balenaPodcast episode 04: Better orgs for the future, applying systems thinking, and what's next for Agile and Lean
Software Development Coach, Chris R. Chapman, joins the balenaPodcast to talk about what next-gen engineering leaders need to build better organizations. Chapman discusses why systems thinking is critical for any new leader, as well as applying psychology and empathy into the mix. He reminds us of the management thinking of luminaries like Deming, Ackoff, Taguchi, and more, while encouraging new leaders to help modernize those principles to help build better businesses for the future.
Good to have you on the balenaPodcast. So for everybody, who's watching us from, from, from home now, we've got Chris Chapman who is someone I've I met by chance, or, or by serendipity, perhaps, on on the, on the social media.
I guess I'll, I'll say like a little bit about, are just started, probably met because it's probably going to be relevant to our conversation. So I recently published a work we've been doing from the team at balena-- a document about how balena itself operates internally, at least our first crack at sort of describing it on, on a high level. And I just kind of put it on social media and I thought, you know what, I'm just going to take a chance and I'm going to leave comments open, right.
Completely expecting that the trolls would descend at some point, but I was like, look, I'm going to keep an eye on it. And when they do, I'm just going to shut down the comments, but you never know. Right? Who might see this and who might start making some really clever comments.
And so I put this up and I think I went away for an hour or so. I came back. And what do I see? I see Chris basically just making like spot-on point after spot-on point. And I was like, wait, wait, who's, who's this guy?! I gotta talk to them.
So, we connected and had a great conversation. Then we basically were like, well, this was fantastic as a podcast... if we had recorded it. This is kind of like the second run of it, though I mean, not really. But I'm sure we will. We'll it's not going to be like the first one is going to be like this one. I'm sure we're going to find amazing things to talk about.
So that's the, the long story short for my point of view, but maybe you want to tell us a little bit more about your background, you know, how, how your life ended up with comments on the Google docs, and beyond...
Life is a bizarre series of serendipitous conversations. You never know who you're going to run into. So it's, it's by pure happenstance. I see what you're talking about with respect to your conversations about Robert Malone, and I'm following you, I'm really enjoying your threads. And I'm like, wow, this is really great material. And then you put that link out for the doc. And I just had to jump in because I was seeing some stuff that was directly related to what I do.
So perhaps I should introduce myself to your, to your audience. So I'm Chris Chapman, I'm a software development coach. So what I do is I help teams and managers and organizations learn how to deliver software, using an agile mindset, you know, values, principles, techniques. So I understand the ins and outs of Scrum, Kanban, Lean. I've been doing this for 15, 18 years, like since the dawn of it all.
And in the last, I would say eight years or so, I've shifted a lot of my practice, which was called Derailleur Consulting. I'm here in Toronto, Ontario, Canada. I've shifted a lot of my practice to focusing on helping leadership make more sense out of what's going on. So that took me into the world of applied systems thinking, especially when it comes to how organizations work and how they are designed and some of the philosophy and values.
So some thinkers that are really important to me, or have been a big influence on me have been W. Edwards Deming, Dr. Russell Ackoff, Eli Goldratt, Peter Scholtes many others that fit this, you know, kind of this gestalt or medium. And so I try to fit all of this together and come up with ideas and strategies about how to take what they were talking about and make it applicable in our world.
So when I, when I saw what you were writing on the dock with the, you know, the nascent operating system for what you're envisioning with a balena, I was like, wow, this is really interesting because I was seeing the very beginnings of what looked like system flow diagrams, and you were encapsulating how the interactions worked and I've not seen that.
That's what intrigued me. And that's why I started commenting almost immediately. I'm like, oh, did you think about, you know, influences with what Ackoff was saying here? Or, you know, what, you know, your philosophy on how Deming might look at this here, or, you know I think I mentioned “Inverse Conway” as, as a potential mechanism for designing how your flow, how your teams are going to design architecture by reorienting themselves.
So I was really fascinated. I couldn't hold back. I was like, this is too cool.
So yeah, I mean, this is kind of a strange thing about social media. Hope we don't get derailed in that direction, but it’s a comment I kind of have to make, which is that you, my, my hypothesis for sort of engaging is that if I, I put out there something that is sort of unfiltered, right? That the era of sort of the, the, the, the curated sort of, you know, sterilized stream is over. And the era of, you know, things that are personal and kind of real is coming, you know, like that's why podcasting works. That's why Substack works. People are kind of done with this kind of like artificial sort of corporate construct, like turn on, you see CNBC and that's like, supposed to be mean something, but what does it, what does it mean?
So that was my, my hypothesis, personal, engaging, and explicitly having saying sort of, I, you know, there's a lot of people that, you know, I'm having conversations with you know, they're really brilliant and like very multifaceted kind of folks that they're not what you might expect sort of, I, you know, it'd be, that'd be talking to you. It was really surprising even to me, like coming in with that.
So, so, but even, so I have to say like the, the kind of familiarity with the concepts that we were talking about, that, that, that we had we, we, we kind of exactly sort of serendipitously locked into was fascinating to me mostly because the, it seems that the pass with followed are very different, right? So we've got different influences from different thinkers we've been reading and different, maybe motivating paradigms parallel, for sure. Right? Like, it's, it's still about businesses still about management with organizations, but from, from maybe a different sort of, you know, angles.
And yet we seem to have, we seem to understand each other, I think, which was just fascinated me. So you mentioned Deming and, and then I'm wondering what you, you were kind of saying, you're trying to apply those ideas to today's sort of context, right? So what do you think, the problem-- how would you articulate the problem and how would you articulate, you know, what, what would those ideas be trying to address?
So I can tell you, from my perspective, working with agile practices and techniques. I started as a software developer, and then I picked up a lot of these practices as black arts on the streets, cause nobody was teaching them. You had to go and find them out on a website, very arcane and you know, some obscure books. And what I began to see was I was thinking as this was coming along, gosh, like all these guys seem to have this figured out. All I have to do is improve how we work at the delivery side and everything is going to, you know, there's going to be a great manifestation of change. That's going to just be a wellspring-- it'll organically grow. And I worked under that delusion for a very, very long time, probably about a decade.
You know, when I saw how it didn't work, the last company that I worked for was Microsoft. I worked in their consulting services division and, you know, around 2008, 2010, in fact, I even onboarded in Seattle. So I'm familiar, very familiar with the town and, and Redmond campus. But what I began to see was that was not quite working, right. It was beginning to break down.
And then I, when I started moving into, like in 2010, I founded my own consultancy and I started working trying to bring these ideas forward and try to get them even more acceptance. I began to realize I was, it was running into some barriers-- things weren't working. It seemed that if I work in coach a team, I'd take my hands away, and it would, it was like a sandcastle would fall. And I'm like, this doesn't seem right. Why is this going wrong? And so it took me a few more years to realize that what we were doing was trying to ameliorate to incompatible systems.
So largely we've got all of the trappings that have been around for probably a century or more with respect to how we think organizations should be structured and managed. And then we've got the ideals that we have a very nimble agile organizations that are able to pivot and adapt and take in new inputs, use empirical planning, all of these different ideas on how to be able to get faster feedback loops working and you immediately run into problems.
So my, my profession, my industry is a rather cynical perspective of it is trying to get these two to fit, but they don't. So you end up you know, the, the buzzwords that we use is we're in the business of transformations, but there are two kinds of transformations.
There's the cynical one, which predominates the industry where we think we just tell teams what to do. We tell managers how they've got to adopt these new patterns and practices, and it's very expensive and it doesn't work, or you have sincere ones which are more organic, which begin with not the teams changing, but the leadership and working with their leadership teams and their management to try and figure what are better patterns of communication better patterns of structure. How do we see the organization manage it differently than what we've done in the past that makes this possible? So it goes away from this to, you know, how do we cooperate?
So you mentioned sort of the leadership changing, right? Which is like the, the, the system you described sort of the, the factors some working together, or, well, I guess each other really in, in, in that sense make a lot of sense to me. And this is kind of like an impedance mismatch, right? You're trying to blend sort of oil and water, and not only is it a water, but like the oil is, is sort of toxic to the water or something like, you know, the one that directionality, you know, if these two things fight, like who will win is like, predetermined right? The one literally has direct command authority. So, you know, it's, it's, it's only going to go one way. But I guess the question correctly identified obviously is how do we fix the problem and the other, you know, kind of at the source, right?
So, so what kinds of patterns... so let's say there's a leadership team and they, they want to change, like, what would they be even in like, what, you know, you can, you can make this as specific or generic as you, as you want, I suppose, but it's like, what inspirations are they, like, what does this look like? Basically, like what a, you know, a lot of, a lot of transformation I suppose, is about visualizing what, you know, knowing what you're sort of trying to get to into then trying to get there. But I think a lot of management teams don't even have an alternative vision in their mind. So what might that, what might that look like?
Well, it doesn't have to look completely foreign or alien, right? So you could have some of the same departments that you've had before, but instead you start working towards thinking about what are the ways that I can improve my communication patterns. And you know I'll give you an example. It's, it's thinking much more much more what you are able to begin to influence the change right in front of you, and it necessitates a change in mindset, right?
So you would begin to think that within a typical management structure, you're going to be pressing upon things like, how do I interpret feedback that I'm getting numerically or a target or a goal, and how are the ways that I'm beginning to parcel that out into the organization? And what are my expectations when I communicate that change, how is it actually going to be done?
So there's a theory, and that's what underpins all of this is when I start an engagement with a new leadership team, I will ask each of them to tell me, can you express to me in a very simple way, how do you predict the outcomes of your decisions in the organization? This is where it all begins. And that's your theory of management.
So in, in the old school way the theory of management is I'm able to control things. I have systems that control. I am able to issue directives. People will follow the directives and the systems will respond accordingly. And this is where we get into, I think I mentioned in, in your doc as a comment that Russ Ackoff looked at this, he said, what is the characteristic way that we teach management in the Western world is that we take something complex, we dissolve it into parts, we call those parts, ironically divisions, and we expect that these parts will all work in isolation of each other. We can optimize the parts and optimize the whole. And I liked the way he says, and that's completely false. Because there are always, there are always interdependencies between the parts and that's, that's what the devil's things is-- being able to see the organization as a network of parts that no matter how you thought it looked on the org chart, there's an actual underground network that you're unaware of that's working in spite of you. And it was one of the, one of the brilliant things that they taught us when they were onboarding, because I worked in the consulting services, a division of, of Microsoft, they taught us how to take an org chart and then dissolve it into the actual pathways.
So you begin to have conversations with people and they say, that's what they think. Now you make the real map, the political map the, how things get done, math. And then that becomes your guide for figuring the organization out. So when we think about transformation, it's transformation, that is it's moving away from the predominant and prevailing patterns that have gotten you perhaps quite well to this point. But if you're actually wanting to get beyond this point, they're going to be very insufficient because you're only going to be fighting the system from this point forward because you can't see it.
And at this point, reeducation needs to take place.
So you, you, you touched on something that's just really sent my mind traveling right now. So you said, you know, when an organization basically tries to analyze another organization, right, to accomplish something like to, and I think of like attack and defense, right. I think that the spike and the, and the sort of the wall so when an organization is acting as a spike they would model the other ones, right. It would make the, sort of the, the, the, the real org chart or whatever.
So this is something that's been baffling me for a long time, so I really want to see if you have an asset list. Right. Okay. They should know this is that there is a difference between reality and, you know, the model, right. And yet they themselves have the model and tell themselves that the model is real. Like, how do they not have this contradiction not sort of, I dunno, like, what do they do with this knowledge, I guess, spacing internally, or maybe a slightly different way to ask the same questions: why would they let themselves get manipulated that way? When they know they know how to manipulate others? And yet the same, they also know that the same door is open on their end.
Well, I mean, it's familiar, right? We've been taught these patterns of thinking since we were kids. So it's just a natural progression and extension that we see the organization as this thing that we can comfortably build a model about. But we don't actually think about our thinking when it comes to that. Right?
And that sort of stops me like a small story. Peter Senge who wrote the book, the fifth discipline in the mid nineties, early nineties, and it's about systems thinking and about the, you know, building the learning organization was his thesis. And he gave a lecture one time where he said, imagine for a moment that we could understand what animals can say to each other. And we happened upon a stream, and we see two Brook Trout. What do you think they're talking about?
And he says, damned if I know, but they sure as hell ain't talking about the water.
And it was, you know, when I, when I heard that, that is precisely the, the, the moment that clicks, I think for, for folks like in my profession is that we're always helping leadership, understand the water-- the things that keep many of the things in suspension that you take for granted, we're acutely aware of, because we can see it from the outside.
And that's actually a critical, critical part. You need to, not all of this, you're going to be able to do by yourself, because when you're inside the system, it's very difficult to appreciate what, you know, all of this water, all of these invisible structures. So you need to have someone come in from a, with a fresh perspective who isn't biased and is able to say, this is what I'm able to see.
You know, I've spent a couple of weeks, I've been observing how your department's work, and I can tell, you know, what is running this organization versus what you think is running it.
Right? No, yeah. That's, that's a, that's a, it's a, it's a fascinating sort of analogy to, to thinking about thinking, right? Because yeah, we don't, there are things that are so taken for granted on our own side. I mean, that, that, that we sort of just don't we don't, we just don't want to model.
We don't, we don't really, they don't enter our conscious sort of reasoning processes. So then they tend to get ignored sometimes disastrously. It actually reminds me of the I'm trying not to mess up the name, which I probably will, but a Fundamental Attribution Bias. I think it's called which is you know for, for our, for our listeners the, the, the tendency that people have to blame when, when, when I do something right, and somebody else does something, some, some, some, some violation of some norm, right? Like maybe I'm late to a meeting. I might myself explain myself away as a negative there's traffic, there was this, it was that whatever.
But when somebody else is late, I'm like, well, this person is clearly not, not, not responsible. They're not organized very well. They might think it must be, you know, I'm making all sorts of assumptions, so I'm not applying the same criteria or the same you know, extenuating circumstances to the other people as I am applying to myself. Right?
So, so it's kind of reminds me, it's like, it's almost like it's a similar thing, but inverted and scaled out to, to large companies. I don't know if this, this maps to how you, how you see that, that, that problem or not.
Yeah, no, quite similar. Quite similar. Yeah. And I've got a couple of ideas that are, you know, as you're talking that I'm for a cognitive and formulating some, some ideas as well, based on some of this conversation, right. I got to see if I can pull it. This reminds me of our one to one conversation.
Yeah. Like, please feel free to sort of, we can go wherever.
Yeah. So I was thinking about some conversations that I've had with a mentor and, you know, with respect, to thinking about thinking. And that's where I get a lot of these ideas. So his name, he's a he's based out of Southern California. His name is Dr. Bill Bellows. He used to be the Deputy Director of the Deming Institute. And that's where I got a lot of the original thinking about thinking about your thinking and how you choose to perceive things. And so, as you're, as you're mentioning some of these ideas, a, you know, it occurs to me an example from a team I was working with. So I was approached a couple of years ago, an entirely remotely distributed organization. I knew the CTO and he said, “I need you to help out a new director. We've got problems with a couple of our teams. We're distributed across the U S and Canada. We've got a lot of pressure on us. We think we're doing agile, but the team seemed to be falling apart.”
And I said, what's the basis of that? And he said, well, the director says, he feels that the teams are not T-shaped enough. T-Shaped so they're not worried. What do you mean by that? And he says, well, they're not cooperating. They don't help each other out. They don't learn each other's skill sets. And so what I began to untangle was they, the real problem was predictability. You know, with respect to when you were saying, is somebody early or late? So when I, when I hear things like the word predictability, I'm like, okay, well, what did that actually mean in your context? And it turns out that they were continually overestimating their capability and they were always falling short and that their customers, their customers are losing patience.
They're like, why does the, why did the goalposts keep moving? And they said, there's gotta be something wrong. And so I, when I went to actually do an, an an analysis I plotted their throughput. So throughput for folks who are not familiar in software teams, it's how long it takes measured in days or hours for a piece of work to move from one part of the organized or one part of the system to another.
So it's got to go through you know, specifications UX, UI, UX. It's going to go through dev, it's going to get a little bit of tests it's going to get deployed. And then we might have some UAT. And so how long did it take to go through that? And I was analyzing the flow and I said, well, actually, you're incredibly predictable, your systems are designed perfectly to achieve the results they are obtaining.
And I was able to demonstrate that I plotted it on something called the process behavior chart. I was able to show you, you've got no issues here. You may not be happy with how this is working, but this is a consequence of how your patterns of interrelationships work, because you're entirely remotely distributed because your knowledge is not uniformly distributed, because you are still using very strong systems of control mechanisms on these teams. While at the same time, trying to say that they're agile that's not, that's not actually manifesting. So we're actually seeing some of these problems come back on themselves. And that's why you've got a larger systemic problem.
And I said, who designed the teams who, who who staffed the teams? How was the hiring practices work? Why did you decide to stick QA right in probably the worst possible space and, and just continually slammed them and slammed them and slammed them and not help them? This is, this is, this is a reason why you're going to have this kind of systemic issue, the systemic problem. Does that kind of get to what you were... If I am I pulling the right thread?
It's all in the same, it's all in the same sort of quarter of organizations failing to model themselves others. There's one more element I'm picking up from this, which is similar to something we said the other time and similar to something I've made that I've been ranting about recently, which is if you, what, I try to model a situation, right? Like there will be comfortable explanations, very, very pleasing to my ego that will show up like they're idiots. Right. They don't get it right. The problem is that they don't get it, or like, oh, they're slow. Oh, they're not cooperating. There is a more sophisticated way of saying they're not good enough. Right. and to me, like when I reached that explanation, I've now made it a habit. It took me a very long time to, to, to make this conscious.
But it's, it's, I've gotten pretty decent of saying, don't stop here. Like, this is a false, a false ending, right. This doesn't make any sense. Right. Like, and you see it glorified as well. When people will say like, oh, you know, well, the problem was the other half of the country, or, you know, whatever. And, and, and to me, like, whatever you reach that explanation, you know, it's, it's, it's actually like good news in a way, because you know, something for sure, which is something about your understanding is broken.
There's some rats, so there's a bad apple in your own model. Like that is such an unlikely outcome. You, you have a team of highly paid software engineers, and they're all incompetent? Like, okay, well, that's unlikely, right? Let's, let's throw that one away, but explore why we thought that, because that's interesting.
That, that, that, you know, that's totally correct. So again, guidance that I give to my managers when I, when I talk to them is your first port of call is not blaming the individual for not getting it right.
The first port of call is how did I design these processes? Or how did I design this relationship where this is the problem that's manifesting. So always look towards what, you know, what policies, what procedures, you know, and there's a lot of other things. If you have a very poor personal relationship with your subordinates, or your, or your team, you're not going to know, or you're not going to be sensitive to when extrinsic factors are going to be interfering in their lives. So they could have stuff going on at home. They could have a parent who is ailing. They could have stress with maybe a sibling or maybe an in-laws that you're not aware of, or there's another pressing issue.
That deals with, you know, psychology of individuals and leadership is very scarce on the knowledge of psychology. I find that's what we do in coaching. We're brought in because we dabble in a lot of different areas of psychology. So we're able to use a number of different tools to begin to tease out how the people work together and how do people collaborate, and what do we need to look out for you know, in individuals.
So, one thing that we're very aware of, or that we try to explain to, to our to our manager coachees is, do you understand the difference between intrinsic and extrinsic motivation, and how your words and your attitudes can begin to press upon people and invite the exact behaviors that you're trying to avoid? So you can actually, by your words and your mannerisms and how you treat people, you may say, well, I'm really dissatisfied with these guys getting their backup all the time, but the way that you you're subtly sending cues to them and not having a good relationship with them, you're getting that coming. You're, you're basically affirming that you're going to be in a feedback loop. That's going to be bringing that behavior back on you. So these things are not isolated. You've got to understand a little bit about systems. You've got to understand a little bit about psychology. How do people learn and variation, not just, not only in the system itself, but you know, between people. How do we, how do we make this work?
So, what you're saying is the managers are not T-shaped enough.
They need a new theory. They just need a little bit of time and a little bit of knowledge. That's all they need.
And what I find interesting is, is that, you know, that's such a repeated pattern that, I mean, at this, you know, at some point it stops being, you know, a coincidence, right, where we have this situation where, you know, you have one discipline and they're really good at their discipline. Like they know all of the things about their discipline, but the solution to the hard problem within that discipline is not in that discipline. Right? Because as they would have solved it, like, I mean, it's kinda, it kinda makes sense, right. If it's persistent, they're missing a tool somewhere.
Yet we see very little crossbreeding of, of expertise. You know, there's always the gatekeeping, well, why are you an X or are you a Y implying that, I guess all Xs should only think about X and Y should only think about Ys or whatever, but it's, it's, I don't know how one can can drive that.
And again, I, I focus mostly on leadership because in general, my, my experience is that people with just a good sort of, you know people in, in, in teams have a common innate broadness, but it's, it's when you sort of start to, to get, get very focused and you might end up actually going up hierarchically, but you the narrowness doesn't go away.
And then I'm just wondering how, how does it, it's, it's also kind of like exploration / exploitation problem, right? Because you, when, when you start reading about X or Y, right, you don't know that exploration will be exploitable. Like, you don't know if you'll find something good, you know, you're going fishing, you know, and then you got to be comfortable that nine out of 10 times what we find will not immediately apply, but is there any sort of practices that, that can help sort of solve that problem, or just broaden out the need, the horizons, I suppose, of, of, of people and organizations?
So well, in what way specifically? What do you think of like, how, how to...
You mentioned the sort of team leads not having enough understanding of psychology right? And I guess the obvious counter is like, why would they? They’re engineering leads-- why would they know? It was like, oh, it's obvious why, but that's the thing is like, why would they go out and learn things there to potentially find a specific thing they might need to know in this situation?
Okay. Well, it would largely come down to why are they in that job? So, if you are looking to genuinely help people as a leader, and as a manager, you need to know these things. A while ago I was coaching a room full of like eight or nine senior managers. And I asked them to tell me why they got into the role. I wanted to get a baseline. And I said, just think about, go back to the time when you were just about to get the promotion you've been angling for this. I want you to tell me what, what were you thinking and feeling at that particular point? And then we're going to go and jump ahead in time. And I want you to tell me, you know, what is it like now? What do you, what did you come to realize was the reality of management?
And I've only had, it was funny in that, in that or nine, there was one who honestly told me it was for the money. And I’m like, you know, that that's, that told me a great deal, because I've worked with this manager and, and they were having a lot of particular issues and understanding how to relate to the people that they were, they, they were working with. And they had a very directive style. I mean, it was very much by the book, by the numbers, you know, just push, push, push, push, push.
And it was largely because you could see in the rest of the organization, the dominant management structure measured him on that. It rewarded him on achieving certain, certain metrics and milestones. So the behavior was passed down and he gathered a cadre that related to that.
So why did, why do leaders and managers need to learn new theory?
It's literally out of care and concern for the people that they're leading. If you fall, if you fall back on the, on, on being blind to these things, this is when you are going to engage in a lot of behaviors that are counterproductive. You're going to try to induce folks to achieve things that they can't, because you haven't provided a method for them to be able to do it or how to assist them in understanding the job.
You're just going to say, look, I'd like, you know, I'd like you to reduce defects, the escaped defects this, right. You know, for this past month, unacceptable, they've got to come down by 10% or 15%.
Well, what does that even mean? I mean, and if you've been in the business any length of time, you know, what's going to happen. I mean, like basically they're going to find a way to obviate and they're going to make you feel happy about seeing that figure 10% hit. And then everybody goes home happy, but the quality is still is still not there.
So it's not an easy thing. I'm not proposing something. That's, if it's easy or instant, it does not happen. But if, if a leadership team is sincere enough and I have worked with sincere leadership teams-- they want to learn, then they dedicate the time to this. They make the space in time and they dedicate themselves to regularly understanding these things. They don't have to be experts. They just have to be putting forward diligent effort to improve. And it starts with them, like, they've got to clean house, they've got to get the cobwebs out the bad practices out and start building towards better ones that are going to allow them to manage more, manage their people more effectively.
So you mentioned that there's, there's a few threads I want to take on, but they all come to the same thing, which is kind of numbers, right?
So you mentioned this, not this, this manager saying, you know, I did it for the money, which is like, it should not be condemned. You know, like, you know, how much money you make means like certain things. It could be money for the healthcare of my mother. That should not be condemned, but at the same time, what is on my mind a lot is that the obvious set up of organizations is if you want more money, move to management, right? That there's that sort of one-way street of sorts.
And, you know, some more recent organizations have, you know, specialists paths that can escalate sort of in compensation. But the, the obvious path is sort of, oh, you know, that's kind of like for the truly special people that maybe they can get to do that, but like most people can tell me I'm a management. So what solutions are there to that problem? Because to me, like, if that problem is there, we were talking about incentives as well. In our previous conversation, you were you're, you're always going to be sort of pushing against the tide, right?
Yeah. Well, I, because again, this goes back to how we've been taught since we were kids. We were given gold stars. We were given very specific awards to, you know, that rewarded certain behaviors. You know, our parents would, you know you know, might give us a cash award or might buy us you know, a bike if we get a certain grade in school. And there's a, there's, there's a certain sense of irony in that because the grading is entirely, even when you, there, there is a large percentage of you that goes into the achievement of a grade. I'm not going to, I'm not going to dispute that, but there's a certain level of arbitrariness in it as well. And what we're doing is we create that expectation. So you go to university, you get your first job, and you're in a performance appraisal before you even know it.
And you're being appraised, rather perversely for the design and performance of the system. You had no hand in just how well you did within it. And I used the metaphor of, you've got to go get the cheese. So the manager is watching you go through the maze and seeing how well, how adroit you are getting the cheese.
And then he says, well, you didn't do so well. So, you know, you get artificial scarcity that begins to get put in there. Now, when you decide to do that as a leader, it seems natural. I mean, like, I, I deal with this all the time. People even giving, you know, like Amazon gift cards, you know, if they, if they take on a certain task, here's a hundred bucks, really great job.
That introduces distortions into the system almost immediately.
I had a manager, for example, who played into the inducements game because they had found that they needed to have people cycle on to do maintenance. And they said, it's really unpleasant work. You sometimes have to take calls, deal with people in the field, deal with technicians. So I'm going to give out Amazon cards and they gave them the lower denomination value.
They thought $25 would keep bias out of the system. So I said, well, go ahead, see, I've, I've taught you as much as I can. If you think this is a good idea. Tell me about how it works. And so long story short, a couple of people began to bias toward working in support all the time. And she found out there was a whole underground economy going on that she created with these Amazon cards where basically they would agree to do shifts for people and would get the cards and exchange.
And they've banked well beyond their original allotment. She was thinking people might get one or two or three cards. These people were getting like 10, 12. You know, you're never going to find that, yeah, you're never going to achieve really what you wanted to do, which was improve the work so that it was more effective and enjoyable.
Now to your, to your point about base salary remuneration. Yeah. That, that goes without saying, I mean, like, that's, you want to feel that you are valued for what you're doing, but at a certain point, and this is what I see with a number of organizations that adopt opt a more systems oriented approach, they look towards how do we understand contributions that go out into the system? And for a lot of folks, what they do is they get rid of commissions. They get rid of that distortion, and they get rid of, they get rid of excessive bonuses and they move towards profit sharing, and they might gear the profit sharing based on seniority. So if you've stayed with the company five years, eight years, 10 years, there's, you know, your contributions are going to be considered to be more, you know, you've dedicated more time. That should be acknowledged, but the idea is we all make contributions to raise the boat, as opposed to all the extrinsic motivation, inducements that we've come to rely on, that we all come to know and love.
Yeah, that's fascinating. I mean, I'm glad to say we the salary, sorry, the, the, the commission thing was something we stopped doing early though. It's fascinating because, well, I was going to say, you know, we, when you lose sort of good candidates, but I I'm actually rephrasing it as I'm saying it, because it's, it's more like we have an early chance to on both sides actually figure out that there's not a fit right?
So you, you, you you're, you're saving yourself something there, but it's, it's yeah, it's, it's that sort of, you don't see the escape behaviors that you are enabling by saying, you know, one person is motivated this way. One person is motivated that way. And that they will find a way to sort of balance that out and not necessarily in the way that you want them to.
No, I was, I was I was gonna I remember you were saying about sort of the manager who said, you know, well, you know, this is maintenance, that's support. This is kind of like a lowly work, let's say, so we got encourage it a little bit extra or something like that. Right. And so at balena we have this thing called support-driven development, which means basically all of our developers all of our engineers do support. It is just part of the job. Everybody does it.
It's just it's not something that you know, some people love it. Some people don't love it, but it's not like considered like less than right. Because everybody does it. But we had a support lead that joined us from GitHub at a, at a time. And they, and I saw a lot of sort of apologetic messages about like, you know, I know it's support, but could you please.
And I started getting wind of this and that. And I just sort of, you know, took him aside. And I said, look, don't, they don't know. Don't tell him the secret. Like we here, we have to maintain it as a pretty high end activity because in truth, I am I'm this close. And really Monday, I should just, I should just do it. I should rename support into user field research, because this is how we understand it.
You know, we, we, we really say there are, there are two objectives and support. One is to solve the immediate problem. And then one is to solve the incident problem of the fact that there's probably 10 more customers having the same problem right now, but they're, don't go to support because you go to support. I don't go to support. The brave person that’s going to support is probably speaking, you know, for another ten, if we don't help them, it's going to be 10 times that many in the future, right?
Like we got to draw a line. So hoping to one person is great, but the fixing the root problem is probably not. We just use 101 sort of ratio sort of the mental toolkit. It's a hundred times better.
It's like, it's all the people right now that are having the same problem, plus all the people that will have the same problem.
You know, this is something that and this is, this is, I mean, this is fundamental to the loop, right? Like the loop has these, these, these channels, which are like our sensors, the biggest sensor we have is support. So things come from there, all that it's just constant. And you never know, right? It's, it's the other thing you mentioned about how the T-shaped-ness Ms, or you start an investigator following one direction and ends up being in a completely different place.
That's also fascinating, you know, you get a strange question, something like, oh yeah, the customer's trying to do this. And, you know, they want this feature or whatever. It's like, wait, wait, wait, wait, what are they trying to do?
This just came to me, as you were talking about the, the lowly support and how you can frame things completely differently, right? The one is like, well, you know, it's, it's, it's hard work, but someone's got to do it might as well throw somebody under the bus. And the other one is like, no, actually that is probably the most important thing we can do. And it also builds empathy by the way, right. Because
Oh, totally, totally.
When we're working on one little part of the system you can be, you know, focused on that and not really think about anything else. And the sad truth is that our users are more experts in our product than any of us is because we don't experience it, you know, the gestalt. And they do, so it's more than supporting us, really.
Well, well, customers are incredibly valuable for this. This is what I like when I saw how you're continually moving things up to the surface. You know, there was that, that one particular area that you had. And I said, wouldn't it be great if you put the customers there, because that's exactly the touch point.
So when you look at what it, what it brings to mind for me almost immediately is when you look at Deming's model of production viewed as a system. So in the 1950s, he's showing this revolutionary way of looking at how the organization works to the Japanese, and it's the germ that led to, you know, and no one could have foreseen how fast they would overtake the market to the point where they were building higher and higher quality products by following this. But if you look at it, he's got very interesting notes.
He's basically laid the, the, the top down structure is turned at 90 degrees and he says, it's a flow. So you've got suppliers, providing input processes are changing it, and then it goes out to customers, but then customers loop back into research. And then that goes into product development and design, which then gets fed in as an input again, throughout the entire system.
So he was beginning to observe this because it was natural in Japanese businesses for people to go through the apprenticeship levels. So you wouldn't just start as a manager, you often started learning the business. You had to understand what does the customer go through and using our products. And that's what builds a lot of pride and joy in the work that you are doing, because you understand I'm contributing to this product. Here is how my customers are using this product. This is really, really important.
There they're solving huge problems with this. And the more that I can learn that I can glean, I like what you're doing, that if you're taking this input and it's, you don't call it support you, you call it customer research. I mean, like that's perfect. That's exactly what what, what should be intended-- that this is the lifeblood, this is how we're going to learn how to improve.
You know, I, I compare and contrast that I had I ranted about this on LinkedIn, about how it doesn't work and it doesn't have to do with technology, but it does have to do with not understanding your customers and not connecting the parts of your organization.
So I have an older Acura MDX and love that car. I got it. I bought it from the original owner because I wanted to see what it would be like to be an Acura owner. So I take to my local Acura dealer for servicing, and I begin to notice almost immediately that there's hiccups in how the servicing gets done. It seems like the left hand doesn't know what the right hand is doing. I get the vehicle back at times and there's damage done to the vehicle. And I've actually given up, like, I, I I've had tires changed and they've like scraped the rims all up.
I had you know a recall that had to be done. There was seals that had to be put in around the rear tail lights. I go on, I find that they've gotten cracked some of the the ferring in the back by the gate. So all of these little things begin to accumulate.
And then one day, you know, like I, I don't drive it that often. It's very low mileage. The sales executive sends me a text and he says, would you like to trade in and buy a new one? And I'm like, so I, I got in touch with him and I said, why in God's green earth, would I pay 80, $90,000 for a new Acura when you treat mine like complete garbage? I don't think that there's a connection that you understand that I'm going to see you for two seconds. I'm going to see these guys way, way more like, you know, every six months I'm going to be in for an oil change you know, transmission fluid, tires, et cetera, et cetera.
And you guys have got to start working together because what they're doing on their end is hurting you on this end. And I introduced them to you know, there's a concept that, that comes from this, that, that gets paid forward and it's it was communicated with Deming called Unknown and Unknowable Consequences. These are things that are incredibly important for management to measure or to, or for management to actually manage, but cannot be measured. So in this, in this particular instance, and it applies to your business as well, what is the multiplying effect of a happy customer, one whom you guys, without even knowing knocked it out of the park, you help them in an unmeasurable way, and what is the same multiplying a negative effect for when you dis-satisfy or you drop the ball for a customer in a really significant way.
These are things that we can account for, but are so important. So for what I was able to reveal to the sales executive at the dealership was you've got a big hole in your system where you're not connecting the feedback of the customer experience and how that shapes, whether that person's going to be a future customer. And then of course, when I share it on LinkedIn, now it's gone. Oh, it gets amplified.
Everyone's like, wow, that's a really, yeah. We had no idea. They're a Japanese company. Should they be, you know, really aware of quality, you know, commitment to quality that seems like it's a little bit of cognitive dissonance and it's like, yeah, yeah, exactly. Like why, why would you buy a luxury SUV and get service that you, I may as well have bought a Honda CRV you know, like I would accept these kinds of mistakes at a lower quality.
When I, when I, when I hear you say the story, right, my mind always can't help on feel bad. I mean, feel bad from the sales executive at the same time, he didn't know what he was buying with that sales call, right? So that was that's great.
But the, the, the thing that we've so, so this is, this is this is a story I tell often, but at some point I wanted to avoid that exact problem. Right. I wanted to avoid a customer, having a bad experience. Maybe they send us a survey that says, you know, like I'm really unhappy, whatever, this is terrible while we'll, we'll trying to, on the other hand, like sell them something or, you know upgrade their package or whatever. And so I, I asked the basic question: can we have a unified term line for our customers?
I know we have forums. I know that there's social media. I know we talked to them on support. I know we talked to them on customer success. And as you who knows, you know, you know, dot, dot, dot, there's like the, the, the other how can we pull all that together?
And the answer I got is we do not, and we cannot, then it's actually no real answer, you know, because every, and this gets me to the, to the other problem that I is basically the bane of my existence, which is our tools own us, right? Like the reason we can't have that, it's not because, you know, we don't know how to put, put a lot of events in one pipeline and parse by customer ID. It’s that every company that makes that product wants you to stay in their product, they don't want you to take, you know your analytics events and your your, your, your, your support threads and your everything else and, and match it to get the top, top down view.
And, and that sounds conspiratorial, but I mean, if you seem to, if you see some of the API that I've seen, at least this upset, so you thought at some point, you know, incompetence starts to play as the amount of malice starts to emerge. What we experience at balena is an outside-in effect of like, we don't follow that structure, but the outside world will say impose it on us, because what do they want to do? Right. So to have seats, I need to find the, the priests, the priesthood of Salesforce, Zendesk, or whatever, and not already then backwards.
Yeah. And so that begins to get to this Inverse Conway proposition. Again, we come back to that where, you know, you're, you're finding that the communication patterns and structures that your customers have with respect to how they want to have that licensing or, or management done is now causing you to shift.
But what you could do is realize that for some customers, that's the world that they're in, you, you meet them where they're at. And then begin to evolve that relationship, you know, show prop, you know, proposition, how can we improve this more?
So this is the very Toyota way of thinking is that they're very concerned about how do their vendors and suppliers work? How can they begin to share some of their knowledge about their operating system of how their organization works to facilitate bringing material through, and realizing at the other end, how do customers buy our products?
You know, and so for Toyota, it's, it's, it's rather important. They connect the entire value chain based on customer poll. So they set up production schedules based on sales that are done at certain cadences, so that they know how many cars and how many parts and how many colors, everything needs to be done.
They've designed a system to sell very efficiently, sell cars. The challenge for you is to design and teach your customers a new way of purchasing your products. Right now they're stuck on wanting you to look at it in a certain per seat way, but what is the next innovation?
You know, this, this again is why I think Deming's sometimes ahead of his time because he has a, he breaks this brilliant part. And I just wrote a blog post about this. The customer generates nothing and his position on this was innovation doesn't occur by continually satisfying incremental improvements that our customer may ask for an existing product. It comes from actually predicting what the customers is not going to be ha not going to live without in the future.
And that is what is more interesting. You, you deal with maintaining your customer relationships now, but the secret sauce is leapfrogging ahead. What is the next view? What is the next way that people are going to want to use your products and services? And you might get some of them, you might lose some of them, you might open up a whole new market.
And that's another reason why you don't want to be overly committed to your organizational structure. Famously Steve Jobs sort of happily cannibalized the iPod with the iPhone and knowingly. So, because he determined that it was dead, that it was gonna be gone. Right. And he probably knowing Jobs said, well, he did that when he was at its peak. Right.
We don't want it, this is way too good. We've got to kill it or something like that.
But you know, that means that you are committing to essentially eliminate an entire sort of, I mean, what is the iPod today at Apple? Right, right. Do they even make, like, I think like maybe like we make a, like a, a weird iPhone or something without a phone, but it's, it's this willingness to cannibalize, which, I mean, the founder has the sort of moral authority to do, but it's like often lacking in sort of follow-on leaders.
But it's, it's, it's that sort of, this is the part I'm, I'm, I'm also actually not I don't have fully developed thoughts on, on sort of how do you, so we kind of know, right? You do not ship your own checks, right? You don't, you don't want to have your own structure, which you develop in whatever way you developed it and then imprint that into your product accidentally, right?
So in Sinofsky’s blog post about that actually, when he said, you know, don't ship your org chart. He wrote a blog post, which, which strangely I read, I usually just take the aphorism at that time. This was so big. I was like, I gotta find more. And he says in that blog post that but, but the secret is you can't right? Not ship your org chart, not make your org chart ship your product.
Great. But how do we, this is another problem. I keep coming up against them. I've got maybe hints, but I don't have a fully finalized solution, which is, if you're, you know, you've got basically two, two forces flowing, you know, you've got your customer telling you, I want this product either this way, or you see what works or whatever, right. That could be going different, different paths. But then that implies an org structure. Right. And that implies to the people. And they have a set of people and they are in a structure and they are making a product and they are trying to sell it to a customer, sometimes force it onto a customer. Right.
So you've got these two flows of causality. And you, you, you want, I mean, some, if there's like a visionary fine, right? Do you want to go that way? But most of the time you want to, you want to sort of be moldable, right?
You want to be water compared to your customer, to be what they need, ideally what they will need, but definitely not what they needed 20 years ago. So how does an organization forego that sort of path dependence that we built? So we'll put the structure, we've got people there's egos, there's like history, there's all of that stuff, which has nothing to do with making a better product. How does an organization sort of make its org chart fluid in that way of like, we have to be the best organization we can be today for the product we're making today for our customers.
Well, look at what you would be satisfying alternatively. So we already know that if we decide to put departments and divisions in place and limit communication flows, and rely on hierarchy, we're, we're necessarily, ossifying, we're limiting our degrees of freedom as it were to be able to respond. So in the traditional matrix or hierarchy, a hierarchical organization, the people who actually have the fewest degrees of freedom are the people that need the most. And so that is when you start ascending up the chain. So you'll find that product managers, then VPs, associate VPs, all the way up into the C-suite. You just watch these degrees of freedom begin to evaporate, especially if they're reporting to a board. So that begins to influence things and very, very interesting and sometimes not so good. So if you're wanting to evolve and adapt different structures, it's, it has to be particular to what you do.
I can give you examples. You know, I could say, go look at what Bill Gore did with Gore and Associates. Why was everyone who joined Gore and Associates and created the lattice structure?
It's because he wanted an organization that was free to innovate and develop right at the point of the spear. And it was often, there was a story that was often told that when you joined, you would meet gore, sadly he's passed away, but you go and you'd meet him in his office. He'd say, “you know, great, see that you're a graduate of, you know, Harvard MBA. We expect great things of you.”
So, you know, go and that's your orientation, your orientation is sink or swim, you know? So you go and you learn about what the different product groups in the organization do. And you've got to go say, well, I've got a great idea for a new sleeping bag, or I've got a great idea for a new boot and I'm going to pull the people together. They're all, you know, we're going to see what we can do.
And the funny, funny thing about gore is that I don't know if they still do it to this day, but he used to answer the phones. So if you, they, there was the responsibility of anybody in the organization to answer the phones and pick them up. Similarly, you could look at a company, you know, it's not so much now, but it was a darling for the agile set. You know, maybe about six years ago, seven years ago, it was Valve.
So they, they had their handbook. You may remember it got leaked onto the net and it presented this very interesting idealized view of what it's like to work at Valve, but it was an intriguing structure because they said, basically you became the advocate for an idea or a product, and you tried to build your own team.
Now you might win in the, you might win in the marketplace of ideas. You might lose, you might end up joining another team. It seemed a little bit, a little bit of like controlled anarchy, but it allowed them to develop products because they were able to net, you know, create instantaneous networks.
And they got out of the way for the teams to be able to figure out how to solve that. So I think they, I think you know, another influence that just comes to mind as well. And it's a very, very old when it comes from the 1980s, that was the influence for the original Agile practices and frameworks like Scrum. So there were two guys who wrote a paper in 1986, Harvard business review, Takeuchi and Nonaka, and it was called the New Product Development Game. And inside of that, they analyzed why at that particular point in history, Japanese teams seemed to be, so adroit at getting new products and innovations into the market.
And one of the things they attributed to and I found really interesting is they said that management needs to create a space that's got some tension. It's not completely open. It's not completely unlimited and unbounded. It's, you need to solve this particular problem using these particular resources within this particular timeframe. We're going to give you some ideas and guidance on that, but you're responsible for figuring out how to do this.
And so it led to two ideas that we used in early agile, where it was a, you know, white broom design. It was kind of like the nascent beginnings of that, that you, it was ironic. You would decouple a team from the part of the organization that was constricting it. You removed all of those. You set them in their own space with controls and boundaries and said solve, you know, how can we solve the problem?
So, the challenge for leadership is looking at how to marry using your knowledge. And that's the very important you can't divine these things by relying upon the ideas of the past. And this is why I can continually come back to guys like Goldratt, and Deming and Ackoff who I think were you know, until the 1990s, that that was kind of their Zenith, you know, the early 1990s. And then it began to drop off for whatever reason.
We've got to rediscover what some of these guys were talking about, because that's where it comes from leadership. And and their leadership teams being able to understand how do we can contribute towards creating a holding environment in the organization, in the operating system that allows us to adroitly address these needs to reform as we might need. We can't predict, right? We can't divine how should I move into this new new paradigm? How should I move into this new structure? What do I need to put in place?
That's largely up to you to figure out you've gotta be able to have the theory to say, I understand all the things I should be looking at and thinking about, now, what are the experiments that I can begin to take to design this? How do I begin to get a feedback loop that go, that allows me to interpret what I am getting as I move into this.
The big, big, big, big caution is, and you, and I think we talked about this before, about the Spotify model and its influence in agile and realizing that nobody does the Spotify model at Spotify.
I mean, like it was, it was an experiment. They did, it suited that particular period in time. And yet, what do we have right now? We've got a lot of companies wanting to adapt to, or copy without understanding anything about Spotify, the product that makes the people that work there, trying to bring all of that into your organization. It's as naive as when, you know, the big three tried copying lean in the 1980s. It's bound to fail. Bound, to fail. No theory, no knowledge.
I mean, the, the, the, the sort of the binary I see is the reasoning by analogy, areas and reasoning by first principles. Right? So you when you try to ask the question of like, how should I structure my organization? You have, you know, these two paths to go, like, analogy, like, who am I going to? Like, like, who am I going to structure myself as? Right. What is out there?
There's Spotify, there's like a generic agile there's like holacracy, god forbid. You know, but they will, they will be very nice and they will submit their, their, their aggressive feedback. Very, very well formatted. Or the other side, you could see like, okay, what is it that we do, right? What is it that we need? How, how is it yeah. How should information travel, et cetera, et cetera.
I can take inspiration, of course, whenever, anywhere else. But and often, I mean, having, having, you know, worked balena for a long time one, one thing that I, I used to think that startups would bring that to the new organizational paradigms, right? And to some of degree,, that's kind of, sort of true, you know, like Valve, they’re a startup, Spotify, startup ideas are coming through, but they aren't far.
You know, the, the, the rate of innovation is far, far slower than I would nightly expect them that I can now tell you why, because oddly enough, as a, as a, as a sort of, as a founding team or whatever, you are very encouraged to innovate on your product, but very discouraged from innovating on your structure. Right? Because it's seen as a distraction, basically the explicit connection between what you do and how you're structured is not well understood by anyone who might you know, it's, it's, I mean, we know that it's like many, many things that we know it, but it's not at the forefront.
So when we see people like tweaking, like you know, incentives or structures, or trying different things, they’re like why aren't you working on the next feature? Right.
So that's, that's something that I guess, I resolve my own curiosity by finding that out the hard way, but it's, it's, it's, I guess it expresses the same thing. I think we've been, we've been dancing around this concept over and over again, where you try to fix one part of the system, but then, you know, whether it's the softer or whether it's you know, your, your, your mentors or whether it is your, even your, your customers, right, sometimes supplies, all things will try to draw you back into balance. And that might mean that they might absorb 1% of what you want, but they'll need you to accept my members of what they want.
So, you kind of assist them, you create a hole in the water, and if the system wants to fill it back, I guess maybe this is a good place to go in. Like, this is, you know, ultimately the real, the real issue-- how do you create, I guess, how do you, how does one handle this, this problem? And this is what you've faced as well in your, if I remember this correctly, from your introductory comments, you said, well, you know, you can't just fix the software team, you have to fix the management team. Right. But you know, does that mean, like we have to fix our civilization? Yeah. How do we establish progress that is long lasting, I guess, in a world that is fundamentally brokenness is everywhere right now. How do you create something that not only works, but continues to work?
Well, I think it's as simple as just starting with what you can, what you have the domain to control. The change can seem overwhelming. If you, if granted, if you blew the scope of the problem up, it would just be discouraging. And that's why transformation is individual.
So Deming says this very clearly in the book, he says, you know, transformation is individual and it's discontinuous. But through that, that's where he's going to pick up all of his new understanding and his relationship to other people and how he interprets figures and sees things. So it begins very, very simply with you observing, learning new things, and then what we, the, the metaphor we use is the lens. So there's a set of lenses that we use to see the organization today. And then we bring these new lenses in, and we interpret new feedback, new information saying ah here's why some of these things might be working this way. Perhaps I can nudge this and I can change this. So just a very simple example.
I'm auditing a class right now. That's done, it's a virtual academy, the Institute for quality improvement, and it's facilitated by Eric Budd. And it's out of Michigan. I'll be teaching a portion of that class in December, but he has a very interesting methodology when you participate in this and in the target audiences, leaders, managers it's in-situ hands-on, you're going to change things learning. So, one of the first things that he posits is we're going to learn how to do something called moves. And what I want you to do is come up with ideas on something you are going to change. You are going to move something and he gives you a caution. He says, first time out, you're probably gonna make a move that's way too big for you.
And you're going to have to dial it back to a point where you actually can and what he's teaching you is how far you can actually move the levers in the system that you have the access to do. And then he's going to, he's going to say, well, now you've got to design and experiment. You've got to tell me, plan out. How do you know that this move is going to produce this outcome? What's the outcome that you're looking for? What are you expecting to affect that change with? And those are the things that you're going to slowly incrementally begin to evolve out.
So over like this class goes until December 17th, every single day, they go, they meet for 45 minutes in the morning, and they talk about what did you learn yesterday? How did that move experiment go? How are things going? And, oh, by the way, oh yeah. You also have to have a conversation where you're teaching what you're learning to somebody else in the organization, because it's only through teaching that we close the feedback loop.
So he's teaching you how to build your own operating system for change. And it doesn't matter what business you're in, and you're going to begin to incrementally move that forward. You're going to move these experiments and changes forward. And it's a lifelong learning process.
You're not going to know, but it has to start at a very, very small space so that you can begin to figure out what is my scope of change, what can I really affect? So you don't blow your brains out and discourage yourself and implode.
And speaking of, of this sort of you know, how far you can go, or you can not go, I guess what you mentioned before about sort of how, you know, the thinking that came out of Ackoff and Deming and stuff, I guess with lean was like at the peak, right. Everybody was like looking into lean and then, you know, where that came from, but lean was like a massive success. Right.
So that clearly was changed that happened. And God fixated, like it, it's not a thing that everybody sort of understands and it's been replicated and putting us to work. So maybe that's something interesting to think about because it's been so small, but it's, it can't be done because it hadn't been, but I'm wondering what what perhaps happened around that time, then that sort of, because when I, so when I rediscovered those ideas, they seemed both to be very well credentialed.
Like anyone who's, anyone, you look at them and you say, okay, what did they think about Deming? And they're like, yeah, they think that he was the greatest. I go, you know, what do they think about Ackoff, you know, extreme, like positive arrows. Right.
But then let's continue that it was that those ideas are not being applied. So you're like, okay, what you know, it's like, there's like a, it's almost like we entered a dark, a dark age and I don't know what that was, but I'm just wondering if you, having you, have seen it. I mean, this isn't, by the way, to me, this isn't unfamiliar because I, my, my my, my sort of academic work, and then what I do at balena actually goes into 5GLs. Right. So Fifth-Generation Language is effectively like the domain, which is a, not a bad thing. Really cool.
But like late eighties and early nineties, and then kind of like the dark side, I'm extremely used to that, like kind of digging out and saying like, well, there's any other great and tying them out and they do work, but it's just that everybody's mind is elsewhere. I'm just wondering how if you know, any of that story or, or how the are, are, are like, are they coming, is there like a new generation now that's looking at those ideas, you mentioned the, the Deming Institute.
How, yeah, I guess what's the story of those ideas since, since the lien era maybe, maybe let's make it a little bit open that, that sort of, how did they go into, you know, did they go into hibernation or the kind of background what's the timeline.
Well, so lean, I think, has not really gone away. It's evolved.
So there, there are, you know, and you probably know from academic work, there is often the theory as was intended, and then there's the, what ends up happening in reality. So a lot of the story of lean and Deming and Ackoff, Drucker, we see that a lot of these ideas had great promise, but it was the Western mindset that began to not really fully appreciate or understand things. So one of the things that really bedeviled a lot of things, working with respect to whether it was Deming's you know, whole system improvement, total quality management ideas, or, or lean evolving into lean six Sigma for Motorola, these ideas began to kind of run their course. They were designed to solve a particular problem, like lean six Sigma was but didn't take into consideration all the things that Deming was trying to make evident.
And Deming's problem began with sadly him dying. I mean, when he passed away in 1993, it was not long after there were a Deming Associations around the world, across the U.S. in the U.K.. And within five years, they'd all folded, right?
Like he was such a Paragon, such a, you know, a force of personality that once he was gone, everyone was kind of like, well, I don't know what to do with this. And no one was left to carry on the advocacy. So you ended up with this critical gap. And for him, where the dark point began to settle in was, and what he was always pressing to advocate is we're teaching the wrong things in business school. And Ackoff would say the same thing. We're teaching the wrong things to MBAs. We're churning out MBAs and embarrassingly, from here, we're sending them overseas.
And they began to learn very bad practices. And they began to undo a lot of the things that Deming had taught to the Japanese, for example, you know, in the 1950s and 1960s. And there was a very, you know, a recent example, you might remember where in Japan, they were having issues with the quality of steel. So there were, there was highly defective quantities of steel going out that were getting put into cars and airplanes, boats, and they traced it all the way back. When you looked at it, it was right back to leaders who were, when they were younger, being sent to America to learn all of the worst practices that we've got to offer and bringing them all back. And then if they changed, you know, basically a generation of management, they undid everything and you were left with this, with this particular problem.
So that's literally where things went dark. Now, fast forward, I go to the Deming Conference, annual general conference it's in L.A., it was 2018 and it was an opportunity. So my mentor, Bill Bellows, he's this was his baby. He's putting it on it's his hometown. And we've got all of the original stalwarts that are left in the Demond community. And it was phenomenal. Like I got to meet, you know, you know, I got to meet Joyce Orsini, you know, I got to meet you know, Doug Hall, I got to meet you know Deming's daughters, you know, I got to, I got to meet Kevin Cahill, who's Deming's grandson, who still carries on the work of the Institute today.
I mean, it was, it was phenomenal, but one of the things that was, was apparent is that for they're, they're continually trying to reinvent themselves to keep this message alive, but it can't all rest on their shoulders. It is dependent upon guys like me to pick up some of these ideas, dust them off and say, how do we apply them to the 21st century? How do we apply them in our current context in time so that we don't have this, you know, where it's begins to slide and go dark again. It's dependent upon all of us to hold that tie back. It suffers entropy. Like any other idea, it suffers entropy. That's the best that I can, I can, I can explain.
I think you've given me a big insight. I'm going to try to articulate it and, and probably not all of it, but like, I'll do my best which is that I've never really understood the part about, you know it's the, you know, there's the systemic, and then there's the personal right? The part about the person.
And, and I think your story about Deming is starting to form that picture for me, because Deming is one person, right. And there are other one person's like, there's, you know, there's a Steve Jobs, like a lot of people who like are irreplaceable, essentially, like you, you have a leader or you have somebody who comes up, they have a fixed on an idea and they really understand it so well that, you know, you can ask them any question about, and they'll, it'll be natural to them to have the answer for you, but you can't replicate that source of truth somewhere else, right?
And what, what strikes me is that obviously these people came through a process, right. There was a, there was a path that they took. I'm assuming if I, if I met a 12-year-old Deming, he would not be as eloquent about the you know, the problem of incentives and management or whatever. Right.
So, so it, it strikes me that potentially that is the thing to look into. And, and, and the, what you mentioned about apprenticeship, it gets touches on that. Right. Which is that you kept just hope to sort of just teach with the idea of like verbally, or just like, you know, there's, there's the concept of embodiment, like, is a concept of, I can read about how to, how to ride a bicycle, but I, if I don't ride a bicycle, I'm going to fall, right. No matter how many tomes I've read, right. There's going to be some knee-scraping.
So that there's something there about, you know, putting people through pathways that you know, can, can stimulate the same or even better insights. Right. Hopefully you're getting ever better Demings. It's not just clones. Right.
That's exactly it that's exactly it. Like, we kind of like go into what we've been discussing previously. We can't evolve Deming's ideas or begin to apply them just by copying what he did. Right. So I, one of his one of the, one of the contemporaries, he had Ron Mullen who did a lot of on the statistical side theory with respect to Deming's work. He became an early, early ally, and he had a fantastic talk, but he started it off with a, I think it was a Japanese proverb. And it basically goes something to the effect of don't seek to do what to follow the master's footsteps instead, seek what the master sought.
And it's a very, it was a very, very profound way of saying, yeah, this is up to you. He's shown you a path, but you're not going to really achieve anything just by following that particular path, it's putting your own mind to work here. And that's where we in the west get really stuck. We're hung up on having concrete examples. We need to be taught through an example. If I teach you an example, you'll end up emulating the example, and you won't necessarily know how you got from here to the example, and then worse, I will go away and you will begin to have problems with the example. And you're like, well, great. Now, what do I do?
This brings to mind a somewhat of an anecdote that's always on my mind, it's like, really, it's kind of depressing, I guess maybe it has like an optimistic ending. I think as the Roman empire sort of dissolves, the, a lot of the schools of, of, of, of learning also sort of you know, kind of roll backwards at the very least. But they still have the, the, the, the, the, the trigonometry sort of ratios there, so they could design things and, but they also copied them. Right?
So they, they made copies and copies and copies. However, in every copy, like if you, anybody who studies, like how the, how will the New Testament where it became what it is like you learn this thing about the scribes, right. Somebody makes an error. That error goes into that. That same thing happened with those trigonometric constants and the, the, the, the gradually they started losing the ability to build buildings because the, the, the, the, the, the books themselves are unreliable, right?
So you, you, and the key problem was that they couldn't recover them, but they couldn't like originally somebody calculated where they had the methods and they could derive the numbers, but at some point, the number itself, the example in your, in your telling was the thing. And so long as you can take the example, right. But the that's fine, but the, but the example itself is something that, you know, in the telling or in the, you know, everybody will reframe it somewhat gets, you know, loses its potency. And then you no longer can, can, can it's no longer instructed because it was so...
It was, but the thing is like, you were doomed the moment you lost the formula, right? Maybe the examples, it looks like things are working, but actually you can't you that's just, just you know, it's predetermined what's going to happen. Right.
You lost, you lost your source. So it could be 300 years before you find out that you’re completely screwed. But the moment you lost your sources is the moment that the, your, your fate was sealed. I don't know, somehow that maps to the, to the, to what you were, you were at, you were mentioning.
Well, immediately, what comes to mind is variation, right? So I mentioned the four domains that Deming taught. Actually, I probably didn't tell you this, but the four domains of knowledge that he wanted you to learn about to be more effective, whether you're managing yourself or an enterprise, one of them is variation. Another one is appreciation for a system, psychology, and theory of knowledge, and they are all intertwined.
So variation is very interesting in this respect, because what you're telling me with the scribes cocking or the trigger trigger the metric functions that they're laying out, that how they get lost in translation over time, that's a pattern of variation that exists. So that, that got put from individual to individual and what they had interpreted and learned.
And so Deming used to communicate this with a fantastic, simple little experiment. He had a funnel and he had a marble and he put an X on a tabletop, and he would drop the marble through and say, okay, I want you to mark where it landed. And our objective is to get the marble as close to the X as possible.
Now, when we talk about, when things get lost in translation and transcribed, what's happening, there is he had rules. He had 1, 2, 3, 4, this is the fourth rule that you're describing. So basically what happens is we develop the mentality of the marble, landed, you know, maybe two inches Southeast of the X. Well, what I'm going to do is I'm going to move the funnel directly over where that landed, because my expectation is I'm going to somehow correct for that, and I'm going to drop through, and then it's going to move and it's going to move.
And he said an off to the Milky Way we go, because I'm literally chasing, I'm using the last reference point for a variation to try and compensate and get me back towards the X. That’s what happens.
Anybody who's built a deck where you use the last piece of wood to measure the next piece of wood, and you keep repeating that process, you know, how does your deck turn? Right, right, right, right. You've introduced inherent variation.
That's why it's so important to have some of these concepts because we're human and we're fallible. Even knowing these things, we're going to screw up. But it is in recognizing that we have these foibles that we try to guard against them. So when you have some knowledge of how a system can produce that kind of variation, all of a sudden, you're going to maybe do something a little bit differently, right. You're going to develop standards, operational definitions, that reduce the variance.
Now we could get into conversations. For example, of specification thinking is something in spec, out of spec and the contributions in the 1960s that Dr. Taguchi provided to us with respect to the Taguchi Loss Function, that changed like that, that blew Deming's mind so much that he incorporated it into his thinking.
He was like, I was there in 1961. I was there. I took in the, and it just blew my mind. That's where he, he was effectively saying in his papers, after that and into the new economics and just for the audience, just how that briefly changes things. It took, it took the concept of quality and moved it a quantum leap forward. Because before what we used to think was it was a very binary condition where I'm defining with my fingers here. This is in spec, but there's variation. That's occurring inside of that. So you'd have engineers designing things for tolerances. And so that will begin to move. And if it fell out of spec, then that's how we would know that it wasn't an acceptable part.
But one of the things that we found was what, how that drift occurred. There are thousands of variables and inputs that would determine how that actually occurred and what we were doing when we were trying to design a higher quality products is we were only satisfying meeting the tolerances within specifications.
Dr. Taguchi comes along and he says, what if we were to draw an inverted parabola, you know, kind of like this, you and instead we place at the bottom of that parabola. Now this is just an example. That's what we call the nominal value. That's what we want to improve toward-- that's, that's bang on. Now, what I'm going to see is in my processes and systems and tools, how close to this am I getting? And he would say, if we, if we undershoot, or if we overshoot, this is a much more systemic way.
It's not in spec out of spec binary. It's how well are we meeting the specifications? And there, what he would say is he would shade the, if we drew a a point on the parabola and drew a line straight down from it and shaded that in, that's what he would call a loss, but not just a loss to us, you'd say there's actually a loss to society because we're not developing something to a high standard of quality.
Now, how do we bring some of these ideas into what we do inside of technology is pretty obvious. Anybody who has developed a system knows that meeting requirements is not the end of the road. And in fact, it's, it's the road to ruin because how many times have we, you know, perhaps in our early careers, have we met the requirement and yet the customer is looking at us like we totally dropped the ball, or we're catching hell from a manager because of it.
The idea is, okay, well, let's strip that back. And what if we were to change your philosophy to how well are we meeting the requirements for the customer? And then you begin to see, well, that seems to sound a lot like agile, because we're continually running feedback loops to see if we're getting ourselves closer and closer to the nominal value that we want to meet for that particular customer. Like the philosophy of, of, of how we look at quality as a systemic systemic outcome, a lot of different inputs. And how do we manage that? That changes thinking.
And it's I mean, the, the, the, the, yeah, this idea is definitely a kind of constant, it’s kind of blowing my mind a little. I mean, to me, maybe immediately obvious is from a psychology point of view, right? If you have a team and you tell them you're doing great, your, your, your in-spec, cool. You know, what do they do? They relax, right. Like, oh, great. You know, we can focus on something else. Right.
Then of course, what happens next? You know, he'll do it for a while and then it'll go out of spec and everybody's like, ah, hair on fire, not something to really aspire to. And whereas if you, if you are analog about it effectively you, first of all, you realize the fragility of it, you realize the variation of it, right. Because it might like just naturally flicker and be like, okay, this is just what it does, you know, like it's not something that we I mean, we see it now actually with, with with with with, with, with the virus, sort of where people are, you know, there's going to be a peak, right.
Right at the peak of bustle measures get announced. Right. And then it goes down because, you know I mean, this is what it'll do. And everybody's like, great. The measures worked! Let's do more of them. It's like, you know, it's, it's, it's, it's, it's very, very reactive, right. And, and looking for an N equals 1 outcomes. Right. Okay. We'll get this and this happened, and therefore, this, this did that. Right.
So, whereas, you know, in our normal times we were like sampling, you know, millions of variables and confounders or whatever. Then when the crisis hits, we are like, throw whatever you can at it and see what happens
Well, exactly. And you will introduce more variation into the system without even knowing. Right.
Yeah. It's, it's, it's a lagging indicator, right? So when you look at, for example, case counts, like at least here in Canada, I track the case counts and the accumulation of uncompleted or incomplete tests in the backlog of tasks. And it got crazy for a while.
And what I had to realize initially was I was trying to see when the government would make different interventions into the system, they would introduce mandates, or they would introduce different control measures. And I'm like, this is complete naive control of a complex non-linear adaptive system. This is not going to work.
It's not going to work as intended. In fact, what's going to happen is we're going to get something called a compensating feedback loop. And it feels like when you, when the system pushes against you or when you push against the system, it pushes against you harder. And you get stuck in this fight where it's,
Yeah, I know I say more about it. This is a fact, this is a fascinating, fascinating concept.
Senge gave it this name in the Fifth Discipline, where he explains this concept a little bit more fully, but basically it's when, if we don't understand a stimulus that is coming outside of the system. So if we're interpreting, for example, a number, and this is a fantastic example. So the Premier of our province sees the number of case counts begin to accumulate. And so the first thing he does is introduce maybe an intervention saying, okay, well, we're going to introduce a mask mandate that should, that should nail it.
And then the system continues to do what it does, because this is a virus, right? So it's got a different system it's working within. Then there's the human based systems that we're working in as a society. And we've got these complex confluences and we don't fully understand them.
And so how are we interpreting the viruses behavior is we're sampling. So we're doing a sample within the community to be able to divinate a number. This is how many cases we've got. And the interventions that began to happen was you'd see the system begin to shift and change. And then the case counts begin to increase.
Well. So you say, well, what happened here? What happened inside of the system? And you say, well, they had a crippling problem where they weren't able to get enough tests done per day. So they said, well, we're going to increase the number of tests we're going to do per day. And so they did, they opened up some capacity and, you know, farmed out to different labs. And it seemed to work for a little while and then till it, until it didn't, because then the premier said, well, you know what, if we're testing, we're not just going to test symptomatic people. Everyone should be able to get a test symptomatic, asymptomatic. You feel like you got the sniffles. No problem, guys. We've got the capacity.
And so that had an immediate effect where it, the system began to press back because now you've got more and more you're outstripping the capacity of the system. So now the system is beginning to accumulate more and more load and the can’t process. And so now it's pushing back on him and he doesn't know how to interpret this.
The cases now are taking two weeks, three weeks to process people who are being identified as, as being positive may have already passed through the window, the threshold of being contagious. And so now you've introduced a new variable into the system. So you watch the system drop a little bit, and then it crescendo’d back up again. I was just talking with someone about this the other day in the month of September last year, it got so bad that at one point, I think what we climbed over the entire month of September when school opened and what it, what it began to happen was there was a fundamental attribution error that occurred because it seemed like the case counts were climbing when it was actually the backlog that was climbing. And it reached 93,000 samples that weren't able to be processed.
And nobody had an accurate picture. It was two, three weeks out of date. So they were already beginning to think that their goose was cooked. And they began to introduce another intervention. We're going to have lockdowns soon. So the, the, the thinking about introducing a lockdown to control this wave that was already moving through. I mean, you're, you're, you're responding far too late, right?
And these are naive measures. So you get locked in this dance where I can appreciate the Premier, the Minister of Health, you know, the health officials, they're flying a little bit blind to this because all they've got are visible figures and they don't realize the figures are coming from many different parts, many different systems, many different labs, not everybody's using the same way of gathering the sample and processing and doing the, doing the assays and how do they handle for false positives or false negatives.
So you've got in effect systems upon systems, upon systems that are filtering all of this and you're reacting to it. So this is where you get into the dance. I'll introduce a measure. The system comes back and the cases go up, all, introduce another measure. And so you push against the system and this system pushes back and we've been, we've been through this. I mean, like we've had three lockdowns.
It's, it's actually a very interesting one as well, from a startup perspective you know, AB testing. Right. And you mentioned before the, the, the unknown of the unknowables if you do an AB testing, you, you count positives, right? You count good convergence, you have a metric, let's say conversions. Okay, fine. Who clicks the button?
Are you getting a better kind of customer, maybe the people who are gonna look at your bedside place are more serious. You count it as a negative. Right. And, but to me, the thing that may be testing that I just cannot get out of my mind is like, you know, the, the negatives, if you can, you can maybe increase positively. You can force polarization, right?
So you can, you can maybe find the, the, the, the thing that will get the most people to like, immediately do what you want by also making, finding, but by signing a scissor statement, basically, right. By finding a form that will be, you know, some proportion will be enthusiastically pro while some proportion is enthusiastically anit, right?
So now you're creating, you know, you just, you just like lower the resolution, like aggressively basically. There's like you put them in a position where the title is yes or no where, so, but you, as you are converting, you know your chart is amazing, right. You are also creating a shadow population of haters that you can never really quantify. You don't know what's happening, you know what to say, maybe your, your, your, your revenue drops two years later. Right.
You don't know what, what did that you can, you can really never find out. Right. But that is something that is so out of your radar sort of radius that it's just, it's just, you know, you can all, maybe they'll get an anecdote and give, be like, ask whatever, but in reality, like you can, you can replicate that set up. Right. You can, you can make situations like that. And, and so we can, we can know it can happen. And yet if you're in that situation, you can never confidently say that that's what did happen. Right. So, so, and, and, you know, then there's a fundamental attribution error. So you're probably not going to accept that. And we're back to like, tweaking, let's insert commissions, I guess, sort of how...
Well, well, not only that you can have, remember each person is going to bring their own judgment and biases to the AB test results. So something is going to inform, you know, how they interpret, you know, maybe this isn't so bad when we put it into context, or maybe, maybe there was a mistake made in how we designed the test that promulgated these results, but each individual is going to be filtering that data differently.
So Deming had a very good expression about this, that he would say, get the facts, like what really, what is, what is a fact that we're going to be getting from somewhere, any two people. And that's just with two people, can have completely different ideas about an empirical fact, because it's based on their interpretation and judgment. And this is where this, this is the small little things that we begin to get if we're not aware of. So if we try to evaluate ideas, we think empiricism works. For example, as a fail safe against error or against misjudgment. It's not always the case because we're interpreting it through a particular filter.
So you know, the father of general semantics, Alfred Korzybski, your audience may be very familiar with him. He said, the map is not the territory, right. When I am interpreting something, it is coming through several different layers before it gets filtered into my brain, and I make a value judgment based on that. And then I'm going to be taking characteristic inputs that are going to be coming from my theory about what that test was actually telling me, what is the contextual contextual data?
Am I comparing just two data points or am I, you know, comparing a one that has more breadth understanding and knowledge has got temporal spreads. So I've got to be able to actually measure this and put it into a contextual frameworks so that I could interpret this. And then I'm going to share that theory, how are we going to design this test? And how are we going to interpret the results of this test that becomes your operational definitions for the work that we do? You know, how do we introduce new innovations and ideas and decide what to do on the basis of them?
One concept you seem to be touching on. I want to be mindful of your time. I probably should wrap up, but I have so many questions and I'm learning so much that I'm just going to, I'm just going to also to there I'm like, you know, like the, the guy at the booth, it was always one.
So you mentioned the, the, the, the concept of like the, the Western mindset, right. Which like, I have to be honest, like me three years ago would roll my eyes at that. I was like whatever, like, what's next? You know, are you going to do yoga? But I’ve come to find that I've come to hit upon that, like, as he, as he started to work on the thing about systems, right. Do you see, it's just constant like that, the numerization of all the things and the, you know, finding I've learned a new thing now, a new term yesterday that is just beautiful.
They use it in various medical studies. They call it like, it's a surrogate endpoint as in, I cannot get the result I care about. Right. Maybe it's too long before I find out if like the patient was cured. But I, there was some other thing that happens before that, right? Like the antibodies or the counting now the antibodies for, for, for, for, uh to see if vaccines work.
Well, we don't know if they're immune, but they’ve got more antibodies, so that's considered a surrogate endpoint. You get something earlier in the process. Right. But we know that for the, the history of medicine, but like things that have been approved with surrogate endpoints tend to have a terrible track record. So, so that's another, like, we, we, we know that whenever we do that, maybe we have a good idea for, we have a mechanistic model. And we're like, well, if you got this, then this is going to happen. We've got a story, right. That we sell ourselves, but we don't actually have that, that last data point. We just have the, the intermediate one.
But some of them convinced ourselves to focus on that one. Well, approve the treatment or whatever it is. And then, you know lo and behold, something about our story was wrong or that the system pushed back at us. Right. and, and it didn't actually play like, like we, like, we thought it would, or like we got the causality wrong, but it's, this is something that I, I feel like a person who has grown in, in, in this, in this culture, and I'm becoming aware that there's something else like that there's, you know, maybe not everything is words, maybe not everything is numbers.
Maybe things are, you know, like maybe it's okay to be told, to just jump into the ocean and like swim rather than being given like an extensive document with like all of the bullet points. Right. Then you're not going to be able to observe anyway, but hey, somebody got their ass covered, so that's fine.
So, so that that's, yeah, that is something that I, I I'm just coming up against it. And, and I'm, and I'm seeing, as, as you're describing this, it's almost like it's not like Deming taught the Japanese what he knew, but he was almost like a displaced person finding his is his true whose true culture where his ideas made sense because of every other idea that was there already or something like that.
Yeah. It's an interesting proposition. And it's discussed a lot in the Deming community about why were the Japanese so accommodating of his ideas?
And I saw an interview. So there was a guy who got to Japan before he did. So Deming went over to conduct a census post-war. And that's how he, you know, he's a statistician by trade, so he went to conduct these studies and it was while there that he began to realize he could apply some of his skills, which he had done for the United States in the war, but they dropped it all. And so he said, well, maybe I can teach you a little bit about how to improve quality with these techniques. But there was a guy who was there before he got there. His name was Homer Serasohn, and you can still find this interview. He, he has an interview with a fellow by name of Myron Tribus, who another really fascinating guy who was a he's got quite a storied career, but he was like a professor at MIT Sloan school of business, and he famously tried to interview Deming and Deming schooled him rather horribly. And he, he, he left the interview very upset and, you know, was, he said, well, I'll show him, I'm going to go into the library. And I'm going to find out about all of these things. And then he finds out no Deming was right and becomes one of his big advocates.
So I mentioned this because it's in the 1980s, it looks like it's the mid 1980s. And Myron Tribus is interviewing Serasohn who was there in Japan before Deming got there. And it's really fascinating, and you can find it on YouTube. It's a fascinating interview because he basically explains how he found at that time, just after the war, Japanese culture was such that you could tell them to do anything. And this kind of shocked me because it was my expectation that a lot of this you know, a lot of what I understand was a big influence on Deming, it was kind of like a symbiotic relationship? What Sarasota was communicating in this interview. It was like, you know, yeah. You know, like we had to get things done. We had to improve the quality of the, you know, immediately improve the quality of things on the ground. And so I just directed them. I told them what to do, and they did it. And I'm like, oh, wow.
So my mind was actually blown about this. It wasn't, you know, how do we figure out how to work cooperatively? How do we worry about the stuff that was not, no, none of that was being done at that time. It was very directive work. So Deming comes into this milieu afterwards, and this is why he's able to find so much traction. I think initially with the engineers, that was one of his original, early mistakes was he talked to the engineers and not the managers.
That was a pivotal thing though. Like that taught him a great deal, that he was not reaching the right levels to communicate his message. And what he ended up with was a problem with engineers being high advocates for the ideas, but never being able to implement them. So that began to change neutral things, but it makes me think very much of, of Japanese culture in that respect.
Like we always think that it's much more complicated. It's not so cut and dried. It's a, it's a complicated society. It's got hierarchical elements to it. It's not so it's not as well as what we think with Western eyes. When we look at Japanese cultures, not necessarily as we, as we might interpret it through, you know, movies or books, TV, et cetera. It's a little bit more a little bit more nuanced.
Now I've got colleagues or friends who who traveled to Japan. They will actually take in the before times, at least they used to take groups of people to learn about lean. And then as part of that, we're going to go over and spend one or two weeks in Japan and we're going to tour a number of different facilities. Toyota will be one of them. But we're going to go around and we're going to learn about the culture. We're going to learn about everything that makes lean in their understanding possible because it fits in that domain.
So when I talk about like the Western to Western eyes, to Western culture, why we think a certain way, it's just like in Japan, there are certain things, certain subtleties that we don't understand necessarily that sound very cool when we learn about them, you know, we're like, ah, you know, they've really got it, nailed down. They've got these fancy words to describe these subtle cultural practices that, you know, involve, you know, come out and these amazing, amazing ways. And, and what have we got know, but we, but we have subtleties as well. There is uncommunicated tacit knowledge and patterns that we've got. Just some of them, we tend to focus too much on what is in our face versus looking at the subtleties of how the, you know, how people work and how organizations work, you know, that they figured out over time.
One of my yeah, one of my favorite I've lived in different places in my life. I was born and raised in Greece at 24. I went to the U.K., I stayed there for 10 years. And then I, I moved to the U.S. when I was coming to the U.S. for the first time to raise venture capital. Right. That was like the reason I, I, I sort of came and ended up staying was, was, was sort of venture capital. And I did my early pitches for, for some people that I really respected right. Then [audio cuts out] U.K., very quiet, very listening, you know, speaking directly it's, it's actually surprised, like much more like, like a Japanese actually hierarchy matters, suddenly matters. Innuendo. There's a lot of that, right.
So I went to the U.S. and like, nobody could really understand. I had questions. I wasn't understanding them. But the punchline is, at some point I realized I got to get back to my Greek style for them to understand Silicon Valley. Because I gotta be like, how did those two worlds connect? But somehow that was an insight that like, it just came to me and then it clicked. Then I was able to much more communicate than using my U.K. sort of matters that I learned, but I just, I'll never forget how, you know, having, you know, these three contexts and how they, they mix and match. So weirdly.
That's perfect. I mean, like situationally, you found there were different, your different parts of your cultural experience that were better suited for what you needed to do to do pitches you needed to be direct. But you know, like we, we find that as well. Like when I was you know, early in my career it was impressed upon me when working with executives, brevity is best get to the point. You know, nobody's got time to, you know, go through the, you know, the subtleties and the nuance. Just say what you've got to say. And it's a very, it's a very North American thing.
I at least find, I find it definitely more pronounced when I was working with colleagues in the U.S. than in Canada, and we've got to kind of the same thing, some of us, some of the business communication here can be a little more relaxed. You might get away with an extra sentence, but it generally is, but it just generally the same thing, just get on with it, or right by that, that suggests, you know, like when you peel it back and you say, why do I need to, you know, I might lose something there. I, you know, if I begin to truncate things in my language and how I express myself, I'm actually leaving it up to him to be able to figure out what I meant. And this is where we get into classic traps where we believe someone's done something or promised something or communicated something, and really, it was just the brain being exceptional at filling in a blank. And we set that pattern up.
And why, why do executives need to work this way? It's because they have very little time to be able to process all the information that they need to go through day because we created email and that's just destroyed our ability to actually focus on anything on any given day.
So we gotta think about, well, what, what can we do? One of the first things, and this brings up, we've got, we travel in this conversation. But one of the first things that I encounter with with new coachees is I haven't got any time. And so the first thing that we've got to work on is how to figure out how to, how for them to reclaim some of their own time, because it's been given away to so many other people and so many other, so many other responsibilities. I can't begin to teach you how to begin to learn for yourself.
If you can't carve out an hour, an hour, an hour and a half every day where we get to talk, frankly if you delay that, if you say Chris, I can only engage you for one or two hours once a week. Well, the kind of change that you're going to be able to do with that while it's better than nothing is going to be very, very slow, because the points where we're going to have feedback loops are going to be delayed and so much is going to have filtered in, and we won't have solved any problems.
So the first problem is how do we expand? What is the biggest bubble of time you can create for yourself where you can shut everything out and think, just think you're, you may read something, you might cognate on something deeply, but it's free of other distractions. And then we're going to begin on working to expand that inch by inch until we get ourselves a good size bubble, where we can spend very deep time, because some of the things that are going to come out of our conversations are going to have nothing to do with the day-to-day pressures.
It's going to be, how do I deal with my interaction with myself? How do I start thinking about my thinking to improve and what am I going to apply these new ideas to et cetera, that's going to come later, but I've got to start somewhere. I've got to build traction. You know, so when I see that an executive is very harried into it, can't give me time, like, well, that's the system you're in, right? I mean, like, I, I may not be able to change that. So I'm going to work with you, I'll start with the square inch of time, and then we're going to see how big we can make that, because if you really want to improve, I've got to do this.
This idea. You, you you're, you're mentioning you've you've there's been a number of, of of points where we, we kind of talk about how the system sort of formulate the people within within them and how in particular you talked about how executives, right, have less freedom as they go upward, whereas they actually should have more freedom., Which I actually, this is something that I I'm a big sort of Elon Musk sort of fan. You know, I tell people like if I was a basketball player, I'd be idolizing Michael Jordan, I guess. And the what I see is that he is completely maverick, right? So my, one of my favorite CNBC segments which I watched on YouTube mostly to mock, but still I, I consume some of that content was Elon Musk, is the richest man in the world. Is he finally gonna start behaving properly? (laughter)
Like everybody else.
But the, the thing you see him like being a complete maverick, and I think there's something really important to that. I mean, I think he defends that extremely strongly like that he has complete freedom of action. I hadn't really thought of it in the organizational tree structure of you know, maybe as you are new and maybe working more directly, you are more constrained because you are absorbing what you're learning. Right. But as you learn, you're able to re-express and therefore you should have more more, more, more range. I think there's something really, really important in that. And I don't, I don't exactly know how to apply it, but it feels really fundamental.
Yeah. Well, you know, again, this comes back to how you're innovating, designing the operating system for balena, how we're learning about how people work in accordance with the system that they're in. So some of, you know, a large part of our conversation really revolves around that kind of nucleus that we respond to stimuli in the containing system. So in traditional hierarchy that dictates certain behaviors of certain patterns of behavior. This is the when we had our original conversation, when I brought up Deming's preface to the new economics where he says this book is for people working under the tyranny of the prevailing style of management and how he calls it a prison that we've created for ourselves. It's not something fixed. We did it to ourselves. So when I say that we lose degrees of freedom inside of a hierarchical structure, that's by design.
That's why you see when most people ascend into the C-suite. The first thing that they've got to do is do a reorg of some kind. And it's literally because that's all they can do. That's how you make your mark this time it's gonna, it's gonna work. And I've, I've, I've worked in with some organizations where, you know, like I had a gig for it didn't even get off the ground. It got stillborn because they literally, while I was talking with the, I think it was a VP I was going to be working with and they were about to have reorg number three, right under his feet. And he says, I haven't got time to talk to you. And I'm like, I don't blame you. You wouldn't. I mean, like the sea has changed one more time. So when, when that's all, you have the ability to respond to, you know, like you're going to set a grand vision, you're going to say, this is how the sea will be parted. And this is what, you know, this is how I shall command the boats. You know, that's what you get.
And that's rather unfortunate, like finding leaders that understand this differently. And this is what's really fun and engaging with you is because you're different to the leaders that I've actually interacted with. You're not predisposed to some of these, I, this baggage. You do have some of that freedom. That's built into what you're doing. And that's very, that's very apparent.
Like, as I said, when we look, when I saw what you were writing in the in the balena doc, I was like, wow, this is, this is really innovative because you're thinking very, very differently. You're not constrained by patterns and designs of the past. You're actually looking at how do I design something for the future? And you already have some very good ideas, some very good theory, and you're taking a lot of different inputs to, to inform that that's different.
So your degrees of freedom. And I guess that's the benefit of being a founder. You've got a few more right now, but you know, you're eventually, if you succumb to the pressures of shaping your organization to satisfy some of those outside forces that you were talking about earlier, that's where your degrees of freedom are going to begin to close back in on you.
What I've I mean, well, might be that we're just swimming in the same water, right? What I've come to appreciate is that these incentives, they come and they introduce themselves to you and they smile. You know, it's kind of like a sympathy for the devil that the song, you know, like allow me to introduce myself. But they are, they're short term. They're always short term. They're like they're like, you know, a hit of steroids or something, right. Where you will get something, but you will lose something. And that's, and again, it comes back to metric-ization, right? Like if you are looking for the number in the next quarter, you can sacrifice things next to them number, or you can sacrifice things after that number. Right. The future is always, they used to think sacrifice because you know, who's going to be there anyway?
So we'll figure it out when we get there, you can always make up something, right. We need this right now, no matter what. So, you know, I always find that these preppers, when they appear add what the way around these pressures it's understand that whatever you're going to get, whatever they're offering you is short term. And, and the true this blog post I read actually that I just keep, it keeps coming back to me. I don't even think it's on the internet anymore. I've looked for it and I can't find it. But it was talked to, it was called taking happiness en passant which is a bit of French, but basically I did and chess move you can make where you don't go straight. It goes sideways. Right. But you kill the thing in front of you. I'm just describing it for the audience because I had to look it up.
So you basically, instead of going into the same square of your opponent, where you take them off the board, you have to go diagonally, but you still take the pawn. And the metaphor that that blog post was making that is that happiness is like that sort of thing. You cannot acquire directly.
Like nobody gets out of bed and says, today I will be happy. And then they are happy. Like, you can take some drugs maybe, and they'll make you happy for a little bit, but that's, it's going to fade. And there probably is going to be worse. But, but a lot of people become happy by finding something that really matters to them and devoting themselves to it. But it's so weird. You get the thing that everybody wants by not going after it.
And I think that is I think that is sort of a universal rule for a lot of things that, you know, you cannot go as the Crow flies, there are boundaries. you're going to hit a wall. You have to actually navigate. And the navigation does not suggest itself to you. It's not, there's no, there's no arrows or anything like that. And really the real path to that thing is to follow some other, the gradient you have to follow the metric you're looking for is not the metric that you're, you're, you're going after. And this is something that is just over and over again, like we would look at the, you know, some of the richest people in the world are technology entrepreneurs. Right. I have a hard time believing that they started and said, I want to make a lot of money. Right.
What do I do to make a lot of money? Right. I love technology. I love innovation. I love whatever, ended up extremely rich. So I just think there's a very big class of such things that everybody wants. And the achievement of those things is not linear. It's not like direct, you, you can't, they cannot be had by those who seek it.
Yeah. So this is where, you know, at balena, at least we have first principals, right. We talk about short-term pain for long-term gain. We talk about you know, thinking about all of the aspects of a system. And a lot of these things are, come back to the fact that there are these little temptations that always show themselves and it always falls, but they always feel right.
So, but it comes back to what you were saying, actually that this is something that I've experienced directly. Right. And, and I know it to be true, but that's because of, of, of things that I've gone through. And, and, and the real question is like, how does that, you know, I was perhaps lucky, right? Like having lived in these three, three countries is not something I set out to do. It's not right. And now I can see something that maybe is useful.
But the question is, how do you, how do we I mean, I'm not, you know, I'm not really looking at myself as, as a, as a model, but there's a lot of other people who have accomplished incredible things. And you can either just wait for them to emerge and pluck them out of the population. Right. That's one way to do it. But if you want to be a little bit more directed about it, that's to me, the designing sort of the feedback loops or the gradients that would produce what you want.
I don't know what it looks like. I know it's not an MBA.
Yeah, no, I, I, that's what I've come to recognize. I've got friends who have MBAs and none of them are using the, you know, using it for what it was intended. It ended up being an accoutrement on the resume, you know, they're doing other things.
Now did they gain something out of the experience? Sure. I had really interesting conversations. My best man for my wedding, he, he did an MBA. And I used to have incredible conversations with him about what he was actually learning versus the reality, you know? And it was astonishing. It was a very big disconnect. He did learn some stuff about how to read balance sheets, P and L's and how, you know, corporate structures work. But he had, like, for example, an assignment where it was I think it was, they had to spec out an SAP installation and I said, so, did you get an estimate on what it's going to take to do that? Okay. So just take that estimate and conservatively, double it. That's what that's, what's going to happen in an SAP implementation. And he's like, really, you know, they, yeah. They just look at the industry figures.
There's a reason why these things go sideways. What is the point of it? What is the aim and purpose of a consultancy? It is not necessarily just help you solve problems. It's to establish a footprint in your organization to continually sell you solutions. Some of which you may not actually need. So when you, when you get hired to be an SAP consultant, be aware that you know, that you're not just there to help them implement a solution, you're there to go and see what other parts of the organization could benefit from more SAP.
There's no, there's nothing that an SAP implementation can solve, but I think what you're, what, what you're communicating here is, is, is quite good. I like the idea of the en passant capture that you are obtaining joy and you're, you're, you're obtaining this, this sense of fulfillment and pride not as going for the thing, but kind of getting it in passing. It's the consequence of all the interactions. I think that that's just, that's perfect. I mean, like that is actually, I think to arrive at this, when you talk about gradients and influences, I think that it takes a certain kind of experience to reach this point in your life.
So selling these ideas to somebody who's a new graduate who's been taught in the prevailing style of management is very difficult because they haven't had the knocks. They haven't had the experiences that tell them why these certain things are not desirable and how they keep you from obtaining what you want. They will misdirect you. They will confound you, disappoint you, demoralize you. And, you know, you only have to point to how many people do we know that were in investment banking that decided to go become bakers and artisans. They took what they earned. They said, you know, that's fine. I cut bait. And I'm doing my own thing now, you know, like that, that just wasn't satisfying for me. I wonder why that occurred, you know, and I, I, don't under I, that just tells me that something's happened to the profession and how we treat people in these organizations. And that's something I'd like to help change. I'm a little bit realistic that you know, it's my little dent in the universe to try and help a few. We'll see what happens.
All right. I think this is as good a point as any I feel like we could keep talking for for another two hours or, or, or 20 really at this point. But we gotta, we gotta draw a line somewhere. Chris, thank you so much for, for your time. This was just, I'm thinking I'm going to be thinking about this conversation for another week or two-- full intellectual meal. This may be a podcast for an audience of one...
Maybe, maybe, but boy, I, a lot of I've had so much fun. Our two conversations now... let's let's, let's keep this ball rolling maybe, and maybe have more focused conversations next time.
We can attempt it, but something tells me yeah. Okay. So thank you so much. I'm sure we'll do this again. One way or another again, very, very happy to have met you. Thanks. Thanks for all the, all the sort of gems of wisdom. Thanks.
No, no worries. Let me make a final plug before, before I sign off, I've got,
Yes. How do they get more, more, more of this?
So you can find me on LinkedIn. Chris R. Chapman you can find me on Twitter. My handle is @derailleuragile. So it's derailleur like the bicycle part, A G I L E.
And I've also got a blog on Substack. That's called DigestibleDeming.substack.com. Where basically you subscribe to this and twice a week, Mondays and Fridays, I publish a little blurb that takes a segment of Deming and makes it digestible for you. I'd take a few quotes. We talk about an example, a story, and ask a couple of questions, and then that's how you can get some of this goodness too.
Fantastic. All right, we will, we will put all these links in the description, the low sideways, whatever you're listening to this and find that accompanying text and you'll find that there's links as well. Chris, thanks once again. Thank you.
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by Andrew NhemAndrew is the Content Strategy Lead / Product Builder at balena, and enjoys tinkering on web content, building stuff, music, hydroponics, and homeschooling