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Episode 6: (Dispatch from the Scenius)

Dr. Steve Spear's 2019 and 2020 DevOps Enterprise Summit Talks on Rapid, Distributed, Dynamic Learning.

Guest: Dr. Steve Spear 

In the latest Dispatch from the Scenius, Gene Kim brings you two of Dr. Steve Spear’s DevOps Enterprise Summit presentations in their entirety.

In his 2019 presentation, “Discovering Your Way to Greatness: How Finding and Fixing Faults is the Path to Perfection,” Dr. Steve Spear talks about the need and the value of finding faults in our thinking that result in faults in our doing. 

He continues to explore this lesson in his 2020 presentation about the US Navy 100 years ago, when they were at a crucial inflection point in both technology and strategic mission. It is one of the most remarkable examples of creating distributed learning in a vast enterprise. 

As always, Gene provides exclusive commentary to the presentations.

For sponsorship inquiries, please contact Ann Perry ([email protected]).

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About the Guest
Dr. Steve Spear

Dr. Steve Spear (DBA MS MS) is principal for HVE LLC, the award-winning author of The High-Velocity Edge, and patent holder for the See to Solve Real Time Alert System. A Senior Lecturer at MIT’s Sloan School and a Senior Fellow at the Institute, Spear’s work focuses on accelerating learning dynamics within organizations so that they know better and faster what to do and how to do it. This has been informed and tested in practice in multiple “verticals” including heavy industry, high tech design, biopharm R&D, healthcare delivery and other social services, Army rapid equipping, and Navy readiness.  

High velocity learning concepts became the basis of the Alcoa Business System—which led to 100s of millions in recurring savings, the Pittsburgh Regional Healthcare Initiatives “Perfecting Patient Care System”—credited with sharp reductions in complications like MRSA and CLABs, Pratt & Whitney’s “Engineering Standard Work”—which when piloted led to winning the engine contract for the Joint Strike Fighter, the operating system for Detroit Edison, and the Navy’s high velocity learning line of effort—an initiative led by the Chief of Naval Operations. A pilot with a pharma company cut the time for the ‘hit to lead’ phase in early stage drug discovery from twelve months to six.

Visit Steve Spear's Website

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You'll Learn About...
  • Explore how Steve’s mental model of dominate architectures, structure and dynamics can explain why organizations behave the way they do.
  • The conditions for organizational-wide learning that allows the achievement of amazing goals and to dominate in the marketplace.
  • How fast feedback creates opportunities to self correct and improve in real time.
  • The characteristics of a dynamic learning organization.
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Resources
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About the Host: Gene Kim

Gene Kim is a Wall Street Journal bestselling author, researcher, and multiple award-winning CTO. He has been studying high-performing technology organizations since 1999 and was the founder and CTO of Tripwire for 13 years. He is the author of six books, The Unicorn Project (2019), and co-author of the Shingo Publication Award winning Accelerate (2018), The DevOps Handbook (2016), and The Phoenix Project (2013). Since 2014, he has been the founder and organizer of DevOps Enterprise Summit, studying the technology transformations of large, complex organizations.

In 2007, ComputerWorld added Gene to the “40 Innovative IT People to Watch Under the Age of 40” list, and he was named a Computer Science Outstanding Alumnus by Purdue University for achievement and leadership in the profession.

He lives in Portland, OR, with his wife and family.

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Transcript

Gene Kim (00:00:00):

This episode is brought to you by IT Revolution, whose mission is to help technology leaders succeed through publishing and events. You're listening to the Idealcast with Gene Kim, brought to you by IT Revolution. If you haven't listened to the last episode where I interviewed Dr. Steven Spear, go listen to it now. If you have listened to it, here are the talks that I promised you. This is the entirety of Dr. Spears 2019 DevOps Enterprise Summit London presentation, where he talks about the need and the value of finding faults in our thinking that results in faults in our doing. I'll then play for you nearly the entirety of his 2020 DevOps Enterprise Summit London presentation which was held virtually.


Gene Kim (00:00:49):

In many ways this is a continuation of the lesson he started the year prior, where he talks about one of the most remarkable examples of creating distributed learning in a vast enterprise, which is in the U.S. Navy 100 years ago at a crucial inflection point in both technology and strategic mission. Join me as we listen to this presentation together. I'll be breaking in periodically, adding my own running commentary on points that I find particularly impactful, both when I watched them originally and listening to them again now. Here's, Steve.


Dr. Steve Spear (00:01:20):

And I'm going to make a very, very strong case. As individuals and as a people responsible for managing other people, our daily objective function should be learning. And the more we learn the better, the faster, that's great. And I'll just build up that storyline but that's the key point. I often start when I'm working with some of the clients Gene mentioned with a question about when they get to work or when they go home from work. And the question at the end of the day, what did I accomplish? Think about that, how do most of you answer that? What am I hoping to accomplish today? Caught out? Oh yeah, that's the punchline. How do you normally phrase it though? Because most of us phrase it in some form of, "What am I going to make and what am I going to deliver?"


Dr. Steve Spear (00:02:19):

In a pharmaceutical company it might be, how many molecules do I synthesize today? How many tests do I run today? How much data do I process today? Whether it's physical, literally physical or metaphorically figuratively physical, we tend to think about the physicality of our daily activities. What did I make? What did I deliver? The case that we really should think about, "What did I discover today? What did I discover today?" And then try this when you get back to work, whether people are logging in, badging and punching in, however you indicate your presence on the job, ask your colleagues, "What do you hope to accomplish today?" My bet is most people will give your equivalent of make and deliver, and almost nobody will give your equivalent of discover and the same thing on the way out.


Dr. Steve Spear (00:03:12):

Now, let me explain why, what will I discover today is such an important question and an important objective. We tend to think about our work having a value stream and a value stream progressing through time from way early conceptual to actual construction, development, delivery and operations. But let me suggest we're missing a critical dimension here because our work doesn't progress, just our work through time, our work progresses through understanding. The reason we take on projects, programs, work streams, competency, development, whatever else it happens to be is because there's a need for which there's no solution. And part of the reason there's a need for which there's no solution is because we may not even know what the need is and we certainly don't know what the solution is.


Dr. Steve Spear (00:04:04):

Our start point is that we're ignorant. And now where's our end point then need to be? If we're starting off ignorant in terms of needs to be satisfied in the nature of the solutions for those, what we want to do is progress and progress quickly from a point of ignorance to a point of a high degree of knowledge. I guess, anywhere along this value stream we're plagued by what we don't know. And just looking at the very end of the value stream where something is even operating.


Dr. Steve Spear (00:04:36):

There's a lot of reference to Lean and Toyota throughout the day. The reason Toyota developed these tools have a poke yo, go no go gauges, Jidoka and on et cetera, et cetera, is they recognized even after all the effort of designing operating systems and building operating systems and implementing operating systems, and actually operating operating systems, there are still things that were going to go wrong because of what was poorly understood so they wanted quick feedback on that.


Dr. Steve Spear (00:05:05):

Well, that's true in the operating system, all the more so we want to know what's wrong early on. Long and short we want to progress very quickly, very aggressively to where we don't know to where we do know. Now, let me just make an aside on why speed matters. It's not just direction but why speed matters hence high velocity learning rather than just learning. Is that getting to the right answer better, faster matters a lot. As Gene mentioned in the introduction I've been spending time with pharmaceutical companies the last several years trying to compress the time it takes to go from one end of the value stream, where we really don't know to the other end of the value stream where we know a lot.


Dr. Steve Spear (00:05:48):

It turns out in their industry, that the rewards for being first with a therapeutic into the marketplace is that you enjoy something like 50% of the revenue on that therapeutic. If you show up second you get something like 30%, maybe there's 15, 20%. If your fourth, fifth or sixth, you've waited a huge chunk of money and about a decade. That relative speed matters a lot.


Dr. Steve Spear (00:06:15):

Now we did another calculation at one point to figure out what's a day worth? And it turns out the way their patent system works is that when you have an idea you patent it and you don't start collecting revenue until you have product in the marketplace, and then your revenue basically goes to zero when your patent wears out. And we started calculating what's the value of an extra day in the market? It turned out it was $3 million per day to show up earlier than later. In terms of the start, you're starting ignorant, where you need to get is where you have sufficient understanding of what to do and how to do it, and speed matters a lot.


Gene Kim (00:06:53):

Gene, here. This was such an aha moment for me because he quantified the value of being fast in an industry like pharmaceuticals, where it's almost encoded in the way you play the R&D game. In the DevOps handbook I quoted Courtney Kissler, who was at the time a Senior Director at Nordstrom. She said that the stage for Nordstrom's DevOps journey was likely set in 2011 during one of their annual board of directors meetings. She said, "In that year, one of the strategic topics to discuss was a need for online revenue growth."


Gene Kim (00:07:25):

They studied the plight of blockbusters, Borders, and Barnes and Nobles, in other words, the killer bees, which demonstrated the dire consequences when traditional retailers were late creating competitive eCommerce capabilities. Those organizations were clearly at risk of losing their position in the marketplace or even going out of business entirely. In this period of incredible creative destruction that is happening right now, speed matters. Reed Hastings, the CEO and Founder of Netflix said, "Companies rarely die from moving too quickly, and they frequently die from moving too slowly." More ways to say what Steve just said, speed matters and it matters a lot. Let's go back to his talk.


Dr. Steve Spear (00:08:10):

Now, let me give a couple of examples of where this issue of getting from we don't understand, we don't have a solution, we don't understand the problem to where we have one matters a lot. It turns out June, July, our period of great anniversary recognition. This month we mark the 75th anniversary of the landing at a Normandy, D Day. Now it's funny it's almost four years to the day from the evacuation of Dunkirk until their return of the allies on the beaches of France, the four years. Now, here's another anniversary. Next month we're going to mark the first landing of human beings on the moon. Now that was seven years after President Kennedy offered the challenge of, or the declaration we're going to send a man to the moon by the end of the decade and return him safely to earth, seven years.


Dr. Steve Spear (00:09:14):

Here's a question, what took so long? I mean, it's not like when the British and their allies left France in 1940, they sat around and said, "Well, we're really in no rush to go back." And the French weren't sitting around and saying, "Well, London's kind of nice. We really liked the plan food and warm beer." It didn't take four years to realize, "Wow, this is really dragged foot..." just to make the point here. I'm not meaning to insult an entire cuisine and a whole people, right?


Dr. Steve Spear (00:09:45):

Presidents like to take credit for things that happened on their watch, whether or not they're responsible. Probably true for prime ministers also. Ideally when President Kennedy made the challenge in 1962, he would've said, "We're going to send a man to the moon and return him safely to earth by next year." He didn't know about Dallas, I guess, right? But by next year... why did he say the end of the decade? What took so long? Why take so long?


Dr. Steve Spear (00:10:15):

Four years to come back to France or go back to France and seven years to get to the moon and come back, why so long? No one knew how to get there, right? In 1940 as the British and their allies are leaving Dunkirk, it's not like they're saying, "Wow, we're going to wait four years to go back, we know how to go back now. We'll wait four years." The reality is no one knew how to go back and there's some fascinating military history on this. There was a decision, once the U.S. got into the war, do we go back to France in 1942? And as you know what happened is that the allies first went across North Africa up through Italy before launching of D Day.


Dr. Steve Spear (00:11:00):

And the history is fascinating. Is that when the U.S. and its allies landed in North Africa they were horrible, they had no idea how to fight a war. I mean, it was antiquated as backwards as disastrous. It was disastrous at one 1000th of scale of Normandy. And historians have said, "Had the U.S. and its allies not gone to North Africa first and learn how to actually fight, they would have gotten decimated had they gone to France first. And the same thing can make the argument of trying to go to the moon in 1961 and 1962 versus 1969. What took so long? What took so long is that the president and the prime minister didn't have an answer to the question, how do we get where we need to go? And why didn't they have an answer? Because they were ignorant, the mother of all problems.


Dr. Steve Spear (00:11:50):

Now let me just pitch this because of the reference to Lean Toyota. Let me offer that Toyota is an organization which has defined its operating system as the relentless pursuit of ignorance to beat it with a club and convert it into useful knowledge. Now with Lexus they call it the relentless pursuit of perfection. But what they really mean is the relentless pursuit of perfection so it can drive it to death. Now, here's an example. The picture on the screen is the first product Toyota brought to the U.S. market in the late 1950s, it's called the Toyopet.


Dr. Steve Spear (00:12:25):

Anyone ever seen or heard of a Toyopet? Yeah, one. All right. How did you know about a Toyopet? I will explore the unusual art, but most of you haven't. What does that suggest about the characteristics of a Toyopet, no one in the room unless this person over here, no one in the room has ever heard of a Toyopet? Yeah, it was a lousy car. It was a terrible car, it was an awful car. And just sort of quantify qualifier, awful that the Toyopet, to go uphill in a Toyopet, the odds, no guarantee on this, but the odds were better if you put the car in reverse. And it was more likely than not on the way up the hill it fell apart.


Dr. Steve Spear (00:13:09):

And it not only was Toyota making a horrible car, but it turns out they were horrible at making a horrible car. Which I guess is good, it means they weren't that many horrible cars left around. I mean, if they were good at making horrible cars we'd have a lot of them. And just in terms of horrible and making horrible cars, Toyota's productivity in the late at 1950s was about one eighth the world's standard. Now at that point Toyota management had a decision to make a choice and the choice would be amongst alternatives as to why they were lousy and making lousy cars.


Dr. Steve Spear (00:13:43):

They could say, "Well, it's something unfair about the economy or unfair about trade relations or unfair about employees," all sorts of blame things outside our control. But within Toyota they made a different choice amongst their alternatives. To hit the problem is, "We just don't know any better. If we knew better about how to design a car we wouldn't have designed a Toyopet." I mean, why would you do that? It's like you invite guests over and serve the meal that you don't know how to make rather than your specialty. And they said, "If we knew actually how to be more productive, we would be, we wouldn't spend eight hours doing what the guys at Ford and elsewhere are spending one hour doing."


Dr. Steve Spear (00:14:26):

With the admittance, recognition, identification of ignorance as the mother of all that trouble, the folks at Toyota said that, "Well, if ignorance is the problem, not cars, not markets, not GM, not Ford, but ignorance, we have to manage in such a way to get rid of ignorance." And they came up with this mantra that everything you do you're ignorant about in some fashion. And if you're going to learn about it you have to see your ignorance quickly, you have to see your problems. And once you see a problem you have to swarm on that problem to understand and characterize it so you can solve it. And when you've come up with a discovery, right? Part of your discovery might be the problem because we might not have known about the problem but if you say, "Hey, wait, there's a problem over here." Good to know. If you swarmed and characterized the problem, you may not solve it yet, still good to know. If you come up with a solution, fantastic to know, so let's spread it around and share it and get that multiplier.


Dr. Steve Spear (00:15:24):

And so within Toyota a decision was made amongst all the alternatives as to why they were lousy and making lousy cars. They decided the problem was ignorance and the solution to ignorance was learning. Now the consequences of that was by '62, Toyota's productivity was equal the world standard. By the late 60s it was double the world standard. When Toyota comes back to the U.S. market in the 1970s, they're selling cars way more affordable because they had doubled the productivity. And cars which are now, again, back to this terrible cars terrible productivity because they've been learning the cars now are much more reliable by a factor of 100 or 1000 fold more reliable than what's on the market.


Dr. Steve Spear (00:16:06):

And that creates this opportunity to not only sell subcompact fuel-efficient cars, but to sell mid-sized cars. Now Toyota, in that asking the question, "What explains our underperformance? So quality productivity and then time to market. By the time the mid-80s come around, Toyota's introducing new models on a two-year clip, versus four years at four. Now think about this, you walk into a dealership and you look at a Ford and average age is two years on the technology, the styling, design, et cetera, compared to Toyota which is looking fresh. Why would you buy an old outdated car when you have the choice between the Ford Taurus and the Toyota Camry?


Dr. Steve Spear (00:16:51):

And Toyota continues this cycle of demonstrating their ability to learn their way to greatness around quality around productivity, time to market with new models, standing up new production facilities. Now remember the starting point for Toyota in late 1950s is the Toyopet. By the 1990s Toyota has a product in nearly every segment. In the 2000s a product in nearly every segment in the U.S. market and it's first or second in each of those segments.


Dr. Steve Spear (00:17:18):

Now just another quick example moving further upstream to developing new technology. Car drivers, the auto market sent a signal to auto makers that they wanted a doubling of fuel efficiency, be at the cost of gasoline, smog and emissions in Tokyo, Los Angeles, wherever else. And after a bunch of getting the answer wrong, General Motors and Ford both came up with the same answer of hybridization. And this is an offline conversation, which is better hived, et cetera. But General Motors came out with a Chevy Volt. Toyota came out with a hybrid, the Toyota Prius. Now, what happened after that? General Motors ended up selling about 160,000 Chevy Volts-


Dr. Steve Spear (00:18:03):

... motors ended up selling about 160,000 Chevy Volts before ending the model, shutting down the factory, and laying off the workforce. Toyota took its hybrid system from the Prius onto the Camry, tuned it differently so it was really attractive on to taxi fleets, re-tuned it again onto bigger product like the Highlander, re-tuned it again onto the Lexus as a performance package. Now, having taken their product through six, seven cycles of retuning and putting it on 24 different platforms, Toyota to date has sold, again, 160,000 Chevy Volts to 16 million of its hybrid. Same problem, but Toyota managed in such a way to get to more and better answers faster. So a difference in outcome of a hundred to one that's craz... that's better than the drug industry in terms of distribution of profits.


Gene Kim (00:18:53):

It's amazing to listen to this part of the talk because in the last three minutes, he just summarized the entirety of the Seminole 1990 book, The Machine That Changed the World by Dr. James Womack, Dr. Daniel Jones and Dr. Daniel Roos, and Steve just projected it forward to its seemingly inevitable conclusion. When the book was published in 1990, the book had some dire warnings to the entire automotive industry, suggesting that if Toyota could deliver new car models faster and if they could build them more efficiently and effectively, then they had an incredible competitive advantage. Steve brilliantly summarized how Toyota not only went on to dominate every major car category in the marketplace, but then proceeded to create entirely new ones and dominate those as well, far beyond any of the predictions in Machine That Changed the World. It is my personal belief that this phenomena will be seen in software companies as well, as well as for organizations that need software to compete and win, which basically is in this age of software, every organization these days. Back to Steve.


Dr. Steve Spear (00:19:57):

So anyway, what does that leave us? If ignorance is the mother of all our problems, then learning and high velocity learning has to be the mother of all our solutions. Now I'll just tie this up to Toyota again in terms of where this is rooted, so the founder of Toyota is a guy named Sakichi Toyoda spelled with a D-A not at T-A on the end. And he wasn't an auto guy at all, he was a textile guy, and he had this fabulous idea watching people in his home village weaving fabric. And the way they tell the story is that as he watched them weave fabric, he got broken hearted when someone would weave fabric unaware that one of the threads on the loom had broken and they had spent their entire day making fabric with a run in it rather than fabric, good for clothing.


Dr. Steve Spear (00:20:47):

And so he invented this looming, you see it in the picture here. Which, when a thread breaks on that loom, a little flag pops up to say, "Hey operator, Hey weaver, this thread is broken, stop weaving, restring the thread. Restring the thread and continue making a defect-free product rather than wasting your time." So that'd be sort of, was the initiation of this idea, that in operations you have to manage those operations. When you have a problem, you can see the problem so you can resolve the problem. Now to really bring this home, here's another picture of Mr. Toyoda later in life, and the loom here is one also that he invented and actually built, it's in the Toyoda Family Museum, outside of Nagoya. This loom, for whatever reason, it weaves in a circle rather than back and forth. You walk into the museum and you see this beautiful mounted loom and it still runs, it makes fabric, it's very pretty.


Dr. Steve Spear (00:21:40):

And it says on a plaque, "Invented by Mr. Toyoda. Built by Mr. Toyoda. One of a kind." That's odd, such a good idea and why is it one of a kind? That loom will keep running even if a thread breaks. Now I spent about five years trying to wrestle with this. If his standard is that the thread breaks, the problem is seen, the loom stops, the problem is solved, right? Why have that as the artifact, dead center in the foyer of the museum? It'd be like, if you went the Edison Museum, and what they had, the one thing in the center, was the light bulb that doesn't glow. Spent five years wondering about this, but then it dawned on me, this is a Japanese not an American aesthetic. The monument of Mr. Toyoda is not the loom, it's the fact that there's no second loom. This principle that whatever you design will break because you're ignorant and you're wrong and you make mistakes.


Dr. Steve Spear (00:22:39):

This principle that anything you design will break, and because it will break, it has to tell you that you have a problem so it can be swarmed and solved, and what's learned will spread. It was so important to them, so important to them that they decided to show not the loom, but the discipline. The discipline. Anyway, I spent a lot of my career in this, some book excerpts and some what not, you can see on, focusing on the operational side. But what I want to leave you today is to think that you can see what's wrong in your thinking long before it becomes evident in your doing. And so I'll end with a case here, yet another anniversary, June 1942, the U.S. Navy sent a task force to engage a Japanese task force at Midway. Now here's the setup, the Japanese Navy arrived with twice of everything, ships, planes, sailors, airman, et cetera, and a whole lot of experience fighting off of aircraft carriers because they'd been marauding around the Pacific for the last couple of years.


Dr. Steve Spear (00:23:40):

Now that's set up, right? A force twice as big and more experienced going against a smaller one, or I guess it's in this direction, twice as big showing up against a smaller one, right? No, no, no, it's twice as big this way, I got it backwards. Twice as big, all right. All right, there we go, the fan of mine. You'd think the one coming this way, twice as big with more experience should win, and that's not how it happened. Now, the reason I have this book up here is these authors did as a story, the Japanese perspective on Midway, written out of Japanese interviews, transcripts, documentation, et cetera. And after they built out this whole story of the battle of Midway from the Japanese perspective, I mean tremendous detail about what a pilot might have been experiencing in his torpedo bomber as it banked into a dive. You get to the end of the book and they say, "Hey reader, so given what we've told you, when do you suppose the Japanese Navy lost the battle of Midway?" Which was a disastrous defeat for the Japanese Navy.


Dr. Steve Spear (00:24:45):

So you're thinking, "I've seen the Hollywood movie, the Hollywood movie says three o'clock in the afternoon." There's a real guy Wade McClusky, a Lieutenant Commander in the Navy, he banks through the cloud, sees a Japanese war ship, drops his [inaudible 00:00:24:56]. All right, that's how Hollywood has it. Then you think, " There's no way people write a 500 page, tiny print book and reach the Hollywood conclusion, that'd be a waste of time." So you flip back through the book and you try to think, "Maybe it's earlier on the 4th of June, maybe it's late May, because the Japanese fleet was late and discombobulated leaving its harbors and ports around Tokyo in late May. It may be late May." So you get to the back of the book after you flipped through the front of the book looking for the answer to the question, "When did they lose?" And you flip it and it says, "Dear reader, by this point you probably flipped through the book looking for an answer and arrived at May 27 as your answer. You're wrong. The Japanese Navy Navy lost the Battle of Midway no later than 1929."


Dr. Steve Spear (00:25:45):

Now, at that point you're saying, "Don't screw with me, 1929's not even in the book." But then they go on to explain by 1929, the Japanese admirals had given a lot of thought, a lot of thought, a lot of thought to how you fight with aircraft carriers in the Pacific. And once they calcified and said, "We know how this is going to happen," everything else float out of that, how they designed their ships and their planes, how they trained their crews, how they planned the reconnaissance and patrols, and how they planned for the Battle of Midway. Now, the authors go on to say, "They had an opportunity. They had an opportunity to find the flaw in their thinking, but they missed it." Because prior to the Battle of Midway, the Japanese Admiralty ran a war game, tabletop, little wooden ships, very cute, like in the movies, right?


Dr. Steve Spear (00:26:33):

And imagine standing at that end of the Japanese Admirals, and at this end, there's some junior officer who's guiding the battle plan and he's standing in for the Americans. So start running the battle plan in this war game, and after a few rounds of this the referee stops the war game. He stops it because he says, "Hey, the junior officer is not following the battle plan as it's written." And why do you suppose he really stopped the war game? Yeah, the junior guy's winning, and he's beating the admirals. Now at that point, what should the admirals have done? They should have said, "Hey, maybe, all right," but what do you think they actually did? Yeah that's right, they fired the junior guy. They found another junior guy. And the way this books tells a story, they go through one junior officer, more junior officer, a senior enlisted, junior enlisted, seaman recruit, some dude selling noodles off the street of Tokyo. But it turns out anyone who reads the battle plan looks at the table says, "If I did that with half of everything, I'm going to get crushed, I'm going to do something different."


Dr. Steve Spear (00:27:39):

Anyway, what happens is they go with their battle plan, and the thing about with a battle plan or any plan, is basically a guess of the future. And they had feedback that their guess was not such a good guess, but they said, "We're going to stick to our guess and reject the feedback," so they go into Midway and they get feedback from Admiral Nimitz. Now what's Admiral Nimitz's experience in the preceding years? So the U.S. Navy leadership, like the Japanese Navy leadership had gone through a similar exercise of battle plans and war games. But on the U.S. side, they would design a battle plan, run a war game, maybe with a comparable junior officer on this side, but if the battle plan went contrary to the plan, they asked the junior officer, "Hey, what'd you see wrong?" And they went through these cycles of updating and updating and updating based on the feedback. And in fact, they took this as far as when they were running actual exercises, real ships, real planes, real people, out in the ocean, which is a dangerous place. You'd think at that point someone might've said, "Hey Admiral Nimitz, it's fine to mess around on a tabletop with a wooden ship, but when we're out at sea we got to rehearse the battle plan because now it counts." That was an alternative. But the choice they actually made was when they were running real exercises, the end of the day, the senior leadership would stand not in, not hide in a war room below deck, they'd stand on the flight deck and debrief on the war game, on the exercise. Not only would they do that, they do it publicly in front of the 700,000 officers who participated with the officers in the back saying, "Yo Admiral, I understand your thinking. Let me tell you something, you're thinking, it sucks. We tried it, it's terrible," with Admiral Nimitz, beautifully taking notes.


Dr. Steve Spear (00:29:25):

And by the end of the... After the war, Admiral Nimitz reflects, he said, "Of all the things that happened in the Pacific, as horrible and terrible as it was, basically there were no surprises because we use this early stage planning to find out all of the flaws in our thinking, aggressively, aggressively, aggressively, before it became flaws in our doing." So let me leave you guys with some homework on this one, is that undoubtedly, there are people in this room, actually all of you, right, who are planning something, designing something, conceptualizing something. And my bet is that as you're going through this process, you're getting with your colleagues and trying to get the plan, the design, the conceptualization right. And you're working harder and harder and you're budgeting time to get it right. And my guess is that for a lot of the things you're planning and designing, you're not committing, dedicating time early often to stand up and say, "Hey guys, gals, gang, this is what I've got so far, tell me what's wrong. Tell me what's wrong."


Dr. Steve Spear (00:30:30):

So your homework, your homework, is to take your experience right now and convert it from one, which is more like the Japanese preparation for Midway, which is, "Oh, the point of the plan, the point of the design, is to get buy in understanding. We have to get the minions to understand us." As opposed to the point of the plan, the point of the design, is to garner feedback on what we think we know so we can get it better and better and better. So real quick, just in terms of making a choice on a different alternative to managing versus, and the importance of high velocity learning and high velocity outcomes. So coming out of World War II, the U.S. and the Soviet both had this idea of putting nuclear power onboard submarines to dramatically increase the effectiveness and lethality of that weapons platform. U.S. launched their first boat in 1955, the Nautilus, and since the launch of the Nautilus in 1955, the U.S. experience with nuclear power has been absolutely perfect. There's been no environmental harm, no human injury due to reactor failure on a U.S. warship. Other things go wrong.


Dr. Steve Spear (00:31:39):

By the way, the British Navy, you guys are testing out a trident missile last year and got spun around, you launched it at Disneyland. There are folks that are from Disney in the room, so they're a little ticked off by that. But anyway, but the reactor was fine. The reactor was fine. Anyway, this is the Soviet experience. This is the Soviet experience with nuclear power and submarines in general. About every two years, the Soviet Navy has lost a, or lost a submarine, it's crew and did terrible damage to the environment, and this is a very small sampling of the records since the 1950s. Now you ask the diff... You ask the question, "What's the difference?" Well, the start point was the same, a huge amount of ignorance. Huge amount of ignorance about the science and technology, engineering, et cetera, related to atomic power. The end point was, the desired end point was the same, which was a sufficient level of understanding. One level of understanding was achieved, in the other case, it wasn't.


Dr. Steve Spear (00:32:32):

The only thing left as an explanation is how these programs were managed. And this character here is the fellow who is Admiral Rickover, the father of the U.S. nuclear program. And given the choice of defining adversaries, he could have defined his as a Soviet Navy. He could have defined his adversary as the science technology engineering of atomic power. But instead, what he did was he defined is his adversary, his adversary, the lack of understanding. And I'll just talk to this picture in a second. So Admiral Rickover tried to cultivate a culture in his program, where if you didn't understand something you raised a hand, and I... Chapter five has some cases on this, but I'll just talk because I'm kind of deliberately imitating him.


Dr. Steve Spear (00:33:20):

Here's a guy's, he's an admiral, he's entitled... Here in the UK or at home, admirals are entitled to wear a ton of bling on their uniform, but he's wearing a gray suit. Not only is he wearing a gray suit, it's on the day of the Nautilus, the first submarine is being commissioned. It begs the question, why doesn't he show up in a uniform, with all the Navy blue and gold trim and this and that? And what Rickover realized is that his real adversary is the inability, discomfort of people to raise their hand and say, "Yo, I don't understand."


Dr. Steve Spear (00:33:51):

And so one of the many things he did was he started showing up to work in a gray suit, the idea being that if he shows up in a gray suit, people, other people will show up in gray suits, and it'll at least address a little bit, the Pavlovian response of, "Oh, there's someone more senior to me, I don't want to look stupid," "Oh, there's someone more junior than me, I don't want to look stupid." "Oh, there's a uniform guy, they're so macho and heroic, I don't want to look stupid as a civilian," or vice versa. Those are just one of many techniques, but the key point is, is Rickover defined the problem as behavioral. The technical stuff was a consequence of behavioral. The getting into the market as it were, technical, behavioral, the Soviets, right? Having the ship at sea because of technical, but because of behavioral.


Dr. Steve Spear (00:34:38):

Anyway, the storyline here is when we look at the few organizations which have utterly crushed their competition, it's because people managing other people, people like you, have decided that the objective function every day has to be discovering something new. And the way to do that as expose our thinking. Expose our thinking to feedback, which tells us our thinking is wrong before it becomes wrong and are doing. All right, so here's my ask for help. As you can see, my basic thinking goes something like this, is to avoid having a flood, grab the leak. And before you have to grab the leak, which is a hard problem to solve, notice when your pipes are sweating. And if you can solve the problem of the sweating pipe, you don't have the leaking pipe, if you can solve the leaking pipe, you don't have the flood.


Dr. Steve Spear (00:35:29):

And so, what we've done is we've created a portable and on, because the problem we encountered, the problem we recognized, is that it's one thing, you got a moving assembly line, someone works in about the same 10 foot left, 10 foot right, space. But when you have a workforce like nursing, like field service crews, et cetera, which people working in amusement parks where people are out and about distributing mobile, the person with the problem has this difficulty that they've got their work, and it's a huge overburden to stop their work, go find a computer, log in, send a ticket off to someone else-


Dr. Steve Spear (00:36:03):

... there were. Go find a computer. Log in. Send a ticket off to someone else. So what ends up happening, the person with the problem is unseen, unheard, voiceless. And the people with solutions who may be somewhere else, they're deaf, and blind to what's actually going on in their organization. So what we did is we said, well, you know, you guys are IT geniuses. There's got to be a solution. So what we did is we built an app. The app sits on a mobile device so the person in the field can quickly with 10 seconds say I've got a problem that immediately goes to the central service, which is supposed to be supportive of solutions, giving real time very rich visibility to people managing systems as to what's going wrong and how quickly it's being addressed. So put it in a factory and their uptime went up. We put it in a hospital connecting pediatric inpatient care to pharmacy.


Dr. Steve Spear (00:36:58):

Their rate of missing medication went down by 30% because of this rich, realtime visibility of information. So here's the ask of all of you, which is, in your own organizations, you got anybody who might want to partner with us and try this out? Within your organization has maybe 30 to about 300 people, fairly small, not gigantic, but more than two or three folks who are not computer bound, which means they're disconnected often from the rest of the organization, out mobile distributed, where they need help from what might be a centralized service, which may not be anywhere close to them.


Gene Kim (00:37:37):

Gene here, again, to learn about what Steve and team have been working on, go to CytoSolve dot com, which will be in the show notes. So that was his presentation from DevOps Enterprise Summit, London 2019. Here is a presentation he just gave at the DevOps Enterprise Summit, London 2020, which has held virtually. He talks about one of the most remarkable and historic examples of creating a dynamic learning organization at scale in the US Navy. We're going to jump to the beginning of his presentation, where he talks about the defeat of the Japanese Imperial Navy at the Battle of Midway. I deleted some portions of what we just heard so we can quickly get to the point where Steve makes an even more surprising conclusion of when the Battle of Midway was lost for the Japanese Navy, that it wasn't in 1942, nor was it in 1929 like he suggested in the last talk, but even decades earlier than that. Here's Steve


Dr. Steve Spear (00:38:30):

June, 1942, should have been a source of huge celebration for the Imperial Japan Navy. And why is that? Because December, 1941, utterly stunk for the United States Navy. The Japanese Navy had attacked Pearl Harbor, surprise attack, destroy battleship row. And immediately after that, go on a wave of conquest through the Pacific while in Bhutan, Singapore, this place, that place. And, June 42, this is going to be the coup de grace. Japanese Navy was going to sail out from Japan out to Midway Island, started bombarding the heck out of that island, lure the US Navy out of Pearl Harbor, and sneak attack from there and destroy the remainder of the US force. This time, the aircraft carriers now that the battleships were still burning. Well anyway, it didn't work out exactly that way for the Japanese. And in rather than June 42, being that momentous triumph, it actually turned to be pivotal.


Dr. Steve Spear (00:39:24):

And after the defeat suffered at Midway Island by the Japanese Navy, they couldn't wage a meaningful offensive for the remainder of the war. Now that's not to say that it was easy going for the US Navy. Japan staged a brutal bloody prolonged retreating defense, but it was a retreating defense. And so you might ask yourself the question. So, with these great plans that were being cooked up and operationalized in June, 1942, what went wrong? And when did it go wrong? Now let's think about it. So anyway, having flipped through all the way to the beginning of the book, you go to the back of the book again, and the authors, it's kind of funny. Right? There they go from this very dry prose to almost slapstick. They say, hey reader, I bet you went all the way to the start of the book and found a May as when the Japanese Navy lost this because they got discombobulated.


Dr. Steve Spear (00:40:16):

And guess what? The Japanese Navy lost the battle of Midway no later than 1929. And I'm like, what the? Because 1929 is not even in the book, but here's the thing. My reaction to that book was 1929, what, the? All right. Let me offer another offer is that the Japanese Navy may have lost by 1929, but the US Navy won by 1895. Now you probably go, oh what the? So anyway, let me explain that. In the late 1800s, the United States Navy was faced with huge, huge change, both strategic and technological. And as I start talking through this case, start thinking about all the strategic and technological changes we have in 2020. So you got your internet of things. You got your industry 4. 0. You got your G5. You got your AI. You got machine learning. Got data mining, and all of that lumped together.


Dr. Steve Spear (00:41:08):

I mean, how often do you see in an article where the headline is basically, throw your past away your history hasn't been written. You're going to have to completely rethink not only what you're doing, how you do it. Well anyway, that was a real problem for the US Navy in about 1895, and I'll tell you why. Up through the mid 1800s, the United States had a very continental focus. You started off with a 13 diminutive weak colonies on the Atlantic coast, but you got the Louisiana Purchase. You got Westward expansion. You got Lewis and Clark finding... Other people knew it was there, but they found it for themselves the Pacific Ocean on and on. But by 1900, just to scale this, by 1900, of the 50 States in the union we have today, and you can peel off Hawaii and Alaska, so we're down to 48.


Dr. Steve Spear (00:41:54):

So of the 48 continental states, 45 are already in the union and Oklahoma was a territory. So it wasn't quite a state yet. It was on the way. And so by the time you get to 1900, you have the United States having solved the manifest destiny problem and the continental expansion problem. And it starts thinking itself less and less as only a continental power and more and more as also transoceanic power. Now, what does that mean for the Navy? Well the Navy has got to redefine its job? Because it's job had been coastal defense, and now it has to start thinking about how it expands itself, transoceaniclly, big oceans, the Pacific in particular, and the thing is it's more than just the distance involved. Because on the other side of the Pacific Ocean, guess what? The Japanese Navy is going through a same similar self reflection because Japan had been in a self-imposed isolation for the better part of, what? 400 years?


Dr. Steve Spear (00:42:52):

And coming into the late 1800s, Meiji restoration, all that. They started thinking of terms, well, how can we be a world power transoceanic? So one of the ways that started that exploration was kicking the stuffings out of the Russians in 1904, 1905. So anyway, you have the United States Navy now having to think about projecting power and protecting interests over the Pacific. And on the other side of the Pacific there's a potential adversary somewhere someday about something. All right. Now, that's just strategic element, changing what we do. But there was also a huge amount of technological change that the US Navy had to worry about. Now this is a great side by side comparison. Two battleships. Right? You say, oh a battleship is battleship. Right? But take a look on the left hand side of your screen. USS Texas commissioned 1892, maybe [inaudible 00:43:42] but 1892 is a good enough guess.


Dr. Steve Spear (00:43:45):

1892. They take a close look. You see, all right, so she's got a steam based power plant. She's got a steel haul. You start looking at where the guns are, the guns are in exactly the same places on the USS Constitution, or you know what, Admiral Nelson might have fought it out of battle of Trafalgar. It's side mounted and the tactics to fight with this ship and fight against ships like that. It hadn't really much advanced. Yeah. You had more control where you went. You didn't have to depend on the wind quite so much, but the same tactics strategy, et cetera, would have applied in 1892 onboard the USS Texas as in 1792 on comparable ship. Now look on the right hand side of the slide here. You have USS Indiana, three years younger, that's it.


Dr. Steve Spear (00:44:31):

But you know, the big difference that the Indiana she's got gun turrets and they say, oh, what's the big difference? And the difference is huge. Huge. Because when you have side mounted guns, what can you do? You just try and cross the T, as it were. But turreted guns. Take a closer look here, Turreted guns. What does that give you opportunity to do? Well, it gives you the opportunity to aim at anything you want because you've got two, three, sometimes four turrets on a ship. Each gun is independently aimable. And when you've got that capability, what that does is it lets you aim at all sorts of different places, which the whole side mounted thing never, never allowed. I say put these two things together, what do you have for the US Navy? One, they're facing this huge strategic change and that'd be enough already as it is for most of us when we have to really repurpose what it is we do. But they had this huge technological change, which is they had to repurpose how they did whatever they were going to end up doing.


Gene Kim (00:45:35):

Gene here, again. I want to pause here for a moment and emphasize what Steve just mentioned. He just described the confluence of two very powerful forces that the US Navy faced, a dramatic change in strategy from being a coastal power to a transoceanic power, and a dramatic change in technology as the US Navy went from a sail powered fleet to one power by steam equipped with tremendous advances in aimed turreted artillery. This is a moment of tremendous disruption where the mission goals are changed as well as the strategy to achieve them happening at the same time as a huge technology change. And if that sounds familiar, it should because this is happening right now. When people talk about digital disruption, this is what they are referring to, technology has dramatically changed the way you would create value. Technology is no longer the back office ERP systems. It is the systems of engagement and the systems of innovation that allow us to find customers and deliver value to them quickly.


Gene Kim (00:46:34):

The retail apocalypse, which has been going on for nearly a decade as referenced by the killer bees story by the Nordstrom board of directors, as referenced earlier, has only accelerated as COVID-19 has decimated so much commerce at brick and mortar establishments. So many brands, as evidence in the amazing DevOps Enterprise talks from Nike and more recently, Adidas, are going direct to consumer driving billions of dollars in revenue directly as opposed to going through more traditional retailers. So as Steve describes what the US Navy's response was to this massive disruption in strategy and technology a hundred years ago, compare and contrast that to how your organizations are responding to digital disruption today. Back to Steve.


Dr. Steve Spear (00:47:18):

Now at that moment, the leadership of the United States Navy, these guys, they had a choice. And I just want to [inaudible 00:47:27] this is that in 1900, who were the leaders in the United States Navy? Well, the leaders of the United States Navy were men. They were white men. They were Protestant men who had grown up with a sense of elitism, classism, hierarchy, status, et cetera, et cetera. And you start thinking about what folks who've got all those isms, it's to their advantage, not their disadvantage. But people with all those isms working for them do, the only way they do is they say, oh, well everybody else, that's a bunch of jerks. What do they know? We're going to do all the thinking here. We don't want to get our pretty hands dirty. And we'll do the thinking.


Dr. Steve Spear (00:48:08):

We'll push out and tell what all those other folks should do. So that was a choice. That was a choice, which is they could have consolidated the thinking in the decision making to the Navy Yard in Washington, DC. And once they had thought through the strategic question, what are we going to do? And the technological question, how are we going to do it? [inaudible 00:48:28] instructions out to the Navy with the expectation that they pushed the instructions out and what are they getting in return? And aye, aye, sir, away we go. And that would have been the natural thing to do, but that's not what they did. Instead, those leaders with all the social societal economic advantage they had, when it came time to the question of what do we do, how we do it, they got together and said, we got no idea what to do and how to do it.


Dr. Steve Spear (00:49:00):

It's so far beyond any experience we've had to allow us to approximate, analogize, extrapolate, et cetera. We got no idea. So what do they do? They say, you know what? We got to get the distributor problem solving capability of the whole Navy involved in this. And so they go through the series of exercises to push out to the fleet, to push out to individual ship skippers. But ship skippers pushing out to their individual crews problems. How do you fire a gun? How do you aim a gun? How do you aim a gun in rolling seas? On and on. And what did they want done? Not the aye, aye, sir. Anchors away. What they wanted done in return was experimentation with the idea that whether the experiment worked or not, the lesson learned would come back for consolidation, then synthesis, and then redistribution as a collective lesson learned as way better than anybody else has. All right. So anyway, where does that lead and how does that get operationalized? Well, they go out to the squadrons. The squadrons go out to the ships and even onboard the ships. The ship skippers go out to their crews and say, hey, they handed us these guns and these weapons in these turrets and they're wildly complex. And, hey, so chief petty officer, why don't you try a couple of different things with your gun turret crew and the guys at the stern while you're up in the bow, they'll try some other things. And onboard the ship we'll come up with some synthesized consolidated lessons learned package. So when we go out and experiment and test and go through drills and exercises with our ship, we got the collective best understanding of everybody on board the ship, and not just what the captain thinks.


Dr. Steve Spear (00:50:52):

Well, anyway, that was one round. Now another round of this is you have these ships where you've now introduced really advanced power plants and really advanced navigation and really advanced weaponry and really advanced communication. You know what you've done? You've created the risk that you're going to fry the brain of the captain. Because back in the day, it sails. He's going around this way, that way, sailing around. Someone, hey, captain, here's what's happened. Oh. Thank you. I'll think about that. I'll tell you what to do. Oh, captain, here's something else. Oh. I'll think about it. And you get on board one of these then modern ships and the amount of information flowing, if it goes to the captain, his brain is going to melt down. The Navy invented this idea of a combat information center. And the idea was have the information coming in from this division, this department, this division, this department come into the combat information center, where there would be a methodical way of absorbing, digesting, scrubbing, re-interpreting.


Dr. Steve Spear (00:51:50):

So the information that went to the captain was only the things the captain needed to know to make captain decisions. And other information, which wasn't captain decisions, it was department decisions, or division decisions, or watch station decisions, that information would be parsed, and go to the right places. Now, when this idea of a CIC, combat information center, came up, guess what the Navy knew about the appropriate design and use of those things? Nothing. Because they had never been designed and used before. And so what did the leadership of the Navy do? The same thing. They said, hey, that's a problem. We don't really understand how that thing works. So here's what we're going to do. We're going to push out to the ships the opportunity, the authority, the responsibility to experiment with those CICs. And what we're asking is not that they use them right.


Dr. Steve Spear (00:52:44):

Because no one knows what right is. But when we asked them to do is use them creatively and capture the consequences of using them creatively this way, or creative that way, or creatively some other way. And, in fact, they gave so much authority to a ship captains that if a ship was still being built, the captain could go to the ship yard and talk to the engineers, the designers, the builders, and personalize it. Think about it. We tend to think of the military. Oh, well it's highly standardized, command control, top down... [inaudible 00:53:15] Right? No. No. No. Captain, look, you're a young guy, and we're a bunch of old guys, but we want you to go to the shipyard and tell them how you want your CIC configured so you can run the experiments, the creative experiments that are only you can think about.


Gene Kim (00:53:30):

I'd love this stuff. I've often seen the CIC portrayed in Tom Clancy novels on modern aircraft carriers or nuclear attack submarines, but never in the World War II context until I saw the just released movie, Greyhound, on Disney plus starring Tom Hanks. It's based on the 1955 novel, The Good Shepherd by CS Forester. It's about a destroyer captain escorting a convoy of freighters crossing the Atlantic Ocean during World War II. And I loved it. In fact, I made my kids watch it with me twice. I was particularly blown away by how much the situational...


Gene Kim (00:54:03):

... twice. I was particularly blown away by how much the situational awareness of the battle against the German submarine task force centered around the captain, keeping mental track of targets, inbound torpedoes, other friendly destroyers was information coming in from the CIC, as well as his own observations, such as inbound communications from the convoy Commodore, ship lookout and his officers. I was struck by how adroit certain people had to be at trigonometry to keep track of the battle space in their head. And I had this feeling at times that the amount of information that the captain could process was nearing its limits. If it's accurate, it's such a neat way to appreciate the cognitive load of a World War II destroyer captain in battle. Okay. Back to Steve, as he talks about innovation, not within just a ship, but across a group of ships.


Dr. Steve Spear (00:54:49):

Anyway, this continues forward. So think about the scale we started at, which is getting the petty officers and the chiefs to figure out how to operate the crew within a gun target. And then we go to the skippers and say, "Well, how do you coordinate the guns and everything else with the combat information center?" We've got another unit of analysis, which is the task force. And he had this question then, now that you've gotten center, think about the change. Because now that you've got all this advanced technology of communication, propulsion, armaments, et cetera, you get a lot of different kinds of ships. You've got your battleships, you got your cruises, you got your destroyers, et cetera. And the question is, how do you take all those pieces and put it into a meaningful whole, not hole, but whole, complete, so that the pieces come together in a sum greater than the parts?


Dr. Steve Spear (00:55:38):

And so again, think about the dudes in the Washington Navy yard, who'd grown up with status and hierarchy and privilege and elitism. And the question comes down to, so what do you want to do with these task forces of disparate ships? And I said, "Well, you know what we think we should do? We don't know. We don't know. We haven't done this before. So you know what we're going to do. We're going to run a series of ... I'll be careful on the wording here. We're going to run a series of exercises." I'm using little e there, because that's not exactly what they called it. They said, you know what? If you want to project power across the Pacific and protect interests across the Pacific, and you're trying to do it with these brand new diverse sciences and technologies, you have a lot of problems, because we don't know how to do that.


Dr. Steve Spear (00:56:26):

And so from the 1920s, through the end of the 1930s, right into 1940, the United States Navy ran these exercises. But it's very important what they call them. They didn't call them exercises, because exercises sounds like, I don't know, Gene writes up a plan. And then Steve has to look at the plan and say, Oh Gene, I got the plan. I'm going to execute it. And I get graded on how well I adhere to the plan, but they didn't call them exercises. They call them problems. Think about what a problem is. Problem is we got a situation, but you know, we don't know what to do. Like wow, if we're going to be transoceanic in the Atlantic and the Pacific, we might have to defend the Panama Canal for merchant shipping, for military shipping. Well, how do you defend the Panama Canal? And everyone said, "I don't know." Well, you know, that's a problem. Go figure it out.


Dr. Steve Spear (00:57:21):

And so what did they do in 1923? They send out many, many ships. And thousands and thousands of sailors said, "You know what? Try to defend the Panama Canal and let us know what you did and how it worked." And then as you can see through these titles, they attack and defend the Panama Canal more than once. They try to figure out, Oh Jeez, if you're going across the Pacific, lot of little islands could be useful. How do you secure an Island? Everyone is, "I don't know." Well, that's a problem. Why don't you go find out?


Dr. Steve Spear (00:57:49):

So 1931, it looks like amphibious landings. Go try to figure out how you get soldiers and Marines off of ships and get them safely ashore so they can exert control. It goes on and on and on, these dozens of problems. And again, it's the same basic philosophy. We've got a situation, we don't know what to do. Rather than trying to sit around and think through an answer based on complete ignorance, what we're going to do instead is let people go and experiment, experiment in a distributed fashion. And what our job as the central folks is to pull in those lessons, synthesize those lessons, consolidate those lessons and go back with what the collective wisdom is, versus the individual wisdom. And where does that lead us? Is that you've had this series of fleet problems, all through the twenties and the thirties.


Dr. Steve Spear (00:58:48):

All right. So now let's bring us back to Midway, what's going on? Get back to Midway. And the Japanese send [Amada 00:58:55] out to Midway Island to lure the U.S. and think about it, the U.S., if you have to think about your battle plans for Midway, would it depended on battleships? One would have assumed the battleships show up, but they didn't. And so the Japanese is thinking, look, they would have been planning on aircraft carrier plus battleships. They don't have the battleships. We're going to clean their clocks.


Dr. Steve Spear (00:59:22):

Now this gets back to the part about when did the U.S. win 1895 through this distributed experimentation approach to problems with no way to think you through to the answer. But anyway, these guys wrote shattered sword, how they come up with 1929. So this story goes, something like this. They say 1929, by 1929, Japanese Admiralty had decided, they decided, think about the arrogant to that. In 1929, they had decided how war would be waged against the United States in the Pacific Ocean. That's not clear that they had sort of, I don't know, had a conversation with the American said, "What have you decided about war in the Pacific?" But the Japanese Admiral, they had made their decision in 1929, about how war might be waged in the 1930s, 1940s. They decided.


Dr. Steve Spear (01:00:16):

But anyway, here's the thing about making a decision like that. Once you decide that this is what's going to happen, everything else flows out of that decision, how do you design an aircraft carrier? Well, it's got to be compliant with the decision of how we're going to wage war. How do you design an aircraft? Boom! Compliant with the decision we made in 1929. How do you think through things like fueling, arming, rearming, refueling, launching, recovery, relaunching, repurposing, navigation, communication, reconnaissance? Well, we got, pun intended, we got an anchor point. We made a decision in 1929, how war will be fought.


Dr. Steve Spear (01:00:54):

Carrying this through a little bit further. So these guys, describe what happened here based on this 1929 decision. So going into Battle of Midway, the Japanese admirals had written a battle plan and the battle plan detailed what was supposed to happen. So they decided to do a war game, kind of little tabletop, little wooden ships and whatnot. Then they decided to do a war game to rehearse for the Battle of Midway.


Gene Kim (01:01:23):

Gene here. At this point, Steve recounts the story of the tabletop exercise that the Japanese admirals do, firing the junior officers that are role playing the American adversaries, which he told us about in his 2019 talk. Let's jump ahead 90 seconds, where he talks about the contrast between the Naval doctrine and plan that the Japanese Admiralty created versus the ones that the Americans created.


Dr. Steve Spear (01:01:46):

What's happening on the U.S. side is that they had gone through these exercises, these problems in the twenties and thirties. So they didn't have a battle plan. They had a portfolio. And when they didn't have battleships, they said, well, let's flip a page here. Let's see what we got in our book. Page one we can't use, but this one will work. Let's go with that one. And not only that, in terms of having plays to pull upon, they had a mindset. What was their mindset? Life is going to throw you situations where you know what, you just don't have the answer. You may not even know what the problem is, which you can go out and you can experiment and learn as quickly as you can.


Dr. Steve Spear (01:02:31):

So the Japanese Navy shows up in Midway Island and you could argue they had a bigger fleet and they had more planes and certainly had more experience in terms of pilots and sailors, but they show it up to wage war against the Navy, that innate, innate in the fiber of its being, with this certainty that they didn't necessarily have a right answer, but if they behave in a certain way, an exploratory and experimental way, they could discover the right answer.


Dr. Steve Spear (01:03:03):

Anyway, the Japanese Navy showed up at Midway and they got their clock kicked because they showed up and they flood folks who rather than have this compliant form of leadership over the last 20, 30, 40 years, they showed up when the Navy that had had this very engaging, experimental, distributed problem solving culture. And smart beat stupid just about every day.


Dr. Steve Spear (01:03:29):

So anyway folks, I'll hold to this storyline that when in doubt, having a way to get smarter faster, that's going to win, if not every time it's going to win most times. And when it wins, it's going to win by a whole lot. Look, we've spent the better part of the last 20 years trying to change behavior from this command control compliance audit approach, to a much more distributed, engaged, experimental discovery approach. So anyone who wants to partner on trying that out, wherever you happen to be, let us know. We've created some software tools to kind of help that behavioral change in certain circumstances. So if you're curious what we've cooked up around that, get in touch. Let me just offer the last encouragement, is when in doubt do, because if you're in doubt, it's because you don't know, but if you do something, you might learn something and learning something is a good thing. So that's what I got to say, and over and out. Bye-bye.


Gene Kim (01:04:32):

Wow! Those talks are so great. I have two observations I'd like to share with you. The first is around distributed learning. When it comes to digital disruption, at least around the use of cloud, it's not the top leaders that figure out how to exploit this new technologies, it's senior engineers and architects. Managers, senior managers, and directors, trying to figure out what works and how do we make a bigger, more material impact on our organization. In other words, it's not the admirals. It's the chief petty officers, the lieutenants and the younger leaders who really figure out how to pioneer these new practices that allow us to win in the marketplace.


Gene Kim (01:05:07):

In the unicorn project, the protagonists have to stage a rebellion in order to bring in a better way of working, to bring in new technologies, to displace the old. And those stories were really inspired by the DevOps enterprise community. It is this rebellion, having to fight an ancient, powerful order who is quite happy to keep doing things the way we've always done it. In a more just world, where there is a culture of dynamic distributed learning, It wouldn't require so much courage and heroism to bring these great ideas to bear.


Gene Kim (01:05:39):

Secondly, I wanted to mention something that I've been reflecting on for weeks. What I learned in the last three months leading up to running our first virtual conference was that it was a totally different problem than running a physical conference. Bob Bejan, a Corporate Vice President at Microsoft said, live in person events are a theatrical experience, whereas virtual events are a cinematic experience. And we really doubled down on that premise. We prerecorded all of the presentations and we thought about how we would do programming differently as if we were producing a TV show or a movie.


Gene Kim (01:06:15):

And one of my big learnings is that the dominant architecture of how one puts on a great live conference is very, very different to how one puts on a great virtual conference. I'll give you one example. In a physical conference, I never interacted with the video editors. They were the people that we gave all our footage to after the conference. And somehow they would eventually find their way on to YouTube. However, in an online conference, it was the other way around. Everything had to be recorded beforehand and edited. And I was working with the video editors all the time. And in many cases, I couldn't wait for them to complete the work overnight. So suddenly I'm using tools I've never used before in my entire career, like video editors and recording programs.


Gene Kim (01:06:59):

Over the last couple of months, I've often felt so fortunate to have learned about Steve's notion of structure and dynamics before the global pandemic. It is what likely saved us from entering into a potentially very problematic contract with our AV production company, which had very precisely defined roles and responsibilities. It's what made me realize that we didn't understand what problems we were going to be facing. So we needed cross functional teams who were full of people who were willing to learn new things. The notion of cross functional teams, T-shaped people, these are things that we talk a lot about in our DevOps community, but it was incredible to stumble upon these lessons in a totally different context of producing our first virtual conference.


Gene Kim (01:07:44):

It's what made me realize how much we needed cross-functional people with very wide skillsets, who are willing to learn new things where so much of the problem was unknown. Not only did we know what the right processes were, we didn't even know what the right problems were until we encountered them. And like Steve advised, we kept trying things, reaching out to experts and friends to help us get smarter faster, and in the end, deliver what I believe was a fantastically successful online event, which many people said was the best they've ever experienced. And part of that was being acutely aware of and revisiting the structure we were creating. Acutely aware of the sometimes bad dynamics that resulted from the decisions we made. I'll explore this further in a blog post I intend to post sometime in the next week.


Gene Kim (01:08:28):

Thank you so much for listening to today's episode. I hope you enjoyed them as much as I did. As a bonus to you, you can watch Dr. Steven Spear's amazing 2020 London Virtual presentation at itrevolution.com/watchspear just by entering your email address. Directions will be posted in the show notes.


Gene Kim (01:08:54):

I hope you loved listening to the last two ideal casts with Steve, because I've got one more for you next week. In the next episode, I'm going to play a followup interview I did with Steve, where I got to ask him some even more basic questions I was left wondering about after my first interview. Continuing some of the explorations I started with Elizabeth Henderson. Is it really true that leaders have fewer and fewer knobs to turn as you get higher up in the organization and what are the implications? And why do we see this ever increasing complexity and need for specialization in the world? And what does it mean for leaders? And we talk about and explore further the structure and dynamics of the MIT beer game. See you next week.





Conversations with experts about the important ideas changing how organizations compete and win.
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