Scrum Master Toolbox Podcast: Agile Storytelling from the Trenches
Episode: CTO Series: How Open Strategy and Agile Practices Drive Success at NorthCode With Ismo Aro
Host: Vasco Duarte
Guest: Ismo Aro, CTO and Partner at NorthCode
Release Date: January 15, 2025

1. Introduction and Background

In this episode of the Scrum Master Toolbox Podcast, host Vasco Duarte welcomes Ismo Aro, the Chief Technology Officer and partner at NorthCode. Ismo brings a wealth of experience in software development and workflow modernization, having worked with industry giants like Nokia and Ericsson. His journey into entrepreneurship, combined with his expertise in Agile practices, sets the stage for an insightful discussion on leveraging open strategy and Agile methodologies to drive organizational success.

2. Pivotal Moments in Ismo’s Career

Ismo reflects on his early career, highlighting a key turning point in 2006 while working at Nokia Networks. He shares how the transition from a traditional waterfall project to an Agile pilot transformed his perspective on software development.

Ismo [05:28]: "Yeah, then there's a huge amount of this kind of chaos around it and what I noticed that it turned more like an agile way of doing the chaos hit because then you start to talk actually for the development that okay, I have this problem, okay, can you fix it?"

This shift introduced him to fast feedback loops, continuous integration, and collaborative problem-solving, which he found invigorating compared to the previous stagnant environment.

3. Transition to Entrepreneurship and Leadership

After gaining substantial experience in corporate roles, including serving as an Agile coach at Ericsson, Ismo decided to embark on his entrepreneurial journey with NorthCode. This decision was fueled by a desire to infuse Agile principles directly into the company’s DNA and move away from the rigid structures of large corporations.

Ismo [12:52]: "But now when you have your own company, it's something that you can create from like in the DNA of the company."

Ismo emphasizes the importance of creating a company culture rooted in Agile and lean thinking, allowing for greater flexibility and responsiveness to change.

4. Organizational Structure at NorthCode and Open Strategy

NorthCode operates with a unique organizational structure comprising a parent company and its subsidiaries. The parent company manages customer relationships, recruitment, marketing, and other managerial tasks, while the subsidiaries consist of specialists who work directly with clients on a time-and-materials basis. This structure fosters an entrepreneurial mindset among employees, who are also co-owners of their respective subsidiaries.

Ismo [18:51]: "Yeah, in some sense but still there are no. Because it's a combination of normal like if you would call the normal company in that sense that you are so you get the salary, you are not in the normal employee contract stuff like that."

Revenue is shared between the parent company and subsidiaries, with 80% of the incoming funds directed to the subsidiaries and 20% to the parent company. Profits are distributed equally among all members through dividends, promoting a sense of ownership and accountability.

5. Open Strategy Process in Detail

NorthCode's open strategy is an ongoing, adaptive process managed through a Kanban board. This board lists strategic items that anyone in the company can propose and vote on, ensuring that decision-making is collective and transparent. The strategy is not rigidly planned but evolves based on emerging opportunities and collective insights.

Ismo [20:24]: "So basically it's ever always running a process. So in that sense it's a Kanban board and in a Kanban you have just the flow and the flow continues flowing endlessly."

This approach allows NorthCode to remain agile in its strategic planning, enabling the company to pivot quickly when new opportunities arise without being bogged down by long-term commitments.

6. Implementing Agile in Strategic Planning

Ismo describes how NorthCode applies Agile principles beyond software development to its strategic planning. By treating strategy development as an iterative process, the company can continuously adapt its roadmap based on real-time feedback and evolving market conditions.

Ismo [24:44]: "Yeah. And if we are doing this kind of when we try to, okay, we have these kind of things that we are also trying around our business that okay, is this something that can sell? But those are more like a spikes that we are trying it."

This method mirrors Agile practices like "spikes," where the company invests minimal resources to explore the viability of ideas before committing further.

7. Challenges of Open Strategy

While NorthCode’s open strategy fosters inclusivity and adaptability, it also presents challenges. Not all employees are equally invested in or interested in participating in the strategic process. However, Ismo views this as a natural variation in engagement and emphasizes that participation is optional.

Ismo [26:27]: "Maybe it might be that I'm a little bit naive or then I don't see all this but I think this has been proved really nicely."

Additionally, the slow pace of strategic item progression—often taking years—requires patience and sustained commitment from the team.

8. Measuring Success with KPIs

NorthCode employs transparent Key Performance Indicators (KPIs) to track the company’s performance. These KPIs include revenue, profit, utilization rates, and cash flow, all of which are openly shared with the entire organization. Monthly meetings review these metrics, ensuring that everyone is aware of the company's status and can contribute to its success.

Ismo [30:09]: "So we have a KPIs and we have a monthly meeting and we are showing those KPIs to the whole company."

By openly sharing KPIs, NorthCode fosters a culture of accountability and collective responsibility, aligning the entire team towards common financial and operational goals.

9. Resources and Further Reading

When asked about resources for those interested in open strategy, Ismo mentions key publications that have inspired their approach:

• "Open Strategy"
• "The Six Enablers of Business Agility"

He notes that while these resources are geared towards larger corporate environments, NorthCode adapts the ideas to fit their smaller, more agile context.

Ismo [36:47]: "But the company like our size. So we are at the moment 20 persons. Of course we are growing. Those are not maybe that relevant. So of course we are taking the idea stuff from there but it's already start to feel a bit too stiff for our context."

Additionally, NorthCode integrates playful and creative exercises, such as the "Nightmare Competitor Challenge," to inspire out-of-the-box thinking and strategic innovation.

10. Conclusion and Final Thoughts

Ismo’s insights into open strategy and Agile practices offer a compelling blueprint for fostering an entrepreneurial and adaptive company culture. By integrating Agile principles into both operational and strategic facets of the business, NorthCode exemplifies how organizations can remain dynamic and responsive in a rapidly changing market.

Ismo [40:08]: "I'm in LinkedIn, so please add me as a friend."

For listeners seeking to delve deeper into open strategy and Agile methodologies, connecting with Ismo on LinkedIn and exploring NorthCode’s published articles provide valuable avenues for continued learning and inspiration.

Notable Quotes:

• Ismo [05:28]: "start to talk actually for the development that okay, I have this problem, okay, can you fix it?"

• Ismo [12:52]: "But now when you have your own company, it's something that you can create from like in the DNA of the company."

• Ismo [20:24]: "So basically it's ever always running a process. So in that sense it's a Kanban board and in a Kanban you have just the flow and the flow continues flowing endlessly."

• Ismo [24:44]: "Yeah. And if we are doing this kind of when we try to, okay, we have these kind of things that we are also trying around our business that okay, is this something that can sell? But those are more like a spikes that we are trying it."

• Ismo [30:09]: "So we have a KPIs and we have a monthly meeting and we are showing those KPIs to the whole company."

• Ismo [36:47]: "But the company like our size. So we are at the moment 20 persons. Of course we are growing. Those are not maybe that relevant."

• Ismo [40:08]: "I'm in LinkedIn, so please add me as a friend."

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