(Co-Authored with Steven A. Cavaleri)
In his new book, Chasing the Rabbit, Steven Spear distinguishes highly adaptive organizations from others, terms them “rabbit organizations,” and, alternatively, “high-velocity organizations,” and develops a framework for identifying them. According to Spear, such organizations have four capabilities:
1) “Specifying Design to Capture Existing Knowledge and Building In Tests to Reveal Problems” (p. 22) (This refers to designing activities and processes. High-velocity organizations use their best current knowledge to precisely specify activities and processes to be performed and expected outcomes. Precise expectations about outcomes are benchmarks against which real performance may be tested and errors in expectations revealing knowledge gaps can be seen easily);
2) “Swarming and Solving Problems to Build New Knowledge” (p. 24) through using “the scientific method . . . in a disciplined fashion” (p. 25) (“In the rabbit organizations, problems are swarmed at the time and place where they occur and by the people who are affected.” (p. 24));
3) “Sharing New Knowledge throughout the Organization” (p. 25) (“They do this by sharing not only the solutions that are discovered, but the processes by which they were discovered – what was learned and how it was learned. (pp. 25-26));
4) “Leading by Developing Capabilities 1, 2, and 3” (p. 26) (“High-velocity managers are not in place to command, control, berate, intimidate, or evaluate through a contrived set of metrics, but to ensure that their organizations become more self-diagnosing and self-improving, skilled at detecting problems, solving them, and multiplying the effect by making the solutions available throughout the organization.” (p. 26))
Much of Spear’s book is devoted to describing cases of rabbit organizations and relating these cases to this capability framework. The cases included: Toyota, Alcoa, the US Navy Nuclear Power Propulsion Program, Pratt and Whitney, Avenue A (now aQuantive), Asin, Taiheiyo, NHK, (the last three Toyota suppliers), and a number of hospital cases including Massachusetts General Hospital (MGH), a division of Partners Health Care, and Virginia Mason Medical Center (VMMC) of Seattle Washington. Toyota is the case that is described and analyzed in most detail, but a fair amount of attention is given to the others and Spear does a fine job of making the argument that these four capabilities are characteristic of high-velocity organizations.
In the Alcoa, Navy Reactors, and Toyota cases, Spear does a very explicit mapping job of mapping the case details to his capability framework. However, in the course of doing his mapping for each case, he states each of the capabilities a bit differently emphasizing different aspects of each. For example, in the case of Alcoa Capability (see pp. 93-102) 1) becomes: “Seeing Problems as They Occur.” Capability 2) is stated as “Swarming and Solving Problems As They Are Seen.” Capability 3) was: “Spreading New Knowledge. “And Capability 4) was stated the same way. In the case of the US Navy Nuclear Power Propulsion Program (see pp. 119-140), Capability 1) is: “Capturing the Best Collective Knowledge and Making Problems Visible.” Capability 2) is: “Building Knowledge by Swarming and Solving Problems.” Capability 3) is: “Spreading Lessons Learned to the Whole Organization; and Capability 4) is, again, much the same. For Toyota, each Capability is given a separate chapter. Capability 1) is expressed (p. 155) as: “System Design and Operation;” Capability 2) (p. 193) is: “Problem Solving and Improvement;” Capability 3) (p. 225) is: “Knowledge Sharing;” and Capability 4) (p. 263) is: “Developing High-velocity Skills In Others.”
The changes in wording from his general description of the capabilities to his characterization of each case reflect differences in the specifics of implementation at the rabbit organizations. Differences appear to be even greater in cases such as Avenue A and Pratt and Whitney which are not so well-described. Are these differences significant to behavior? I think they are, but they may have more to do with the specific character of the kinds of business activities being performed by the different companies, then with any differences in the degree to which they fundamentally change the identifying profile of “the rabbit organization.”
Later on in the book, Spear expresses the four capabilities as rules (pp. 302-303). He does this to illustrate how self-organization, and self regulation in complex organizations in the specific case of Asin, a Toyota supplier implementing a recovery from a serious fire, can be facilitated by viewing, mandating, and implementing, as Asin did, the capabilities as rules around which people can self-organize. His rules are:
1) “Design: Specify Work Systems in terms of what output is being pursued, who will perform what steps in what sequence along a pathway to generate that outcome, how exchanges of materials and information (including the informational triggers to start work) will be made across the connections between steps, and what methods will be used at each step. Design systems with tests built in to immediately identify any gaps between what was predicted and what happens.
2) “Improve: Swarm problems the moment they are seen so that they can be contained, investigated, and resolved quickly. Involve those affected by the problems in resolving it, using the discipline of the scientific method to ensure that solving problems also builds additional useful knowledge on ways to increase the chance for success in the future.
3) “Share knowledge: Share throughout the organization whatever is learned locally. Share the discovery process as well as the particular solution, so new insights can be put to wider use and have broader benefits.
4) “Develop problem-solving capabilities: Develop these core capabilities in those for whom you are responsible as a leader.”
Let’s compare Spear’s treatment of the four capabilities and corresponding rules for rabbit organizations with how the Problem Solving Pattern (PSP) was defined in Part One of this series, and how the Open PSP was characterized in Part Two. In Part One we said:
The PSP is the pattern of human interaction that 1) seeks, recognizes and formulates problems, 2) solves those problems by making new knowledge, 3) communicates that knowledge beyond the local context generating it to people who may need it, and 4) enhances how well these first three processes are performed.
1), 2) and 3) in the PSP don’t refer to capabilities or rules but to problem-solving related processes. They are, we think, the reference processes for Spear’s capabilities and rules, and what these capabilities and rules are about is performing the PSP well, and, as a result being successful in adapting to error. That is: seeking, recognizing, and formulating problems will be performed well if an organization has Spear’s Capability 1) “Specifying Design to Capture Existing Knowledge and Building In Tests to Reveal Problems;” solving those problems by making new knowledge will be performed well if an organization has Capability 2) “Swarming and Solving Problems to Build New Knowledge” (p. 24) through using “the scientific method . . . in a disciplined fashion;” communicating that knowledge beyond the local context generating it to people who may need it, will be performed well if an organization has Capability 3) “Sharing New Knowledge throughout the Organization;” and finally, enhancing how well these processes are performed, will be performed well if an organization has Capability 4) “Leading by Developing Capabilities 1, 2, and 3.”
If you’re reading carefully, you may have noted that the greatest lack of correspondence between the PSP and the capabilities of rabbit organizations is found in Capability 1), where the stage of design is not found in seeking, recognizing and formulating problems. This discrepancy flows from Spear’s decision to incorporate Design into Capability 1) along with seeing problems. In fact, however, I think the capability for rigorous process design, including designing in precise expectations and tests is part of Capability 2) rather than Capability 1) and that Spear’s capabilities incorporate a redundant overlap that is better handled through a conceptual feedback loop from Capabilities 2) to 1).
Will an organization perform the PSP well, if it follows the four rules? We think it will, but the real question is what is the relationship between the capabilities and rules? Which comes first the capabilities or the rules? Can an organization do a good job of following the rules without having the capabilities? Can the capabilities be achieved only by following the rules. We think it’s likely there’s a mutually reinforcing relationship between capabilities and rules in organizations; but also that this reinforcing relationship is strongest when both the capabilities are there and the rules are followed, as they are in organizations that are already rabbit organizations. But at the beginning of a transformation to a high-velocity state, when neither rules nor capabilities are institutionalized, the rules are more like policies advanced by management rather than rules that people follow, and it takes management-supported programs and projects exercising rule 4 to enhance the first three capabilities and begin to institutionalize the four rules. In future blogs we will consider in some detail how performing the four processes can be enhanced to create the four capabilities and institutionalize the four rules in organizations. Before we end this blog, however, let’s consider the relationship between rabbit organizations and the Open PSP.
In brief, that relationship is that Open PSPs are the typical form of PSPs found in rabbit organizations. In rabbit organizations employees have both the authority, and the duty to seek, recognize and formulate problems. They also have not only the opportunity, but also the obligation, to “swarm” and solve problems using “the scientific method,” thus exemplifying the Open PSP characteristic of distributed problem-solving. Further, the characteristics of spreading new knowledge to those who need it and transparency are shared by rabbit organizations and the Open PSP.
In both, structural barriers to self-organization are at a minimum, and enabling human and Information Technology structures for self-organization and participation in seeking, recognizing, and formulating problems, and making and communicating new solutions are diverse, widespread, and up-to-date. Also, internal transparency in knowledge processing and trust in related interactions is high in both the Open PSP and rabbit organizations. Finally, the Company that perhaps best exemplifies both the Open PSP and the rabbit organization is Toyota with its commitments to genchi genbutsu, jidoka, kaizen, yokoten, jishuken, encouragement of informal groups outside the formal organizational structure, and distribution/decentralization of management activities (PSP/Capability 4)) intended to enhance all of these processes.