00:00:17

All right, Steve, come on out. So, I'm so pleased, uh, that I'll be presenting with, uh, Dr. Steven Spear, uh, my mentor for almost a decade. So he and he has presented to this community many, many times. So, as you may know, he's famous for many things, but he's probably most famous for writing one of the most downloaded Harvard Business Review papers of all time. They wrote in 1999 called Decoding the d n A of the Toyota Production System. And so this was based on, in part, on his doctoral dissertation that he did at the Harvard Business School. And in support of that work, he worked on the plant floor of a tier one Toyota supplier for six months. And so what's remarkable is that he's extended his work beyond just high repetition manufacturing work to engine design at Patent Whitney, to the building of safety culture at Alcoa, uh, to how we make self safe healthcare systems.

00:01:02

And, uh, he worked with a over a decade, uh, with a former C N o Admiral John Richardson, on helping create a learning dynamic across all aspects of the enterprise. So we are here to talk about what we've been working on for two plus years, and all the amazing discoveries that we've made as we work towards a, getting a book out next year, uh, at attempts to describe a theory of organizations and coordination, both in the ideal, not ideal, trying to understand why organizations work the way they do, um, and trying to synthesize what is in common between DevOps, agile Toyota production system, safety culture, and so much more. So with that, Steve, over to you.

00:01:39

A minute back. Hey, good morning everybody. Um, before I get rolling on this, uh, gene and I are, uh, trying out some new material today, and we'd like your feedback, throw it into the Slack channel. And now here's the reason to do that. If you do not put comments into the Slack channel, when we finally publish what we're talking about today, you're gonna have to read the same crap again. On the other hand, on the other hand, if you put some good comments in the Slack channel, when you get the book, you can turn to your colleagues and say, Hey, Dana, I'm the one who bailed them out on that book. So anyway, lots of comments, please. Now, in terms of, uh, the work we've been doing, we start with a basic question, why are the winners, why are there losers? Lemme say that again.

00:02:18

Why are there winners and why are there losers? And we take for granted that there should be winners and losers. 'cause so often they, there are winners and losers. But lemme just say that we should actually be surprised by the winning and losing in commercial competition. Why is that level playing field, right? Everyone goes into a, a realm looking for opportunity, right? The opportunities are similar to whomever it happens to be. They draw upon similar resources to construct solutions. They're using similar delivery channels to deliver those solutions to level playing field all across the board. And yet there are winners and there are losers. And so when you take away all the common resources, you have to find something uncommon to explain uncommon outcomes. And what we think the answer is, is that the reason we get uncommon outcomes from common resources is that the winners are much better at harnessing the brains in their enterprise.

00:03:15

What I mean more particular about this is that when they take, when they have access to the collective intellectual horsepower distributed throughout their organization, they're way better at harnessing that through collective action towards common purpose than anybody else. Now, here's how we're gonna build out our thesis. So Gina's gonna introduce an example, I'm gonna throw in some color commentary and develops into a model. And like I said, as we go along, your comments into the Slack channel, please. So next year you can say, Hey, that book is good cost of me, gene, over to you.

00:03:48

Thank you, Steve. So, um, I must say this has been one of the most intellectually challenging thing I've ever worked on, and also one of the most rewarding. But there are times when, um, I think that I actually don't know anything. So, uh, I wanna explain something that you might've seen. I've been, we've been, um, I've been writing a series of blog posts on something that might be, uh, a little strange, uh, but it's because, uh, I'm finally gaining some clarity. Um, after working with Steve, after, you know, this has been almost a decade, and so this is, uh, the, the aha moments came after Steve and I spent a week together in Boston. So, uh, what the first essay I posted was about how even moving a couch, uh, moving a couch is not just, uh, Braun work. It actually, it requires a lot of brain work.

00:04:28

So let's suppose you have two people. Let's call them Steve and Gene. There's actually a ton of communication and coordination that is required, uh, as they move the couch. When they start, they're immediately in conversation, actively communicating according where do you put your hands? How do you keep the couch balanced? Uh, what do you do to move the couch through a door sideways or lengthwise? Um, you know, uh, how do you get downstairs? So suppose the homeowner shows up and insists that Steve and Jean can no longer speak directly to each other. In fact, even certain actions shouldn't be taken without first getting approval from the homeowner. Suddenly, very urgent messages like the couch is slipping, can we slow down? Or the couch is pinching, my finger in the doorway are no longer making turns and time, everything's getting worse. Uh, it takes longer. Uh, things are getting damaged around them and even more dangerous as well.

00:05:11

So I thought this had a whole bunch of, uh, for me, profound insights. So the second essay was, uh, the extension of the scenario. So it turns out that Steve and Jean are moving the couch because they're helping Miriam and Marguerite paint the walls and ceilings of that room. And so they're moving the furniture out because they don't wanna get paint all over the furniture. So in the room now, there are two people moving the couch, and two painters and strewn across the room are open paint cans and four ladders. And now the work, the communication and coordination required is substantially higher. People have to signal what they're trying to do, maybe ask people to get outta the way, right? Uh, you know, Miriam and, uh, Marguerite have to ask Steve and Jean, uh, to not, uh, move something. There's dependencies. We can even imagine a scenario where they deadlock and no one can actually, uh, do anything.

00:05:54

So this is where coordination dominates and no, uh, energy is spent on the value creation activity of the task at hand. So, uh, what we've been working on for two months is the extension of the story. So the story begins because it turns out that Miriam and Marguerite are so pleased with the way the painting turns out, that, and everyone is so impressed with the beauty of the rooms, they've now been hired to paint all the rooms in an entire building, you know, 50 rooms across 10 luxurious apartments. So Marguerite and Miriam take charge of the entire operation. They receive a list of the room from the apartment owners along with the needs, size, variety, and so forth. So, uh, their first decision, uh, is to appoint Steve as the chief moving officer responsible for managing the movers. Jean is, uh, appointed as a chief paint officer responsible for hiring skilled painters, um, to paint the rooms as, uh, uh, desired by the customer.

00:06:45

So Jean takes the list from, uh, Marguerite and Miriam, uh, and creates a draft schedule of the rooms to be painted, uh, in what order, uh, shows it Steve, who scrutinize the schedule and make whatever changes is necessary, uh, so that they can promise that when the painters are, uh, gonna start painting, the furniture will be gone. And when the furniture is done, I start, when the painting is done, the furniture, uh, will be restored and so that the owners can take, uh, move back in. So they print out the schedule, put it in their clipboards, uh, give it all to the movers and painters on day one, but things quickly go wrong. Sometimes painters show up to paint the room, but all the furniture's still there. Why? It's because the movers are running late because there was more furniture than expected, or the furniture was harder to move than expected.

00:07:25

But something else, uh, and sometimes painters can't. Um, but something else that looks benign is happening too. Movers are removing the furniture sometimes long before the painters arrive. Why? Because sometimes a painting takes longer than expected. Sometimes, uh, they can't do the second coat of paint, uh, because it took longer to dry than expected. Um, so this leads to a spectacular moment where no one can start painting new rooms because the movers have run outta space to store the furniture. So, uh, and now we have to reset the whole system, um, and everyone potentially has to stop working. So at this point, uh, Jean is very frustrated with Steve. All of, uh, Jean's painters are complaining about how Steve's movers are never in the right place at the right time. Furniture's not being moved in the right way. In fact, painters are starting to go directly to the movers, telling them what to do, and which leads to this weird situation where painters aren't painting because they're too busy telling the movers what to do.

00:08:14

Similarly, Steve is, um, having to, uh, frustrated with Gene because the schedule is widely inaccurate and it didn't take into account all the unexpected variety being encountered in both the moving and painting operations. Steve is having to firefight steaming movers from different teams with difficult jobs. Um, uh, and Jean does the same with painters, but this is actually causing something even stranger to happen. Problems are now rippling out. Problems are not isolated to a room anymore. It ripples out through the entire system. Steve and Jean, how are they spending their time? Uh, they are hopping from one problem to another, just trying to get teams what they need. Uh, movers and painters are, uh, yelling at each other just because they don't, uh, have what they need. And it seems like everyone is talking to everyone else. Everyone in the system is spending time coordinating just to get what they need to get their job done and incident.

00:09:02

The irony here is, despite the huge amount of coordination, it is nowhere near adequate to the task. Um, uh, and their bosses, oh, they all agree on one thing though. They all think that Steve and Jean are not very good at their jobs, including, most importantly, their bosses. Marguerite and Miriam, they're both very unhappy with Steve and Jean because they have to explain to the customer why all their promises that they made have not been met. Uh, none of the apartments have been painted as promised, and the apartment owners can't even move back in. And when they do, like the furniture's have the furniture's missing. So they, at this point, they think they might have to fire Steve and Jean, uh, before they're fired by the customer. And all these characteristics of good architectures and modularity that we've talked about over the last two days are absent.

00:09:43

So that evening they come up with a different structure, uh, they decide something else is needed. Uh, so they realized that having the world's, even if they had their world's best movers and painters, they would not solve the problem. Uh, instead they have to figure out how do they get their painters and movers to work in anything that looks like harmonious coordination and collaboration. And so they get one more chance from Marguerite and Miriam. So instead of sending painters and movers to a room on schedule, they form room teams, uh, where they're assigned a group of apartments, which these room teams will complete one after another. And in each room team will be a coordination lead responsible for all the internal moving sequencing coordinating within that activity. And now all the room teams can work independently. They will own all the sequential steps of removing the furniture, painting, restoring the furniture within the team.

00:10:30

When something goes wrong, uh, they can be handled within the team, right? And if they really need help, they can go to Steve and Jean. Um, what does Steven Jobs, Steve and Jean's job now? It is to create great painters and great movers that they can give to the room team because they become the customer. And incidentally, if something goes wrong, if furniture takes longer to move, painters will wait patiently, or maybe they will even help. And the notion of what the team is at the edge changes in the previous, uh, scenario, the team was the movers, right? Or the painters. And now it is all around the room. Instead of a transactional, uh, interaction, now they're in a co-creating activity of, uh, uh, giving rooms that are beautiful. Um, the result movers and painters are now happier. They feel like they're working towards a common purpose with a genuine sense that they're on the same team and they're actually creating knowledge, uh, which benefits every future room they paint.

00:11:24

Uh, some teams decide not to return the furniture until the paint is dried. Uh, some teams close the windows when they notice pollen sticking to the walls, which we require painting. And in comparison to the previous system, the system is calm, quiet and orderly. Communication and collaboration, communication is way, way down. Instead, they are, uh, collaborating around the value creation activity. So, uh, apartments are beautifully painted at a level of quality that Marguerite and Miriam are delighted by, which also delights the customer. And so I'll just end with, uh, a couple observations for Steve and Jean. They had to jump from crisis to crisis in the first scenario. Instead, uh, they are now in a contemplative, uh, mode. Uh, Steve notices that the furniture, um, uh, some from the furniture team, they're using blankets to protect the furniture, and he decides to roll that out.

00:12:09

And he creates blanket teams to help support the movers, um, elevate the quality. Um, um, and Steve also knows as many innovations and exemplary practices, um, that are now spread through the organization. And this way they're experimenting with new structures and configurations and architectures are improved performance, and they're pushing the frontiers of what is possible. So I learned from me, Kirsten, I was reminded about, uh, cohesion. Coupling in the first scenario we had high coupling and low cohesion in the second we have low coupling and high cohesion. The teams are be able to work independently, but also in harmony towards a common purpose. Um, and we can also, this parsimony example gives us ways to say and team topologies the notion of enabling teams, productivity teams, all these things. So, uh, what is the difference between the first and second scenario? Nothing except for the management system that Steve and Gene used. Steve, how'd I do? Uh, is there anything I forgot?

00:13:09

No, I know. That's good. All right. So let's step back a moment to our thesis, which is there are winners and losers. And the reason the winners win is 'cause they're way better at harnessing the intellectual horsepower distributed throughout their organization, harnessing it through collective action towards common purpose. And losers do what Steve and Jean were doing, which is they're very, very poor at harnessing that intellectual horsepower. So just let's walk through the case. We start thinking through, and this is one, one part where we want some slack comments. We start thinking, if we're competing on our ability to harness the intellectual horsepower in our organization, what are conditions in which we're really, really bad at solving problems? And what are conditions in which we're really, really good? So conditions in which we're really bad is that we've got really hard problems. They're very complex.

00:13:55

The environment is moving very quickly. We get few iterations at, if any at all to get some learning loops going on. The hazards are very high, the risks are very high, et cetera, et cetera. Wicked hard to do, slow, deliberative, contemplative problem solving when the environment is so, um, aggressive against you. In contrast, what's the, if that's the danger zone, what would we call the trium zone or the characteristics? So the trium zone is all the opposites, right? Things are slow moving, they're decoupled, they're, um, less complex. You get iterations, shots on goal, low hazard, low risk, lots of safety. So when we start thinking about our own organizations, ideally what we're doing is helping people get out of the danger zone and more and more into the triumph zone to do their problem solving. And with this example, gene sort of illustrated this going on.

00:14:43

So the first setup was just total chaos. People showing up on a job, trying to figure out what to do while they have to, trying to figure it out while they're trying to actually do it. It's a mess. So then they do a little bit of simplification, they decouple, they partition time. So there's a moving element and a painting element. It helps a little bit, but it's not great. The movers are still arguing with each other, painters with each other. So then what do they do? They say, well, we gotta slow things down. We gotta calm the situation. We gotta move in. The triam zone is slow moving. They say, Hey, why don't we stage in the basement a mock-up area so we can figure out where's the furniture starting? Where's the furniture going? Where do we have to put ladders? Where do we have to put cans of paint?

00:15:20

And then create standards that we can bring back into the operating environment. So now we have an edge, again, over the fast moving environment. Now that, that works somewhat, but not perfectly. There's still some problems. And they say, well, you know, we've simplified things. We've created these standards in the slow moving environment to bring into the fast moving environment, but there's still stuff we just don't anticipate. So the first instinct, the first instinct is to grab Jeff off of another paint crew and have him help out in the apartment over here, which is having problems. But you know, what happens then? You've now coupled the systems, right? 'cause the problems in one apartment now ratchet right over to the other apartment 'cause you've pulled Jeff across. So now Gene and Steve have this third realization. One, to get people from that danger zone into that trium zone.

00:16:10

Simplify things, that's good, stable, standardized things, which you can do in that offline preparation. Then stabilize things, but not like by pulling one resource from another project. Now, making the systems more tightly coupled and more prone to failure. Actually throw a little slack into the system. Maybe we'll have Steve Thomas, who, who's the, who's there on hand, just in case. All right. And then what's the third thing Gene talked about? Is that, um, once we have much simpler flows and it's much easier to make sense of things, what's feeding me? What am I feeding? And we create standards. So now we've got into a situation, Ooh, what can I expect that I have to do? 'cause what can I expect about my surrounding environment? And then we stabilize that whole thing with Steve Thomas coming in. Now all of a sudden we can have this thing self synchronized.

00:17:05

We don't have to have the paint crews going up and down all the time trying to find Gene or Miriam or Marguerite trying to figure out what to paint and when to paint and where to paint and do all that. We don't have to have the movers going up and down the Marguerite and Ann and Jeff trying to figure out, do I move the couch first or the ot or the chair, and where do I put it? This or that. Now that we have simple workflows with standards built in and stabilizing factors, the work itself becomes self synchronizing. And what does that mean? Is that what we've done is we've created a much simpler, less complex, calmer environment in which people can do their work in the operating environment. And now they have a huge advantage over it. 'cause they're carrying into it the product of their harnessed intellectual horsepower, harnessed through collective action for its common purpose.

00:17:52

And so what do we see Gene do here in managing this? He simplifies things, pull things out of performance, execution, back through practice into planning, and then takes what's developed and plans and brings it back into practice. So that's our story. And like I said, we wanted some feedback on this. And, uh, I guess this is where we typically end with, uh, asks. So I've got two an ask and an admonition. So as far as the, um, the ask, um, my buddies and I, well, a bunch of years ago I wrote a book. Some of you have read it, some of you haven't. If you haven't buy it, read it. That'd be nice. But, but more, more selfishly in your, in your selfish interest. Um, this whole issue of pulling people out of the aggressive, dominating, disadvantaging danger zone of trying to think during operations and allow people to do really good, hard, deliberate problem solving, collaborative problem solving in planning, it turned out the type of work you do, we just type it into keyboards.

00:18:56

There's no movement of physical material. Sometimes people lose track of the system into which they're embedded. So, uh, do me a favor. You got your little phones and tablets and that kind of thing. Type in c2 solve.com. My man Daniel is seeing how many click-throughs we get. So type in there and we've got a protocol flow, take a look at that, and we think it'll help you be more productive in the triumph zone. All right? So anyway, that's the ask <laugh>. Um, as far as the admonition, as far as the admonition, if you have responsibility for other people, if you have responsibility for other people, and I think everyone in here has responsibility, at least for one or two, if not many, many other people, then you are in a position to shape the time and shape the space in which they operate. And if you have opportunity to shape the time and shape the space in which they operate, you can determine you have great authority and great power to determine whether they're operating in an environment which is the danger zone, where they're constantly trying to solve problems on the fly, real time with all the frustrations that ensue.

00:20:00

Or you can shape time and space so that people, when they're solving problems, they're solving problems in the triumph zone, not the danger zone in the triumph zone, where individually they can give fullest expression to their innate creativity. And collectively they can give fullest expression to the collective whole. And I gotta say, if you're in a position to shape time and shape space, that's kinda like Godlike powers <laugh>. All right? But think about this. What it really means is that you have opportunity and consequently responsibility to shape other people's time and space. The finite space that we occupy, the finite time allowed to us in such a way that at the end of every day, someone can go home and say yes or no. Today, the person responsible for me today, the person responsible me for me shaped my time and my space. So when I went into my moment of test, I was prepared to succeed. The person responsible for me today shaped my time and my space. So that when I went into my moment of test, not only was I prepared to succeed, but what I did was appreciated by somebody else. And when I went into my moment of test, the person responsible for me shaped my time and my space in such a way that when I did my work, it added value to my life. And that is the choice. And so make the right one.

00:21:28

And so can I use the, uh, can we use the last 50 seconds to, uh, reiterate our, uh, our, the help we're looking for? So we, we are very happy with the concepts. Uh, we're still debating about the names. If you have any suggestions on what words work better than others with this, uh, uh, the four S's, uh, the and so forth, um, the danger zone versus the tri zone, we would love to hear them. Thank you so much.

00:21:51

Outstanding <laugh>.