Shifting to a Product-Based Operating Model with APOM - The Accenture Way

In this episode of the Scrum.org Community Podcast, Dave West chats with Accenture’s Professional Scrum Trainer Dimitris Dimitrelos about how companies and organizations introduce the Agile Product Operating Model (APOM). They explore the shift from project-based to product-based approaches, how APOM integrates business and product development, and the challenges of aligning legacy structures with new ways of working. Dimitris highlights the need for strong C-level sponsorship and cross-functional transformation teams to drive success. Tune in to learn how organizations are navigating this transformation to achieve true business agility.

Transcript

Lindsay Velecina  0:00  
Music. Welcome to the scrum.org community podcast, a podcast from the home of Scrum. In this podcast, we feature professional scrum trainers and other scrum practitioners sharing their stories and experiences to help learn from the experience of others. We hope you enjoy this episode. Hello

Dave West  0:19  
and welcome to the scrum.org community podcast. I'm your host. Dave West CEO, here@scrum.org today's podcast is actually something I'm really excited about. We're fortunate to have with us a professional scrum trainer, Dimitrios Dimitrelos. I'm really excited to have him join us, because he's going to be talking to us about his experience of introducing the Agile product operating model. For the people that have listened to this podcast before, or maybe you've been to scrum.org, website, you've seen that I'm really interested in how organizations can move from a project based approach to a product based approach, and what does that really mean to them? Demetrius has been doing some amazing things about introducing products with his work at Accenture. So so I'm really excited to have him at the podcast today. Welcome Demetrius.

Dimitris Dimitrelos  1:16  
Hello. Hello, Dave. Thanks for having me. It's really great to be here, and it's also a really nice subject that we're going to discuss about tonight.

Dave West  1:26  
I think it's really, really interesting, the whole topic of product thinking. I mean, it keeps me up at night. It is so interesting because how do organizations move from an industrial mindset of projects, of allocating resources, of managing these flows, to something about delivering value to customers in a sort of package sense. So, so I'm, I'm glad you could spend the time. Where are you joining us? From Demetrius?

Dimitris Dimitrelos  1:55  
I'm joining from Martins, Greece,

Dave West  1:59  
Greece. Well, that's awesome, you know, sort of like the place that civilization began. So I guess it's very APO then, really, to be talking about the next wave of change. Maybe I'm playing this up a little too much, I don't know, right? So let's, let's, let's start at the beginning. That's a very good place to begin. To quote Julie Andrews, a palm agile product operating model, or, you know, this move to product thinking. What does it what does it mean to you?

Dimitris Dimitrelos  2:31  
So let me start by saying that in my mind, product thinking is in the core facility, in a sense, it's it's the soul of agility. So I'm sure you will agree with me that the need for agility is there, and it's bigger than ever. So the external environment, the market dynamics, customer behaviors, are changing faster than ever. Crisis come and go and an increasing rate. That means companies, organizations, they need to adapt in a faster and faster rate. So the need for agility is there, even though the world agile might not be as hot as it used to be, right, but the need for agility is there. And a lot of organization, a lot of organizations, companies, they focus on agile from the technology point of view. They started doing agile in in it and in digital mainly the technology department. So now it's like the rest of the organization, the business of the organization, the product part of the organization is is joining this wave. So the a bomb, the Agile product operating model is a structured way to try to organize the company around the product, around the value, usually in Accenture. Our customers call us to help them transition in this way we have to typical, typically. They want to change organization structure, create new processes, identify new skills capabilities, create new talent pools. They want to evaluate the technology. They want to change the culture. So all these things are part of a major change initiatives that APM requires.

Dave West  4:49  
It is interesting. You said that you know this is business driven, because one thing that you know, agile obviously started in software development and. My boss, Ken Schwaber and and others were working in these software teams and realizing that traditional project management approaches were stifling the way in which this technology, or technology was being used. So became this way of working, which then, you know, transformed a lot of technology organizations. So it started there. Then we had a few years of business agility, right? And people were talking about business and the like. But what I saw, and I don't know if you saw the same religious was this, they were taking the ideas that were being practiced in software, but they weren't changing the unit of consumption that they were basically taking their existing project management operational systems and saying, let's do some agile stuff on that, you know, build a backlog and and manage, you know, self organized teams that aren't that self organized, but we'll pretend they are. You know, use user stories, JIRA Trello, whatever the Kanban boards make things, and it did have some improvement, but without the paradigm of a product and this universal sort of container organizations were sort of floundering with business agility, even with the Spotify model and all the all the lie is that, and is that what you saw, is that, what you observed, as well as organizations wrestled with business agility,

Dimitris Dimitrelos  6:30  
absolutely, business agility means much more than creating some Scrum teams within the business department. Yeah, it's much more than that. It's a much more brave move. It's a much more structural move around the organization, and it's a very good sign that we see that we are called from the business side. Business has the initiative on a pump introduction and apon adoption. And this time, technology is around them is with them. So it's not, you know, it's not now initiatives that are that begin from digital as they used to, they begin from it, and then they have to bring business along. Now business starts the journey. Business starts to change, and technology follows. And this is just one of the differences that we see.

Dave West  7:40  
So let's explore those differences a little bit more. So the number one is, this is a business initiative, where Agile transformations traditionally have been a technology initiative, right? So that's the you know. That's the number one. What? What? What other you know differences do you see Demetrius. The second

Dimitris Dimitrelos  8:00  
one is the definition of success. So if you start from technology, then success is smooth delivery, right? But now it's not about delivery. It's not only about delivery anymore. It's about product success. And one thing you could say here is that product success also include product operations, right? Business Operations are in the mix. So it's not only about new projects, you know, getting more stuff, more features, out of the door. It's also really having an impact on the market. So that means creating feedback loops about what you're building. Do you measure what you're building? Do you measure the impact of what you're building, what your developer on your customer behaviors? Are you getting value for the money you spend? And also, how do you integrate the business operation with the project, the product development. So you create a new product, how do you market it? How do you create campaigns around how do you support it with your customer base? All these things are creating value from the product, and it's now one thing. It's not, you know, a wall between delivery projects and business operations.

Dave West  9:26  
I just want to lean into that for a moment, because I think what's really interesting from the conversations I've had with organizations who are on this journey, the one thing that it becomes very apparent is this holistic way of looking at value through the lens of a product highlights the fact that their organizations are not necessarily structured consistently across a value stream, meaning you've got either a lot of people in. In in one part, and not a lot in the other meaning, people that are developing new products, getting it out is really hard, and you've already got too many products that these operational groups are supporting, or you have operations that that are too busy focused on the challenges with the existing products that they can't they've got no room, or, you know, you've got all sorts of different sort of problems that this makes very, very apparent, which can be very challenging for an organization because they actually now are looking at, you know, the examples are on the technology side. Things like technical debt are very apparent. Now you know that that business debt is very apparent, meaning, you know, that's sort of like putting things off, having manual processes that should be automated as they add a new product they break, or, you know, these sort of things. Do you see that as well, that this holistic sort of perspective is a little scary, and and

Dimitris Dimitrelos  11:02  
the way this is, this is translated into change, is that we're building the product development, the business operations people, not only within the same organizational structure as such as a tribe or another release train or whatever You may call it, but also within the same team, so you have business operations and product development people within the same small, cross functional team, so they interact. And when the product, while the product is developed, then everybody thinks on how we will support and market it and bring it to the customers. Yeah? So it's a really, yeah, holistic, holistic view. And basically, I believe it's one of the big values. It's one of the biggest values that this model brings the holistic view brings people together, much less politics, a lot a lot of better alignment and a lot of less escalations. So I there's a funny story. I remember when we introduced product, operating model in a large organization, and after a few months, we did a big retrospective with all the stakeholders, and the CEO joined us, who was not, we had his sponsorship, but he was not very actively involved in the day to day. And when he came his comment was, well, something is very good, something is very wrong, because I don't get any escalations, no more. So typically, you know, people from business and technology, they will fight, and they will come to me for resolution, yeah, for escalation. So I don't do that anymore. So either you're working very well, or you're putting everything under the carpet, and I should be worried. So that was his comment, and that's the biggest win. Yeah, that's

Dave West  13:03  
yeah. So simplicity, I mean, from my experience, coming from the software industry, which historically has been very focused on products and built around products, you know that keeping it really simple, it was always sort of ironic. When I was developing products, you'd go into these banks who, you know, have very, you know, they have financial products and 1000s of people and loads and loads of money. And actually, you know, a lovely canteen where, you know, in my company, we didn't actually have a canteen. You had to go to Subway, down the round the round the block anyway. And you'd go in, and the level of complexity, there was 1000s of people. It looked like orchestrating all of these different bits to get and I'm like, Why? Why don't you just align around these products? Are like, well, what are the products? And I was like, Well, we start with the customer. Understand your existing systems, understand where you where your value is, and start there and work your way out. But we could never really do that. So what has changed is it, is it technology has driven these organizations to the businesses to really realize, is it that there's a whole new group of business leaders that are more technology oriented, that suddenly realize that their biggest opportunity is with the application of technology to solve their customers problems. What's changed? Demetrius,

Dimitris Dimitrelos  14:36  
well, it's not it's not as simple as it looks. Please remember that the in the in the last decade, a lot of organizations have been focusing on on digital on the digital transformation, right? Yeah, and that means that a lot of of energy went into that department. So a lot. Of agile went into that, that area as well. So a lot of Agile transformation, agile teams were around digital departments and digital transformation. But if you think about it, digital so they shop or the portal of organization that is used to interact with customers is not a product per se, right? It's only a channel. So you have to think more holistically and and now that organizations are organizing around product, means that you have to transform this previous organizational agile structures that were around digital and now wrap them around your real product structure. If you're a bank, it may be your cards business or your your loan business or your, you know, savings business, that is the real product, and this is where we see customers are organizing their organizations around, yeah,

Dave West  16:08  
the that when you see people have a mobile product team, you think to yourself, well, that I understand it's a competency. I understand that there are some things that are unique about mobile in terms of the technology, but I and maybe there's some opportunities for doing things differently with your customer. So I get that however that should be, you know, the that should be sprinkled into if your bank loans, private checking, or whatever, those you know, and it becomes this capability that all of your products can take advantage of. And yes, maybe you've got a community of practice around it, or, or some sort of, you know, I guess it would be so, you know, some sort of competency in that. But, but that, you know, driving that across all of the products that deliver money, mobile doesn't make you any money, your checking account, does your loans, do your brokerage, your, you know, whatever life insurance, whatever the things are. So I think, I think that is a big, big change that organizations are wrestling with. And so let's talk a little bit about challenges, you know, so from what I see, just to sort of go on from that is existing systems, legacy systems, which are both an opportunity because it means that people are using stuff and, you know, generating money and value, but it's also an absolute nightmare, because you're now trying to break those systems And the organizational constructs that are associated with them into a product culture would that is that the biggest challenge Dimitris or other other challenges,

Dimitris Dimitrelos  17:49  
this is one big challenge that's very true, but with all these years of other transformations, we have now developed some practices, some methods to help us overcome this. So you may call them chapters. You may call them communities of practice, and other methods and practices that will help you overcome this, the division of work between different organizational units that actually work on the same legacy systems. But there are also other challenges. Please, don't forget, this is a major change initiative, and the way that your product is your product is structured may not align with your current organizational structure, so that means changes may be needed, and this is always difficult in organization. This is always this always requires strong C level sponsorship, strong CEO sponsorship. So this is what we do, yes. So this is what Accenture does. We help them. We help customers. Is the change with major change initiative, we have experience with other organizations, and we have different ways of engaging that have to do with the specific customer. For example, there are customers that tell us we want a lot of prescriptiveness. We want something that you have done in other similar clients in other countries, and it works. So we want you to bring us a model that will work more or less. And there are other customers that start from a blank sheet of paper, and they. Go, Okay, let's design it from scratch and let let's make this our own. We are ready to invest time in this and make it our own. Do you think that the biggest

Dave West  20:13  
reason why, and this is sort of more of a philosophical question, perhaps, and stop me if I'm getting too sort of deep. But for my observation, the biggest challenge that I see around adopting these kind of models is status, power, authority, these very human things. For instance, I was interviewing a large financial institution when I was researching product definition. So I was basically, I met people that were working in product model in this company, and I said, How did your products get defined? And, you know, I was expecting to hear, you know, value streams, legacy systems, data, I don't know, these things, and all of those things were discussed, but, but then one guy said to me, he goes, Do you know really how they were? I was like, goes, who we said, basically, it's almost an indication of power structures in the existing organization. He goes, who we were scared of moving. I was like, what? And, and it was, it was just sort of ironic that the cute, because people build these, like there was one product that, I mean, he was speaking to us candidly, with me, said it's much bigger, and we invest a lot more in it than we really should. But the reason why we do that is, yes, it's important, but the reason why we do that is because the guy that runs it, everybody's kind of, they don't want to deal with him. So what we do is we basically, when we transition the product, he was an application system and some data, and we just sort of, like, put a ring fence around that and say, well, we're not going to change that. We're just going to call it a product. And and he goes, he says, honestly, is that the right thing to do? I don't know. Does it cause some issues? Definitely around dependencies, definitely around empowerment, definitely around value, like there's lot more value could be delivered in other products if we really broke it up. But he goes, but honestly, in terms of my life's a lot easier because, because we haven't messed with that, because I'll take that. And I thought that was quite interesting. Do you do you see that sometimes? Or, you

Dimitris Dimitrelos  22:32  
know, you know, Dave, it's not so wrong. Let me explain myself. Oh, interesting. There are people that the organization really needs. There are very important C level executives that the organization, that have been with organization for a long time. They're really important. They drive this organization, not only on sea level, but on various levels. Yeah, you want these people. You don't want to just bring a ready made model, and some people just, you know, they don't fill in some some position. So let's get rid of them. Doesn't work like that. You need these people. So what you do, what we have seen, organizations successfully do is that they let these people transform their role to fit into into the new structure, into the new organization. And we have seen people evolve. We have seen technologies become excellent business sponsors and excellent business owners. And we have seen people that were project managers become excellent product managers, because Product Manager product ownership, is another major change we're seeing in this organization, product is a very good is a very good example of what an opportunity in an organization that is switching to a product operating model may look like. So up to now, product manager, product management was more like a function in the marketing department, in the product department, which was not so involved in in delivery. It was not so involved in product creation. It was more like an operational, let's say communication role. Now, this role is pivotal. Now, this is the general of the product. So the product manager now really owns the product in the in the scrum, Product Owner sense they control delivery. They control product business operations. So they are really the sense of. Is what an end to end owner of a product may look like. So I believe this is this can happen in various levels of the organizations. People can transform their roles, but you always start with the people. It makes sense.

Dave West  25:22  
That's an interesting perspective, and maybe yeah, and one that I think we all need to be a little bit more conscious of, that this isn't a architect. We often think of this in terms of an architectural problem that needs solving. Organizing. How do we organize support products? What products do we have? You know, what are the dependencies between those products? How do we build the systems and the processes? And we forget? I think that ultimately, an organization is just the sum of the people that make that organization up, the ideas, the thoughts, the experiences, you know, the problems that they've seen in the past will help shape, you know, solve the problems that they see in the future. And I think we do forget that, right? So we try to keep these, these conversations short. And I know you and I could talk about this all day and and I'd learn so much from you. So if you were just starting this journey, if you're sitting there, and maybe you're sort of not the most senior person in the organization, not the most junior, but you're somewhere in the middle, and you're looking at what where do we start when we want to move from project to product? It all sounds like a really important maneuver, but how do we get going, you know, from your years, or if that makes you sound really old, but from your from your vast experience, where would you say you should begin Demetrius,

Dimitris Dimitrelos  26:55  
okay, first of all, I think that you should realize that this is the major change effort is not something that you can bring in a consultant and write it up for you and bring it in a PowerPoint. So this, this will not work, because we have seen this kind of mistakes and this kind of request business should initiate, the product part organization the business should initiate or be heavily involved in this kind of of transformation. In this kind of request, a very good practice that we have seen work is creating a cross functional transformation team. We called it transformation enablement team, or something equivalent, from people that comes from different parts of the organization, product, technology, HR, finance, that will power the transformation, that will iron out all the details and that would take major decisions, as I said, from all different perspective of the organization. It helps very much to bring an external view, an external partner that will be willing not only to work with you on the design level, but also get down with you on the trenches and work day to day with you and help this transformation on, on, on, on The front line. So as long as you have these basic prerequisites in place, then thinking hard about what your value stream is. How do you deliver value to your customers, and what your product align, really is that would be the first that would be the first step.

Dave West  29:07  
That's awesome. I think the the advice about building that cross functional change team, whatever they end up being called, I was at a client on Friday, or talking to an organization on Friday at a client I was on Zoom, but it felt like I was there, and we were talking a lot about the transformation that they're trying to make. And they have a very established, pretty amazing business, actually, and but they're increasingly want to be take advantage of this amazing business and scale it beyond its current parameters. And so they're looking at product model. They've got a very specialized organization optimized around skills and technology and and PLA and now, I hate to say it, but platforms as well, and and the problem in the most. Most important thing that came out of that meeting was the importance of building this cross functional change team to drive because as they incrementally adopt a product operating model, you know, they pick an area of the business, they focus on it. It's going to cause all sorts of surprises around incentives, organizational construct, hiring policies, you know, you name it, supplier policies, outsource, you know, all that stuff. And so you need that executive sponsorship and support for dealing with those we'd call them impediments, right? But dealing with those challenges as they occur that the team and the teams of teams can't, can't deal with, I think that that is so, so important, and that ultimately, in most organizations needs C level sponsorship and access, otherwise it you're always fighting against this the system. I think that's a really, really good bit of advice. Hey, thank you for joining us today on the scrum dot podcast. Yeah, it really, really, really good. Maybe we can talk again about some, some of the, you know, the more fine grain elements, whether it's portfolio planning, whether it's product definition, whether it's organizational constructs, whether it's incentives. Maybe these are some of the topics we can address next. But from a from a perspective, it's really interesting to hear the success and the value that move into an agile product operating model is having in your in your with your customers at Accenture. Thank you. Thank you. Dave, great. So thank you for listening everybody to today's scrum.org, community Podcast. Today, we're incredibly lucky to have Demetrius. DEMA trelos, gosh, I'm going to destroy poor Demetrius his name every time I say it, but talking to us, he's a PST. Demetrius is a PST, working for Sencha on driving the Agile product operating model into their clients, creating that environment for success. If I took anything away from today's conversation, I took lots of things, but one thing that I wrote five times on my sheet of paper were people are at the heart of this transformation, and creating an environment for them to thrive is ultimately what what Demetrius does with Accenture in Europe and the world. And I think that's something that we should all focus on thinking about how we can create this, this organization, to allow these people to thrive, to deliver value faster and faster rates, which I thought was really, really good. Well, if you liked what you heard today, please subscribe, share with friends, and, of course, come back and listen to some more. I'm lucky enough to have a variety of guests talking about everything in the area of professional Scrum Product, thinking agile, and, of course, the Agile product operating model. Thanks for your time, everybody and scrummorg.

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