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Episode 33 - Excellence in Safety & Operational Performance: Lessons from Alcoa, the US Navy and Toyota with Steve Spear

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In this week’s episode geared towards leaders, founder of See to Solve, MIT senior lecturer and award-winning author Steven Spear shares his rich knowledge of safety success stories to help guide you towards tried and tested approaches to safety. Learn from real life examples, from Toyota’s commitment to “coaching the coach” and late Alcoa CEO Paul O’Neill’s revolutionary learning culture to the U.S. Navy’s smooth sailing operations thanks to a connected task force. What better way to improve your safety leadership and safety culture than to learn from the original trailblazers?

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Real leaders leave a legacy. They capture the hearts and minds of their teams; their origin story puts the safety and well-being of their people first. Great companies ubiquitously have safe, yet productive operations. For those companies, safety is an investment, not a cost for the C-Suite. It’s a real topic of daily focus. This is The Safety Guru with your host Eric Michrowski, a globally recognized Ops and The Safety Guru public speaker and author. Are you ready to leave a safety legacy? Your legacy success story begins now.

Hi and welcome to The Safety Guru. Today I’m thrilled to have a real guru in operations with us, Dr. Steven Spear. He’s a senior lecturer at MIT Sloan School of Management. He’s the author of High Velocity Edge, probably one of the best books you can find on operational leadership, and definitely one that was incredibly influential for myself. He’s a winner of five single prizes. And the late Clayton Christensen was who himself was one of the most influential management thinkers of his time. Call Steve Spear in a quote saying, History will judge his thesis as the finest, most impactful thesis written at Harvard. Wow. And more recently, Steve has his lead and is co-founded Asea to Solve, which is a software we’re going to be talking about later on, which is really about bringing some of these principles from operational leadership to organizations. Stephen, welcome to the show.

Oh, Eric, thank you so much for the invitation. Really looking forward to this conversation today.

So first, let’s start out by hearing a little bit about your story, how you got interested in all these fascinating talking topics around operational leadership. And even as it pertains to the Alkozai, which we’re going to talk about soon to safety.

Yeah, it’s a great question. If I can jump to the end at the beginning, what we’ve discovered over the years is that. The difference between great, I mean, really phenomenally great and everything else is the ability of those with responsibility and authority to tap and harness and take full advantage of. The distributed and the collective genius of the people who are part of their enterprises now, I’ll get up to that. How do we get to this notion of distributed and collective genius?

So, I came of age when the US was transiting from one existential crisis, the Cold War, to another existential crisis, which was industrial competition, particularly from Japan. And as part of that generation that was aware of that new existential crisis, I was part of that whole bunch of young people who got curious about what was going on in Japan and why their companies seemed to be so much more able to generate and deliver value to the marketplace than their American counterparts, many of which had these long, storied, glorious histories.

When I started down this path, I think like many, I thought maybe there was a policy issue that the Japanese diet, their parliament made better law and constantly better rules and regulations than our Congress. And I think a contemporary audience could look at our Congress and say, well, you know, that’s a reasonable explanation. Right. And then there was some thought and there was a lot of stuff. I found a book. Coincidentally, someone had a giveaway pile on the sidewalk the other day.

It was a book from about nineteen eighty eighty-one, which was talking about cultural differences between the two societies. And certainly, there was. The question was Japan somehow just better at technology? Was this an engineering problem? Right. And I spent a lot of time kind of searching, exploring, prospecting for where to get a hook onto a good question as to the differences in performance and a good hook onto a potentially good answer. That opportunity to attach a hook came in the mid 90s when as a doctoral student at Harvard, which is where I met Clay Christensen, I had this really unusual opportunity to learn Toyota’s system as Toyota people learn it on site, embedded Karate Kid, very inductive Socratic method approach.

And what came out of that was that. All the explanations previously that people had given, and I think still give in terms of why the Toyota production system and lean manufacturing is superior and attribute success to. Tools, production, control tools, standard work, et cetera, et cetera, they miss the point that it was the behavior of people to be remarkably creative is in the course of doing work and then offline in terms of planning and preparing work. Now, the ability of people to be remarkably creative in terms of seeing problems, solving those problems and then systematizing, sharing what they’ve learned from that, and that this social dynamic was really the differentiator between Toyota and just about everybody else, and that the social dynamic of really, really locking into.

The innate potential of people to be genius, both in a distributed fashion and a collective fashion, that that rooted right back right back to how leadership behaved. And, you know, bringing this forward to today, what we have found is that when you look at organizations which seem to have performance, which is way out of scale relative to any of their counterparts, we see the same patterns emerging in terms of how leadership. Cultivates, nurtures and then grabs a hold of this distributed collective genius in their enterprise.

I love I love that comment. And it shows up many times in your book. And when we talked last time, one of the themes you really brought up was this very impactful sentence. Really ignorance is the real culprit. Tell me more about that, because I think that’s really the theme that’s driven across Europe, but also in all these high performing organizations.

Yeah, that’s a great question about ignorance. So, you think about the conventions we have in terms of solving problems and there’s the idea of a five y. It’s not that you necessarily have to ask why a problem exists five times. It’s not like I think the five has. Has two reasons, one, the people who are inventing this, they were saying, look, Steve, Eric, don’t be superficial in your analysis, asked why that’s good, but then keep going.

Don’t stop it. Once or twice, you’re going to get a superficial answer and constantly generate a superficial solution. So, I think that’s one reason they said five. Sometimes it could be 10, it could be 15. The other thing is the people who popularized this notion of five, why were Japanese and Japanese and the number five and in Japanese, one of its pronunciations is a homophone for the word luck. And so, they could have said four wise, but the homophone for the word four in Japanese or one of the homophones is death.

And that one’s a superficial four times. It is not really fortuitous what five shows some depth. And also, not only you are invoking death, but good luck. But anyway, this idea of. This this whole notion of asking questions and going and going and going until you get to the point of having deep understanding is just so fundamentally important in these organizations. And now this gets back to your question about ignorance is the real curse is that if you if you take your five wives or 10 or 15 wives. And you keep going at some point, you’re going to get to the and the real cause, which is we just didn’t understand why did you make A and B we just didn’t understand that the customer wanted B, why did you make it with a defect? Because we knew how to make it with a defect. We didn’t know how to make it without defect. Why did it arrive late? Because what we knew how to do, we know how to arrive late.

We didn’t know how to arrive on time. And so, if you start off. With the assumption that any deficiency is rooted in ignorance, then you’re going to keep asking the why, why, why, you know, beyond five, maybe to the point that you get to the thing that you’re really, really, really didn’t understand. And that’s where you have to invest your time and energy to come up with solving the problem with some discipline so that the consequence of the solution is not just sort of pasting over the symptom.

Mm hmm. But it’s the generation of some new profound wisdom. That’s what Edward Demming called it, very profound wisdom. The profound knowledge, I think, is the term we actually used new profound knowledge that has recurring use. So, if things go wrong simply, you know, you know, when you get through all your whys, because we simply didn’t understand, then the solution to every problem is some profound knowledge that has been gotten by seeing a problem, investigating it in a non-superficial fashion and coming up with a solution which is also not superficial.

I love it. And so, let’s transition to the Alcoa case study, because Alcoa, I think, is the late Paul O’Neill was known for having driven a phenomenal transformation from a safety standpoint. But what’s interesting is, is really your case study from in your book really talks about how is much more profound than even just impacting safety. It was really about discovering eliminating issues, problems and improving. So maybe if you could walk through some of the things that you’ve learned from Alcoa and what was their success?

Yeah, it’s great. I’m so happy to talk about Alcoa. I spent a lot of time working with those folks have great appreciation and infection, affection for them. And in particular, you mentioned the late Paul O’Neill, whose life was. Characterized. By service, right, and also some core values, and I just want to as a setup for the case and you’ll see how this comes to you want to tell the case, Paul had this fundamental belief that everyone, not some people, but everyone deserved to have a good experience and that the good experience should be all the time.

And we’re not talking pina coladas poolside. If you want it to work, work should be for you a rewarding experience where you’re at the very least, you left as good as you came in and ideally you left better. And so, Paul had this great sense of. I don’t know, egalitarianism or, you know, Democrat democracy with a small D. about what people were truly entitled to, but he also had this very optimistic notion that everyone was a potential contributor.

So, see as an impact the Alcoa case. I just want to as we get into this; I just want to do some anchors for the contemporary listeners like Alcoa. What do they even make, you know, that aluminum foil or whatever? So just to bring it up to present, you know, I think a lot of people noticed that Amazon in the last couple of weeks made a big deal about improving the workplace safety of their employees, particularly working in warehouses. 

So, I think the current injury rate, this is reportable events in their current rate is five point six. And what that means is for if you’ve got one hundred people, five, you know, some five can expect to be injured in the course of the working year. And so, their current level is five point six. The stated goal within the next few years is half. That’s a two-point date. Just want to go really high. Right.

So I’m glad you picked up on that, because if you can imagine what goes on inside an Amazon facility, it’s people moving boxes, boxes, little bags, moving boxes, what goes on inside and Alcoa facilities, people working with molten metal, which has a point that, let’s say of plus or minus fourteen hundred degrees Fahrenheit ingots, which can weigh many, many tons of things come out and coming out of extrusion dies, you know, sharp, fast whipping around and Alcoa starting point and the point at which they were having like this huge paranoia and anxiety about safety, their starting point was two point eight or thereabout.

So, Amazon’s goal is to get to where Alcoa started. So, it’s something to keep in mind. The other thing I’ll offer is that Alcoa End Point was near perfect safety with a reportable rate, something like zero-point zero seven percent a year.

Which is phenomenal, if you think about that industry, the hazards involved, I mean, anything that’s at-risk environment, that’s a phenomenal rate.

Yeah, it’s crazy. Look, I agree with you in just a personalized I think I mentioned in the book at a rate of, let’s say, two-point eight percent a year, the odds are that each year, you know, someone gets hurt, right? Because it’s two, three out of 100. The odds are that in the course of your career, 20, 30 years. The odds are you’re going to get hurt, right? Well, better than half when you’re down at zero-point zero seven percent.

You can go you have reasonable expectation that not only will you be heard in the course of a career, but you also have a reasonable expectation that no one, you know, in your facility will be hurt in the course of a career. So, these are you know, these really staggering differences, right?

So, tell me a little bit about how Paul O’Neill got there, what was the message? Because I think there’s a there’s a safety story around it, but there’s also this element around continuous learning. And I think that’s really the part that is really phenomenal in this story.

Yeah, that’s right. That’s absolutely right. So, Paul’s approach to getting from. You know, to something to nearly zero, it tied back to Paul’s values, right, which is. Everyone deserves a good experience, and everyone is a potential contributor. It also ties back to a point you raised earlier in our conversation, which is. The root of all problems is ignorance, right? So, in terms of safety, when Paul. Started asking the question, well, why is it people get hurt, you could imagine and again, alcohol at that point was well past 100 years as a company operating in a headquartered in a city where other high risk, high hazard, heavy industries that existed, steel, etc. Young people might have said, look, Mr. O’Neal, you have to understand with all due respect. And when you get that, of course, you know, when someone says no, you have to understand, with all due respect, they’re really showing, you know, respect to. Right. They said, you know, this is very dangerous, what we do. Right. You know, the point and the mass and the velocity and the momentum of stuff.

And Paul said, well. Is it in the mind of the aluminum to hurt our associates? Like, what are you talking about? No, it’s an inanimate object. He said, well. The reason then that were that were and I want to focus on Paul’s choice language, is that the reason we are hurting people, we, the leadership are hurting people. Are we simply don’t understand how not to hurt them, that what we know how to do is create conditions in which we can hurt them, in which we do hurt them, but we haven’t yet figured out?

What does conditions look like? So, they don’t get hurt while still doing their job. Now, with this idea that ignorance is the root cause of all things bad in this case of. Workplace hazard, rather than the source of workplace safety, Paul set up a system which falls into this. Pattern of make sure that if there’s a problem, it’s seen and seen early and often, if it’s seen that it gets swarmed both to be contained and also to be resolved.

And then whatever’s learned from seeing and solving the problem is what you learn is that the problem exists, which is good to know, because if I stumble, it’s a good point to say, hey, Eric, be careful, there’s a stumble point over here. But certainly, if there’s a resolution that the resolution be systematized so that this system benefit to the problem. And in the book, I describe these mechanisms put in place appropriate for a company, large, sprawling, international, industrial, pre-Internet, et cetera, that if an employee got hurt, Paul insisted that he find out within twenty-four hours.

Now, again, this is in an area of desk phones. No cell phones, right? Right. You know what? Why couldn’t they just text them? Because one, they didn’t have phones. And two, you had to make sure that you got to your desk to call him at his desk. But the other thing Paul insisted was that he find out from the president of the business unit in which my injury occurred. They start thinking about two things out of this one.

For the business unit president to know that someone had gotten injured in a remote facility. The alert system had to start literally immediately because the number of layers separating the president of a business unit from the person working on the shop floor, we once counted, I think it was like two dozen or a dozen, some crazy number. And this is all people calling each other on desk phones. The other part. So when was that kind of to activate the system?

Right away. The other one was. Paul kept coming back to it’s the responsibility of leaders, those with authority, right, to create conditions in which other people can succeed. And so, he didn’t want to get a report from somebody else lower down in the chain of responsibility he wanted from the business unit president. The second piece again, and this is around both the activation speed, but also making clear who was responsible for the conditions in which other people operated within 24 hours.

He wanted to know from the business unit president what initial inquiries revealed about the source of the problem and possible corrective action that forces very rapid learning. Right. Because now you’ve got an executive who’s very interested in making sure I understand what happened.

Absolutely. Absolutely. And if I can add one point to that, when I wrote the case for the book, look, it came out of knowing Paul and I had the good fortune of knowing Paul for the better part of two decades. I consider that a real blessing and also got to know a lot of other senior leaders, plant managers and other people tasked with spreading this type of thinking and doing within Alcoa. So, when I wrote the case that I think I wrote the case study from their perspective, not surprisingly, more recently, I’ve had a chance to think about the perspective from the shop floor, which I also had experience, and just I don’t think I gave it nearly the credit and the people working there.

I don’t think I think I gave I don’t think I don’t think I know I didn’t give them the credit they deserved but started thinking about what Paul did with this. And it gets back to this sort of very sort of. Egalitarian, democratic, optimistic view of all people, right, is that. Kind of the terroristic view of management and labor is that management thinks, and labor does right. And Alcoa and I say, Paul, but I think it’s really true of Alcoa as a as a community, as an enterprise.

You know, senior junior here, there, Alcoa adopted the attitude that the person doing work. Had it had an enormous amount to contribute by use of his or her intellect and that his or her intellect actually was the best tuned to recognizing that something was amiss, because, you know, I mean, you know, everyone knows this, that the closer and closer you are to something, the more the subtle the subtlety, the more the nuance, the more the detail that you can perceive. And so, this whole approach at Alcoa of this rapid acceleration, escalation of problems started with the assumption that the people on the shop floor actually had a lot to say. Right. And this idea that they had. The right, the obligation, the responsibility, the opportunity to call out. Hazards and risks, I think, was a very positive statement about this inclusive view of management, the fact that they had an opportunity to trigger and participate in the investigation of the cause.

Again, I think reflected this very inclusive, egalitarian view of peoples and a potential to be creative. The fact that those associates were part of a team that both help construct corrective action, sometimes that took some really deep technical work, but were there to validate it. Right, because at the end of the day, they were the ones who had to use and depend on the corrective action. Again, I think reflected this very egalitarian view that everyone has in a creative potential to contribute to the larger enterprise.

And we start considering that view of the workforce that everybody can contribute to a distributed fashion, their genius. And everyone, if we go through this, see a problem, solve a problem and then systematize that everyone can contribute their distributed genius to the collective genius. That’s really an outrageous statement by the head of a large, heavy industry firm in the early 1990s.

It’s phenomenal. And I think the other element you touched on briefly as well is the impact of alcohol. Obviously, Paul had had to share to the street that he wanted to drive an impact around safety. And it was really a rallying cry around it. But it improved operational performance, financial performance as well.

Yeah, 100 percent are. You know, when it gets it gets back to a point you made right early on, which is the root cause of our deficiencies is ignorance and nothing else. Right. So, the attitude within Alcoa was that. When you finally found out why someone was facing a risk or a hazard. The reason was the situation was understood well enough to present them with the risk or the hazard, it wasn’t well understood enough to present them with a safe operating environment right now.

Of course, if you’re ignorant about a situation that is risky and hazardous, you’re probably ignorant in ways that will express itself in terms of impact on quality, impact on yield, impact on timeliness, effectiveness, efficiency, etc., Look at ignorance. Ignorance is a non-discriminating, and it will affect all aspects of your life, not just one or two, where you’re great at everything else. And so, this using safety as a hook to recognize, acknowledge and then attack ignorance meant that you were recognizing and attacking.

The fundamental causal factor for all the things that you right, and I think that’s to me, the power of ACOA is an element of obviously there was this deep-rooted desire to create an environment that wouldn’t harm anybody. But he also knew, because I’ve heard some executives question, how is it that he went to the street and said, we’re going to focus first on the unsafety? And how did anyone tolerate it? I think is my assumption is he understood that by removing the ignorance, by learning how we could get better, everything would get better.

That’s right. So, he got that. And look, I knew Paul, like I said, for a long time, long enough. I can consider him a mentor, you know, not just an acquaintance or a famous guy, but a mentor. And Paul is really an interesting character because on the one hand, he had this phenomenal brain and analytical capability that was just off the charts. I think he was in some fashion involved with the Rand organization. And at Rand, he was probably putting other people to shame regularly. But he doesn’t have this ethical element. And I never got it to Paul’s personal history enough. I know a little bit to get a sense of where it came from. But this view that as a as a leader. You’re responsible to everybody over whom you think you have authority, that authority and responsibility are not ever decoupled. And I would just offer this is that if we look at the UN, the consistently exceptional organizations, it’s common, not uncommon.

For the people with authority to realize that they also have this integrated responsibility, responsibility that can’t be decoupled from the authority. I mean, I certainly saw that at Toyota through and through and in the military organizations where I’ve had. You know, close familiarity over about the last decade or more, and the ones that are the high performing ones, leaders view authority and responsibility as tightly, tightly coupled.

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Right. So, you’re talking about military, why don’t why don’t we pivot now to some of the work you’ve done with the U.S. Navy? Sure. There are some great examples of it within your book. But I think as well, some of the work you’ve been touching more recently on the USS Mason is worth touching on, particularly because a lot of people deal with a very distributer organization. And I think a lot of even if I think on the safety space, a lot of people have a sense of how do I manage it when there’s a shop floor where I can see everybody?

But they in the U.S. Navy have got incredibly distributed workforce, how I influence them to make the right safe choice when nobody’s watching is incredibly challenging, yet essential. So maybe if you could get into a little bit of your work there, I think that would be really beneficial.

Yeah, you got it. So as far as the reference in the book, I have a case that I think a Chapter five or so about Admiral Rickover, who really was the father of the Navy’s nuclear program. And it’s an interesting pairing because the Paul O’Neill case is a Chapter four and then Hyman Rickover is in Chapter five. And you see with Rickover also this. Incredible, paranoid, passionate, hyper energetic. Attack on ignorance as a source of anything that would prevent the Navy from fielding nuclear propulsion, that was.

Nothing less than short of perfect in terms of safety, reliability, et cetera. Anyway, I do encourage people who, again, especially on the topic of safety and issues like that, that the U.S. Navy over the. It’s experience with nuclear propulsion, which goes back to the mid 50s that there’s been forget loss of life, there’s been no injury nor environmental harm due to reactor failure on board a US nuclear powered ship. And I think, you know, people old enough to remember that the Soviets would be losing a nuclear-powered submarine every year or two with great tragedy for the crew, the crew’s family, that fleet that lost the ship, the seas where the ship was lost, et cetera.

In terms of the reference to the message, I just want to be clear, I have it’s a great example. I’ve actually done other work with. The Navy and in terms of some of his. Issues that some of its different fleets have had, but the Mason is a great example where not where things went wrong, but where things went right. So, here’s the setup. The Mason is a destroyer, which in the scheme of things is one of the smaller ships that ever gets it tied to it gets attached to a task force.

And people are aware of the. The aircraft carrier, the 70 some odd, you know, catapult launch planes, Top Gun, all that stuff. But turns out there are these other ships that make the aircraft carrier its presence possible. You’ve got the cruisers and destroyers which do all sorts of things in terms of creating a cocoon of safety within which the aircraft carrier can operate and so on. One of these destroyers, of which there are many, is a ship called the USS Mason, and the Mason happened to be assigned.

This is October twenty, sixteen or so beginning of the month. In the straits that pass right past Yemen, across from Ethiopia, going into the Red Sea, right. And in the course of that. Week, the first week of October, the Mason came under attack three times. You start thinking about it know that, you know, got out of there unscathed, well, let’s just think about the counter to counterfactuals. What if one of these attacks had damaged the Mason right?

That immediately becomes a presidential problem. Right. What if one of those attacks since the Mason definitely become presidential from now you start thinking about this. This is October twenty sixteen. So, it’s right before the election. This is President Obama. And you got to think that President Obama, you know, let’s say the 3rd of October, he didn’t go to sleep that night wondering, gee, I wonder how the US nation is doing in the straits going into the into the Red Sea.

Right. Wasn’t on his pun intended, wasn’t on his radar at all. And he probably would have been really, really sort of this, you know, upset, disappointed if he had gotten, you know, a nudge from his national security adviser. Sir, you have to wake up now. There’s been an issue with the USS Mason transiting in the straits near the Red Sea, but for whatever else aggravated President Obama in early October. Twenty sixteen.

It was not the USS Mason. It didn’t get hit. It didn’t get sunk. It didn’t act in retaliation and caused civilian casualties. It went about her business. They asked the question, how is that possible? Let’s set it up even further that the USS Mason was the commanding officer, probably was in his or her early 30s. Right. It’s not that old in the scheme of things. I mean, when I was in my 20s, 30 seems like so mature.

But, you know, now that 30 is that, you know, not at all experienced and in fact. Oh, you know, let’s think about the things that wake up the present. Right. So, you’ve got the damage to the nation, the sinking of the base of the Mason Overreacts or the Mason Flea’s writing, all of those all of those are a wake up for the president. And none of those happened. The Mason just you know, I don’t know what the nautical equivalent is of stood her ground, but she stood her ground.

She didn’t leave and she didn’t leave because her commanding officer was running the ship in such a way that the Mason was able to respond appropriately and effectively and efficiently. Now, the other thing I want to put in my mind here is that, not surprisingly, a warship is a 24/7 operation. And there are times where the commanding officer of the ship may be the commanding officer of operations in the moment, but that commanding officer has other responsibilities, has to eat and sleep and take care of all of those things.

And it turned out that at least during some of these three events when the Mason was under attack, it wasn’t the commanding officer who was orchestrating the response. It was the officer of the deck, now the officer on the deck, and not even the executive officer, who also is almost a peer of the commanding officer. The officer of the deck is typically one rank below a few years younger. So now we’re talking about this very expensive ship in harm’s way being commanded in the moment by someone in his or her late 20s and handled the situation in such a way that no one bothered to tell the president.

Right. At least not wake him up with a real concern. Now, you get into the question, how is that possible? Well, you have to think about the enormous, enormous capability of the commanding officer of the executive officer of the tremendous capability that they had with the help of others obviously built into their crews that the officer of the deck was running that particular watch could conduct themselves with such effective effect, effectiveness, efficiency, poise and calm in the face of potential harm.

It’s really quite remarkable that that capability is so far flung across the world when you consider the distances from the Naval Academy, your ROTC programs, the Naval Yard at the Pentagon, this far-flung capability to. Act in the right way, the character to act in the right way, and the connectivity that in the course of action is both the extreme delegation of responsibility and authority, but also connection to the task force and the task force fleet in the fleet to the Navy that.

That commanding officer in that executive officer and that officer of the deck, they were never alone. They were never alone, tremendously capable, very high character, but also connected. So, they were never alone.

Right. And I think the other part you share predominately in the book is really around how the U.S. Navy does incredibly well. It seems similar to what you talked about with Alcoa seeing opportunities, solving them and then sharing and embedding it across the fleet. Can you touch on that briefly in terms of how that plays into this as well?

People in the Navy have told me so if there’s any Army listeners on the line here. Yeah, not me. This is not a go navy beat army kind of thing. All right. Not at all. But what naval officers? We’ll explain is that for most of the Navy’s history. Not only didn’t they have control of their distributed forces, but they also had no contact with them. True, because, you know you know, if you ever seen that Russell Crowe, master and commander or whatever, that is.

Right. You know, when that dude left port with a wave goodbye from the queen, you know, he carried orders basically, which said to the effect, you know, for the next year or two or three that you your ship and your crew are. A way to act on behalf of the queen, you know, right now, you know, or, you know, in American parlance, you know, act on behalf of the nation.

Sure. And, you know, for the entire period that ship was gone, it’s very possible that there was no contact with anyone senior and it was all the captains. So out of fairness to my army friends, the truth is back before the invention of telegraph and radio, when you send someone over the horizon on a horse, you also had. But I think I think what’s fair about the Navy is the eventual distances were very great in the period.

A separation was also very long. But this is not army. You know that the army always had this very tight sort of, you know, a tail. Rustic Command. Control. All right. So anyway, I just want to make sure I’m not trading on a green blue thing here. What’s been explained to me is that a service with a history of sending, you know, ships and crews off, unable to supervise them meant that when you sent them off, you had to have really great confidence in their capability, in their character, because once they were over the horizon, there was literally nothing that you could do for them because you just didn’t know Backyardigans problem, the point of emphasis that the same instructors have given me and said, look, you know, now we’re in the age of GPS and rapid communication satellites, this thing that things said.

But in the moment, there was no. On the fly support you could have given the CEO, the XO or the officer, the deck of the Mason, things were happening too fast, right? That there just wasn’t time to escalate this up to this task force or the fleet and certainly the Pentagon to say, what should I do? Right. That you had to have that capability, that intelligence, that genius already developed and dispersed around the world.

So, you didn’t have to wake up President Obama with the sinking of the Mason.

Right, right. Right. So, again, there’s this element of driving, good decision making, but also trusting people to make the right choice, similar to what you were talking about, Alcoa, this strong belief that I’ve got the right people there.

Yeah, that’s right. That’s right. And a belief which is validated by the huge the huge investment in building that capability and selecting people on their character. I mean, I just tie it back to Alcoa because it’s such a good example within our call. You know, I mentioned this these mechanisms for getting the system activated around a recognized risk or hazard, so. You know, we talked on the positive that if someone is at risk or hazard, that the problem is seen and then escalated to within 24, Paul O’Neill made a point when that escalation didn’t happen, once happened that the escalation didn’t occur.

He found out about it in a very sort of awkward, embarrassing fashion. He fired the president of the business unit. And to be clear, you know, normally when you fire someone in an organization, you say, oh, well, you know, getting the ball up here. And no, no one I care. Bob has chosen after a glorious career to leave so I can spend more time investing in this family and his community. Right.

And when this guy, the head of the automotive business unit, left Paul O’Neill in a particularly. Franken parsimonious say, Bob, we fired him. Why do we fire dudes a bum? Why is he a bum? Because he had an obligation to make sure that if a problem was recognized, it got escalated, as was the investigation and the resolution. And he didn’t do that. And because he didn’t do that, he left other people exposed.

Right. A similar risk and hazard. And that makes him a bum. And we’re firing him. And if, yes, he can spend more time with his family and invest more time in his community. But that’s not why he’s leaving. We’re fighting him because we’re firing him because he’s a bum. And anyway, you get the reason I bring this up, he gets back to this issue of trust. Right. Which is it’s a validated trust that Paul O’Neill and his senior leadership spent a lot of time checking the character of people that they could trust them with these?

Really, in some cases, life altering decisions and made sure that they had the capability and the support that when faced with such decisions, that they had both the technical capability authority, the responsibility. And the support back to the mother organization. They needed technical support and whatnot to do the right thing. What we see with the Navy, with the Masand example, is this tremendous investment in capability, this tremendous develop screening, but also development of character and also this connectivity to resources that if you really find yourself in a situation where you need help, you can ask for that help.

And that becomes a recurring pattern. You know, we’ve got it. We see it in the Navy. We see what they’ll call us. Certainly, we see it with Toyota around developing of capability, screening and development of character. And then this connectivity, too. So, you brought up Toyota. I think it’s a good transition. There’s a case study that you wrote. I don’t think it’s the one specifically in the book, but there’s is a separate one that I remember picking up. It was also a Harvard Business Review article a while back. And it really has to do with the onboarding. A new leader at Toyota and the investment in coaching the coach, which I think is phenomenal. I’ve never seen anywhere else that level.

Can you touch on that briefly? Because I think that’s also key is really how do you get a leader to become a better coach?

Yes. So that’s great. So, the case you’re referring to is about this fellow, Bob Dallas’, who went from a fairly senior management leadership position at one of the Big Three to Toyota. And, you know, the irony is that the reason he went to Toyota is he wanted to work for an American based manufacturer of cars. I mean, that’s funny, but the Big Three were, you know, sort of going offshore and elsewhere. And Toyota, I think now is maybe the second largest automaker in the in the continental US or North America.

Anyway, it’s crazy. So anyway, and if anyone wants to read that, that that that case, I think a chapter not in my book, I’ll make it available, a copy to you and you can put it up on your site and what other people can just click and download it. But the storyline there is you have this guy who’s phenomenally skilled, has got all these advanced degrees. You got all this great accolades and experience, and yet they don’t slot him into a position when he shows up, he goes through this 12-week onboarding mentorship. 

And if anyone has seen either the Mr. Miyagi version or the Jackie Chan version of The Karate Kid, it’s wax on, wax off his jacket on, take your jacket off. Kind of like that is steady, steady introduction into ways of thinking and ways of doing which. And for this very accomplished guy you didn’t understand. And as people read through the case, and I don’t think this is a spoiler, so no need for an alert, he learned a lot about the technical aspects of seeing and solving problems, really, really high accuracy and acuity.

But one of the things he also came to appreciate was the. The critical importance of group leaders in a system in which you’re trying to. Develop and then take advantage of the distributed genius of the enterprise and the way the case ends, one of the surprise endings is that he realizes that to fix them. Production processes to which he was first exposed, the solution wasn’t technical, the solution was social, right. And the social solution was building capability in the group leaders who could build the capability and the team leaders who could build the capability and the associates somewhat akin, I guess, to the USS Mason story.

Right. Which is the Navy realizing they have to build a commanding officer who can build the capability of the officer of the deck chair.

And I think that the part there I mean, the 12 weeks is unheard of perhaps in the military, but unheard of in industry. And from what I remember of the case study, it starts where he was driving Problem-Solving at a front line and eventually became coach to the coaches. So, his coach to the other leaders. Right. So, he’s a very thoughtful progress to force somebody to really start thinking about how do I influence in a senior leadership role other in terms of how they show up?

That’s right. That’s right.

Right. Yeah. It was really, you know, that Chapter nine kicks off with this case about this fellow, Bob Dallas’, who has this huge epiphany that his job as leader is building capability of others, and then it has these other examples. So, there’s an example of the. The president, the leader at Toyota’s Indiana plant, a fellow great guy, I met him and that he was usually generous with his time to me full named buffoonery. And, you know, his daily work included making sure that this cascade of capability was going on.

So, every day, you know, Norm had his you know, his very quick morning meetings, morning updates. Then he went on the floor. But it wasn’t an arbitrary management. By walking around, it went very specifically to a significant Problem-Solving improvement undertaking. And he went with the entire chain of command that connected him directly down to the group leaders who were leading this effort and. You know, as a recount in the book, he is there maybe to lend some perspective, technical expertise, but what he’s doing is making sure the dynamic is working right, that the group leaders are capable of engaging team leaders.

And the reason they’re capable is because they’re being engaged by their assistant managers and their managers in the area, managers and the general managers, all the way up to all the people that link Norm directly with the shop floor. And then there’s other examples in there. And I just this is just sort of what they call it, a movie. A trailer is a great example of a very senior Toyota executive turning a car into a post-it notes at Pinata.

Enough said, read the chapter. I think you’ll enjoy it.

And I think the other part that struck me is a lot of the improvements they were trying to find ways to improve the quality, but also productivity, but also safety of ergonomics depending on the circumstances of the work. So, there was not a limiting belief of I can only fix one dimension. It was let’s improve all three, not only like 100 percent. Right. But it’s a phenomenal point. It reflects the sort of fundamental optimism, but also humility of those people who are really, really good at this.

And when I say those people are really, really good at this, it’s a few. I mean, look, everyone has this potential, but I think very few actually exploited enterprise wide. So, the optimism is that when we look at a situation which is just littered and infused with our own ignorance, the optimism is that as we convert that ignorance into profound knowledge, we don’t have to worry about trade-offs, at least not as we’re going through this ignorance into knowledge transition that we can improve safety as we get smarter and as we improve safety because we’re getting smarter about the situation.

We can improve productivity and quality and timeliness and yield and not or let me just offer back that this is I don’t know where people get these ideas. If you go back to Henry Ford, he was also a humble optimist that when he talks in his book today and tomorrow about how they can press the time to make a Model T from, you know, weeks down the days. His was an end and end story of right, we didn’t know how.

So, we investigated by investigating, we got smarter about getting smarter, we improved quality and we investigated, and we got better and at efficiency and that yield and that safety and that cost, et cetera. So that’s where this optimism comes in, is that when we’re in situations, the situations are not trade-offs, situations of HRP. It’s a learning situation and we can get better at A and B. So that’s the optimism. I think the other part is I think in order to learn, you need some humility to admit that in a situation there’s a lot more to know than you currently know.

Right. And again, it ties back to the optimism, which is I may be as dumb as a rock today, but I’m not going to be dumb as a rock.

Right, exactly. And I think this is really, to me, the theme between all three of the case studies and really appreciate you sharing them between US Navy to the leadership scenario is it’s really about how do I tap into the greatness that I already have and how do I I focus that to improving the operations in a broad sense. Right. So, it’s heard it’s talked about in the safety space, but it touches all three dimensions of Toyota, one all three dimensions, US Navy, all three dimensions.

It’s really not let’s go fix this one problem. It’s really this sense of learn and become better. So, I think is for normal case studies.

Yeah. Let’s go recognize where we don’t know and correct for that. And if we correct for that everything else, it will be a second and third order. Positive effect. Yeah.

So, so I think these are phenomenal stories. One last question, Steve, is you recently kicked off you founded a software to solve, which is a fake CBS dot com. Can you tell me a little bit about it? Because it’s really about bringing some of these concepts to life, getting organizations to see the opportunities and channel it to a solution. 

Yeah, that’s right, look, you’ve had this experience and I have had also where you really have just phenomenally good fortune of meeting people who have the combination of humility and optimism, humility that things aren’t as good as they possibly could be, but also the optimism they can be much better. Right. And they also in their own way, maybe they were influenced by Toyota, maybe by America, or maybe they just sort of stumbled onto this learning dynamic on their own.

And there are certainly plenty of people who discovered how to discover on their own. And they go in to try and make this. This learning dynamic where it’s very easy if you recognize something amiss to call attention to it, and that if you as if you as a reporter call attention to it, that someone will respond with the necessary technical or other expertise, but also that those managing the system will be acutely aware, Real-Time, of where problems are being seen and how effectively they’re being solved.

Right. Because as a manager, you want to know both. Right, what problems that I have, but also what’s my cape? What’s the capability of my organization to dynamically digest these things? What we discovered is that even in places with absolutely, positively, 100 percent unadulterated good intent. Right. And also, you know, one hundred percent absolutely, positively unadulterated, a good mindset and behaviors that sometimes it is just impossible by the situation for a problem to be seen and solve quickly.

And why is that? Because you have these workforces which are distributed, and you start to start thinking about any facility of any meaningful size. Know, you got the person over there in the northeast quadrant and the others in the northwest quadrant that are right. And not only is the workforce possibly distributed, but they may also be mobile. And the combination of distribution and mobility means that visibility of what’s going on, you know, quote unquote in the field, in the facility, visibility is poor for responders who actually want to respond and be helpful and to the managers who would really want to have a rich, real time sense of the pulse of things going on.

So, what we did is we created a very simple app, simple to use. My tech guys would say, hey, it wasn’t so simple to create really quick and easy. And what we do is we give those people, the reporters, that those people who are distributed in mobile and otherwise not connected could be on a phone, could be on a tablet in about ten seconds to say this is who I am, I’m having a problem. And that could be the bare minimum.

And then it can also be where am I having the problem? What’s the type of problem? Here’s a quick picture of it. But we’re trying to avoid these outlandish reporting systems which require in the course of work for you to disrupt the work and then start filling out field after field after field on a keyboard or with your thumbs. We just want you to three, tap, tap, tap, take a picture, boom. You’re done. Right.

And immediately, immediately, the reporter finds out that you, Eric, are having difficulty and need support. And this doesn’t necessitate them going into a reporting system and looking for this report. And that report is just it just pops up right away. And that the manager also has nearly immediate and certainly real time constantly updated awareness of how well the system is behaving. So anyway, that’s what’s key to solve is it’s a way to provide. It provides connectivity quick and easy so that you have visibility quick and easy, so that you have this.

As I was remembered, we’re talking about capability, character and connectivity that you have the connectivity for those who need additional augmentation, that capability, they get it right. So anyway, if people want to come visit the site, see to solve and we’ve got a little do it yourself demo, you can set it up and just play with it at home or, you know, with some of your colleagues at work.

Thank you. I really appreciate all the work you do around it, really creating better learning organizations around operations that continuously improve. As I said at the beginning of your book, High Velocity Edge, if you haven’t read it, absolutely must pick it up. It’s probably one of the most influential books I’ve read from an operational leadership standpoint. So, so phenomenal book. Phenomenal stories. Thank you so much, Steve, for coming on the show and sharing your wisdom.

I think that’s very flattering and you’re quite welcome and I just want to say thank you because, look, the stuff that concerns you about safety specifically in operational excellence more generally is so profoundly important. And the fact that you are amplifying the message that much better is possible for everybody. I mean, you’re spreading the good news, man. You’re spreading the word. And so, I think, you know, I want to say thank you for being that megaphone on these such important ideas, which I think fly in face, fly in the face of sort of the stylistic cynicism that people carry around.

And this is this is a very optimistic, optimistic message. Yes. In a very encouraging message that you spread. And I’m so delighted that you do this.

Thank you so much. And I really appreciate what you’ve shared. So, again, thank you very much, Steve. And I hope to be in touch again.

Yes, sir. Thank you. Take care.

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ABOUT THE GUEST

Steve Spear DBA MS is founder of SaaS firm See to Solve LLC, is a senior lecturer at MIT’s Sloan School and is a senior fellow at the Institute for Healthcare Improvement. His work focuses on managing complex enterprises so they can get the maximum benefit of their associates’ distributed and collective intelligence. He’s author of a number of influential works including The High Velocity Edge, “Decoding the DNA of the Toyota Production System” and “Fixing Healthcare from the Inside Today” both award winners from Harvard Business Review, and articles in Annals of Internal Medicine and USNI Proceedings. He’s been advisor to the Director of the Army’s Rapid Equipping Force, a Secretary of the Treasury, the Chief of Naval Engineering, and the Chief of Naval Operations. His worked has influenced the creation and deployment of the Alcoa Business System, DTE Energy’s operating system, and operating systems at healthcare at Intuit and Intel. He has degrees from Harvard, MIT, and Princeton.

More Information: http://www.thehighvelocityedge.com/

See to Solve: https://seetosolve.com/

The High-Velocity Edge: How Market Leaders Leverage Operational Excellence to Beat the Competition by Steve Spear

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