Niels Pflaeging
Transcript
So in this session, I would like to invite you to think lean,
or lean Kanban, not for teams, not for downstream, upstream, but for entire organizations.
Because I think in this kind of conferences about lean, about agile, about scrum, Kaizen, Kanban, whatever it is, there's usually one piece missing and that is decentralization. I believe that decentralization is the key to all of agile. All of lean, all of effective organization, all of organizational fitness. You can ignore the title of this keynote. The title I chose is Complexity Tools. That is just to do a little marketing for my upcoming book.
So you can just ignore it. There will be a new book, you know, called Complexity Tools. The old book is here.
Organize for Complexity, and I will talk about... This is just a marketing thing, you know. Organize for Complexity and the new book. But you can ignore it. Anyways, let's start with a little quiz.
What do we see here? Any guesses? Just a little quiz to start. What do we see? Starts on the left, goes up to the right. What is this?
Ideal to product, yes. And using a more general term, how would we call this kind of...
From concept to? Cash. Cash, yes, le cash. Le money, l'argent, l'argent. La plata, la guita, how the Argentinians would say it. Any Argentinians here? People from Latin America? Okay, I will speak English.
No Spanish today. I will try to speak English as good as I can as a German. So indeed, yes, this is about developing... I like the word I wanted to hear is innovation. Very broadly speaking, this is about innovation. Innovation always starts with an idea and only, actually only at the end, this whole thing turns into innovation. I like to define innovation as something that a customer would pay a bill for. You can invoice a customer and he or she, that customer, would pay for it. Nobody pays money for an idea. Ideas are full of potential, but they're not yet worth anything. They're just ideas. Which is why, if this is true, what is the worst thing that you can do with ideas? What's the worst thing? If you really want to kill ideas, what should you do? Which technique should you apply? What's the really worst idea? How to kill any idea?
What should you do? Brainstorming. Because brainstorming tells you to collect ideas and then immediately judge them. Which is the most stupid thing that you can do. Because all ideas, one Greek philosopher, 2,000 years or so ago, he already said, all ideas are born ugly.
All ideas are born ugly. They're pure potential. You should never judge an idea. You should test them or prototype upon them or something like that. You should develop them. But do not judge ideas. All ideas are ugly, like they are little knees or really ugly stuff, you know, little feet. But they are nothing complete, you know. So ideas are ugly.
The good thing in organization, it's true, all ideas are born ugly. The beautiful thing is innovation at the end, but it takes some time. Do you see the chain here? This is like a chain. So imagine this is like metal pieces of chain, little links of the chain. What would resemble that? How would you call that? What you need to transform ideas into actual innovations or products for which a customer would pay money. How do you call that? Directions? Interactions? Yes, you need interactions, which is very important. You do not need any interaction to have an idea. Individual people often have ideas just by themselves. You do not necessarily... You can use interaction to generate ideas, but you do not necessarily need interaction. To generate Individual people have ideas and then you need interaction to transform them into... But how do we call this interaction if it leads to innovation?
I call it creativity. And this is a little, there's a little hint here. I hope you like it. Individual people cannot be creative. That's just bullshit from the United States of America to say that people can be creative. It's not true. Nobody in this room has ever been alone, been creative. Individuals cannot be creative by themselves. You need the interaction.
Creativity only happens in the space between people. You need a social process to transform ideas into innovation. Ideas, individual people have them. But to transform ideas into innovation, you need interaction. And this is where the problems start. Our organizations are not horrible at having ideas. Or having people generating ideas, they are horrible in the creativity thing. Let's say, I lived in New York for a couple of years, so I picked up vocabulary. In the United States, they say, we all fucked, you know, organizations fuck their creativity process, unfortunately. It's doomed. We are excellent at killing creativity. The social processes in organizations that need to transform ideas into innovation are killed by this. There are many names for this. A couple of names I heard about this is upstream. Today somebody talked of upstream and I think he meant this. Who was that, Patrick, I think, in the last session? I'm not sure about Klaus. Did you also mention upstream? Kind of, yes. And I think you were referring to top management. This is a problem. I will prove it to you why this is a problem. You cannot have a lean organization or
or an agile organization, if you think that you can organize the work around this. This was never, never, this was never a concept to organize the work. It has nothing. thing to do with work. You cannot work in this. Work doesn't flow from bottom up or top down. That's just a beautiful oversimplifying illusion. In other words, to think that you can organize the work by reorganizing the org chart is just bullshit.
And I will prove to you why. I will try to prove to you why. But first, something very important here. Do not believe anything that I say. You don't have to believe me. If you want to believe for yourself, that's okay, but you don't have to believe me. I can only offer you ideas and concepts. You don't have to believe. Don't trust me, okay? If you still want to do it, that's your problem. It's very nice. I mean, between Germans and French, many French, who is French? Oh, okay, yeah, we have to work on this.
You know, Macron, Merkel, it's not enough. We have to do the real work. So, okay, let's try it.
First, I want to analyze work with you. We have to talk about complexity. To understand lean, to understand agile, to understand work today, we have to understand complexity. And complexity is usually something very different from what most people say. Complexity is neither good nor bad. Which is why I like to use this metaphor. Complexity is like the weather. There is no such thing as good or bad weather. It's only bad if you're not prepared, then you're fucked, you know, because you didn't take the umbrella outside. But there's no bad weather. weather and there is no bad complexity. We cannot manage complexity either. Complexity is just like the weather. You cannot manage the weather. It's impossible. You can just manage, you know, take an umbrella for Christ's sake or take your clothes off if the sun shines. But you cannot manage, you don't have to deal with complexity. Complexity is, it's a fact. Okay, now in work,
The complex shakes hands with something different. I'd like to say in this session I would like to offer you that we call complexity the red. Red is complexity, okay? And in organizations, the red shakes the hands of the blue. Do you know what the blue is? It's not complexity, it's something different. It has a similar name. Klaus, any ideas what the blue is? The red is the complex, and the blue, what could it be? It doesn't have complexity.
It could be simple, yes. The blue, for the expert, the blue is simple. But for the non-expert, it is complicated. Yes, the blue is complicated. So in organizations, we find two kinds of problems. They are neither good nor bad. They are just different from each other. We face blue problems, complicated problems, and red problems, complex problems.
And there are certain characteristics that differentiate the blue and the red. In the blue, for example, you can understand the problem. There is a right and a wrong. In blue situations, complicated situations, there is a right. and the wrong.
In the realm of the red, there is no right or wrong. There's uncertainty and other stuff. But in the blue, you can control things from the outside. There's a yes and no and a right and wrong. Things have linear relationships. So there can be many parts. In complicated systems, but the relationships between the parts remain stable. Our friend Klaus here referred to the work of Russell Eckhoff before. He was one of the, I think, masters of explaining the difference between the complicated, the realm of the blue, and the complex. And he says, in blue systems, the relationship between the parts remains stable. In red, problems or situations, the interactions between the parts can change. Do you have an example for a blue system first? Blue system? The example of a blue system I like best is a watch or a computer or a software. Any kind of machine is a blue system. Also, by the way, blue problems can be solved with machines, with algorithms, software. No software ever written is complex. All software is complicated. It is blue.
How do you know that I know? Do you think that I'm right or wrong?
Maybe not. Maybe you think that there's... I will give you... The point here is blue systems are dead.
That's neither good nor bad. It's a fact. Everything that's dead is blue. My watch is dead. A computer is dead, any machine, a plane, that's dead. I'm not judging. It's just a scientific fact. The realm of the red, things are alive. So what's an example for something red? Do you have examples?
Organizations, markets, clients, customers, teams. What else?
Maybe you have loved ones at home. Do you have, I mean, you are French.
Have loved ones at home? Did you ever say, honey? I'm not even sure how to say that in French. Honey, you are so complicated. Have you ever said that? Here's a hint. Scientifically, that's just wrong. Honey is only complicated if he or she is in the fridge.
So, by which you learn it is easy to transfer a red living thing into something blue and complicated and dead. The other way around, have you tried?
That only exists in the realm of science fiction. Frankenstein and so on, and sci-fi movies like Terminator. There are systems that become alive. That is not the reality. AI is just plain bullshit. AI doesn't exist, will never exist. Don't worry. Because there's a difference between the blue and the red. But we can discuss this in the lunch break. By the way, let's talk about problems in organizations. You all have these post-its.
You have three post-its. Please pick them up. And you now need the blue post-it. No, the blue post-it.
And the red one, you need these two post-its. Just to check if you understood the difference between the red and the blue, I will check. I'll give you a problem. Can you imagine bookkeeping, accounting? Is that a blue problem or a red problem? Please hold up the post-it. Accounting, bookkeeping. There's one guy with a red. Why did you say it's red?
It's very good. He doesn't trust me. But I didn't tell you. So you don't have to trust me on this. Of course, in bookkeeping, there's a right and a wrong. It's complicated. There are laws around it. Of course, creative bookkeeping also exists. That can get you into prison. At least in Germany, not sure about France.
Just a joke, just a joke. Okay, developing a product, developing software, developing a product.
There are blue parts, of course. There are things that you can make checklists for. But most of it is all the essential stuff. And this is very important. The essential stuff is red. There are surprises. Otherwise, if you discover blue parts, you can try to automatize them.
Codify and automatize them away. You know, the blue stuff can be automatized, solved with rules, processes. In the realm of the red, you encounter something very important, very simple word in French and in English for it. What do you encounter in the realm of the red with our loved ones at home, with teams, customers, how do we call it? Surprise. Surprise. Surprise. No surprise in the realm of the blue. But here, lots of surprise.
Oh, beaucoup de surprise.
Which is neither good nor bad. It depends on how you are prepared. But in complexity, we find surprise. Again, the blue, if you understand... The complicated can become simple. It becomes simple. And here we have things like chaotic as well. If you cannot identify the patterns, why they are happening, we call this chaotic. It's all part of complexity. I just explained to you why the Kinevan framework is useless, but not sure if you listened to it. Customers, how do we call it? Surprise. Surprise. Surprise. No surprise in the realm of the blue. But here, lots of surprise.
Oh, beaucoup de surprise.
Which is neither good nor bad. It depends on how you are prepared. But in complexity, we find surprise. Again, the blue, if you understand it, the complicated can become simple. It becomes simple. And here we have things like chaotic as well. If you cannot identify the patterns while they are happening, we call this chaotic. It's all part of complexity. I just explained to you why the Kinevan framework is useless, but not sure if you listened to it. Anyways, this distinction is very important. We always should ask, is it a blue problem? Then we should use process, standards, rules, and try to automatize it. In the realm of the red, these things here won't help you. Of course, I'll give you another problem. The future. Is it a blue problem or a red problem? The future. It's very simple, I know. So in your organizations, how do you deal with this red problem that is the future? Do you have something like budgeting? Budgeting is that blue or red tool.
I mean, there are emotions in it, but it's still a blue fucking blue process, right?
If you learn project management, 99% of the tools you learn in traditional project management are blue tools. Aren't they about complex stuff?
It's, what shall we say, it's stupid. I can show you why this happened. We are trying to solve red problems with complicated tools and means, and that is just horrible. It's a crime against work, it's a crime against human intelligence. You can never solve a red problem with blue method. It's impossible. You can solve blue problems with blue method and for red problems you should use red method. Or as we call it, complex tools.
Normal tools, complex tools. Normal tools, complex tools. Process. project, that kind of stuff. There are differences in the realm of complicated and complex, but I would try to show you why we are confusing the red and the blue all the time. If we think back 200 years ago, 200 years ago here in Paris, and we visit a workshop company or a manufacturing company, how would value creation be predominantly red or blue? Please hold up the post-it, please vote. Would value creation and work be predominantly red or predominantly blue? What would be dominant, more important? 200 years ago. Hold it up, hold it up. Whatever you choose, you have to choose what's more important. Okay, most of you say blue, which is wrong.
Let me explain.
In the manufacturing age, 200 years, years ago or more, 150 years ago even, a company had to wait for a customer and then produce on demand customized products with value creation. There were no globalized markets, very few globalized markets, only for spices, silk, porcelain and so on, but most markets were highly local. So any manufacturing company had to wait for the customer and then customize the value creation. You could not mass produce and then sell to the whole world. These markets didn't even exist. You see the markets at the top like little sparkles, you know, and even in a large city like Paris, you would have few people producing violins.
And they wouldn't really compete with each other, you know? This was highly customer-driven, individualized, highly customized value creation. This is neither good nor bad, but there was little standardization. You didn't have the markets or the technology or the logistics to mass produce. That, of course, changes in the industrial age. In the industrial age, for the first time in human history, we have these massively growing, exploding mass markets, and we can standardize the product. Those were the good days. In these mass markets, you see them here with few competitors. This is an oligopolistic mass market. It explodes and you can just produce, produce, produce the same, same, same, same, same. So no customization anymore. Service, not very important in this era. You sell. You sell, you produce. and you sell. That of course changes again, but in this kind of market where you just have to produce and can sell, this works very well.
For this era of the industrial age, for this blue era here, predominantly blue, there's a little red, a little surprise in the industrial age, but very little. For this Age of human history. We invented management, the social technology. Who invented it?
An American.
Oh, mon Dieu. Frederick Winslow Taylor, he figured out that for this highly repetitive mass production, we should standardize mass command and control. And the idea that Frederick Taylor gave us was to
to liberate the workers from the thinking.
That's the beauty of it. You don't have to think much. You just execute.
Planning is done on top. James O. McKinsey, the founder of McKinsey& Company, the consulting company, he was pretty much the first person in the world to write a book about budgeting and how you would budget for the entire organization to coordinate these pyramid structures, these organizational command and control structures. Frederick Taylor had this idea to liberate the doers from the thinking. So you have thinking at the top, doers at the bottom. The doers on top. Upstream, maybe? I'm not sure how you want to call it. I think that's not upstream. It shouldn't be upstream. Upstream should be something very different. We will talk about it. The top steers the bottom. Steering is very important in this organization. Our organizations are infested with top-down steering. And the cruel reality is it makes sense. In these blue markets, you can steer your organizations and the value creation and the work like a machine. That is where the idea of waterfall comes from. The idea of strategic planning, of budgeting, fixed targets, incentive system, bonus system, growth targets.
A little bit of optimization and tweaking, and that will suffice in this kind of mass market. Any questions? Doubts?
Of course, you already see something will change again, right? Here, this is the... In the 1970s, we moved from Taylor to Toyota. Taylor, Toyota. Waterfall, lean, agile, scrum, whatever you think. And this is where the bullshit starts. The problem is not Frederick Taylor's idea. Frederick Taylor's idea about management of social technology was perfect. It wasn't really humanistic. It wasn't very humanistic, but it was efficient for this kind of work and value creation. Lots of blue, very little surprise, very little complexity. In this era, we call this the Taylor bathtub, this movement, you know? Do you see it? Complexity goes down and then it goes up. It's like a bathtub.
And Taylorism was perfect for the lower part, but now it is not anymore. In the 1970s, management, the social technology, dies in organization. And since then, it has been a zombie technology infesting our organizations. Do you see The Walking Dead and Fear of the Walking Dead and that kind of stuff?
It's like that. Management and social technology has become a zombie. It wants to bite us all the time. It wants to suck the energy and life out of organizations. And we let it.
We are stupid enough to let it happen. In this era, since the 1970s, we have different markets. They are crowded. They are dense. You see it at the top right. We have red markets. There are still blue parts of value creation where we need processes and standards and where we can automatize. But the most important part of value creation is red. It has to do with surprise, with innovation, with creativity.
It needs and requires social density. So in this era, this is not good or bad, it's just a fucking historical fact. Like it or not, nobody cares. The world has changed, period, that's it. Since the 70s and our organizations have been sleeping. Okay? Good. Management of social technology is dead. Our tools, most of our tools, from the blue era of the industrial age, we try to use them on anything. You know, I have a project, for example, and I send in a... process manager, or how we love frameworks. I think Klaus was also, you were also critical about, a little bit critical about frameworks. Frameworks, what do you think, what kind of solution are they?
They tell people what to fucking do, which is a fucking crime against value creation and people and their intelligence.
The problem is not the people who make frameworks. They just want to be rich. That's okay. C'est capitalisme?
The problem is if you buy a framework and force people to follow it and obey it. Frameworks are evil. Frameworks are evil. We shouldn't use frameworks. We should have everybody think. In the world of the red, we should have everybody think and act at the same time. Frederick Taylor, he taught us how to divide thinkers and doers. And organizations like Toyota, of course, they reunited the thinking and the doing in their lean agile teams. At Toyota, everyone in every team is supposed to think and act and go back and forth thinking, acting all the time. It's natural. You do not need supervision nor managers if you have people thinking and acting and doing Kaizen.
So this is the challenge. Move away from corporate pyramids and have people thinking again. Of course, you cannot use frameworks because frameworks take away the thinking from people. That's the crime of the framework. Also, management consultants. External agile cultures. Who's an agile coach here? It's not good, right? It's not good to be an agile coach because you take away the thinking. I mean, some of you. The German ones, not you. In France, you're much smarter.
I hope you get the point. This is not personal. I'm only criticizing those who are not here.
A little riddle here. This is important to understand and appreciate the difference between the blue and the red. If this at the left, what do you think it is? Or what do you think these things here are?
This has nothing to do with ideas, no? On the left here you see data, and the right is what? Information. Context, if you give context to data, data on the left, it's just points. If you contextualize data, you get information. You can store both these things in IT systems, right? But what's the difference compared to knowledge? What changes?
Knowledge can only be possessed by people. You can store data and information on IT platforms, on servers and chips. Knowledge, you can never serve it on any machine. You can never put it on a machine. Knowledge is personal. How do we acquire knowledge? Well, we learn. Okay, now... Knowledge is knowledge. What kind of problem can we solve with knowledge, blue or red?
With knowledge, what problems can we solve? Just vote. Most of you are wrong. I already see that. If you look around, take a photo to get... Please take photos so that it's visible that you don't have any idea what I'm talking about. This is good, yes? Great, great, great.
Trying to embarrass you a little bit. Okay, so you want this again? Yeah, yeah, you can vote again. Knowledge, can you solve blue or red problems with knowledge? I can tell you for sure, it's only one, only one thing is right. It's not a mix. It's not a mix. Klaus. No, it's not both.
Blue. Blue is right. Sorry. And why? Look, knowledge is a child of the past.
With knowledge, you can only solve problems that are already known. So they already exist, they're not surprise.
You cannot solve a new problem with knowledge because the knowledge doesn't even exist. Of course, I'm very specific here, but... We need to be specific and exact about the vocabulary. It's very important that we use the right words. With knowledge, you can only solve blue problems. It's not good or bad. If I ask my 17-year-old son how to make a chocolate pie, How to make a chocolate, how to bake a chocolate pie. Is that a blue problem or a red problem? How to bake a chocolate pie.
Chocolate cake, yeah. Okay, it's a blue problem, yeah? There is knowledge. The knowledge is called recipe or YouTube video or Wikipedia comment or whatever. What else?
Grandmother.
Or grandmother. Well, grandmother has more than the recipe. What is the thing that our grandmother has in addition to knowledge? She has something red. Experience is not enough. Experience a stupid grandmother will not learn how to make the thing better. The chef, le patissier, he has more than knowledge and experience. What does he or she have?
Understanding, yes, yes. We call it, I mean, we call it not experience. We don't call it competence either. We call it mastery. Grandma or mother or father who is a chef has mastery. Now the problem with this, ah, with mastery you can solve red problems. That's the point here.
If you are a geek, think Star Wars, think Yoda.
That's a master. Yoda also knows a lot of things. I mean, you need some knowledge to have mastery. But like in Montessori pedagogy, do you know Montessori schools and Montessori pedagogy? It's not about transmitting knowledge. It's about involving children or little people into developing developing mastery, and then Maria Montessori said, the knowledge will come behind, it's not a problem.
Of course, our organizations, we confuse that all the time. With knowledge, you can solve blue problems to solve red problems. In today's age, we need people with mastery. And now the trick is, the two kinds of learning that you need to develop knowledge and mastery are totally different. Knowledge, you get it by reading, studying. But to develop mastery, you need to practice. Or as the experts say, you need to practice, practice and practice. Montessori schools and Montessori pedagogy, it's not about transmitting knowledge, it's about involving children or little people into developing mastery and then Maria Montessori said the knowledge will come behind, it's not a problem.
Of course, our organizations, we confuse that all the time. With knowledge, you can solve blue problems to solve red problems. In today's age, we need people with mastery. And now the trick is, the two kinds of learning that you need to develop knowledge and mastery are totally different. Knowledge, you get it by reading, studying. But to develop mastery, you need to practice. Or as the experts say, you need to practice, practice and practice. Maybe 10,000 hours as Malcolm Gladwell tries to teach us.
Practicing takes a long time and sometimes you need a master on your side to really master the stuff, like Grandma. You need a master.
To become a Jedi, go meet Luke. You know, that's about, I'm doing the trailer here for the new Star Wars movie. To become a master, go to that fucking island and meet Luke, you know, who's also, coincidentally, your father.
Oh, that was a spoiler. But we already knew, right? So, okay, mastery, knowledge, totally different things. Totally different learning approach.
And of course, in Agile or in Lean, we need to have... Who should be a master in Lean and Agile and that kind of work? The answer is simple. Everyone. Because if not everyone is a master in agility or in lean methods or in Kanban, then you will still need supervision and bosses and command and control, which is bad.
And now we have to talk about the most important stuff at this conference, I think. We have to talk about people. Are you prepared to talk about people? Who knows this concept here in the room? Theory X, Theory Y by Douglas McGregor. Some of you know? Okay, good. That's very good. It doesn't matter if you know or if you don't know. I will walk you through it. You now need, we will do a little bit of research about this. You need the pink post-it and the yellow post-it in a few seconds. You need these two. Forget the blue one. We will not use it anymore. But the yellow and the pink or red, you need that.
56 years ago, Douglas McGregor wrote this book, Human Side of Enterprise. Let's say he's the grandfather of Lean. He's the grandfather, or one of the grandfathers of Lean and Agile. Of course, Taichi Ono from Toyota also was, and Edwards Deming, they are all the grandfathers of Lean and Agile. But Douglas McGregor, he figured out something very, very important with regards to organizations. He figured out that there is not one way in which we imagine people at work, in which we imagine human nature.
How is human nature in French?
Naturemen. Naturemen. There's not one vision of naturemen in organizations. There are two.
Forget the names. The names X and Y, they don't mean anything. Truly, they don't mean anything. But McGregor, he said, he was the first to explain that there are two ways of thinking about people at work.
I'm not sure if you can read it. I will explain it briefly. The first image of human nature at work, theory X, it says people dislike the work, they will try to avoid it if they can,
Who are you thinking of?
People from Normandy, Bretagne? Not sure what you're saying. In Germany, we think about certain regions in Germany where people are lazy. But McGregor doesn't say people are lazy. Is anybody here from Normandy, Bretagne? Sorry, it was just a cliche, sorry.
Of course, they weren't lazy, they were just poor. And now people from Paris live there, as far as I know. You have your second home there. Who has a second home in Britannia, Normandy? No, not the right audience.
Okay, just a joke. That was just a joke. Just a joke. I've been there last year, so... I had to remember everything. Okay, so Theory X. Theory X says people dislike work, will try to avoid it if they can. And so in order to have people, ex-people, do the work, you must force or bribe them. You must give them orientation from the outside. You must force them to take on responsibility. And there's an assumption here about creativity in Theory X that says, Few people have creative potential, except when it goes to circumnavigating management rules, you know? Then these Xs become creative. So these people, they're not lazy, they just don't like the work. So they must be extrinsically motivated. That's the idea behind theory X. With these ex-people. You must extrinsically, from the outside, motivate them. And of course, the most important mechanisms, they're written there as well, money and fear. You use that with theory X people. Now, McGregor says, okay, this is one image of human nature, but there is a second image of human nature, theory Y. Theory Y is a little bit tricky. It says people need money. To feed themselves and their loved ones, but people, white people, also want to take an interest in the work. They look for self-effectuation, for growth, for learning at work, and if they can get that, if the conditions are right, then these white people can actually enjoy work and have fun or experience fun at work. Crazy, right? Crazy. If under the right condition, these white people can enjoy the work. Which means that these people, these white people, are capable of self-directing and they will take on responsibility if the conditions are right. They will accept responsibility and they will self-direct. So these people, they don't have to be extrinsically motivated, they are intrinsically motivated.
If the conditions are right, these white people are motivated by the desire to fulfill their potential at work. Key here in theory why and McGregor also adds an assumption about about creativity he says and creative potential is widely available between among these people, but it is grossly underused by organizations. Do you get the difference?
Don't believe me. Don't believe McGregor. Or do it just for a moment. What McGregor does here is he says there is not one image of human nature, there are two. There is no third image of human nature. There was a very popular book in the 1980s, I think, called Theory Z. Have you read it? Have you heard of it? It basically says the Japanese are different.
So it's just stupid, you know.
You don't have to believe me, but if you want to believe me for a second, believe me, there are only two images of human nature that we can have, X and Y. Two different images of human nature. I would like to do a little exercise with you. You need the post-its and a pen. Any kind of pen will do. You can also share a pen with somebody else. Don't be worried, nothing bad will happen. It's very safe.
Very super safe. It's super safe. Nothing bad will happen.
You can share a pen with another person. You don't have to write much. First, we need this post-it, the reddish. Is it okay? Are you ready for the exit? This is science. Scientific experiment. Don't worry. Are you ready? Look inside your own heart. Judge yourself. What kind of person are you? Now, very important, we're not talking about behavior here. We're talking about your human nature. Don't think about, have I ever felt like XC or like YE? That's not the point. Your behavior may flip, but your human nature, it's either X or Y. Do you find it? Do you see it? What kind of nature you have? Look inside yourself. Write on the pink or red post-it, what kind of person are you? It's just one letter. An X or a Y? Please write it down now. You have to choose. X or Y? You cannot be both in your human nature. Is that clear enough? Is that clear enough? Any questions? Maybe I didn't explain right. Any questions about the method? Can you accept that you can only be X or Y? Okay, good. Okay. Now, did you write one letter on this post-it? Please exchange this post-it with somebody close to you. Just hand it over and accept the other post-it. It's like giving a little gift and...
Getting one in return. With anyone. It can be anyone. Okay. That was very simple, right?
Everybody should participate in this. Does anybody not have the post-its? There are more post-its here in the front. If you wanted to still participate, it's not too late. Because this is the most interesting thing. Do you all have the yellow post-it as well? If you don't have it, I have Philippe here.
My only French friend.
Are you from Batania or Normandy? No, no. So that's... If you don't have a yellow post-it, I think you will give it. Hand out one. Okay. Now it's getting more difficult. Think about everyone in your organization, or if you are an agile coach or consultant or trainer, think about all your clients, people at your client companies. How many people are you thinking of now? Klaus? How many people?
Hundreds or thousands? Yes, hundreds. Who's in a large French organization here? How many people do you have in your? 2,000. Okay. So think about them all. If it's an international company or organization, think about the international group. All of it. Even if it's 200,000. You don't know them personally, but you can judge them.
So, now the question is, look inside their hearts. What kind of human nature do they have? And please write down on the yellow post-it the percentage of Theory X people in the total.
The percentage of theory X people. That's a number, 0, 100, or something in between. It cannot be minus 5 or 117. Clear, right? The percentage of X people, only the percentage of X people. Please write it down. Just judge them. Fuck them, they are not here. They will not hear about what we, how we say. We are taping, we are recording this session. But nobody will hear about it, only the NSA. And InfoQ, I hear. InfoQ? InfoQ, yeah. InfoQ.
And that's A. Okay, did you write down a percentage? Just a percentage. Yes, did you? Did you judge? Now exchange the yellow paper with a neighbor again. Somebody near you. Any neighbor.
Okay, now let's analyze the results. It's simple.
I studied statistics at the University of Hanover, so I know the method. Take the pink post-it note and hold it up.
Hold the pink post-it note up. Just to check if you have it, you know. Okay, you can take it down.
Now read the letter. It has a letter on it. Somebody wrote a letter on it. If it says X, hold it up again. Only X post-its. X, only X. Now look around. Let's count. Look around. I see maybe 10. Okay, 10. Approximately 10. You can put them down.
Now, again, I studied statistics. What do we do in statistics with a result like this, Klaus? Do you know?
We round it down to zero. That was just noise.
That was just noise. I will explain later to you. We saw 10 or so post-its, but I rounded down to zero anyway. Now let's look at the yellow post-its. There is a number or a percentage written on it. If it says 0 or 0%, please hold it up. Only 0? Ah, this is... It always happens. Look around. No, no, hold it up. Zero, zero percent. Zero, zero percent. How many do we have? Maybe 10, 12, something like that? Do you see why we are all fucked?
We are definitely all fucked. If this is the lean community, is this the lean community? Fuck.
It was a waste of time. Fuck Agile. Fuck Jeff. Fuck Jeff. Sorry, it's just a joke. But nobody here thinks highly of Scrum anyway, so I can make jokes about Scrum. No, no, but we are the problem. Do you see why we are the problem? Let's see if we know. I asked my friend from Austria.
Klaus, why are we doomed? Why do we have a problem?
Because they were...
Yes, I will repeat. We can be very close, so... No, because it doesn't work with it. We are fucked? Yeah, why are we fucked? Doomed, I mean.
Because the number of...
The number of... Hello? Post-its?
Yes, exactly.
Ah, you don't know. Okay, who knows? Who knows why we are fucked? This is not personal. This is just what we are. Yes?
What we believe we are is not what we think of the others. I think that can be said, right? We're not so sure. I mean, I'm sure about myself. The ten guys among you, you have a problem. If you held up, those of you who wrote X, On the post-it, you have a problem. Do you see the problem?
You do not exist. That's the problem. Don't believe me, but believe Douglas McGregor. He said, this is 55 years ago, Douglas McGregor said, X people, there's one problem.
They do not fucking exist. Have never existed, do not exist, will never exist. Theory X people do not exist. How is that even possible? Klaus, how is that possible? How is that possible? Do you see how it's possible?
Okay, according to Douglas McGregor, everyone is a theory Y person. He argues like this. Every science in the world, every empirical or anecdotal evidence in science tells us that people are Y people. They are intrinsically motivated, the theory Y people. They are intrinsically motivated. Everybody possesses motivation. It's fucking obvious. I mean, we have the latest brain science. It just perpetuates the same insight over and over again. So how is it possible that we think there are X people in our organizations? Do you see how it's possible?
Okay, according to Douglas McGregor, everyone is a theory Y person. He argues like this. Every science in the world, every empirical or anecdotal evidence in science tells us that people are Y people. They are intrinsically motivated, the theory Y people. They are intrinsically motivated. Everybody possesses motivation. It's fucking obvious. I mean, we have the latest brain science. It just perpetuates the same insight over and over again. So how is it possible that we think there are ex-people in our organizations? How is it possible?
They behave like it. People in our organizations, some or many or everyone behaves like stupid fools, like donkeys, like idiots. Okay, they aren't idiots, they are perfectly correct theory Y people, but they behave like theory X fools. How is that even possible? Douglas McGregor explained this. This is the cruel thing.
I mean, Tai Chi Ono wrote about it as well. And Deming wrote about it as well. And every decent, lean, and agile expert will tell you people are not the fucking problem. What does Deming say? Deming says...
of the problems that we see in organizations, we think somebody must be to blame, somebody must be guilty. We look for the problem in people. But, Deming says, 95% of the problems actually come from the system.
And the cruel thing is Deming was totally right. He was right. 95% of the problems come not from people, but from the system. People are not donkeys. Our systems are designed to drive out the worst behavior from people. People are masters in adapting to stupid donkey systems. And that's why they behave like donkeys. If you see stupid, exy behavior, you should ask yourself, how does our fucking system produce this stupid behavior? How is it possible? You should never ask, who was it? Which is, by the way, something that an actual lean company like Toyota, they never allow for blaming. Never ask who it was, always ask why five times in a row to figure out where in the system the problem is.
Of course, you don't have to believe me. You don't have to believe Douglas McGregor. You can only convince yourself. But I can tell you this. If you believe that theory X people exist, you must deal with them. And that's where the trouble starts. If you think you have X people in your organization,
What do you do? I give an example. You are a bank.
Societe Generale, is that a French bank? Oh my God, Societe Generale, oh my God.
That's a laugh, right? Okay, but in Germany, some of the worst organizations are banks. Deutsche Bank, Commerzbank, have you heard of them? It's... What do they do with their people? Because they think they are ex-people, what do you do with them? You give them individual targets, bonuses and incentives. So what kind of people do you use incentives with? Ex-people. But they don't exist. It's perfect.
Except that it is perfect for people who do not exist and fucks up value creation.
So, if you think that X people exist, you will use X tools. And I will show you practices that treat people like donkeys or X people, and then you get X-y behavior. I will show you the methods here.
Oh, can you read them? Can you read them? Can you count them? Like quotas, project management is here, strategic fucking planning, competence management, training budgets, travel policies. Do your organizations have travel policies in France? Oh yes, oh my god. Only stupid people deserve travel policies. Ex-people, they deserve that fucking thing, but it doesn't exist. Business units or upstream as I... Oh my god, matrix structures, individual targets. The irony of it is individual performance doesn't even exist. I will prove that to you in a minute, if I have the minute. Management by objectives, oh my god, that's just, you know, getting ex-people's balls and squeezing them.
It's so crude. It's the worst.
Oh my God, budgeting, org charts, dress codes, performance appraisal. Have you done that at performance appraisal? Do you do that at home? Honey, time for your performance appraisal?
It's so crude. Meritocracy. HR. HR was invented because we thought people were stupid. Excess. HR should never have existed, or sales departments. But okay, you can go more deeply into this. The problem is that we think organizations have this structure, and this is only partially true. Organizations have three structures. Every organization in the world has three structures. And this is just the simplest. With this structure you can only do one, one, one, one thing. And that is create compliance. Be within the law. That you can create with formal structure. Compliance, how is the word in French? I'm not sure.
Le conformisme ou le formisme? Conformité. Conformité, well, conformité avec la loi. Avec la loi, non? Le loi? La loi? It's a nasty word.
Conformité avec la loi.
That you can produce, but you should never organize the work around it. This is totally inept to solve complex problems. Now, this is called formal structure. Structure formelle.
Philippe and I, we wrote an article in French about it. It's on LinkedIn. We call it physique organisationale, no? Organizational physics. There's a great article, Philippe translated it from English in a very nice way.
Formal structure, every organization has it to be within the law, to be compliant. But this structure also exists. This is very important also. How is this called? Informal structure, structure informelle, social structure. People relate informally. They like each other or hate each other. They have sex in the office and then they hate each other.
Or I like to say, the bigger the company, the more important it is that you smoke.
It's very important to smoke.
If you are at Renault or Peugeot or any large company, you must smoke and drink tea and coffee. Because then you connect informally. It's very important to drink coffee with the right people, of course. That's informal structure. Informal structure is highly effective in terms of communication, much more effective than this, much faster than this structure. Before the CEO writes an email to everybody announcing something, everybody already knows. Because we smoke.
So this is like the, this keeps the machine
working as well. This is very important. Every organization has informal structure. There is no way not to have informal structure. It is highly effective, of course, also for politics, self-defense, solidarity comes from this structure. But the irony You cannot work here, you cannot work here. Work cannot be organized here or here. You need another structure. And this, I think, is the most important. If you want to talk lean, you need this structure. And this is the problem. Here, in this community, I think you do not even know the difference between center and periphery. If you only take one big idea from this conference, it is that organizations, every organization in the world is a peach. How is that?
La pêche, bien sûr.
Chacun, organisation du monde, des pêches. Merci beaucoup.
Organizations create value, value creation streams travel from the inside to the outside, from center to periphery to the outside market. Here you see the boundary of the organization, outside is the market. Internally you have center and periphery and only the periphery touches the market. Which is why in complexity, who should be in charge?
the fucking periphery, not outside, the fucking periphery. In other words, organizations in red markets have to stop the steering.
In the industrial age, it was very effective. Managers in the center, they think and they steer with budgeting plans and individual targets and incentives and bonuses and processes. And you have quality managers and process managers and this kind of stupid thing. It works in blue markets. In red markets, The market is in charge. Our organizations have outsourced the steering to markets. Even in France, our organizations have outsourced the steering to markets in the 1970s already. You may not have noticed, but markets became red again.
And if the market is red, then the market starts steering the periphery, and the periphery must start steering the center, and not the other way around. In other words, organizations, managers in organizations have to stop the steering, stop the budgeting, stop the target setting, stop the approving thing.
Teams in the periphery have to make their own decisions. And that is what is needed for agile or lean organizations. The periphery must start making all the important business decisions. We do not need managers for that. We just need mastery in the teams in the periphery.
is something like, I'm not sure if you know Game of Thrones, Game of Thrones? Big battle between good and bad or so?
Winter has come. In organizations. Because in our organizations we have an epic battle between formal structure, here on the lower part, and value creation structure. There is an epic war between functional division and hierarchical division in formal structure and radical decentralization that we would need to solve red problems for red markets. There is an epic battle here. The power of people with mastery, we call that reputation, meets the power of those with hierarchical power, we call that hierarchy, you know, and there is an epic struggle. No work gets done, usually. At least not at German car manufacturers and banks.
Ultimately, the most important structure in complexity must always be the creation structure. If we talk lean, we are ultimately always talking peach. We're talking decentralized, radical decentralization of decision-making power to teams in the periphery. That is exactly what Toyota has done for decades. That is exactly what Southwest Airlines has done for decades. Or Handelsbank and the Swedish bank. Or DM Drogeriemarkt, a German company with 50,000 people. Or Morningstar, that Californian tomato processing company. They are doing the right model. They use the formal structure only to create compliance. They fight command and control, the model embodied by archites. Now, you don't have to believe me, but culture is neither a problem nor a solution to this. Culture, as a systems theorist, which I am, culture is not a problem. There is no such thing as readiness or you don't have to be teal to be teal or something like that. If you change the system, culture will follow. Culture is like a shadow organization. Culture is like a little dog or a shadow following the organization everywhere. In the culture, you can recognize what you did good or badly in the past, but culture doesn't dictate anything. These are my preferred companies. Of course, there are companies that have moved from Peru. to peach, from command and control to radical decentralization, or from, as I like to call it, alpha to beta. These are my preferred cases. Among them Handelsbanken and Toyota and Southwest Airlines, WL Gore. Google is pretty good still as well. There are many cases, or Burzorg as well. There are several good, very good cases, but you know, if you wait for more cases, then you will never become lean or agile. We have to work the systems now. We have to move from principles of command and control to principles that are peachy. From pyramid principles to peach principles, so to say. And of course, the Agile Manifesto is not enough. It doesn't cover things like how to pay people. Well and fairly without incentivizing them. We need more principles. These principles originally came from a movement which I started working with 14 years ago, the Beyond Budgeting Movement. We now call it the Beta Codex Principles. But it is not a framework. Don't follow it.
Just convince yourself that it's right and important.
So in order to improve systems, to make organizations agile or lean, we have to work the system. We have to work the three structures of every organization, and we have to make formal structure less important and work positively on value creation structure.
The problem are not people, the problem is the system. And only if we start working the system, we will see people showing their Y-iness, their theory Y-iness at work.
If I can offer you a sum up, this is it. Systems drive behavior, not the other way around. People are not the problem, systems are the problem, always. And maybe this is very important, of course, we are in the software development community here. Sometimes at this kind of conference I hear the call for, ah, if management only understood us. Do you know this? This whining thing? Our managers do not understand us.
We had this in Klaus'sessions at the end as well. How do we convince top managers? And I think the answer is simple. Top managers, they aren't more stupid or more intelligent than we are. They have a mandate to work the system, but here's the joke, the funny thing. Everybody in organizations, everybody who gets a salary or gets paid, do you think you only get paid for doing work within the system?
Or do you think you also get the money to work on the system? This is an ethical, a moral question. I think there's no city better in the world than Paris to discuss this philosophical question. What is our fucking mandate? Is it suffering from the system or working the system together with managers, together with software developers, together with everyone? And helping our organizations get better. Thank you very much. Thank you for your attendance.