Shayne Daughenbaugh  00:04

What can you say would be some of a catalyst, or some of the catalysts that kind of spark the need for some of these cultural transformations?

Steve Spear  00:12

The catalyst for cultural transformation is either a justified or a cultivated paranoia, and unless we get out of the building, you know, put ourselves in the problem space, then we will be stuck in the situation we’re having with the experiences we’re currently having. Everything has to have a standard, but the standard also has to have tests built in to reveal early and often where the standard is failing.

Andy Olrich  00:35

My family, my grandfather is a farmer, and he had this great saying was, there’s no point bending your back if you’re not going to use your head see that system like he’s connected to the process or the value of the job that’s got to be done. But having the visibility of the broader system just got to give them a bit of help and then get out of the way they’ll solve it. I on.

Shayne Daughenbaugh  01:05

Remember when Netflix was mailing DVDs, Amazon was selling books and taxis were your only ride share option. Behind every evolution that seems so obvious to us now is a painful period of change and resistance. Hi. I’m Shane, co host of Lean solutions podcast. We’re jazz you’re here. My fellow co host, Andy, how are you today, sir,

Andy Olrich  01:33

I am sensational. Good morning. G’day, good evening. Wherever you’re listening from Great to be here. Yes, yes.

Shayne Daughenbaugh  01:39

So these industry giants that that I mentioned, Netflix, Amazon, you know, the taxis or Uber now that’s come in rideshare, Lyft, all of those. These industry giants didn’t just wake up one day with new business models that they had in mind. In fact, they most likely underwent intentional cultural shifts that challenged everything about how they operated, the same principles that drove these dramatic transformations are still working quietly in organizations all around us today, and so we’re going to be talking to Steve spears, exploring how these organizations navigate their own transformations through Lean thinking and the very human stories behind this process. I’m very excited about it. Andy tell us a little bit more about our guest today,

Andy Olrich  02:26

absolutely. So we’re fortunate enough to be talking to Steve Speer. Steve’s a senior lecturer at MIT Sloan, founder of the software firm C to solve and author of wiring the winning organization with Gene Kim and high velocity edge. His work featured in Harvard Business Review, MIT Sloan Management Review and the New York Times, focuses on complex organizational challenges through innovation, systems thinking and technology. Steve’s ideas to shape product designs at Pratt and Whitney accelerated farmer development cycles and optimized operations at firms like Intel, Alcoa, DTE Energy. He has advised the US Army’s rapid engine Equipping Force. Excuse me and the Navy’s Chief of Naval Research, aiding in tech development and operational innovation. Wow. Steve, when are you going to do something with your life? Mate? Welcome to the show. Steve,

Steve Spear  03:19

thank you. Thank you. Thank you for having me. I’ll get around to it at some point.

Shayne Daughenbaugh  03:23

I know. I mean, as he’s reading those things, I’m like, What have I done? Have I been my local paper? Never mind Harvard Business Review, you know, MIT Sloan, The New York Times. Okay, now we are, yeah, very excited to have you, Steve. And as you know, as I’m thinking about your bio here, just to, like, spitball off the top here, yeah, what got you involved in all of those things was, was this, like a cascade of things that happened? Was it just happenstance that the US Army said, Hey, knock, knock, knock, Steve, we’d love for you to come and help us equip our forces a little bit better. Little bit better. I mean, how does

Steve Spear  04:04

this happen? Yeah, thank you. So I’ll tie this actually, back to your original comments about innovation and how it occurs in all different sort of settings. I think the thing I would offer is that I don’t have a career path. In hindsight, you might be able to draw a line and say, oh, there’s a rationality to it. I actually had a career stumble. I was interested in something, kind of leaned into that problem and said, Oh, that’s kind of interesting. And it sort of then exposed me to a new set of problems I hadn’t even anticipated. And said, Oh, those look interesting. Also, I’m gonna spend some time there. Now you point about innovation and how innovation comes back on this, I’m saying nothing original to myself. I’m channeling very strongly Clay Christensen, who was a mentor, friend, colleague for a 20 year period. You know, he was the dean of disruptive innovation, innovators dilemma, innovators solution. The other guy I’m channeling very heavily is a guy named Steve Blank, who’s um. Be the inspiration for the lean startup movement. He’s a really faculty out at Stanford, and another guy who’s had tremendous influence on me, Andy mentioned the organization is a guy named Pete Newell, who is a retired US Army colonel, and he was director of the US Army Rapid Equipping Force. I had the privilege and honor to work in support of his efforts and learn a ton from him, anyway. So those are sort of the citations here. What’s the basic theory is that all of them will tell you that innovation doesn’t come about because a bunch of people sit around in a room and conceive of this grand, huge vision of an idea, and out of that ether, out pops, not forget even Amazon retail, but the cloud or the whole ecosystem around Apple, more to the point, play, I made a distinction between a sustaining organization and an innovation organization. Steve Blank uses different terms to mean the same thing, an execution versus an innovation organization. But in both cases, what they say is, there is somebody who’s been unidentified by the legacy or the sustaining or the execution business models. And there’s reason for that is because these business models of what to do, how to do it, and why to do it, and for whom they’ve evolved over time, and people who join an organization join the organization and acquire competency in the execution of those pre existing business models. Now, if there’s somebody outside that business model, it’s not that they’re interesting or not. They’re not even detected. And so what’s the advice of these real luminaries on innovation thinking. And this is a phrase Steve Blank uses constantly, which is, quote, unquote, get out of the building. And get out of the building. Because in the building, you know what you know, but what you don’t know is that other person who’s not identified. You know, Clay Christensen used to call this the white space. It’s just that it hasn’t been even filled in. So blank says, Well, get out of the building, get into the problem space, get with the problem holder, and in that way, immerse empathetically into the problem that they’re holding. And then this is where the Lean Startup, sort of the agile as the IT people would put it, is, when you’re out of the building, in the problem space there generate some kind of idea, and hand it to them, and the first response they’re going to get to you, give back to you is that doesn’t really work very well. Say, Oh, well, thank you very much. But how about this? And how about this? And at some point you do those iterations, often, enough, quick enough, somebody will say, Oh, this will be useful for something, and that becomes the first useful step in creating an innovation. And whether it’s Steve Blank, Clay Christensen, whatever is it, where disruption comes from. Is not someone having a big conceptualization of idea, it’s having that step, that first step, realizing getting feedback that there’s value to it, and then saying, Well, what else might be valuable to you or people in your adjacent area? And just to sort of finish up with this with two examples, when you look at Amazon today, my understanding is that a very large portion of their revenue and their profitability comes out of the cloud. The way I understand the story of the cloud is like no one sat around and said, Oh, let’s develop the cloud. What happened was Jeff Bezos had this idea of moving to Seattle, finding himself space across the world’s largest bookstore, and taking email orders for books, buying them in one place, shipping them from across the street, and that got traction. And then, you know, and again, it’s this incrementalism. So, um, then, you know, at some point he said, Well, why am I crossing the street every day to buy retail when I can put up my own warehouse and buy wholesale? And with that came a more complex, more complex in his business process, software. And then it was multiple warehouses. And then, and this way I understand that the pitching point we want to say, well, you know, we can do clothes online too. The thing about clothes is that clothes come in different color and size, and then all of a sudden the product complexity of boom, like this, goes up exponentially. And their business process software couldn’t keep up with the growth of their business. And so then they said, Oh, well, we got to come up with a better approach to the design, operation or business process software. This is where all this stuff about APIs and Cooper, you know, and all this micro services and whatnot comes in. It was only after they build it for themselves. Someone said, Huh, I wonder if other people would benefit from the functionality new architecture gives us what did you know? Right? So anyway, I think the nice thing that comes out of all these pieces of advice is that, um, you don’t have to be super smart or super creative to at least jumpstart the innovation process. You just have to be you. Comfortable enough to go into unfamiliar, uncomfortable situations and start asking questions of people, of like, Huh? Who are you? What’s your experience, and what makes your experience less good than it otherwise might be, right?

Shayne Daughenbaugh  10:14

So what I just heard there at the end, as my mind was like just processing this comfortable with being uncomfortable and curiosity, right? Because that’s where you start asking the questions like I mentioned. Yeah, interesting. So as we talk about this, and we’ll let’s just jump right into now, what can you say would be some of a catalyst, or some of the catalysts that kind of sparked the need for some of these cultural transformations, because, like the first one you just mentioned there, with Apple, it was their own need, right? That’s what you’re saying. They had this need. They were meeting our need. And then they said, Hey, we could almost productize this, or whatever the word might be, to share it with other people. But so what are some of those catalysts that might be a need for this significant cultural transformation? Yeah, and how do you think that, or does, or I should say, has, lean played a role in this?

Steve Spear  11:15

Yeah, that’s great. So I’d say the the catalyst for cultural transformation is either a nurtured, a justified or a cultivated paranoia. Yeah, really, okay, okay, yeah, that that there’s reasons to be dissatisfied with the situation we’re in. Reasons to be dissatisfied with the experiences that we’re having. And unless we get out of the building, you know, put ourselves in the problem space and start getting a better understanding the problem, the problem holder and the problem space that surrounds them, then we will be stuck in the situation we’re having with the experiences we’re currently having in terms of this cultivated and justified paranoia. One of the things that really struck me during the many years I’ve been a student, and I think I’m now, 30 years on and still counting as a student of Toyota, is in the very first article I wrote about Toyota, I said the thing that got missed, people really got a, you know, caught up on the various tools of 5s and this thing and that thing, particularly around the idea of standardization. And in the article I wrote with my advisor at the time, Kent Bowen, we said, well, something odd about this. On the one hand, Toyota is renowned for its standardization, yet it’s showing this incredible agility. How do you reconcile the both? Right? And one of the points in that first paper, we said is what people are missing. Is that Toyota standardizes with the implicit assertion that that standard is, in the moment, the best known approach, what is not the best approach. And so on top of that is added in the mandate everything has to have a standard, but the standard also has to have tests built in to reveal early and often where the standard is failing. They start thinking about that is that if you construct everything with this built in test to tell you what you know, you design something, and then the very next thing you do is before you and actually to get permission to release the design into use. The very first thing you have to do before you release the design into use is actually build into the design. These built in tests which tell you that the design is flawed, right? So when you’re in an organization which is like that, it’s kind of interesting thing. What really it is, it becomes a fault seeking organization, which at first sounds very deflating, but on the other hand, what’s the essence of a fault seeking organization like that? There’s a humility in that, in the recognition that anything designed will have flaws in it, and that’s why you need these built in tests to find them. But with it also is an optimism. It’s a humble optimism, because if every time we release something into use, and it tells us that there’s something that we missed, we can say, Ah, that’s good news, because now we can come back and improve on the design. So anyway, this is, this starts getting into, you know, yes, the question about the necessity, or the catalyst, catalyst, yeah, for cultural transformation. And again, it’s this comfort of making a very sound declaration in order to find out what’s wrong with the declaration as the basis for coming up with an even better declaration.

Andy Olrich  14:32

I like that comment you had there, Steve about paranoia, like, I’m not paranoid. Why? Who says I am? And you had humility and vulnerability and yeah, you’re like, you’re walking into this thing knowing that there’s going to be all seeking out flaws. So then you can learn and go again. It’s not just like, here’s the standard and that’s it. It’s perfect the way we go. It’s always Yeah, in the Lean circles, you still think. Thing, that everything’s a mess in some way. It’s like we’re just going to go with this, do it consistently, and away we go. So yeah, I really connected with that. Thanks, Steve

Steve Spear  15:10

Andy. If I can just pick up on something you just said, there is you start thinking. What this really means is that in a world where we have nothing but standards, it’s fairly repressive, right? Which is, you know, if we’re sitting here and, you know, Shane tells you and me what to do, and we’re just like, we got no word in that, you know, that’s not very good. However, this, this activation agent of relentless, of false seeking, is actually a real democratization of the enterprise, because if we say, no, no, it’s not that we have standards. We have standards with built in tests. What it says is, you know, if you build a standard for me, my use of the standard is constantly exposing your thinking to refutation. All right, so that’s already democratizing, right? Because you’re our esteemed leader, and yet you know our action on your best ideas is opportunity to tell you you were wrong. So that’s one part of the democratization. The other part of the democratization is that if I generate a standard for myself, and it has this built in test and it refutes my best thinking, it gives me the opportunity to improve on it, right? So in terms of hierarchy, this is not to say that we should have flat organizations without nesting, I know it. But in terms of hierarchy, this relentless fault seeking is very leveling in terms of hierarchy. So yeah, anyway, sorry to interrupt, but you said something which I think is a very important point about this. Yeah, and

Andy Olrich  16:42

I think, you know, as you said, it’s that democratization, or it gives them license to say, look, we’ve agreed on this, but you know, as your leader, I need you to help us right. Go no worse than here. But yeah, look, it’s constantly seeking improvement, and you play such a huge role in that it’s not like that’s the way or the highway. And as I said, we pull up there and right, it’s perfect type thinking, all right, unless I change it, it’s not going to work. You know, those sorts of things. So I guess which, which is a great segue into the next question we that I have here. It’s when you’re being brought into organizations, or you, you know, that catalyst is, has been uncovered. Can you talk us through maybe some of the signs of early resistance that you have or you’ve experienced within an organization, awesome. How do you this? Is why people listen to this show. Is, what did you do about it? How did you get there and but also not lose Steve, or lose that true vision of the company that you are with or representing, right? So,

Steve Spear  17:40

um, I think there are two sources of resistance in working with organizations. The one thing I’ll offer is it’s not people doing the direct work of the organization. And again, Andy on this theme of, you know, turning the cliches and democratizing them. And people talk about, oh, the people at the bottom of the organization. And you start thinking about that, it’s like, wait a second, the people at the quote, unquote, bottom of the organization. It’s a term that makes me gag. Those are the people actually doing things to create value right at the point of work that people reward the organization and continue to renew its social license to keep doing what it’s doing. So those people aren’t at the bottom of the organization. They actually are the reason for the organization, with everybody else in the organization should be in support of them. And so in terms of engaging with folks and leaning into the problem space to empathize with the problem holder, we rarely get pushback from the people who doing the direct work, because all you do your first step is that you show up and say, Hey, Shane, you know, I have never seen anyone do the work you’re doing. You mind if I watch and as I watch, if you wouldn’t mind thinking out loud and explaining to me what you’re doing, that’d be simply awesome for you to teach me. Andy, back to your question. Most people, when you say, I’m wildly fascinated in you. And what you do, most people don’t shrivel away from that. And then, then as you’re watching and listening, and you say, Hmm, you know that that looks like it might be more difficult than it might be. And they say, all right, again, that’s a statement of empathy. And you say, hey, you know, can we get some committed time here to think about how to deal with that thing that’s a source of overburden. Again, most people don’t say no, right? You know, how do you take some weight off my back? So anyway, in terms of the, you know, where is their pushback? Typically, it is not with the people doing the direct work. So where’s the next pushback? One, sometimes I’ll give an example of working with, you know, really marvelous folks in hospitals when we’ve gone in and tried to help in particular practices or units occasionally, not always. Occasionally, we’ll get a unit manager that’s typically a nurse with 2030, years of experience, and that person said, I don’t know, leave us alone. You know, we don’t need your help. And first, it seemed odd, right? Because what they. And you start realizing be a unit manager, not only does a nurse have to have, like, phenomenal technical skill in her trade as a nurse, she’s had tremendous personal skill because she’s been in nursing for 2030, years, to do a job which is meant to make other people feel better. And so why? Is that nurse unit manager resisting? Because normally, is she, but he or she has spent 20 or 30 years how to figure figuring out how to get a otherwise chaotic system to behave. They have figured out that they need someone. They know who to call. They know when to call them, how to reach out to them if they’re transferring, and this was a real case, transferring a patient from acute care to step down care. That nurse is the one who knows who to call it the receiving facility to maintain the continuity of care. So when you when you walk in and they’ve already been on the receiving end of this thing or that thing, they say, oh, last thing I want is your help. What they’re really saying is, I don’t want you changing things up, going to destroy the value of my heuristics, and in doing so, make this place chaotic. To me again, I said, How do you deal with that person? You say, Look, I’m not trying to do anything. I’m just really trying to lean into the problem space and understand your situation. And oh, by the way, if we see something that might invite a corrective action. We’ll do it together, and we’ll do it in a very small way, non intrusive. And if it doesn’t work, we’ll throw it away. And if it does work, then you can decide whether or not to keep it so there’s initial resistance from sometimes, not always, but a mid level manager who’s figured out the heuristics, and typically time spent with that person eventually leads to sort of a conversion. The other point of problem is the senior leadership. And in the book wiring the way in an organization, we make a distinction at the end of the book between transactional leadership and developmental leadership. Transactional leadership is what they teach at schools where they say, Oh, just give me enough data, give me the analytics, and I’ll generate an answer for you. That kind of person actually never wants to go to where the work is done. That kind of person actually thinks the people doing the direct work are the people at the bottom, because they’re at the top right. Those people are very, very difficult at best. My experience has been you get permission from them to work at some component piece of the organization, and your hope then is that you get enough time to build up enough convincing example, that the spread is organic and horizontal, and you hope that they don’t become a source of resistance. Um, you know, because what also goes along with that, um, that personality type is with the transactional mindset is, well, why do I need to go and see why do I have to get out of the building, like Steve Blank would say, Why do I have to get into the problem space? Because I got all the data in front of me, and if that person is not willing to empathetically go to the line, go to the bedside to see what’s going on, then they won’t have the nuance, the idiosyncrasy, the detail, to understand how the conditions, the people for whom they are responsible, the conditions are not as supportive as possible for those people to have an excellent experience every time about everything. So anyway, and Andy, those the mid level manager that that’s a conversion opportunity the senior person, you try to persuade them with the experience, and hopefully you

Andy Olrich  23:39

do, yeah, walk a mile in their shoes, and a lot of great organizations will intentionally put new leaders out on the front line. And I love it, yeah? When you say at the bottom, and it makes you gag a little bit on the same I like to say that they’re the people at the front and right leadership’s at the back, right? It’s so true. Thanks. Dave,

Shayne Daughenbaugh  24:01

yeah, so, so, Steve, I heard two things. One is, in regards to mid level you mentioned, you know, hey, let’s, let’s just try a little bit like, tell me, tell me about what you do. Help me understand it. We may come up with some ideas. If you like them, great. Go with it like that was one, one thing. The other thing is trying to stack up enough small wins that you start to win people over. So when you’re thinking about your years of experience and all the things you’ve done, how did you What are some other ways that you may have been able to gain buy in from leadership and Frontline during this this process? You know, you’re, you’re in there to help make things, you know, maybe it’s the army, you know, some something huge, like that. Like, there’s so many moving parts and so many standards, right? I mean, and those standards aren’t supposed to change at all, like they’re, I mean, that’s, I’ve never been in the military, so I apologize if I’m over generalizing, but that that’s what it sounds like you. Seems like to me, but how do you what are some other ways that, and let’s even try to simmer them down into very tangible things that our listening audience and watching audience can possibly think of and chew on, some you know, to gain buy in from leadership and Frontline.

Steve Spear  25:17

Yeah. So my experience has been, yeah, if I’m invited into a conversation, I’ll say, Look, you know, first of all, let’s understand the difference between typical and great. Is extraordinary. This goes back to the original seminal research about Toyota and lean that led to the term Lean Production. Um, the MIT graduate student John craft sick who did that work? And his first paper was called the triumph of the lean production system. He documented, documented across all 186 final assembly plants in the world. And what he found on any given day, 181 of them, more or less the same number of people needed the same amount of resources to create more or less the same amount of product. On the other hand, there were the five plants. Those five plants, on any given day, half the people with far fewer resources, were generating twice the volume of product, and the product was much better. And it was in trying to set a contrast between the five and the 181 with the 181 being the epitome of mass production. John craft sick, trying to figure out, well, what do you call this other thing? And that’s where the term Lean came up. You know, doing so much more with so much less. When the the innovation people yet, or the startup people, needed a term. I think the reason they they came up with lean startup is it was to capture the same notion of this miraculous ability to create so much more value with seemingly less effort. So anyway, that’s the start, and then that’s really what you’re offering to people and say, Look, there is unbelievable evidence that there’s this ability to create so much more value with less effort. So you know, who doesn’t want to have that? And then you start building into the theory about, well, where does that come from? And it’s not the arbitrary stripping out of resources. The problem with the term Lean is it got so bastardized, because when John classic first used it, he was describing the the consequence of managers behaving in a certain fashion. And then what people thought was like, oh, no, lean. That must be the decision variable. But just rip out people and rip out materials will get more effective. And it’s like, well, no, but anyway, if you started you try to grab people and say, Look, you know, there’s a much better place where you can be. Some people will say, oh, I want to be there. I’m frustrated with where I am. Then you start explaining what’s involved. It’s just, it’s really a it’s the the rigor, the energy, the curiosity to find and fix broken things. We started thinking about what most people do professionally. They find and fix broken things. So a nurse goes to patients and tries to find out what’s wrong and fix it. An engineer, I mean, that’s what their job is, is right, to find situations that need fixing and come up with fixes. Scientists, the same thing, you know. So you go everywhere, and you can figure out what it is that people are excited about finding and fixing, you know, and then use that as your segue. Say, Well, look, you know, we’re saying, we’re not saying, do anything different. We’re just saying, rather than doing it only on that thing, step back from the Production cell, set, step back from the studio, step back from the the bedside, and the same rigorous of finding and fixing broken things, just apply it to the system around you right then, when they start applying to the system around you, then enlist colleagues to do them around them, and then get the mesh to work together. Then you start getting out, building out systems. And Shana bill, indulge me, just a one last thing, because I can imagine people say, Oh, well, that sounds very local. The answer is, it starts local, but the effects can be enormous. So I had the privilege of working with folks at Alcoa some years ago. The starting point on their introduction of what was called the Alcoa business system was a single production cell and a single extrusion plant in Davenport, Iowa, three years later, Alcoa was recording $700 million per year in recurring savings. Three years after that, they added another another $700 million in recurring savings. They started with one production cell, Detroit energy, DTE Energy. They ended up having extraordinary, I think they got $150 million out of the cost of generating power. And you start thinking about this, you know, people in burning fossil fuels for a very long time, the fact that they found $150 million of savings, you know, it’s like, wasn’t like they transitioned to sustainable. It was, it was in the core business. Well, how did that start? It started. With a vice president at DTE Energy, guy named Harold Gardner, getting on the back of a field service truck one morning in the middle of a Detroit winter with the question, what makes it hard to do service calls one truck, and they found out it was all sorts of the hundreds and hundreds of things that made it hard. And said, Well, you know, now we figured out for one truck, we do it for two, and then it’s not two to three, it’s two to four and four to eight and eight to 16. And yet, is exponential growth, and so also PT energy’s transformation. It was huge in about only two years,

Shayne Daughenbaugh  30:36

huh? So that, you know, I’m tickled that you’re saying this only because it resonates with me and it resonates with you know, I did. I did some great work at the state of Nebraska, and came in and would help teams. And one of the things that I would start with, to try to get that buy in that you’re talking about, is just what you said, although I didn’t have those words about people finding and fixing broken things right? What I would say to them is, you guys are amazing problem solvers, like you will find a workaround for anything. And they’re, they’re so, like they have so much innovation in how they have to do their job because of, you know, limitations or obstacles or whatever. And what, what I would try to do is to get them, hey, take that energy, that curiosity, that determination, and refocus that into and I like how you said that. And I we should have had this conversation years ago, Steve, but thanks for having it now. You know, to back up and go. Now, let’s look at the system instead of hey, I need to process this, whatever it happens to be, I can’t do it, so I have to have this work around. Well, let’s look at the whole system, and, like you said, jump on the back of the truck and find out what makes it hard to do this. Yeah,

Steve Spear  31:52

and I’ll keep using this fellow Harold Gardner as an example. Gives credit to him for getting on the back of that truck. He didn’t have to do that, right? We start thinking about when he got on the back of the truck and went out, and he didn’t even do residential service calls. He was doing, you know, the commercial out and outside service calls again in the winter in Detroit. So does it really give a sense of his commitment to this? Is that the technicians who wrote on those trucks, they were very good at finding and fixing broken technical things. Why was Harold there? He was there because he was trying to find and fix the broken systemic things, or system things that made it hard for the technicians to find and fix broken technical things. And again, this is why it’s so important for leadership to show up at the point of work, because until they show up at the point of work, they can’t again, you wouldn’t have a service technician try to fix the gas or electric in your house remotely, right? You know, Shane, go over there, you know, bring your little iPhone and show me on the camera. No, you wouldn’t trust that, because, again, there’s subtlety, Nuance that’s necessary to inform the expertise they need at the point of the problem. And so similarly, for a counterpart of a guy like hero Gardner, to be remote and say, Oh no, no, I don’t have to go to the point of work. I can, I can see it in a dashboard of metrics. It’s one or the other, right? Well, Why can’t your technician make fixes with so anyway, yeah, basically what Harold was doing, and credit to him, he was imitating the very best finding and fixing broken things behavior that made it possible for his technician to actually fix broken things out in the field. What he was doing as a leader, though, was not fixing technical problems. He was fixing organizational problems that made it easier and easier for the technicians to fix technical things.

Andy Olrich  34:03

I think that’s critical, Steve, what you’re saying there is the leader actually identifying, well, what is the actual true value out of this service or product that we’re offering? And, okay, that’s this thing here, and that’s the fixing of the technical things. Yeah, what around it? Upstream, downstream, over the top, you know? What is making it hard, all that waste around the actual thing that the customer is paying us to do or really wants to provide. And yeah, leaders need to actually go, Yeah, okay, well, we do this end to end thing. But actually it’s, that’s the thing there. And yeah, Roundup is making it hard. And that’s such a great story. And again, I think, you know, getting on the back of the truck, you see where they get on, and they go, Oh, wow, I’ve been out in the field today. And wow, those guys have got a tough job. And, and this is what we’re going to do. We’re going to fix this thing, and then we’re going to two trucks, four trucks, like you said. But how, you know, what if they get to 16 trucks, and then there’s a, there’s some. Sort of event or issue in the organization that the leadership then has to divert some time to for a while. What are some of the things that that you have seen or done that helps keep that momentum, even if the organization has to take a little step back for a while, but carry on

Steve Spear  35:17

So Andy, I’ll keep using Harold Gardner as the great example. And I mean, he’s kind of, he’s one of, one of the heroes in this story, right? Because he did something which is really against the grain of what we tell managers to do. We tell managers, oh, you’re in the command, control, supervise, evaluate thing. And it was like, no, no, I’m here to support people. So anyway, let’s use this example again. And Shannon goes back to the very thing about innovation and cultural change and the importance of the first step. So what happens when Harold Gardner jumps in the back of that that first truck on that first day in a Detroit winter morning, and it’s early, right? Because, you know, when service crews get out, oh, the truck doesn’t start. And why not? Because the block heater didn’t have an adequate, reliable power source to warm up the engine to Start, All right? So the thing was, you know, some people would say, Oh, we’re going to have a service crew initiative, and how it was, like, we’re going to have a power strip initiative, right? Because, what? Because the thing is, that’s the first thing you see, the first problem you see, and then when you solve that problem, you say, Okay, we’re ready to go. Oh, no, we’re not ready to go. Why not? Because my truck hasn’t been fully stocked with all the parts I might need in the field. Okay, well, we don’t need it again. We’re not we’re not doing a service crew initiative. Now we’re on to our second initiative, making sure you have all the parts and tools you need in the back of your truck. Again, it’s a small step, right, but it’s a tangible, tractable, solvable problem. Okay, what do we need next? Okay, now we can actually leave, right and we can arrive. Oh, but I don’t have the right technical direction as to what needs to be done. All right, that’s fine. We can solve that problem. You see, the point is Harold Gardner in this part of DTE Energy that was responsible for field service operations. They never had a field service operations initiative. There was never sort of a top down scheme, a grand plan. What got done was they solved hundreds, maybe 1000s, of problems. The net result was doubling of their field service operation capacity, doubling. No new trucks, no new people doubling. Now. Andy, back to your question about what happens when, let’s say Howard Gardner gets distracted. Well, he started establishing an example of the right culture, the right behavior that everyone should have, which is, you know, find and fix something broken, whether it be the block heater for the engine or the supplies on the back of the truck, or the routing for the calls. And once he’s done that, and he’s done it again, not for but with the technicians in the field, there’s a lot of stuff that they can start fixing without Harold, because he’s both shown the example and given the authority that the permission, and so is it actually, this is how we behave. We don’t gripe, we don’t moan, we don’t work for anyone. No, we just go ahead and we fix broken things. And then what’s the message Harold’s giving to the the person who’s running that service station? Well, there’s what a leader does. So at that service station, and I remember the name, it was called the Chevy I think the thing was called the Chevy Chase. Was, was easy to remember both, both the comic and I lived around the block from a block called the Chevy Chase. It was Chevy Chase service station. What does he establish the supervisor of that station learns that his job is not to tell all the technicians where to go and what to do. It’s to ask the question, well, what’s making your job difficult today? Well, once Harold Gardner has established that as this is what you do as a supervisor, well, he doesn’t have to go back to that service station anymore, because there’s now, it’s now self reliant, and it with good mechanisms. Not only is it self reliant, but the adjacent service station said, Oh, wow, that’s a much better way to conduct ourselves than banging our heads against the wall every day as the technicians and yelling at people as supervisors. So anyway, Andy, what’s happening is you’re liberating time, not not only for the technicians and the supervisor, but for Harold Gardner. There’s another piece here. Sorry. I’ll end it with this is what is Harold Gardner and people like him drawn away to do most times, is a deal with the crisis that was allowed to emerge because little problems hadn’t been dealt with early and often. So for example, you know, back in the day, what would a guy like Harold Gardner be drawn to? Oh, the regional blackout. Well, why did the region blackout? Because some things had power lines hadn’t been properly fixed. Well, why not? Because the Serb. Truck hadn’t been able to leave because the block heater hadn’t turned on. So anyway, this issue of being pulled away also goes down because a lot of these little provocations that have had a chance to metastasize, they’re now getting dealt with when there’s still little provocations.

Shayne Daughenbaugh  40:17

I love that. So again, just to rehash leadership, establishing the culture. I love how you said that, you know, hey, find and fix what is broken. You know, asking the question, what is making your job difficult for today and then the early and often? You know, just to having that, that mindset and and I have, I have found it again, working, with the state of Nebraska, and I’m sure that this could be applied all over the place. I’m just speaking from my experience, but having that skill and or desire to be able to see the things, because sometimes, I mean, I am sure that they’re like, my office has stacks of paper everywhere that I don’t even see, like I could 5s my desk right now, but it works for me. I don’t even see it. So I mean that that’s such a such a challenge to as leadership, to give those, I don’t know, goggles, so to speak, or those lenses to help people be able to Oh, yeah, I guess you’re right. I hadn’t even thought about the fact that sometimes I have to wait for my truck to warm up because it’s not ready. You know, it just, it’s just status. What we have you

Steve Spear  41:29

from Nebraska, great agricultural state, you started thinking about the behaviors necessary to be successful in agriculture. It’s a personality, a creativity, curiosity, sometimes a desperation to find and fix broken things all the time, because everything breaks, right? And a lot of stuff that breaks, it’s not even in your control, you know, the weather. So you got to be an obsessive finder and fixer broken things to survive, let alone thrive, right? So again, the things that you know, whether it’s Toyota as the inspiration for Lean in its good form, or any of these other real, I wouldn’t say just thought leaders, but doing leaders, what they’re really tapping into is the core of what people what allows people to be excellent at whatever they choose To be excellent at, whether it’s excellence, professionally, excellence, personally, excellence in a hobby. I mean, look, we’re all in communities where there’s that person who, oh, that’s the person you need, you know, if you have anything to be done, whatever your thing is, right? George temple, Moscow, whatever it is, the Boy Scout troop, the PTA, oh, yeah, that’s the person I need engaged in this why? Because they’re wicked good at finding and fixing broken things. And then that person over there, well, they’re not going to do it for that thing, but, oh, we’re going to why? Because we happen to know they have this thing that they’re the world class at finding and fixing broken things at that now, all we’re asking to do is create a situation where the behaviors people have that allow them to do things about which they are proud. Can we create the same conditions when they come into the office, into the factory, onto the job, so they feel the same sense of opportunity in the job that they have at home? And I’ll just illustrate this for an example I’m doing the last number of years. I have a real, great privilege of doing work in support of the foreign naval shipyards that repair aircraft carriers and submarines. And it happened, I normally go midweek, but one day I was there on a Monday morning. We’re talking about what folks had done over the weekend. One guy said, Oh, it’s a fantastic weekend. Well, what’d you do? I said, Oh, man, we had this busted engine on a friend’s tractor. So I opened up the tractor and opened up the engine, and had a chance to look at all the cylinders and all the valves in there, and the valves were a mess. So I pulled the valves out and I cleaned them up. And it’s like, this guy is talking and talking. It’s like, wait, wait, wait, what’s your job here? It was rhetorical question. Dude worked on repairing ball valves that go on to submarines. What was his recreation over the weekend? Doing over the weekend, unpaid when he got paid to do during the week. And then another dude, dude named Keith, is like, hey, Keith, how’d you spend your weekend? Oh, it’s great. You know, I had a neighbor in her garage doors weren’t going up and done properly, so I went in the garage and realized that it was a problem with the money. Problem with the motor. So I took the motor off the rails and took it apart, and realized there’s some issues with wiring in there. So I unwired and rewired the motor so it got much better. You know, impulse out of the power put into it. It was like, um, there’s like, Keith, where do you work? Where do you work? Normally? He says, I’m in a motor shop. What it’s like. So how did Keith spend his weekend? Doing for fun and finding value in doing on the weekend? What for free? What he get? He does anyway, if we can channel that right and create conditions. If you can channel that basic ethos, then we’re in really good shape. Yeah,

Andy Olrich  45:04

triggered some thinking there. Steve, So you talk about the farmer and agricultural my my family, my grandfather was a farmer, and he had this great saying was, there’s no point bending your back if you’re not going to use your head. And he it was, things had to be fixed or problems to be solved. He couldn’t really afford to pay anyone to do that for him, so he would need to do that. And I think what’s important there, the lesson is, see that system like he’s connected to the process or the value the job that’s got to be done, but having the visibility of the broader system just got to give them a bit of help and then get out of the way. They’ll solve it, yeah, but just a little bit of help here and there, because you’re seeing, you know, where they fit in a broader ecosystem. And I think that’s just really important. And yeah, they do. People make your obsession your profession, and you’ll never work a day in your life, and you’ll do it on the weekends, like you said. So that absolutely, yeah, a cool memory for me. So thanks.

Steve Spear  46:02

You brought that up. Andy, the reason I was chuckling is I mentioned before one of the terms I really hate, it caused me gag reflex, is of the people at the bottom. The other one I hate is knowledge workers, because it gives the impression that people who sit on their Duff all day or knowledge workers and people actually go out into fields and into factories or not. My son wrote a paper. My son, Jesse, wrote a paper, and he changed the terms. He talked about not knowledge workers and non knowledge workers. He talked about sedentary workers and non sedentary workers. And I said, that’s fantastic, because it gets right to my pet peeve. In the new book, we make the point that all work is problem solving work. Now in some cases, some people have the luxury of being in a climate controlled environment, and when they have solved the problem, they can express it with typing on a keyboard or dictating a Siri or Alexa or whatnot. And other people, they have to put what the problem they’ve solved and the solution, it has to be expressed through their hands, onto something physical. There’s a whole lot of problem solving involved in all that work. So it’s really not that there’s knowledge work and non knowledge work, it’s all knowledge work. It’s just the question, are we going to approach in a knowledgeable fashion? So Andy, I really appreciate what you said is that, before you start breaking your back, have you really started to use in your mind? Because the fact is, if you haven’t used your mind, you’re going to break your back a whole lot, right? I am with you on that,

Shayne Daughenbaugh  47:31

right? This has been a fascinating discussion. Steve really appreciate and we have even used the terms like cultural transformation, but that’s what we’re talking about. Like the this is the practice of the practice of transforming a culture. Is, is is again focused on the people. And I wanted to ask a quick clarification. I’m pretty sure I understand the answer. You mentioned, relentless fault seeking. But when we talk about that as as a transformation culture transformational or component, it’s not fault seeking in people, it’s giving people that that impetus, that that push to relentlessly seek what is broken and find what that is. And that’s part of the

Steve Spear  48:21

transformation so on. I mean, I learned a lot of this from the folks at Toyota, you know. And their attitude is, you know, you know, when there’s an accident, there’s an investigation, and the question is, oh, it’s due to human error in Toyota world, you know, they’ll go through and and if they find out that someone actually erred, the leaders will still keep pushing and say, Well, wait a second, there’s human error here. It’s by the people who, um, didn’t prepare the person for the situation they found themselves in, or they made the mistake of putting the person in that situation. The point is, they never blame the car driver, the truck driver, the pilot, the operator, because it’s quote, unquote leaders who are responsible for putting those people into situations in which they can succeed, or making sure the situations are ones in which those people can succeed, one or the other, that the leader is responsible the person and the place. And so this whole notion of human error, anytime you get to human error as a very dangerous place to be. The reason is, when you get to say, well, which human has aired the figure has to come back and point at the leader. So I’m with you there. Yeah,

Shayne Daughenbaugh  49:30

interesting, interesting. Andy, any any last thoughts or words here, as we, as we wrap up,

Andy Olrich  49:39

I just think, Steve, there’s, there’s a lot that we’ve uncovered today, and we’ve talked about, the thing that jumps out for me is seeing the person who is or what is unseen, right at the right at the front end. You talked about, you know, when we talk about cultural transformation, connecting that to that person that’s unseen, maybe that, that person, that or that that group. That’s unseen. Might be the culture that you’re seeking out. And I think that that’s, you know, just having that, that eyes, that visibility, get on the back of the truck, like you said, it’s really important go and see, as they say, and go to GEMBA. I think I’ll leave that there, apart from Final question for you, Steve, what’s the one lesson that you would share for us, if we’ve listened to the end of this hit us in the fields. What’s the one lesson you’d like to share with us to take away? Yeah,

Steve Spear  50:30

the moment you have the opportunity go find and fix something broken and do it on behalf of someone else. And if you do that, find and fix something broken on behalf of someone else, they will invite you to find and fix more things. Yeah, I like it. Turns out I like shoveling snow. I do. It turns out, when I shovel snow, if we don’t have enough of my own house, I’ll try and shovel the snow of a neighbor and and Andy. I don’t know where you live in Australia, maybe you don’t have quite as much snow as Shannon I might have, but it never, ever has happened that I’ve shoveled someone’s snow, they said, Don’t do that again. I want the snow back.

Andy Olrich  51:06

Well, funny, fun fact for free is we have more snow in Australia than the Swiss Alps, right? Each year. It’s just it’s so big that it’s in it looks really like a little spot. But yeah, and you got to be careful too, if that you’re not constantly doing it for that show that snow shoveling recipient either. But I it’s so good. If you help someone, usually they’ll help you back, and that’s a good place to be. So awesome. Steve, thank you.

Shayne Daughenbaugh  51:32

Excellent. If they, if people, if our listeners wanted to follow you, do you have a LinkedIn? Oh

Steve Spear  51:39

yeah, I’m on LinkedIn. I think LinkedIn. Steve spear, you’re going to find me. You know, I appreciate you. Mentioned earlier. We’ve got a software company. What we’re trying to do is create tools that people can use to bring some of these go find and fix broken things, tools to help you find broken things and fix them. So that website is see to solve this one character string, you know, C, S, E, T, O, solve, s, O, L, V, e.com, so they can get more info there as well.

Shayne Daughenbaugh  52:07

Fantastic. We will put some in the show notes. So,

Andy Olrich  52:10

yeah, and the book, steak, the book. We got to talk about the book, yeah. So,

Steve Spear  52:16

you know, I’ve written two so far. The high velocity edge was trying to consolidate the learnings I had from Toyota. That that point would have been about a 20 year learning journey. There’s other stuff in there, Alcoa, some other things, but that book is about 50% Toyota really the source a lot of this great thinking in the Lean world. And the second book, wiring the winning organization. And where that came from is, as I learned more and more about Toyota and started looking at these other examples of really great organizations, like, oh, wait a second, they behave the same way. I mean, part of the reason I’ve connected so well with Clay Christensen and Steve Blank over the years and everything they say about, you know, lean into the problem space, buy the problem holder. You know, validate the problem. It’s like, well, that’s what Toyota does inside its facilities. All you’re saying is, behave the same way when you leave the door. It’s nothing new there, right, right? So the wiring book, not surprisingly, the last exemplar of exemplar cases about Toyota San Antonio plant and some of the really fantastic leaders there and conditions they create for the people for whom they’re responsible. But there’s a lot of other cases in there, some historic, you know, manned mission to the moon, it Apple, Amazon, etc. So we kind of broaden the aperture to say, look, these behaviors work. So it’s not an issue of, oh, well, they work for those they don’t work for me. No, they work so quite now it’s now down to a choice. Are you going to behave this way or not? Right? Your choice? Yeah,

Shayne Daughenbaugh  53:47

awesome, excellent. Well, thank you so very much. Really appreciate the time. Andy, as always, it’s a pleasure to see you.

Andy Olrich  53:57

I’ll catch you on the screen soon again,

Shayne Daughenbaugh  54:01

yeah, yeah, thanks so much for joining us, ladies and gentlemen. Have a great day.