Aug. 16, 2018

Article in Harvard Business manager: sipgate’s agile transformation

Tim Mois, sipgate’s CEO, writes on his company’s path to radical change

HBM_Cover.pngHarvard Business manager, the German edition of the Harvard Business Review, published in its August edition an article by Tim Mois, the CEO of our client sipgate, on how his company confronted its “Black Hole”, learned about Scrum, and with the help of agile42 wholeheartedly embraced an agile way of working that they are now modelling for others.

A free sample from the article in German is available here, and you can read a brief summary of the story below.

In 2009, Tim Mois, the CEO of sipgate, had a revelation. Things could not continue as they were. Everything looked good on paper and the company had grown in leaps and bounds, but for the past three years everyone had been working on the same new tool, sipgate team, and they were still just barely able to bring it to market, partly out of luck. With decisions taking longer and longer, lack of communication, and the formation of separate islands of knowledge, they were not sure they could ever create something new again. They called this problem “the black hole”.

Speed and flexibility used to be built into sipgate’s DNA from its early days, when they were the first to bring internet telephony to the German market. But along the way they made a crucial mistake: they thought that they could get twice the work done if they had twice the people. By 2009, it was clear that this wasn’t the case. Business studies at the time were rigid and mechanical. Following that type of knowledge, sipgate ended up with single-function teams, tasks being divided among them, getting stuck in bottlenecks, and not always coming together in results again. It seemed that the  organisation was just too large for effective communication. 

Sipgate simply did not know how to organise their kind of complex work when they grew beyond a nimble startup, but they knew that there must be an alternative out there. And finally, in 2010, a colleague passed Tim Mois a booklet describing Scrum. This was what they wanted, and to get there they needed the opposite of what they had been doing: no more huge project plans, but instead a new structure, new roles, and daily coordination. They did not understand it all, but it was worth a try. 

At first they went at it alone, with limited results. Then, agile42 from Berlin came to the rescue. The learning curve was steep: agile42 turned the whole development process on its head and dragged sipgate kicking and screaming towards change. This kind of deep transformation was not just about adopting a couple of new methods: instead they had to break down and then remake their very sense of self as people and as a company. Many identified with their role as experts in a field, and now outsiders were coming in and telling them that they should no longer assign specific systems to single people. Even if they wholeheartedly adopted it all, they had no idea what, if anything, they would gain in return. Now there is a lot of literature on the subject and more agile companies on the field, but back then sipgate were very early adopters, and very alone. 

It would not be possible to go through something so difficult without losses, and those included almost half of the staff at the time, either because they could not adapt to the new ways of working or because they preferred a more predictable career development. Despite the initial struggles though, advantages quickly became apparent. Divisions in departments that did not make sense and resulted in knowledge loss through a game of Telephone were eliminated, and company structure centred instead on non-hierarchical client-oriented teams. In the process, Tim Mois and sipgate also learned more of agile and the origins of Lean Production in Toyota. This was a great influence in changing the entire company and not just developers.

Tim Mois, CEO of sipgate (photo by Max Slobodda for Harvard Business Manager)

Photo of Tim Mois by Max Slobodda for Harvard Business Manager

Now totally lean and agile, sipgate works in brief project cycles incorporating continuous feedback. The cross-functional teams that make up the company combine a range of skills and need no managers, team leaders, or titles. Along the way the company adopted a variety of methods, some from classic agile practices, while others they developed further or outgrew. For Tim Mois, if there was only one method to recommend, it would be the retrospective. There, every two weeks teams go over progress, planning, and obstacles, but also face inconvenient subjects. In sipgate retrospectives, the Las Vegas rule applies: whatever happens in the retro, stays in the retro. 

This process does make demands on staff and leads them to take on more responsibility, but it also offers them the opportunity to constantly grow. Recruiting new colleagues is an excellent illustration: while in the past it was done by the boss with no discussion or questions, now the teams are in charge of the whole process, from placing the call for applications to explaining to someone why they will not be taken on. Matters like holiday time are also worked out by the teams themselves, and care is taken that no one works too much. In sipgate there is no overtime, and they have even instituted an old-fashioned punch clock to make sure of that. 

Within all these changes, the role of the CEO himself has changed. No longer involved in micromanaging the day to day, he can focus on the company’s future and work of a more strategic nature, asking the core questions about who they are and where they want to be. Tim Mois takes particular joy in one new aspect of his role: when sipgate became a model of agility, others began to take notice. Now they are a company open to the world, and many want to come in and see how the system works in practice. For Tim Mois, this knowledge was a gift that should be passed on. 

In sipgate they recognise their good fortune in being in the financial position and of the correct size to make those changes, but they are also aware of how far they have come and are rightly proud of their priorities and the culture they have created. The journey is not over, but they hope that they will continue growing and breaking through boundaries. 

Read more about agile42 work at sipgate.

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Marion Eickmann

I am one of the founders and the executive director at agile42. I have supported strategic product development and leadership development for longer than 15 years. Since 2007 I have been realizing local and global agile projects with agile42's international team successfully. You like to talk about: ORGANIC agility, complexity, resilience, organizational culture & Agile? Just send an email :-)
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Image of marion

Marion Eickmann

I am one of the founders and the executive director at agile42. I have supported strategic product development and leadership development for longer than 15 years. Since 2007 I have been realizing local and global agile projects with agile42's international team successfully. You like to talk about: ORGANIC agility, complexity, resilience, organizational culture & Agile? Just send an email :-)

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