
CTO Series: How Open Strategy and Agile Practices Drive Success at NorthCode With Ismo Aro In this BONUS episode, we sit down with , to delve into the transformative power of Open Strategy in the tech world. Ismo shares his journey from...
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Vasco Duarte
Hey, how are you doing? I'm Vasco Duarte, your host on the Scrum Master Toolbox podcast. And I've got some exciting news. So right now, as I record this, I'm holding in my hand the signed contract for our very first Global Agile Summit. We're all in and I couldn't wait to share this news with you. So mark your calendars. May 18th, 20th of 2025 in Tallinn, Estonia. We're gonna have a transformative experience. We're putting together an event that is all about real life Agile. It's not theory or buzzwords. It's practitioners sharing what's working, what's making an impact, and how they've overcome challenges that you too will have to face, or maybe even facing. Right now, we're bringing together the best stories in Agile. From product leaders to engineering wizards to business visionaries, these will be stories that will inspire you to action. This isn't just another conference. It's a chance to connect with the people that are shaping the future of Agile. And here's the best part. Right now, we're in our super early bird phase. And that means you can grab tickets at just 25% of the final price. Look, that's not just half off, it's half off of the half off. It's an incredible deal for our dedicated community members, just like you listening to this right now. So at the summit, day one will be all about hands on workshops. And days two and three, we'll dive into leadership, product strategy, coding, testing, and everything that makes Agile thrive in organizations. Right now remember, these are all first person, real life stories. Now whether you're a leader, a developer, or part of a consulting company, this event is built to take your Agile game to the next level. So don't wait. Go to globalagilesummit.com and grab your ticket. Today, let's all make 2025 the year agile truly transforms your teams, your business and our industry. I'll see you all in Tallinn. And Remember, go to globalagilesummit.com and get your super early bird ticket right now. It only be available until the agenda is announced, so don't wait. Grab it right now. Right now that that's out of the way, on to the episode. Hello everybody. Welcome to one more episode of our now famous CTO series of episodes. And joining us for today's episode is someone from the north. I'll introduce him in a second. But first, Ismo, welcome to the show.
Ismo
Thank you very much and good morning, Vasko.
Vasco Duarte
Absolutely. It's a pleasure to have you. I say Ismo is from the north because he's a CTO and partner at a company called northcode. So kind of everything is in the name. He's specializing in software development and workflow modernization with experience at companies like Nokia and Ericsson. He's held many roles but Today he's a 100% full focused entrepreneur having sold a previous company and now CTO and co owner of northcode. He's also served as the chairman of the Robot Framework foundation foundation that is there to support the development and use of the robot testing framework and he contributed to the growth of that widely used open source test automation framework. So Ismo, that was a short intro. When you think about your career going back to all of those, I'm sure many interesting stories, which one do you consider was that pivotal moment that defined your approach to leadership and technology?
Ismo
So my pivotal moment was 2006 and I was started working in Nokia Networks in 2005 and I was doing my bachelor thesis to Nokia at that time and it was really cool to get to the family because the Nokia was really big family during at least during that times and joining the big pig family and being part of the success story of Finland. But the thing is that I started as a test engineer and that was one of the most boring time of my work life because we waited something like three months because it was still a water form. So there was a six months release time. So I was waiting three months that nothing happened because it was already late release. So it wasn't something that it just. It was already like a mature product. So after three months we waited and we have test cases ready. So I was a test engineer and then the news release came and I put it into the. And it was during that time that was really hardware stuff. So it was DX200, those old mobile exchanges and when I put the software in it was in the reset loop. Okay. But anyway the thing was that the test were already long waiting times and then there was a huge amount of hurry in that point of time when the release came.
Vasco Duarte
That sounds very normal for a waterfall project, right? Lots of waiting and then lots of rushing after that.
Ismo
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? And then fast feedback stuff like that. But before that it was like a baiting and I suppose little Bit I love the company, but I was a little bit disappointed. The work itself that okay, is it this going to be my rest of my life? That this sounds pretty like depressing. But then the good things happened that my manager, I said, okay, do you want to join this Agile project? So it was. There was a different kind of pilots going on in Nokia. Also in the Nokia Mobile side. I think you were working on Nokia Mobile for that time.
Vasco Duarte
Yeah, correct.
Ismo
And I was working Nokia networks and there was a different pilot and I wasn't one of those pilots in the Nokia network site. And we start to use Chrome there. And then it kind of hit me that okay, this is the way to do it. So release like really early and then like incrementally add more features and take the feedback from the customer. And also when we have this shorter development loops, then of course stuff hit like strong automation. So things like continuous integration was introduced as we used. I think during that time it was cruise control. I think that doesn't exist anymore as a CI server.
Vasco Duarte
I remember that.
Ismo
Yeah, yeah, yeah. And I think Jenkins came a little bit later and we started to use robot framework as a test automation tool. It was still in the internal tool in Nokia. And we start to use it and it start to make sense for me that okay, we are doing the work and we are releasing often and we are always checking that product is working. Then we are creating test automation around it and always checking that, okay, it's still behaving as we are expecting it. Then I have my developers also in the same room, so if I have any problems then I just ask from my colleague that okay, what's the problem here? Should it work like this or is there a bug or something like that? And then we together think about okay, it's a bug, okay, fix it and then push it to the version control system. And then we check that, okay, now it's working. And that's in that sense that was. Maybe I have two pivotal moments, but that was big thing for me. Of course I was a young and eager engineer during that time and like the whole philosophy hits me really hard. But it was clear for me that okay, this is the way how the software development should work. So fast feedback loops, collaboration inside the team, collaboration with the customer, often release maybe the next thing. So I worked I think a little bit over seven years and then I worked companies like Ericsson after that and also Busware. And my role first was into Ericsson was Agile coach. So we have a coaching and it was more, more or less this kind of whole organization coaching that we are thinking okay, how we are going to transform Ericsson way of working more agile. Of course starting in the Finland child, but also spreading this love to the Sweden also. But anyway, that was more or less this kind of agile coaching. And maybe also I not only the agile coaching, the test automation. Automation really hit me also hard that this is okay, this is the thing what we should have here. So we have a machines doing machine jobs. So when we stuff happens then automating as much as possible and repeatable work always. So in that sense it was already then there's a real combination of like automation and agile way of thinking. Of course, lean way of thinking also. And yeah, and that also in the past where I was like a lead GUI engineer but that was also around the CI CD system and this kind of fast delivery stuff. But then the next thing happened. So one of my friends Antipohionen from Nokia Times asked that okay, he was founded the company called it Omenia. And during that time and then I was already talk like auntie and other people that it would be really nice to be an entrepreneur and trying something my own. And there was also really cool, cool persons on board already like Donny Corte Boja who is the business partner at the moment in Northcote and Tep Pokoskinen. And I saw those guys and there was okay, these are this know what they had doing. So I was okay, now or never. So it was this kind of, you know, the situation that okay, either I going to continue as a corporate car rest of my life better option, this kind of opportunity never will come. And then choosing this one and that I chose and in sense in that part I have been. I have worked two years in Sealy. But that was something that after we made a exit in Northcote, that was after that the time that I spent there. And I tried again that okay, is this something that I want to do to be the part of the public company, big company. But it turned out that okay, this is not anymore me. So I need.
Vasco Duarte
Yeah, so that's really interesting stuff. So of course first the realization of Agile and how it impacts software development. As you said, it hit you hard and it did to me as well. And I wasn't necessarily an advocate when I started. And then the second part, which is to realize that okay, I'm not cut out to be a corporate person. I really need to be out there and doing things on my own with great people just like the ones you mentioned, people that you love working with. That's very important. When you think about how you look at technology, being a corporate person as you were when you were starting your career and now as an entrepreneur, what do you think is the biggest shift in your mind regarding how you look at technology?
Ismo
I think it's cloud at the moment, a cloud transformation, that's the biggest thing that. No more like hardware things, no more bare metal stuff. We are doing most of the stuff. What we are doing, we are doing to the cloud environments. Of course there are Iot stuff so that's really like tied to the bare metal. But that's the thing. Of course, nowadays if I wouldn't mention artificial intelligence, I would be like old schooler. But that is still something that it's helping us, but it's still waiting for the moment that it's really, really chasing how we are working. It's already making to change. And I really, I recommend that use the LLM tools like ChatGPT, Copilot, stuff like that because they make your life easier but they don't do your job. Remember that and, and they are still really far away in that kind of things. But at the moment, cloud transformation is the thing.
Vasco Duarte
And when you think about your leadership perspective, again the same transition, right from a corporate type of role where leadership has a certain meaning and structure, then to becoming an entrepreneur where you're taking your own risks, as I like to put it. How did your perspective of leadership change in these two phases of your life?
Ismo
This is again something that during my corporate times when more and more I learn about this kind of modern way of working from the agile movement, the lean movement, I start to understand that this is something that if I'm going to do in this kind of corporate environment, the change is going to be long and really hard to make. Now when you have your own company, it's something that you can create from like in the DNA of the company. The thing. And the thing is here, what we are doing at the moment is we are calling it open strategy. And it's actually, it is open strategy in that sense that we are like all statistical decisions are made together. So we have a, in the company at the highest level, we have a roadmap. And basically the roadmap is just a trello board with the items. And the item is something that anybody can propose that, okay, this item should be there and anybody can vote also those items. And this is something what we are as a leadership team, we are like navigating our company to achieve those goals. I was thinking should go a little Bit deeper because the organization, how we are organizing our companies a little bit different. So we're using the same model as lot of companies using. And there's also whole ecosystem which is using this same corporate structure.
Vasco Duarte
But basically can you describe that a little? Yeah, go ahead, describe that a little bit.
Ismo
Yeah. So basic idea that we have two types of companies in the inside like inside the company. So in the north code there's a parent company and then there's going to be a subsidiary and parent company. I'm working for the parent company. So our job is to make sure that people have work to do. So we are handling the like customer relationships. We are doing recruitments, marketing, bookkeeping, all this kind of like managerial stuff and keep the engine rolling. And that's the job of the parent company. In the subsidiaries are the experts, so specialists who are working for the customer. So we are consulting company. So we are basically most of the cases we are selling our expertise at time and material base. So 1 hour x amount of euros and people are working there and they are focusing, producing value for the customer and that's their job. And our job is like surveilling everything else in the company. And also people who are working in the subsidiary, they are owning the subsidiary, 80% of the subsidiary. So they are also owner, co owners of the company where they're working. So the call of the company is pretty clear in the monetary.
Vasco Duarte
Monetary.
Ismo
Yeah, monetary wise that when the company, the whole block, both companies are making profit then everybody's getting it. So okay, maybe I said a little bit more about the money flow. So when we make a contract with our customer, parent company is invoicing the customer and make all sorts of deals and contracts to the customer. And when the work has been work is done or work during the work, the 80% of the money what's coming. So every euro what is coming from the customer, 80, 80 cents is coming to quoting subsidiary because they are providing work and 20% is for the parent company. And the parent company we are making like previously said, we are making sure that everything is working smoothly and operations working and 80% and from the 80% the subsidiary salary are paid also side costs, salaries, stuff like that. And also like tool expenses like laptops, mobile and stuff like that. But nothing else. Everything else is paid by the parent company. And now when the fiscal year ends then if there's profit then people are getting those as a dividend and we are sharing that those equally. So everybody has this 4, 4% of the share of the company. So we are sharing this equally. So there are no like individuals, nothing like that.
Vasco Duarte
So that also means that at the start of this discussion you started talking about how you have like this roadmap for the organization and everybody helps to kind of lead towards that roadmap process you call open strategy. We'll go to that a little bit more. But then what happens is that not only do you have this open strategy so everybody participating, but you also have this split between what is the company that does all the sales and mostly admin work like hiring and contracts and legal and so on. And then you have the subsidiaries who then are linked to the parent company and of course they share in the the revenues. You said 80, 20, where 20% stays with the parent company, 80% goes to the subsid subsidiary. So in effect what you're trying to create, if I get it right, is that everybody becomes an entrepreneur. Right?
Ismo
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. And how I see this is the like extra are the dividends. But in that sense entrepreneurial mindset hits there because now we can see really clearly that people really want to help the customer and also if they see inside the customer that okay, this is the situation where Northcote can help more the customer which of course in the end is going to be more sales, they are also taking that one. This is something what we are seeing really strongly. So yeah, our specialist owners are also seeing this kind of opportunities which usually only the sales people in the companies are seeing. But the risk is still about the same. What you have if you are normal employment relationship with the company.
Vasco Duarte
Yeah. So you have, you have basically you have an insured salary and then if things go really well then you share in the profits.
Ismo
Yeah, that's a deep insistent.
Vasco Duarte
So of course this is a totally different perspective on leadership and I can totally see how your own entrepreneur story kind of leads into this type of organization. But let's get back to that open strategy process because I think that's really interesting to explore. Tell us a little bit more like in a regular year, how does the open strategy process at Northcote go?
Ismo
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. And of course these kind of things we have as an example what Kind of items we have in the roadmap. Those are that. Okay, we have decided that there's a 20 persons need to. We collect 20 persons and then we are going to found the subsidiary. And until then they are working for the parent company. But the reason is that when we are creating a company from the 0 then date it has zero value. So you can give the shares free from the taxation point of view. But that's this goal. So 20 persons subsidiary, that's it. And then this is because it's clear then we have also KPI for that. So that's easy. KPI so 20% hard. So then we have the. Then we hit the KPI and then we can create found the subsidiary. There are different kind of stuff. So we are also talking about that we want to have a business outside of Finland. So now we are pretty domestic, domestic. We have some business in Sweden and we have had also in the United States and in Canada, also outside the eu. But this is something that we are not aiming to those markets. Those has been coming to our lap. But also this kind of thing is on the roadmap. So we want to have a come like a business outside of Finland. What does it mean in the future? Is it something that we are founding a new company outside of Finland or are we still Finland based? That we will see. But that's example one of the.
Vasco Duarte
So you work. You work with the organization. So the people who are in the organization to try to develop towards that vision, right? Like having a business outside Finland. But you're not kind of planning how it happens. You're just regularly reviewing it with the people that are involved in that. In that goal. Is that how it happens?
Ismo
Actually as long as it's not going to happen like in the near future, it's still an idea. But when it started to be more like in the execution phase, of course, then we need to break it down and okay, what this really means. But until it can appear just the idea level. Okay, this is the. In the long term, this is where we are going. Let's see how it's going to prove up. But world changes, companies changes, business change, everything change. So we don't need to plan it forehead before it start to happen.
Vasco Duarte
This is interesting because what you're saying is okay, so we have this idea, we talk about it, we even may do some things for it, like starting a business outside Finland. But it's only when it becomes real that we break it down. Until then we are just kind of discussing making sure that the idea is Alive and considering options. But we are not committing, for example a lot of time or money into that because we don't yet see the opportunity even though we want it to become true. Right.
Ismo
Yeah. And that's also that if the opportunity comes then we can hit it like take it really like there. Because we don't have strict plans yet. But that can be to plan that. Okay, this is the opportunity. Let's say that the big customers comes from the, I don't know, Germany. And then they say that okay, we want to take 10, like expertise, expertise from you, then that's already this opportunity. And if we would have planned something else that okay, we don't take a Germany, we take a Sweden first, stuff like that. And then. Okay, that doesn't hit our, our roadmap. No. That if we get the opportunity then we are going to take that and then we are working on that.
Vasco Duarte
Yeah, this sounds very agile. Right? Like because basically what you're saying is okay, we have a clear goal, we talk about it, but we're not going to make a commitment to something that there's no evidence it will work. We're keeping ourselves open so that when something happens, meaning that there's an evidence that there's value, then you move there and you move quickly because you're not committed to some long term plan you started a while back.
Ismo
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. And let's see, does it like take. But we are not investing huge amount of money on that. If the opportunity comes then of course then investing more time and money to that.
Vasco Duarte
So basically what you're describing are what I would call like business spikes. Right. Like you see an opportunity, you say okay, let's invest one month, couple of people and this much money to figure out if we can make something happen. If we can, great. If we can't, not much is lost. So we move on. Right?
Ismo
Yeah. And we also learn into the process that. Okay, because it might be that later on it might be the time is not right. That's also possibility. The idea is good, but time is not right. But we have already investigated it some point and then when the time is right, then we already understand it more than the company who's starting from the bottom.
Vasco Duarte
Yeah. I think this is a really great illustration of how the concept of a spike can be easily applied when it comes to driving a business's strategy. Right. And I think this is a great example. When you think about this open strategy, like the whole process kind of you talk to us about some of the aspects that are important but when you think about the open strategy as a process, even as the co owner of the company and even when you have everybody on board, there's still some challenges. What have been the biggest challenges of getting this open strategy process to work for Northcote?
Ismo
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. Of course the thing is that people, some people are more interested about this open status stuff than others. Some people are and it's okay that, okay, I'm just working here, so I'm helping my customer, we are getting money out of it, then the drivers to company, I don't care that much and that's okay. And then there are people who are more interested about the direction of the company and then they are participating more. But I don't see that it's a problem that everybody is not participating. Everybody's participating as much they want and they have opportunity to participate, then it's okay. Also it's a decision not to participate and it should not be, people shouldn't be blamed. And, and of course this kind of strategic game stuff happens really slowly. So it might be that one item takes one, two, three years. So this is always there that people can bought these items, people can put this item to roadmap and we are discussing time to time about the roadmap but this is something more like it's always there so people can check it. It's an open trailer board for everyone, people know where it is. And also it's aligning the strategy in that sense that because it's open information and discussion happens around it.
Vasco Duarte
So what you're saying is that okay, so there are items in the board, everybody can access the board. As you said, some people want, others don't but that's okay. People are not forced to. But those that want, they can easily access the board. They can see what has happened, they maybe can look into documents or research or whatever has been added to the topic and at any point they can say hey, we should really put more emphasis into this topic. So what you're also saying is if I get it right is that you're using everybody's cognitive ability, so motivation and creativity to bring up to your attention, meaning the people who eventually need to execute those Items to bring up to your attention what might be a good opportunity at the time. Right?
Ismo
Yeah, yeah. And this is also because now this is collectively happening. So this stuff usually in the big organization heart that in the like a higher level things are decided and then when you start to spread the information downwards, it's always okay, PowerPoints, meetings, whatever, stuff like that. And still people are not understanding it correctly. And that's how it works. And of course, because you are not deciding the thing and you are not seeing every aspect of the things and it might be the idea is really great, but because you don't know everything then it seems that it's not good way of like chasing company. But now when it's more like a collective decision, then this work has already done. So people know that, okay, what we are going to do and why we are going to do it and especially why we are going to do it is really important then.
Vasco Duarte
Absolutely. So basically you're trying to create an environment where when something needs to be done, everybody who needs to be on board is already on board because it's been discussed, it's been evaluated and an opportunity has been assessed. And then we move on with the execution, right?
Ismo
Yeah. And then when everybody's on board, then the execution is also faster.
Vasco Duarte
So when you think about this open strategy and how you look at the management of the organization itself at northcode, what are some of the key performance indicators, things that you look at to measure the success of this organization?
Ismo
Actually I wrote my master thesis about this. This is a. I really love the topic. So the thing things what we are measuring. So we have a KPIs and we have a monthly meeting and we are showing those KPIs to the whole company. And this is also something that everybody and anybody can check it in any time if they want. But there are things that. There are these kind of general things. Revenue is the big things, profit is a big thing. And we are showing this like openly. Also, also okay, utilization rate is 1. This is normal. Utilization rate is something that usually this kind of consulting companies are not that equally showing to the employees because it's. It feels like it's a weep that okay, you are not working as you should be. But in our context it's a really necessary measure and it is something that we are not like in a management or leadership. We are not giving the sweep because everybody understand that if, if this is low, then the money is not flowing in the company. And anyway 80% of the money is the people like those specialist owners, okay? That's one. So we have a strict. In this money wise and also this kind of KPIs. So we also see that okay, what does cash flow and how much we have in the money in the cash. So we also understand. Everybody understand the situation what we have in the like in the business and fiscal wise. Then there's also these kind of things. But already discussed that. Okay. When we have a roadmap item. The roadmap when we decided okay we are going to do this. Then we are creating also KPIs for that understanding when we are ready. And then we also put this to our dashboards and we are. This is also visible. So if we decide that we are doing something we are creating KPI and then we are going to show the KPI to everyone. It's not just for the management.
Vasco Duarte
Yeah, absolutely. And the way you're showing these KPIs I guess is through the monthly review of the strategy board and information available on the board itself. Where you attach data or whatever it is. Right?
Ismo
Yeah. So it's a. Basically at the moment it's just a Google presentation. So we are collecting there. Of course we are going to automate at some point of time because we are ITC company and we have pretty good quarters. But at the moment it works like. And our monthly meetings they are like this kind of more like a strategic meetings, tactical meetings. So we are checking that okay, how the month has gone. Stuff like that. We might check the. The roadmap but like said it's happening so slowly stuff there. So it's something that if you revise it time to time and people are anyway should look at time time that's not checked there. But we are going more like this kind of tactical stuff there that okay, what the situation with the sales requirements. This kind of more like a general stuff when we are going to have our next strategy meeting. So we have a quarterly this kind of strategy meeting where we want to invite everybody. So people are working from the Oluf at the moment to the Helsinki. So we have a. And also in Tampere area there's huge amount of people. So we try to gather people there. So also talking about those things that okay, what we are going to do next strategy there stuff like that. But more like a tactical stuff in the monthly meeting. Then we are. When we have this kind of strategic meeting we are not. It might be that we are checking the roadmap like that. It is more like this kind of. How do I say we are doing a different kind of workshop and more like opening the mind that. Okay, more like in the strategic level, one of the things what we have just an example there was this like a nightmare competitor challenge. I don't know. Have you ever heard it?
Vasco Duarte
No. Can you explain what that is?
Ismo
Yeah, that's cool thing. Because it's something that now the idea that you are. Let's say that you have five persons teams and the team, the target of the team is invent a company which is going to nuke our company where we are working at the moment. So be as nasty as you can and create a business strategy to nuke our company. So people are spread and then of course who is facilitating a little bit help there that. Okay, that might be that there's a business canvas or something like that as a framework to create it, but it can be also freeform. And then people are presenting. Was presenting after the like a workshop to the rest of the people. Okay. This is how the companies. This company is going to nuke Northcott.
Vasco Duarte
Wow.
Ismo
So this kind of.
Vasco Duarte
That can feel a bit scary, I guess.
Ismo
But it's also this. I think it's. But again if the idea comes from the people, then we can do about it. Because of course the ideas that we are gathering all the ideas there and we start to be a nightmare company of our competitors. That's the end call of course there. But that's something that little bit like Australia's day, like little bit more playful things that. Okay, think about outside of the box, not anymore in the consulting context and stuff like that.
Vasco Duarte
Yeah. And using those playful approaches to inspire new thinking can really drive results. Right. Like you can try out different things and maybe you have found already some things that you've adopted in Northco that came from such sessions before.
Ismo
Yeah, yeah. And of course it's something that. And it would be a stupid bit if we would take everything in there, the good ideas in there, what's coming. So of course it's shaping our company or the culture of the company, but also way of working in the company, those kind of systems.
Vasco Duarte
Absolutely. Okay. So this open strategy is an incredibly interesting aspect in itself already. So as a CTO and business owner, if you would pick like sources of information, could be books or I don't know, videos or podcasts or whatever that keep on inspiring you also to think further about this open strategy approach. What are some resources links you could give us for people who want to explore this open strategy idea further?
Ismo
I haven't what I have been using, I have read this book on open strategy that's one. And is it business agility? I can check from the Kindle. One second. All right, so open strategy is one book and then there's this, the six enables of business agility. But at the moment I must admit that the proposal problem in the whole industry is that those books are about more like this kind of corporate environments. So if you are this kind of transformation coach, then these books are good for you. And if you have this kind of like this, these big companies, then these are valuable. 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.
Vasco Duarte
So you modify them.
Ismo
Yeah, we are modifying, taking good ideas. This nightmare competitor challenge was one of the ideas what I took I think for the OpenStream book.
Vasco Duarte
Yes, absolutely.
Ismo
So you can pick up those kind of ideas. But the scene is. It's pretty young. But how I see it that we already into software development we have gone to the agility so more and more agile way of working and this is mainstream. It's not anymore like 2006 it was okay, those hippies are not trying to do something here. It's a hardcore business nowadays. But it's still that the companies itself are not that agile. So it's still working really hierarchical way of ways and then those are stiff. So the I think that it should go because if the software development is already agile then the bottleneck is not anymore there. So we should look in the other part of the company and get it's more like agile way of working and or lean away of working. How does it.
Vasco Duarte
Yeah, I think that the inspiring thought here of course is that we can make our companies more agile and maybe this open strategy is a good place to start, right? Like investigate that, learn more about it and then bring it to the company and see how that can be adapted to the context. Ismo, it's been a pleasure. I mean so many ideas and of course I would say challenging and inspiring ideas for us to think through. If people want to get in touch with you and know more about the work that you're doing, where should they go?
Ismo
I'm in LinkedIn, so please add me as a friend. I'm not using that much social media anymore, so that's basically only place you can find it. But work wise it's something I think it's still mandatory but you can check for the I'm. What if I'M writing something these days. I'm writing in the Northcote Fi and there are articles so that's stuff I'm writing there. So those are the places. But check me from me LinkedIn and add me as a friend.
Vasco Duarte
Absolutely. I will put the link to those on the show notes to make sure that people can easily find you. Ismo, it's been a pleasure. Thank you very much for joining us and for being so generous with your time and your knowledge.
Ismo
Thank you very much and it was a pleasure. And by the way Vasco, you have been one of the advocates when I started my agile journey, so you have I can blame a little bit about you. My like a first pivotal moment.
Vasco Duarte
Excellent, Excellent. Glad to hear that.
Ismo
So thank you for that.
Vasco Duarte
Oh boy, I bet you are buzzing with ideas after listening to this episode. I know I was. Now there are so many ways we can help the leaders we work with. So I hope this episode helped you get some of those ideas going going and getting inspired. Hopefully also to take action. That's what matters in the end. Don't forget that. Now if you want to check out the key lessons from this episode, check out the show notes@scrum mastertoolbox.org but for now I'll say goodbye and see you in the next episode. We really hope you liked our show and if you did, why not rate this podcast on Stitcher or itunes. Share this podcast and let other Scrum masters know about this valuable resource for their work. Remember that sharing is caring.
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
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.
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.
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.
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.
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.
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.
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.
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.
When asked about resources for those interested in open strategy, Ismo mentions key publications that have inspired their approach:
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.
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."
For more insights and actionable advice on Agile practices, listeners are encouraged to subscribe to the Scrum Master Toolbox Podcast and engage with the community through ratings and reviews on platforms like Stitcher or iTunes.