Las Vegas 2023
Creating Conditions for the Enterprise’s Distributed Intelligence to Achieve Unparalleled Results
Wiring the Winning Organization: Creating Conditions for the Enterprise’s Distributed Intelligence to Achieve Unparalleled Results
GK
Gene Kim
Author, Researcher & Founder, IT Revolution
DS
Dr. Steven J. Spear
S2S: Founder & MIT: Sr. Lecturer, See to Solve; MIT
Transcript
<silence>
Fantastic. All right, so this next talk will be Dr. Steven Spear and me. And, uh, the goal of this talk is to, uh, share what we learned, uh, while writing wiring the winning organization. So, uh, let's see here. So over the last three plus years, come join me, Steve, I'm gonna introduce you,
<laugh>, get you that. Me.
Fantastic. So, over the last three and a half years, uh, I've had the privilege of working with, uh, Dr. Steven Spear on, uh, uh, this quest that we've been on trying to answer why do organizations work in the way they do, um, understand, uh, both in the ideal and not ideal. And, uh, to answer the question of like, what is in common between agile DevOps, lean the Toyota protection system and, and so much more. Uh, and it has been an exhilarating wild ride. So I thought it'd be fun in this session to describe our top learnings. So I'm gonna go for eight minutes, may set the stage, uh, share with you what my big aha moments were, and then I'll turn it over to Steve. So, uh, really the, the key was that there's this magic, whether it's in manufacturing. So let me ntroduce Steve.
So Steve is probably most famous for writing the most, uh, downloaded Harvard Business Review article of all time called Decoding the DNA of the Toyota Production System. And that was based on his, uh, doctoral dissertation that he did at the Harvard Business School. Uh, and so, uh, after that, he moved beyond just, you know, the high repetition of manufacturing to engine design at Patent Whitney to, uh, helping build the safety culture at Alcoa, uh, and, and so much more. And our observation was, regardless of whether you talk about software or, uh, these other environments, there's this incredible magic of winning organizations that are somehow able to fully liberate people's creativity and problem solving capabilities. And this is, as opposed to those organizations that somehow constrain or even extinguish entirely, uh, that same problem solving creativity. Uh, and that really comes down to, to what extent are leaders able to make it possible for their people to do their work easily and well?
And, and so, uh, this is what went into the book wearing the Winning Organizations coming out in 2023. Uh, and one of the things I didn't mention was that I was, I was so delighted that, uh, the for was actually written by Admiral John Richardson who spoke, uh, earlier, uh, this morning. So, uh, and, uh, uh, so what were our top learnings? So one of the learnings was that all these things that we talked about, you know, these, uh, different tools was the Toyota Depression System, uh, team Topologies, DevOps. These are all incomplete expressions of a far greater whole, and that we can explain what they do and why they work and, uh, in three ways. Uh, and so without a doubt, this project has been the most intellectually challenging project ever worked on, uh, but also the most rewarding. In fact, there was a point about, uh, a year ago where, uh, I felt that Steve and I were stuck.
This is, uh, during the summer, uh, and I felt like we just couldn't come up with a model that was truly simple, that demonstrated the principles that we were writing about. And I told my boss, my wife, uh, Marguerite, uh, that I was gonna go on a walk on the beach, and I wasn't gonna come back until it was clear in my head. And so, six miles later, <laugh>, uh, I was convinced that I wasn't smart enough to understand what Steve was trying to explain to me, uh, or I didn't understand software well enough, or, and in, in this quest of trying to come up with a simple scenario, I learned that I didn't understand movie theater operations or restaurant operations. Uh, and it's a very interesting feeling to, uh, you know, question, you know, to feel like you're not smart enough to finish a project that you started.
Uh, and that's what led to, uh, building a scenario that was an extension of a scenario that we had written earlier to explore what coordination cost looks like, um, around moving and painting. And so, uh, the top, uh, the, so that led to the moving a couch vignette, uh, where Steven Jean tried to move a couch. And that's really a metaphor, uh, for joint problem solving. Uh, and so regardless of domain, uh, you know, eventually at some point you have people who often need to work together that requires communication and coordination. Uh, and that led to the second metaphor of moving, uh, Stephen Jean trying to move and paint, um, a house to support the spouses and hopelessly screwing it up, right? And that became a metaphor of how do you integrate the work of multiple functional silos towards common purpose? And really, the aha moment is, uh, you know, if Steven Jean can screw up such a simple system, just imagine how spectacularly you can screw up far more complex system with more functional specialties, with more complexity, with more, um, uh, uh, with more hazard and so forth.
So, uh, that was certainly one aha moment. The second one is, uh, about, uh, the three mechanisms. So one is ification, the second is, uh, uh, simplification. And the second, the third is amplification. And I'm never gonna get through my slides, but I will end on time, <laugh>. So, uh, you know, one of, one of the things that I learned, uh, working with Steve is that, uh, you know, you have to have, uh, time scheduled for planning and practice so that you're not doing the most dangerous work in production, in performance, uh, where there, uh, you can't do work where you have high stakes, uh, and be able to fail, learn, and improve. Um, and so whenever you look at, uh, things in our space where, you know, you take a look, most, look at the most reliable, uh, secure, uh, operable sites on the planet, you know, Amazon, Google, Netflix, Vanguard, uh, you know, what looks like, um, you know, something that they've just figured out.
It turns out they were investing far beforehand in terms of planning and practice. Um, so that turns out it's based on, uh, the work of Kahneman and Ky. Uh, so this is what won them, uh, Dr. Kahneman, the Nobel Prize for Economic Sciences in 2002, I think. Uh, and it's really, uh, the notion that, you know, there's fast and slow thinking fast and think fast thinking is where we use our biases, habits, and routines, right? But those are created during this more slow thinking processes where that can be deliberative, creative, and complicative. And if leaders don't create the time to generate, uh, to allow for slow thinking, uh, you, you, we are in a hopeless situation. And that's the sta in software. Uh, but that's also in, um, you know, every other work domain as well. Uh, and turns out there's actually no word in English that we could find, uh, that actually really describes this concept of slowing down to speed up of, you know, stop sawing to sharpen the saw, uh, and chat.
GP is so good at language, and it's just amazing, uh, that, you know, I asked for a 80 different, uh, words. None of them were satisfactory. The best word that could come up with, uh, we thought there would be a German word for it, and it's ver ersing, uh, and it just didn't fit on the book cover. So we, we chose not to use that <laugh>, um, simplification. I just wanna share this. Um, and so in simplification, one of the most, uh, mechanisms that we use a lot in software is around modularization. And so in the ideal, everyone's working on solving important problems all the time, uh, in parallel. And it's, they can do this because everyone has what they need in the right format at the right time, and they're interacting with the right people. And in, uh, our world, I think one of the most famous examples was Amazon Life was pretty easy when you're in Amazon in 1988, they only had two categories, books and music.
Um, and, you know, life got a little bit more complicated by 2002, where they had, you know, not two categories, but 32 product categories. And, uh, they got to a point where, uh, you know, they had, you know, scores of teams who had to communicate and coordinate where no one could get work done. Uh, Dr. Vernor Vogel described this kinda absurd situation in 2005 where, uh, the digital teams were required to provide a physical shipping address, you know, to buy a Kindle or a video, right? Which was so absurd, but there was no way around this. They had to go to 80 different teams, you know, asking to kind of work around this. But they said, you know what? We didn't budget for it, and they were stuck. And so what's astonishing is that, you know, things ground to a halt. Uh, and this is what led to, you know, the Amazon API, um, billion dollar re-architecture.
And I used, uh, you know, in past presentations this diagram to show kind of like what, you know, complexity and, uh, uh, highly coupled architectures look like this turns into this, which is not so good that eventually turns into this. So I wanna share this learning with you, uh, that really, a better metaphor might be gears, right? Uh, you are in a very bad situation where in order to do what you need to get done, you have to communicate and coordinate with scores of other teams. And so you can't move your piece without all the other team members agreeing to move their piece, right? And so this is where I have to communicate, coordinate, schedule together, prioritize together, worse yet, deployed together. And so by decoupling, this is what allows independence of action. And so independence of action also comes, uh, can be traced back to another Nobel Prize winner, uh, which is Dr.
Merton, uh, Dr. Fisher in black, uh, around option theory, where they essentially what earned them the Nobel Prize was their observation that decoupling decisions tomorrow from conditions today creates incredible latitude of action. And so the link here is that by decoupling things spatially as opposed to time you create independence of action that otherwise wouldn't have existed. And, uh, to summarize, uh, you know, it's not just gears. Imagine if each one of these were roulette wheels, right? The ability to spin these wheels independently, you know, win money independently, right? Creates amazing fortune, right? And so, um, Dr. Co Baldwin described how in the IBM three system 360 project in the 1960s, it enabled 25 times more value creation. And she wrote, when there is 25 times more value creation for users, there's so much value that the entire commune will rearrange itself to accommodate this venture. Capitalists will deploy capital just to get a piece of the surplus. And so I think that was certainly, uh, a way to think about sort of what has been done in the software space that is equally applicable, you know, in every other domain as well. So, Steve, I'm gonna turn it over to you for your top learnings.
All right? Yeah. Thank you. Um, no slides, no clicker, uh, Jean, thank you. You can like that. Thank you. So, um, before I started about my top learning, I just want to say that I've had a 20 some odd year privilege of being on the faculty at MIT. And, uh, what I'm really delighted is that immediately after us, uh, former student, Adam Trina, who's one of the many students from whom I've learned a ton, will be speaking, uh, about a case that's actually in the book. So I'm delighted to intro, you know, Pree him. And then tomorrow I've got another colleague, uh, Maria Menser, who, uh, also from whom I've learned a ton, both when she was a student, when she was at Intel. And now that we're working together, she'll be doing a presentation, I think around one o'clock. And I encourage you to, um, listen to both of 'em because they're gonna be talking about personal experiences where the three mechanisms we describe in the book, um, came into very powerful play in their own lives.
So, just wanna mention that in terms of, uh, lessons learned, I'd say the one that really rises to the top is focus on the individual. And, and in particular, I'm speaking to those who, um, have, uh, moved up through various expressions of technical competency and now find themselves in positions as leaders where they're responsible for creating conditions in which other people do their work. Focus on the individual to kind of make that point, since it was lessons learned from the book, I thought I'd draw upon stuff we actually put in the book. So, um, on page four down in a footnote, I, uh, recollect an experience I had was driving along the Hudson, uh, river in, in Manhattan, looked up the, uh, navy, uh, air and space museum, and on sitting on top of the aircraft carrier was an SR 71, a blackbird. So I called him my Uncle Larry, who had worked on that.
And I said, Hey, I saw that SR 71 Blackbird, I know you worked on that when you were a junior engineer. And he said, you know, that was the best engineering experience I ever had. My first reaction to that was that, that's insane. You know, he had had a career in engineering that work he was doing, maybe when he was in his twenties, he, he was designing not even the locking system, if this was a car as a, as a metaphor. It was like the little lever on the locking system. I'm trying to understand how could that have been the best. It took years of reflection. It finally dawned on me the reason it was the best engineering experience he had ever had is that he was part of this enormous hole of technical and engineering talent that created something as magnificent as the SSR 71.
That his ability to connect to this very large system was what made it the best experience. Right? So that's proof point. One second, uh, reference here is on page three, right before the Uncle Larry reference, where, um, we write on July 20th, 1969, mass crowded into Times Square, central Park, Algar Square, the city centers of the Soviet Union, north and South Vietnam, Hong Kong, and other places around the world, they gathered to watch Apollo 11, astronauts, Neil Armstrong and Buzz Aldrin start their descent to the lunar surface. All told 650 million people shared that experience, watching and listening in theaters, taverns, airport, and train terminals. And at home in wonder and awe, as Armstrong stepped onto the moon and declared, that's one small step for man, one giant leap for mankind. What's the point? Those people weren't even part of the project, but they wanted to connect to it in this visceral way and feel like they were part of accomplishing something gigantic, something far beyond, uh, what any one of them could have accomplished on his or her own.
Third proof point each day, people badge in, budge, in swipe and scan and sign and log in, or otherwise just walk into their places of work from that common beginning. The differences in their experiences are vast. For some work is marked by drudgery or even danger. Their days are filled with frustration to make the amid the regular confusion of figuring out what to do when and how to do it, and even why it needs to be done. Too often, they're left cynical about what's going on around them and exhausted from trying to get meaningful things accomplished. However, some people experience the opposite. They're well equipped and capable of succeeding at what they've been asked to task to do. They're respected and appreciating for doing, doing their work well, and they leave the workplace knowing they've added value for others and to their own lives. Why focus on the individual?
'cause that, uh, difference in experience that individuals have between the drudgery, the disappointment, the danger versus the exhilaration, the exaltation of being a part of something much larger. That's the difference that leaders can create. And as a leader, you don't need reports and metrics that are lagged and aggregated and then discussed in meetings, and then clear clarified in, um, filtered and distilled in pre-meetings on the pre-meeting for the pre-meeting of the actual meeting, which then has a follow up meeting to have a new report about that. What do you need to do? You need to go into the workspace, look at the individual, and look at the individual and ask the question, what experience is she or he having today? And I'll, I'll end my, um, reading outta the book, um, that mention of, uh, the individual experience. That's a direct draw on lessons I learned from one of my mentors, Paul O'Neal, who is the CEO at Alcoa, when it transitioned from a very dangerous place to work because of high risk, high hazard processes to a very safe, productive place to work despite the same high risk, high hazard industrial processes.
And when we asked Paul, how did you manage such a sprawling enterprise? You know, the dozens of plants, the many, many different countries, the the tens of thousands of employees, Paul's answer was simple. He said, I asked a few questions every day, and they're all around focusing on the individual. So, uh, since focusing on the individual is at the beginning of the book, and at the end of the book, I figure this is a key lesson. So, uh, I write in the, uh, acknowledgements, what was Paul's homework for us? Find people for whom you are responsible, and ask them, are you treated with dignity and respect? The answer is no. As a leader, you have work to do. Are you given whatever you need to succeed? And does this bring value to your life? And are you recognized for what you do by someone whose opinion matters? And then Paul concluded his advice, conditions that generate a no to any of these merit correction. So anyway, there's a, a lot of good stuff in this book. I think, you know, recommend it. Um, you decide for yourself, you're getting a copy later, but, you know,
But, but, but if, if there's one thing that if you find yourself in a leadership position, don't be overwhelmed by the sprawl, the span of the technology, the sprawling span of the organization. Focus on the individuals. Ask Paul's question, are you set up to succeed? Does it add value to your life? Do you feel appreciated? And if the answer to any of that is no, you've got work to do. Jean, thank you. It's been a, a great
Journey. Awesome. And so, um, Steve and I will be doing a book signing tonight. Everyone will be getting this special edition that, uh, uh, was, uh, record some heroics to get here, <laugh>. But, uh, and, and so I've, I'm so proud that, uh, we're done with the book, thank goodness, <laugh>.
Yes.
Thank you very much. All right, thanks, son. Be well.