Gene Kim and Steve Spear on Why Organizational Wiring Matters More Than Tools or Talent

My guests for Episode #493 of the Lean Blog Interviews Podcast are Gene Kim and Steve Spear, co-authors of “Wiring the Winning Organization.” We talk about why so many organizations copy the visible practices of Toyota or Amazon — two pizza teams, andon cords — without understanding the design principles underneath. Gene and Steve make the case that what separates winning organizations isn't talent or technology. It's the way work is structured so people can actually think, learn, and solve problems together.

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My guests for Episode #493 of the Lean Blog Interviews Podcast are Gene Kim and Steve Spear, co-authors of the new book Wiring the Winning Organization: Liberating Our Collective Greatness through Slowification, Simplification, and Amplification.

Joining us for the first time is Gene Kim, a Wall Street Journal bestselling author and researcher who has been studying high-performing technology organizations since 1999 – He 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 (now the Enterprise Technology Leadership Summit), studying the technology transformations of large, complex organizations. He lives in Portland, OR, with his wife and family.

Dr. Steven J. Spear, DBA, MS, MS is a senior lecturer at the MIT Sloan School of Management, a Senior Fellow at the Institute for Healthcare Improvement, and the author of influential publications like the book The High-Velocity Edge, and the HBR articles “Decoding the DNA of the Toyota Production System,” and “Fixing Healthcare from the Inside, Today.” 

An advisor to corporate and governmental leaders across a range of fields, he is also the founder of See to Solve, a business process software company. He has a doctorate from Harvard, master's degrees in mechanical engineering and management from MIT, and a bachelor's degree in economics from Princeton. 

Steve was previously a guest on five episodes: 58, 87, 262, 358, and 386.

Topics and Questions in This Episode:

• What happens when senior leaders show up at the gemba to hold people “accountable” — but have the accountability backwards
• How did Gene first encounter the ideas behind Lean and DevOps — and what made the performance gap between organizations so striking?
• Steve's path from economics to engineering to an immersion inside Toyota
• Toyota as “the ultimate learning machine” — designing systems around the human mind, not just the flow of materials
• How Gene and Steve's work converged across very different industries — and what finally pushed them from talking to writing
• Why copying Amazon's two pizza teams (or Toyota's andon cords) without understanding the design principles underneath usually fails
• The “danger zone” vs. the “winning zone” — what conditions make it nearly impossible for people to solve problems, and what shifts those conditions?
• Slowification, simplification, and amplification as the three mechanisms behind every worst-to-first transformation
• The andon cord as a system for speaking up — and why no one pulls the cord in some factories while it gets pulled every 40 minutes in others
• Does “see, solve, share” need a fourth step? Why psychological safety might need to come before problem solving

The podcast is brought to you by Stiles Associates, the premier executive search firm specializing in the placement of Lean Transformation executives. With a track record of success spanning over 30 years, it's been the trusted partner for the manufacturing, private equity, and healthcare sectors. Learn more.

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Episode Summary

Wiring the Winning Organization: Unlocking Excellence Through Structure and Culture

In the quest for organizational success, there's been a perennial search for the elements that create an exceptional company. It's not just about the products you sell or the services you provide; it's fundamentally about the way your company operates. Leadership scholars and practitioners Gene Kim and Steve Spear explore this intricate dynamic in their new book, “Wiring the Winning Organization,” shining a spotlight on how specific organizational disciplines can unleash greatness.

The Cornerstone of Company Success: It's Not Just About the Work, It's About the Wiring

The basis of any successful organization isn't merely the individual excellence of its members but the symphony-like coordination of their talents into something greater than the sum of its parts. The most groundbreaking organizations treat talent like electricity–ensuring it flows smoothly, without impedance, throughout the system. The wiring, a term that Kim and Spear use extensively, refers to the processes, procedures, and routines harmonizing individual efforts towards collective goals.

Leadership styles in such organizations go beyond just being present; they involve being empathetic and proactive. Senior leaders frequently visit operational sites to understand the conditions their teams work in, exhibiting genuine interest and offering assistance to empower their teams to excel. This isn't solely a matter of control–it's about creating an environment where problems can be safely and proactively addressed.

Creating Conditions for Growth: The Framework of Slowing Down, Simplification, and Amplification

Kim and Spear emphasize “slowification”, simplification, and amplification as core mechanisms transformative organizations leverage.

• Slowification suggests that taking the time to properly plan and prepare can enable efficiency and excellence. Inspirational examples include the US Navy's Top Gun program, which emphasizes rigorous training to create an environment for pilots to thrive under pressure. This approach, akin to Daniel Kahneman's “slow thinking,” endorses a reflective reaction over a reflexive one.
• Simplification means altering the problems themselves so they become more solvable. Techniques like incremental solving, sequentializing, linearizing, and modularizing enable independence and reduce the chance of complex, coupled problems. Organizations that adopt a philosophy of simplification often lead to a culture where innovation becomes an everyday occurrence rather than an infrequent breakthrough.
• Amplification is the ability to escalate even the faintest indicators of issues so that they become impossible to ignore and require immediate resolution. This concept is tightly linked with creating a culture of safety–psychological safety, where workers feel encouraged to flag concerns without fear of retribution.

Nurturing Psychological Safety and Encouraging Proactivity

Creating the right culture is as important as implementing the correct systems. Psychological safety–a concept Google's Project Aristotle and the State of DevOps support report as predictive of high-performance teams–stands pivotal in ensuring teams can freely express concerns and ideas. For this reason, leaders must adopt a mindset of systems thinking, which allows them to see how the organization's structure can either facilitate success or foster failure. It's the responsibility of those in charge to ensure the environment is primed for their teams to deliver value effectively and efficiently.

The Power of Independence and Collaboration in Innovation

Building on the architecture of processes and teams, the notion of “independence in action” plays a dual role. It applies not only to sequential processes where small batches and single piece flow prevail but also to parallel systems that empower teams–like the two-pizza teams at Amazon–to innovate without being bogged down by unnecessary coordination. Organizations that understand and put into practice these principles of independence paradoxically become more interconnected and robust.

Conclusion: Beyond Copying Best Practices to Understanding Principles

Spear and Kim caution against adopting initiatives akin to “cargo cult practices” in which organizations superficially imitate elements of successful firms without understanding the underlying principles. They push for a deeper appreciation of why certain practices work and encourage leaders to focus on building processes that organically prompt collective greatness. The art of “wiring the winning organization” is an interplay of structure, culture, and innovation–a blend that only works when underpinned by a deep understanding of personnel dynamics within any given company.

In embracing the triad of slowification, simplification, and amplification, businesses are not just optimizing performance but also crafting an environment where progress is the natural outcome. The work of Kim and Spear provides a compelling roadmap for leaders to turbocharge their organizations, liberating the collective intellectual prowess of their workforce, much like the electric circuitry that so smoothly harmonizes the power within a system.

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Automated Transcript (Not Guaranteed to be Defect Free)

Mark Graban: Welcome to episode 493 of the podcast. It's November 29, 2023. My guests today are Gene Kim and Steve Spear. We're going to be talking about their new book, Wiring the Winning Organization. You can learn more — find links to their book and their websites and more — look in the show notes or go to leanblog.org/493.

There's so much we could talk about related to the book and their expertise and applications of the ideas in their book. I think at the end we all feel like we just barely scratched the surface. We'd like to invite you, the listener, to submit questions. I think Gene, Steve, and I are looking to do a follow-up episode in early 2024. You can email me at mark@markgraban.org if you have questions for that discussion based on the episode. Get their book and see what questions you have. Always good to talk to them and look forward to doing it again. So again, mark@markgraban.org — you can send me any feedback or ideas you have about the podcast there. And again, the episode page is leanblog.org/493.

Welcome back to Lean Blog Interviews. I'm Mark Graban. Very excited — we're joined today by two guests here together, Gene Kim and Steve Spear, co-authors of the new book Wiring the Winning Organization: Liberating Our Collective Greatness through Slowification, Simplification, and Amplification. And I got all through that on the first try.

So congratulations on the book. Before I tell you a little bit more about Gene and Steve Spear, welcome to the podcast. It's great to have you here.

Steve Spear: So great to be here.

Gene Kim: Yeah, Mark, it's good to be here.

Mark Graban: I thought it was going to take like three tries. Joining us here for the first time, Gene Kim. He's a Wall Street Journal bestselling author and researcher. He's been studying high-performing tech companies since 1999. He was founder and CTO of Tripwire for 13 years. He's the author of six books, including The Unicorn Project, co-author of the Shingo Publication Award-winning Accelerate, and others. He has been the founder and organizer of DevOps Enterprise Summit, which Gene, I saw an email earlier and I didn't update the intro. This event has a new name — tell us about the new name for the event.

Gene Kim: The Enterprise Technology Leadership Summit. And I think the observation is that the aperture of the conference has kind of moved on beyond just Dev versus Ops, the stuff in between Dev and QA, and also stuff afterwards — operations — and stuff before — business and so forth. So really it's been a conference about experience reports of technology leaders transforming their organizations, often with their business counterparts. So it was time. We got so many comments over the years saying, this is not the way I talk about the conference to other people. It's really about a leadership conference. So anyway, that was a long time coming and we finally made the change.

Mark Graban: Okay, we'll put a link to that in the show notes and hope people check that out. Gene's joining us from Oregon. And we're also joined, coming to us from Massachusetts, Steve Spear. Steve, this is your sixth time, I believe, on the podcast.

Steve Spear: You're the guy who returns my calls, Mark. What can I do?

Mark Graban: You return mine. And more than 100 episodes ago — we look at the gap between episodes — that's on me, that's my fault. But I'll put links to the previous episodes. Always great to talk to Steve. He is a senior lecturer at the MIT Sloan School of Management. He's a senior fellow at IHI, the Institute for Healthcare Improvement. He's the author of very influential publications like the book The High-Velocity Edge and HBR articles including “Decoding the DNA of the Toyota Production System” and “Fixing Healthcare from the Inside, Today.” He is also founder of See to Solve, a business process software company. He has a doctorate from Harvard, master's degrees in mechanical engineering and management from MIT, and a bachelor's degree in economics from Princeton.

So, Steve, unlike Saturday Night Live, I don't send a special jacket to the five-time club members. We'll figure out something to help signify that, other than a hearty thank you and welcome back.

Steve Spear: Mark, I'm highly motivated by trivial swag, so if you come up with a jacket, T-shirt, even a scarf, I'm good.

Gene Kim: Actually, Mark and I were brainstorming about the 150-pound trophy that's actually heading your way.

Steve Spear: And you know what? Nothing spouses and families love more than having that 150-pound trophy put central, like in the living room or the kitchen.

Gene Kim: It can be blurred behind you in the background. Every Zoom meeting and podcast you have, it'll be hard to miss.

Gene Kim's Origin Story — From DevOps to the Toyota Production System

Mark Graban: Before we talk about the book, Gene, I want to throw this at you first. I've come to ask people as an introductory question, tell us your origin story, whether that was Lean or Agile or however you frame or label it, but to this whole world of interconnected methodologies — how and where and when and why did you get started?

Gene Kim: Yeah, for sure. In fact, for those of you who don't know, Mark and I have a lot of friends in common in the technology community. So my journey started back around 1999 with this observation that there were certain organizations that simultaneously had the best project due date performance in development, the best operations reliability and stability, and the best posture for security and compliance. And so the natural question is, what are they doing differently that results in those amazing outcomes?

And in that journey, I remember reading the 1999 article, “Decoding the DNA of the Toyota Production System,” and just was dazzled by the clarity of it. And this journey has taken me through ITIL, through an operations framework, led me to the DevOps community. And what I found so exciting was meeting Steve at an executive education course at MIT in 2014. That just changed my worldview. It made me realize there was so much that I didn't see.

And hopefully we integrated some of that into the DevOps Handbook. But it's been so rewarding working with Steve over the past three-plus years, really trying to answer this question of what is in common between DevOps, Agile, the Toyota Production System, Lean, safety culture, and so much more. And I think a phrase that Steve uttered that I'll carry around forever is, “They're all incomplete, of a far greater whole.” And so that's really what we tried to put into Wiring the Winning Organization.

What Is DevOps?

Mark Graban: And real quick, for all the different terms there, not everybody listening has that software or tech background, and I don't even know — so I'm going to ask you just for myself, what is DevOps?

Gene Kim: In a nutshell, I would say it is a set of architectural practices, technical practices, and cultural norms that allow organizations to do tens, hundreds, or maybe even hundreds of thousands of deployments per day, like at Amazon, while preserving world-class reliability and stability.

And I think the way they do that — in a world where most organizations ten years ago were doing maybe one release a year, and it was often resulting in terrible outcomes, think HealthCare.gov — that was just unthinkable, irresponsible, maybe even immoral. And yet, if you take a look at the techniques they were using, I think that you would recognize so much of it in the Toyota Production System. The small batch sizes, single piece flow, linearized processes as you go from development to QA to operations, and information security baked in at every step. How am I doing, Mark and Steve?

Steve Spear: Right on.

Mark Graban: That sounds good to me. Like I said, I don't know enough to grade your answer, but thank you for that.

Steve Spear's Path from Economics to Toyota

Mark Graban: Steve, since you haven't been on here since episode 386, I don't know if I was asking the origin story question. I've somewhere heard you talk about this, but let me ask a question about your TPS origin story. How does Steve Spear go from bachelor's degree in economics to engineering and study of the Toyota Production System? What tipped you in that direction?

Steve Spear: Yeah, thank you. I appreciate the question. So I'm of the generation that's sort of post-Cold War. I got out of college in the intense rivalry of the early '70s between the US and the Soviets and their respective domains. It was clear there was a winner and a loser in that. But there was an opportunity for relaxation, because while there was no longer this military-political threat, there was this industrial threat.

Japanese companies were on the rise and posing real existential threat to American manufacturers, some of which faced their demise. US Steel, Bethlehem Steel, RCA — General Motors still struggles around, but not nearly at the pinnacle of what they were. So you and I are of that generation where we were like, what the hell is going on in Japan? Which is so fabulous in terms of their ability to generate and deliver value into society, which is wildly appreciated, whereas others can't.

And we were fortunate that we were not the first wave of that question, because the first wave in the early '80s had a sort of Cold War answer, a nation-state contest. And so the first wave of answer was, there must be something national in nature. It's Japanese versus American culture, which wasn't actually the case. Or something about the great wisdom of the Japanese governmental bureaucracy, which was not the case — theirs is equally poor.

Fortunately, we arrived with the second wave, where the studies were no longer at the nation-state level, but at the corporation, the enterprise level. And what was becoming more and more obvious was that the huge distinction wasn't Japan versus the United States, because there were perfectly crummy organizations within Japan and some great ones in the US. It was at the level of the factory or the studio — whatever the organizing, generating, productive unit.

We had the good fortune of being at MIT when folks like Lester Thurow were around, encouraging us to think this way. The Leaders for Manufacturing program was being gestated across the business school and the management school. And I got caught up in that wave.

I had the good fortune — really just the blessing — that Kent Bowen, who was a professor at MIT in material science, we started a conversation, started a relationship, and he took me on as a doctoral student. And there it was, the mid-'90s, where I end up as a student of Kent's. And we're ten years into lean manufacturing. Toyota is arguably one of the most studied organizations ever, and there's no second Toyota.

Toyota as “The Ultimate Learning Machine”

Steve Spear: And by good fortune, I had this chance to do a karate kid immersion inside a Toyota organization to learn firsthand what it was they did. And this was the huge epiphany.

I'm going to connect it right back to what Gene was working on at the time. I went in like a lot of people, thinking, oh, man, they must have some production control algorithm or something like that. It was in the math, it was in the robots.

And what I came to appreciate — unfortunately, not as quickly as I wish I had, but what I finally came to appreciate — is that they created the ultimate learning machine. They had established themselves and the way they organized the work of many, many people in a way that people were seeing and solving problems with a rapidity, a breadth, a depth, which no one else could match.

Now, what I want to carry this over to Gene's work is: we hit the Sloan School right around the time that MIT was the host for the International Motor Vehicle Program, which generated the research to show these enormous disparities between quality, productivity, agility, that a handful of Toyota factories could achieve versus everyone else. And that was the program that coined the term originally “lean production,” that became “lean manufacturing.”

Gene was doing on his own the same thing, trying to understand disparities. And if you look at the International Motor Vehicle Program — a study of 186 plants — Gene was on his own doing the same thing across projects of his type, where first he documented the enormous disparity between what was typical and outstanding. And then he started to dig around and dig around to try and figure out what explained this enormous gap between the very best and everyone else. And I think he was arriving at the same conclusion. It was the learning dynamic that separated the best from the rest.

How Gene and Steve Started Working Together

Steve Spear: So at some point, Gene and I have a common acquaintance, a guy who's just a phenomenally good connector, Tim Taylor. I'm saying his name because everyone on your show probably knows him, because everyone's removed by like two degrees of separation. He knows everybody or knows someone who does.

But he made the introduction, said, you guys should start talking. That was 2014 or so, and we've been talking since. And a couple of years ago, whether it was someone in his family or mine, they said, would you stop talking and start writing? So we did.

Mark Graban: That leads into what I wanted to ask next. We heard some of the origin story. Gene had been reading your work, Steve, and then you met. Tell us more about how your paths became intertwined here to work on a book together, because that's a big commitment.

Gene Kim: I'll do a short version on this and then kick it over to Gene. But, Mark, like you, my roots are in factories, and I'm very comfortable in places where before you go in, they say, do you have your eye protection and your steel-tip shoes? As far as technology, I use Apple products because they require no skill at all. I turn them on and everything happens.

And Gene was coming out of an environment which I understood not at all. That's actually not an exaggeration. Not at all. And yet, when I listened to him talk and he got past a description of the technology being used, and he started talking about the organizing principles — that's a little foreshadowing of our book — when he started talking about the organizing and the management principles, it was like, holy crap, he's talking exactly the same ideas that I was being immersed in at Toyota and immersed in at great places like Alcoa.

And that just fueled the conversation, because we're talking exactly the same language about what I thought were two completely different things.

Designing Systems Around the Human Mind

Gene Kim: In fact, I mean, I'll just characterize the working relationship with Steve as the most intellectually challenging but rewarding relationship I've had ever. And just to maybe get concrete, here are some of the epiphanies that have come up over the last couple of years.

I think so much has been written about the independence of action that's created within the Toyota Production System. The notion that somehow we're able to lower the cost of change, to be able to do so many experiments and be able to be so resilient during production. And so that is actually something that you see in great engineering organizations, where they're able to do so much more with such a dramatically lower cost of change. So we could certainly derive some of the similarities there.

But another aha moment is that there's another independence of action that happens on a totally orthogonal axis. So we're talking about independence of action within sequential processes. There's actually a whole other category where we can create independence of actions for parallel processes.

And so that's based on the work of Dr. Carliss Baldwin and Dr. Kim Clark around their study of the System/360 project at IBM. That's a modest $5 billion project — $20 billion US in current dollars — that created the basis of dominance in the computer industry.

It turns out that's exactly what we saw happen at Amazon in the early 2000s. They had 2,000 engineers. They were able to do maybe hundreds of deployments per day in the early days of their e-commerce property. But that sort of ground to a halt as they kept on adding product categories to the point where they were only doing tens of deployments per year.

And so that's what led to the famous creation of two-pizza teams — the Jeff Bezos memo saying, we want teams no larger than can be fed by two pizzas, able to work independently of each other with no communication or coordination, as opposed to spending all their time communicating and coordinating.

And so in the same way that independence of action creates this dazzling amount of ability to innovate and adapt, we can do that similarly in parallel systems like in software. Steve, how am I doing?

Steve Spear: It's fantastic. And Mark, if you'll indulge me here, I want to pick up on something Gene was saying. The opportunity to embed inside Toyota was a once-in-a-lifetime experience for me. And what I came to appreciate was they were designing systems — and you and I know this going through business school — the influence is, oh, you're supposed to think about the efficiency of the flows of materials through machines.

And what I came to appreciate in this immersion is that they were designing the material and the machines and their flows around the human mind. Is there clarity of purpose? Is there clarity of approach? And is there clarity of error, so that the system can be rapidly self-correcting?

And it was such a mind-boggling thing to realize that this is what was going on. It was designing around the human mind and the potential of the human mind to be creative and have ingenuity and recognize problems that hadn't been recognized and generate solutions that previously didn't exist.

Amazon's Two-Pizza Teams and the Brain Budget

Steve Spear: Now I'm going to tie this back to Gene's comment about the Amazon two-pizza thing. It's rare that you encounter an organization which says, what we're going to do is gain our competitive advantage by creating conditions in which people's brains can be put to the best possible use.

So Toyota — and in fact, if you go back through Taiichi Ohno's seminal book from 1988 in English, 1978 in Japanese, and you read it with an eye toward what he's really saying, he's not talking about manufacturing processes, he's talking about creating conditions that allow people to make intellectual and creative contributions.

So that carried over to Toyota. I had a 20-year relationship with Paul O'Neill, who was the CEO at Alcoa and went through just some phenomenal transformation there. And I had the advantage of being mentored and tutored by Paul O'Neill.

And one of the things he said was, it was simple. If you think about the complexity of the process and the sprawl of the organization, he said, my competitors, when someone showed up every day, they said to the body, put your lunchbox, your coat, and your brain in the locker and bring your brawn out onto the shop floor. And Paul O'Neill said, all I had to do was say to the bodies, thank you for bringing 30,000 brains into my enterprise, because now I outnumber the bad guys — the competitors.

And you take that a step further. This is back to the two-pizza thing. Now, Amazon — I think the bulk of its profits come from its cloud services. And as Gene was talking about, the cloud services emerged not because someone deliberately designed cloud services. They were trying to solve for the problem of the complexity of their business process software.

And there was a redesign. But here's the sequence: some might think it's like, oh, we're going to design this business process software and then allow us to create two-pizza teams. But the way I understand it from Gene is, first they set the rule that the thing we're going to design, we're going to design the thing so that we can work on it two pizza teams at a time.

And once they set that criteria, then came up with this whole idea of modularity and APIs and everything else. And it was really quite remarkable. If you follow that chronology, they realized that their exit velocity out of the problem situation they were in was around liberating human intellectual capacity — allowing the ingenuity to be focused in a highly productive way. And then they landed on the modularity.

And again, that's a very rare thing. Toyota, Amazon, Alcoa — that's three. Naval Reactors, Admiral Rickover — he also designed processes to allow people to be creative. But, Mark, it's rare. And they don't teach it in business school, unfortunately.

How Many Copied Two-Pizza Teams and Failed?

Mark Graban: The title of the book, Wiring the Winning Organization. That wiring seems to include systems, high-level design decisions. This is not the top-down genius at the top making every decision for everybody. The subtitle talks about liberating our collective greatness. And then I think we'll have time to get to the how.

It's a rich title and subtitle. We could talk for an hour just unpacking the title. But I wanted to ask one follow-up question about wiring. I know this has happened. A lot of people studying whether it was Toyota or some health system that people thought was going to be the Toyota of healthcare. Gene, there's a chance to ask you if this happens with other tech companies. But people get enamored with one piece and think, oh, that's the magic beans.

So my question is, how many people copied two-pizza teams and failed spectacularly because they didn't understand the rest of the wiring?

Gene Kim: How about — this is a sequence. Gene, you can answer Mark's very particular question about how many failed. I'll just take a guess at: most. Because so many people try to copy Toyota, and there's no good imitators. And then what I was thinking is, I'll explain the concept of the wiring and you explain the concepts of the danger zone and the winning zone.

Steve Spear: I'll just riff off of you, maybe. Let's set the stage for the foundational concepts in the book that I think we find so rewarding.

Steve Spear: I'll take a stab, Mark, that those who copied the two-pizza teams actually went out and bought a lot of pizza and didn't understand why the hell they were buying pizza. And if you were the dude who owned the pizza store down the block, you had like six months of profits you couldn't imagine. Then you wondered what the hell happened to the pizza. And that's because they said, oh, no, it's not pizza, it's falafel or whatever.

The “Wiring” — Why Circuitry Is More Than a Metaphor

Steve Spear: Anyway, the concept of wiring — I'll tell you where it comes from. In the book, we talk about a big focus. The book is focused around the individual and their ability to be creative in a productive, contributory fashion. And we say most organizations think about where people focus their ingenuity. And we say there are three layers.

The first layer is the object in front of them. Trained as an engineer, if you're a mechanical engineer, you learn to think about the design and structure of a gear. If you're a geneticist, you think about the design and structure of DNA. Whatever it is, you think about the object in front of you. And I guess the IT people, which Gene is representing, they think about code or whatever they do on their little keyboards all day.

Then there's a second level where you have to focus not on the object, but the instrumentation through which you act on that object. For a mechanical engineer, it might be a lathe or some other kind of machinery. For a geneticist, it might be the CRISPR technology. It's the instrumentation through which you act on that thing.

But then there's a third layer, and that's the argument we make. And this is where folks like Toyota really sweat it. It's the processes that allow the individual to connect to the larger whole in a way that the individual efforts actually harmonize together smoothly towards some collective creative action toward a common purpose.

And the reason we use the term “circuitry” to describe processes, procedures, routines, the things that join us together — it's not metaphorical. So you start thinking about what a technical circuit does. A technical circuit takes something which is in high concentration in one location and allows it to flow — ideally smoothly, efficiently, without impedance — allows it to flow where it's actually needed. So an electrical circuit takes charge from here to there. Plumbing takes pressurized gases and fluids and allows them to go from here to there.

You start thinking about an enterprise. We form up enterprises why? Because there are big, huge, hairy problems that we can't solve individually. We have to put a lot of minds on it. And why do we have processes? To allow the thing that you know to flow to me, because I actually need that information, or the thing Gene knows and the thing you know to come together and have a very positive reaction.

And so we were really deliberate and non-metaphorical in saying there's all these processes which are meant to join people into this collaborative, creative, joint effort. And if they're well designed, the brainpower of the people who are in the circuit can harmonize and synthesize in a beautiful fashion. But if that circuitry is ill-designed, then so much ingenuity and effort is just squandered trying to figure out: where do I fit in, what do I do, who do I depend on, who depends on me, what do they need? That's the ultimate finite resource.

Your Brain Budget Is a Slice of Toast

Steve Spear: Sorry for the digression. I once did this thing with a group. It turns out that the average person burns 2,000 calories a day. I'm doing the math off the top of my head, and some huge portion of that is consumed by the brain. I think it's like 1,000 calories of the 2,000 calories.

It sounds like a lot until you figure out a slice of bread is 100 calories. So then basically you start thinking about your strictly limited resource. Pretend this is a slice of toast. That's your resources for an hour of brainpower.

And so the question is, how are you going to invest that slice of toast? And in most organizations, you tear this off — oh, what am I supposed to do? You tear this off — who am I supposed to work with? You tear this off — what resources do I need? Where do I get those resources? How do I clean up this area to actually do my work?

And then when you do all that tearing off, because you've burned your brainpower just figuring out what to do, what you're left with is this tiny little scrap. That's your brain budget for the hour.

Now on the other hand, you've got that circuitry wired right, you've got the whole thing. And if you've got this as your brain budget versus that little scrap, you're going to win every day.

The Danger Zone vs. the Winning Zone

Gene Kim: So what we say is, the folks who lose give very little of the nutritional budget for the brains in their organization to actually do useful stuff. The reason there's so little energy left to solve hard problems is because they put themselves in what we call the danger zone.

And the danger zone is characterized by — again, the reason we form up in the first place is that we're trying to solve problems together that we can't solve individually. So you ask the question, what makes it hard to solve a problem?

Well, give me a really hard problem — when we've got a lot of factors and a lot of intertwining of forces. When I look at that thing, I can't even characterize it, let alone make any guess about pulling which lever causes which outcome.

What else? Well, if you're going to ask me to solve a problem, give me very little time. So I've got no time to really think it through. I just have to go — whatever muscle memory, habit, routine, bias — apply that onto the problem, because there's no time to be creative. Raise the stakes of the situation, so my heart is pounding. I know if I get the wrong answer — poof. Don't give me any control over the situation, so I don't even have access to the levers. I just have to watch and guess. And then don't give me any iteration, because we all know learning is an iterative process where hopefully we converge on an answer or a skill.

So that's the danger zone.

And we say, what's characteristic of the winners? And this is kind of the beauty of synthesizing Gene's experience and perspectives with my own, because I have no idea what they do in DevOps. It's like, what is this DevOps thing? What's a computer? I still use mechanical pencils.

But what we both found is that the winners in whatever sector we encountered move conditions from the danger zone to what we call the winning zone. And the winning zone is the danger zone, but just the opposite.

You say, hey, there's this big, huge, hairy problem, but we're going to give you the piece that you can actually see and understand and characterize. It's tractable. We're going to give you some time so that rather than being in this fast, impulsive, reactive thinking, you can actually be in a deliberative, reflective, self-critical, slow-thinking state. We're going to create conditions where no matter what you try, it's safer than not. We've reduced the risk, we've reduced the hazard. We've given you some control — not only are there fewer levers, but you can actually grab them, or there are dials and you can turn them. And the last thing is, we're going to give you several shots on goal so that you have a chance to learn iteratively.

So the danger zone is a horrible place to be if you have to generate new, useful information. And the winning zone is where you really want to inhabit. And then linking that to the circuitry — organizations that are wired to win create the processes, the procedures, the routines, by which people are regularly moved out of that danger zone into that winning zone where they can engage their brains most productively.

Slowification, Simplification, and Amplification

Gene Kim: Mark, can I riff off of that and maybe answer your question? I think one of the things I'm really proud of in the book is that we make it very difficult to just cargo cult. We don't just copy the vocabulary, we don't just copy the tools. We really work from first principles.

And essentially, we assert that whenever you see an organization go from worst to first, there's only three mechanisms at work.

The first is to slowify. Whenever we see people doing brilliant work in high-consequence environments where you can't undo things — terrible things can go wrong if we screw up — when you see them perform brilliantly, they have to have invested time in planning and practice.

There are 26 case studies in the book, and we have examples not just from technology, but from the medical community, from engineering. And I think a great example is the US Navy Top Gun program. During the Vietnam War, US Navy pilots suffered unexpected losses. And as Steve wrote, one of the findings of the Ault Report was that pilots were having to do on-the-job training. So what was the answer? High-intensity training under very realistic conditions so that they had all the muscle memory needed when they were actually in combat.

And so we were able to tap the work of Daniel Kahneman and Amos Tversky, and show that in organizations, something very similar is happening. We want to build the routine so that we can perform brilliantly when it matters the most. And that means we have to slowify.

Just a little trivia: one of the things we grappled with is that “slowify” is a made-up word, but there's no one English word that says you have to slow down to speed up. There's a lot of adages that insinuate it, but we felt like it was very important to describe this as a short-term investment for long-term gain.

Mark Graban: There is that expression “go slow to go fast.” We've heard that attributed to Toyota people. Toyota people say it. Is that the right way to say it?

Gene Kim: Yeah. Slow is smooth, smooth is fast. You've got to stop sawing to sharpen the saw. I think there's all these adages that allude to it, but no exact word.

Steve Spear: And Gene, if I could just add — Mark, we actually did find a term. I think it's called “bullet time,” and it's that experience you see of Neo in The Matrix, where he's got such an intense perception of the environment that everything seems to be moving slow to him.

But “bullet time” is really a lousy word for one of your three main mechanisms. It turns out that Kahneman and Tversky, with this whole notion of thinking fast and slow, and this idea that fast thinking has a time and place, but at other times it'll compromise your performance — to use the term that builds off their idea of thinking fast and slow, “slowification” was, I think, a very accurate representation of our indebtedness to their research.

Simplification and Amplification

Gene Kim: So slowify is one dimension. The second dimension is, how do we make sure that the problems are actually easier to solve? So take those wildly complex problems that are highly coupled. Some of the work of the nuclear reactor safety guy, Charles Perrow — we don't want highly coupled problems, because small little failures cause global, catastrophic failures.

And so there are really three ways that we can chop up problems. We can make them, instead of large-batch problems, we solve them incrementally. We can sequentialize and linearize problems like the Toyota Production System. Or, like the Amazon example, we modularize it.

And all of them have this incredible benefit of enabling independence of action. We contain issues so that they can't cause global catastrophic failure. They lower the cost of change, enable innovation — all these dazzling things that people have marveled at about Toyota.

And then the third one is around amplification. We've got to be able to amplify even weak signals of failure so they can be acted on decisively to better prevent, detect, or correct. And this should summon images of Paul O'Neill, the Alcoa safety culture, and so forth.

Anyway, so those are — I think our goal is really to go from first principles of how you create greatness and not fall into the trap of cargo-culting certain tools in the Lean toolkit. Or, to answer your question, in the DevOps space, we very much do the same thing. There's a Spotify model of how we organize. There's automated testing that we see the tech giants do. So the two-pizza teams.

Hopefully this will give leaders a very firm foundation to reason about why organizations do the things that they do.

Mark Graban: I wanted to ask about amplification. Before I do that, though, I can't pass up — this is a time of day where I feel like all I can contribute is pointing out the fact that you talked about the Top Gun program, and you're also talking about Danger Zone. And I've been hearing Kenny Loggins sing in my head for about ten minutes. We don't have the rights to use that music, so we will keep that out of the episode.

But you think about the wiring, and that seems to include culture.

Why No One Pulls the Andon Cord — and What Happens When They Do

Mark Graban: One thing you write about in the book is that the factors that help amplification include leaders encouraging people to speak up — psychological safety. So I wanted to explore that. Steve, I think of you and I think of see, solve, share. But I always think that there's a fourth one implied: see, safe to speak up, solve, and share. Or maybe that's assumed in some organizations and then doesn't get copied into others. I was wondering maybe, Steve, if you could talk about some of those habits, or the wiring in your experience, that creates the psychological safety so people do feel safe to get from see to solve through speaking up.

Steve Spear: Yeah, Mark, that's great. And just to link back — the see, solve, share was something I realized around 2005 when I wrote that article “Fixing Healthcare,” and it became the skeleton around which I draped the entire book, The High-Velocity Edge.

Kind of connecting the two works — I think The High-Velocity Edge is a book in some regards about linearization, one of our simplification techniques. And it's a book a lot about amplification.

To unpack that: in that book, I make the argument that it's critical that you design whatever you're designing so you can see what's wrong with the design. You design things to see problems, and that's supposed to be the trigger — when a problem is seen, it's swarmed so it can be solved. Contained first, but then solved. So see, solve, and then what's discovered locally can be shared, systemically spread.

The fourth part — I worked with a client who came up with a fourth S, which they call “sustain.” And what they mean by sustain, they just wanted a fourth S, is the leadership role in actively keeping the wheel spinning, to maintain that angular momentum. Because just like you pointed out, the whole notion of raising one's hand to say, yo, this is not working right now, I see the problem and I'm calling it out — that's not a natural act.

It's certainly not a natural act in traditional Japan, which was coming out of samurai culture and the militarism through the '40s. But the Toyota people said, the only way we're going to become not sucky and actually become competent and then world class is we've got to give opportunity to people to call problems out.

And we're finding this everywhere — Mark, I'm sure you find this everywhere you work, and Gene too — which is, the pivotal moment is when the most senior person is consistently present in the workplace. And they say, what are you working on now? And what is compromising your best effort?

We're doing this in a place right now where a guy shows up every day. And people said, oh, what's that senior person doing there? And that took weeks to just get used to, where it's like, oh, he's here again. Oh, he's here again. Well, I guess it's just normal for him to be there.

And then he started asking, what is compromising your ability to do an outstanding job? And people started telling him.

Then, what's the next part that's so critical — he responded to it. It's not just call it out. Call it out and then something happens.

Two Andon Cords, Two Very Different Cultures

Steve Spear: Two digressions on this. We had a doctoral student who wrote his dissertation comparing two plants. Both had andon cords. And in one, no one ever pulled the andon cord. And in the other, it was being pulled every 40 minutes by every individual.

And the thing was, the place where no one pulled the andon cord — they should have, because they sucked. They had terrible quality, productivity problems there all the time. So he goes in there and says, why don't you ever pull this cord? And they said, oh, well, one guy says, I was pulling it because I didn't have materials, I didn't have instructions. I didn't know how to do my work. I pulled the cord. No one showed up.

And then his colleague says, well, it's a good thing no one showed up, because let me tell you what happened when I pulled the cord.

Now in the factory where people pulled the cord all the time — he said, well, how come you pull it all the time? They said, because we start with the assumption that the environment should be designed so that I can succeed, to do something valuable that I'll be appreciated for. And they've told me, if that's our baseline, if it's designed for me to succeed in a way that I'm appreciated — they said, if we violate that, let us know.

What's the response when he pulls the cord? Someone shows up and says, oh, Mark. Oh, Gene. What's the problem? How can I help?

So anyway, Mark, to this point — you're absolutely 100% right. It's not even the safety. It's the encouragement and the reward. Raise the hand. And where does that come from? It's from the senior leader who's present — persistently present — in a very empathetic way.

Psychological Safety — From Google to DevOps Research

Gene Kim: If I can add one thing. I think one of the neatest data points in my journey was a project called Project Oxygen, and I think before that was Project Aristotle at Google. Essentially it was this multi-year study that spanned over 600 teams and really tried to ask, what makes great teams great?

They found that one of the top predictors was really — it wasn't a sense of mission — it was around to what degree do people on the team feel safe to say what they really think, without feeling like they're going to get ridiculed, made fun of, or marginalized. And they found it not just in the engineering teams and software teams, but also in sales teams.

And so this is actually repeated year over year. And when we did the State of DevOps research — a cross-population study that spanned six years, 36,000 respondents — again, there were two factors that predicted this amazing performance. One was that notion of organizational safety, the ability to say what you really think. And the second was architecture. In other words, how do we wire our organizations, which really dictates how easy it is for us to do our work easily and well.

And I just love this quote that we put into the book. Winston Churchill once said, “We shape our buildings, and thereafter they shape us.” And so too with the systems that we create, the management systems that we have to work within. We shape it, and then forever after, it shapes us.

And really, I think the goal of the book is to show what are the most important things to get right — and there are only three — and really make the case for why each one of them works, so that hopefully people will recognize when they survey the Toyota Production System, Lean, Agile, DevOps, that they all have common mechanisms at work.

Steve Spear: High reliability organizations and all the other acronyms and terms — reengineering and this and that. If you read deeply into them, the ones that have substance, they all come back to: we either change the conditions in which people are asked to solve problems — that's the slowification. We've actually changed the nature of problems themselves so they're easier to solve — the simplification. Or we've just made it so obvious that you have to draw attention to the small thing versus not, and you respond to it — that's the amplification.

And we even have a nice Venn diagram in the book, which we repeat a couple of times, which shows how each of these popular practices and tools is at least one, but typically some combination of two, and even three, of slowification, simplification, and amplification.

Fear, Futility, and the Role of Senior Leaders

Mark Graban: And it seems like in any of the study of other organizations, there's the risk of people getting a part of it. They installed the andon cords and didn't behave the same way as leaders might at Toyota.

You talked here about frequent site visits by leaders. I've been in manufacturing companies where you didn't want the leaders going there because they weren't going to behave the right way.

One quick story of trying to play defense — keeping a vice president of Lean Six Sigma away from a shop floor team. This is why I'm thinking “go to gemba” is not a panacea.

We were kind of trying to guide him as we walked down the stairs and out into the vacuum, like, okay, we're going to an area, but this one machine's been down for like a day and a half. So we're just bracing him for what he was going to see. He started going on this rant of like, well, we need to send those workers home early, because then they'd have incentive to get the machine up and running again.

And I'm like, this machine was older than me at that point. The machine was over 30 years old, and this guy was just so far out of touch. We were like, please, no frequent site visits by him.

Steve Spear: So, Mark, I'm going to go on a bit of a rant about that. No, it's fantastic, because you get that attitude. We throw an appendix at the back of the book which takes a shot at a lot of these conventions — that it's all about incentives. If we just pay people the right way and measure them the right way and pay them according to the right measurements. We all know that if you go anywhere — shop floor, deck plate, studio, laboratory, nursing unit — that's not how it's working.

But all that ridiculous thinking gets phrased in terms of accountability. “We got to hold people accountable.”

You take your anecdote — it's the perfect inversion of accountability. That unelevated executive comes in and he's wanting to hold the workers accountable. He's going to send them home early and dock their pay because they're not doing their work.

But who's responsible for having competent equipment on the floor so that they could do their work? It's him.

And so in the outstanding organizations, the senior leadership is not only present and persistently so — they understand the accountability. The reason they're present is to find out their accountability, to make sure the machine is fixed or the engineering instructions are in place, or the material is properly prepared.

So when the nurse, the doctor, the machinist, the mechanic, the coder, the chef — when they show up in that moment of actually doing the beautiful thing they have to do to create something of value, the conditions are prepped for them to do that. And if they're not prepped, whose fault is that? The machinist? No, she showed up to do her job. It's that senior executive who didn't prep the situation.

Nokia vs. Apple — When the Wiring Fails

Gene Kim: Mark, can I add one story just to give a software example of exactly that? One of the pairs of stories I love in the book is like, how could the Apple iPhone — in the early stages, it was like ten software engineers — beat Nokia?

And one of the reasons is that they had a very small team, but they had everything they needed to quickly iterate and generate new builds and even figure out how do you make a keyboard that someone could actually type on when it was even less than the width of a credit card.

And it's an interesting case study to look at what happened at Nokia, which had 24,000 software engineers. There's this phenomenal book called Transforming Nokia by Risto Siilasmaa. And he described how, as one of the board members, he said it felt like being hit in the head with a sledgehammer when he learned from the VP of strategy at Nokia that the compile time for the operating system that Nokia was relying on to compete against Apple was 48 hours.

Because he said, if any engineer took 48 hours to learn whether a change worked or would have to be redone, then all of this operating system was an illusion.

When I got to talk with him, I asked him, it seems like such a tactical measure — 48 hours compile times. How did you detect that as a signal that was important to you as a board member? And he said, in any organization, you have to ask, who is doing the most important work of the organization, and then how easy is it for them to do their work?

And when he heard 48-hour compile times, as a former developer, he said, it's impossible for them to actually get anything done. That's just one piece. To actually put together the whole system and see if it worked together took two weeks.

And he said, there are two reasons why this could be the case. Senior leadership didn't know, and that's a problem. Or senior leadership did know, and that's even a bigger problem. And that led to the firing of the CEO.

And I think to Steve's point, what we need in these leaders are systems thinkers who can see the wiring of the organization and detect these sometimes weak signals of failure and do the right thing so that people can do their work easily and well.

Wrapping Up and an Invitation for Follow-Up Questions

Mark Graban: I apologize that we have kind of a hard cutoff here time-wise. I would enjoy carrying this on. Maybe we can do this again after the first of the year and get questions or input from people who've started reading the book. Open invitation, one or both of you. Or, heck, I could just open up a Zoom room and do a fireside chat with Gene and Steve, and I'll just get out of your way.

But it's always a pleasure talking with you both. Gene, I'm glad we could record it here in this venue. This is the first time, right? I had to go and double check that.

Gene Kim: Absolutely.

Mark Graban: But let's not let it be the last. You're not quite close to Steve's giant-trophy level of guest appearances. Again, today we've been joined by Gene Kim and Steve Spear, co-authors of the new book Wiring the Winning Organization: Liberating Our Collective Greatness through Slowification, Simplification, and Amplification. Two for two on that. So thank you for being here. Thank you for the book. Can't wait to get deeper into it.

Gene Kim: Great. Thank you, Mark.

Steve Spear: Thank you.

Mark Graban: Thanks again to Gene and Steve. Look for links in the show notes or go to leanblog.org/493. If you have questions for them for a future episode, you can email me at mark@markgraban.org. Thanks for listening.