Fractal Theory And Human Organizations

Oksana Shmaliy, scientist turned technologist, currently leads IT Strategy and Architecture at Grange Insurance, where she led the DevOps transformation company-wide.


In this episode, Oksana and Ledge chat systems thinking, organizational scale, and how creative, multi-dimensional employees make the difference in high performance companies.


Oksana gets super-meta, showing us how fractal theory can help us understand complex human organization. Super-fun geeky stuff right here, and you do not want to miss out!

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Oksana Shmaliy | DevOps Leader, IT Strategy and Architecture
Grange Insurance

Oksana Shmaliy is the DevOps Leader, IT Strategy and Architecture at Grange Insurance. She is a Information Technology people leader who builds high-performing teams where people have opportunity to grow, be challenged, and create technology solutions to achieve business goals.

 

Keep up with Oksana's work and connect on Linkedin.

David "Ledge" Ledgerwood
Research, Insights | Podcast Host
Your host, Ledge, is a many-time founder, with deep experience in growing six-figure startups to 8-figure enterprises.

“Love this podcast! Best one out there for high-level industry trends and advice. Recommended!”

Danny Graham, CTO / Architect

Transcript

 

DAVID LEDGERWOOD:  Hi. Would you say your name please?

 

OKSANA SHMALIY:  My name is Oksana Shmaliy.

 

LEDGE:  Oksana, it’s great to have you on. Thank you for joining us.

 

OKSANA:  Thank you, Ledge. It's a pleasure to be here and I thank you for the opportunity to speak to you.

 

LEDGE:  Great. It's good to have you on. Would you mind giving just a two or three minute background introduction of yourself and your work so that the audience could get to know you a little bit?   

 

OKSANA:  Sure. I think that the best thing to introduce myself is to say that I am a scientist who, by way of life, became a technologist or an engineer. I spent the last 20 years working with smart software development engineers.

I built some software, I was lead projects, and in the last three years I got an opportunity to actually do various things. I came to do the transformation for test engineering, to convert our manual testers to automation engineers. And then I think it was a logical continuation and I led the software engineering taskforce to improve and implement different processes and tools to support development process. Then I actually started the DevOps movements at my current company.

I think all of that comes from my overall scientific background and desire to learn, as well as build connections and truly think about how all of it comes together. I always think about system. So I'm a system thinker, which leads me to different books and topics that I'm also interested in.

 

LEDGE:  You and I talked about a particular book that really set off your interest in thinking about the scale of the organization. Please talk about that. That’s really interesting, the way that you've been thinking about that holistic systems thinking in your work.   

 

OKSANA:  Right. I was kind of fortunate to discover this book called, Scale by Geoffrey West. I highly recommend anyone who likes a little bit of science.

Geoffrey West is a great author because he explains concepts easily, and it's a very interesting book because he compares living organisms, cities, and companies. There are underlying laws that he describes that explain how and why organisms live and die, and there is a limit of age.

What really made me mostly interested is his ideas around the companies. The companies are like living organism. They are born, they live, and then they die. We know that some companies live five years, some companies live ten years, or fifty years, and there's really few companies that live like 500 years. There is one company in Japan that really existed that long.

My interest was to understand why some companies really live longer and some don't.

If you think about companies, there are three components; one is, companies have to produce value, they have to compete in the marketplace, and then there should be an underlying organizational structure that supports the networking and information dissemination within the company.

When I look at that and compare the structure, the network with the idea of cities… Within the cities we also have a huge network. It's a network of people, infrastructure, our roads, communication, et cetera. All kind of networks exist within the city.

By nature, those networks are fractal. For people who don't know a fractal, so fractal is self-repeating systems or self-reproducing systems, sort of. So, visual. If you imagine the tree, each branch is similar to the big branch and goes to the smaller branch and then it's all connected, interrelated. And when you look at the branches, for example, they all have crinkliness. They are not smooth, they're not flat. And fractal usually is characterized with the additional dimension that they create.

When we looked at our companies and our structures within the companies, the first thing comes into place is its flat structure. It's sticks and boxes, right? And then you start thinking about it. So when your company is organized in a way that is really hierarchical and depends on who is in power, who is on top of that structure, it limits the interactions and the possibilities of people interacting and organizing altogether.

So my question was, what can we do to organize ourselves as fractals versus repeating the hierarchical structures that have probably been in the companies for quite some time.

 

LEDGE:  I totally resonate with this because we have to think about organizational structure and be able to draw it, but it's this insufficient way of representing the complexities of that system.

To draw a bunch of, like you said, sticks and boxes in pile and we imagine that the complexity of a person in a role fits in a little box. And then we imagine that the only way that those people communicate is on the little sticks and that ought to be effective.

It's a very simplified model. I understand why we do that, but you just have to ignore such a huge amount of complexity of the fact that those are people, and people bring all kinds of multidimensional approaches and experiences and skills to their work. None of us has the same fingerprint, if you will, from a career and a collection of experiences.

I think this is what people talk about when they want to bring diversity to the front, and yet we need to design systems that are even allowed and able to consume and leverage diversity in a positive way.

How does that fit in?

 

OKSANA:  You're absolutely right. I think that there is a huge movement right now around diversity and it really talks about embracing everyone, but I think what we really truly need to embrace is diversity in our thinking. Understanding that we all come from different backgrounds and we bring our own filters, if you can say, because it's there based on our experience. How we grow up, what college we attended, what jobs we had so far.

Also, it goes with our innate intelligence. We think differently. Some people think through feeling, some people very rational. So bringing it all together into the structure of the company is probably a huge task, and I don't have a solution right now, but we have to understand that these traditional structures are creating limitations right now.

I also did some research on hierarchical structures and they were quite a bit of white papers. What the white papers really described is that the hierarchical structures really work well when you have repetitive, simple, less complex tasks. When somebody truly tells you, "Okay, you need to go and do A, B, C, D," that's where the hierarchical structure supports this type of work.

But we know in our world, in our complex world and especially in the world of technologies, we have creative people. We have thinkers. People want to solve problems. But if we try to restrict them with telling them you need to A, B, C, D, we're not utilizing their full dimensions. We're not understanding how to tap into what each individual really brings.

And I was thinking about, what's the potential things you can do?

In some ways, you still need a leadership element, absolutely. But I think with the… If you think about a tree, there is a trunk. The trunk connects everything together and it supplies the information. So if our leadership organizes in a way that they perform that type of trunk, and maybe more I was thinking about becoming a culture – so distributors of information and soliciting the information – then I think our organization can reach that fractals type of structures where the multi-dimension of each individual is shining and utilized in full potential.

So, that was kind of the initial idea.

 

LEDGE:  It's a huge investment. You can appreciate how, under the stress of capital constraints for example, that it's. "Well, yes, that sounds great, but we all can't sit around just think all the time and take care of each other.”

So, it's a component of everything, and yet demonstrating the ROI has been a huge challenge that researchers have taken on. Always trying to say, "Well, why is it not like building widgets in a factory to have a knowledge organization?" I think we're all struggling with this as we try to build more dynamic organizations.

Everybody knows that some 80% of your cost structure is going to people. Certainly you want to get the full return out of those, and yet it's hard to see. It's hard to materialize that and to figure out how to use those resources in the best way. It's a very complex raw material.

 

OKSANA:  Yes, it's true, but I would challenge us maybe we need to stop thinking in terms of ROI around people. Because I think that when people are happy, and when they're happy at the place and they contribute with their full potential, the ROI is then a hundred times fold more than just telling somebody to complete or meet certain objectives.

I understand we are not there, this is the world that we may want to evolve or figure out how to get to, but I think we have opportunities to start maybe loosening up our structures in terms of always trying to control certain things or telling people what to do.

By creating an environment where my… So, I will speak about myself. If I come to work and I bring everything I learned so far and I build my scientific mind that actually those connections determine strategy, and I feel that everything I bring when I solve a complex problem was my full self, I'm actually helping the company to get to a different level.

The idea is always, think about it's like a tree. It always grows, and the same applies to companies. In order to grow it means you have to take into account every element and every human being that is given to you to create those different structures.

In some ways, organization have to think about the flexibility around their structure. Instead of always building this hierarchy of tree, the organizational tree, think about organizing people by a specific effort, where you have flexibility to people together like a Hollywood production and find the best to do the work just for that particular effort. And then you move them again to a new set of tasks that are needed or emerging that needs to be solved by the company.

 

LEDGE:  Right. We've had other guests talk about swift action teams and different approaches like that, where you assemble teams and work toward a specific objective and then wind that team down and look for something else to do. Taking a problem and solution based disposition.

So, every fire is a thing that we want to solve, you know, gets an owner and a team that gets to work on that. Lots of approaches that way.

I do think it takes a leadership leap to allow those things to happen because, when you're in charge, losing control of things feels scary, and yet we can't avoid it. We get to a scale that is simply impossible for one person or a small team to process.

 

OKSANA:  Correct. Right. Imagine how much stress it puts on that person if he has to solve all the problems in the world, or think about the future. In some ways, it is this great opportunity for leaders sometimes let go and sometimes to maybe step back and be in the role of a coach. Where you're observing how the team performs and you simply direct them or provide additional strategy or self-course correction,  instead of figuring out everything and spewing out everything and knowing how…

I think it's not possible in our world. There is too much complexity that we're dealing with.

 

LEDGE:  Absolutely. You're talking to 20,000 engineering leaders right now, so maybe some tips of things that have worked as you brought this mindset to work. That you do have a big organization that reports to you and that you've had to build structure and strategy around.

What things have worked, and maybe some things didn't work the way that you hoped?

 

OKSANA:  Sure. The things that really worked for me, and just probably me personally, when we are trying to take on really big initiatives, same as a DevOps, I was fortunate to reach out and form grassroots initiative.

We formed a group of developers. Then you work almost individually with each person, you see what their interest is and you support that, and you try to figure out the tasks that fits that particular mindset.

But at the same, it's all about helping people to build the internal connection. My goal is always, if I can't step out and see the team doing things on their own and figuring out next set of tasks they need to solve, next set of tools they need to want to learn, I think my goal is done.

I think this year I saw that. We built a specific implementation for one of our biggest initiatives around DevOps, and the team worked absolutely independently. You really stay on the side and as a coach you try to say, "Okay guys, we need to maybe think about this opportunity here," or, "We need to maybe refine some of our initial processes."

I think for me being in my role and trying to lead and help people, it is all about inspiring but then stepping back. You inspire people to go and do some crazy stuff that they haven't done before but then you have to step back. Natural processes, natural talents of people evolve on its own.

It's messy. It's like chaos. If you think about fractals – it goes back to fractals – I don't know how much you know about chaos but with the natural processes and chaotic systems they always reach a structure that internally evolves, and that structure is beautiful. If you look at some visuals they're beautiful.

I think in many of our organizations if we just allow the people to evolve through the chaos, through that mess – and it's very tough to stay aside and watch it because you always want to jump in and start solving and telling people what to do and where they need to go. But if you find the right balance of guiding and then stepping back out, then you will see at the end that the structures that are created and how people work together are beautiful. They feel different. They feel different.

 

LEDGE:  I should note for our listeners at home that, maybe you're thinking that you are in an industry that is very forward-looking or maybe working at a startup, but I happen to know that that's not the case.

 

OKSANA:  I am in the insurance industry, and we're not.

 

LEDGE:  Not a place that's commonly known for moving quickly and doing lots of things that are super innovative.

 

OKSANA:  As I said, I've been fortunate that people around me supported my ideas and they let me actually… I’m maybe that example where the organization saw something in me and supported who I am, and allowed me to kind of move forward with the strategy, with the ideas and now it's really helping that organization.

That's the look-back, right? So, you let somebody move forward with who they are, what they bring best to the table, and you get a very impactful or influential outcome.

 

LEDGE:  I love that. I don't know if we can do better than that.

I think I better wrap up here and just say, Oksana, thank you, this is really inspiring. We'll make sure we link out to any of the work there that can help other people take the fractal organizational journey.

 

OKSANA:  Yes, absolutely. Thank you very much, Ledge. I appreciate the time and the opportunity.


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