If you hadn’t already figured it out, we live in an increasingly complex world. More people. More moving parts. More interactions. More uncertainty. Some organizations, like Toyota, Alcoa, and the U.S. Navy’s Nuclear Power Propulsion Program, have learned how to manage that complexity in ways that have helped them separate themselves from the pack. In The High-Velocity Edge, Dr. Steven Spear decodes the magic and gives us insights into how these “high-velocity” organizations have become who they are. In a nutshell, Spear’s conclusion is, “It is how the uncertainty, the expectations, and the unexpected are managed that separates the high-velocity organizations from their pursuers and proves to be a source of sustainable competitive advantage.”
The results of these high-velocity organizations are striking.
- Toyota’s market cap is three times larger than GM’s, the largest U.S.-based auto manufacturer, despite GM having a fifty-year head start.
- Alcoa’s workplace injury rate is 25% of the average for all manufacturers by one measure and 5% by another according to OSHA data.
- The U.S. Navy Nuclear Power Propulsion Program has had 5,700 reactor years without an accident. Compare that to the number of nuclear accidents in the Russian’s nuclear propulsion program and the nuclear power industry in general.
Here are my thoughts on some of the most important concepts from the book.
1. It’s about the learning.
The book makes one point loud and clear: learning is the differentiator. High-velocity organizations have a different attitude toward learning, a faster pace of learning, and more capacity to learn and apply that learning. “What did you learn?” was the quintessential leader question at Toyota. Another example of how much Toyota valued learning was how they created opportunities to learn.
“Therefore, on days when the lines were not fully loaded, they deliberately overloaded one, specifically trying to discover its failure modes.”
This example reminds me of chaos engineering at Netflix — deliberately (and safely) breaking things to see what happens and learn how to make systems more resilient.
2. Deal with failure immediately.
High-velocity organizations deal with failures, errors, mistakes, and “the unexpected” as they happen. They don’t ignore them, they don’t create work-arounds, and they don’t just “deal with it.” Spear puts it this way.
“In high-velocity organizations, problems are swarmed at the time and place where they occur and by the people who are affected.”
One reason for this behavior is how these organizations view failures: they are opportunities to learn about the system. (There’s that “learning” theme again.)
“For the leaders, the daily chatter of imperfect systems is not unavoidable noise to be griped about or ignored; it is a stream of messages telling them where they can and must improve.”
The high-velocity organizations see failures as opportunities to learn and improve. They want to learn what happened, why it happened, and what can be done to avoid it happening in the future. They believe what Gene Kim and his co-authors said in The Phoenix Project, “Improving daily work is even more important than doing daily work.”
Another reason for dealing with failures as they happen is the realization that, “Information is not only contextual; it spoils.” The longer you wait to address a failure, the less accurate information you’ll have available about what happened and you’ll limit what you learn from the failure (and hence, limit your ability to improve from the failure).
So hold your retrospectives and postmortems quickly, frequently, and timely.
3. Be intentional.
There isn’t a lot within high-velocity organizations that happens by accident or goes unexplained. They are rigorous about using the scientific method. They’re intentional about what they’re trying to accomplish, how they will go about accomplishing it, what they expect to happen and why, and creating a means of detecting when what they expect to happen varies from what actually happens.
“High-velocity organizations don’t like anyone to start work, whatever its size or complexity, until the organization has (1) specified the most effective approach that is currently known for achieving success at that task and (2) built into that approach the capacity to detect failure when and where it occurs.”
The second part sounds a bit like automated testing and TDD, doesn’t it? We continue to see parallels between the worlds of manufacturing and technology.
4. Get better at getting better.
This may be my favorite takeaway from the whole book. High-velocity organizations not only get better at what they do, they get better at getting better at what they do. They’re playing a different game than the rest of the pack. While the rest of the pack is busy finding ways to get faster, reduce waste, and increase efficiency, the high-velocity organizations are busy improving their ability to solve problems and build better problem-solving skills in more people — which leads to getting faster, reducing waste, and increasing efficiency. Boom.
High-velocity organizations have a different, higher purpose for process improvement than other organizations.
“The point of process improvement is to improve the participants’ process-improvement capabilities by coaching them as they try to improve the process.”
Or more simply put, “Improve the process to improve the people.”
People over process. Agreed.
5. There can only be one.
I’m borrowing a line from Highlander to capture this relatively obscure point from the book. If all you do is imitate the leader, it means the best you can be is a fast follower. That’s certainly a legitimate business strategy, but it’s not one that creates a sustainable competitive advantage. Ask GM about its experiences with the NUMMI plant and what lasting effects that had on its business since the start of that joint venture with Toyota in 1984. Just a reminder, Toyota’s market cap is three times that of GM’s.
You can improve the performance of your own organization by adopting the learning practices of these role model high-velocity organizations. Don’t imitate how they do what they do. Instead, imitate their principles, mindsets, and attitudes. Those are what create high-velocity organizations and will help your organization separate itself from the pack.
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[…] of Management, Spear is a senior fellow at the Institute for Healthcare Improvement. His book, The High-Velocity Edge, has won the Philip Crosby Medal from the American Society for Quality in 2011. He is an […]