Certain to Win John Boyd’s   Strategy in the 21st Century Chet Richards J. Addams & Partners, Inc. Version 1.2 March 2005 ...
Whether it is in the personal realm of the individual warrior, or in the public domain of an entire nation or culture, the...
Agenda <ul><li>What does it take to win? </li></ul><ul><li>Maneuver conflict (not just “warfare”) </li></ul><ul><li>The OO...
Starting point: The study of conflict <ul><li>To flourish and grow in the </li></ul><ul><ul><li>many-sided </li></ul></ul>...
Starting point: The study of conflict <ul><li>To flourish and grow in the </li></ul><ul><ul><li>many-sided </li></ul></ul>...
Wars don’t always turn out as expected Israel Various Arab States Vietnam United States Afghanistan Soviet Union Chechnya ...
Business doesn’t either Lost billions in 2001, 2002 & 2003 Delta, American Airlines Gone Digital Equipment, Compaq, Montgo...
But it’s not inevitable Dell, Apple Computers Southwest, JetBlue, Singapore, Emirates, Ryanair, AirTran Airlines Wal-Mart,...
In other words, there are many times when the side we’d pick to win, based on: <ul><li>size/financial resources </li></ul>...
Why?
Some possible answers <ul><li>Luck </li></ul><ul><li>Divine intervention </li></ul><ul><li>Local culture </li></ul><ul><li...
How this works in war Gen Tommy Franks, Commander, USCENTCOM in Peter Boyer, “The New War Machine,” The New Yorker , June ...
What he’s talking about is “maneuver warfare” <ul><li>The essence of maneuver warfare is  taking action to generate and ex...
The primary advantage we want to achieve in all forms of maneuver is  time .
Time is special <ul><li>Time is the only physical parameter with a direction (the “arrow of time.”) </li></ul><ul><li>You ...
Using time as a weapon: The “H-Y War” 1981 - 1983 <ul><li>Honda Motorcycles introduced or replaced 113 models, effectively...
H-Y War: The Results <ul><li>Key point:  Honda succeeded in making motorcycle design a matter of fashion, where newness an...
A time-compressed company does the same thing as a pilot in an OODA Loop … It’s the competitor who acts on information fas...
Business is a dogfight. Your job as a leader:  Outmaneuver the competition, respond decisively to fast-changing conditions...
This is the OODA loop Observe Act Orient Decide
This is  not  the OODA loop Observe Act Orient Decide
An OODA “loop” with power “ Interaction permits vitality and growth, while isolation leads to decay and disintegration.”  ...
Observations on orientation for business Feed Forward  Observations Orientation <ul><li>NOTES </li></ul><ul><li>Without ge...
Orientation locked tight The company (A&P), under pressure from Kroger, experimented with a new concept, “The Golden Key.”...
Improving orientation <ul><li>Set aside specific times (e.g., at each staff meeting) to review feedback on possible mismat...
Improving orientation (II) <ul><li>Post on internal web site (& invite discussion): </li></ul><ul><ul><li>Assessment of th...
What about “action”? <ul><li>The idea is that the vast majority of the time, actions should flow smoothly from orientation...
A better way to think of OODA “loop” speed Observe Decide Act Action (Test) Orient Orientation is the  Schwerpunkt .  Orga...
Observation Observations Feedback From Action Feedback From Decision Implicit Guidance & Control  (Orientation) (Orientati...
Put simply <ul><li>Good news is dangerous </li></ul><ul><li>Bad news is the only thing that will save you,  if : </li></ul...
Ideas for improving observation <ul><li>If you’re GM, buy Fords & Toyotas for company cars. </li></ul><ul><li>Send  everyb...
Be the customer <ul><li>Example:  If you’re a Delta Airlines VP, book your own tickets (directly, via the Web, & through t...
In one of the first games he attended, [New Sacramento Kings Owner] Gavin [Maloof] missed an entire quarter waiting in a b...
Or at least meet the customer <ul><li>Spend a hour a week manning the company’s reservation, sales, or customer service de...
Decision Feed Forward Feed Forward Decision (Hypothesis) (Orientation) (Action) Feed Back (Observation) Note:  Decision is...
And so you decided. Great. (Businesses don’t have commanders, whose legal orders must be obeyed) “ I wish I could get them...
Research supports this <ul><li>There are times for deliberating about options.  Usually these are times when experience is...
<ul><li>“ Can I operate inside the decision time of the enemy?  If I can, I’ve got him.” </li></ul>Phil Condit, former Cha...
Question What determines OODA loop speed? <ul><li>Answer: </li></ul><ul><li>Ultimately, a moral climate/culture/ environme...
Boyd’s organizational climate:  The Principles of the Blitzkrieg <ul><li>Fingerspitzengefühl  - Zen-like quality of intuit...
<ul><li>Schwerpunkt  -  Any concept that gives focus and direction to our efforts.  In ambiguous situations, answers the q...
Fingerspitzengefühl  at the tactical level <ul><li>Every day the sales team met at 7 a.m. for two hours of training that i...
Fingerspitzengefühl  as strategy <ul><li>There is a surface version of genchi genbutsu (go and see for yourself) and a muc...
“Trust” ultimately relies on a common orientation <ul><li>Arrange setting and circumstances so that  leaders and subordina...
“Trust” ultimately relies on a common orientation <ul><li>Arrange setting and circumstances so that  leaders and subordina...
Constructing a climate for fast OODA loops The Tao of military operations lies in harmonizing people. Zhuge Liang, c. 300 ...
A  Schwerpunkt  for business Ultimately, the Toyota Production System means a lot more than productivity and quality.  For...
Flowdown:  Schwerpunkt  for manufacturing The Toyota Production System, quite simply, is about shortening the time it take...
Another  Schwerpunkt <ul><li>Most CEOs are focused on achieving their financial and operational goals, and on executing a ...
An Auftrag primer <ul><li>The mission must express the will of the commander in an unmistakable way </li></ul><ul><li>The ...
But first … Such a system, of course, presupposes uniformity of thinking and reliability of action only to be attained by ...
Augtragstaktik —missions and contracts instead of tasks <ul><li>The concept of mission can be thought of as a contract, he...
Augtragstaktik —what “commitment” means <ul><li>As part of this concept, the subordinate is given the right to challenge o...
Auftrag in a business setting Abbott recruited entrepreneurial leaders and gave them the freedom to determine the best pat...
Powerful stuff— if you can use it  <ul><li>Samsung has kept a lean corporate structure, with authority increasingly delega...
Another example “ As you know, Mary, it is the board’s intent to keep a balance between manufacturing in the US and sourci...
If you were Mary … <ul><li>Why are sales below forecast? </li></ul><ul><ul><li>Ageing product line, relative to the compet...
It’s really pretty simple I.  (Individual)  Fingerspitzengefühl III.  Schwerpunkt IV.  Auftrag II.  Einheit
Top management’s unique responsibility is to tend the culture These and other miscues prompted Mr. Barrett to send a memor...
<ul><li>Run your business like a NASCAR team: </li></ul><ul><ul><li>Design & build a winning car </li></ul></ul><ul><ul><l...
How to install Boyd’s strategies <ul><li>Make a commitment -  maneuver conflict is a martial art , in the same family with...
In other words Not this doofus: But this guy:
“ The Operating System is GE's learning culture in action. “ It is a year-round series of intense learning sessions where ...
Toyota’s Learning Culture Version 1.2 17 March 2005 Jeffrey Liker, The Toyota Way Meaning Principle Policy deployment Hosh...
The Payoff: Operating inside their OODA “loops” <ul><li>In War: </li></ul><ul><ul><li>Keep the initiative: Set up and expl...
You don’t wait for the future.  You create it. Hwang Chang Gyu, President, Samsung Semiconductor BusinessWeek , 25 October...
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  • Welcome – be sure also to play this as a slide show. For an in depth look at the topics in this briefing, please read the book version of Certain to Win : http://www.amazon.com/exec/obidos/tg/detail/-/1413453767/qid=1092217465/sr=8-1/ref=sr_8_xs_ap_i1_xgl14/102-3940878-6099359?v=glance&amp;s=books&amp;n=507846 http://search.barnesandnoble.com/booksearch/isbnInquiry.asp?userid=7I0sblm9Bq&amp;isbn=1413453767&amp;itm=1 Thanks!! Chet Richards Author, Certain to Win Editor, Belisarius.com
  • The Japanese Art of War was one of John’s favorite books. The symbol is the Tao – Boyd was heavily influenced by classical Taoism (as described in books like Alan Watts’ Tao, the Watercourse Way ) and by Zen, the branch of Buddhism most closely related to Taoism. The idea that resourcefulness should be your primary resource runs all through Boyd’s work. It’s what you can do with what you know. You can, if you know what you’re doing, buy, contract for, or partner with virtually anything else you need. His famous mantra: People-Ideas-Hardware in that order ! embodies the idea of what is now called a “knowledge-based” or learning organization. Words often used to describe organizations that operate along the lines in this briefing are: rangy, opportunistic, high tempo, exciting, and fun. The idea of always taking the initiative at all levels to seek out opportunities is fundamental – but isn’t that what resourcefulness is about? And the opportunities can be anything that furthers the purposes of the organization – new products and services, better customer service, streamlining operations, more effective sales and marketing, reducing costs, and most fundamental: by recreating the organization using these principles, always reducing the time between when something happens in the internal/external environment and when the organization understands its meaning. Think about that – an organization that as a part of its everyday life, gets better and better and better. Could be a tough outfit to beat.
  • Not necessarily in this order. Sorry. Think of it as a virtual agenda.
  • This is from the opening paragraph of the Discourse (all components of the Discourse are available at http://www.d-n-i.net – go to “Boyd and Military Strategy” and scroll down.)
  • As opposed to following procedures or checklists. Note that since we’re talking about exigencies and an uncertain world, we can’t specify in advance the specific tactics we’ll use. Boyd’s statement stands as written, however, as the rest of this briefing will show.
  • [This chart is designed to work as a slide show. There are five white boxes covering the table rows that will dissolve as the show plays. If you don’t want to run this as a show, just select and delete the boxes.] As if you haven’t noticed – larger and/or more technologically advanced state on the left, winner on the right. For more details on this subject, I recommend Stephen Biddle’s superb book, Military Powe r. Israel is up to about 1970, when it became captured by technology. For a depressing but insightful look at where we may be headed, try Martin van Creveld’s The Transformation of War .
  • The companies on the right had all the advantages thought to produce long term success in the marketplace. On March 24, 2005, Sears was absorbed by Kmart. Every time I give this briefing, I have to update the list on the left – talk about depressing.
  • Can’t blame it on being in a “bad businesses.” Toyota made around $11 billion net profit in FY 2004, which ended in March. The March 2005 revision removed IBM/Lenovo and added Apple.
  • These are three of the underlying factors often thought necessary for business success. It this were true, the Fortune 500 would never turn over. In a July 2004 piece in US Business Review , Consultant Ray McKenzie of Fujitsu Consulting wrote: “ All of this may have been fine prior to the mid-1990s or during the Industrial Age, when size and strength through accumulation of assets created barriers to entry and isolated or minimized competitive threats. With a business strategy that emphasized size and strength, the watchwords were efficiency and cost control, and hence the need to focus on those things that were core and to reduce the energy given to anything that seemed to be non-core. “ Today, these Industrial Age tactics seem to be crashing headlong into the Information Age …” Actually, these were always dumb strategy (although at times, they could be clever tactics) since they entice their practitioners into what we call the “Maginot Line Mentality.” For more information on this deadly but all too common syndrome, I modestly recommend my piece, “Riding the Tiger” at: http://www.belisarius.com/modern_business_strategy/richards/riding_the_tiger/tiger.htm Point is that at the local level, the Maginot Line worked – it channeled the German attack into the Low Countries, where an Anglo-French army was fully prepared to deal with it. Unfortunately, the Maginot Line, and the cost of building it, also removed anyone with an inclination for maneuver from the French high command.
  • Indeed. A rhetorical device Boyd often used.
  • You may recall there was a time we based the success of companies like Toyota and Honda on “Japanese culture.” Inspired leadership is right, but what, exactly, is it that inspired leaders do to achieve success? Hitler, after all, was an inspired leader, but neither he nor is country turned out that well. My answer is in red. This means that you start with a lot of study.
  • Here you see all the ingredients you need to succeed in war: timing, deception, ambiguity, surprise.
  • Warfighting established maneuver warfare as official Marine Corps doctrine. Mike Wyly was one of the forces behind the original version of Warfighting , which came out in 1989. He now, by the way, runs the Bossov Ballet Theater in the Bangor, Maine, area, http://www.bossovballet.com. The observation about competitors is his. Note that competitors may be highly mobile parts of the environment, that is, they may jump in your way, move the goal (customers), or use their political power to change the rules. But you don’t make any money until customers buy something.
  • This is key. It is what distinguishes maneuver from, say, attrition warfare. The term “maneuver” may be confusing, with some otherwise distinguished military analysts still wanting to confuse it with “movement.” But there is a lot of movement in attrition warfare, primarily to position firepower or to avoid the enemy’s. “Maneuver,” on the other hand, has the connotation of “maneuvering someone out of position” or “out of their comfort zone.” It is concerned with creating surprise, ambiguity, panic, breakdown of cohesion, and so on. If you look up “maneuver” in a good dictionary, you’ll see that it has the connotation of something skillful and intended as part of a stratagem. The Marine advance on Baghdad in March – April 2003 is (rightfully) considered as a masterpiece of maneuver warfare, but it you work the numbers, it averaged about 1 mph from crossing the Kuwaiti border to downtown Baghdad. Time is what’s important, not speed.
  • Fourth bullet is key. You may have worked in organizations that thought they could fix problems by staying later at night or coming in on weekends. These organizations are treating time with disrespect and will be appropriately punished.
  • A very famous example of how a company can use time to shape itself and the marketplace, to the detriment of its competitors. Yamaha had built an enormous factory and proclaimed that it was now the world’s leading manufacturers of motorcycles. An American company would probably have responded by building an even larger factory – the business version of attrition warfare. Honda was learning from each iteration.
  • First two bullets are fundamental to explaining Honda’s victory. At the end of the H-Y War, the motorcycle market in Japan was a different beast than it was at its start. Both Honda and the marketplace had changed each other, leaving poor old Yamaha out in the cold. Stalk &amp; Hout’s book is still one of the best on the subject of using time as a competitive weapon.
  • One of Stalk and Hout’s conclusions on how Honda managed to make it happen. Notice their claim that it’s the competitor who acts on new information faster, not necessarily the one who obtains more of it.
  • A decade later they’re still talking OODA loops. May be time to look at what they are.
  • So what is an “OODA Loop”? This is how Boyd originally explained it.
  • Boyd has only himself to blame, since he originally explained it this way. In his defense, it must be noted that he never actually put the circular version into any of his briefings. The sequential (circular) version isn’t very competitive because: It’s not a good idea to stop observing as you move to the other stages. It’s not uncommon to get wrapped up in internal decision making exercises, and stop paying attention to the world outside, but it’s not a good idea. In this model, operating tempo (OPTEMPO) is welded to OODA loop speed – that is, how long it takes to cycle past the Act stage. While you’re observing, orienting, and deciding, you’re on autopilot (presumably.) If you delay decisions, you delay actions. In the real world, delaying decisions can often speed up the operating tempo, if in the process you eliminate the need to revisit or revise previously made decisions. There are actually maneuver-based systems that work this way.
  • This is the only version of the “loop” Boyd actually published. When Boyd talks about “faster OODA loop speed.” he means the entire loop – all 33 or so arrows. However, the key to quickness turns out to be 1) speed of re-Orientation and 2) whether one has suitable responses (actions) available that can be applied intuitively via the implicit guidance and control link to Action. In other words, most of the time people and groups do not employ the explicit, sequential O-to-O-to-D-to-A mechanism. Most of the time, they simply observe-orient-act. In addition to a millennium or so of Zen, there is data to support this (see Gary Klein’s book, Sources of Power .) The question, of course, is, “What action?” A thinking opponent doesn’t provide us with a laundry list of his tactics so we can work out responses in advance. The mechanism which handles this uncertainty and makes the loop function in a real world situation is “Orientation.” As we suck in information via the “Observe” gateway, and particularly mismatches between what we predict and what actually happens, we have to change our orientation (and hence the implicit guidance and control flowing from orientation.) New actions flow from new orientations, if we have the proper training (what martial arts training is all about) to “meet the exigencies of the world.” Note that “OODA” speed is quite different from the speed of our actions. Doing something dumb, but doing it at high speed, may not provide much of a competitive advantage. Physical speed also has other disadvantages, like momentum. The “Decision/hypothesis” block is the learning part of the loop, where we experiment and in the process add new actions to the Implicit Guidance and Control link. You can also think of it as programming orientation for intuitive actions.
  • “Orientation” was Boyd’s concept for taking our interactions with the outside world and deciding what they mean. You could think of it as creating a mental model for what’s happening externally. It involves factors that can change at various rates, and some, like genetic heritage, not at all. Since business do not have a genetic heritage or a cultural tradition (although the people in them do), previous experiences exert a strong influence on any company. You are all familiar with this fact. This is why change can be difficult. It always seems to require a destructive phase, where previous experiences (reflected in things like existing processes and practices) are broken up and become less relevant. “ Correction of error cannot always arise from new discovery within an accepted conceptual system. Sometimes the theory has to crumble first, and a new framework be adopted, before the crucial facts can be seen at all .” Stephen Jay Gould, Dinosaur in a Haystack , 127. (emphasis added - for “framework,’ substitute “orientation.)
  • Although I think the fundamental premise behind Good to Great is flawed, the book is a wonderful source of ideas.
  • The problem with the last two is that they tend to focus internally and so tend to reinforce the existing orientation. Also “management clubs” quickly become loyalty checks. It might be possible to use these things effectively, but it’s an uphill battle – just get rid of them. If you look around, you can probably find lots of other practices in your organization that have the a similar effect and should also be eliminated.
  • Tom Peters once wrote that the real business of any company is done around the coffee pot and water cooler.
  • Specific action depends on what sort of competition you are in. A typical Boyd action is a violent, jerky, unexpected, disorienting maneuver. While the enemy is disoriented (which against a worthy foe will be very brief) you eliminate him (or her.) It is unexpected because of the way it was set up – the art of cheng (expected) in combination with ch’i (unexpected) maneuvers. This is a fundamental concept in all forms of maneuver conflict, and is one way to unleash the power of time.
  • IF action is flowing smoothly and (nearly) instantaneously from orientation, as it should the vast majority of the time, then the speed that counts is the speed to reorient in response to changing external and internal conditions. That speed is symbolized by the IBM Power PC 970 processor in its guise as the Apple Mac G5. There is no case where slower is better. You may decide not to take any action (that is, no action may flow from your current orientation), but your internal processor should always be faster than those of your competitors. Don’t push this analogy too hard. The time that it takes to learn and add new capabilities to the implicit / intuitive part of the Loop is also important. If you play this as a slide show using PowerPoint 2003 or later, you’ll see my crude attempt to illustrate this. In real life, the IG&amp;C link from orientation to action would be firing irregularly.
  • Observation is one of the two places (Action is the other) where the internal world comes into contact with external reality. All of the other machinations of the OODA loop are internal, with all the hazards (unstable feedback loops, entropy, etc.) that that implies. It follows that anything which hinders Observation in any way risks not only feeding bad information into Orientation (which should not, of itself, be fatal), but corrupting all of the other processes in the loop.
  • Only the Paranoid Survive , title of a very good book by Intel Chairman Emeritus Andy Grove. Got to eliminate the sycophants – even better not to have them in the first place. Question: How do you know who they are? Would all the people who work for you agree? Really? Fact is, no one can deceive you as quickly or as thoroughly as you can deceive yourself.
  • Peters includes secretaries, maintenance personnel, production line workers. Everybody. There is nothing wrong, per se , with focus groups. But they are very limited and should not be your major interaction with the outside world. (In many, if not most, cases, the focus group session is run by an outside firm that specializes in such things. So the original company that’s paying for the sessions isn’t “interacting” at all.) None of these may work for you, although I cannot see why. Most of the “reasons” I’ve heard are excuses for preserving the status quo. But you may well be able to come up with better ways to interact with the outside world. The point is to become creative in these things. Also, you might ponder the Second Law of Business Dynamics: Closed organizations die. “Inwardly focused” means roughly the same thing as “closed.”
  • Within Toyota, this would be known as genchi genbutsu , “go and see for yourself.” Trick is, you have to understand what it is you’re seeing. There’s nothing more telling than a picture of some CEO or other top exec on a plant tour, walking around with a big doofus grin on his/her face. Genchi genbutsu , though, applies to all facets of a company’s operations. It’s also a hallmark of successful military leaders (“lead from the front.”)
  • Some companies actually work this way: genchi genbutsu in action. By the way, the Kings were 15 years old when the Maloof brothers bought the team and the arena. This had been going on for 15 years, and nobody had noticed (or cared.) Probably previous owners had no problems getting beer in their sky boxes. Just incredible, but all too common.
  • If you can’t be the customer, you can be creative.
  • As I mentioned before, “decisions” in the form of “hypotheses” are part of the learning, rather than the execution process. In armed conflict, it goes on in the background, since you rarely have time to stop and “make a decision.” Business is different from war in this respect, since (as I suggested in “Orientation”) you can and must be learning while you are operating. But the main idea is that until this learning gets into orientation and affects the implicit guidance and control feed into action, you really haven’t accomplished anything as far as winning competitions. Note that most “decisions” in the usual sense are actually actions: you publish some type of document that promulgates what you have “decided” to do intuitively.
  • Personally, I think the role of formal decision-making in business is highly overrated (Boyd did not agree with this, incidentally). If you’ve done the hard work of programming your orientation , then intuitive decision making can work very well. Your orientation will then tell you what the “right” decision is, and you can always construct an analysis to justify any action you want to take (Def: Objective analysis: You tell me the objective, I’ll do the analysis.) Note that buried within Orientation is that “analyses and synthesis” box. Boyd was an engineer and well understood the importance of data and analysis. But remember that it is really difficult to prove something about the future, especially when thinking customers, competitors, and opponents (in armed conflict) are involved. Data/analysis can support, and they can sometimes rule out, but they cannot prove the worth of any future course of action.
  • Get this book, Read it. Now. Klein’s work suggests that a well-trained individual will use the implicit guide &amp; control feed at least 90% of the time.
  • At least Condit got this part right. Too bad Boeing still acts as if its mission is to protect its aging product lines rather than to create new ways to improve the experience and business of air travel. It has been 16 years since they began the 777 project, the “21 st Century Jet.”
  • If we agree that OODA loop speed is an important part of competitive advantage, we can ask how to increase it. Certain to Win (the book) is all about how to improve OODA speed, and why. You can make a lot of progress applying standard techniques to your existing processes, as the insurance industry, for example, has done for claims processing. Similarly, you can get ideas from the Toyota Production and Development Systems, both of which are roughly twice as fast as most of their competitors. But your competitors can apply the cookbooks, too. I think you will find that competitive advantage must come from something more fundamental. What you want to do is establish a culture or environment within which people will continually invent ways to develop and produce new and improved products/services more quickly. Experience suggests that such a culture will continually improve both the quality and the cost of the products and services that the system delivers, This Toyota stuff, for manufacturing as well as development, has been out there for a while. If your business is manufacturing and your people aren’t using it, why ? That is the fundamental problem that you must solve. “People” means everybody in the organization, from the president on down This approach depends on the personalities and leadership skills of the people within the organization. But then, do you know any human activity that doesn’t? Why do some college and professional coaches have astonishing win/loss records, even though they use the same equipment and recruit from the same pool as all of their competitors? Some analysts draw a distinction between “culture,” which pertains to the organization as a whole, and “climate,” which is established by individual leaders or managers. Clearly, there is a potential for the two to conflict. [Many thanks to US Army MAJ Don Vandergriff for this observation.]
  • It’s fine to say that businesses are complex adaptive systems (CAS), but where we do get the few simple rules from which a complex adaptive system evolves? And how can we tell which are likely to work? A little experimenting [I recommend A New Kind of Science , by Stephen Wolfram] will show that the forms of evolved systems are extremely sensitive to the underlying rule sets. So for human systems, these rules need to be robust and prescribe only very general patterns of behavior. Boyd’s “Principles of the Blitzkrieg,” which came partly from established German doctrine and partly from extensive interviews during the 1970s, provide a framework for creating CASs. You can find them, or something quite similar, in many competitive systems, such as maneuver warfare and the Toyota systems. According to this scheme, any set of rules will work if it advances these four attributes. All else being equal, pick the simpler set. Of course, your organization’s OODA loops should operate over time to refine your initial set. This activity is one of the primary responsibilities of leadership. The culture/behavior patterns that result are known as “emergent properties” of the CAS. John didn’t like the term “Principles of the Blitzkrieg” because of its connotations. He preferred to call these four, “An Organizational Climate for Operational Success.” thereby tying it to any type of organization. Another important point: Since this “climate” permeates the organization, it tends to accelerate OODA loops from top to bottom. This is far more likely to produce a competitive organization than trying to identify OODA loops one at a time and then devising new processes to speed them up. In any case, under the mission/ Auftrag concept (next chart), if people can figure out how to shorten and simplify something, or eliminate it entirely, they just do it. One foolproof way to tell that people have “taken ownership” of a process is that they’re spending time and energy to improve it.
  • The most important idea is that in order to use mission orders ( Auftrag ) successfully, the other three elements must be in place. You earn the right to use Auftragstaktik .
  • The company is SecureWorks in Atlanta, and “Winkler” is Tyler Winkler, who took over as VP of Sales in 2001. Virtually all Winkler’s sales force are making several times what they made before and most say they would follow him to another company. People with a military background aren’t surprised by this chart: Drill sergeants are the soul of any army. You would be surprised, though, how many companies consider training a cost (i.e., to be minimized.) You would be surprised, though, how many companies consider training a cost (i.e., to be minimized.) Question – if you are a CEO, how do you know for sure where your company stands?
  • So, you wonder how many companies today have anything about them that is worth studying for years in order to “deeply understand.”
  • Boyd called this a “common mind-time-space scheme.” The common orientation means that you and I may not come up with the same solution to any problem, but we will understand where each other’s solutions came from and be able to operate together without a lot of bickering and confusion. The Germans considered this possibly the most fundamental element of their system. Think of all the orientations within the organization being pretty well aligned, but not held rigidly in check.
  • If you stop and think about it, the specific practices back in the Orientation section were designed to accomplish this. You should be able to come up with dozens of others for your organization. The question is, will you be able to implement any of them?
  • This stuff goes way back. Note the Auftrag in the last item. “ Kanban ” are the cards used to control a Toyota just-in-time system. As noted, the employees on the floor operate it, and are not just responding to orders issued by some central control system. While they are operating it, they are also thinking of ways to improve it.
  • Compare with Boyd’s goal of survival “on your own terms.” Toyota is saying that they want to make money in good times and in bad so that they don’t have outsiders trying to “help” them.
  • And when you flow that down to the manufacturing floor, this is what you get. Notice: the use of time, as in all forms of maneuver the anchoring of this statement firmly on the customer An external focus is essential for a Schwerpunkt in either business or war. In war, the focus is on the enemy and in business it is on the customer, as Mike Wyly noted at the beginning of the presentation. Note that this does NOT say that each shop in a TPS has a Schwerpunkt of shortening its own throughput span (that would put the system out of balance and lead to accumulation of inventory – puddling.) People who work in the TPS or similar systems must be well trained in the system itself and their roles in it. Just like people are in elite military organizations.
  • How else to explain Apple’s survival? OK, I know they are virtually impervious to viruses, worms, trojans, etc., and always rate at the top in quality and customer satisfaction surveys – but maybe that’s part of what “insanely great” means in today’s PC marketplace.
  • von Lossow wrote this in the US Army’s publication, Military Review , in 1977. Martin van Creveld (next chart) quoted him in his book Fighting Power . If you replace “will of commander” with “manager’s intent” it will apply to most any business. If you don’t have managers, try “intent of person running the program” or some such. Point: doesn’t apply just to hierarchies.
  • Van Creveld is considered one of the world’s leading military historians and analysts. He teaches at the Hebrew University of Jerusalem. Note Boyd’s “common mind-time-space scheme.” in the first paragraph. Also note that “complete confidence” has to be earned. There is no other way.
  • A few points: A “contract” implies a freedom to choose (to paraphrase Milton Friedman.) If there is no choice, then you have a “ Befehl ,” order, like “Right face!” Communication even after accepting the Auftrag is critical If the subordinate doesn’t ask questions, he/she may not be the right person for the job.
  • There are times, by the way when you don’t manage this way: With the members of your organization who aren’t ready (i.e., haven’t completed sufficient training – don’t have the common mind-time-space scheme.) This means that you have to lead different people in different ways. With people whom for whatever reason you don’t trust. If you’re dealing with nuclear weapons (really don’t want a lot of individual initiative with these things.) For most transactions involving money – strict financial procedures must be followed. Any other time that the law prescribes specific processes, procedures, or reporting
  • More great material from Collins.
  • But, as the article hints, they’ve been working at it for years.
  • This is one I made up. You&apos;re the CEO asking Mary to take over as VP/Domestic Sales and giving her a critical assignment. Ordinarily, goals like 10% would sound arbitrary and would suggest that the person assigning it hasn’t thought through the problem. In this case, the reason for 10% is explained. Note the statement of intent, twice. Now, suppose you’re Mary. What are some things you might want to know before accepting the contract?
  • Also, how about: Since we have a new product line coming out, what’s the risk of pressuring customers to buy the old line now? Mary and the CEO need to agree that she will communicate any resistance or sign that this will damage the company’s customer base in the future. Note that the “10%” goal is based on an internal company problem. You should be able to think of a bunch of others. Once the Q&amp;A period is over, the CEO needs to look Mary in the eye and ask, “OK, Mary, will you do it?”
  • People without Fingerspitzengefuehl would be shapeless blobs. (I’m still working on this one – it’s explained better in the book.)
  • Intel is on the right track – top management knows where to focus.
  • Most of the money on a NASCAR team - $16 to 20 million – goes into building the car and engines. This is where the team owner concentrates and is analogous to building a competitive company culture. Most of the time, the driver is hired help.
  • This is how the Marine Corps did it. A subtlety here: to make a commitment, you have to understand what you’re committing to. This is one reason why so few companies actually implement these ideas: The CEO can not or will not take time to understand it, and so the people in his or her organization quickly figure out that it’s really not that important. If you’re going to stand any chance at all, you have to study this stuff until you understand why it arose in other forms of conflict, what it’s supposed to do, why it works, and where other people have had problems. In the process of studying and discussing it, you will develop the common orientation that makes implementation possible. Study, thought, discussion, and reflection are risk free and fairly inexpensive. Crotonville would serve a function similar to those of the Staff and War Colleges in most military services. You might also get some good ideas from Mike Kennedy’s book on the Toyota Development System, Product Development for the Lean Enterprise . People within the organization will watch the last two bullets to see if this is real. There is an old saying: You can BS a general. In fact, it’s not difficult at all. But there is no way on God’s green earth to BS a sergeant.
  • My answer to a question that came up years ago: What’s the ideal Boydian warrior look like? Those of you familiar with Anna Russell will immediately recognize Siegfried there on the left.
  • Note that the Operating System is the culture in action, and not a conglomeration of lines and boxes on a chart.
  • These are just some of the principles and practices that people in Toyota are expected to study for years and deeply understand. These apply to the whole organization – for people in manufacturing, for example, there’s more to deeply understand: kaizen, kanban, jidoka, heijunka, mura, muri, muda , and a number of practices that don’t have neat Japanese names: single piece flow, pull system, standardized work, and so on. The development system has its own principles, as described in Mike Kennedy’s book. This may seem like a lot, but ask any member of a top military unit, such as the Marines or a member of a special operations force or other elite unit, what they have to master over the course of a career. Now compare that again with what your company requires.
  • The “command both sides” is key. It’s a prime indicator that maneuver is being used – the other side becomes confused and susceptible to being led about by feints and deceptions. Cheng/ch’i for business is the subject of Chapter 6 in Certain to Win . It’s a well known effect to people who study time-based (maneuver) strategies in business. The Japanese even have a phrase that describes one of its effects on customers: miriyoku teke hinshitsu .
  • Nothing more to add.
  • Download certain-to-win.ppt

    1. 1. Certain to Win John Boyd’s Strategy in the 21st Century Chet Richards J. Addams & Partners, Inc. Version 1.2 March 2005 Or, any position other than first is a tie for last.
    2. 2. Whether it is in the personal realm of the individual warrior, or in the public domain of an entire nation or culture, the essence of the swordless art is to make resourcefulness your resource . Thomas Cleary, The Japanese Art of War , 77
    3. 3. Agenda <ul><li>What does it take to win? </li></ul><ul><li>Maneuver conflict (not just “warfare”) </li></ul><ul><li>The OODA “loop” and its components </li></ul><ul><li>Operating inside their OODA “loops” </li></ul><ul><li>How to have fast OODA “loops” </li></ul><ul><li>Installing maneuver conflict strategies in business </li></ul>
    4. 4. Starting point: The study of conflict <ul><li>To flourish and grow in the </li></ul><ul><ul><li>many-sided </li></ul></ul><ul><ul><li>uncertain, and </li></ul></ul><ul><ul><li>ever-changing world </li></ul></ul><ul><li>that surrounds us suggests that we must make intuitive within ourselves those many practices we need to meet the exigencies of that world. </li></ul><ul><li>— John R. Boyd, A Discourse on Winning & Losing </li></ul>
    5. 5. Starting point: The study of conflict <ul><li>To flourish and grow in the </li></ul><ul><ul><li>many-sided </li></ul></ul><ul><ul><li>uncertain, and </li></ul></ul><ul><ul><li>ever-changing world </li></ul></ul><ul><li>that surrounds us suggests that we must make intuitive within ourselves those many practices we need to meet the exigencies of that world. </li></ul><ul><li>— John R. Boyd, A Discourse on Winning & Losing </li></ul>
    6. 6. Wars don’t always turn out as expected Israel Various Arab States Vietnam United States Afghanistan Soviet Union Chechnya Russia
    7. 7. Business doesn’t either Lost billions in 2001, 2002 & 2003 Delta, American Airlines Gone Digital Equipment, Compaq, Montgomery Ward, Eastern Airlines, TWA, Pan Am, McDonnell-Douglas In Chapter 11 United Airlines, US Airways Dropped to #52 on Fortune 500 Sears Market share fell from 52% to less than 30% General Motors
    8. 8. But it’s not inevitable Dell, Apple Computers Southwest, JetBlue, Singapore, Emirates, Ryanair, AirTran Airlines Wal-Mart, Target Retailing Toyota, Nissan Automobiles
    9. 9. In other words, there are many times when the side we’d pick to win, based on: <ul><li>size/financial resources </li></ul><ul><li>technology </li></ul><ul><li>market share </li></ul>loses.
    10. 10. Why?
    11. 11. Some possible answers <ul><li>Luck </li></ul><ul><li>Divine intervention </li></ul><ul><li>Local culture </li></ul><ul><li>Inspired leadership </li></ul><ul><li>Better understanding of the nature of conflict and competition </li></ul>
    12. 12. How this works in war Gen Tommy Franks, Commander, USCENTCOM in Peter Boyer, “The New War Machine,” The New Yorker , June 30, 2003 And that is the business of decision cycles, or inside the decision loop , as people say … if, in fact, you can deceive him with respect to what you are going to do, to cause him further confusion and make him keep his force in place one day too long, then, in fact, you find yourself all the way to Baghdad.
    13. 13. What he’s talking about is “maneuver warfare” <ul><li>The essence of maneuver warfare is taking action to generate and exploit some kind of advantage over the enemy as a means of accomplishing our objectives as effectively as possible. </li></ul><ul><li>Marine Corps Doctrine Pub 1, Warfighting , 1997. </li></ul><ul><li>If we can take the inimical aspect out of the word &quot;enemy,&quot; we see that the primary difference is that business focuses on the customer where maneuver warfare focuses on the enemy. </li></ul><ul><li>Col Mike Wyly, USMC, “godfather”of maneuver warfare doctrine in the Marine Corps. </li></ul>Competitors can be thought of as malignant parts of the environment, not as the focus of our efforts.
    14. 14. The primary advantage we want to achieve in all forms of maneuver is time .
    15. 15. Time is special <ul><li>Time is the only physical parameter with a direction (the “arrow of time.”) </li></ul><ul><li>You don’t have an unlimited supply. </li></ul><ul><li>Once it’s gone, it’s gone. </li></ul><ul><li>Sure sign you’re not using Boyd’s strategies : you try to solve problems by throwing more time at them. </li></ul>I may lose a battle; I will never lose a minute. Napoleon
    16. 16. Using time as a weapon: The “H-Y War” 1981 - 1983 <ul><li>Honda Motorcycles introduced or replaced 113 models, effectively turning over its entire product line twice. </li></ul><ul><li>Yamaha, which also started with about 60 models, was only able to manage 37 changes in product line over the same 18 months. </li></ul><ul><li>Observation: As a result, Honda was able to incorporate (and test in the marketplace) a much wider variety of styling & technology. But that alone would not have been decisive. </li></ul>
    17. 17. H-Y War: The Results <ul><li>Key point: Honda succeeded in making motorcycle design a matter of fashion, where newness and freshness are important attributes to customers. </li></ul><ul><li>Next to a Honda, Yamaha’s bikes looked old, unimaginative, unattractive. </li></ul><ul><li>Yamaha was left with 12 months of unsold (and unsellable) inventory. </li></ul><ul><li>Stalk & Hout , Competing Against Time, 59 </li></ul>Comment: a classic example of “shaping the marketplace.”
    18. 18. A time-compressed company does the same thing as a pilot in an OODA Loop … It’s the competitor who acts on information faster who is in the best position to win. George Stalk, Jr. & Tom Hout, Competing Against Time , 180-181.
    19. 19. Business is a dogfight. Your job as a leader: Outmaneuver the competition, respond decisively to fast-changing conditions, and defeat your rivals. That's why the OODA loop, the brainchild of &quot;40 Second&quot; Boyd, an unconventional fighter pilot, is one of today's most important ideas in battle or in business. Keith Hammonds, “The Strategy of the Fighter Pilot,” Fast Company , June 2002.
    20. 20. This is the OODA loop Observe Act Orient Decide
    21. 21. This is not the OODA loop Observe Act Orient Decide
    22. 22. An OODA “loop” with power “ Interaction permits vitality and growth, while isolation leads to decay and disintegration.” Strategic Game , 29. “ Orientation is the Schwerpunkt. ” Organic Design , 16. “ Emphasize implicit over explicit in order to gain a favorable mismatch in friction and time (ours lower than any adversary’s).” Organic Design , 22. Observe Decide Act Action (Test) Observations Unfolding Circumstances Outside Information Orient J. R. Boyd, “the Essence of Winning and Losing,” 1995. Implicit Guidance & Control Implicit Guidance & Control Decision (Hypothesis) Feed Forward Feed Forward Feedback Feedback Unfolding Interaction With Environment Unfolding Interaction With Environment Feed Forward Cultural Traditions Genetic Heritage New Information Previous Experience Analyses & Synthesis
    23. 23. Observations on orientation for business Feed Forward Observations Orientation <ul><li>NOTES </li></ul><ul><li>Without genetic heritage and cultural traditions, the influence of new information & previous experience increases </li></ul><ul><li>In particular, they exert a much stronger effect on analyses and synthesis </li></ul><ul><li>Therefore, it becomes vitally important to beef up the feed forward into “New Information” </li></ul><ul><ul><li>Quantity </li></ul></ul><ul><ul><li>Quality </li></ul></ul>Observation is the only feed into Orientation Cultural Traditions Genetic Heritage New Information Previous Experiences Analyses/ Synthesis Feed Forward Decision Action Implicit Guidance & Control Implicit Guidance & Control
    24. 24. Orientation locked tight The company (A&P), under pressure from Kroger, experimented with a new concept, “The Golden Key.” “It sold no A&P branded products, it gave the store manager more freedom, it experimented with innovative new departments … Customers really liked it. “ What did A&P executives do with ‘The Golden Key’? They didn’t like the answers it gave, so they closed it. ” Jim Collins, Good to Great , 68.
    25. 25. Improving orientation <ul><li>Set aside specific times (e.g., at each staff meeting) to review feedback on possible mismatches (“ Reflection must be institutionalized as a business process. ” Michael Hammer, co-author of Reengineering the Corporation , and Steven A. Stanton, Fortune OnLine, Nov 24, 1997) </li></ul><ul><li>Abolish the Executive Dining Room </li></ul><ul><li>Abolish “Management Clubs” </li></ul>These are tubs for drinking your own bathwater
    26. 26. Improving orientation (II) <ul><li>Post on internal web site (& invite discussion): </li></ul><ul><ul><li>Assessment of the current situation: customers, competitors, economy, government, our situation, etc. </li></ul></ul><ul><ul><li>Post-mortems (proposals, projects, etc.) </li></ul></ul><ul><ul><li>Specific competitor observations (esp. things they do better) </li></ul></ul><ul><li>Include a “what competitors do better” section in staff meetings </li></ul>
    27. 27. What about “action”? <ul><li>The idea is that the vast majority of the time, actions should flow smoothly from orientation via the “implicit guidance and control” link </li></ul><ul><li>Thus, excellence in technique is vitally important – study, train, rehearse, practice, critique constantly, at all levels of the organization </li></ul><ul><li>To use the currently fashionable label, this is what defines a “knowledge-based” organization. </li></ul>
    28. 28. A better way to think of OODA “loop” speed Observe Decide Act Action (Test) Orient Orientation is the Schwerpunkt . Organic Design , 16. The ability to operate at a faster tempo or rhythm than an adversary enables one to fold adversary back inside himself so that he can neither appreciate nor keep up with what’s going on. Strategic Game , 44 Implicit Guidance & Control Implicit Guidance & Control Decision (Hypothesis) Feed Forward Feed Forward Feedback Feedback Observations Unfolding Circumstances Outside Information Unfolding Interaction With Environment Unfolding Interaction With Environment Feed Forward
    29. 29. Observation Observations Feedback From Action Feedback From Decision Implicit Guidance & Control (Orientation) (Orientation) Feed Forward Real World <ul><li>Unfolding Environment: </li></ul><ul><ul><li>Customers </li></ul></ul><ul><ul><li>Competitors </li></ul></ul><ul><ul><li>Economy </li></ul></ul><ul><ul><li>Government </li></ul></ul><ul><ul><li>Employees </li></ul></ul><ul><ul><li>Financials </li></ul></ul><ul><ul><li>Other Indicators </li></ul></ul><ul><ul><li>Etc. </li></ul></ul>What you’re looking for are “ mismatches ” between a) what your orientation is telling you the world ought to be and b) what the world really is.
    30. 30. Put simply <ul><li>Good news is dangerous </li></ul><ul><li>Bad news is the only thing that will save you, if : </li></ul><ul><ul><li>You find it before it finds you </li></ul></ul><ul><ul><li>You correct your orientation </li></ul></ul><ul><ul><li>You act upon it </li></ul></ul>And “loyalty checks” are deadly.
    31. 31. Ideas for improving observation <ul><li>If you’re GM, buy Fords & Toyotas for company cars. </li></ul><ul><li>Send everybody on at least 2 customer visits each year (Tom Peters) </li></ul><ul><li>Insist that your company newsletter (published or on your intranet) focuses outside the company (customers, competitors, the environment, etc.) and includes a “bad news” section </li></ul>
    32. 32. Be the customer <ul><li>Example: If you’re a Delta Airlines VP, book your own tickets (directly, via the Web, & through travel agents). Stand in line to check bags. Fly coach. Now do the same thing on Continental. Talk to everybody while you’re there. Fly Delta no more than 50% of the time. </li></ul><ul><li>Distribute what you found to everybody in the company (e-mail, intranet site, internal chat /newsgroup, coffee pot, etc.) </li></ul>
    33. 33. In one of the first games he attended, [New Sacramento Kings Owner] Gavin [Maloof] missed an entire quarter waiting in a beer line. Knowing his father would have gone nuclear, Gavin arranged to have 20 minibars installed throughout the arena. Nobody waits for a beer now. Hugo Lindgren, The Flying Maloof Brothers, New York Times , February 15, 2004
    34. 34. Or at least meet the customer <ul><li>Spend a hour a week manning the company’s reservation, sales, or customer service desks </li></ul><ul><li>Receptionists should work for the CEO (or at least he/she should buy them a drink periodically) </li></ul><ul><li>Put a “Comments?” link on your Web site. Have the raw responses mirrored to you. Read them. </li></ul>
    35. 35. Decision Feed Forward Feed Forward Decision (Hypothesis) (Orientation) (Action) Feed Back (Observation) Note: Decision is fed only from Orientation Note: Decisions, in this sense, are needed when action does not flow from orientation. These types of decisions always slow down the OODA “loop” They can be considered as part of the learning process.
    36. 36. And so you decided. Great. (Businesses don’t have commanders, whose legal orders must be obeyed) “ I wish I could get them to make more.” Roger Smith, Chairman of General Motors, on his Pontiac Division’s planned production rate for the Fiero
    37. 37. Research supports this <ul><li>There are times for deliberating about options. Usually these are times when experience is inadequate and logical thinking is a substitute for recognizing a situation as typical … </li></ul><ul><li>If fireground commanders read the situation correctly, their orientations should match the events. When they are wrong, they can quickly use their experience to notice anomalies. </li></ul><ul><li>“ I don’t make decisions,” the commander announced to his startled listeners. “I don’t remember when I’ve ever made a decision.” </li></ul><ul><li>Gary Klein, Sources of Power, MIT Press, 1999 . </li></ul>
    38. 38. <ul><li>“ Can I operate inside the decision time of the enemy? If I can, I’ve got him.” </li></ul>Phil Condit, former Chairman/CEO, Boeing, Aviation Week & Space Technology , 2/10/2003
    39. 39. Question What determines OODA loop speed? <ul><li>Answer: </li></ul><ul><li>Ultimately, a moral climate/culture/ environment that encourages people to use their initiatives to further the goals of the organization </li></ul><ul><li>Under such a climate, people will solve the technical problems </li></ul>
    40. 40. Boyd’s organizational climate: The Principles of the Blitzkrieg <ul><li>Fingerspitzengefühl - Zen-like quality of intuitive understanding. Ability to sense when the time is ripe for action. Built through years of progressively more challenging experience. </li></ul><ul><li>Einheit - Has the connotation of &quot;mutual trust&quot; and implies a common outlook towards business problems. Built through common experience. Fingerspitzengefühl at the organizational level. </li></ul>
    41. 41. <ul><li>Schwerpunkt - Any concept that gives focus and direction to our efforts. In ambiguous situations, answers the question, &quot;What do I do next?” Requires leadership. </li></ul><ul><li>Auftragstaktik - Tell team members what needs to be accomplished, get their agreement to accomplish it, then hold them strictly accountable for doing it - but don't prescribe how . Requires very high levels of mutual trust. </li></ul>Boyd’s organizational climate: Continued
    42. 42. Fingerspitzengefühl at the tactical level <ul><li>Every day the sales team met at 7 a.m. for two hours of training that involved role playing, sales strategies, and videotaping of mock sales calls. </li></ul><ul><li>Don Sumner, 38, an account executive, says Winkler has handed him a three-page performance analysis more than once, after overhearing one of Sumner's phone pitches. &quot;Dealing with someone who can be such an S.O.B. has made me more thick-skinned,&quot; says Sumner. </li></ul><ul><li>Since his arrival the number of clients at SecureWorks has grown from 100 to 800. The sales team that Winkler initially whittled from six members to three has grown to 30. New orders at the now profitable company are growing at 200% to 300% a year, and the company says sales will hit $20 million for 2004, up from less than $1 million only three years ago. </li></ul><ul><li>~ Fortune Small Business , “The Best Bosses,” October 2004. </li></ul>
    43. 43. Fingerspitzengefühl as strategy <ul><li>There is a surface version of genchi genbutsu (go and see for yourself) and a much deeper version that takes many years for employees to master. </li></ul><ul><li>What the Toyota Way requires is that employees and managers must deeply understand the process of flow, standardized work, etc. </li></ul><ul><li>Jeffrey K. Liker, The Toyota Way , p. 224 emphasis added </li></ul>
    44. 44. “Trust” ultimately relies on a common orientation <ul><li>Arrange setting and circumstances so that leaders and subordinates alike are given the opportunity to continuously interact with the external world, and with each other, </li></ul><ul><li>in order to </li></ul><ul><ul><li>more quickly make many-sided implicit cross referencing projections, empathies, correlations, and rejections </li></ul></ul><ul><li>as well as </li></ul><ul><ul><li>create the similar images or impressions, hence a similar implicit orientation , needed to form an organic whole. </li></ul></ul>Organic Design , 23
    45. 45. “Trust” ultimately relies on a common orientation <ul><li>Arrange setting and circumstances so that leaders and subordinates alike are given the opportunity to continuously interact with the external world, and with each other, </li></ul><ul><li>in order to </li></ul><ul><ul><li>more quickly make many-sided implicit cross referencing projections, empathies, correlations, and rejections </li></ul></ul><ul><li>as well as </li></ul><ul><ul><li>create the similar images or impressions, hence a similar implicit orientation , needed to form an organic whole. </li></ul></ul>John R. Boyd, Organic Design , 23 This is the answer to how to improve and align orientations in a company.
    46. 46. Constructing a climate for fast OODA loops The Tao of military operations lies in harmonizing people. Zhuge Liang, c. 300 AD The issue of human nature is the most basic problem … The most important factor is maintaining a relationship of trust between labor and management. Shigeo Shingo, one of the architects of the Toyota Production System. (emphasis added) The employees themselves are completely in charge. Toyota Motor Company, “Toyota Production System,” 1992, describing the virtues of the kanban system
    47. 47. A Schwerpunkt for business Ultimately, the Toyota Production System means a lot more than productivity and quality. For companies and for employees, the Toyota Production System means taking their destinies into their own hands . Companies should not and need not be like ships adrift at sea, cast about uncontrollably by external factors, such as the latest oil crisis. Toyota Motor Company, “Toyota Production System,” 1992.
    48. 48. Flowdown: Schwerpunkt for manufacturing The Toyota Production System, quite simply, is about shortening the time it takes to convert customer orders into vehicle deliveries. This tells everybody in Toyota manufacturing: “When in doubt, take the action that has the biggest impact on order-to-delivery time”.
    49. 49. Another Schwerpunkt <ul><li>Most CEOs are focused on achieving their financial and operational goals, and on executing a strategy. But Apple's Steve Jobs believes his company's ultimate advantage comes from its ability to make unique, or as he calls them, “ insanely great &quot; products. </li></ul><ul><li>Jobs's entire company is focused on that task. </li></ul>Version 1.2 17 March 2005 Peter Burrows, “Commentary: Apple's Blueprint for Genius,” BusinessWeek Online Extra, March 21, 2005
    50. 50. An Auftrag primer <ul><li>The mission must express the will of the commander in an unmistakable way </li></ul><ul><li>The objective, course of action & constraints must be clear & definite without restricting freedom of action more than necessary in order to make use of the initiative of individuals charged with the tasks to be accomplished </li></ul><ul><li>Limits as to the method of execution within the framework of the commander’s will are imposed only where essential for coordination with other commands. </li></ul><ul><li>Gen. W. von Lossow </li></ul>
    51. 51. But first … Such a system, of course, presupposes uniformity of thinking and reliability of action only to be attained by thorough training and experience … Complete confidence of superiors in their subordinates and vice versa is absolutely essential. Martin van Creveld, Fighting Power , 36
    52. 52. Augtragstaktik —missions and contracts instead of tasks <ul><li>The concept of mission can be thought of as a contract, hence an agreement, between superior and subordinate. </li></ul><ul><ul><li>The subordinate agrees to make his or her actions serve superior's intent in terms of what is to be accomplished, </li></ul></ul><ul><ul><li>The superior agrees to give the subordinate wide freedom to exercise his or her imagination and initiative in terms of how intent is to be realized. </li></ul></ul>
    53. 53. Augtragstaktik —what “commitment” means <ul><li>As part of this concept, the subordinate is given the right to challenge or question the feasibility of the mission if: </li></ul><ul><ul><li>he feels his superior's ideas on what can be achieved are not in accord with the existing situation or </li></ul></ul><ul><ul><li>he feels his superior has not given him adequate resources to carry it out. </li></ul></ul><ul><ul><li>Likewise, the superior has every right to expect his subordinate to carry out the mission contract when agreement is reached on what can be achieved consistent with the existing situation and resources provided. </li></ul></ul>J. R. Boyd, Patterns of Conflict , 76
    54. 54. Auftrag in a business setting Abbott recruited entrepreneurial leaders and gave them the freedom to determine the best path to achieving their objectives. On the other hand, individuals had to commit fully to the Abbott system and were held rigorously accountable for their objectives. They had freedom, but freedom within a framework . Jim Collins, Good to Great , 123.
    55. 55. Powerful stuff— if you can use it <ul><li>Samsung has kept a lean corporate structure, with authority increasingly delegated to front-line managers around the world, and almost a quarter of the far-flung staff of 88,000 dedicated to research and development. </li></ul>“ Samsung Is Now What Sony Once Was,” By James Brooke And Saul Hansell, New York Times , March 10, 2005 Version 1.2 17 March 2005
    56. 56. Another example “ As you know, Mary, it is the board’s intent to keep a balance between manufacturing in the US and sourcing overseas. Sales of our current product, however, are below the level we need, and it will be at least six months until the new line is ready. “ I’d like you to take over domestic sales and raise our revenues at least 10% (more would be great) until the new line debuts in May. This will allow us [[in order to]] to avoid a highly disruptive interruption of our US-based manufacturing operations. Be careful, however, not to do anything that might hurt the launch of the new line.”
    57. 57. If you were Mary … <ul><li>Why are sales below forecast? </li></ul><ul><ul><li>Ageing product line, relative to the competition? </li></ul></ul><ul><ul><li>Poor sales strategy? </li></ul></ul><ul><ul><li>Lack of sales training? </li></ul></ul><ul><ul><li>Poor sales management? </li></ul></ul><ul><ul><li>Poor execution by the fulfillment side of the house? </li></ul></ul><ul><ul><li>Poor quality? </li></ul></ul><ul><li>What are my constraints? </li></ul><ul><ul><li>More sales staff? Transfer star salespeople from another territory? </li></ul></ul><ul><ul><li>Do I have any pricing power? </li></ul></ul><ul><ul><li>Crash training program? Funding for this? </li></ul></ul><ul><ul><li>Any short-term improvements possible in the product? </li></ul></ul>
    58. 58. It’s really pretty simple I. (Individual) Fingerspitzengefühl III. Schwerpunkt IV. Auftrag II. Einheit
    59. 59. Top management’s unique responsibility is to tend the culture These and other miscues prompted Mr. Barrett to send a memorandum in July to all 80,000 Intel employees, promising that top executives were &quot; revisiting the meaning of Intel culture and talking about management expectations.&quot;
    60. 60. <ul><li>Run your business like a NASCAR team: </li></ul><ul><ul><li>Design & build a winning car </li></ul></ul><ul><ul><li>Then go racin’ </li></ul></ul>
    61. 61. How to install Boyd’s strategies <ul><li>Make a commitment - maneuver conflict is a martial art , in the same family with karate, kung fu, kendo, aikido, and judo. </li></ul>i.e., you don’t need to be perfect, just better than the competition. <ul><li>Infuse it throughout the organization - establish formal mechanisms (e.g., GE’s Crotonville-on- Hudson.) Educate, train, practice. Try, learn, share. </li></ul><ul><li>Promote those who embrace and use it. </li></ul><ul><li>Remove those who do not, regardless of how good their numbers. </li></ul>
    62. 62. In other words Not this doofus: But this guy:
    63. 63. “ The Operating System is GE's learning culture in action. “ It is a year-round series of intense learning sessions where Business CEOs, role models and initiative champions from GE as well as outside companies, meet and share intellectual capital.” http://www.ge.com/en/company/companyinfo/at_a_glance/operating_system.htm - 2/25/2003
    64. 64. Toyota’s Learning Culture Version 1.2 17 March 2005 Jeffrey Liker, The Toyota Way Meaning Principle Policy deployment Hoshin kanri Reflection Hansei Consensus building Nemawashi Report, update, advise Hourensou Go and see for yourself / gemba Genchi genbutsu
    65. 65. The Payoff: Operating inside their OODA “loops” <ul><li>In War: </li></ul><ul><ul><li>Keep the initiative: Set up and exploit situations before they can respond (again and again) </li></ul></ul><ul><ul><li>“Command” both sides </li></ul></ul><ul><ul><li>Catch the other side flat footed: Make them seem slow, unresponsive, clumsy; pump up Murphy’s Law (entropy) </li></ul></ul><ul><li>In Business: Meet expectations & create value, but also delight . Turn customers into fanatics. </li></ul>Play the “cheng/ch’i game”
    66. 66. You don’t wait for the future. You create it. Hwang Chang Gyu, President, Samsung Semiconductor BusinessWeek , 25 October 2004, 58

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