Wiring The Winning Organization | Author Dr. Steven J. Spear

0:00what we hope to accomplish with this book is take the mystery and the magic out of the design and operation of these complex social technical systems and give confidence and comfort to those responsible other people. There's some very simple, basic ways to think about the problems. And the issue is not mastering more and more and more concepts. It's about gaining acumen and skill and speed and applying the same basic principles onto harder and harder and more complex problems. Hey, Devon Rapid listeners, I've got exciting news. We're a finalist for the best DevOps-related podcast series award by DevOps Dozen.

0:38Thank you so much to all the listeners who nominated us. We're honored to be recognized for our support of the DevOps community, but we need your help to win. If every listener votes just once, we'll win this. So let's make it happen together. To cast your vote, head over to surveymonkey.com slash DevOps Dozen 2023 or click the link in our show notes. Voting is quick and easy, and it would mean a lot to us. Thank you for being a part of our journey and helping bring some joy to the DevOps community along the way. Welcome back to Dev Interrupted. I'm your host, Connor Bronson. We're here at the DevOps Enterprise Summit in the Dev Interrupted Dome.

1:15And I'm excited to be joined by Dr. Stephen J. Spear, senior lecturer at MIT, founder of C2Solve, and co-author of the upcoming release with Gene Kim, wiring the winning organization. Welcome to the show, Steve. Oh, thanks for having me. Yeah, really glad to be here. I'm glad you could bear with me while I flubbed the intro like three times here. You didn't laugh too hard, which I appreciated. And I'm really excited to have another author on the show because it's been a while. And this isn't actually your first time writing a book either. You also previously authored the book, The High Velocity Edge.

1:45Right. What did that teach you about writing books that you've applied now to wiring the winning organization? Oh, yeah, thanks. So first of all, I guess one key lesson is work with Gene Kim. It's a very good experience. Last time I solo authored. Anyway, that's a whole separate story. But let me tie it back to content. Both books, both Wiring the Winning Organization and the High Velocity Edge, which preceded it, come out of the same motivation. Is that I came in professional age in the late 80s, early 90s, when Japanese companies were posing this existential threat to American competitors. And I was one of many, many people who were trying to understand what they were doing different.

2:21that on any given day, those organizations were able to generate and deliver so much more value into society than their American counterparts. And what I came to appreciate after years of study and immersion in places like Toyota was that the winners had created far better conditions for people to give fuller expression to their ingenuity, their creativity, their mind's internal capacity to solve problems in front of them and then have those individual efforts Let's harmonize and integrate in a beautifully choreographed fashion into collective action towards common purpose. In terms of, you know, your question, what did I learn from the high velocity edge to wiring the winning organization?

3:02The first book was based on my work with industrially intensive organizations. Toyota is at least half the book. Alcoa is a major case study in there. And so in that book, I gave a lot of expression to the design of linear processes and how they can be designed to make it easier for the individual to understand where he or she fit into the larger whole, accomplish their work, accomplish their work in such a way that when it's passed on as a intermediate input into the next step, those handoffs and exchanges are very good. And also around this idea that anything we design is going to glitch at some point, this idea that not only do you have to design things with your best understanding, but you have to design them so they reveal very quickly and early and often that something's going wrong.

3:49So in that book, I call this idea, design things so that you can see problems. So it quickly triggers this response to solve a problem. And you mentioned, and I appreciate the mention of the software we've designed and it's built and actually our company is called C2 solve. So it's around that. So making the transition into wiring is that working with Gene, we shifted, I wouldn't say shifted, we expanded our area of concern from processes which look industrial in that they lay out in a linear fashion, sequential fashion through time, and expanded to worry about things that spread out over space, you know, technical systems.

4:24What we discovered, and I think it was, you know, fabulously exciting and validating, is that the same issues exist, that how you create the conditions as a leader, the conditions you create for those people for whom you're responsible, fabulously affects their ability to bring their ingenuity to bear on the problems which you as a collective are trying to solve. Where we went with this is that we had a better appreciation that we're designing around the minds of human beings and that we have to worry not only about things which exist spread over time, but which is spread out over space. I think that's a wonderful insight because so many people hear phrases like organizational system design or system design.

5:05And they simply think, oh, well, I'm designing a technology system. They don't think about the people that are leveraging that system or the people that make up these organizations. And high-performing teams need the right conditions to deliver. So what did you identify that was so similar for these high-performing teams across both manufacturing and these other styles of teams that you mentioned? That's right. Yeah, great question. In the book, we introduce this notion of three layers at which people express their ingenuity, their creativity, and that sort of thing. And again, this was a very important insight in writing this book, which I hadn't realized in the first one.

5:39And is this the three mechanisms of performance? So it's on the way to those three mechanisms, 100%. The first layer is the object in front of the person. So literally, that could be a ball valve or a submarine hatch sitting on a benchtop in front of a mechanic who's tasked with fixing that thing. Sort of more modern technology. It might be the genetic code, which is sitting someplace that someone is trying to manipulate to deal with an ailment, fix a disease, that kind of thing. Or the code itself that your community worries about. So that's layer one. And the capabilities and concerns on layer one are very technical engineering concerns.

6:15Layer two is the instrumentation through which people work on the object in front of them. So, you know, that mechanic who's working on a ball valve or a motor or whatnot, it might be the tooling, the machining that they use to deal with voids and pits and that kind of thing. For the person working on DNA, it might be the CRISPR technology that allows them to manipulate that. And then there are the tools that you use in the software world to affect the code. So that's layer two. Also very technical, very engineering, very scientific. this is when we get to layer three is that layer one and layer two we can imagine the individual using that instrumentation on the object in front of him or her when we get to layer three what are we worried about is we're worried about the processes the procedures the routines the norms by which all those individual efforts at all those uh literal and metaphorical benchtops how all those individual efforts uh integrate into this uh collective action towards common purpose in the book we refer to that overlay of processes and procedures as circuitry social circuitry and we use that term circuitry not metaphorically but really deliberately you start thinking about what a circuit does a technical circuit it takes something which is in high concentration in one location but where it's not needed let's say charge and it allows it to flow efficiently effectively to where it's in low concentration but actually needed and when you know and sometimes the circuitry exists not to just allow for the flow, but allow things to mix and commingle and react.

7:44Whatever the case is, you start thinking about why we have processes and procedures and organizations is that you're working on something, Adam's working on something, Brett's working on something, I'm working on something, and we're all doing good work. But that individual work is necessary, but it's not sufficient to achieve that common purpose. And it's by the way in which the work we're doing becomes coordinated, collaborative, integrated, harmonized, choreographed that determines whether we're successful or not. So when we wrote wiring, we were very, very concerned about guidance on how to design that social circuitry, that layer three overlay of processes and procedures so that people can invest their ingenuity on the hard problems in front of them for which society will value the solutions and not in a poorly designed or poorly wired organization.

8:34and spend so much time, so much ingenuity, so much emotional energy, just trying to figure out where they fit into the larger hole. Do they have little energy left over for the hard problems in front of them? I'm really interested in this concept because we talk a lot about this amorphous idea of team culture, team dynamics, and the social circuitry of a team seems like a great way to describe it. Honestly, I plan to borrow this phrase and use it repeatedly. I'll try to reference you back, but don't worry. Please do. Can you dig more into what you saw the most high-performing teams do as far as constructing that social circuitry?

9:03Yeah. For technologists, engineers, scientists, there's a tremendous deliberate concern with the architecture of the objects on which they're working, the design of the circuits on a chip, the design of the codes in a larger software package, the shape of the teeth on a gear so it meshes properly with the apparatus into which it's inserted. So there's a lot of concern about that architecture. And certainly there's a lot of concern with the architecture of the design, the operation of the instrumentation through which people work. What's a missed opportunity too often is a similar engineer's concern for the design, the operation, and the improvement of this social circuitry that determines how people will work together.

9:44And what ends up happening in the absence of having a simple first principle based way to think about the design of the social circuitry, because we have those, right? We have principles we use to talk about the design of the object and instrumentation, but in the absence of being able to talk in a first principles way about the design of the social circuitry overlay, we get stuck with some things like, well, trust is important. It's like, yeah, duh, trust is important. If I think you're gonna stab me in the back, I'm never gonna turn my back on you. Respect is important. Again, yeah, duh. You know, if you walk into a situation, You think I'm going to be insulting and ridiculing.

10:23We're not going to, I mean, those are all given, but you know, those, those fall into the category of things I learned in kindergarten. So yes, they're important, but important in sort of an obvious way. What's important in a less obvious way is this methodical deliberate approach towards designing process and procedure with due full consideration. In fact, almost as an objective function, consideration for how people's minds work and the type of problems they can solve well, the type of problems they struggle with and making sure that the circuitry is designed with those considerations in mind.

10:58What's an organization that you think does this really well? All right, so look, I'm gonna have to move back to Toyota, right? And I know people may be listening. I've gotten this for now 30 years. Oh, we don't make cars. So bear with me a little bit. But when we start off the book and say, who should read this book and why? We talk about how important it is for leaders to read this book if they wanna understand how to put their organizations to the front of the pack. And so here's what I mean, and this is why I think autos is actually a very good example. And again, for the people saying, oh, we don't make cars, just understand a car is about as complex a technical system as it exists.

11:33The millions of lines of code that sit on a Prius is actually way beyond, I think, what happened. Anyway, I'm going to stop making the case for cars. If you don't like cars, you've dismissed me already. But anyway, why do we look at that? Is one of the points or the opening points Gene and I make in the book is that when you have level playing field competition, you know, your organization and mine are looking more or less at the same market space. We're looking for the same and probably finding similar market opportunities. We're depending on the same resources for capital equipment, raw materials, workforce.

12:06We're operating under the same set of rules and regulations, right? It's very level playing field. And yet what we see is some organizations, which given all that commonality of input, but all that commonality of challenge, the differences in output are extraordinary. I mean, they're just like crazy. You know, this was certainly exemplified back in the auto industry in the 1980s when people were worried about Japan and an existential threat. But, and the numbers then, just to, you know, anchor this for people, what was being observed is that in the production of automobiles, which is a very difficult thing because the factory that you have to design and operate involves thousands of people doing this choreographed work to get cars coming off the line every 50 seconds.

12:45And increasingly automated, all this new technology bringing in IOT, all this stuff. Absolutely. I mean, this is a non-trivial problem to get an auto factory to make one car, let alone one every 50 seconds. Look at how many car startups fail. That's right. Bingo. So, you know, apropos of this level playing field competition, but non-level playing field outcome. So when people first started looking at the auto industry, they said, holy cow, on any given day, everyone performs about the same level of productivity, effectiveness, efficiency, except this handful of factories, which produce twice the cars with half the people and half the time, half the resources and half the space.

13:22So I don't know if that's 2X, 4X, 8X or 16X, but whatever it is, it's a lot. And then when they started looking at design, they said, oh, wait a second, everyone takes more or less the same number of calendar years and number of engineering years to design a new model. Yet there's these exceptions to the rule with half the people and half the calendar time, they generate twice the designs and the designs are better both for manufacturing and market appeal. And here's the thing, you know, stepping out of autos, you start seeing the same ratios of exceptionalism across these multiple dimensions, simultaneously, quality, productivity, safety, and, you know, workplace safety, security for data, time to market, product variety, product response, resilience, agility, reliability, and so on.

14:08All concentrated, all great concentrated on one or two organizations in the sector and everyone else. This is in healthcare. It's an education. It's an IT. So anyway, what seems to be, you know, that's a huge elaboration. Why look at cars and the examples. So why look at Toyota is because they're in about as competitive a field as exists in the world. And not only do they have leadership on nearly every important dimension, but they've maintained that leadership for 50 years. Right. 50 years. It's like, all right. I mean, I know the Boston Celtics, they won a lot of champions sort of period. The Lakers won a lot.

14:43The Yankees won a lot. The Patriots, obviously. I'm from New England. I got to throw that in. Wow, you're a Patriots fan? I'm sorry. I know that lands badly with the West Coast folks. I'm a Seahawks fan. So it was just a tough year a couple years back. Yeah. That was a tough year. So as an aside, I wrote up a whole case study around 2015 about the Malcolm Butler interception. Oh, okay. I'll tell you that later. Yeah, I'll check that out. I hope you're not poisoning my water now. But a 50-year dominance in a field with that level of competitiveness? Incredibly hard. You got to say, what the heck is going on there that's not going on elsewhere?

15:20And again, tying back to my first research going back to the 90s, is what we found is that Toyota had created an organization which was a knowledge factory. They had designed their systems in such a way that the systems themselves, the systems of moving material and producing parts and turning inputs into outputs were deliberately designed around, designed towards the cognitive strength of people and away from the cognitive weaknesses. And so with all the problems involved in building a factory, launching a model, running a factory on a day-to-day basis, the environment was such that people's minds could be more fully engaged individually and collectively on solving those problems.

15:59Whereas you went into their competitors, it was just so overwhelming, confusing, and frustrating that the human intellect had very little ability to give itself full expression. So it sounds like you're saying something which I think we've seen in a lot of research recently, which is that high performance is predicated on cutting down on friction points, cutting down on distractions and being able to achieve flow state and really focus. That's right. Yeah, I appreciate the notion of flow because in the book, we talk about three mechanisms, which if each is employed individually, you make it much easier for people.

16:32And obviously, if you use the combination, So three mechanisms we call one is slowification. And that plays on to the research of Daniel Kahneman, Anastorsky, thinking fast and slow. And creating situations in which people can engage their slow, creative, deliberative, generative thinking, rather than having to be in a fast thinking, impulsive, reactive kind of modality. So that's one. Then we have this third mechanism we'd call amplification, which is to make it more obvious that problems exist to be solved in the first place. But within sandwiched between slowification, which is to make it easier to solve problems and amplification to make it more obvious that problems exist, we have this thing called simplification.

17:09And simplification is to actually change the nature of the problems so that the problems themselves are easier to solve, that the piece in front of the individual is more tractable, understandable, so on and so forth. And that way, as the pieces come together, they come together more simply. Anyway, the reason I went into that is you mentioned creating flow. It turns out within this simplification mechanism, creating flow across functions, across departments, across specialties so that things have a more sequentiality to them as opposed to having work jump back and forth, move over here, move over there, get passed to this department, this division, this function, this subject matter expert, boom, boom, boom, boom, boom.

17:48Just line the work, the people who are expert at doing that work, lining them up so there can be this baton pass of value as it accumulates. It turns out flow is a critical technique within this idea of wiring organizations around the cognitive strengths and away from the cognitive weaknesses of people. I know you mentioned this in the book as well, this knowledge capture piece, this saying like we're learning from our mistakes and we're continuing to grow, reducing the friction points. Can you dig into that a bit? Yeah, absolutely. So when we wrote the book, we said, look, why to read the book?

18:21Because you're leading an organization which has accepted onto itself a mission and you want to succeed better, faster, with more certainty than not. All right. So that's why I read it. We have this kind of rhetorical question, which is, well, why do we even create organizations in the first place? And, you know, and again, it's to accomplish mission, but why organization? Why don't we do that individually? And the reason is there's more work to do than any individual can ever hope to accomplish. Right. And, you know, when we start talking about projects, you know, the hundreds of thousands of engineering years involved in designing something.

18:53Right. So, you know, it's not like you say, well, I'll do it myself. I'll just take more time. No, I don't have thousands of years. I have a few. So, you know, as we start talking about this, why we create organizations, create organizations because there's more work than an individual or small group can do. But there's a key point here. It's not just sort of the heavy lifting. Like you grab one end of the couch, I'll grab the other end of the couch. It's the problem solving. In the book, we have a couple of vignettes kind of illustrated in very simple terms. The largest class of problems in the first vignette is about two guys, Gene and Steve, trying to move a couch.

19:26The point we're trying to make is that even something as sort of familiar as moving a couch is not entirely a brawn problem. It's a brain problem. Part of the reason you have Gene and Steve moving the couch together is, yes, Steve has to lift one end and Gene has to lift the other. But part of the reason you need two people involved is there's questions about balance, there's questions about navigation, there's questions about grip points, questions about how do we go up the stairs and down the stairs and in the outdoor and through the narrow hallway, right? There's a lot of problems. And I think anyone who's ever had to move from their first apartment to the second apartment to a dorm room to a house is like, oh yeah, you know, it wasn't just, you know, the muscles I brought to this, but it was the problem solving and my ability.

20:05And there's another part. I've had to hoist a couch out a window and down off a balcony. That's right. You got to do it. Yeah, and I once had a refrigerator down a slope roof. Oh, okay, yeah, yeah. So, all right, we're talking this. And you realize that your ability, whether it's the couch off the balcony or the refrigerator down the slope roof, and part of it depended, did you have this sort of the horsepower to control the couch? But part of it is, were you able to work in a collaborative, problem-solving, creative fashion with the person on the other end of the couch or the refrigerator so no one got hurt?

20:34No one got crushed, yeah. That's right, yeah. And you're here, I'm here, so I guess it worked out well. We don't know about the other two guys. Maybe they're on the other side, right? Let's not talk about that, okay? But, you know, what we're setting up is that really we form organizations because it's not just the brawn work, which is more than one person can do. It's the brain work. And if it's the brain work, which is more than one person, then we really have to be quite deliberate and thoughtful and respectful when we design our organizations and their processes and procedures. We design it around the brains of people and not just around the brawn.

21:04And this is really interesting because it does correlate to a lot of other research we've seen. So we talk about thinking fast and slow is a great example. Another good example is the research that's been done around teams that are high performing and the importance of diversity of ideas. That's right. Bringing in these different voices and then maximizing that for creativity, getting these massive productivity gains. You know, you pointed out design as one area, like that's a huge opportunity. A hundred percent on that. So, you know, I don't know if it's a parable, but you know, the notion of the blind man trying to describe an elephant.

21:33You know, the person with the limited perspective describes the elephant as a phone pole because they grabbed the leg versus a snake because they grabbed the trunk or whatever. You know, the way that story is told, it's kind of like, well, those poor people who can't see well, like somehow the seven blind people trying to describe the elephant, you know, a normal person could, you know, someone who had normal sight, not vision problems. But the reality is we're all blind. And I think that, you know, if we start with the acceptance that none of us can see and understand the whole and that our life is nothing but elephants and we're all blind about the elephant, then what we have to do is create systems in which we're set up for each of us to take our imperfect and incomplete understanding and have that synthesized together to a much better whole.

22:21I mean, look at every founder we talk to on this show, every great leader. They talk about the importance of hiring great people and putting them in a position to succeed. And that's exactly that we were talking about at scale and consistently. That's right. I'd love to dig in a bit more and say, like, what are the other insights that people can expect when they read the book? Yes. So you mentioned founders and leaders and we create this notion of the iconic leader who's all seeing and all understanding and that kind of thing. I remember many, many years ago, I had a, there was a kid in our community who was a big fan of Bill Gates.

22:52And he said, oh, Bill Gates reads every line of code. It's like, really? You know, the boy's name was Atlet. uh aj say aj let's think about this for a second how many lines of code are in and this is way back right so it's far less than today how many lines of code are there you know it's you know x gigantic number and it's like all right how long does it take to read one line of code now let's do the the math here how long would it take him for read every line of code in just one package it's like forever yeah how many packages they have a lot so it would take a lot forever so all right so the thing is you know whether it's bill gates steve jobs and others we've created this mythology about the leader who's, it's their mind and it's the action through everyone else's hands.

23:35But it can't be the case. You know, just like with Toyota having a 50-year dominance in its industry, you can't have a company like Microsoft, which has had such a massive presence on a worldwide scale for so long, or Apple, which has had such disproportionate impact on how we think and live and interact with each other. It can't be one human brain and acting through all these hands. It has to be, it has to be that Bill Gates and Steve Jobs and some of these others where the organ, and again, that's the point, the organization has endured way beyond their active involvement, right? So even if it was, let's entertain for a moment, it was, oh, well, you know, Bill Gates or Steve Jobs was such a genius, right?

24:13She's not there anymore, though. And it hasn't been for a long, long time. What they did was they were fantastic architects. And yes, probably initially fantastic architects about the technical object, that's layer one thing, but fantastic architects of layer three systems and processes and culture inside those things that so much greatness could be produced with their influence. Now, you know, tying that back to, you know, where does this matter is I think unfortunately, a lot of people come into jobs for their technical expertise and they build up their technical expertise and they display and express that technical expertise.

24:49And that's fantastic. At some point though, the responsibility is migrate from level one and level two concerns, which is the technical expertise, to layer three ones, which is a responsibility for other people. And for that, they think, oh, my job now is to be the chief decider. I have to gather data. And that doesn't scale long-term. Of course it doesn't scale. And the other thing is, if you start thinking about how we express our expertise or technical expertise on layer one and layer two, it's by solving problems. And no problem gets solved by, oh, I look at the situation and I generate an answer.