High performance organisations with Steve Spear
Join Murray Robinson and Shane Gibson as they chat with Steve Spear, author of a High Velocity Edge, Wiring the Winning Organization and Decoding the DNA of the Toyota Production System.
We discuss how good leaders create a system that makes it easy for people to do quality work when and where it’s needed by continually asking, what’s the problem and how can I help?
Steve explains how to use a developmental leadership approach with collaborative problem solving, workflow visualization and iterative improvement to become a high performing organization with an unbeatable competitive edge.
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Shanes Summary
We started out with a existential threat. The US looked at manufacturing organizations in another country and said, they are so much better than what we’re doing that actually we’ve got an existential threat. And that drives change because you had no choice. It’s either a change or disappear.
And when you started looking at those organizations, everything you looked at they were markedly better than the competitors. So it wasn’t just that they were lower costs. It wasn’t just that they had a better time to market. It wasn’t just that they made more revenue. It wasn’t just that they were better at risk management or better at change. They were better at everything.
And then you talked about this idea that those organizations were hyper focused on solving problems. But the key was, they then tested their hypothesis for a solution on how to fix that problem. They tested it again and again until it was proven, and then they implemented it. They were iterating before they pushed the big green button. They weren’t iterating after pushing the button. So they were ensuring that they were not bringing in more bugs. They were not bringing in a more defects. They were not bringing in more faults because they were testing iteratively until it worked.
And then you talked about the core of those organizations was managing collaborative work. How do we get multiple people to do the work together. Visualization changes the way humans work. Being able to see the work who’s dependent on whom and when are they dependent on them? And then we can focus on what needs to change. Is it time between links? Is it handoff between nodes? Is it rework. If we don’t understand who we depended on when, and who’s dependent on us then we optimize our location. It’s a local optimization, not optimization of the system because that’s what we paid for.
The metrics aren’t important. It’s really is the organization haphazard in their way of merging many into one? So rather than focus your metrics, focus on how much time are they taking to understand their environment? How much time are they taking to get the things they need to be able to do their job? How much time are they spent hunting, gathering and foraging rather than just doing the thing they need to do.
Podcast Transcript
Read along you will
Shane: Welcome to the No Nonsense Agile Podcast. I’m Shane Gibson.
Murray: And I’m Murray Robinson.
Steve: And this is Steve Spear.
Murray: Hi, Steve. Thanks for coming on. Could you introduce yourself to our audience.
Steve: Oh, sure. I’m author of 2 books, founder of See to Solve and on the faculty at the MIT Sloan School of Management, previously taught at Harvard Business School for a little bit.
Steve: I’ve spent the better part of 30 years trying to understand why certain organizations are so much better able to generate and then deliver value with less effort, greater speed, greater certainty than their counterparts.
Murray: What sort of organizations are you thinking of that are a lot better than average?
Steve: What’s encouraging, is that it doesn’t matter which sector we examine. There’s typically that paradoxical outlier who with far less effort is delivering a whole lot more value. We see it in heavy industry, tech, biotech, pharma, education. And we see it from early stage discovery through development, design, production, delivery. I first got interested in this in the late 1980s when Japanese companies represented an existential threat for American manufacturers.
In electronics, it was Sony that was innovating and delivering cool new products faster than anybody else. In heavy industry you had your folks like Mitsubishi, who seemingly were able to deliver much higher quality product at lower costs with more certainty than anybody else.
Steve: Then there was Toyota which was delivering twice the product into the market every day with half the effort, half the people, half the physical space, half the capital equipment. And quality was more than double. Better than anybody else in terms of first time quality, durability, reliability. And then they also exceeding on things like agility, scaling, et cetera. So whatever metric was being considered Toyota were better at everything.
What’s motivated my work over many decades is to identify those organizations able to deliver so much more value with so much less effort and then figure out what it is that explains their ability to do so versus everybody else. And it’s not just Toyota. In the new book, Wiring The Winning Organization, we do the pairwise comparisons, Apple versus Nokia, no contest anymore, Google versus Yahoo. No comparison anymore, though they started off in the same place, same time, same opportunities. So these paradoxical examples exist and they’re not limited to a sector, a phase, it’s just a common human condition that some organizations are much better run in terms of generating and delivering value than their counterparts.
Murray: Would you put Tesla in that bucket?
Steve: I have a lot of skepticism about Tesla. They’re selling a premium car with a substantial subsidy to a segment of our society that has the luxury of affording a second car or doesn’t really need a car and they just have it for the regular convenience. It feels like they’ve gamed the system to give federal subsidies to those who already well to do. And their 1st time quality is not great.
Toyota stands out because it’s one of the most competitive commercial sectors in the world. And there you have Toyota relative to everybody else on this very level playing field, generating more product, introducing new technology, better, faster, standing up new facilities, better, faster.
Shane: So you mentioned first time quality. Can you explain for me what is it and why is it important?
Steve: Yeah. So, someone who’s trusting an organization to meet their needs, what do they deserve? When we look at defects compliance, basic performance. How well does the thing operate? How well does it hold to those standards? There are certain organizations, their level of performance is very high and the variance around that is very small. But let’s step away from manufactured products to health care. A sector where the amount of trust that the user places on the provider is extraordinary. And the more urgent critical, the situation, the higher the level of trust for two reasons. The stakes go up as the the medical condition increases in severity and the ability to do it yourself goes way down. Anyone bringing themselves or a loved one to a healthcare institution, should have the confidence that they’re going to get the best care possible the moment they walk in the door. And this gets back to the question about first time quality. Do you have a reasonable expectation that you’ll be seen immediately? That the attention you get will be undistracted. That as treatments begin, or even examinations and tests begin, that they’re done in a fast, effective, efficient, as low intrusive a way as possible. When you get treatment, do you have a reasonable expectation that the treatment will be done in a way that eliminates any collateral risk of harm?
Now the truth is, in the United States, while those are fair and reasonable expectations, too often, they’re not met. That is not the typical experience. Things go wrong, misdiagnosis, mistreatment, mismedication, patient falls. People deserve perfect first time quality when they place their faith in another organization.
Then it gets to the question how do you achieve it? And the thing that we’ve observed is that those who execute, perform, produce, in a flawless fashion, they are absolutely obsessive about the debugging, the problem solving that they do in their planning and preparation. The effort they spend upstream before production is extraordinary. So they’ve seen and then solved an extraordinary number of problems in planning and preparation. So there’s actually very little unknown left over to cause hiccups during production or performance or execution.
Shane: So software companies took the word lean from lean manufacturing and put it onto lean startup and lean MVP, which isn’t about production ready first time quality. It’s about, put something out and see who complains. What’s your view on that?
Steve: It’s interesting the bastardization of this term lean. When John Krafcik wrote Triumph of Lean Production what he was trying to do is describe a situation where on any given day, most automakers used a certain amount of resources into their systems and got a certain amount of product out of their systems. Similar ratios everywhere other than this handful of facilities, which on any given day, it was half in twice out. And John was trying to come up with a way to label that phenomenon of half in twice out. So he said, if the other thing was mass, then he used this term lean. And what he meant by lean was this ability within the system to create so much more value with so much less effort.
So that’s what John meant by it. What happened, of course, in the nineties is people confused the outcome of a superior management system to put half in and get twice out, and thought that if you just went into a factory, fired half the people, ripped out half the equipment your productivity would go up. Not surprisingly, if you go to half X you’re only going to get half Y if that at all. It’s pretty clear people have misunderstood what John meant by lean.
Now, how did those people achieve half and twice out? The answer was problem solving energy and aggressiveness. We’re talking squirrels on amphetamines in terms of how anxious and energetic these people are to find any little problem and immediately call a timeout, swarm on the problem to understand its sources, try and quickly generate corrective action, run those corrective actions through one, two, three, four, five validations before re releasing into production a new and better way.
in software, those folks who have emphasized seeing and solving problems offline, their release of a product and service into use is phenomenal. On the other hand, those who think that this lean thing or agile thing or minimal viable thing is just a matter of cut the resources and hope for the best. They get what the logic would suggest.
Murray: I’ve seen clients engage a big international company to build software for them. And those companies say they can do things for lower cost by doing most of the work in India or Vietnam or Pakistan. And then when you get into testing practically every feature in the software fails the first time. And it’s quite common for features to go through a test fix cycle 10 times before they’re fixed. Maybe you could comment on it. Cause it’s funny that it’s still there today.
Steve: Let me draw an analogy from something I’m familiar with. I was in a facility 2 weeks ago. They took out a major piece of their facility, reconfigured it, replaced enormous pieces of it, put it back in place. From the moment they started taking things out to the moment everything was buttoned back in 10 days. When they turned the on button it ran perfect. Absolutely perfect. If you looked at all the stuff they moved around, you’d think just the moving things around was 10 days, let alone the reconnection and validation.
Steve: So what did they do? They start away ahead of time because the stuff they were going to put in literally didn’t exist. It didn’t exist as a design. It had to be manufactured. They created a coherent working group of an engineering function and a production function. Designing not only the equipment and the way it would be installed, but also how it would be used. Having all those affected by the change in the design together from the very beginning.
The other part is they took a very agile approach. Which is all right, we’ve got an idea. Let’s build a mock up. Let’s test the mock up and have the mock up tell us what’s wrong with the idea. When they started doing the tabletop exercises and the role playing, it said, Oh, there’s something we didn’t consider. Let’s make a modification. Okay. Let’s do another one and another one and another one and another one.
They took a very DevOps approach of ~~ ~~the coherent cross functional team running lots of experiments. In advance of releasing it into production on hard, heavy, expensive capital equipment and got spectacular results.
One of the arguments that Gene and I make in Wiring the Winning Organization is that the development and deployment of new software is exactly like the challenge of the development and deployment of new industrial equipment. Because the problem is not the technology of the thing you’re working on. The problem is engaging the creativity of the minds of many into a well integrated harmonious collective action towards a common purpose. It doesn’t matter what people are working on and what tools they use to work on that thing. The problem is creating conditions in which the human mind can give fullest expression of its innate potential to be creative and have that come together collaboratively and collectively.
Murray: When we talk to companies and try and help them, we are often told this team isn’t performing well. We’ll fix the team and then within a few months, we discover that actually all of the major blockers to the team’s performance are coming from the system that they’re in and the leaders will not recognize it. How common is that?
Steve: It’s commonly and tragically all over the place all the time. In the book, Gene and I start off with this provocative vignette two guys carrying a couch. At first glance, people think, oh, carrying a couch, that’s a brawn problem. But we point out is that, to successfully move a couch, you have to have pretty good collaborative problem solving in order to figure out where to lift the couch, how to balance the couch. How to, port it so that you don’t get stuck on doorways trip in hallways have trouble going up and downstairs.
Let’s carry it over to your point about offshoring design over there and test over here. If moving a couch is so damn hard that it requires high bandwidth collaborative conversation between two guys so they don’t get hurt. You gotta figure a modern day anything that’s scientific or technical. The amount of collaborative problem solving to get that thing, right, it’s gotta be pretty high. And to think that somehow we could commoditize the individual efforts that have to mesh in this harmonious, integrated collective action towards common purpose, it’s comical.
We make this contrast between transactional and developmental leadership. The transactional leadership is where you price everything in every activity to minimize cost. And the problem is then you get into these absurd situations. It’s like I’m going to outsource the left side of the couch to some dude in that country, and the right side of the couch to some dude in some other country. And Oh, by the way, if we need a third person to help navigate the stairs, we’ll outsource that to somebody else. And guess what? The three pieces are as cheap as possible. But the couch doesn’t move. That’s a stupid ass way to manage collaborative work. There’s a more thoughtful way that the high performers take, which is they view management, not as transactional, but as developmental. Wherever they are, they’re in a situation where what they know and what they’re able to do is less than what they need to excel.
And if the problem Is characterized by ignorance and incompetence then the solution to that problem is not a cost solution. It’s a learning solution. And if learning is a collaborative discovery process, in that case, what you have to do is manage and organize so that you’re optimizing not around, , the minimization of cost. You’re optimizing about the maximization of discovery and learning. And that really discourages this behavior you were just describing of put a function over here and a function over there and a function over there and hope by some dumb luck, the pieces come together into a meaningful whole.
Shane: How much of the problem is lack of visibility. If I go to a factory I can see raw materials go in. I can watch the raw materials flow through the machines. I can see it come out at the end. If I want to change one of those machines I can see the cost of buying a new machine. So both the flow of work is visible and the cost of change is visible. If I then look at healthcare or I look at software, there is a system, but it’s not visible. Business process mapping doesn’t seem to happen anymore. There’s lots of handoffs. Often there’s not people who are across the end to end process anymore. They don’t understand the whole system. And the cost of change is perceived to be low because it’s not visible. So how much of that lack of visibility is actually the reason it’s not working?
Steve: Thats a phenomenal point. Where there’s not the physical generation and transmission of something solid, it does become easier to lose visibility of the process and that invites chaos because we’re not really aware of on whom we depend. We’re not really aware of who depends on us. For what they depend on us. So what the heck I’ll just do, whatever makes sense to me locally, because I have no sense of the larger scheme of things. Now, of course, if I do that, I’m going to seem completely haphazard to the two of you, but I feel fine.
For what it’s worth, it’s a solvable problem. A bunch of years ago, we were working with a engineering intensive organization, which was struggling to compete. And to design 1 of the products that they made was hundreds, if not a 1000 or more distinct steps in the design process involving hundreds of engineers. But were you to go to any engineer and say who do you depend on for what to do your work and who depends on you for the things you create to do their work? No one could give you an answer. And that’s not a hypothetical or an exaggeration. We actually asked people, who do you depend on? Who depends on you? No one had an answer. So what we did is we started quite literally with post it notes on a very big wall and ask people just to put up on the wall what they did and the wall started to fill up with these yellow post it notes. And then people started to realize, oh, wait a second, in order to do that I’ve got to get the output of the thing you do. So that allowed us to start getting some sequence to visualize the responsibility.
We started this with post it notes, but as we started going through this exercise, we realized that in order to design something, there were 1000 of these maps and the room has certain limit in size. And even if we put the post it notes on butcher paper, there’s a limited number of maps. So we created a product we call See to Solve Flow. So we can do this electronically.
This organization did like a thousand of these maps, making it more obvious who did what dependent on whom dependent on by whom. Anyway, not surprising with that kind of clarity, people could act more purposefully and less arbitrarily. Product development cycle time went down by half. 1st time quality went up by a 1000 fold. And they went from a second rate position in their marketplace and within about a year, they were number one and they were able to hold number one.
And nothing changed in terms of the product. They were still trying to meet the same needs, the same marketplace, the basic science and engineering and technology was still the same. The only thing that had changed was the shared visualization of the process into which everyone had to fit to get good collective action.
Shane: When you walk into an organization, is there a list in your head that you walk in and go, let’s look at these metrics and that’ll tell us whether they’re great or good or not so good.
Steve: Yeah, the empirical evidence over 30, 40 years is that when we compare productivity between everyone and the best, the differences are double, triple, quadruple. Best everybody else. Early 1980s, David Garvin at Harvard Business School compared the defect rates for industrial HVAC equipment and the differences between the best and everyone else were defect rates, one 1000th of what was normal in the industry.
If you go into healthcare and you start looking at quality in terms of patient safety, missed medication, patient falls, et cetera. It’s the same damn thing. Differences are one, one thousandth to normal.
So when you walk in an organization the natural temptation is look at the gear. Oh, look at that really cool gear, that gizmo, that shiny thing. So we immediately get distracted like that. If we can take our eyes away from that and start looking at people, the amount of time people spend trying to make sense of the environment in which they’ve been asked to work is extraordinary.
When we first started shadowing nurses, we found that of all the things that nurses learn in nursing school to take care of patients, they spend about one third their day doing that. The rest of the day what are they doing? Hunting foraging and scavenging for the things they need to do nursing work. When we started looking at industrial sites, doing idiosyncratic work, building things tearing things down and refurbishing things. They’re spending about 1 3rd of their time, giving full expression to their skilled trade expertise. And the rest of the time they’re hunting, gathering and foraging for the materials, the information, the paperwork, the technical guidance that they need to do their work. That’s the first place to look. And the thing about that is you don’t have to collect data. You don’t have to collect metrics. You don’t have to generate reports and PowerPoints and this thing and that thing and trend lines. All you have to do is watch. And if you walk into an organization and you see people hunting, gathering and foraging for what they need, you can guarantee without looking any further that they’re laggards in terms of quality, productivity, workplace safety, first time reliability, et cetera, et cetera, et cetera.
On the other hand, if people don’t look awkward and confused and disoriented but instead there’s just a shared gracefulness to the performance of work, you don’t have to look any further. The systems are set up that the things people need are where they need them when they need them. And if you see that gracefulness, you can say, oh, that place, quality, productivity, 1st time, quality, reliability, agility, safety. It’s gonna be off the charts. It comes back to this issue of looking at the people and looking at the experience they’re having as a diagnostic of the conditions that someone else created for them to do their work in.
Murray: So what is the role of leaders in all of this?
Steve: In the high performing organizations leaders create conditions in which the system itself is not distracting, so people can concentrate their ingenuity and their problem solving skill on real problems. They’re always in the operating environment. Could be a factory. It could be in the design studio, the laboratory, whatever else it is. And why is that? Because they understand that their success or failure is determined by the conditions they create for other people in which those other people have to do their work.
And so just to give an example, I was at a Toyota Facility last year, we were talking to the site president, Suzanne, in addition to 10, 000 people, she has to worry about on site she’s got all her suppliers and logistics and materials and this thing and that thing. And we said, so Suzanne, how much time you spending on the shop floor? And she said, I’m really working hard to make sure I get at least four hours a day on the shop floor engaging with my department heads to make sure that they’re properly harmonized amongst themselves and then digging down into the problem solving within the departments.
She runs the whole thing and she’s four hours a day, maybe five. And she’s apologetic for the other four. And we started asking her department heads about their time. In the environment and they said it’s actually easier to count the minutes we’re not on the shop floor, constantly checking and trying to improve upon the conditions because we have very small offices, the offices are actually in the production environment, and they’re tiny. So who wants to be inside anyway?
Now I just set up the contrast. Is that we’ve done work with organizations and it could be factories it could be hospitals. It could be medical practices. It could be IT situations, high tech. And you start doing a survey about how much time leaders are spending in the environments where they’re asking other people to work.
Forget about four or five hours in a day, but if you get four or five hours in a week, you’re lucky. If you get four or five hours in a month, they think they’re like a Paragon of virtue, but more often than not, they’re not even there. They expect that people are going to email them or present them or come to them rather than them going to where the work is being done.
Murray: So why don’t more leaders work on the system to make sure that their teams have what they need when they need it so that they can be effective in achieving their goal? Why is it that we see so many leaders, blaming their teams rather than improving the system?
Steve: I’ll blame business schools for lobotomizing our leaders. Here’s what I mean by this. You think about most of our leaders and you look at their education, most of them have a technical background. What does that mean to have a technical background? It means when they were young men and women they’d went to school they like systems, whether it was mechanical systems, electrical systems, software system, they liked systems. And as they grew through their careers they became more and more expert about taking the basic science of their discipline and applying it onto systems of greater complexity, greater sophistication and higher performance. At some point, though, someone took their eye from being responsible for the technical system and said, hey, you know what? Now you’re responsible for the social technical system. The combination of processes and procedures, what we call in the book, this overlay of social circuitry by which the work of individuals is combined into collective effort. And when they get the business school and get that business degree, someone tells them to stop thinking about systems and how nodes are connected to allow flows and exchanges and interactions and start thinking about transactions. And it’s lobotomization of system thinkers by the business school community that I think has been the undoing of most of our enterprises.
Think about the alternative. One is we have system thinkers who think about the thing on the bench top in front of them. They think about the technical system through which they act on the thing in front of them. And then all of a sudden I think now what I have to do is think about transactions. What if when people got to graduate school to learn about management, they said, hey, we want to take full advantage of the systems thinking you already have.
But now instead of thinking about the nodes as devices, transistors, capacitors, and the connectivity as wires, we want you to think about the nodes as people with specialty solving particular types of problems and the circuitry, the processes and procedures that join them into collective action. I think we do much better.
This is the stuff we’re trying to teach at MIT Sloan through some of the courses we offer. So if anyone is interested to know how do I manage as a systems thinker, not a transactional thinker. That’s the heart of a lot of what we’re trying to teach.
Murray: I did my MBA at Melbourne University which is quite a good MBA school and I didn’t really learn much about systems thinking there. But I wouldn’t blame the business school so much. I would say that people are learning this very financial transactional way of thinking from the companies they work for. So they go in as this young bright eyed engineer who’s done an MBA and they join these organizations and they start applying some of the things theyve learned and they get told to shut up we do it this way. If you want to get ahead, do it the way we do it. So I think managers are learning all of this behavior on the job, and a lot of it comes from the accounting and finance profession, which is all about transactional analysis or break everything down into its cost inputs and its unit costs.
It’s common in our industry for senior managers to believe that all developers are the same so why would we pay a thousand dollars a day for an engineer in the U S or Australia when we can get an engineer for 200 or 300 a day in a low wage developing country cause engineers are all the same. It’s a commodity.
There’s this highly transactional, very narrow way of thinking. And when you consider the total cost of a value stream or a system it’s totally different to the cost of the individual inputs. So reducing the cost of all the individual specialized bits of labor to the lowest cost possible typically makes the total cost of the value chain ten times more expensive and take 10 times long. And yet because of this financialization, this accounting approach, managers do the opposite of what they should.
Steve: Yes. A hundred percent on that. As you were going through the example, I was thinking all this attempt to put a price on the unit of production, forgetting that it’s not the pieces, it’s how the pieces come together into a system. Your example earlier about outsourcing or exporting this piece of work to that place and this piece of work to that place. Yeah, except you have 3, 4, 5, 50 different types of specialty that have to come together.
You know where you see this? All star games. The more team oriented, the sport and the more the plays matter, the worst, the all star game. You get an all star game in basketball it’s entertaining to see the greats on the same court at the same time, but it’s not a basketball game and why is that? Because they don’t know how to run plays, which is why the final score at in an all star game is like, 2023 to, 2024 where a normal game is, about a hundred points each. And why is that? Cause no one plays defense because defense requires plays and it’s a team sport and no one’s practiced any of the plays.
Anyway, carrying this over to your point about the accountants and financiers looking at the unit of production when they start not only thinking about the individuals in a role is interchangeable, but start thinking about individuals in a role on a team who can be slotted in and slotted out. And when you pull someone out, what you do is you destroy all that situational awareness, which makes the team great. So anyway, I’m with you 100 percent on this and it’s interesting when we watch sports, what we see is that the franchises that spend a lot of money getting the all stars typically don’t succeed. Whereas, there’s all these great examples of teams that none of the players are the best at their position, but the team as a whole is unbeatable. And that gets to this transactional versus developmental mindset.
Shane: We often see that with the fallacy that adding more people to the team make the team go faster, where we know as soon as you add them, the team break and go slower. So a number of times, yeah, people going, we’re not going to make the project, let’s add more people. And you say to them, you’re not going to make the project, take some people away. And they go, you’re crazy. And you go not really cause it’s been proven add people you’ll go slower.
Steve: yeah. And that probably explains why in hockey they don’t swap in players, they swap in whole lines. Because the game is moving so fast that to have one guy drop in for another guy or one gal drop in for another gal, they’re not gonna have the chemistry. All of a sudden, all these people go off the ice, all these people go on the ice, but they know how to mesh.
Murray: So in a lot of organizations, people have learned through hard experience that if they provide feedback on problems in the system, managers will get angry with them. That they’re going to get punished, ostracized. Amy Edmondson talks about this as psychological safety and fear culture. And I think it’s still very prevalent today, even though leaders will deny it. So tell me what is the culture that makes for high performing organizations.
Steve: High performing organizations recognize that leaders are responsible for creating conditions in which other people can succeed in giving fullest expression to their potential to be creative and solve hard problems. And if there’s a problem and that person raises his hand or her hand the leader says, what seems to be the problem? How can I help?
That simple question? What seems to be the problem? How can I help is the day to day embodiment, the day to day operationalization of the idea that all are created equal. The leader has authority, they have responsibility, they have status, yet, despite all of that social stratification, they show up to the person doing the work and say, what seems to be the problem? How can I help?
Murray: Shane, I think we better go to the summaries. What do you think?
Shane: Sounds good. Alrighty. So we started out with a existential threat. The US looked at manufacturing organizations in another country and said, they are so much better than what we’re doing that actually we’ve got an existential threat. And that drives change because you had no choice. It’s either a change or disappear.
And when you started looking at those organizations, everything you looked at they were markedly better than the competitors. So it wasn’t just that they were lower costs. It wasn’t just that they had a better time to market. It wasn’t just that they made more revenue. It wasn’t just that they were better at risk management or better at change. They were better at everything.
And then you talked about this idea that those organizations were hyper focused on solving problems. But the key was, they then tested their hypothesis for a solution on how to fix that problem. They tested it again and again until it was proven, and then they implemented it. They were iterating before they pushed the big green button. They weren’t iterating after pushing the button. So they were ensuring that they were not bringing in more bugs. They were not bringing in a more defects. They were not bringing in more faults because they were testing iteratively until it worked.
And then you talked about the core of those organizations was managing collaborative work. How do we get multiple people to do the work together. Visualization changes the way humans work. Being able to see the work who’s dependent on whom and when are they dependent on them? And then we can focus on what needs to change. Is it time between links? Is it handoff between nodes? Is it rework. If we don’t understand who we depended on when, and who’s dependent on us then we optimize our location. It’s a local optimization, not optimization of the system because that’s what we paid for.
The metrics aren’t important. It’s really is the organization haphazard in their way of merging many into one? So rather than focus your metrics, focus on how much time are they taking to understand their environment? How much time are they taking to get the things they need to be able to do their job? How much time are they spent hunting, gathering and foraging rather than just doing the thing they need to do.
Murray, what do you got?
Murray: Yeah, I think the key thing for me is developmental versus transactional leadership. So the developmental leader is building up people, building up the system, building up the culture. They’re investing in people. They’re talking to people.
I’ve seen really high performing teams building software based products and services, and they’re all professional, skilled. They all help each other out. They’re not siloed. People are working together like a basketball team. And the leaders in those situations are listening to people, asking questions, trying to find out what’s going wrong and then trying to fix the system that’s around those people. So in my experience, most problems in organization can be found by just going to the people doing the work and saying, let’s talk about what’s going well and what’s not going well as a group and then start addressing the top priority problems that are outside the team’s control. And if all leaders did that all the time, you’d have a dramatically better organization in 12 months. Now, a big part of that is going to be about visualizing the work and doing value stream maps so you can work out how to link things up properly. Because otherwise you can get in a situation where you get local optimization, which damages the whole system. but
Fundamentally it comes back to leaders investing in developing, growing their teams, their systems, and their culture. And it’s surprising how few times that happens. I’d say about one in four executives I’ve worked for have had that mindset. But out of the remaining three quarters, probably about half were bureaucrats who are running the system, just follow the rules even if they’re having bad results. And the other half were just pathological politicians who were knifing each other to climb up the next rung in the ladder while appearing to be everyone’s friend, and unfortunately those people seem to do really well.
You need the developmental leaders to have a great organization. And I’m still not clear why some organizations have lots of developmental leaders and others they lose out in all the political battles. Maybe it comes to the leadership at the very top of the organization.
Steve: Yes. I’m with you. 100%. It comes back to the leader at the very top. If they act persistently in developmental ways, those people around them have to do the same. So I gave you an example before about the site president, this Toyota plant in San Antonio, Suzanne. If she’s on the shop floor four hours a day asking people how well the pieces for which they’re responsible are meshing with the pieces that depend or dependent on them and what problems they’re dealing with. Those large operating units have to have answers to that because that’s what Suzanne is asking about. And in order to answer those questions, they, in turn, then have to cascade the same question to the people who run the component pieces that fit within their division within their department. So thing gets wildly amplified based on the behavior, the action, the questions, the attitude of the leader to those people for whom he or she is responsible.
In these organizations, the most senior person not only modeling, but practicing this behavior and getting better at it every day. They’re really deliberate about making sure that they’re coaching this behavior. When they’re ready to move on, there’s a lot of people who are already capable of slotting in for them. Susanna, Toyota, Texas, backfilled for a guy named Kevin, who got a different job and it wasn’t like there was a leadership crisis because Kevin as site president was very deliberate about making sure that this same talent was being developed obsessively so that it not only had breadth, but it had continuity. And in some organizations, leaders don’t even think about this. But the leader who actually takes this on themselves, they create for themselves an insurmountable competitive advantage. Because not only does their organization have the breadth of this behavior, but it has the the durability that if someone leaves, it’s all right. The enterprise itself will maintain its health and vitality.
Murray: Yeah. All right.
Murray: So if somebody wants to learn more about the things we’ve been talking about, what are three books they should read?
Steve: All right. So Wiring the Winning Organization, High Velocity Edge. The most recent one I wrote with Jean, which takes these concepts very generally, the one before that very specific to Toyota. As far as the third, David McCulley is a very famous American historian who wrote a beautiful biography about the Wright brothers. Recommend that highly. For those of you who have a different inclination Trent Hone wrote a beautiful book called Learning War, which talks about the learning dynamic that Teddy Roosevelt helped instill when he was secretary of the Navy. And then he wrote another book about Admiral Nimitz, and it was called Mastering the Art of Command. And I recommend those also.
And why do I recommend such a breadth? It gets back to this point, is that exemplar organizations, as different as they are by time and place and discipline and mission, there’s a commonality of behavior and attitude. And so whether you’re looking at the Wright brothers or Admiral Nimitz or Teddy Roosevelt we see these recurring patterns of behavior and attitude.
Murray: All right. Now, how can people get in touch with you?
Steve: So, go to our website, See To Solve dot com. There’s some case studies in their resources. So if they go to SeetoSolve. com, they can find me there.
Murray: Or they could go and do your course at MIT.
Steve: Absolutely. If you pop into M. I. T. Sloan exec ed and look me up, you’ll find similar content in different packages. And any of your listeners who have questions about the course, even before enrolling. Happy to talk to them.
Murray: Well, thanks very much for coming on today Steve.
Steve: I feel richer for the experience. Thank you.
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