Europe 2022
The Flywheel Effect Creates Space for Innovation
Creating confidence in the technology team is critical at every company. The flywheel effect occurs when we balance business strategy (via Wardley mapping) with technology strategy (via Modern cloud).
As a preview of the upcoming IT Revolution book, Dave creates a Wardley Map to show how to use the value flywheel to build confidence, improve your cloud stance and create space for innovation. Many business leaders ask for Innovation and speed, but it’s really Problem Prevention (Well-Architected), Modern Cloud and good Developer Experience that unlock higher value capability.
DA
David Anderson
Bazaarvoice, Technical Fellow
MO
Michael O'Reilly
Software Architect, Globalization Partners
Transcript
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Thank you Brody and Jane. Okay. For at least three years, I've heard so much about some amazing work being done by a bunch of Renegade engineers at Liberty Mutual, a large American mutually held insurance company. By all accounts, these engineers who are based in Ireland were among the first in the organization to get real applications running in the cloud using technologies very different than one typically found in a risk averse enterprise those days. But they eventually would help elevate the productivity of over 6,000 technologists at the firm. Not only did they help modernize the technical practices across the organization, starting with their e-commerce site, they also helped create the AWS Cloud development kit, serverless patterns, which is widely adopted, not just within the company, but across the industry. Even being heavily promoted by AWS themselves <laugh>, it was made popular because it made writing serverless applications so easy and understandable for developers. So last year I finally got to meet some of the people behind this effort who were leading a team of over 500 engineers in Belfast, Ireland. I was so excited to finally meet him, especially since he was introduced to me by none other than Adrian Cockcroft, who wrote this amazing gushing introduction letter. And I'm so delighted that they'll be codifying their learnings into a book that will be published next year called The Flywheel Effect. So here is David and Michael.
Thanks, gene. Um, so my name's Dave Anderson. I'm a technical fellow for Bizarre Voice. The story I want to tell you is really about space renovation, how we made that journey from the last few years till today. I'd like to introduce my colleague here.
Hey, everyone. I'm Michael O'Reilly, an architect with Globalization Partners.
So, uh, myself, Michael, under third Amigo Mark McCann, working together probably for about 13, 14 years ago. And, um, back in Liberty Mutual. At the time, we were a lot working a lot of kinda e-commerce sites, big systems, but on-Prem. And we, we were really lucky to be in a position in Liberty Mutual where the move to the cloud was starting. And this was back maybe in 2013. I just took a CTO role in Belfast and had a small team of architects. And, uh, we started the look at the landscape and we could see there was opportunity for a huge change in a Fortune 100 company. This is an opportunity you don't get every day. So we wardly mapped out what we think might happen, and it was clear that there was a different cloud application architecture approach that we could take. Huge risk. It turned out to be serverless.
We didn't know that's what it was. We didn't really know if this was actually made sense. Massive personal risk. With any big risk like this. A lot of middle management push back, say, why are you doing this? We had the conviction to press on. It was almost like a poker game where you can see there's one hand that's going to pay off big, but you have to play it. So we started to bring in some of these practices like, uh, serverless, well architected engineering, secure by design, all these things that were to become very, you know, good practice. But at the time, we didn't really know. This diagram is something we drew out at the time to try and make sense of this kinda this thing. We were trying to do this, this sort of almost like a system we were trying to create within a huge organization to basically reimagine engineering for the whole enterprise.
A massive ask from like a, what I would call a, a small office sitting in Belfast about 20 19, 20 20, we had achieved a huge amount of, um, uh, success with this service first strategy. We actually started to coin it a service first enterprise. The network effects that we were starting to see were starting to come true. And we all the weak signals that we had seen back in 2013 were starting to kick in. And like anything, the numbers didn't lie. We were starting to see massive returns on some of the risks that we had, that we played off maybe back in 20 14, 15, 16. And we, I, I put this diagram together to try and explain what we had actually achieved. 'cause it was so difficult, you know, because, uh, cloud application architecture is, is so hard to describe. And once I drew this diagram, I actually called, um, Adrian <inaudible> from a SI showed him this diagram says, you know, do you think this di this, this approach makes sense 'cause I haven't seen it anywhere else.
And he says, no, this is absolutely brilliant. You're, you're leading the way with the way you're thinking here. And they said, at least I was shocked. So we described it in four layers. Foundational. Those are basically our key engineering approaches, which are kind of bread and butter stuff. Then we wanted to layer in our, our cloud kind of expertise, security, uh, infrastructures, code and certification. Then have an opinion, be opinionated about architecture service, first to be well architected, focus on cost, have an organization strategy, have a clear north star business metric, and then organization team topologies, be organized for success. And then find acceleration. How do we scale that across 6,000 engineers with CDK architecture patterns, specific innovation practices, evolutionary strategy, encourage teams to pave their own way. Code is reliability. Try and get engineers to write less code. And then evolution architecture, try and get the concept into the business that we are always changing these systems, which is quite difficult. There's lots of really good stories out there about Liberty Mutual. I would actually Google Liberty Mutual, serverless. There's a whole bunch of case studies. Uh, Michael, you were there those years. I mean, what, what stands out for you in this picture?
Yeah, no thanks Dave. I mean, I, I love this. I love this. Um, I love this diagram. It brings back some awesome kinda memories. Um, but certainly I, like, for me, I always kind of go back to the, the foundational, because I think that was, that really, you know, set us up for a lot of the success that we went on to achieve. Um, you know, working with the teams, helping the teams really become data-driven, you know, and by that, like, understand what measures were important to them, both from a business perspective, also from a technical perspective. How are they able to add value? So when you kind enable your teams to understand their, their mission and their purpose through the data, it then makes a lot of these other things easier to kinda integrate and, and, and, and drive within, within the organization.
You know, for example, I know we're gonna look at, uh, serverless first org strategy. So this is a building block that within the, the diagram. And really, we, we coined this because obviously we're operating at scale. You know, we're a large organization. We've got dozens and dozens of squads, product squads, different types of squads. But we try to distill that down into something that would fit into, into teams' heads. Um, but really summing it up, you know, this is kind of the, the metrics that we use to help create teams that maybe didn't understand their purpose or their mission, and maybe working on their non-differentiating type work or work they didn't understand to become teams that really understood their mission and purpose, had good situational awareness, and were able to kind of make good decisions in terms of the products and features that they were able to then go and build and develop. Leveraging that serverless first, uh, organizational strategy.
Yeah. And Robert Serverless first, that was important. 'cause you have engineers and an insurance company, their focus should be insurance, you know, that it's, it's the business. So we, I'm so proud of some of the outcomes that we kinda drove. One of the ones that I thought was, was amazing was a call transaction cost. We ended up building a complete sort of, um, cloud call center using service technology using kind of, uh, on AWS like Connect and at Lambda and a bunch of other kinda services. And we reduced the cost of a call from $20 and to 4%. And by about a year and a half ago, I think they were taking something like a quarter of a million calls per month on that. There's a purely serverless kinda automated, um, call center. Um,
Yeah, and for me, you know, um, and we've got a call out here, second point, but the rapid delivery, there was a, there was a scenario, I remember just at the, when the pandemic kicked in, and effectively we had a business use case in South America where our, where our agents had to go and visit the homes of potential customers. You know, if they were trying to insure their car, they needed a manual inspection. Now, obviously with the pandemic, that became much more difficult. And, um, obviously there was issues with that. But leveraging our serverless first org strategy, we were able to kind of assemble an application that was leveraging artificial intelligence, that to kinda automate that process and build a product that, you know, could protect both our agents and our customers and, and, and move that, that that process digital. Um, also that became, that was an innovation in a sense, and we were able to then roll that out to subsequent countries over the, the, the next three to four months. And I think that's, we rolled that from South America, six countries wide, and then we moved that into Europe. So a hugely successful story with that one.
And then, and like the digitization of the business is, is really what you're talking about here. And, uh, one of my favorite stories that I'm also super proud of is the fact that we had, we'd won an insurance is thousands of applications for a big company. We had one small application that was sitting on WebSphere, I think it was costing maybe $50,000 a year to run. Um, one of the teams seen that as an opportunity, refactored the service solution and reduced the cost from $50,000 a year down to $20 a year. I mean, and think of the sense of empowerment that those engineers have via a nice kind of project like that.
Absolutely phenomenal, phenomenal. And I think even on the smaller scale, we, you know, it was really successful. But even again, on the larger scale, you know, like we, we applied this strategy to some of our largest insurance platforms. You know, I remember our global insurance platform that we rolled out into Europe, and it was kind of driven a large part by our serverless first org strategy, was able to kinda, you know, help the org move its scale as well and drive scale into the business, which was fantastic. Um, really, really successful.
And then there's also a whole big story about the, in the journey that engineers went on to kinda, you know, work through this kinda system that we created and, and really kinda excel. Uh, at one point I think I had four AWS heroes on, on, on my sort of extended team. I mean, very few companies, even with four heroes, uh, with like Jillian McCann, Jillian Armstrong, Matt Coulter, and Tom McLaughlin. And then there's a whole bunch of people as community builders as well. So these are engineers that have done fantastic pieces of work, you know, doing keynotes, big presentations for a s uh, Jillian McCann took, uh, work grid as a, as a project and spun that out into a complete startup. Its own separate company. Mean massive success stories here with people focusing on the business outcome and using serverless to go fast at high, at quality and at scale.
It's so proud of the work we did there. What we are almost seeing then was like AWS started to take notice of the success we were having. And, uh, back in 2020, there was a serverless first function, uh, event where, um, and I didn't, I didn't know this. We vogels the CTO of Amazon actually described Liberty Mutual as organizational nirvana because of our serverless first cloud application architecture approach. I almost fell off my chair watching this at home. Um, and then six months ago at reinvent, Matt Calder, um, one of the architects, he, um, did the keynote with Vogels to tell the Liberty Mutual story, which was an unbelievable, uh, uh, presentation. I was so proud of watching Matt. I was, I was in the front row cheering him along, and he, he told this brilliant story about the whole evolution for, for Liberty Mutual becoming like a service first enterprise.
And, um, one of the things that we did was we codified a lot of our patterns and created this, um, CDK pattern, um, kind of library to help developers, uh, create their kinda applications really fast. And now that's been open sourced and that's its own kinda, um, open source project itself. And Matt has been fantastic in kinda leading that community with CDK Day and a whole bunch of other stuff. So not only have we created building blocks to build applications that they had been shared out, and I think there's something like 5,000 people on that GitHub repository. It's absolute, absolutely huge, phenomenal story. Yeah. Yep. So that creates a flywheel effect where engineers start to see the success and start to learn more and, and see the, the, the, the feedback of in their community getting, getting really good, good, um, uh, kudos with all engineers.
So then we kinda stop back and says, we, we've, we've stumbled across something here that's a fantastic technique that's try and distill all this thinking in the book, which we're publishing with it revolution, uh, this November called the Flywheel Effect with myself, uh, Mike and Mark, uh, putting this book together. And really it's about how do you take your business strategy with worldly mapping and your kind of technology strategy with modern Cloud and combining 'em together, and what does that flywheel effect look like? So we talk about this in the book and get into the thinking and some of the theory about how we, and the practice and the success stories of how we actually made this happen and how to do this yourself. So really one of the questions that I, I found was fascinating as I, as I think about other companies, is what happens after the transformation.
You know, we've had the hullabaloo around where we're going to the cloud digital transformation. What happens when all the consultants have been paid, we've did their three or four years, the big bonus pot's been empty, everyone's going and bought their cars and boats, et cetera. Everyone's got cloud socks, they've come back from the conference, we're all high fiving each other. Mm-Hmm. <affirmative> at some point, the board or the CEO goes, okay, we've spent a whole bunch of money going to the cloud. Why are we not delivering faster? It's a great question. And I mean, and, and really the question is, is technology really driving your business? 'cause there is a culture change required. I mean, in this event we've, we've talked with the DevOps culture for, for, for many years. And that is the, that is the cultural change that needs to happen. Just lift and shifting to the cloud just gives you a nicer data center.
You're not really benefiting from the cloud. And one of the ways we sort of started to describe this is this idea of modern cloud versus legacy cloud. If you just lift and shift what you have, you've got legacy cloud. You, you maybe still have a monolith in the cloud, maybe still have a lot of EC twos, virtual images, maybe you're logging in, change stuff in don't of that automation. With modern cloud, you're thinking and behaving differently If you're very, you have a very small town of value, you can prove value quickly, you can use the latest techniques, and you've got that empowerment and really strong developer experience. We think this, this way of acting differently is, is the, is is the actual massive success factor for modern cloud.
Yep. Dave. And, you know, we talk about the, the flywheel and the flywheel as we've described it here is, you know, how do we, how do we create a flywheel? How do we create that movement and progression, uh, within our organization? And this is the flywheel we talk about within the book. So we start off with really trying to understand our purpose. Um, we set ourselves, we, we create an environment that supports challenge and psychological safety around challenge, um, in terms of really getting to understand that purpose. Um, then we kinda leverage, you know, situational awareness to decide on next best action, you know, what's the next best action for us to take? And then also, you know, regardless of what the next best action is, we've always, we've al always gotta keep an eye on the long-term value. And they've taken this back into wordly mapping. Wordly mapping helps us always have those conversations. It helps with the challenge, it helps with that situational awareness. It helps us always keep an eye on what, what's our purpose, but it also, you know, can help us drive and, and, and make sure that we're working towards that, that long-term value. So we're gonna get into that. And I think in our, our worldly mapping session,
Yeah. So some of you may not be aware of worldly mapping, but so we're gonna take you through how we, as, as an architecture team have used this technique to actually visualize some of the things we're trying to do in this value flywheel to kinda drive that change we, we had talked about earlier. So let's, so anytime you're starting a worldly map, the best way to start this is with the value chain. So we've picked up a persona here as the anchor, as a senior leader, this is likely A-A-C-E-O or maybe someone on the board, a a very senior leader in your organization. And for me, there's, there's two main value streams that that senior leader is looking at when they think about technology. First, the time, the value, right? It's not lead time, time to value. Um, so which depends on good architecture, I would say, well, architect is, and what good architecture depends on technical leadership. These are just straight dependencies within your organization. And then the second kind of, um, say, customer needs for that senior leader is innovation. So for me, innovation depends on modern cloud and modern cloud depends on a strong team environment. So it's, it's how is your engineering environment set up? Like, if anything, anything you wanna kinda add about these value chains?
Well, the thing is is, I mean, why I would ask the question is how do we know they're right? And the answer is, well we don't, but it helps us get out of that analysis paralysis and helps us really get into that, that conversation. But then I think applying mapping and the approach to mapping helps us get a wee bit more, probably wee bit more meaning, and a we bit more understanding to that, that conversation.
I mean, if I was doing a wordly map, I would do these pretty quickly. I would just have something fairly simple and just lay them out. It's like a five, 10 minute exercise. So here we've got the shape of the map here, as you can see, we've kind of got business growth on top left there. We'll architect it on the right and the environment success is that kinda key enabler. So let's go back to the start and actually draw this map out again. And I think what's important here is as an architecture team, you need to know what you invest in and what we don't invest in. What do we need to improve as an architecture team and what else do we not touch? So something operational excellence. We know how to do operational excellence as a senior leader, there is a specific need there. It's understood, job done. Like what do you think about this one?
Yeah, a hundred percent agree. And if it's, if we are following practices and standards around operational excellence that aren't commodities, what are they and why are we doing them? You know? So that's a good conversation.
Pretty simple. So the deal to time, the value is probably more we understand it well and we understand there's key things like observability and customer, customer obsession that are important there for business growth. It's a bit more kind of, uh, you know, a hypothesis. Uh, we we're still trying to understand better about how you actually get that business growth.
Yeah, it should always be custom. It should always be custom. And then I love here out in the left, you know, you've got sustainability and coming in, in the genesis space. How is that gonna affect what we do, you know, uh, sustainability's impact industry in a big way. Cloud providers are allowing us to, uh, measure our carbon footprint. It is gonna have an impact. What, what is that impact? Let's have a conversation. Um, what could that be?
Again, as architects, we want to figure out that we're we're being most effective. And for me, I thought when definitely went through this, it's around that developer enablement, developer experience. How can we have a modern kind of, um, tech stack that we can experiment and learn, which includes the, and the, the foundational block here is modern cloud.
Absolutely. Um, so you can see in here that, uh, developer enable is a huge component of, uh, our ability to modernize. And it does feedback up into, into type of value. So really what are we doing as a, as a technical leadership squad to really enable our teams and, and focus on developer experience and developer enablement. So that's a huge factor in our map.
And you think of the major cloud providers, this is where they're focused on right now, and there's good reason for that. Well, there are things like well architected, both Amazon, uh, Google and Azure have really, really solid architected frameworks that are maybe 8, 9, 10 years old. We know what good architecture looks like. You just follow the guidelines. Don't, there's, there's no custom good architecture practices. They're very well understood. And then we can codify those in cloud architectural patterns.
Absolutely. And Will Architected gives us that, that commoditized set of architectural standards that allows us to create patterns consistently across the whole organization. So when we do enable our engineers by putting them into that, that cloud self-service portal, they're all really consistent. They're all working to the same set of enabling constraints. So as an architect, I love that stuff.
Yeah. And look, adopt the standard, don't write your own, like you are not different <laugh>. And then finally, growth mindset. If you go down this route, you need to have technical leaders who are willing to change and experiment, and engineers who are willing to try new things. So that growth mindset is so important for us. Wordly mapping is that hypothesis that we could maybe map things out and understand what we need to do, what we need, not what we don't need to do. And then psychological safety to that idea of, it's our role to try and create that for the teams, give the teams space to learn.
Completely agree. And, you know, in a, in a diverse sort of cultural environment such as a, a big corporation, extremely important. How do you get everyone's ideas? How do you get them involved in that modernization process? Um, how do you create a, a space where people want to come and be creative? Super important part of the map.
So you see how complicated this, this whole picture is like about, but what, what we have found is drawn this out like a map enables that conversation and challenge to try and get everyone on the same page, but let's shrink this back down and really see the shape of it again, again, you want to tie the senior leader needs right down to what the architecture team can do, do what we need to do within the engineering teams. That's the kinda chain here that we're trying to, uh, reflect here. And then from a modern cloud, this is probably the unknown piece that we need to move to the right, the modernize.
Absolutely, Dave. And you know, we talked about CDK patterns as being really a massive part of that serverless first org strategy. You know, so we were investing quite heavily in embracing modern cloud. How do we get modern cloud into all, every part of the, the organization? Well, our strategy is evolving around developer enablement, that cloud, self-service, those patterns that are built on well architected. We plan to shift that from a custom, you know, being built as a, as a, as a custom component and one part of the org, but make it the, the de facto that's the, our modern cloud strategy for the whole organization. So that, again, important part of movement. And we also talked about sustainability as being a climatic pattern that has begin to penetrate the map there in terms of the, the business growth area. So you can see you're already starting to see movement within the, within the map and having to deal with that movement.
Mm-hmm. <affirmative>. And then at Texas, as we talk about the book, the flywheel effect, we start to see the value flywheel, um, reflected here in the map. And number one was the, the customer need there, which for clarity, a purpose, it's that first part of the flywheel. Um, number four, as a architecture, as architects, we've got, well architected is, that's okay long term value. But the, the, the, the difficult things to do are number two and three are two parts of the flywheel. How do we create a challenge, an environment for success where we can challenge thinking and how do we introduce like a next best action kinda mindset that we can act quickly and can go that modern cloud, which will get you to that kinda work, take the long-term value.
Absolutely. And this was know the flywheel effect in action for us. We've kind of talked about briefly already, but you know, even we look at that challenge in landscape area, you know, types of things that we were doing was looking at replication and, you know, across all our squads and our, our environments and our teams, what could we do to address that? How could we reduce our costs? What is our next best action? How could we, you know, um, uh, take actions and apply strategies to move that, that that modern cloud practice from, from custom built into that product for, for our organization? So again, the, the flywheel, in fact is very, very real in, in this, this scenario.
And remember the map drives conversation. So really the four, the four phases there again, we've got them here in, in the value flywheel in the book with a clarity purpose, which is that north star in the time, the value challenge, that environment. Next best action your developer experience and serverless. First your modern cloud strategy, and then long-term value, which is your problem prevention culture. Well architect sustainability. This is this concept of joining your business strategy with your technology strategy. And again, this is what we're talking about, uh, in the book, and we explore this to with great detail and example in the book. So thanks very much for listening. Um, here's the help we're looking for as, as Gina has asked us to kinda give our call out. Um, the, the book is there for, um, pre-order on Amazon. And you can see there, it's, it it's built out in, in November.
What I'm really interested in, and I'm very happy to continue discussion on Slack or on Twitter, are you seeing this modern versus legacy cloud split? I see a lot of both modern legacy cloud, but I haven't seen it really be named in this way yet. Do you see this flywheel in your organization? I've seen this in lots of organizations, but I'm looking for more examples that we can, you know, really kind of, um, understand this and help people through this. Have you looked at, well, architect and sustainability for me, the well architect the frameworks are absolute gold, but I don't see the adoption that I think there should be there. Uh, have you tried wardly mapping in sense making and technical discovery within the architecture teams and technical leadership teams? A lot of people are afraid of wardly mapping, but a lot of people have got massive success.
How can we lower the bar to entry and help help leaders actually map out their landscape and, and, and drive forward? Um, I number you Mike, but I mean, it'd be great to kinda hear people's opinions and, and continue the discussion. Yeah, that'd be awesome. Brilliant. So that's us. Um, so we have more, uh, like I said, the book's coming out on, uh, November in IT Revolution, and it's been a great experience writing the book. Uh, we also have a blog there@theserverlesssites.com and we have, um, um, our serverless crack channel podcast. Uh, look us up on Twitter there. And, um, please reach out to us in Slack on the DevOps enterprise, uh, channel and happy to keep the conversation going. So I thank you Eugene, for the kind introduction. Thank you. Thanks.
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