​How Jeff Smith built an Agile culture at IBM

IBM CIO, Jeff Smith: Only 24 people are employed to manage 225,000 iOS and MacOS devices across the company.

IBM’s global CIO, Jeff Smith, has been practising and succeeding with Agile methodologies for many years – you could say that Telstra’s former IT chief is about as agile as one can get.

Smith – who was plucked by Big Blue from his role as CEO at Suncorp Business Services in mid-2014 – manages the technology, people and systems that help 20,000 IBM staff worldwide design and build products and services.

But this was not the only reason Smith - who grew up in Ohio in the United States - was lured from Suncorp’s Brisbane offices to his new life at IBM headquarters in New York.

“I have a second role – which is probably the primary reason that I was hired – and that is to roll out an Agile culture across the whole company – close to 400,000 staff, and if you add the contractors, another 150,000,” Smith tells CIO Australia.

Smith has created a culture that combines the agility of small companies with the scale of a very large organisation like IBM. Startups building next-generation technology generally create small teams of 8 to 10 people in cross-functional roles, he says.

Smaller firms have teams with broad-based skills and therefore carry very little overhead, which as Smith puts it, can act as an anchor on speed and innovation inside an organisation.

IBM’s IT group doesn’t have overarching enterprise architecture or strategy groups, or an enterprise project management office. Rather, it relies on a ‘guild and chapter’ model that enables practitioners to make decisions on things like enterprise architectures and standards.

IBM is using the ‘Spotify’ model, forming teams into 8 to 10 person squads (there are 1,800 in Smith’s IT organisation worldwide). These squads are grouped into tribes, which are then grouped into domains.

“Then we use the guild and chapter model to make the decisions. So if your discipline is ‘developer’, you can join a chapter and that’s within a tribe and if it’s a guild, it crosses tribes. We do that so we can linearly scale teams that are working together,” says Smith.

The goal is to work like a great CPU, Smith says.

“If you think about computers, you can take a big, long instruction set, break it down and run it through multiple cores. Our job is to take a big backlog, break it into lots of small backlogs, scale it across multiple teams at the same time and get something done materially better. We have a modified Spotify model to do that,” he says.

Before IBM scaled up these teams, it had to create the right environment, and highly successful English football team, Manchester United, was its metaphorical model.

Manchester United achieved 30 years of success with a simple strategy and game plan with a playbook that matched the “tactics you could use for the talent you had,” says Smith.

“We had to have that vehicle for attracting, developing and retaining aspirational people to form those. We also needed to have a vehicle for practicing the methods and operationalising culture.”

The ‘secret sauce’ to scale this process is a combination of coaching the teams to ‘course correct’ when necessary while providing an ‘Agile Academy’, which offers 30 self-service courses, he says.

“That’s the way we are scaling not only in my teams but the other teams around IBM as well.”

An Agile culture applied

IBM’s Agile culture is a combination of lean and Agile techniques like continuous delivery and design thinking to ensure the customer experience takes centre stage.

One initiative that has stemmed from this new way of working is the successful Mac@IBM program, which has been running since mid-2105. Macs are shipped to the user in a box with a URL and when they visit the website, they are guided, step-by-step, through the set-up of the Mac.

Previously, Macs weren’t a general option inside IBM because they cost between US$400 to US$500 more per device than PCs.

“If you multiply that by half a million people, it’s a big bill,” Smith says. “So we had to solve two problems – we had to figure out how we could get the cost down to match a PC, as well as how we could provision [the Macs] like a mobile device.

“So you should be able to provision over the cloud and activate the Mac through an app store. No-one had done this at that point, even Microsoft.”

Users had to be able to select the applications and services they would need from an app store. To achieve this, IBM had to do three things: automate provisioning, rebuild its intranet, and open up a new service desk.

To automate provisioning, IBM joined Apple’s device enrolment program as its first customer. When Apple ships a device, it provides a certificate with the details of the user it is being shipped to.

“So when the user does get the device and puts their credentials in, we automatically know how to setup their VPN certificates, client mail, their Office apps and everything they want,” Smith says.

IBM’s intranet – which receives about 25 million page views per day – needed to be rebuilt so it would make self-service very easy, says Smith.

“The biggest way to drop the total cost is to make sure that less calls come into your service desk so you can operate with less people. We had to build this whole piece on a lightweight framework, using APIs to pull content from legacy systems, because we didn’t have time to rewrite all the backend systems. Original estimates were two-and-a-half years,” Smith says.

Using an Agile approach, it didn’t take anywhere near that long.

“We took a great big backlog and broke it into a bunch of backlogs – we formed Agile teams and concurrently built multiple teams at the same time. We rebuilt it [the intranet] in four months.”

Finally, Smith and his team opened a new service desk, staffed by Mac lovers and college graduates, and threw out old help desk metrics around how many tickets were closed and how long a caller was on a call.

“We said, ‘you stay on the phone as long as it takes to solve that problem and make sure that you help them so they don’t have to call back.

“We also put the service desk in charge of the backlog for things that should be fixed by the automation teams. So we went from upgrading an intranet every few years to upgrading it every week based on the priorities that the service desk sees. So we use them as the advocate for the customer,” says Smith.

The net result was a customer satisfaction rating of 92 per cent, which is around 30 points higher than IBM’s PC help desk. Today, there are only 24 people employed to manage 225,000 iOS and MacOS devices across the global company, Smith says.

“That’s an extraordinary number. We roll out, on average, 2,500 MacBooks per week with no people.”

Lessons learned

IBM learned some lessons throughout the journey, says Smith.

"We learned how to learn from others because we worked with Apple directly on it - we still work with their MacOS engineering team every quarter. We learned how to break big problems into small problems when rebuilding an intranet."

The Mac@IBM concept was also expanded with Box@IBM, where 240,000 new users were provisioned, without any intervention from IT staff, through the app store.

"We then did a roll out of Office 365 products also through an app store with no people involved. We learned how to take something and apply it to different areas and we gained some battle hardened confidence - we knew how to break big problems down and we used these small teams to attack it concurrently and we did it much faster than we thought."

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