onboarding of new ideas. This gives us a good instrument to feel the “heat” of the organisation, throughout the change process.

For example, the idea of introducing Merit Money was completely rejected – stating that the organisation is far from ready to adjust the compensation model. So the bonus system remained a top-down-process. A top-down introduction of Merit-Money would have been very disastrous…!

Louise: Who’s been involved in this transformation?

Peter: The agile transformation was focused on the software engineering departments; approximately 160 people, across 20 teams. But of course, changing the operating model and culture impacted other departments.

First and foremost the line of business with the product-owners. Transparency, collaboration and trust required an empowerment of this new role. The CIO and driver of this initiative gives us strong support within the board of directors.

The other IT disciplines such as operations, IT-project management, reporting / controlling are changing and following along the roadmap.

Louise: Have you seen an overall change in the productivity and motivation in your organization?

Peter: Definitely! We achieved all our top-level management objectives: the customer satisfaction was raised by 49% and the system stability by 57%. We clearly feel that the trust of our business partners is coming back. And at the same time, thanks to an external-to-internal program, we managed to cut the costs by 18%.

Louise: What are you working on for the future?

Peter: We are currently focusing on the following areas:

  • Agile engineering practices: Test-driven development and continuous integration – changing the culture “from bug-detection to bug-prevention”, using some of the Champfrog techniques.
  • Culture & Soft-skills: Investing in the personal development of the team-members. This is inspired by the Feedback-Wraps. We are in the process of setting up a compulsory soft-skills feedback training “Fit4Feedback” for all team-members.
  • Agile Alignment: even better involvement of the other IT-disciplines and helping to improve the maturity within the business. Focusing on mutual understanding and learning techniques, such as the Celebration Grid.

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