 Welcome to the Agile People FIKAcast. We talk about how to navigate with agility in our organisations. Welcome to the Agile People FIKA. This is a podcast or a coffee talk where we share some thoughts about our latest learnings. Today we will talk about Agility in Finance. If you have been following us, we took a training last week and now it's one week later and Anders and I were thinking maybe we need to remind ourselves about what did we actually learn? What was the big takeaways for us from this training? And both of us, we have been working in organisations where we would deliver different ways of building an Agile organisation and delivering in an Agile way. So here we have some good coin drops about the financial management system that is maybe working against things because it's very traditional. In the training we started to get insights of what we might need to do in our organisations to move towards a more decoupled organisation. And that's the word for me in this training, decoupled. So let's take it from there. Decoupled is the word, Anders. What was that about? It is, and I think to start with, one of the insights was exactly how much the need for financial control caused by a fixed budget, fixed annual budget affects the organisation or structure. I felt it many times and seen it but not as clearly as I did during the education. And for me it's, I've been more thinking previously that of course you, if you have a classical setup where we see management more or less leading or controlling people in the worst case, then you can't have two big groups, so that builds the hierarchy by itself. But I think seeing it as I did during the education that the financial control is what triggers that to a large extent was a harm moment for me, I think. And just as you say with the coupling, I think that another insight was that I've often talked about that the system needs management. And we need to support and guide and help people about the system as such and what is that system? And during the course, we got the term for that that it's called the management model. The management model we set to define how the system behaves more or less. And for me that's a matter of because we need to have a strategy which is often lacking. I see that in all companies that you have a strategy which is a very fussy high level PowerPoints often. And there is a big gap between what teams actually do and what it means. So it's a disconnect between that high fluffy strategy and the actual work being done. And I think what we need to do in many companies is to define that management model in a way that communicates and leads the work towards the strategy we have defined and do it in the most minimal possible way to see, okay, so how do we, what do we need to, what kind of information do we need to get to be able to lead the company on a high level, reaching our strategy, but not micromanaging. And that's where I think that this decoupling comes into play. So how can we lead, but still allow as much autonomy as possible in other parts of the organization? I remember when I took the sociocracy training and we were introduced to new ways of organize ourselves more into being a more of a network organization. And it looked really nice, but what that training were a bit lacking is what we are talking about, the management model and the financial model that is to some sense here, or maybe it's really hindering that type of setup. So if we decouple it, then we create that fantastic pitch organization where we have supporting units in the middle and customer facing units outside of that. And they are very autonomous to each other, but they might be able to get support or get aid from different parts. The financial things isn't really expressed. I heard some words about it, but I didn't really understand it and how important it is. So creating that financial autonomy it's also the decoupling that we are talking about. Yeah, exactly. And I think one key insight, key learning objective was the need to separate these different processes of targets forecasting and resource allocation. The way I see it is to decouple those to get a dynamic and healthy discussion going between the three, because otherwise we would end up as being slaves for the financial model more or less. So we can't really, that is completely hindering agility in that sense. So even if, and I think it, that way of seeing the budget also causes a very cost centered mindset. So I took an example last speaker, I think that I was in a situation where all the developers and the teams we had saw a huge benefit in delivering a new feature because that would bring value. And the company, or the financial model of the company had this cost oriented mindset. So they just saw the cost and the cost was a bit high, but the value was even higher. So it became impossible to optimize for value in the financial system that the organization had. And that is just pure crazy, right? So if we unlock that and see, okay, so we have this, this is our target and this is our forecast. And yeah, the forecast looks okay. So we have some room here. So what is the most value bringing thing we can do when we have our basics covered sort of speech? I think that is what decoupling these three will bring you the possibility to actually prioritize and be dynamic and agile. How do you see that? Now I was starting to think of the next thing and would like to use that also into the discussion and that was about how you measure in your body or the follow up of it. And I've heard about this before, but it was really interesting to hear the real cases that we were introduced to in the training that more or less you set the budget in the beginning of the year and one to two months after it's committed, it's a bit obsolete. It's the wrong thing and everyone knows it, but you continue work with it for the whole year. And then it's the behavior that you also need to fulfill your budget because you have as a manager maybe you have a bonus attached to the budget with the fulfillment of the budget or it could also be that you need to use your budget otherwise you will not get the same budget that we did hereafter. And we saw measurements of what's happening in November December that people start to buy stuff just to fulfill the budget so to say. From the delivery perspective for where I come it's really interesting to say that we decide in January what we should deliver in the end of the year and in two months we know that we are building the wrong thing but we are not adapting to doing anything about it we just need to build that thing because it needs to be ready in December even though it's the wrong thing so putting that into a budget perspective we need to think differently and we need to iterate the budget all the time and we need to get rid of this annual system that it has a connection to so it should be more of a rolling thing and it should have new behaviors and new types of approaches to the budget so that was the third big thing for me in this training so all of these are very obvious but it's to some sense also a bit radical because many of the things we see in the models we have in budgets or budgeting models that we have today or the controlling mechanism that we have in the company's trades it's ideas that is based on things that we found in 1922 I think was the year when this was documented the first time and we are more or less working the same way in many traditional companies so it's kind of fun and just as you mentioned it's not only driving this cost centered mindset instead of the value based mindset it also introduced lots of wasteful behaviors with spending a lot at the end of the year to kind of protect the budget for the next year it's even people even send invoices internally just to be able to show that they're spending their money what else did we have people don't dare to spend in the beginning of the year because they don't know what it looks like at the end of the year and they're also lacking potential values so it's a system that is based on control and built on control that causes lots of bad behaviors I think and then once again to unlock this to continuously have healthy dynamics between the targets, the forecast and the resource allocation of course that you need to trust people a bit more I guess but it's also a matter of if you have the forecasting and you see that it seems to be okay based on previous year for instance then you can have this room how should I say head room to be able to maybe spend a bit more but it's still not alarmingly much so you don't interfere with the the team or the organization that is spending that money until it's really alarming then maybe you need to go in and check and see okay so what's happening here why do you overspend compared to previous year maybe that also comes away a bit from controlling to just following up and see most likely because we want to trust people right, they want to do good and as long as we communicate values and what value is to us then of course the big majority will try to do the best with that of course so I think all want to do good the only experience not the only but some of the experience I had from this before I took this training was highly connected to the investment we do into features maybe we pre-defined that we should spend a lot of time or effort into a feature and I can see that it's sometimes hard to get or to help teams to take that responsibility so if they share a thought of how much effort they would like to spend then it's also that we need to coach them in behavior so they are also transparent and communicate the progress connected to the spent effort and all that because we in our organizations we are more known to having top-down control on this if you give the control to actual development teams or delivery teams they also need to be able to take it and to work with it in a healthy way but I think it's really important on board they should not be decoupled from that financial system and just do things and being stopped or started depending on someone else that is looking at the numbers they should know the numbers and could take conscious decisions of where is good enough where have we succeeded the value or should we spend more to add nice to have features or should we stop before when we just have the basic functionality it's highly connected to deliver in an agile way but you need to put money into that calculation and not just only the value we create we also need to know it's not a charity delivery of course and I think then it's back to having real product owners if you have that kind of role and we also my conclusion was and I've stated it before as well that it's way too uncommon way too common to have product owners who are not real product owners they are more technical coordinators prioritizing technical stuff and they are not empowered enough to take responsibility for the outcome for the business part and is that lack of empowerment due to the financial management model why is it like that why is it so common that they are not real product owners or actually I think it comes from many places still separate business and IT so it's kind of an order from business to IT to deliver something and the requirements that come are way too low level so you kind of hinder all motivation and engagement in the teams because it's already set right so it's kind of a water scrum forward approach to things and maybe that is I'm not sure it's a good question that's influenced by the financial setup maybe maybe it's a topic of its own maybe any other things that you took with you from last week except it was very nice training with people from different parts of the world all the way from Brazil and from Ireland and from sorry Costa Rica as well right Costa Rica as well yes and Austria and many places really big buying session I enjoyed the education very much I think it put words to many thoughts many things I've talked about in my assignments and my previous jobs and put a new angle on it that was really fruitful for me and also it was the first face to face training I had since before Covid and that was also nice I liked trainings like that even though I am a fan of online things with fantastic canvas tools like Miro and Mural this is a different thing being in one room together having lunch together and reflect on the subjects in between and we will offer the distribution both on site and remotely so the first session was on site and soon we will offer the remote version as well of course and we are doing this together with Ekan consulting and also beyond budgeting round table so very excited to deliver this I really feel that I would like to dig deeper into the financial model maybe we should continue with the subject Fika further on here should we explain Fika Daniel what is Fika, Swedish Fika yes that's a nice one maybe we should end with that Swedish Fika is a very cultural thing where we in either if you meet your friends and family or at office when you would like to have a coffee and you are not just taking coffee and bringing back to your desk maybe you would like to stand up or sit down and talk to people we call that ritual more or less Fika a proper Fika needs to have coffee or tea if you want to drink and in the best way it's also if you have some cinnamon buns or some cake or something something to eat to it then it's a proper Fika but coffee or tea is the bare minimum and it's an important thing usually you can find companies doing this 9 o'clock and 3 o'clock you can see that people are leaving their desks for from everything from 5 minutes to 30 minutes it depends I like to have Fika and I think it's also a very good occasion where you start good discussions both to get to know each other a bit better to build psychological safety but I also seen in places where we take decisions during Fika we more or less come to consent during the Fika and then it's easy to take the decision afterwards and I heard that one of the I don't remember his name he used to work for the UN and he was negotiating in a conflict in the Middle East and they didn't come to any consensus or consent or any decision at all and he decided let's bring a Fika into this and during the Fika they started to talk about each other who they were, family and all that and afterwards he said it was so much easier because then it was just not that individual from that country it was an individual and he had a family and had kids and all that so they could easily understand each other that they are more or less driven from the same place but they come with two different views on things but they had an easier way to come to consent so that's why Fika is powerful it could also create this Yes I think that's I don't remember the name of that model but you know to build relational depth which we need to be able to discuss complex matters so the Fika really contributes to that so someone is being open and discussing things privately personal stuff and that openness brings trust and trust brings additional openness and then you have this spiral that brings this relational depth and suddenly when we trust each other then we can discuss really complex matters because we give each other a bit slack in the discussions and really focus on understanding each other because I know you and I know that you're a nice guy right so I won't understand instead of backing out and resist so that's good so that is and our take on Fika then is to bring something I had some coffee today you don't seem to have that and you don't need to improve until next time but we meet for a few minutes and discuss a subject that is of mutual interest so everyone is welcome just join it's an open and usually fun discussion See you next time See you