Rob's Thoughts

Fixing Agriculture

Can we fix Agriculture by a focus on how we do it or by seeing the system?

1. Its a system - in our role playing we can see that
trying to play one group off with another leads no where
but into blame. One of the key metaphors in TNS is the
idea of leaves versus the trunk of the tree. Avoid
working with the details and go to the heart of the
system. So what are the leaves? We focus on things like
rotation and buffer zones which all have to be done but
they don't get us to the core of the system. What is the
core of our system? That the food business is based a a
very very small group of distributors sitting in the
middle between all the farmers and all the consumers and
taking value for both sides. The result is that so long
as farmers are restricted to selling to 2 buyers, they
will be in a jam and will have to take it out on the
land.

Can you see what I am saying? It is not about farming
practice per se it is about the entire food system where
in potatoes there are only 2 processors for fries and 2
end buyers for fresh. They push back at the grower who
has to himself become more efficient and hence has to
use more capital equipment, get more land and hence have
more debt.

If you went organic and sold to Loblaws, you will end up
in the same pickle.

This is where we have got it all wrong from a policy
perspective. We focus on the "leaves" of the farm
practice. Farm practice will be vital but we won't get
a change in practice until we can change the economics
and the power issues for the farmer

2. What is the emerging new model? It is to grow,
process and sell food locally and for the grower to own
all three aspects of the process. It is in effect to
develop a direct relationship with the consumer. The
essence of the industrial model was to own the interface
- initially the production such as making steel or cars
- but more recently the real power has been in
distribution or in ideas. Think of this. A DVD player
can be bought for $50 now but a DVD film costs $20!
Production for all producers has been commoditized to
the point where no one can make money after a while as a
producer only. You can download music for free - soon
you will be able to download most movies as well.

3. What are the negative trends that will help the move
to the new model? Energy costs. Modern food systems
depend entirely on cheap energy. Fertilizer is made from
oil and gas. Farmers need lots of heavy equipment. Food
is transported a 1,000 miles before it is eaten. All the
cheap and easy oil has been found. The swing oil is
located in Saudi arabia. How hopeful are you that we
will have a stable middle east? For certain oil prices
will go up. This will push the cheap oil system to the
limit. Secondly there is the issue of food safety. Mass
produced food is inherently unsafe. Cows fed grain get
ill and have to use large amounts of antibiotics and
hormones. As we understand this we will back off. Cows
slaughtered in big factories are killed badly and
cruelly. Mistakes can contaminate thousands of tons of
hamburger or hot dogs. As these risks become more
apparent we will back off. Food additives for shelf life
like trans-fats are very bad for us. As we understand
this we will back off - and so on. In the next 3 years,
food health as driven by mass production and mass
processing will come to the fore.

The idea of growing a lot here and selling it a lot over
there - the export model - is dead. Why? because
everyone except the developing world now grows a lot.
The Americans and European farmers will fight Canadian
exports and will use any means - one sick cow, a few bad
spuds to close the border. Canada's whole food industry
is built on this model and as the idea of an open border
dies so will this business.

4. What are some trends that will help? The growth of
fully integrated local food systems such as Chudleigh's
as an example to others. Or Organic coops that also
grow, process and sell locally. The growth of the
understanding that we don't want to buy food that is
unsafe or to support companies that take advantage of
us. There will be in effect a consumer lead pull for the
new.

5. Leadership - there will be a crisis or a series of
crises. We have them here already. Wart, mad cow, lumber
etc. Poor leadership sees these as blips and hopes that
the good time will come back. Good leadership sees the
pattern and knows that we have to change. Like Ikea, the
good leader will react to the wake up call. In your
assignment be that leader. How would you get your
message across - what would you do?

6. A tip. People find it hard to grasp concepts alone.
My advice would be to build and in-cent an alternative
system on PEI and let farmers and consumers choose.

A post I used in my UPEI COurse on Business and the Natural Step

The Relationship Economy - UPEI Jan - March 2003

The Customer Revolution - The Relationship Based Business Model - Turning Our World Inside Out

We are so encultured by the traditional model for organization that we no longer think about it. It is just how things are. When anyone becomes unconsciously captured by an idea, they are vulnerable to a new and better one. The Ford production model was invented a 100 years ago this year. It has been so successful that it has taken over every aspect of how we organize to do work – not only in business but in government, education and healthcare.

But, in the last 5 years, many leading firms that use this model are being threatened with extinction. The discounters have overwhelmed the full service airlines. In retailing, Kmart is bankrupt and many of the past retail leaders such as Home Depot and the Gap are really struggling. In bookselling, Amazon has shaken the industry to the core. In PC’s there is only HP left to confront Dell. In food, McDonalds seems mortally wounded and cannot appear to help itself.

We are also seeing the public sector struggle. Our K/12 education system is not delivering. Drop out rates are close to 30%. Boys are seriously underachieving. Our healthcare system is becoming too expensive and risks being overwhelmed by the advent of the seniors’ demographic bulge. Those that try and improve things by applying the old model harder and faster seem to get even further behind. So what is going on? This course will help shed light on this turning point.

A new model for organizing for work both in business and in the public sector has arrived.

When applied well, it destroys those that still use the traditional model. It has enough practioners now that we can see how it works and we can extract the lessons so that we can apply it ourselves. Understanding both the old and the new model will become a survival issue. This course will look below the surface of the Ford Model and reveal how it really works. Why? Because we have taken it for granted and we no longer question it or even see its rules and how they work. We will put the traditional organization into the MRI and see why using the Ford model is a fatal condition. .

We will look at eBay, at Amazon, at Dell, at the Discount Airlines, at Wal*Mart and we will discern from their activities, a new model emerging that has a radical approach to costs and a radical approach to value. We will see that at its heart the new model has a radically different set of assumptions about power and about relationships. We will see what it means to make the shift from a transaction economy to a relationship economy. We will see how these firms have revolutionized costs. We will see how they have found value in emphasizing community. We will see why in most cases it is much more personally rewarding to work in this type of organization.

We will look at the demographic and cultural forces that underpin this new model and we will look at some of the new Social Software that is transforming the customer and workplace interface.

We will speculate what this new model means for business and all institutions in Atlantic Canada. We will explore the “Hick” effect – many of the new leading organizations have been born in small town cultures. We will also explore what this model means for education and healthcare delivery. Finally we will explore what this means for your personal choices and for your work life.

Context for the Course – The Core ideas
When Henry Ford introduced mass production at the beginning of the 20th century, he not only changed how things were made, he changed the culture of the workplace. In this production culture, head office was the organization’s brain and it decided everything. Products were conceived, designed, produced and then marketed and sold. The enterprise pushed out from the centre. This model has taken over all aspects of organized life today. At its heart is a need to control the core process. Everything and everyone had to be “managed”. It was successful during a long period of relative stability.

We are so imbued with this model that we mainly fail to see it for what it is – only a model which has had a life of about 100 years. Today, we have reached the design limits of this model. More efficiency cannot be squeezed out of it and the business, social and technology environments are now changing so fast that such a model cannot react fast enough.

A new model is emerging. It is the reverse of the production model. In this new model, which we can see in the actions of new adopters such as Wal*Mart, Amazon or Dell, the flow is reversed. The customer sets the product agenda. It is the customer who decides what they want and who drives the production process back into, not simply one organization, but into a network of suppliers organized by the host company. The new model works deliberately to eliminate, or significantly reduce, inventory, such as eBay, Dell or Southwest, or to carry inventory in a distributed form in the supporting federated system such as Wal*Mart and its suppliers. With very low or no inventory, they have a compelling cost advantage.

All have remarkably sensitive customer interfaces where, at best, individual customer profiles, preferences and accrued activity and trust are maintained in real time such as by Amazon, eBay and Dell. Or, profiles are held in aggregate, where community profiles are maintained such as at Wal*Mart.

This is not simply a re-engineering of the process but a shift in culture. It involves the giving up of the idea that the market can be controlled by head office. Head office in these organizations does not pretend to be able to predict customer behaviour, instead it works to have the best sensory system possible. It uses this acutely sensitive information system to track trends and to react immediately.

As a result, the customer experience has been transformed from an outward push to an inward acceptance. It is fun to fly Southwest as well as being inexpensive. Amazon provides a community of book reviewers that pulls the customer into the primary sales position in the firm. Wal*Mart greats each customer and so on. The customer gets what they want rather than only what the firm will give them.

In a world where most of have all that we need, in terms of things, this putting the customer into the driver’s seat give them the potential for the experience of control and participation that the old system prohibits.

This is the key to understanding the new model. Its value is in the experience of control and participation given to the customer. For the first time, the customer is in control and not the corporation. Once customers have experienced this, they do not go back! Conversely, in the new organization, to give the customer control and participation, head office has had to give the front line control, and participation as well. Once employees have had a taste of this they too do not want to go back.

To pull this off, these organizations have pushed a remarkable amount of decision making power out to the front line. Floor clerks in Wal*Mart can move material around the store and each store has a computer assisted re-order model that enables the store to track orders to the unique preferences of its own community. At Dell you speak to a real person who then tracks your order all the way to set up. At eBay the buyers and sellers deal direct.

If you are a competitor of one of these new model firms and you are still using the old model, you will fail. You cannot deliver the costs and you cannot deliver the customer experience.

So we see the icons of the old model struggling or even moving into bankruptcy. United Airlines, AMR Air Canada; Kmart, Home Depot; and most small booksellers and Indigo and Chapters. eBay is on track to dominate the second hand car market. Dell can take on any competition and is moving into other sectors beyond PC’s.

In the old model, you could compete by applying a simple concept – more money. By gaining access to more resources, you could use increased scale to push prices and costs down and use your increased hegemony to have power over the consumer. This is why the trend in the old model is for more scale. But now scale will not help United Airlines or Home Depot. The new model demands that you kill off your old culture, the culture that made you successful and which you know so well.

This is what competing by using culture really means. It means that an old model restaurant chain has to give up its identity to compete. McDonalds cannot stop itself from being a production based culture that drives from the centre out. It is so invested in the old model that it cannot change. This is what makes it and many like it so vulnerable to a new model competitor who competes by culture.

All new models supplant their predecessors. Henry Ford destroyed the idea of the automobile as a luxury item and invented a model that could be applied to any organization. This is the story of McDonalds and why it was successful and will now fail. For Ray Kroc was the “Henry Ford of Food”. He introduced a new production model to the diner. In the early years, if you were a family diner and were faced with a Production Model competitor, you inevitably failed. This is even the story for government services and for education and health care. They have become production line organizations.

Just as all the benefits in the 20th century accrued to those organizations that adopted the Ford model well and early, so in our time, the advantages will accrue to those that understand and apply the new relationship model.

Course Objectives
• To use a series of case studies on eBay, Amazon, Dell, Wal*Mart and Southwest & Ryan Air to develop an explicit understanding of the key features of the new model
• To understand the origin and the application of the Ford model in all sectors of organization
• To explore the new Darwinian process of how the small and the nimble destroy the large and the powerful
• To understand the cultural aspects of this shift and how they connect to a major cultural shift in society
• To speculate on how this model can be applied to business in Atlantic Canada
• To understand how the new model may be applied to parts of the public sector such as education and health
• To explore what this model means for each of us as individuals

Required text & Recommended Reading
We will be using three texts this semester. None of them are text books – all of them are leading works on various aspects of this issues. All are fun to read as well.

• Our core text is called “The Support Economy – Why Corporations are failing individuals and the next episode of capitalism” by Shoshana Zuboff and James Maxmin. Published by Viking Penguin ISBN 0-670-88736-6. ($39.99 Cdn)The book explores the reasons for the failure of the Ford model and presents a clear vision of how a model based on capturing the value in the relationship will work

• Our case book text is called “The Perfect Store – Inside eBay” by Adam Cohen. Published by Little Brown ISBN 0-316-15048-7. ($36.95 Cdn) This book explores the founding of eBay and picks up many of the ideas in the Support Economy and puts a human face on them. If there is a “How to Book” for the relationship economy this is it.

• Our process book is called “The Innovator’s Dilemma – When new technologies cause great firms to fail” by Clayton Christensen. Published by Harvard Business School Press ISBN 0-87584-585-1. This clever book reveals how good firms risk their future by ironically upgrading their service and hence costs to meet the needs of their existing clients – risking that they open up pools of opportunity for low cost innovators to come in below. Southwest Airlines’ rout of the conventional full service airlines or the Mini Steel Mill’s triumph over big steel come to mind as examples. Here we see how the application of new technology can be so disruptive.

Other Course Resources
My weblog, which is updated daily, has a great deal of other supporting material and links. It is an interactive site and allows for your comments. I would like you to start your own weblog as part of the experiential aspect of the course. Weblogs are part of the new very inexpensive tool kit that is reconnecting the world.

Have a look at “The Cultural Creatives- How 50 million people are changing the world” by Paul Ray and Sherry Anderson. This will give you a sense of the powerful cultural forces of individualism that are driving the shift in organizational model.

Have a look at “The Hidden Connections – Integrating the biological, cognitive and social dimensions of life into a science of sustainability” by Fritjof Capra. The first half of the book is a challenge but his second part where he takes the theories of living systems and applies them to organizational life is breathtaking and simple.

Have a look at “Free Agent Nation – the future of working for you self” by Daniel Pink to see how many individuals, millions of them in fact, are now working in the new model for themselves

Course requirements and structure
The course will be offered online using the webct platform at UPEI. The course will last for 12 weeks and will have 4 assignments – i.e. specific written papers. The key to the course is a “Learning Conversation” which takes place in the Bulletin Board. 40% of the marks will be for regular participation in the bulletin board. It is mandatory that you participate regularly in the bulletin board.

The assignments will be valued at 10% for the first 3 and 30% for the final paper. The assignments will be set from a menu of topics – the course is very broad. I want to offer you enough choice to enable you to find topics that especially interest you.

Evaluation plan

• Participation 40% of the total mark
o The bulletin board is at the heart of the course. Dive in and have fun.
o I am looking for Quality and Quantity.

 Quality is defined by introducing novel insights and by building well on the ideas of other.
 Quantity is defined by participating 3-6 times a week
 If you participate less than 3 times a week without just cause, you will fail the course immediately

• Assignments 60% of the total mark.

o Papers that simply deal with the question and repeat the class thinking will be marked in the 60-75% range
o Papers that show original thought as well as having the covered the material will be marked in the 75-85% range
o Exceptional Papers that should be published will be marked in the 85-95% range

Course Schedule

Please note that some of the schedule may change. Please see this as an outline. Check my weblog under UPEI for the current schedule and for supporting material for all the key points of the course.

It is important to have read the set books early.
Week Topic Assignment

Part 1 – Conceptual Overview – What is the new Model in action

1. Jan 8 Intro - EBay and Amazon The Perfect Store by Jan 18

2. Jan 17 Dell, Southwest and Wal*Mart

3. Jan 22 What are the new lessons? Assignment 1 due Jan 22

Part 2 – What is the Ford Model? What is the new model as a theory? Why Culture?

4. Jan 29 Explore the Ford Model Support Economy by Feb 12

5. Feb 5 What is the new model?

6. Feb 12 What are the cultural issues ? Assignment 2 due Feb 12
Part 3 – The power of disruptive technology – Why great companies are failing

7. Feb 19 The Innovator’s Dilemma Dilemma by Feb 26

8. Feb 26 Social Software and Community

9. March 3 Costs and Inventory Assignment 3 due March 3

Part 4 – the power of experience and competing by culture

10. March 5 Applying the “Experience” concept

11. March 17 The internal changes to culture

12. March 19 The public sector – Education and Health?

13. March 24 What it means for you? Assignment 4 due March 26

The essence of peer to peer

Great article
The best paper yet on the essence of the relationship economy

Moving from Alchemy to Chemistry - The workplace today Part 1

Why is the workplace becoming more stressful? This is the question that Brian Chambers and I have been struggling with for more than three years. We think that we have stumbled upon some insights that might help you if you share this question.

Brian was the Chair of the Veterans Appeal Board. He was witnessing an ever larger parade of young soldiers who had become disabled in their work asking to be pensioned off. Brian wanted to find out what was the real pressure that was causing this? Why did the obvious fix of providing more medical intervention to soldiers not seem to help? He asked this question about the military just as the Public Service itself had put the issue of the workplace near the top of its agenda as well. Surveys had revealed a growing morale problem based on what seemed to be workload and non supportive management. Plans for significant interventions were put in motion. These plans were largely based on introducing more flexibility into the workplace and in helping staff become more healthy

I had been the SVP for HR for CIBC. Back in 1991, in response to our own perception of growing stress in our workplace I too had brought in the "Mother of all Workplace Programs". We had flex, leaves of all sorts, part time benefits, fitness support. We brought in a brilliant young occupational health doctor, David Brown to help and to coach the senior executives. We had all the fixes that the Public Service were now espousing.

My problem in 2000 was that I knew something that many in the public service did not. I knew that I had failed to halt the slide by using these conventional fixes.

By 1993, we knew that we were not only not making headway but we were sliding into a pit. I knew this because we looked the real numbers - the banker in me. We found that our total cost for everything related to workplace stress, illness, absence, back fills and drugs was then $200 million a year. We ran the numbers out into 2000 and found that unless we did something that worked our stress-related costs would be in the region of $500 million. This got the Chairman's attention. His instruction to us was to find the real reasons why people were breaking down and to find a real fix.

I left shortly after to join Dr Fraser Mustard at the Canadian Institute for Advanced Research and it was David Brown who carried the CIBC torch and who subsequently had much of the breakthroughs that shifted our understanding of this problem from a dependence of beliefs with no science behind them, Alchemy, to a set of principles deeply rooted in 30 years of scientific research, Chemistry.

But before I review with you what we learned from David, and then from the US Army, BP and New York City, we want to add our own view of the context for action. At CIBC we introduced these programs in 1991 because we thought that somehow it would help us look good. After all, who likes the Banks? It was only in 1993 that CIBC woke up to the numbers involved and CIBC got really serious from a core business perspective.

So we asked, was this a nice to have issue or was it more serious than that. For a year, we tried to get the numbers but we failed in that. The task was too complex for the accounting system of the Public Service. At least from our end of it. So we did the next best thing and looked into the future. There was already a intuitive sense in the PS that the current workplace and hiring was going to be an issue. There is the famous, maybe apocryphal, story of the Clerk being told at the dinner table by his own children that they would never consider working for the PS.

Brian and I had arguably a more extreme context for action. We could see a near future that meant that having a more responsive workplace was not a nice to have but a survival issue. We could see a "vice" of powerful forces that were going to intersect in 10 years that would possibly cause the collapse of traditional organizations. By 2003 in the areas of airlines, book-selling, retailing we can see the first effects of the radically new organization confronting the traditional.

1. Who would we hire after the boomers retired? In 2016, Canada will have fewer young than all G8 countries. Not only fewer in number but fewer in quality as our education system is also in tatters with up to 40% of kids either not graduating or leaving school with very poor literacy and social skills.

2. A shift in values that reject the corporate world We have observed a radical shift in values by most of the best of the young who cannot find the freedom and self-expression that they demand in conventional workplaces. Consequently they drift, work for themselves or work for non-conventional employers.

3. The impact of new technology There is a disruptive power emerging in many technology sectors. In essence the need to have a large organization to own major tools is becoming passé. A band can make a CD, mix and edit it and distribute it without the need for a record label. This technology dis-intermediation is taking place all over the economy.

4. The acceleration of the pace and power of change. It is hard to believe that the internet has only been a presence since 1994. It is now ubiquitous. This process took 70 years for the telephone. Moore's law is still working. We can anticipate computing power costing $1000 to include most what is totally available today in 20 years. It is impossible to comprehend what this will mean.

Maybe, we asked, it was the inability of the rigid structures and the culture of the traditional command and control organization to cope and respond effectively to these forces that was the deeper issue. Maybe we have been working on the symptoms. We could see greenfield organizations thriving at the expense of traditional organizations. Could we find any evidence of some traditional organizations that were adapting?

This question lead us back to David Brown and to my old friends at CIBC

Moving from Alchemy to Chemistry - The workplace today Part 2

A myth in science is that great insights occur as a result of linear application of effort and experiment. Most of the great insights have occurred serendipitously in the bath, Archimedes, or after a long walk with a friend, Einstein. It seems that the preconditions are having an open mind and having thought about a problem for a long time.

Brian and I make no claims to be original. We happen to be wide eyed observers. We went looking for answers and for insight. We spent the next year meeting with people much more thoughtful than us and reading about those that were making a real difference. Taken together we saw a pattern.

Changing to the new state that fits the turbulent world that we now live versus the relatively stable world of the 20th and 19th century requires a two step process. We have found that you have to change the workplace culture first and then you have to change the way that you organize. Culture first. What culture you may ask. Please read on and we will explore this map in detail.

Our first call was to David Brown and his partner Dr. Andrew Clarke to catch up with what was happening with their practice and at CIBC. I had heard that they had made progress but I knew none of the details. What we learned got us excited. After 3 or 4 years of frustration and failure in applying the conventional wisdom - much of it by trying to intervene medically earlier and with more power, David and Andrew broke through their own acculturation as physicians. Their insight was that workplace illness is not an illness in itself. It is a symptom. Workplace illness is a symptom of a stress in the relationship between the manager and the managed. While the illness manifest itself in medical terms or in disability, it cannot be "cured" unless the underlying cause - stress in the relationship is dealt with.

David and Andrew took this insight and built a measurement tool an intervention tool based on the managerial relationship and persuaded John Hunkin, the then new Chairman, to give it a try. John was embarking on a massive restructuring and had to take $500 million of costs out of the bank and to shift the culture in the retail operation with 35,000 employees, mainly middle-aged women, to sales. He wanted to find something that would work in providing some stability in a very turbulent time. In simple terms they used a simple tool to track the frequency and duration of absence and illness. In this new context of managerial relationship, regular absence is the first smoke that tells you that fire is brewing. Very few employees are inherently slackers. When an employee is regularly ill, these are the flames. The "cure" was to bring in an outside and neutral Facilitator who worked with the manager and the employee face to face until the real issues were on the table and were resolved. The cure was to broker a real conversation where both sides could be heard. In this short paper there is not space to provide you with a full description of what tis process really involves. The main point is that the cure is in the conversation. A conversation that cannot take place with out a neutral facilitator.

John Hunkin's priority was not science but results. He got them. $8,000,000 was saved in the first 9 months and the disability rate was cut by 40%. In two years, in the midst of the restructuring, CIBC was rated on of th top 35 companies to work for in Canada and the savings rate had continued to build.

So an important insight was gained by reconnecting to David and Andrew.We piled back into the research that supported the idea that the core issue in workplace illness and stress was relational. Michael Marmot's Whitehall Studies are critically helpful in this regard. His study of the British Civil Service shows that workplace illness is found on a gradient in the hierarchy. Those at the bottom with no voice or control had 4 times the amount of illness and even accidents than those at the top. His insight, there will always be hierarchies. The issue is the culture in them. Is it closed or open? Linda Duxbury is close to seeing this as well. She has deduced that the issue that drives most illness, absence and acting out is behaviour of the manager. She is also clear that all the conventional cures such as flex etc do not work in the unreformed organization. A valuable find was the Institute for Work and Health. Their work in the automotive industry shows conclusively that most of the back injuries in factories were related to the amount of control and voice that employees had and were only loosely connected to ergonomics. There is a mass of similar research supporting the issue that stress at work is a product of the managerial culture. An additional aha for us was more research in an entirely different field. Dr Doug Wilms at UNB, and a fellow of the CIAR, has been working on why so many of our children are vulnerable. The conventional wisdom is that poverty is the main driver for poor attainment. Wilms contradicts this. He has found that it is parenting culture not income that is the main driver. The most damaging parental culture? Very authoritarian culture. The same pattern.

So if culture, managerial culture was the key to workplace stress and illness, why did the facilitator seem to work so well to fix it and was this the holy grail or did we need to learn more?

Because we wanted to try this out in the Canadian Forces, we thought we should find a military testbed. So we turned to the work of General Gordon Sullivan (Retired Chief of the Army) and Colonel Mike Harper. To our surprise we found an entirely different route to the same destination. David and Andrew's insight at CIBC is well understood in the US Army and a different process, but with the same DNA, has been in play for over a decade. But we found a new issue. That you can be successful in changing a culture but if you don't also change the main operational doctrine, you are still stuck.

Moving from Alchemy to Chemistry - The workplace today Part 3

It's a paradox that the organization that gave us Command and Control is an organization that has done so much to find a new way of doing things. What was General Sullivan's context for understanding that Command and Control had to go?

As we have witnessed in the last decade, the modern battlefield is now incredibly complex. There is simply no way that all the information can be fed back to the command, understood and then relayed back to units. Everyone has to be in the loop at the same time and those at the front have to have the maximum liberty to take action with no call back for orders or more information. The issue for distributing all this information and power of command is not directly technology. It is culture. If you have a culture of command and control you can't use the new technology.

This is actually every "General's" context whether she runs Hewlett Packard or he is the Clerk of the House. The complexity of our world is increasing exponentially.

The principal tool in the Army's portfolio for culture change is a deceptively simple process called the After Action Review. The AAR works like this. After any task those involved time out and WITH A FACILITATOR, have a discussion about what really happened and what they should learn from this. Does the AAR work? The US Army may not be the exemplars of peacekeeping but their tactical performance in the Middle East was breathtaking. The AAR is recognized as the most important tool in unlocking the culture and enabling this type of tactical flexibility. Brigadier General W (Scott) Wallace, formerly in command of the NTC, has observed that the AARs have "instilled a discipline of relentlessly questioning everything we do.
Above all, it has re-socialised three generations of officers to move away from a command-and-control style of leadership to one that takes advantage of distributed intelligence. It has enabled us to learn that we can never become too wedded to our script for combat and that we have to remain versatile enough to exploit the 'broken plays' that inevitably develop in the confusion of battle.“

Let's play with this for a moment. Do you have real and frank discussions about what is really going on? Do you have junior folks speak in front of you telling you what you did wrong? Do you have junior folks acting as the thought leaders in the group? I doubt it. The key? The Facilitator. Here is where the pattern started to become clear to us.

Culture is embodied in voice. At the heart of the managerial relationship is the issue of voice. Stress as Marmot says visits those of us most that have no voice or who feel that we have no voice. Having a voice does not mean that everyone is in charge. The US Army is still firmly attached to the chain of command. Having a voice means that our opinion is taking seriously. Having a voice as a leader means that we speak the truth.

How we speak to each other is the culture in action. If we have a habitual way of speaking we cannot change this on our own. If you are the DM, or the general, you have a certain type of dialogue with junior folks and they expect this and also speak their side of the deal. To speak differently demands that there is a neutral broker, as in the CIBC or the AAR, to level the playing field. Both the CIBC process and the AAR in their DNA open up the conversation between the leader and the led. They have to use a neutral facilitator to pull this off because we have all be trained too well to play the old conversation.

The central figure in the development and deployment of the AAR is a remarkable man. Col (RTD) Ed Guthrie. Ed was not only the staff man for Sullivan on this file but has since his second retirement, Sullivan called him back to be the AAR guy for 13 years after he had retired, has gone on to make a substantive difference at BP. It was in speaking directly to Ed that we began to see that finding ways to shift the culture were not enough. There was another step that we had missed. Unless you then change the main operational doctrine, you are still bridging two worlds - you are not in the new yet.

Moving from Alchemy to Chemistry - The workplace today Part 4

Our conversations with Ed took place in the context of the political war going on between Secretary Rumsfeld and the Army just prior to the second shooting war wit Iraq. Ed gave us a deep insight as to the blind spot in the Army. They were hanging onto the structure required for the cold War - the Armored division and the "Big 5 Weapon Set" developed for the European theatre and for the Soviets. As Rumsfeld and the Army fought, Ed was providing us with the meaning.

Rumsfeld is deeply influenced by the thoughts of the military genius of the late 20th century the late Col John Boyd USAF Rtd. Boyd is a huge topic himself. One of Boyd's main ideas is that speed itself is the competitive issue. His great thinking tool is called OODA. In layman's terms is is about how fast you can "see" what is really going, understand it, decide what to do and then act. Applying OODA well in today's complex world where we don't see or understand a lot is the difference in whether you win or lose in any competitive situation whether in war, business or in government.

Rumsfeld's problem was that the Army doctrine was wedded to an organization that was by design too slow and too ponderous for the political issues confronting the US. He needed a quick and successful war. But the way that the Army was organized was in the way.

In the US Army operational culture, real generals drive armoured divisions with a huge tail. While the Army had made great progress in changing the command and control internal culture, they still saw gigantism and the Armored Division as how they did things. So the 1st Armored Division could not deploy in Kosovo, the roads and bridges could not fit them. Nor could they deploy the Blackhawk either as it was too expensive to lose and too vulnerable to a sophisticated enemy. Rumsfeld's frustration with the Army in Iraq is that they wanted to take another 6 months in bringing up the stuff. So he forced the issue and got his way. While the political aftermath is a mess and the Army's lack of suitability of peacekeeping is self evident. Their tactical achievement is outstanding. They surprised themselves!

Shock and Awe a Boyd concept where you defeat your enemy in his mind by your speed and flexibility was proved out in the field. Rumsfeld's latest attack on the Armor Generals is the appointment of a new new Chief of the Army who is a retired Special Forces General.

So our study of the US Army had shown us that it was not enough to find a way to change the internal culture. If a large traditional organization was going to make the shift, it would have to change its core operational doctrine as well. The history of technical change and its proper deployment in the military has become a field of study itself. Each new development is introduced in the operational context of a previous era. Long Bows had been in action for a century before they were deployed properly at Crecy. It took 3 years for leaders in the US Civil war to acknowledge that you cannot deploy men in line as you did with muskets in front of rifles. It took until late 1917 to acknowledge that courage was not enough when confronted with a machine gun. The history of arms is only an illustration of the point that when a disruptive new technology emerges, our only context for its deployment is how we used to do things. Hence the Dot com bubble.

Ed lead us to another large organization that had tackled both its internal culture and its operational discipline. BP.

Moving from Alchemy to Chemistry - The workplace today Part 5

BP's story is well documented in Chris Collinson excellent book Learning to Fly. Beyond learning much from the book, it was a thrill for us to have direct contact with Ed Guthrie who played such a key role in the first steps of the transformation that Lord Browne is pulling off at BP.

Understanding what BP, a 100,000 strong organization of mainly male engineers many of whom are Scots, is doing gives us some hope that a traditional bureaucracy can transform. We do not believe that all traditional organizations can transform. Look at the airlines' response to discounters or Kmart's response to Wal*Mart. We are saying that with the right leadership, transformation may be possible.

So what was Lord Browne's context for change? He and his team recognized that they were in the "End Game" for oil. All the easy oil had been found. All the oil in cheap geological structures, in easy political environments, in easy environmental areas has been found. Only the tough oil was left. He and the team recognized that it would take all of BP's energy and intellectual capital to stay in the game and to be close to winning it. What a daunting challenge! But then someone pointed out "What if we win the end game for oil and miss the point - that the future may be hydrogen, wind or something that we don't see '

Well they thought they had a problem but now they had a crisis. How were they going to do their day job in oil and be competitive in the alternative game? The alternative game was a real game. the stakes were survival. BP had to become a leader in the alternative game while still be a contender in the End game for Oil. Who could teach them all these new skills? How could they crank out enough earnings in the oil game to pay for the early days in the new game?

The only answer that they could come up with was that they were going to have to rely only on themselves. There was no one out there that could help. How could they learn enough quickly enough? All the jargon about being a learning Organization now made sense. being a learning organization had nothing to do with credentials, it was all about reacting appropriately to changes in the environment. Being a Learning (OODA)?Organization is a an evolutionary concept. Observe, learn and adapt or perish. (OODA) BP had two strikes against them. They had an exceptionally male engineering culture where not knowing something was not acceptable and asking for help an impossibility. How can you learn if you cannot accept that you don't know? How can you learn if you cannot ask for help? They also were organized by departments and by geography. They were a silo-based organization where crossing departmental or geographic boundaries was in effect impossible. How could you learn if you could not access the full knowledge embedded in the global organization?

They overcame all these barriers and then some. BP did three things well. Browne helped everyone understand what the context was for their future. He had mainly got the job as CEO because if his demonstrated skills as a communicator.as a division leader. A shared context is the opening move in playing the evolutionary game well. Secondly he brought in a world class teacher, Ed Guthrie to work on the culture with the introduction of the AAR. Ed's job was to make it OK to ask for help and to capture the learning. Browne recognized that he had to break down the barriers for conversation before he invested in any technology that may broaden the conversation beyond face to face and hence to tap into the full distributed intelligence of all of BP. Thirdly BP created a new sub organization - the Community of Practice. BP still has the organization that we all recognize in org charts. But BP has a second organization that it is intensely stable. That is global and which even lasts after retirement. It is based on the reality that shared interests are more stable that conventional structures. If you are a driller, drilling is your real organization. being located in the North Sea or in South east Asia does not matter if you are connected to all the drillers. if you are retired you are still a driller and you may know stuff that the younger drillers may find valuable. You are still a player. The mundane gas station COI saved $700 million in 3 years by applying all their learning repeatedly to each new station construction.

The key to effective COI's? A FACILITATOR!. BP found that groups need to be brokered to ensure that the right type of conversation takes place. To work well COI's have to have the right type of conversation. Again voice emerges as a key. Underlying voice is the human relationship that voice establishes. A conversation is essentially human. being human it is attractive and it drives enquiry, challenge and response. It gives the speaker a place in the tribe and status that no official organization can give. The authoritarian voice dos not allow conversation. It is essentially a one way deal. it shuts down the receiver. It closes down the child. It impoverishes the organization

So what does all of this mean? Is there a silver bullet? Is there a Red Pill that we can take that will reveal the Matrix. No but there are perhaps a few principles which any organization could use to transform itself.

Moving from Alchemy to Chemistry - The workplace today Part 6

So what do we know? Could it help you?

1. We think we know a few things about the context of our time. By 2010, tomorrow, we will live through the convergence of a powerful series of vectors that will make staying as we are impossible. While we have mentioned 4 vectors in the Vice that we are sure of, we have not added any environmental or extraordinary factor such as war, a financial bifurcation or an energy crisis. Our point is that we do not have to be right in any detail about these vectors to know that we live in times that are so complex as to be beyond the prediction of mortal man. Only organizations and individuals that are exceptional at reading the times and reacting to them will survive.

2. We are prisoners of our mindsets Our mindsets affect two critical paths. They affect our relational culture or how we as individuals fit into an organization or into society. Currently we are locked into a parental command and control pattern which is evidenced by the corporate voice. This voice is not human and most people know that it is not real. At one end it is the voice of spin and the other the voice of dependency. Only organizations and individuals that speak with a human voice, that have conversations, will learn enough to keep up and to attract the best of the best. We know that the only way to change these voices is to use a facilitator. We are too embedded to do this on our own. We know that only if we can change our voice can we "see" enough to consider changing our operational doctrine.

3. Only a change in operational doctrine will complete the transformation. It was when Fisher did both in Dreadnought that 60 years of technical development in the Victorian Navy bore fruit. eBay would be our Dreadnought today.

4. There are no silver bullets. There are a number of good tools. What is needed above all is an understanding of the context and great leadership. We found many good tools at CIBC, in the US Army and at BP, But the key is not tools per se but intellectual and moral leadership. We are still bemused that most of the research that tells us that command and control is the problem, is not widely know. We suspect that it is easier to act using the conventional wisdom than to do the work to find out what science has to offer. Our greatest risk is to confuse action with understanding and acting for the sake of acting with courage.

Which brings us back to our beginning. Like the medieval world, we seem attracted to a set of beliefs that have no foundation except that they are conventional wisdom. We continue to discuss the issue of "workload" as if this is the accepted definition of the problem. We mandate managers to be supportive, without seeing the irony. We continue to see health as a product of physical issues which only require the application of medicine to be cured. We see being competitive in the future as about the application of technology alone. We think that knowledge is a thing. This is "Alchemy". None of these beliefs have any basis in observation, science or reality.

Science tells us that stress in the workplace is directly related to lack of voice and powerlessness. Science tells us that hierarchy is an essential part of nature and cannot be replaced but that its character can be changed. Science tells us that we cannot change ingrained behaviour by fiat but only by the gentle modelling of a peer or a facilitator. Science tells us that health is driven by our immune system which in in turn is driven by our coping ability which in turn is driven by how supportive our social environment is. Science tells us that to competitive a species or a group or an individual has to be able to observe, learn and adapt to changes in their environment. This is the chemistry of human relations. They are based in rigour and in observation and have been established for many years.

So maybe there is a silver bullet. You can choose to stick with Alchemy or you can choose Chemistry.