That Leadership Mindset That Drove Toyota's Excellence | Nigel Thurlow

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The Ryan Hanley Show shares the original ideas, habits, and mindsets of world-class original thinkers you can use to produce extraordinary results in your life and business.

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Hello, everyone, and welcome back to the show.

We have a tremendous episode for you today, a conversation with Nigel Thurlow.

Nigel was the first ever chief agile officer for Toyota and developed the Scrum for Toyota way that Toyota uses to streamline their process to consistently be one of the most mechanically best made cars on the market.

And this process, Nigel has then gone on to teach to other manufacturing industries.

And his book, The Flow System, takes that idea, pulls it out of the manufacturing space, and allows us as business owners, as entrepreneurs, to apply the same thought process, the same systematic, high-quality design and execution process that made Toyota one of the top selling cars in the world for decades.

Apply that to our own business and implement it.

There are tons of deep dives in this episode.

Also, Nigel gives us access to almost all of this material for free.

And I'll be honest with you, when I saw the resources that he created and put online, I was blown away and immediately started taking notes, pulling ideas out and going, This is stuff that can be applied to any business, a SaaS business, a coaching business, a services business like insurance, accounting, legal, retail, you know, via bakery, shoe store, coffee shop.

This system, and it's more the thought process, right?

It's it's working through how I can apply these ideas and these concepts to my business allows us to build in the efficiencies that still deliver a high quality product.

We are in a time where over-automation can kill your business.

So we want to be smart about where we build efficiencies in because effectiveness, our ability to execute on delivery, our effectiveness is just as important as our ability to build efficiencies.

And if we over focus on efficiencies without effectiveness, that's where the mistakes happen.

That's when we start to have problems with our product.

That's when our customers start to be unhappy with what we're doing.

And Nigel outlines the game plan to make sure that we build efficient, but highly highly effective businesses.

You're going to absolutely love this episode.

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And I love you for doing so.

With that, let's get on to this incredible conversation with Nigel Thurlow.

Nigel, it is an absolute pleasure to have you here.

And if the pre-show conversation is anything like the actual show conversation, this is going to be a lot of fun.

Yeah, I hope so.

It's great to be here, Ryan, and thanks for having me along for a chat.

So you said something that I wrote down and then underlined each word individually in the pre-show, which was the pseudoscience of mindset.

And being that so much of my own work is around mindset, we have to start in this place.

I should never have said that.

But yeah,

given the type of work you do, and of course we talked about that, and given the sort of motivational work you do with individuals and sort of get them to be in that right headspace, that right mindset.

So mindset's fine as an individual construct.

So in a lot of the work I do, we talk about the world view, and I'm going to pronounce this really badly, so for German speakers, I do apologise, but the Germans have a word called Waltenscho Ung, which is this sort of, you know, the world around them, the world view.

So, when you think about a person's mindset,

you think about the fact that they've had nature and nurture, culture,

everything that's influenced their development over time, including their preconceptions, their beliefs.

Everything about who they are has formed their mind's eye view, their world view, their mindset.

The problem with the word mindset is we don't want people set in the ways because then there's no development.

The challenge comes then, and I credit my friend Delian McCabe, who's a cognitive neuroscientist.

At the synaptic level, we cannot share the same mindset.

So as a collective construct, it's the wrong construct.

We can have a shared vision, we can have a shared philosophy, and indeed many of us do, and we can craft our behaviors and our attitudes towards those, but a mindset's an individual construct.

So if you're talking to individuals about their mindset, that's okay.

I I can support that fully.

If people in the in some of the worlds I inhabit, like the agile software development world, they all talk about, well, you just need the agile mindset, and then they want everybody else to become synonymous with each other, become collective sort of thinking, and that becomes a problem when you use the term mindset, because it's actually physiologically impossible to actually have that.

And then even Carol Dwyk, who wrote the sort of, you know, fixed mindset, growth mindset sort of book in her work, she even talked about mindset as being an individual construct.

And she, and I forget how to paraphrase it, but she describes it as the individual's sort of views and beliefs and sort of focus on life.

And I'm paraphrasing badly.

So that's where I get into the pseudo-science of mindset, where everybody has to be sort of in lockstep with each other.

You can share a philosophy, you can have some shared beliefs, and we do religion and stuff of this nature.

And we can work together towards a common goal, a common outcome.

But the mindset thing truly is an individual construct.

Yeah,

well, I wanted to give you a hard time right off the rip because that way we could have fun for the rest of the show.

No, and I and frankly, I completely and utterly agree with you.

It is 100% individual, and when I talk about mindset, I'm always talking to this specific individual, mostly from the perspective of

in a team atmosphere, and I want you to push back

and build on this.

It has always been my experience that

one negative mindset in a group, and I just saw a stat the other day.

There was a study that came out in 2006, and I'm going to miss the name of the study.

I will find it, guys, and put it in the show notes.

That said,

in a group of four to ten,

in a group of four to ten, if there is one individual who operates from a negative mindset, productivity drops by 40%.

So if you are in a team environment and

we want to operate with a shared vision, shared goals, but we're coming to that situation all with our individual mindsets.

How do we start to,

how do we work together as a team in the most effective way?

How do we bring all those individual mindsets together to push in the same direction?

You see, that's it's a really good question.

I was just writing down the because 40% reduction in team performance is absolutely dreadful.

Now, if we avoid the the odd bad penny or the odd-bad actor we get in some organisations and assume, you know, positive intent from the individual and the fact that they just don't have the same agreement as everybody else,

the work I do with team science and my colleague Professor John Turner, who's the really clever guy in this sort of duo I'm talking about, and my other colleague Brian Rivera-Ponch, who goes by ex-Navy.

So they're very experienced, one from the scientific point of view, one from the go-do-it point of view.

Then

we first of all start by focusing on teamwork training before we focus on the work the team is doing.

So in the Navy, Ponch would talk to me about crew concept, where on the US, he was a naval aviator, flew off and on carriers and F-14s, so of course really at the sort of sharp end of having to be in lockstep with your teammates.

So the Navy would teach teamwork.

They would teach them how to be a team, communication, cooperation, conflict resolution, these types of things.

So that at any point they could post things on the the board and they would say to them, We need somebody to go and execute on that, and then you'd dynamically form a team.

And even in corporate organizations, we have dynamic reteaming as a concept.

So basically, they would know how to be a team, know how to operate effectively as a team.

And if people want an example of that, and you better hope they're a damn good team, every time you get on a plane to fly somewhere, the crew have probably met each other for the first time ever, and they need to know how to communicate and collaborate.

We call in the cockpit challenge-response communication, so that we are in a safe atmosphere where we can act in a critically thinking way and communicate, collaborate, and cooperate effectively because we've been trained how to be a team before we were trained how to do the work of the team.

And so, we focus a lot on that to try and eliminate that.

But let's assume now we've got somebody in a team who has that

negative vibe.

The first thing we need to do is to extract the context of where we are.

So instead of trying to say we just need to get on and do the work, and I can talk about shared mental models and things as a different construct in a second, the first thing is to really understand why.

Why is this person?

Has this person been given, I mentioned the words before, agency and voice.

Do they have the right to put the hand up to protest or to sort of, you know, to, in my line of work, to pull the metaphorical and encord, a manufacturing concept to stop the line if you see a problem?

Do they have the right to do that or are they being bullied, forced, cajoled, driven towards something that maybe they disagree with for a whole number of reasons?

So first we need to understand that individual context and then we can work on some of the team training aspects to see whether or not it's just a personality issue, a collaboration, cooperation issue, or there's some fundamental problem there.

Now, assuming we get past that, or at least we have that conversation, in my work we talk a lot about shared mental models, which is really just can we all align, get behind the same idea, the same purpose, the same mission, the same outcome, the same goal?

And do we have any shared understanding or shared belief that helps us align to that goal?

Because if we don't, we have to address that first of all.

What tends to happen in corporate, and I work prominently in corporate circles of course, is you get a group of people and they've got some skills, you shove them together, call them a team and tell them that's the mission, and then we bully and pressure them on timelines, deadlines, deadlines, deliverables, metrics, milestones, other types of nonsensical measurements and we forget these people are humans.

We forget that they're people and we're dealing with human factors and a lot of what I deal with is what's called complex adaptive systems and for people listening or watching to this if you're unsure of what one of those is, look in the mirror and the person staring back at you is a complex adaptive system.

We're not predictable, we're not linear, we're definitely not ordered, we're all the opposite of that.

And when you're dealing with that, you can't just assume that you can group a bunch of people together and say that's the mission go do it because there's a lot of factors that need to be taken into account how am i doing

I have more questions than I think we have time for answers

which is a good thing that's a that's a positive

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Anecdotal, but I had the opportunity to see Jordan Peterson speak live, and he was talking.

He was answering a question from the crowd about

it, kind of was framed personally, but he reframed it as a leader of an organization around this idea of, and he used the example of yin and yang being chaos and order.

And that our goal, particularly as leaders, is to walk that line.

It's literally the line between the yin and the yang

is tiptoeing that line constantly between chaos and order.

Having a shared goal, but understanding that you have a group of individuals on the other side who

may share that goal, but also have all their own personal goals that they have behind that.

And to me, that visual somehow just seemed to really make sense, even though it's slightly, you know, slightly off context.

It really made sense to me as kind of what our job actually is,

is to both manage the order side of the business and the chaos side of the business.

But I love this concept of shared mental models.

Now, you used the term dynamic reteaming.

For the audience, could you just break that down a little bit?

Because I don't think, especially in the audience, our audience tends to be, say, middle market, small business entrepreneurs, a lot of startups, that frame.

I don't know that that's necessarily a term that is ubiquitous throughout that community.

No, and actually, it isn't that ubiquitous in large corporations either because it's just an unknown concept.

But the whole idea is that instead of people being in fixed teams, and again, it depends on scale, number of people, type of work context.

So, small businesses are going to find this a little bit of an alien concept because they have a limited number of people and other resources to put to the work.

But essentially, you may, as your context changes, or maybe the project or the initiative or the product focus changes, the team you built initially may not be the right team.

And depending on the dynamic nature of the business, hey, if you're into AI and digital technologies, things are lifting and shifting continuously.

And so, the team that's formed initially may not be the appropriate team three weeks, three months, six months from now.

And so, you want this ability where teams can break and reform.

So, going back to crew concept, but more from a corporate point of view, where it's not every day we post the jobs on a board, and the team automatically forms to work on that problem or that that opportunity or that thing, but whereas over a period of time we may want to reform.

Now dynamic re-teaming really does put the power to the people in the teams to reform those teams as opposed to the manager or the executive or the leader telling the teams how to reform.

So we've transferred the agency to the people to make those decisions, the ownership of the decision making.

And even in Dave Marquay's work, because you mentioned Jordan's work which I'm not as familiar with but Dave Marquet's work turn the ship around if people are unfamiliar with it.

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His work, great book.

He talks about moving the authority to the information.

So the information is where the work is done.

So the people closest to the information are closest to the work, closest to the stuff that we're working on.

And they have more answers than maybe I do or another executive would do further away.

Whilst we have an understanding, we have much more of a

helicopter view versus the micro view.

We're more at the macro level.

And so, what we're doing is we're saying the people closest to the work may decide at a point in time the team formation needs to reform, and they themselves will dynamically do that on the fly.

Now, of course, what that does, that means you need a high level of trust in an organization and I tell executives if you don't have trust then you need to fix that problem first.

Because if you hired all these clever people with lots of skills and then you don't trust them then we've got a different issue to deal with.

But assuming we're in this high trust, highly psychologically safe environment, teams can choose to reform on the fly within what we call enabling constraints.

So guardrails.

We don't want people writing million dollar checks without permission.

But this gives the ability of the people people we entrust with the work to decide the best way to execute.

And then we get into leaders' intent, which comes from the military's commander's intent.

And about, you know, if I give intent to you as to what I'm trying to achieve, and you give intent to me, so I'm confident you know what I want to achieve, I can let you go on and do it.

And so that's a little bit of what we mean by dynamic reteaming.

To me, this only seems possible, and we talk a lot about on this show in regards to leadership, is we have to to operate, we have to remove our ego from our day-to-day operations as leaders and operate as true stewards.

And that term is not my favorite because I feel like it's been bastardized a little bit by talking heads and gurus.

But what I really mean there is,

and

how I like to talk about this, is

it is our job as leaders to maximize the excellence of the people that work for our company.

Our job is not to be necessarily the point of the spear.

In fact, oftentimes we really don't want to be that.

We want to be behind these teams, giving them the support to know, hey, you need to go spend $50,000 on a contractor to come in for a week to work you through this problem.

If that fits inside, as you said, the guardrails of the intent of this project, you don't need to ask my permission.

Go get the contractor, bring them in, have them execute whatever they need, and then continue on as well.

To me, this, so just so I have this idea framed in my my head, say we have a group of, I'll just take an example, we have a group of 10 individuals working on a project.

I like to think in seasons because that just helps me frame

frame how things move through life.

The first season of a project, these 10 individuals might be absolutely 100% the right 10 individuals to be part of this particular team.

As we may move into a second phase or a second season of this particular project, there may be three of those individuals who performed highly, you know, performed very high at what they did for that project, but just their skill set,

their time, whatever it is, is no longer necessarily the most relevant to this project.

They can be cycled off, and three new individuals who now

can add clear value to that project in the season that it's in, they can be brought in, and now it's not seen culturally as you're being demoted or promoted.

It's just at this moment, we need you here versus where you were before, and vice versa.

i that to me feels amazing um it also feels like utopia so how do we and as we know utopian experiments don't often go around so how do we actually how do we culturally um

establish this because i i know there are many people just from the audience that we have who are listening to this going you know holy shit like this is 100% what it is.

I mean, imagine what we could do if I had a team that had the confidence in their position, in their place in the organization, that they could make these changes on the fly.

How do we start to develop that culture?

And if that's not our culture today,

I guess more than building it from the beginning, although you can start there if you want, I'm more interested in how we can get to this culture if it's not where we're sitting at the moment.

You know,

as you said earlier, there's so much to unpack.

We could probably speak for three or four hours on this, but I'll try and condense some of these thoughts down.

So just to give one another

real world example, Menlo Innovations, Rich Sheridan's company, Joy Inc.

is the book he wrote and he's written others about that.

They use a technique called pair programming where everybody works in pairs and all the work is done with people in pairs.

And you know, one of my colleagues and friends, Joe Krebs, says that it's not twice the cost.

You're getting the output or the effectiveness of three people in two people when you pair versus you're getting two people doing one person's work.

So that's the way he explains that.

But what they do at Menlo, I think it's every week, I'd have to just double-check to make sure my madness is correct.

But every week, when you go into the office, your pairs rotate.

So this week, if you and I are working together, next week you and I'll be working with a different pair, and the week after that, a different pair again.

So that everybody is building cross-functional skill sets, of course.

They're building an appreciation and understanding for each other's work.

I mean, the agile folks used to talk about T-shaped people.

That became a meme and unpopular sort of way to describe it.

My friend Dave Snowden describes it as expert generalists, and that's where I sort of put myself in things.

I may have some deep expertise in certain areas, but it's much more valuable to be a generalist with a level of expertise in more than one topic area.

So that's what the rotational thing does there.

Now,

the culture thing, so I've for a long time I've said culture is a product of our behaviours.

So when you Google the word culture, you start to, and look in the dictionary, start to look at the arts, the institutions, the sort of achievements of a particular social group or something like that.

But when in corporate context, people, you know, get these, as you've told me, the talking heads, the culture gurus, will wander in and say, you just need to sort of, you know, join a drumming circle at lunchtime and hum in a certain way and the culture will improve, which is complete nonsense.

But what we can do is we can align to a direction of travel.

In complexity thinking, we call it the vector theory of change.

In lean thinking, they call it the North Star.

So there's different words for this, but we can align in a direction of travel around a philosophy or an idea, a good vision of something we all agree is the direction we want to head in.

And then we can start to craft our behaviours.

And we talk about amplifying the good, dampening the bad.

More like this, less like that.

So we can start to identify what we think are appropriate behaviours versus behaviours that probably aren't appropriate.

I'm not talking about DEI and things of that nature that's sort of built into the system.

I'm talking about just the day-to-day, how we act towards each other and towards the work, how we support each other, help each other communicate.

And then, you know, coaches can coach that as they would do appropriately.

And then we can see how the system is responding.

And what we're looking for is nudges.

They call it nudge theory.

We're looking, how do we nudge the system a little bit in this direction or that direction?

And as we start to align to that direction of travel, we might actually find after one or two experiments that we've done, or the work we're doing, is actually the direction of travel is changing because we're learning more about these things.

But the behaviors is the key to me or call it attitude if you prefer.

So when I talk about it collective, rather than use the word mindset, I talk about our attitudes, our behaviours.

And if we want a certain if we don't like the culture we have, the culture is a product of how we're acting and behaving today.

So if we want to change the culture, the only way to change it is to change the way we're acting and behaving.

Just as I sort of talk to companies when they bring me in and complain that their productivity is low or their sales are down or this customer or staff attrition or their costs are too high, I tell them they're not problems, they're outcomes, they're results of the way they do what they do.

So, if you're looking at your culture in the same way as you look at your products and you're seeing the results or the outcomes are the outcomes you don't like, then you have to change how you do what you do.

And that's not telling everybody just get the same collective mindset, that's looking at how we behave, how we act.

I was talking to a client the other day, I can't mention them for obvious reasons, where they're a manufacturing client and they have

a technique I mentioned briefly earlier called the and-on-cord.

And for people who are unfamiliar with manufacturing, especially in automotive, you have a production line, the cars are going down the line being built.

And you can reach up and pull the cord.

If you spot a problem, everybody on the line is empowered to pull the cord and that will alert a supervisor to a problem.

If the problem's not fixed in a very short time window as the vehicle's moving, it gets to a certain position on the line called a fixed position stop and the vehicle will stop.

And at that point, the entire plant stops moving.

And in Toyota, because I sort of used to work there, in Toyota, you could have six or seven thousand people just stand still and do nothing until the problem is fixed.

This is how we build in quality.

So the people in Toyota have the agency, the permission, the safety to pull the cord whenever they they see the problem.

This other manufacturer I was talking to, he says, oh yeah, we have the hand on cord, but we very rarely use it because nobody wants to be seen as the person causing the problem.

There's your cultural difference, yeah?

That's the behavior.

Yeah,

I love that example.

You know, in my own company,

You know, one of the things that was the hardest for new producers in the insurance industry, salespeople are called producers, new producers coming in who had worked in the industry before.

And I oftentimes try to hire people who hadn't been in the industry before so I could kind of level set our culture from the rip.

But

one of the key things that I would talk about in their onboarding was detach from the outcome.

You need to detach from the outcome of what happens.

What I care about, what we're going to manage to, is attitude and effort.

If you show up every day, you know, and we had, we culturally removed over time terms like, you know, I got a case of the Mondays, hump day thank god it's friday you know i mean like these these little attitude uh triggers or they're more indicators of i don't really want to be here right i mean that's what those things are when someone's posting a uh i got the case of the mondays gif in your slack channel that's that's an indicator that something's going on from an attitude perspective that they're not aligned with what you're doing so it was that idea It was so foreign to people of like, they're like, what do you mean outcome doesn't matter?

I'm like, well, well, you have to hit sales numbers.

I mean, that's your job.

You're a salesperson.

But

I need from what you're thinking about when you show up to when you leave, do not think about the outcome because you're going to have a day where you go, you know, 0 for 10.

You're going to have 10 calls and all 10 are going to say no.

That's going to happen.

And what I want is for you to show up the next day and do 10 more calls because that day you could go 10 for 10.

And now

you're well ahead of your targets.

But

if we're focused on anything other than attitude and effort, outcomes,

it feels like you fall to the minimum acceptable if you focus on outcomes.

If you focus on attitude and effort, you get results that you couldn't have even imagined.

You know, that's fascinating because a lot of work I do, of course, in software development or in manufacturing and product product product development, a lot of people will talk about outcomes versus outputs because at that end we're looking we don't want lots of stuff, we want lots of value, value being outcomes.

But the interesting thing is if the attitude is wrong, and back to your example of the, you know, the one person in the five or ten person team that doesn't want to play the game, then why?

Why are they doing the TGIF thing?

Why are they, you know, why are they moaning about miserable Mondays or whatever the phrase is?

Because we need to understand why that is, because they are displaying the wrong attitudes, the wrong behaviors.

They themselves may infect the other members of the team, which typically tends to happen because you get this Debbie Downer or whatever word we would use, this phrase, no disrespect meant by that phrase, but that type of phrase where we have somebody who's dragging down the morale or the inspiration or the performance of the team, and we need to understand that.

And it brings me to another topic from the sort of the world I live in called sense-making.

And I was talking to a non-profit this morning I do a little bit of work with

to try and help them sort of understand the attitudes and opinions and sort of the behaviors within their communities that they support.

But in business, we do this and we use something called narrative capture.

Now, if anybody's listening to this and is thinking, what's he talking about?

There's a bunch of stuff on my own websites free of charge.

You can download it, worksheets, templates, and other things.

No charge at all,

no expectation, no commitment.

Just go grab the stuff for free.

And I'll give you a link on this.

Yeah, and not to interrupt you, Nigel, but guys, just so you know, I will also have links, whether you're watching on YouTube or listening on whatever podcast platform, I'll have links to all this stuff.

I'll tell you

your flow guides, the flow system guide that you have up.

I spent too much time nerding out on this particular

document.

Again, I should have scheduled this for three hours because there's so much in here that's incredible.

And every term that Nigel's used so far is broken out in way more detail in just in this document, not to mention the other stuff.

So I'll have links to all of it.

Yeah, when we wrote the book, you know, this really small book that sort of is vast.

Yeah, this is the fancy hardback version.

700 pages of stuff in there, but we realized a lot of people around the world couldn't get access to it, so we put a lot of the stuff on the website free of charge for people in communities and places in the world where $60, $70 for a book is a week's wages.

So, we stuck it out there.

But you are right, everything I'm talking about is available.

But, Sensemaking, which is

a set of techniques that were developed by people far cleverer than I, which which allow you to look at your environment, your company, your company culture, the people and everything around you, and make sense of the world so you can act in it, as my, again, my friend Dave Snowden, who's a big complexity expert, would describe it.

One of the things we use is narrative capture.

Now, narrative capture is just saying, Tell me, think about, we give them a contextual situation.

So, hey, think about the last three months in work.

Write a short story, a short narrative, just a short ditty about how you feel about the work or the environment you're in over the last two or three months.

And then when you've written that, give it a news headline or a hashtag.

You know, hashtag the best day of my life, hashtag thank goodness it's Friday, you know, that type of thing.

And we always ask them to do the headline after the story so they don't try and sensationalize the headline.

And then there are a number of other techniques we call self-signification.

We ask small questions and give them some geometric shapes in which they can place a dot to respond to those questions.

And this sounds all really sort of, you know, complicated and hard to do.

It's really, really simple.

Download the worksheet, it gets real easy.

But the reason for that is if you have a large organization with say a thousand people

within a silo or department of the organization, and you really want to understand your culture or your environment, even in a small company with five or ten people, you can use the same techniques.

You want to really understand what they think and what they feel, because

doorstepping them as the CEO and saying, tell me how you really feel, isn't really going to give them the psychological safety to do that.

But then this allows them to write in just raw English or whatever language they speak, the raw text, and say, this is what I'm thinking.

Based on what you asked me, this is my feelings.

And we do it anonymously, and we do it in a way that captures it where nobody can be identified.

And then by asking them some other signifying questions and the way they respond, we are then able to see patterns.

And we're looking for weak signals.

What are the things that we, and we sometimes call them dark constraints, what are the things we see in the environment?

We see the result of it, but we don't know what's causing it.

And then we have these weak signals, the outliers.

Is somebody going to go postal in the near future?

How do we know that?

Well, this is how we start to identify.

And then looking at the way they signify certain responses to questions, we can also link the narratives.

And if you've got a number of people participating in this, we can start to look at the patterns between the stories they're telling, the narratives, as well as the way they're signifying certain questions.

And to make this a little bit less eclectic, imagine you draw a triangle.

We call it a triad because complexity people like fancy words for simple things.

So we draw a triangle.

And we'll ask a simple question like when something goes wrong.

And then the three answers may be an individual is blamed, the team is blamed, the manager is blamed.

And it's a triangle, and you can put a dot anywhere in that triangle.

So you've got a natural

tension between the three answers, but none of the answers are right, none of them are wrong.

It's just whatever you feel.

So, you may have a tension between the individual and the blame of the team being blamed, so you put a dot somewhere there, or maybe it's between the individual and the manager, or some other combination of that.

Now, as you start to look at that over time, you start to see patterns, especially when there's a lot of people involved.

Let's say you get a whole lot of patterns saying the individual is blamed.

And then you look at the narratives they've written, which says, My life's horrible, I'm always getting shouted at, I feel unsecure, I feel unsafe here.

You start to build a picture, and I'm giving a very broad brush example here, but you start to build a picture of an organisation that has a blame culture, a culture of fear, no individual safety, and you get Boeing as an example, because nobody at Boeing would say, the place sucks, these are all the problems, and if they did, they'd get punished or fired or in some other way, you know, something punitive would happen.

And then we get disasters and bad stuff that we're seeing every week in the news about Boeing.

So we want to avoid that.

But that's how you see your culture without just looking with your own eyes and saying, well, I think this is what we need to do.

And then you start to understand what are the changes we can make.

So sense making, whilst it's taken me a few minutes to explain the basics of it, it's actually quite simple to do.

If you learn it, and there are tools out there and experts out there that can help you make sense of the the world you're in so you can act in it and you can identify those cultural aspects that you need to focus those nudges on those safe to fail experiments and to your point just about liminality this this wandering between order and chaos you know this liminal zone this transitional zone leaders then need to understand that because leaders create the right environment you don't manage the people you manage the work and you create an environment for the right emergence of behaviors innovation creativity.

So, if you're in your business listening to this and you've got people, you've got a problem where you're not innovating, there's no creativity, everybody's burned out, everybody's tired, everybody's exhausted, you're making lots of mistakes.

These techniques might help you understand where you, as a leader, need to make the changes to create the right environment.

I love the visual aspect of that as well because what I'm imagining comes out is essentially like a plot chart of the triangle and where you almost like a heat map inside the triangle.

It's a clear heat map.

Yeah.

And, you know, the power of that is so much

more clear than trying to dissect a series of sentences or yes, no's or one-to-fives

because there's so much subjectivity in,

you know, well, most of the time the individuals blame, but there are some team blames, so I'm going to put it like here, right?

And then, you know, and it gives you, it gives you such a, so much more of a dynamic sense of of what is actually happening i'm going to give you my spoiler on that one as well because that's one i always use the right answer is the manager's to blame always the manager because

a couple of reasons in from the lean toyota world that i you know grew up in if you fail it's my fault how did i let you down did i fail you in training in in giving you the right ethics the right guardrails the right support how did i fail you in some way that allowed you to make a mistake, to fail, to, in other words, do something that we didn't want you to do?

And how do I now address that in the support I give you?

Because if I blame you or blame the team, I set up a certain culture of blame and fear, and I am to be feared as your superior.

Whereas if I'm vulnerable and fallible and show that, and show I let you down and offer to help, then I show that even I can make a mistake and can learn, and it changes the entire dynamic with the people in the teams.

I want to give you an anecdote on that and this is going to sound like a humble brag.

I don't mean it to be because I've made plenty of mistakes leadershiping so so please take that but we had about 26 people in the company at the time and we did it we were doing an all hands and one of our service representatives had a very vulnerable moment in which she admitted a mistake that she had made that that we knew we knew I mean I knew it had happened I didn't didn't expect her to say it in front of the whole company but she did and she was you know I could tell she was upset and I think she just felt responsible for this thing and truthfully it wasn't that big of a deal I mean it was something we had to fix but but not nothing didn't like bring our business down or anything

and you know she finished what she was saying and I could tell she was emotional and I and I just said

you know thank you for sharing that it means a lot to me that you would be willing to do that but understand that that that wasn't your fault i said we had never discussed that scenario before and you made a decision the decision didn't work out.

But that's my fault and our management team's fault for not having trained you on that specific scenario.

And she just kind of looked in the screen and then we moved on to the next topic.

And frankly, I didn't even think anything of it.

Later that day, I get a phone call from her and she's crying.

And I'm like, oh, crap.

What's you know, anytime you get a phone call from someone on your team that's crying, you're immediately nervous.

And she was like, I've never worked for a company before where I could admit a mistake and not not get yelled at.

And again, I don't, that's through many beats that I got to that moment.

I'm not trying to pretend like I naturally had that because my question is, I had to learn what you're describing.

And

five years before, I wouldn't have given her that answer.

I may have answered differently, but having, you know, gone through enough experiences, I was at that point.

But why does

management respond?

It doesn't feel to me as if it is an intrinsic trait for managers to take responsibility for all the actions and outcomes that come from the team that they are responsible for.

Why do you think that is?

I have a theory of this, and I've sort of, I don't know if it's a thesis, a theory, or just an opinion, it's probably just an opinion, but I think from the cradle, we're trained to win.

We're taught to win at all costs.

We teach our kids to win games, then they go to school and we teach them to win sports.

It's all about winning.

That's what sports all about.

Although people say it's not the winning that matters, it's the taking part.

No, we teach them to win.

You know, don't be a loser, be a winner.

And, you know, even at the Olympics that we've just gone on, you want the gold medal, the silver and the bronze is okay, but the gold is the target, so it's always to win, win, win.

And

so, and then you go to school and you're going to get to get get the best grades, get the best GPA, get the best exam results.

And then when you go to college or university, you know, no longer is a bachelor's a good enough degree.

Now you've got to get a master's master's or an MBA, and hell, why not go for the PhD?

And so we've got this continuous

sort of downer on failure.

Failure is seen as bad.

Yeah, even people like Elon Musk, I'm not the biggest fan of him.

I'm a fan of what he's done.

I'm not a fan of the man himself, particularly.

But he says every time they launch a rocket and it goes up without a problem, they learn nothing.

You learn more from failure than you learn from success.

And that doesn't mean we want to spend a life failing because, of course, we need success.

But I worked for a company for for many years that that saw every mistake as an opportunity to improve and that's why Toyota Make most of the time make the best cars from an engineering perspective out there.

Tesla's proven you can make less good cars and people really want them.

So qualities in the eye of the beholder, in the eye of the receiver, not the giver.

But that's business and that's commerce.

But I think we have this stigma around failure that when we're in an organization and we are seen to have made a mistake, whether we call that a failure or something else, we are stigmatized and fearful of the implications of having made that mistake.

And then you've got the extreme examples like Boeing, nobody would speak out, people actually perished as a result of that.

And you've got less severe, you know, examples of that when you're in your own project, you've written a bit of bad code, you're up against a deadline, you know it's not right, but you just don't say anything, let it ship.

And then three weeks down the line, there's bugs and defects and technical debt and other things building up that you need to go back and fix.

But we need to make it okay and safe to admit your mistakes.

And as you made the point in your anecdote, is that you need to have leadership who can be vulnerable.

It doesn't mean people don't want to see their leaders failing all the time because then you're scared and terrible.

If the guy flying the plane is terrified, you got a problem.

You don't want that.

But at the same time, you need to know that they are vulnerable and can admit that they're not perfect.

Because if they're not perfect, they're your role model, you're aspiring to be them, and you're following their leadership.

So, if they're not perfect, then it's okay for you not to be perfect.

It doesn't mean we all run around, as I say, making mistakes continuously, but we need a way that we can do experiments safely, fail without any major consequence, learn from that, and improve as a result of it.

And I'll give you one more

example, and I talk about this occasionally, and I have to be careful because some of it I get a bit emotional about it because it was quite impactful.

But I still go into factories and plants occasionally.

A friend of mine does a lot of turnaround business and we went into one food production facility where the people there had done the job for 30.

One lady had done it for 44 years, packing frozen food as a living, so not the most glamorous of jobs.

And typically the people who do the hardest work get paid the least amount of money.

So they're working in 50-ish degrees of

factory packing frozen food and nothing too exciting the same eight, nine hours a day in the same conditions.

And none of them had agency and a voice.

None of them really had dignity, a sense of self-worth or pride.

And they were having lots of problems on the manufacturing land, that's why we were there.

And we could see the failures happening all the time.

And that whole thing about

move the authority to the information.

So I installed and-on systems.

And because they're working on food, we put foot switches in so they could stamp on a foot switch.

And I instructed all the people on the line who were doing these mean, you know, these boring sort of

these jobs that are just the same old, same old every day.

I said, every time you see a problem, hit the switch and it will stop the line.

And because they were terrified to do this, but I said, no, every time you have a problem, hit the switch, it will stop the line.

And so they started doing that.

But the engineers who had to fix the line were getting really annoyed about this because they were now being, it was now calling them to fix the line and also pointing out how many times the line was failing and having problems.

And then they would fix it, but they'd restart the line.

So then I introduced the next step, which was don't let them restart the line until they've logged the fault codes.

So there was a whole set of fault codes put on the production line controller, the computer, and they were forced, they were compelled to actually select the appropriate fault that had occurred.

And we'd obviously written out the types of faults that would happen before they could restart the line.

But what this did was twofold.

Number one, it gave the people dignity and self-worth and pride on the line because they could stop the line and now they were valuable.

They were the people helping us improve the line, no longer the people that were the problem on the line.

And to be fair, without those people, that line would never have run properly because they were the people who figured out how to keep it running.

But then the second bit was we drew attention to the problems, so now we could build up a backlog of things we needed to improve.

We now knew what we needed to improve, because if this piece of equipment failed seventy times a day, I think we need to go fix this piece of equipment, not just keep shouting at the people that things are going wrong and the engineers just cobbling it together and keeping it running.

We now had an opportunity to fix things and gradually everybody had a whole different level of self-worth on that line on those lines as a result of that so that's the type of thing but I changed behavior by doing that and in doing so I gave people a different perspective of the value of their work yeah it's the easy way out to say work hard or do your job yeah right that's the easy way out that's the that's the weak leadership that's the weak management

I actually was in I was at a conference one time and I was I was speaking and, you know, I like to sit in the audience beforehand.

And, you know, I heard two business owners, you know, and they're commiserating in the back of the room.

And everything was just like, oh, they're just, if they would just do their job, man, why won't they just do their job?

And I'm listening to these guys go back and forth, not a single solution, not a reason why, just, oh, my people, they just show up and they complain and bitch.

And if they would only just do their job, everything would be fine.

And I'm like,

what a horrifying place to work.

Like, these people must be miserable.

If that is like your commiseration is like, if only they would, they're showing up, they're doing something.

They probably don't even know what their job is 100%.

If this is the case, if this is your big bitch, it just, you know, guys, if you have, you know, and I...

This is incredible stuff.

If you've ever said about your team and anything other than a complete moment of weakness that you backpedal from immediately, do your job,

The problem is most likely you.

It certainly is the culture that you're creating downstream.

Because if they would only do their job, is really my

counselor always says, when you point a finger, there's three fingers pointed back at you.

And this just, this looking in the mirror,

it just doesn't happen enough.

But when it does,

you see, like, like, we had an idea.

I was a different company that I was working for.

I was managing, I was managing all the marketing and sales teams, and

you know, we had a we had an all-company meeting, we were struggling with retention, right?

We just couldn't couldn't figure out retention.

Our numbers were just always lower than where we wanted and where we needed.

And it was actually one of our newest employees who had only been with us for three months.

She goes, Well, we're not doing bop, but you know, whatever it was, I can't remember what it was.

We're not doing X.

And I remember like looking at the Zoom, wherever she was on everyone's Zoom screen, everyone's head snapped to wherever, you know, like everyone was like, like you could see everyone like look at her box like,

oh shit,

we're not doing that.

And then I was like, well, what do everyone think about that idea?

And they're like, we should be doing that.

Well, all right, engage.

Like, let's go.

And if we're not, like you said, and I had never framed it as where the information is, I love that construct as a way of thinking about it.

Like the information is actually at that hands-on the tools

job function, there's so much value to extract that we just don't go down to that level enough.

You know, it's funny because there's a bunch of things I'm writing down and lots of anecdotes I could share.

We talk about, in lean thinking in the Toyota world, we talk about this Japanese word called Gemba, G-E-N-B-A or G-E-M-B-A, two ways of spelling it.

And it basically means the actual place, the real place where the work is done.

And so back to the same example as the factory I was mentioning, the other step I did, there was a bit of a, it's a bit of an urban myth, but it has been shown to be true.

That one of the creators of the Toyota production system, the primary creator, a guy by the name of Taichi Ono, he was known for drawing a chalk circle on the ground, two feet wide, and putting you in the circle with post-it notes and pens.

That's what I'm doing while Ryan's talking, I'm making notes.

And I'm basically saying, stand there, watch.

And he'd walk off for one or two hours and come back.

And you were left there to just make observations and make notes.

So I thought, well, this is a great idea.

So the C-suite came in, this particular

facility,

and we were talking to him.

I said, I want to do

something with you.

And so I took them all out on the factory floor.

They all had the hard hats and the high-vis jackets on and things.

And I drew chalk circles down each of the two of the main production lines, six down one side, six down the other.

And they were far enough apart that these leaders couldn't talk to each other.

And I stuck them in there, and they had special sharpies with metal in them for food detection purposes, and

gave them some post-it notes.

I said, Watch.

And I left them in these circles for just half an hour.

And they were furiously writing things down because they'd never actually stood and watched what their people did,

even though they worked for this company and were the leaders of this company.

And some of them were like financial accountants, the CFO was there and things of this nature.

So he'd never done that job, he was a financial guy.

And I said, Watch.

And this is about leaders going to the Gemba.

and the way we explain this should go with no assumptions to observe to understand and to take the next action or to at least offer to help to take next action and so they did this and then of course the next thing I did was turn the lines off much to the plant managers sort of we never stop the lines comment but I said stop the lines and then I asked the the leaders to go talk to the workers go and have a conversation with them just hang out for another 20 minutes and learn what they do.

And a lot of leaders never ever actually do this.

And then I say in this world of webcams that we now live in, in this hybrid existence, and some of it's an entitlement generation thinking everybody should just work this way.

Now, this in-person thing is so old-fashioned, last decade.

Hey, I'm a boomer, so you know, there we go.

But

I say to them, well, where's the Gember?

How do you go to where the work is done if everybody's working from home?

How do you observe and understand

and support and take the next action when you can never observe the work being done?

And how many of you actually know how you do the work?

Back to this sort of thing: if you don't know how the work's done, you don't know why the culture's like it is because you're never actually a part of the work being done.

And many executives are recruited in horizontally, they're not sort of grown through the company like a lot of family businesses or businesses with you know three generations of family ownership.

And then there's this sort of moving

the authority to the information, that's empowerment.

But people get a bit iffy with the word empowerment now.

So I said, Well, you're giving ownership back to the the people who are doing the work.

Ownership of the decision-making within those guardrails, those enabling constraints.

And the other thing as a leader,

leadership is about characteristics, about your behavior.

It's not about a job title or a position you've been placed in.

You may be a manager, but leadership emerges.

And leadership's at all levels of the organization.

It's multi-dimensional and sort of moves in all sorts of different directions.

But there's a term called followership.

And leaders are only leaders if they attract followers and one of my great tests and and and you'll know this because you we've all got mentors in our lives if they stop paying you would you still follow them so if you stop paying your people will they still follow you so if they leave your company or you leave the company will they still seek mentorship and guidance and coaching and wisdom from you now you're a leader and and the people you were talking about in the event you were at, they were just sniping and bitching and whining.

They weren't leaders.

They just wanted to blame somebody for their own failings or their own lack of leadership characteristics.

Nigel, this has been incredible.

We could go on for hours and I feel like we're barely scratching the surface.

I think what that does is give an incredible cliffhanger for everyone to dig deeper into your work.

Where can people go?

Where do they find more about you, your work?

How do they dive deeper?

I know you have books, you have the flow system.

Where are these places?

Where should they go?

So they can get to my website.

They want to see, learn a bit about me, and that'll link to a bunch of others.

Nigelthurlow.com, the flow consortium, so flowconsortium.com,

and then of course, Amazon for the books.

But if you go to nigelthurlow.com, there's a bunch of links.

We'll link you to all the other websites and the free resources.

It's probably the easiest place to go to.

So I like to finish every episode with a question that I just find intriguing because it's personal to everybody.

I believe everyone has extraordinary inside them.

You certainly are an extraordinary person.

How do you defy ordinary in your life?

You know, I talk to my wife about this a lot and she'd have different comments to say of course, but

I never stop learning.

I never stop, you know, there's the fake Latin saying, you know, illegitim non carborundum, which is never let the bastards get you down.

I won't stop trying.

I won't stop sort of, if I fail at something or I don't succeed as well as I want to, I'll I'll keep learning, I'll keep trying, I'll keep iterating.

I think life is precious, life is valuable and I think there's a lot of things to enjoy out there and I won't stop trying

whatever happens and it's hard sometimes, trust me, I've been in deep despair and doom and gloom over the years but I keep finding a way to bounce back, I keep finding a way to do things and you know life is short, don't leave it till tomorrow.

And somebody asked me the day, what would I tell a 25 year old version of myself?

I was on a different show, and I said, Don't spend all your money, you're going to need it in later life.

So I'll leave you with that bit of wisdom.

Well, Naja, I appreciate you.

I appreciate your time, and I wish you nothing but the best.

Thank you.

Thank you so much.

Let's go.

Yeah, make it look, make it look, make it look easy.

Hey, stand up.

Thank you for listening to the Ryan Hanley show.

Be sure to subscribe and leave us a comment or review wherever you listen to podcasts.

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