Sharing Practice: Whats next? From incremental to exponential growth

Speaker A So good afternoon and I'm going to have some notes here because I want to make sure that I don't lose any bits and pieces tidbits of this story. This is a client of ours, and I told the CEO last week that I was going to be doing this here. And he said, Fantastic. He said, I have a request of you, and that is tell the story. Tell as much of the story as you want to tell. He said, It's all open and I'm willing to share it. And he said, But I do want you to ask a question of the group. And he said, And I really want them to answer the question. And so I'll give you the question right now. His question was two words, what's next? So I'm going to tell you the story now, but as you listen to the story, I want you to contextualize the story with the filter of what's next? And he's serious about that. He definitely wants to go to the next level. He feels like he's achieved a lot in the past couple of years and he's keen to go to the next step. The company's name is At T. It's a small little company, and it started from the CEO calling us up about two and a half, three years ago and saying, do you guys know anything about this thing that helps achieve strategic alignment within the organization? And he described his pain. And he had his senior VP of HR on the phone with us and they chatted for about an hour and said, tell us what you know about getting alignment at the top. So we talked about it a little bit and he said, well, I'd like to test you, going to give you one of my divisions, and I'd like you to go off and fiddle in that division. Well, it's about a $20 billion division. That's a small piece of the at and T monstrosity. And so he said, go in and look at that because he said, the brain trust within that portion of my organization, their CEO and their VPs and so on, they've come back with their three year plan for improving that organization. And their three year plan showed, depending on the subdivision that they were talking about, showed between a four and a 7% growth over three years, cumulative growth over three years in their marketplace. There are only two competitors in the world in that division's marketplace. As you can well imagine, it's a high tech universe that they live in. So went down to Atlanta and met with Dr. Tim Murray. He's got multiple offices in the United States. We met with him. He's the CEO of this division. And he told us a story. They had their goals setting process. He said, we have a very formal goal setting process within our organization, and it starts from the bottom up. We've been using it for about 25 years. It's a bottom up built goal setting process. So we take a look at our in terms of building the next year and the three year budget plan. So he said, we're going to build up from there and we do. And he said, you've heard what we've already gotten. 4% was what my group came back with. And so we went and said, all right, we'll take a look. We're process wizards. So we put on our process hats and looked around at the business process of creating their projections and their plans and their growth plans. We also put on, I call it the rose colored glasses. We put the glasses on. That allowed us to look at it from a levels perspective, the kind of folks that were being asked to do and create these budgets and plans and were they asking the right people? Well, I know everybody in this room is already thinking, well, or if it's a bottoms up approach, there's no way all you're going to get is evolutionary growth. You're not going to get anything dramatic. And that's exactly what they got. And that's where four to 7% came from. It was minor increment over inflation and this is in a global $20 billion company. So he said, can you help us? And he said, I've read all about this thing. The Japanese have this approach called Hoshin cannery. How many of you know what Hoshin Canri is and have seen that? Okay, so we'll talk a little bit about Hoshin Canary and we do that as part of our practice, as part of our strategic alignment practice. And Hoshin. Canri is a Japanese methodology. And Hoshin means shining destination. So it literally translated means shining destination. Canri means management control. So it's the methodology by which we can arrive at a future destination that is a bright future. So it's a very nice methodology and I've shown you the picture here and it does the traditional vision, mission strategies, themes and then goals and all that stuff. So it's got all that built into it. But it has some fairly specific methodologies and tools we've integrated into our own, what we call ISAD, which is our integrated strategic alignment and deployment, which is a big mouthful. And so ISAD works for us and it has three fundamental components to it. So the first one is we set the direction and we've got a bunch of things that we take folks through including values discussions and group values, vision, mission themes for improvement. We build the methodology and we've got a bunch of tools and every one of these has some tools with it we'd be happy to share with you all. And then there's some implementation activities that happen. So this is how we achieve strategic alignment and deployment of those strategies throughout the organization. So we shared this with them and feel free to stop me anytime you want to ask questions. And then we took the Hosh and Cannery methodology and one of the best tools in Hoshen cannery is this thing called an A three chart and it's a very simple tool that says down here and it's typically an Excel spreadsheet and it's three to five year breakthrough objectives. So the CEO wrote up his own three to five year stretch objectives, so did each of his subordinate managers and write down through the layer. In fact we took the top 60 people in the corporation through this. So it was the CEO, senior VPs, divisional VPs and then the individual plant managers brought them all into a room for about three days and had them go through this activity and they were given some clear instructions. It's got to be earth shattering. There is nothing that can't be done. Feel free to do anything you want. And this is an organization that has about 11,000 patented new products in their pipeline that they haven't bothered to commercialize. We have a planet that desperately needs those products and they haven't bothered to commercialize it. And the CEO Tim said we are incredibly good at inventing things, we're hopeless at commercializing them. And so he said I've got this pipeline sitting there just dying to be milked. He told them use that pipeline. So they've got a bunch of three to five year objectives and he said it specifically. Normally we would do and he's a 25 year thinker and his senior VPs typically think on that order of magnitude as well. But we specifically said tell you what, you're going from a bottom up approach to a top down approach. It'll be too dramatic. If you ask them to work on a 25 year plan, let's give them something like five years and in some cases even three years. So they did. The next thing over there that they worked on was their annual breakthrough objectives. Specific tactics on how they were going to accomplish them and then some numerical targets on how they would measure their success with regard to those tactics and then who are the victims that are going to go out and do this work and accomplish this all? So to paint you a picture, each of the 60 people in the room created their own and then got together with their cohorts and their own subgroups. Plant managers talked to each other and the divisions got all the divisional VP and the plant managers for that division together and shared theirs. They arrive at some common agreements modified this. So it's an iterative solution. And in fact there's a terminology in this methodology called catch ball. I create a proposed set of objectives. I hand it to you, you then tweak it a little bit and then you toss the ball back to me to modify it further and to integrate all of that into these things supporting all of this. By the way, here's an example of one of these A Three charts. So you put your longer term objectives over here. Here's what I'm going to accomplish in the next one year. And these are substantial breakthrough achievements. Up top are all the high level strategic tactics. These are the things that we're going to go and do often we'll call those projects and then these are the specific measurable targets. And then over here is who's going to do it and how the responsibility is shared. And the little dots are basically let you flow through that. It's a simple tool, works really well. We then had them create action plans so once they achieved organizational alignment on that part right there at the top 60, we then said we want you to create action plans because all of this is just a wish list unless you know how you're going to go get it done. And so we made them create very detailed action plans. That said, here specifically is what we're going to do day by day, month by month, year by year until we've delivered that major improvement. And then those action plans turned into projects to do process reengineering, process simplification and cleanup. There are people issues and organizational and structure and all that kind of stuff that we've been talking about here. And then supporting information systems as well needed to be modified. So it was an earth shatteringly big set of projects. They created all this and this is all at the top level and then implemented. We also gave them a management control system. Let's make sure that you have the ability to measure your progress against where you plan to be. And then if there are any deviations, write them down, tell me what the deviations are and in the third quadrant of this four panel, report it's and why are you deviating from the plan. So give me your litany of excuses and then tell me what you're going to do in terms of countermeasures so that those excuses become irrelevant and you bring me back to where we originally intended to be on plan. And they measure this, they monitor this and discuss it amongst themselves on a monthly basis. Now they've been doing this for about two years now and I described to you what they had as their original bottom up plan of four to 7%. This company is comprised and when I say bottom up, to put it in perspective, 84% of their workforce are PhDs. So when I say bottom up, we're not talking about people who run machines. About twelve of their employees worldwide run machines. We're talking about PhDs, primarily. And that was what they got, four to 7%. After this exercise, what they got was 350% increase in total revenue. Global total revenues was their three year plan and they had detailed action plans on how to do it.

Speaker B No, you need a Mic question into.

Speaker C The Mic, just a question of what kind of operation it is. Is it a supported function for the entire corporation or do they have their own businesses given the structure with the PhDs and so forth.

Speaker A They have R and D facilities, but they are primarily a manufacturing company. Their biggest product is fiber optic cable. And fiber optic cable, that's their biggest product. They also manufacture other things, thousands of other products that is outsourced or something like that.

Speaker C They invented them.

Speaker A No, they actually do manufacturing in house, but the manufacturing operations are primarily automated, so it takes very few people to run a plant. If you go into one of their plants, they're probably 800,000 square foot plant, and you might find 20 people in it. So it's a very, very automated kind of business that they're in, and it's run like they hire as their production managers. They hire PhDs. Now, that's been their style forever. We can have a nice long discussion around whether that's appropriate, but that's what they have today, and that's what they've had for a long time after this work. 350% was their commitment for delivery. They're about two years into that plan, and they've already beaten that. And they're up over 400% increase in total revenues worldwide. Biggest increase in their entire history of this division. And their CEO attributes all of it to the fact that the organizational strategy was incredibly well developed and then followed up on. So his question to you was, now that you've heard the story, and he says, it's been exquisitely beautiful. The results have been exquisitely beautiful. I'm quoting him, and he said, what's next? What can I do for an encore? What new things can you bring that can take us to the next level? Because he says, I can see that we're breaking that goal, but what do I do to get to the next level? So I'd just like to put that as food for thought.

Speaker B From what I could tell that there was no necessary requisite theory used in any of this development of strategy. And you're addressing this group because of our experience in requisite organization, to see how we would link to this development of strategy to implement or do something better. Is that your question? Is that why you're asking this group?

Speaker A Partially. So we did use Don's teachings and we did our diagnosis phase. And when we looked at it, what we very quickly came to is you've got people at the theoretical level one, level two, folks who are creating plans that are supposed to be done by level four, five, six people. So that was our instant diagnosis. It was the one little key that when we turned the key, magic happened. And so he's very enamored of the fact that there's this neat little tool through diagnosis. There was this one little clue that we were able to give him that he and his entire organization grabbed onto and said yes. So now he's looking for and he's a firm believer. He's fallen in love with the concept. He's read a lot about Ro. He's keen to do more with it. But he's asking what should we do? You know, roughly the makeup of the organization. So are there things that you suggest that we either look at?

Speaker D Let me just ask you a question too, to clarify. So what do you mean by your question what is next?

Speaker C Keep on going.

Speaker E Don'T touch.

Speaker A So he's thrilled with the success and he thinks that we walk on water right now and we're this pool of geniuses. And he's saying, well, what else can you pool of geniuses come up with that tells me the next step in our evolution? Because I like what I got so far. I want to go to the next stage and I've got deep pockets to fund it if I need to.

Speaker E My God.

Speaker A And he's got the wherewithal to do. He's got the wherewithal and he's got the blessing from his boss to go forth.

Speaker F Can you give some insight into what they did? What was the incremental sales? Was it bringing inventions into the market? What was the mechanism?

Speaker A So they did a lot of innovative things. Some of them include things like capitalizing their IP. They had a storehouse of inventions, of patents that they hadn't capitalized on. So they've done that. They've created brand new processes for taking products to market rapidly. It used to take them on the order of well, forever to take products to market. Now it takes them typically the commercialization process is typically on the order of about three months. So they've worked very hard on process reengineering. And we've done a lot of that work with them because that's our forte. But he's also looking for how do we capture the hearts, souls and minds forever?

Speaker C Question would you say that given the 400, it's not very common that the company grew of this size by 400 per year and it's less common that they will continue do that forever? In some case, they have to consolidate their situation. My question is the type of things that they did differently that created that and a new amount of revenues, could that be categorized into major portions of business? Were they basically creating parallel businesses, new businesses from the existing ones, or at least a couple of them? Were they just doing the same as before but a little bit more effective?

Speaker A Almost all of it is new markets. Okay, so in communication fiber, for example, I think their total volume increased by like 20%, 30%. So it's not been the 400% in that business. So in their traditional business segments, they've increased quite a bit and everybody be patting themselves on the back and be cheering over it. But that wasn't the big step change. The big step change was listening to their people, their scientists and their brain trust to say how else can we go to market? And so you're saying today's technology that we see commercialized here is going to be is Led technology, where the next one is solar optics. And they were already commercializing that. And it saw in the order of 500, their first three months had been $500 million of sales.

Speaker C Both those are sort of industries. Yeah, if they into both, I mean, then that could be a starting point to look at this business into portions or cogloma of operations.

Speaker A So part of what we've been racking our brains as well, and part of what we've been thinking about is, okay, so you've increased total revenue, what about profitability? And so maybe a focus on that. And that requires a different mindset, different kind of people. Rather than having people who are pushed to generate volume, they're now pushed to think about how do I make money from that volume? That's a different set of requirements. And we were talking about talent assessment. I think that's a huge deal for them.

Speaker F Maybe they should look at the three M model and try to spin these wholly owned subsidiaries off and let them grow organically rather than try to bring them under this big att umbrella. Because the danger is he's going to add another layer. Okay, so next thing is to keep the layers the same and increase the volume. So he split it up. And so these guys can be presidents of big corporations and be basically independent and try to commercialize the there's probably for every ten innovations, there's one guy that can really run with it. And so then apparently they would have a huge advantage if they could pull that off because most companies can't do it. They get too big and by the time you get up the ladder, there's no I mean, you have to go through five guys to get a yes. And that's the key. So you got to go one place to get a yes so the guy can move.

Speaker G I heard Art's comments as requisite and what he's saying here is when you think about organization design, not just as levels, although that was the essence of your comment, but as strategic horizontal as Ron was talking about this morning, that's the other half of this. And that's about requisite organization, it seems to me.

Speaker F Let me make one more comment. See, one of the problems is, depending on the levels, how many level seven guys are there in the world, or level sixes or level five. So the insight would be is create these smaller companies that you can run by level five guys, and there are a lot more of them because you're going to end up with a management constraint as to how do you get these off and then get these guys primed and let them out of the crowd.

Speaker B Very good. Are there other comments of this kind?

Speaker H Yeah, I think sitting here I could write down many, many questions to get me some reasonable information. But here's a few. Does he think that what's happened is sustainable? Has he mind the backlog? There was 11,000 new products. Does he mind that has that come to an end or is product development improved, which it clearly wasn't very good product development from idea to customer. What industry changes does he perceive? In other words, emerging competition or changing competition? What does he think about his execution effectiveness and what does his SWAT look like?

Speaker D What does he wear?

Speaker H SWAT?

Speaker E To answer that question, perhaps? Or you might help them to scan the environment in order to find out.

Speaker D Can you speak?

Speaker E I'm sorry, where the opportunities are? Because the first step is to scan the environment, to analysize the issues and the industry, to identify where the opportunities are and then scan the organization in order to identify what they need to do to capture that opportunity. So the answer is a process to discover you need to install a process in order to answer that question. It's very difficult to answer if not and I just only have one shard and I try to connect the shard with case. This is a model that we developed based on more than 25 years of experience and this is a system, it's an organizational system that operates in an environment, in a context. So the first thing that a company need to establish is the sense of direction that you mentioned in your presentation. Sorry I'm going to introduce you to the understanding of the model, perhaps three concepts you have here four dimensions strategy, structure, culture and processes. Then you have different levels of more essence essential. This is an essential level, it's the core and then you have different levels through the periphery and then you have the leadership system that is accountable for put all these pieces in place because performance, the performance of the system is directly related with the level of articulation of the dirt pieces, the connection. All the problems that the company that we can find in the company are the results of some kind of disconnection of parts of the system. Sometimes the disconnection is between the essence and the form. You can have a company with a clear long term vision but the operational plans are disconnected with the long term vision. So you have suffering here people feel lost their sense of purpose. You can have disconnection between strategy and the structure and capabilities. So the structure and the capabilities don't support the strategy. You have fine disconnections between the strategy and the beliefs and the culture of the organization so the company don't behave supporting strategy or you can find disconnection between strategy and the process to create value to the customer. So to connect strategy to structure we always became here because here is why because two reasons. One, the first more important conversation and discussion with the board and the top management is this what they want to be? Why? What is the mission and the purpose they have? And it is relevant because if we are going to inspire all the organization to move to another step of complexity, another step of growing. We need to have a long term project clearly defined and sincere and honest. You say honest because people need to believe in their leaders so we need to have in place a long term project clearly established. For example, I listened to you yesterday and you say we would like to be the leading mining company in the world. That is this, but then I would like to listen more and you say we are going to migrate from cut open mining to underground and we are looking for more safety and we are taking care of the resources we are using so that are related with the essence of what you would like to be. That is this level. Then you need to articulate this with a current strategy to do that and with operational plans and make all the organize the alignment, the organizational alignment with a sense of direction. So from the top to the bottom of the organization of the organization you need to inspire people to enhance the project and to feel that they could be part of protagonism in the construction of the future. Sometimes this definition implies a jump of complexity and it's very usual that we can find that very frequently. So we need to identify I don't know if I need more click. So one thing is the system performing in an equilibrium equilibrium. Another thing is moving the system to another stage of complexity. It demands to reinvent completely the way the organization has to work and to do things and identifying this, that is the first conversation about implications of the strategy. We work at the same time at the rational and emotional level. So they say we would like to be this and we are going to follow this strategy that have implications in the way they behave and the way they work. So we need that top management be aware about the implications of that movement in order to get them ready to lead the organization to that direction. So if we find that a shampoo of complexity is in place, we need to analyze the current structure and we need to define the requisite structure. We need to evaluate the capabilities accordingly with the current and the future needs and take decisions about how to put capabilities at the level of strategies. And we need to deal very fast with that part. That is the harder part of the system because people behave according with their beliefs and values. And this is not a conscience issue. It's only observable by the behavior. So it's not so easy like to communicate we would like to be like this and go there and expect that the organization behave that way. You need to deal with the management of the change very quickly because if not there become to be a gap between what you would like to be and the real performance of the organization. So the structure definition and the capabilities. Balance is a level of stay in the level of the definitions. But then you need to implement that. At the moment, to implement, you need to deal with that. It's impossible to migrate from a car and requisite organization. You don't deal with the culture and beliefs and fears and all the what you said yesterday, resistance, that is the first step of the process. That is a process that is very well studied, but the leadership of the organization need to install very early in the process, the corporate practice, management, first to lead the curves, then to lead the potential and then to lead the change. And the culture is part of the management practice to do that in the right way. So then when we can move, we can stay five years talking about that, but connecting with the case, the Mickey case. This customer has a very long term vision, an ambition, and he would like to know what next. And in my point of view, you should help him to discover what is. I would like to put a model here. I think that is what is the new cycle of growth. And doing that, after doing that, you can help him to understand what is needed to put in place in order to reach the new stage.

Speaker B Just a comment as we open up for questions. Elliot Jacks was the one who coined the culture of the factory, the culture, and used anthropological methods. He disowned that method. His method is highly rational. At CRA, there was the method and there was some tension because Ian McDonald was an internal consultant and very much developed processes which dealt with values, behaviors and other things. And there was great tension between Elliott and Ian McDonald about the nature of management development and what they should be paying attention to. But as Ian described his interventions in many parts of CRA, and maybe you have comments, but these are things that I was told by people who were there, is that rather than start with anxiety producing analysis of levels, he started with values and status. The certain values that were necessary. He said go for equivalent, forgotten equalizing values in all situations that you can unless differentiation is needed to get the work done. So all the special parking places, special lunchrooms, special costumes, special tea breaks. The first intervention was actually, as he described it was getting rid of all of the bad feelings based on things in the culture which unnecessarily differentiated. So I just wanted to point out that Asusena has reincorporated the need for this look. And I just want to say there were several other projects where Elliot Jacks had clinics and projects were presented and he would present the rational side. And there was someone else who would present the behavioral, the feedback, the personal style, all of the things that Elliot denied or did not look at. And after those presentations, he pretended as if they. Had not occurred and never acknowledged them, it was the most amazing thing you would ever see. So what I want to say about Asusena while Mickey's, you come in from a process and it and process engineering point of view and made great contributions us to say this counterpoint is this model and balanced, which is trying to reintegrate some of the things that were missing from Elliot's emphasis, for whatever reasons. Okay, so I just wanted to acknowledge.

Speaker E Elliot said culture is never neutral. He knew about the importance of that.

Speaker B I am sure he did know about it. But he also believed that putting these practices in place, these structures and management practices, would in fact change the culture dramatically by increasing trust and the dialogue of commitment. And people keeping their promises would build a trust inducing culture versus a paranoiagenic culture that was often in place before. So there may be other comments, but I just wanted to validate Asusena's reintegration and talk about Amiki's strengths and what he brings. And we wanted to get both before you in this important link between strategy and structure. Don has talked about Julian Fairfield, who came from competitive analysis and the evolution of functions. That's a totally different look at how you put strategy and structure together. So there are different approaches being used in our community and I just wanted to validate that. Each of them are it's just the.

Speaker G Integration between what Asusena has said and what Mickey is asking I think is very helpful. It seemed to me that the curve of the next thing is what he's asking for. And I think Art has got the seeds of how to think about that and probably those two things together will give you an answer.

Speaker B Are there more comments about this basic link between strategy and structure, which Ron Cappell told us was often ignored by many of us before we go on? Because the next part is now looking at getting the, let's say tying the strategy, getting the vertical in place, but then linking it to the other shadow area of requisite. That's not so strong, it's the lateral processes. And I know that Mickey and your re engineering you've had and my hunch is there are other people in the room, maybe in Anglo gold. Have you worked with theory of constraints in your organization? I know Barry has talked about experiences and in this next emphasis, we wanted to start off with how do you link the vertical and the horizontal and then to after Mickey's statement. If you're willing to do that, we'd like to get some input from those of you who have had this experience and how you've linked the vertical more requisite analysis with the lateral. Is that a fair intro to the.

Speaker A I mean, I could stand up here and talk some more, but frankly I think that's of relatively low value. We all know what we're talking about when we're talking about business processes. And what reengineering projects look like. And frankly, I think we also know we've got a picture of what Ro projects look like and all the permutations of those and we have an idea of what ERP implementation projects look like because we all suffered the consequences of that. And so rather than me getting up and doing what I just did I was thinking it'd be better if we were to break out into two or three teams and do some noodling on the flip chart and do some work and then come back and report out.

Speaker D Our group didn't come up with quite a bit because we got into a whole discussion on constraint theory and that sort of sidetracked us. At any rate, we did come up with a couple of ideas. And two in particular, that when you're in a system where there are multiple consultants intervening in the system and have interests on behalf of the system, that if you can find a whole systems, thinker that approaching those resources, in the organization that have the capability to actually integrate those efforts, that those might be individuals that you could influence to coordinate the efforts, that those would be targets that maybe could see the broader effect of coordinating those efforts and those might understand a more collaborative or integrated conversation. So that would be important and also perhaps attempting to set up a type of steering committee between these efforts whereby there could be some coordination of the overlaps and managing to coordinate these efforts on behalf of creating the best synergies out of these efforts on behalf of the client. That was it.

Speaker E Thank you.

Speaker B Bill, are you going to report out for your group of one?

Speaker I Fine, give them this is.

Speaker B Your mic?

Speaker A Yes.

Speaker E Thank you.

Speaker I Given what Cindy just said, it occurred to me that this is really a strategy to create an increased number of whole systems thinkers across the whole system and it's based on experience in very different organizations than what we're looking at. I don't know what kind of problems are analyzed in the root cause analyses. I don't know what the extent are, whether they're specific to a product or what but let me just go through it and then you can quiz me from there. When not if, but when something big goes really wrong, breaks, fails, be ready. By which I mean have the concept and associated resources and do a deep rigorous root cause failure analysis with the right team, the right rigor and the right depth which in our experience is often 1015 levels of cause deep cutting right across the organization inevitably it will lay bare the system and assumptions that created the malfunction. This will inevitably include causes where the requisite elements were absent or deficient as well as other systems issues then rigorously develop solutions and the theory and assumptions that assure that the whole system supports the solutions. This is what I've come up with in collaboration with a group of engineers. I'm social, behavioral scientist, economic economist, and I have been worked for years under the assumption that the organization tips that I was trying to give to client managers were rooted much deeper than I could explain to them. Yet there was no way that I could explain then. This was all before I ever heard of Elliot Jacks. And then I heard of Elliot jacks. Almost simultaneous with getting involved with engineers that do rigorous analyses of primarily mechanical engineers, rotating equipment failures. And they had begun to discover that their problems were not all within the flange, as they say, which led us into collision course with one another. And we've been collaborating, collaborated for about 15 years now, coming from these totally different directions. And we find that I consider this really a way to diagnose the system without reference to any other theory except shit doesn't happen, it comes from somewhere. And if you really apply the rigor and you insist on having factory and you can have fact, you know the difference between a fact and assumption. You know the difference between an assumption and a guess, and you identify everything and you do that and you involve a large number of key people across the organization in analyzing that failure. They get smart and we've had a group of plant managers sit down and ask them to develop their theory of management. It will blow your mind, and it's extremely requisite. So that's the thought.

Speaker H Okay, I've just had an experience that is fairly common for me. Sheila hands me the pen and then proceeds to write me notes. I better take those off before I finish. We do it to each other. If she's on the phone often and I'm writing a notes, ask him this, ask him that, listen to one half of the conversation. We had a bit of a structure to focus our attention. How to avoid pitfalls, what has worked, how to get synergy, what doesn't work, what recommendations. And I suppose looking back at it, you'll see that we've got two bullet points on what doesn't work and all of this stuff on what might work. I think that's typical really, because all you got to do if you want to know what doesn't work is turn the what does work around. And it's a quick list and it's not in any sequence, so it's a bit of a brainstorm, I guess. What doesn't work from our collective observations is poor architecture. We see this quite a bit, which is why we don't work with other consultants very much, because we get invited in to do something subordinate to another consultant and suddenly find there's an architecture that we can't work with, we're going to fail. And I suspect that OD people working with it, people, major business systems people would find the same thing. There's an inbuilt architecture of what this thing is going to look like, and along with that is poor poor, what I've called poor taxonomy. In other words, the grouping of stuff is the grouping of processes the same as the grouping of organizational artifacts or organizational design or does process belong to organizational design? So quite often people get taxonomy wrong. So you end up with an incongruous list of things. What we need to do is to find the envelope as we put the architecture together and the correct envelope, again, in no particular order, what doesn't work, and I won't name the organization that talked about this was consulting the contracting of consultants and the misalignment of consultants expectations or purposes. In that misalignment. Let me jump right over to another thing that does work. We think is what I would call organization to process alignment. You could see that as roles to process alignment. So aligning processes to roles or thinking of the organization as the map of our working relationships and the process flow as a map of the work we do together and aligning those two things is a really neat social process for doing that. And bechtel, for example, years ago we know very well because we're involved set out to build what was then a one and a half billion dollar Smelter project and they went through a role to process alignment with the clients. So they put the engineering team together with the clients team and aligned them. That will be a really neat thing to do with consultants who we know to have disparate views. Yet the alignment around the work and the process is essentially about how do we execute effectively, needs clear conceptual design, joint project team, actually putting the disciplines into the same project team and making sure that that's led at the appropriate level. I think some of these interventions that we see take us by surprise and the failure rate, or put it the other way around, the poor success rate of some major whole of organization interventions should tell us that we get a few things wrong. And one of the things I think we get wrong is we don't assess the complexity of the project at the right level and it ends up being run at probably one or two levels below where it should. And you get what you get. Reductionists drive for the end. Don't worry about what we're building, but we're building the thing. Right. Um, I don't know what decide subordinate system and subordinate processes. Was that a repeat?

Speaker E Could be overarching and other streams.

Speaker H Yeah, I'm sorry, Mickey, but I actually see processes as an element of organization. Okay. A CEO. Led. Sorry, Sheila. This was particular to a company like Anglo where you've got multiple business units in what I would think of as a portfolio of business units. So that was specific to sorting out if this is a major company with a number of business units, then what are the issues of fashioning something in the center and how much customizing needs to be done in the business unit and getting that balance right and making sure that's controlled. Be clear about the interfacing issues. Be clear about the interfacing issues and identify the synergies and blockage in design. I'm not sure that sentence works for me completely, but I know what it means. Let's go to it. I think this is where we can reasonably see it happens. The It offering, the It culture, the It industry has a particular set of very strong beliefs about how to execute. The OD industry, such as it is, has a particularly strong set of beliefs about how to execute. It is unbelievable how solid the boundary line is between them. It's like, what's that wall that's built between the USA and Mexico? Something like that. It's so different that customers of It projects actually don't see that the It projects might have an organizational element. And it's been our sad fortune to do a very good job in taking an Ro based implementation into a company and then suddenly finding out that they're implementing a major business system across the company and they don't think to call us or even see that they've got HR or OD issues. And I guess because the consultants come along and say we know how to do it, get out the way, and by the way, if it fails, there'll be blood on the floor. We expect that people will leave. That's what happens. Tough. So the cynics be clear. I think there's a thing here about those interfaces. What are the rubbing points? Yes, sure. What are the rubbing points? Why do we behave this way? What's causing it? Can we get to the rubbing points? Can we understand it? I think it's actually more simple than the outcome seems to suggest. Identified the complexity. Well, we talked about that need at the appropriate level. The business model determines design and control. Well, again, back to ascen as you would say it again and again and again. No intervention without a business case. Why are we doing this? We're doing this for more effective business or better business success, not for the sake of doing it. And the business model itself is about how have we arranged our company to produce the things it produces and how do we control that? Are we business units? Are we one level seven Led business units, if there's such a thing? And so on. Get project management discipline internally and with the executive team. We had steering committee there, but Sheila's persuaded us because she'sick of hearing this steering committee, why not the executive team? If you let them develop a steering committee, they're shedding their accountability process. Agreed to stage gate. What that means is with these major projects, do the conceptual work and stage gate, the conceptual work and stage gate from concept to implementation and so on. And the stage gating is about getting the executive committee in at the inflection points, authorize, monitoring, monitor the damn thing get control and audit into it, align the project KPIs with the existing business KPIs. So when you're trying to implement this in a business unit in Ghana, and the MD in Ghana's got a particular P L accountability and your project is going to stuff it up, needs to be aligned because he can go back to the CEO and say, well, you asked me for profit, look what can do. You told me to implement a system and that's it.

Speaker E Just the one that Barry forgot to say. And that's about a formal system of review. We always forget that. So with that steering committee or executive team, they often don't have at the stage gates a formal review independently facilitated, where people tell the truth.

Speaker B Thank you. So what we've been discussing is what happens as an Ro consultant when you go in and find these other things happening. What are some attempts at influencing and coaching these senior leaders to do their coordinative role systems thinking, coordinating in an intelligent way? And that's what I hear these to be done. The other option, which has some I heard Barry say two different processes have different architectures, and if I'm subcontracting to them, it hurts and I can't succeed in my own terms. There's another thing, as opposed to doing full blown work, which is shadow consulting or helping on a contractual basis. So what you've done is found a consultant with a different paradigm who is coach. And I don't know how you describe your relationship, but you're learning to put some of these methods in. So this is beforehand, right? This is not encountering another system, but it's taking your other system in with you. So some of us have been interested in the consultants, have been interested in a go consulting network where to serve large clients that have global operations and maybe to have on the consulting team some specialties which we may not have in our own firm. We've thought about a network and collaborating where there is a lead consultant and hopefully some consistency and methods to do Ro work. The other possibility is to do collaborative projects where Mickey may be here scouting us out to see which of us might be good to be in a team to provide certain services, whether it's specialization or geography within project. I've been deliberately visiting different professional associations in this field and looking at where to integrate the vertical and the lateral to see where there's potential synergies of the ones I attended, the ones that are the most open and is the theory of constraints. And I'll tell you a few things about it. This very large, successful conference annually I went to, the one in New York, there was 300 people. That organization is growing. They have certification, it's worldwide. They claim that theory of constraints is being used in something like 20% of world manufacturing, which I find really staggering. And yet Goldrat died a few days before this conference and his death wishes to his colleagues assembled around his bed said that we work at the plant level. If we don't build the vertical linkage into corporate that he described in the goal, we will not thrive as a field. And he said, you must learn to link. And there were people there who were hungry to link to somebody who knew something about a corporate structuring and how to fit into these systems. So this is just an idea for myself. Of the 300 people there, it's the 90 ten rule. I looked for the ten most capable people who were high. Most of the people at the conference were threes, there were a few fours, but there were some people who were capable at five, six, and there may have been a seven there who were just brilliant. So identifying these people, and I've not been able to execute it, I would love to invite them as special guests here to examine the potential synergies and for some of our senior people to go and present at their conference or to do a teleconference. I'd approach Nancy Lee and Steve Clement to do teleconferences. Steve was willing. We haven't been able to operational it. This is connecting to a lot of them through teleconference and initiating them. And now we have the professional development program. My thought was, if there is any cross selling opportunity to integrate the vertical, they may be one of the best partnerships we could enter into. By exploring between some of our senior people and just seeing the opportunities, it seems that this could be powerful. So I just lay this out because it's a different approach that we go in with the vertical and horizontal skills, partnering with Mickey or whatever. So I just lay that out. It's a more proactive stance and that doesn't mean you aren't going to keep running into these things all the time and have to suffer. But I don't know how much we can do, our influence ability, how much we can do. We can try, but there's pain there. But the more proactive chance is to market with some kind of integrated approach.