What the Hell is Water: Reality is Made up of Circles - Part 2

Today's blogpost is a continuation of my previous post which was centered around this profound saying by Peter Senge:

"Reality is made up of circles but we see straight lines."

In my previous post, I discussed about the loopy nature of reality with a couple of examples. I'd recommend that you read it first before proceeding with this blogpost.

While the quote is from Peter Senge, I'd like to dedicate this post to Bill Scott , an inspiring leader who unfortunately passed away a few months ago. I had the privilege of seeing him in action during his tenure at PayPal where he was a champion of innovation. While I never had the opportunity to be part of his engineering organization, just like so many other ex-colleagues of mine, I also admired him a lot for his leadership style.

The Games At Play

Ever been part of a company that has so called "culture" problems? Toxic promo culture, NIH syndrome culture, No vacation culture, Work during nights & weekends culture, and so on.

In one of his blogposts, Bill Scott recollects a time when another executive complained to him that "We need to get our people to understand that they should stop seeking promotions! They should be excited about their work and not worrying about being promoted.” Bill responded as follows:

“That is easy for you and me to say. We are executives and have some of the highest ranks in the company. The company created a ‘game system’ complete with these levels. The levels are things like ‘Sr Manager’, ‘Director’, ‘Vice President’. We reward handsomely the players that beat the previous level and move up to a new level. We send out nice congratulatory emails. We give extra perks and equity to those that level-up. And now you are saying they shouldn’t play the game? This seems hypocritical given that you and I made it the top levels of this game, benefited from it and now you don’t want others to play the same game?”

Observe the level of awareness Bill has about the situation... He is not only within the system playing the game, but he is also able to go meta and view what's actually going on at the company (while at the same time being self-aware and connecting the dots to his own experience playing the game over the years). He is able to self-reflect and articulate in his own words how causality is circular and subtly points out that leaders have to take responsibility for the "system" they create. He goes on to provide his own words of wisdom:

“As a leader, you must understand the games at play and the games you create. Most team’s seemingly irrational behavior will become understood when you know the game afoot.”

I've written in the past about why Netflix doesn't have a performance rating system/process and why there are no "pay for performance" bonuses either. Please read Bill's entire blogpost to learn about another interesting story in which many teams during their journey of agile transformation started playing a game called "Beat the agile assessment" that had a magic score of 72.

I'll close this section with an eye-opening short (tiny ?? ) story by David Foster Wallace :

There are two young fish swimming along who happen to meet an older fish. The older fish nods at them and says:‘Morning boys, how’s the water?’ The two young fish swim on for a bit and then eventually one of them looks over at the other and asks: ‘What the hell is water?’

That's it! That's the story! The moral: The most obvious and important realities are the hardest to see! It is high time leaders moved past linear reductionist thinking and started seeing the circular causality of the real-world.

The Buck Stops with the Leader

Let's now look at another case study in which Dennis Sergent recollects the story of Mike Duggan, the mayor of Detroit who was once the CEO of Detroit Medical Center (DMC). Here is the excerpt/analysis of that story...

While at the medical center, Mike was tasked with solving a multi-million dollar loss. He starts with the Nursing staff to identify opportunities for improvement and removal of roadblocks. First among their ideas was to speed up patient discharge; it sometimes took up to three hours to get an ambulatory patient wheeled out and on their way home. Mike asked where they needed his help and was quickly told the problem was not with the Nurses but with the Transporters.

So off he went to the Transporters, trying to find the "culprit" causing these delays. The Transporters told him they had higher priorities: moving people into ER and Surgery, then from Surgery to Recovery, and then to their rooms. They were dealing with sick people first.

Obviously, that felt right to Mike. So, he inquired where he could help them out instead and they pointed out that the lack of operable wheelchairs was the issue. A large percentage of them were always in for repairs. He asked who was the responsible culprit for this backlog, and off he went to the Wheelchair Repair Shop, in the bowels of the DMC facility, to correct the "guilty party".

Mike arrived at the Wheelchair Repair Shop – the first time anyone there had seen the CEO – and he heard a familiar story. The problem was not here, it was with someone else. Someone in Purchasing was the hold up, and so off he went to talk to the culprit in Purchasing.

By now, you may guess that Purchasing also claimed they were not the issue. The Suppliers were not sending parts on time because Accounting was not paying the Suppliers in a timely fashion. Mike went off to Accounting, knowing he must be getting close to the root cause and the ultimate culprit at DMC. His revelation came when he asked Accounting and they confirmed that yes, they were not paying Suppliers on time, rather, they had orders to hold up payments as long as possible. When Mike inquired about who the culprit was so he could hold them personally responsible for this colossal waste of time, the Accountant pointed out that he was acting at the request of the CEO – Mike himself!

As you can see, the chain reaction of events went through multiple departments and eventually came back to Mike himself! He realized how his own instructions to the accounting department (note: Dennis doesn't explain why he did so) went around in loops and turned out to be one of reasons that is "causing" the very major problem he was trying to solve.

If we observe carefully, we can sometimes see these type of phenomena play out at our own companies. When you talk one-on-one with various employees at the company (developers, architects, managers, etc.) they all want to do the right thing and you can clearly tell no one is waking up in the morning with an evil plan to deliberately try and sabotage the company and its operations. If we are all individually good, why do we then collectively suffer and have "productivity" problems, "security" problems, "quality" problems and more importantly "culture" problems? It is very likely due to the lack of systemic worldview of the corporation - our failure to understand the complex interdependencies and interactions of the various actors, policies, tools, constraints, etc. at play. Culture, after all, is an emergent property of the system as I've articulated in one of my previous blogposts . We can't make it our excuse for not fixing the system!

End of the day, the buck stops with the leader. Leaders have to deeply self-reflect, think systemically to understand the different loops at play and their complex interactions separated by both space and time to figure out the right levers to experiment with.

I'll end this post with a pertinent and profound quote from Dr. Edwards Deming:

“The supposition is prevalent the world over that there would be no problems in production or service if only our production workers would do their jobs in the way that they were taught. Pleasant dreams. The workers are handicapped by the?system, and the system belongs to the?management.”