The High Performance Edge – What Makes Some Organisations Stand Out

Transcript

Shane Hastie: Hey folks, before we get into today's podcast, I wanted to let you know about our upcoming QCon Software Development Conferences. We will be back in person at QCon London, this April 4-6, and online with the QCon Plus May 10-20, join the world's most innovative Senior Software Engineers across multiple domains, in person and online, as they share their real world implementation of emerging trends and practices. You can learn more about the events at qconferences.com. We hope to see you there.

Good day folks. This is Shane Hastie, leading ProQ Engineering Culture Podcast. I'm sitting down today with Steve Spear. Steve, welcome. Nice to meet you.

Steve Spear: Likewise, thanks for making the time for me, much appreciated.

Shane Hastie: So who's Steve?

Introductions [00:54]

Steve Spear: Just real quick by institutional affiliation. I am founder of a software as a service company called See to Solve. We make products that are supportive of creating a high velocity learning dynamic within organizations. And that theme is probably more, a better answer to who I am. Other institutional affiliations, I was just going through the list. I'm a senior lecturer at MIT Sloan School of Management and a senior fellow at the Institute for Healthcare Improvement. I think more importantly though, is thematically who I am, professionally is... I mean, personally, I've got a wonderful wife and three lovely kids and a great community, but in terms of profession, my work revolves around the question, how is it that you can have technology and engineering heavy organizations with access to similar science and technology, access to similar vendors trying to compete into the same commercial spaces yet some few are wildly more effective at harnessing the resources at their disposal in terms of generating and delivering value into the marketplace.

Identifying the determinants of superior performance in technology organisations [01:52]

Steve Spear: That's incredibly well appreciated. And while most struggle to maintain their social license for what they do, there are those few which in a consistent, ongoing successive basis, keep rerunning that license with great accolades and like many, when I first looked at this issue of determinants of superior performance, I thought there was some trick, that there was some clever engineering algorithm, or there was some nuance to creating a protected space in the marketplace. So that one really wasn't facing as serious competition as one might. And it turned out those explanations while attractive, didn't prove out. And this is not just my own research, but the collective experiences we've had the last 20, 30, 40 years. What has proven out is that certain organizations are just incredibly better at harnessing the intellectual horsepower of the enterprise and directing it towards useful, common, valued purpose. Just to bring that home for a second.

Now combination of all the digital revolutions in COVID and work from home and distance work and that kind of thing, people might think that work is conceptual, cognitive, intellectual, but when you look at the industrial world, you still get these wild disparities between the very best and everyone else. And it's tempting to think that, oh, there's an engineering knack, there's an algorithmic wrinkle. But really when you look at a factory, what are you looking at? You're looking at people who individually and collectively have tried to generate new and useful knowledge in terms of what to do and how to do it. It turns out in a factory, there's a lot of equipment, but the equipment is the means of expressing what has been discovered. And so when people go to use otherwise similar equipment to make otherwise similar products, there are some whose hands are so much better equipped, what individually and collectively their minds have been able to discover.

And back to who is Steve and what is my work? So what I've tried to do the last two, three decades already is try and look at work, not as the technical object on the bench top, a gear, a gene, that sort of thing, nor is just the instrumentation through which we manipulate the object on the bench top, CRSPR in the case of genes, machine tools in the case of gears. But what is it about the social overlay, the enterprise mechanisms by which we integrate the efforts of many individuals towards common purpose. What are the characteristics of the social overlay that get us to these wildly stark differences between the very best in everybody else?

Shane Hastie: Wonderful lead-in, can you distill what you've learned in multiple decades down to a couple of paragraphs? What is different? As you say, there's so much in common and we are all in any industry, whether we're talking the InfoQ audience, high technology, software intensive products, or as you mention biotech or manufacturing, we're trying to achieve that. We want to create productive, effective workplaces. I hope in a humane way.

The difference is in the social elements not the technology tools [04:50]

Steve Spear: Yeah, that's exactly right, it's changed. So if we start thinking about this, is that when we look at any organization, whether it's one that creates nothing physically tangible, which is the case in a lot of software organizations and digital transformation and whatnot, things which are somewhat physically tangible pharmaceuticals, for example, or things which are obviously physically tangible like autos, aerospace, et cetera. I think the thing that's really important to recognize is that whatever is coming out of the enterprise reflects the collective wisdom of what to do and how to do it. That is the unique possession of that enterprise. And so when we started thinking about this, is that in order to perform better, both in terms of targeting better in terms of what to do and executing better in terms of how to do it, and that our ability to differentiate ourselves from everyone else is a direct reflection of the wisdom we've been able to generate and then put the good use.

An organization is a platform for people to collaboratively solve really hard problems together

Steve Spear: Then it really is a matter of thinking about the enterprise and creating processes within the enterprise, where the deliberate first order output is useful knowledge. Now I've spent a lot of time in various business schools, on the receiving end, as a student on the delivery end as a faculty member. And I've yet to go to a school where day one orientation, they say, "hey, welcome to the program here in our business school. Just so you understand, when we talk about management, we're talking about management of organizations. When we talk about organizations, we're talking about these artificial enterprises, right? These artificial constructs, which we create for a single purpose. And the reason we create these artificial constructs of organizations is we need a platform in which we can solve really hard problems together. That defy individual resolution." Now, I think some of your listeners might think about it.

They've probably not heard that. And at first and say, "no, that's not what we form organizations. We form for legal reasons." That's true. Tax reasons, that's true, commercial branding et cetera. That's all true. But as we start getting further into it, the reason we need to organize as enterprises, as opposed to markets is because we have to be able to get together and have collaborative creative conversation, which moves us from problem to solution. So anyway, that's the setup. And as you said, the succinct version is one, the recognition, the acknowledgement that we get under the same roof, literally or metaphorically, we get under the same roof to solve problems. And so if the issue is that we're collectively and individually trying to solve problems, then that directs us towards that everything we do, ideally, everything we do is structured in such a way that either it's teaching us something new or it's harnessing what we already know.

And so in terms of teaching us something new or harnessing something we already know. So one of the things we've been really quite enthusiastic about, energetic about, is encouraging people to think about whatever they design, whether it's a product or the processes by which that product gets designed or created, to think about before they act, writing, and I'm going to use a word that may be trigger for some listeners, to write a standard. And before anyone says and hangs up or clicks off, what I want to be real clear is what I mean by standards. Often standards are thought of as something that is written by someone else imposed on the standard user, and it's a forced compliance through auditing and that sort of thing. I don't mean a standard like that at all. What I mean by a standard is that a standard is an explicit expression of what actions we think will have what outcomes, it's a recipe, it's a choreography, it's a score, it's a script.

The combination of standards against which to work and feedback enhances creativity [08:04]

It's all those creative things that we use when we're doing creative things to capture our best understanding in the moment. I said when we act within an organization, then we should either act in such a way that brings into practice, the best that we know in the moment. So that's the standard the script, the choreography, or the act should teach us something. And that teaching is the feedback against the use of the standard. And so one of the things that we've worked very hard with clients, students, and others, is to get them to understand that reliability, resilience, agility, flexibility, all comes from this very tight coupling between having a standard, which is our best guess of how to succeed and feedback, which alerts us early and often that we need to adjust. And so that combination of the best guess we can make in the moment coupled with feedback that there's something deficient about our guess puts us in a situation where we truly are bringing the best wisdom available to us into action. And then in the same moment, building our understanding.

Shane Hastie: That's a really useful abstract picture of why we do form these organizations and the need for standards. And as you say, that's a very different definition of standard to what most of our audience will think about. How do we make these things real? So what is the secret source that the one in a thousand or even less organizations get right?

Communicating with artifacts [09:30]

Steve Spear: There's some very sort of very practical things. And then there's some things which are, I think, a little more difficult. So the very practical, what one finds in organizations, which are really outrageously good, is a commitment to drawing and writing. And if people are sort of scratching their heads about that, I encourage everyone to think back to the first laboratory science they took probably in high school. And the first thing you get, regardless of what it was, Biology, Chemistry, Physics, the first thing you got was a lab notebook. And the reason I have a lab notebook was it was a place where your teacher said, Shane, Steve, before you get started, write down as clearly as possible, what you think. And the reason for that was, it was already an opportunity to capture your best understanding in the moment and the actual act of writing the equation, detail and the experiment, drawing the figure, that act already was a chance to force yourself, to consolidate what you knew and already recognize the gaps in your understanding, where does this bond go?

How do I think about this force, is it going to the left or to the right, which way will the object move? And then of course, once we actually conduct the experiment, the experiment reality is talking against the picture that we drew or the text that we wrote to reveal the gaps in our thinking. What we've seen is that truly outstanding organizations have this... I guess compulsion sounds a little bit pathological, but this compulsion that when people go into a conversation that accompanying them into the conversation is some kind of artifact, which is a capture. So for example, in my book, The High Velocity Edge, I give examples of really outstanding performance. I'm got a case study about the US Navy's development of reactor propulsion, and the father of that program would hardly have a conversation with you unless the conversation was informed by a drawing text, data which had been processed, an equation.

And why was that? Because he wanted to start the conversation with your best thinking already on the table. Also in the book, there's a case study about how Pratt & Whitney reduced from like four years to three, the time to develop a jet engine, not only were they faster, they were faster, better at it, and they won an enormous contract for the engine that goes on, what's called the Joint Strike Fighter. Similarly, going from an understanding of industrial processes, enterprise processes, which was tacit, implicit, vague, ambiguous, et cetera, to a real discipline about mapping what's effectively the social circuitry of the organization so that it was explicit, articulated, clear, obvious so that it was useful, but also that it lends itself to feedback. And of course the remainder of the book is based on a lot of deep dive, immersive research I did with Toyota, which is another organization wildly obsessive about communicating through artifact rather than communicating through spoken word.

And just lastly, to bring this to current times, look, there are a lot of reasons Amazon is the behemoth that it is, but one of the items that often is on the list is Jeff Bezos' requirement that when people have an idea, they write the press release for it. And that when they come into a discussion, they have the six-page documents. And again, you ask, well, why is that? Why does smart people talking to other smart people need all that prework of drawing documentation, et cetera. And it gets back to it. It's because it's the forcing function that everything you might know is crystallized into something you actually do know thereby making all that more useful, but also making it more obvious where you need to know something else. So anyway, that's a first, very practical, methodical approach to getting this going. There's some tricky parts also, but let me just pause for a breath and hear your reaction to that.

Shane Hastie: For me, it makes sense. I sit with a notebook all the time.

Drawing or writing exposes your ideas for feedback [13:13]

Steve Spear: Yes, that's right. So Shane, let's talk about the hard part here now, which is what is the consequence of doing a drawing? And I'll use drawings as a metaphor because my wife is an architect. And so I've seen her go through graduate school in a very successful practice. The last 20 years, doing all sorts of very interesting things, is that the thing about architecture is you have to have drawings. You just do right? Doing a drawing creates a moment of real vulnerability though. Why don't you have a drawing or a model, but let's stick with the drawings as metaphor. Once you have a drawing, you show it to people and now you've exposed your ideas to their feedback.

The client may not like where you put a wall. The governmental authority may not like what you did in terms of setbacks relative to the street. The inspectors may be uncomfortable with what you did with plumbing, electric mechanicals, et cetera. The act of doing a drawing and making absolutely clear, explicit, this is what I believe will work. And then inviting people, because again, this is how an architect does this. An architect doesn't do a drawing and then have to do a sales pitch. Oh this is a great drawing, no, the architect does a drawing, back in the old day, literally pinned it up on a wall and then stood back and watched people take shots at it. Now, if you start thinking about this incessant insistence on drawings and documents in places, like I mentioned in my book, Pratt & Whitney, Toyota, Navy, the Naval reactor program, more contemporaneously Amazon, you think about what's required to create a culture in an organization where feel safe being vulnerable, right?

This needs an environment where people feel safe being vulnerable

Steve Spear: I mean, it seems almost contradictory, but where someone feels safe saying, "hey, this is Steve, Shane. I've done my best to throw this out, write it up, explain it, give all the justification, et cetera take a look." And I feel safe now doing something vulnerable because you're going to tell me what's wrong with this. And so if there's an expectation that the people on the design tables, in the studio, on the deck plate, on the shop floor, at the bedside, if people are going to be comfortable, feel safe being vulnerable, then it really requires that senior leadership create an environment where feedback is done in a way where it's feedback on the idea and a criticism of the idea and an attempt to improve on the idea and not a slamming of the person.

Breaking the mistaken belief that rigor and kindness are contradictory [15:19]

Steve Spear: You said, well, what's hard about what seems so obvious is I think too often we've persuaded people who have some kind of either authority, responsibility or both that being strict and being kind or being rigorous and being kind, being demanding and being kind that somehow those are oxymoronic. That being demanding, having high standards somehow has to be tightly coupled with being cruel. And so if we buy into the belief that rigor, discipline, exactness requires cruelty, then it's going to be very hard to get of people to feel safe being vulnerable.

Shane Hastie: How do we break that section in organizations?

Steve Spear: Yeah. How do we break that? My experience goes something like this, look 20, 30 years of working on this sort of thing. I have had opportunity to meet people. Oh gosh. Thousands of people, I suppose, with many different roles and many different degrees of responsibility, authority, and all sorts of different companies and sectors and on and on. And what I find is that there are some leaders who look at the situation of the enterprise for which they're responsible and are uncomfortable. They're just uncomfortable that even if today they seem to be successful, they just have sort of this edginess, this anxiety, Andy Grove, Intel said, only the paranoid survive. So only this paranoia, they're at risk of losing their social license. And when they start feeling that risk rooted in that is this combination of a sense of humility that maybe we're not quite as good as we need to be, or maybe we're not quite as good as we hope to be.

Maybe we're not even quite as good as people tell us we are. But coupled with that sort of anxiety is an optimism. If we take a closer look at what we do, then we're in a position to get things better than they are. It's this odd coupling, right? Humble optimism or optimistic humility, as opposed to the opposite, which is arrogant pessimism. The arrogance is it can't be any better, but the pessimism of course, is it can be any better. In terms of making the switch, it's the senior leader who realizes whatever we know right now will not be sufficient for going forward. And what we have to do is create the dynamics in which we're learning a lot more, a lot faster, a lot better all the time, ideally from everybody. And when you get the senior leader who realizes that it becomes her responsibility, his responsibility, their responsibility to run an organization so that people are constantly generating individually, collectively new and useful knowledge and putting it into practice. That's a key flipper. That's a key switch.

Shane Hastie: So if I come down from the leadership to our audience here, these are technical influencers, people working inside, often IT departments of large organizations, what can they do to bring some of these ideas into play?

Advice for technical leaders [18:01]

Steve Spear: Shane we started this conversation with who's listening and it's people with a great deal of technical expertise, great deal of technical responsibility, possibly navigating into where their technical contributions are. Second and third order through the hands and minds of others. So to all of you, what I would say is don't be afraid and don't make others afraid. Let me just unpack what I mean by the first don't be afraid. The essence of all learning is seeing flaw. And so for your own personal professional development, you have to expose yourself to feedback. So you can see the limits of your current capabilities in order to know where to direct your energies towards building upon those, to create future capabilities. And as I said, many of us have been socialized to be very uncomfortable being vulnerable. And so to that point, I encourage the aspirational individuals on this call to recognize how they've been socialized perhaps.

And despite that don't be afraid, expose whatever you're doing, expose it for feedback. Now again be sane about this thing. Don't expose it to a sociopath. Don't expose it to someone who's demented. Don't expose it to someone who's a sadistic, find a safe place to expose your best thinking for feedback, but expose it because that is the way you get better. It's through feedback and the recognition of where there are weaknesses, vulnerabilities, risks, et cetera. So anyway, don't be afraid. As far as the second piece, don't make others afraid. That's like the mirror image of that, which is if at least some of the people granting us some use of their time with this. If some of those people are in these aspirational situations where they're going from contributing through engineering, contributing through technology, to contributing technology through the hands and minds of others, then you will succeed as a leader by creating an environment, a culture in which the people for whom you're responsible, they succeed based on how quickly they learn.

So what that means is you have to create a situation in which they too can feel safe, not afraid. They too can feel safe, being vulnerable and coming to you and saying, "Hey Shane, you're no longer a desktop guy, now the guy who stands behind the rest of us working at the bench top, I have something to show you. And the reason I'm showing it to you is not cause I'm certain of it. It's cause I'm actually uncertain about it." And when that person comes up to you and says, "Shane, I'm really uncertain about it." The question is, how do you respond to them? Do you respond in a way that says, "oh why are you uncertain? This is your job. You're supposed to have accountability on this thing." Or do you respond to them and says, "oh, I'm so glad you came to me. I would be delighted to be helpful. So just show me what you got and let's figure out how we can make it and you better." So don't be afraid and don't make others afraid.

Shane Hastie: Solid, succinct leadership advice there. If we can explore just a little bit your organization and the book of a High Velocity Edge, you've touched on it. A couple of things and high velocity learning what's in there?

The High Velocity Edge [20:53]

Steve Spear: The source of the title comes from this idea that no one competes statically, it's not like Shane's got a position, Steve's got a position and we look at it, "oh, that's great where you are today, where you were yesterday." And we just continue to reward you. The reality is that organizations, and this is not just in commercial competition. This is true for governmental organizations, military organizations, social service organizations, educational organizations, they maintain their social license by changing, by keeping up or even getting ahead of the curve of what resources are available and what needs have to be fulfilled. All right. So once we start talking about that, this is not a positional thing, that's a directional thing, and there's a speed element to the direction and there's a change element to the speed, right? So where does change come from? It comes from the ability to take feedback about where one is headed and what one is doing and recognize that there's a need to change.

And so the reason we called the book and the work that's spelled out of it, The High Velocity Edge is that what we found is that the organizations, which not only are ahead, but continue to stay ahead in what is a dynamic, kinetic environment that the reason they're able to stay ahead in that dynamic kinetic environment is that their ability to generate new and useful knowledge just grotesquely eclipses everybody else. And in the book I give a couple of examples, pair wise comparisons. One is the US Navy after the second world war, like several other Navys around the world, realize that submarines as effective as they are as platforms, they're limited by the fact of the dependency on batteries and diesel power to power those batteries. And so everyone was attracted by the idea of fission reactors, atomic reactors. So in 1948, the US started its program, 1955, it launched the Nautilus, first nuclear power submarine.

And since 1955, the US experience with nuclear power, I mean, technically it's atomic power, but the commander of the first ship said underway under nuclear power.  Anyway, since 1955, the US has had reactors onboard submarines in and what's had it on a cruiser, but submarines and aircraft carriers since 1955, there has been zero. I mean, absolutely no harm to human being or environment due to reactor failure of a US reactor. Now we all know in the same period when the Soviet Union was trying to do the same work, they were losing a submarine about every year or two, Kirsk etc, etc, obviously with terrible harm to the crew and to the family of the crew, loss of the ship, damage to the environment. And so you get to the question, well, how is that possible?

Well, the US Navy had to outlearn the Soviet Navy, and we know that right? It has to be because where did they start? They started at zero. No one knew how to harness nuclear power in such a way that you could have it safely on board of warship. The US went from zero to good enough to be perfect since then through all the invention of science and engineering and technology and training and development of supply, they made a huge undertaking. What's also obvious that the Soviet Union learned enough to be imperfect and actually dangerous. Another example on this issue, it's really the learning dynamic, which propels organizations to their competitive success. So I think it was probably sometime early 90s where automakers became aware of people's desire for much greater fuel efficiency, combination of concerns about smog, concerns about price of petroleum, gasoline, that sort of thing.

So everyone did what they could to tweak conventional automobiles, lighter materials, electronic controls on engines, streamlining, and it helped with the fuel efficiency, but not to the point of double. So then others realized, well maybe there's a way to use propulsive technology more intelligently. And that's where you get the combination of electric motors and internal combustion engines, each have their sweet spot, each do their own thing. And so you get General Motors coming up with the Chevy Volt and Toyota coming out... at the time, the first one was the Prius. Now you take a look at they started the same part, right Shane?

Which was, they both got the same market signal. They started with the same understanding, right? Which is no understanding, no one had a hybrid car on the market. General Motors, by the way it's organized in terms of that social overlay, that social circuitry, they were able to come up with the Volt, which in the scheme of things is not a particular interesting technological architecture.

And it wasn't a particularly attractive car. I think over the decade, they sold that car, they sold about 160,000 units to scale us for people 160,000 units for a regular car is not even good annual sales. So 160,000 over a decade, it's like a hobbyist car. Now Toyota, same start point zero, same market signal, they come up with the Prius. And since the introduction, the Prius Toyota's put the hybrid system on three dozen different platforms. So you've got the Prius and you've got your Camry, which is widely attractive with cab drivers. They've got on the Lexus, then it's their performance thing.

And when I last looked Toyota's at about 20 million copies, all right. So just to put this in some context, what was the start point? Zero. What does success mean? We’ve learned a lot from zero, right? And what's the difference in outcome over a hundred to one. So anyway, tying this back to why high velocity and why the emphasis on high velocity learning is that when we look at organizations which have a similar starting point and very different outcomes, we say, well, how could they start the same level playing field and have such a different outcome? The only plausible answer is that the winners learned a whole lot more, a whole lot better, a whole lot faster with a whole lot more duration than the losers.

Shane Hastie: Thanks ever so much, really interesting insights in there and some great advice, particularly don't be afraid and don't make others afraid.

Steve Spear: That's right.

Shane Hastie: If the audience want to continue the conversation, where do they find you?

Steve Spear: You can find us at our website, which is See to Solve. S-e-e t-o S-o-l-v-e, seetosolve.com. We got some nice webinars there. Some other materials, you can check out some of the software we've been building to support this high velocity learning thing. You obviously, you can find my book on Amazon. You can email me steve@seetosolve.com and Shane I really appreciate the chance to talk to your audience here. And if folks got questions, fire away and if folks want help, we'd be delighted to help.

One other  plug I just want to put in here is I've been working the last three, four, five, six years with a guy named Gene Kim. Who's been this wildly productive creator of community for the IT DevOps community. And if you want to check out some great material, Gene's got libraries of it at itrevolution.com.

Steve Spear: And one of the great fortunes in my career is having met Gene. I think in 2014, worked with him more and more, and we're actually trying to work on it... We're not trying to, we're actually working on a book we hope to have out next year, bringing some of these ideas, as I was saying before to put it in writing so we can make a commitment to what we think is right. But anyway, so seetosolve.com for me personally, and IT Revolution to engage with a community that's very energetic about these ideas.

Shane Hastie: And we have a strong DevOps community on InfoQ and Gene is a good friend.

Steve Spear: Gene is a fantastic friend.

Shane Hastie: Thank you so much.

Steve Spear: You're welcome. Thank you for the invitation. I really do appreciate it.

Mentioned

• See to Solve
• MIT Slone Management School
• Book: The High Velocity Edge
• Gene Kim IT Revolution
• Steve on email