Our guest, Doug Kirkpatrick is an organizational change consultant, TED speaker, executive coach, author, and educator.
He recently released his third book, The No-Limits Enterprise: Organizational Self-Management in the New World of Work, an Amazon bestseller with Forbes Books, and is Founder and CEO of D’Artagnan Advisors, helping companies embrace the future of work.
Living Room Conversations: Brave Leadership – The State of Self-Management with Doug Kirkpatrick
Good morning good afternoon good evening wherever you may be watching in the world and today Millions watching at home my name is Ian crane I’m Catalyst at life sciences and welcome to living room conversations really cool format that we have here if it’s your first time watching living room conversations is a raw unedited casual conversation with leaders in the self-management and new ways of working space today I’m extremely grateful and we’re lucky to have a true pioneer of new ways of working in self-management and organizations we have and please join me in the living room Doug Kirkpatrick Hi Ian pleasure to be here great to have you may great to have you um if we can just start with a little bit about you Doug um can you tell us a little bit about yourself and uh and a bit about your history just to give everybody a bit of context if that’s okay sure so um in uh getting out of college in the 1980s I was casting about for a job a way to make a living and I was very fortunate to meet a young entrepreneur named Chris roofer who was starting uh state-of-the-art food processing company at the time and uh was very fortunate that I was able to join his team and uh together with a core group we started a little high-tech uh High throughput food processing company here in Northern California and that was quite successful financially made great product and great customers is very profitable and up to 100 million dollars in sales or so and along the way we just started collecting observations so uh we had defaulted to the traditional organizational design of the command and control so our founder Chris was at the top of a pyramid and then we had a layer of managers of which I was one and then we had a layer of Supervisors and then we had a layer of coordinators and then we had everyone else in the company that did the actual work and we just started noticing things about this system that didn’t seem to work real well so uh for example um we got zero value or negative value out of the structure because we had an open door policy and so anytime there was a challenge or a conflict uh people always went straight to the top of the pyramid um we started realizing that everyone came through the gates to start work in fact was a manager in their own personal lives so they were making gigantic life-changing decisions somehow on their own without a boss And yet when they came to work they needed multiple layers of bosses and that didn’t seem to make a lot of sense so in 1990 uh Chris went off to start a new company Morningstar and I left and went to join him there as a financial controller and part of the core team at Morningstar and so uh when we were there in March of 90 we were working out of a tiny little farmhouse on a Dusty Canal Bank in Northern California we had a core team of 24 people and uh one day Chris came into the house and said let’s have a meeting of colleagues and talk about how to organize and and we said sure that’s fine so we all got together uh in the evening uh in a construction trailer out on the job site we sat around in a circle and um Chris handed out a document it was titled the Morning Star Team principles and essentially the principles boiled down to two things first of all don’t use force or coercion against your fellow colleagues and secondly keep your commitments and do what you say you’re going to do and uh we discussed and debated and realized that these principles were pretty much the foundation of all law everywhere in the world uh so every law gives assault and battery and theft and burglary and kidnapping murder all the rest is based on the principle of non-use of force and then civil laws based on the idea of keeping commitments contract law would mean nothing if parties didn’t keep their commitments to each other and so we adopted these principles as pretty much the entire governance of the Enterprise and when we filed out of that trailer we were a self-managed Enterprise and so we had a lot of work to do we had a factory to build we had hundreds of contractors on the job site 24 hours a day seven days a week instructing and fabricating and Welding we had uh to hire hundreds of people to operate the factory and drive the trucks we had vital equipment arriving on Ocean cargo Freighters out in the middle of the Atlantic Ocean that needed to go through the Panama Canal and we had a lot of work to do and so uh finally on July 16th of 1990 we turned on the factory and it was very successful we made about 90 million pounds or roughly 45 million kilograms of industrial tomato concentrate for the world market and pretty much changed the cost structure of the entire industry and we did it without a single human boss no bosses no managers no supervisors no coordinators no titles no command Authority uh based entirely on the principles of self-management and so the company grew and so we expanded operations up and down the supply chain customers love the product um we had remote warehouses across North America um we expanded operations toward the field in terms of pre-existing Trucking harvesting transplanting and farming built another Factory and then a third Factory uh expanded into new products in the course of that expansion uh and scaling up became the largest tomato processor in the world and an adventure to say that everyone in North America is eating their product it goes into everything you can think of in the grocery store from spaghetti sauce pizza sauce barbecue sauce ketchup dressing uh and thousands of other products and we export worldwide for Morningstar and so um we did it all without a single human boss no bosses no managers of other people no titles no command Authority and so uh people became interested in this story um I ended up helping to start a business unit we called the Morning Star self-management Institute dedicated to promoting the principles and practices of self-management with my colleague Paul Green Jr and our founder Chris um ended up writing a couple of books the No Limits Enterprise and Beyond empowerment speaking writing traveling all over the world there was tremendous interest in this a lot of it was driven by an article written by Gary Hamill was the cover story in the December 2011 issue of the Harvard Business review where he described morningstar’s unique self-management philosophy and so uh it’s been quite a quite a journey uh a lot of fun and uh get to meet people like you Ian congratulations it’s a conversation so that’s what I love to do it’s an amazing story and a few things you mentioned just really stick out to me I mean the whole governance structure of two items don’t coerce don’t force and say what you’re gonna do I mean that can be it’s the Simplicity that’s glorious now a question I might have obviously there’s massive benefits and challenges to this right you’re on The Cutting Edge the crest of this wave and there was no real if I’m not mistaken sounding board sparring partners for you at this stage you were sort of not making it up as you go along you had the plan but how my first question I guess might be how did it how did you manage to stop it from delving straight into chaos and disorganization you know with with so much Liberty and no bosses how did you manage accountability within the organization as it grew it’s uh just a quick question yeah so um I would say that at the moment we adopted self-management uh it did not change uh our uh culture or a way of operating uh in one iota no change we didn’t go from an existing state to a different state as a result of the change we were a small core team in a startup we were building a huge Factory in 1990 it was a 27 million dollar Factory it would be double that today of course and uh we were working probably 100 hour weeks trying to get this Factory up and running in the spring of 1990 as a team a coordinated team working together we didn’t have any hierarchy when we adopted self-management we were just trying to get the factory built so I would say it didn’t change our lives really at all um so um we we built the factory we operated the factory we operated for several years with this very small core team basically and of course a few people left and other people came in but it was a very tight tight-knit small team um it wasn’t until we basically doubled in size in 1995 by building a second Factory which was a fair distance away from the first factory it was uh uh 200 uh not 200 miles but it was a two and a half hour drive away uh to the second Factory and um essentially doubled in size and were able to successfully transplant the culture by bringing people who were familiar with the existing culture and and having them participate in the startup and the construction phase but realized that we needed uh to develop more sophisticated coordination methods uh by in between colleagues operating in in the different factories and so that’s when Chris introduced the idea of a colleague letter of understanding which is essentially a contract uh buying between colleagues with whom one has a working relationship perhaps a handoffs in a business process perhaps working side by side in the same business unit uh close colleagues with whom one would need to maintain a high level of detailed communication so these colleague letters of understanding uh uh were developed and we we promoted those in uh 1996 I want to say uh and uh so we operated for six years uh without having this instrument in place uh just relying on stigmergic uh indirect uh verbal and written communication uh as our coordination mechanism but the colleague letter of understanding uh was a more uh formal document uh essentially identified the the uh who what why where when and how work so it started with a commercial purpose one’s personal commercial Mission why are you here uh what does Excellence look like in your role how does what you do support the activities of your fellow colleagues and the mission values Vision principles of the Enterprise um and then what are the services you’re providing so specifically what what is the value you’re creating here what’s the scope of your decision making Authority call those decision rights um who do you connect to uh we found that most people were connecting with between 7 and 12 of their fellow colleagues uh that seemed to be the number that made sense in most cases um what are your goals um uh you know what uh where and where and how do you work what what are the resources required um how do you handle conflict those kinds of things um so all those elements were incorporated into these contracts uh called a colleague letter of understanding and that became the basic instrument uh that’s still in place today it’s unbelievable and it’s it makes so much sense but to sort of see it in those stages that you’ve described so interesting to me a little bit about myself I come from a corporate structure and and these types of thoughts and these types of of things that you’re asking people you know it’s just really novel and and this all obviously 96 pre-internet so it’s kind of you know that kind of organic growth kind of thing that you’re sharing um were there any specific challenges or benefits to to kind of doubling in size when you say 96 and you double I imagine not just the communication between the two sites not being close is keeping everybody on the same page that makes sense you know the culture translates um when you and was there any discussion or any math method to to keep the communication between the sites wide open um how did that work for you guys I’m just curious yeah it was very organic um you know we had we had um basic cell phones at the time and and uh uh faxes and uh um you know we basically just maintained communication the same way we had within the initial first factory uh and even before that and so um it was uh you know uh human beings uh detecting needs in the environment uh whether those needs were in the market or in the supply chain or um uh in financing or sales or whatever it happened to be uh and then communicating those need and getting help uh from others uh when needed to execute on uh one’s personal commercial mission so um very very organic um not directed or controlled by anyone there were no rules about uh who one could talk to so in a giant Network organization like this the one of the Beauties and and benefits is that people can communicate with anyone else in the network at any time about any subject um around which they they need help or around which they can offer help to others so it was uh it was quite beautiful in that sense and and uh natural and people uh reached out to whoever um they needed to talk to uh to accomplish whatever they needed to get done and it was uh very organic and and uh worked quite well and it still does so that’s you know very much the task in the business side of things which I totally appreciate but that what really struck me was I looked into Morningstar and and your history a little bit nuggets it’s this culture that really sort of takes my breath away the sense of belonging that everybody at Morningstar seems to possess this the same word kept coming up every time I saw I’m proud to work for this company how were you able to Foster that across multiple sites and and you know was it when you’re hiring is it hiring people based on the cultural fit or the document you mentioned plus obviously abilities and capabilities that culture I think is something that’s really special how are you able to sort of foster that and grow that as you scaled up and doubled in size and this kind of stuff and making everybody feel that sense of belonging it’s what strikes me personally well I think people have a natural gravitation toward Freedom um people don’t like to be controlled or told what to do or a given artificial constraints that inhibit them from uh you know being creative and and fulfilling their their purpose and and meaning in the world and so we tap into that uh at a very direct level um culture is very important uh of course uh one of the ways to maintain and propagate culture is to identify hybrids so Edgar shine as the great culture Guru who sadly just passed away recently but uh he wrote a book called the corporate culture survival guy and uh he’s very explicit about the benefits of finding and identifying hybrids people who understand the current culture and the the good uh beneficial aspects of current culture and are able to bridge uh to the Future and and uh embed that culture uh and new colleagues and and new locations and new sites uh and to sort of propagate it uh in new areas so I think we took full advantage of that philosophy and wasn’t
(18:53) necessarily uh based on that on research but it just seemed to make sense at the time uh which is you know bring people up to new uh construction sites new startup sites who understand the existing culture and can share that with the new hires uh and help them understand it and get up to speed really fast uh I think that worked really well worked extremely well and so that’s one of the secrets of propagating the culture for sure in hiring people uh it’s not so much a matter of hiring for cultural fit as it is hiring people who can be adaptive so we want people who are flexible uh adaptable able to uh work in you know any culture and and now that you’re in this culture we want you to be able to adapt and and transition from uh perhaps a a former employer who is based on command and control to this new self-managed environment that’s excellent no it makes perfect sense that flexibility is something that um I see in you know certain colleagues and other people that I run into and talk to and you’re either are flexible or you’re not and and to to be in that space is is very very impressive and well identified um in that though what kind of trust and transparency for example it’s it’s it’s a no rules it’s a connect with whomever you choose kind of set up and and this is self-management right I don’t think I’m saying anything that anybody doesn’t know but but in your particular case trust and transparency seem to be real cornerstones of this this entire thing and and how did you ensure kind of in your setup and your leadership role that trust and transparency Rose to the top is was it a challenge or was it something that came quite naturally to you and the other leaders in your in your setup [Music] well on the the self-managed world of Morningstar and I presume other radically self-managed environments um it’s very much a concept of uh earning Trust so trust isn’t something you impose or just uh stir up in the kitchen and and serve to people it’s something that individuals learn and earn uh it’s the currency of uh accountability and respect uh in the workplace and one earns trust by abiding by the second uh underlying principle of self-management which is keeping commitments so keeping commitments is a huge deal uh it is the distinguishing factor between those who can be trusted and those who can’t and Free Will means that we always have a choice about whether or not we keep commitments making commitments is a serious obligation it’s it’s essentially creating a contract with another human being so if I make a promise um for example I will deliver a sales report by two o’clock on Thursday I’m expected to keep that promise and if I can’t keep it it’s incumbent on me as the promise maker to renegotiate the commitment in advance uh it’s not okay to just not deliver uh and it’s not okay to uh just call ahead of time and make excuses um so excuses are not worth anything but we understand life happens so it’s okay to renegotiate commitments based on on reality and circumstances that’s totally okay but it should be done in advance and uh commitments are serious obligations now the calling letter of understanding is is a contract and it’s contains commitments now these are long-term recurring uh continuous types of commitments uh for example to execute a certain business process or to be responsible for certain information but uh commitments that are made in passing verbal commitments uh that are short-term ad hoc uh commitments uh made verbally between colleagues of passing each other in the hallway those are equally serious those are very serious commitments as well and and those deserve to be fulfilled uh and again if if something comes up we expect colleagues to renegotiate those commitments so this is essentially uh the the idea of contract uh being brought into everyday exchange buying between colleagues and that’s really the social infrastructure that supports self-management and that’s what builds trust so to the degree one keeps commitments one earns trust and Trust elevates uh throughout the organization uh to the degree one does not keep commitments uh then trust uh decreases and in particular decreases for that particular individual who’s not living up to those expectations it’s it’s so interesting to me as an observer just seeing how everything’s so connected right everything is goes back to this flexibility of work-life balance and then understanding and communication and ownership of certain commitments and and the natural sort of inside out building of trust and and it’s remarkable to me and and I’m really grateful to have the chance to talk to you about this because you know I feel like this is how humans should live their life to be perfectly honest you know don’t like cheat and steal say what you say say that do what you say you’re gonna do now something you mentioned earlier about that hundred hour week and and committing to getting this Factory up and running and stuff was there ever a time there where that work-life balance wasn’t quite right for you obviously it sounds like it was a hectic time and then growing forward as the as the company grew and as your leadership skills grew and as everybody kind of grew in this situation together um how did you sort of sort of balance that work-life balance and ensure the well-being because I know this culture part is a huge thing for you guys and and if you look at any morning star videos on YouTube everybody again that word proud kind of comes to mind so you were doing something right but it’s how is that well being established and that understanding is it an empathy thing is it a human thing I mean how did you guys sort of grow this balance that I feel so many companies are missing at this time yeah so I think uh the balance is very much uh a matter of exercising one’s individual Free Will and freedom of choice uh and so in my case uh in the case of where core team has started Morningstar um we understood going into the construction phase that it was going to be 100 hour weeks for a while uh that was that was clear um so we had no Illusions about that and uh accept and embrace that for that period of time and that period of time basically was um early 1990 through the production season which ended in roughly October November of that year um and so that was uh that was our choice I mean we didn’t have to embrace that choice but we did on our core team uh but then the kind of the beauty of the industry is that everything slows down after the uh harvest season which ends every year roughly the same time October November uh and uh most people take you know two or three weeks off uh production colleagues had four weeks of paid vacation uh and so um the reward is the off season uh so it’s very very cyclical that way um but uh in terms of of work-life balance uh it is a very much a summer focused activity uh in in harvesting and processing uh raw agricultural products and so uh people do make the trade-off of you know kind of giving up their Summers uh in order to have more time off in the off season um as an admin uh Finance person uh I didn’t always have the luxury of of getting time off in the off season that’s when we had to negotiate Bank agreements and insurance contracts and try and customer contracts and things so uh it was more a matter of uh finding ways to individually balance work and life uh and in 2002 I I chose to uh leave the company as a full-time colleague uh and embrace a Consulting lifestyle where I’d have more control over my time and hours um and have my Summers back because at that point I’d already been in the industry for 20 some 22 years I had a growing family and I wanted to spend more time with them in their time off and so that was a conscious Choice an exercise of free will have to work quite well for me and everyone has the freedom of making those kinds of choices as well uh in whatever way works for them we’ve got the morning Stars had several colleagues who’ve spent their entire careers in the food processing industry and have just embraced that that lifestyle and it’s worked great for them so uh and it always comes down to individual Choice individual choice and Free Will so before I think maybe we go on some more about your philosophies around self-management and the future of self-management the current state and future I should say my final thing and and I’m I’m semi proud of myself and I love this new self-management and environment that I’m working in with life sciences I’ve just taken on my first internal role as tension master um and this type of thing I feel is extremely important these conversations are an opportunity to release so much great energy and to Harbor these types of conflicts and tensions it’s not helping anybody it’s like any relationship right so um the final thing I guess we can talk about Morningstar before we got more into you Doug is how how was the tension and and the conflict management handled in this burgeoning setup that you guys were living in was there a method or anything specific that were you you were using or can you explain if you have anything there yeah so um from from day one uh in the trailer when we adopted self-management uh Chris had proposed a method of resolving conflict uh it was called uh I think at the time it was called uh resolution of disputes or something to that effect um but it was a very simple uh three-step process a four-step process so um any time uh any uh colleague Morning Star had a problem uh with another colleague that that needed resolution uh it was incumbent on that calling to approach directly approached uh his or her fellow colleague and uh make a request for change now it could be uh that um someone detected a a performance problem you know not not performing up to expectations or maybe it was even an ethical issue of some kind but people were expected to directly approach fellow colleagues and directly request change that was step one step two was uh if if the person agreed with the request for change then and then great you’re done uh basically you you have have an agreement you move on uh but if the person really didn’t accept uh uh one’s request for change then uh step two was that the parties could bring in a third colleague it was it would serve as a mediator whose job was just to listen to both sides and offer their best advice uh and see if they they could resolve it at that level and and if that worked right um but if that didn’t work uh then uh the third step was to bring in a panel or a group of mediators uh fellow colleagues uh whose job was the same as the initial mediator is just to listen to both sides and offer their best advice and see if they could work it out um so if that were they’re done but if that still didn’t work then the fourth and final step was to document uh the difference in writing and submit it to the president of the company the legal president who’s Chris roofer uh who would serve as an arbitrator and to make a a final binding determination uh on that request and so that was the mechanism it still is today um it’s uh it’s not new it’s thousands of years old in in essence the basic structure uh it’s uh depends heavily on what some people call organizational adulting which is just expecting people to behave like adults and and have conversations even if they’re not comfortable conversation right um and uh and that’s what it was now a few years after uh we introduced this uh we added the idea of a an ombudsman okay uh who could serve as a private confidential advisor uh to one of the parties uh because we found that people were not always comfortable in fact were quite uncomfortable uh directly approaching fellow colleagues and asking for change naturally and so uh getting advice if I don’t know this other person that I want to approach that well maybe I can talk to a confidential advisor who knows them better and get some advice on how to approach them uh that kind of thing so that’s still in place as well but that is the mechanism and uh it does put uh uh the burden of uh resolving differences on individual agents in the environment uh it’s been renamed now it’s called gaining agreement uh so it’s got a more positive spin on the name but uh it’s the same process and it depends heavily on people exercising uh their agency and autonomy and and Free Will and courage uh in directly approaching each other and and getting things worked out beautifully explained thank you Doug I just want to point to the uh to the comment section if we can take one from the audience if that’s all right Rosanna thank you for joining us today Rosanna asks it’s been a really challenging time for for Rosanna and her company to establish self-management the most difficult part which is something I actually struggle with in my day-to-day life as I learn and grow is is is this sort of people waiting for someone else to begin in an initiative rather than doing it themselves
(35:53) um her second comment to just follow up is a question to you Doug maybe could you share one of your biggest challenges and what you did about it now we know about rosanna’s what was perhaps the biggest challenge and and the resolution with from from your side goodness one of the biggest challenges um so uh I love questions about initiative because the self-managed environment that we experience at Morningstar depends heavily on individual initiative and that that is a huge uh opportunity that’s a huge value it’s something we look for in hiring that’s something we cultivate assiduously in self-management one of the biggest business challenges that I’ve ever experienced was um uh the the state of California sent uh sent me an invoice one day for two million dollars and uh was they were trying to collect sales taxes on our shipping containers our bins so tomato paste goes into uh three thousand pound uh a ton and a half bins that are made of plywood uh and and the company spends millions of dollars on these bins uh every year and the industry as a whole uh spends Millions more on these containers and the state of California decided that they were going to reinterpret the sales tax law to um to charge sales tax on these bids which they’ve never done before because it had always been exempt as as food containers we’re providing food to the world and so uh so I just looked at these invoices and said I I can’t solve this alone I’ve got to get the entire industry involved and so um sent letters to uh competitors in the industry to attorneys to trade organizations to government officials uh and call the meeting and this this meeting sort of catalyzed this uh Collective uh effort uh to restore our understanding of of taxation of food containers wow uh and it took about three years but we got finally we got the governor in the state of California to sign a bill uh restoring the original interpretation of the law the regulatory agency changed their regulation and and we got our invoices uh zeroed out and so the whole industry benefited and has benefited uh from this sort of uh challenge that we experienced but we never would have gotten the results that we got uh which allowed us to invest uh those profits that otherwise would have been taxed away into creating better businesses and feeding the world we never would have gotten that result uh had I don’t believe uh had I not taken the initiative to go out and bring people together across the industry and it’s not really about me it’s just about recognizing the opportunity taking some initiative and letting the collective intelligence of the group sort of catalyze a solution uh and this me being able to step back and and let this unfold was uh was a real fun experiment in self-management and self-organization yeah it sounds like you almost created this network of All-Stars to you know re-establish this you know we to overcome the bureaucracy and so how do you see that I know you’ve mentioned before in the past that networks not bureaucracy um could you explain a little more what you mean by networks not bureaucracy and the benefits they’re in it’s interesting to me yeah absolutely um what I might be able to do is show you uh the org chart of Morningstar so this is this is morningstar’s org chart unbelievable beautiful and uh this is uh derived from taking the colleague letters of understanding which are uh in a digital form and giving them to a computer lab at the University of California Davis where they projected them and the relationships between people uh in three-dimensional space and and pick that picture and so uh if the picture were a time lapse movie it would be in constant motion right because people negotiate and renegotiate their roles from responsibilities so this is uh this is a network this is an example of a network uh free-flowing adaptive responsive network uh it’s very different obviously from the traditional org chart that that I described when we started our first company the pyramid uh in which one and two which most companies cling today uh unfortunately but um that’s how we achieve the adaptability in the collective intelligence and and it’s a very dense Network and it looks a lot like a spider web and if you think about spiders spider silk is five times stronger than steel by weight so it’s a very strong robust resilient network uh if a couple of people were to leave uh it literally would not matter because the other members of the network would quickly fill in roles and responsibilities and reallocate as necessary um and uh it’s just a very strong uh resilient Network that’s allowed it’s what a loud Morning Star to grow from zero to become a billion dollar company with thousands of colleagues and the largest tomato processor in the world with multiple locations and all without selling your souls you know what I mean it’s a very very beautiful success story um perhaps we can field one more from the uh from the the comments uh guest watching uh George Labrador is with us hi George thank you for joining very much um George well he’s got two points I’ll start with the second one if that’s okay for the back office guys but uh but George mentions that he’s a got an obsessive compulsive personality right so in your experience does this make a bad candidate for self-management I probably start by saying no I think those are the skills as long as you focus them that makes for an excellent candidate I’m an eternal optimist how do you feel Doug about that uh if you can see it on our screen yeah I can see it and um you know maybe the answer is to find an organization to work for where no one no one tells you what to do so that you uh you’re free to be as creative as you as you wish um bad candidate for self-management I actually don’t believe there are any bad candidates for self-management I believe everyone uh in their heart of hearts is already a self-manager we already make life-changing decisions without a boss all around the world uh without managers telling us uh who to date who to marry where to go to college what to do for a living whether to buy a house or a car have a dog we somehow make these decisions on our own without a boss we’re already self-managers so business and organizations just need to recognize that reality and then create systems of organization that allow people to work together and coordinate together without the burden the cost uh the the anxiety uh the power structures of traditional bureaucracy and hierarchy that’s a great answer and if I might stick with George and this is something you know I’ve spoken before uh Doug of course but I’ve never heard this story he mentions uh you have an awesome story that you colored with two different colors and that’s an inspiring story does that ring any bells for you I’d love to hear if you have a moment to share that with us and thank you George for bringing that up it’s a it’s a great prompt uh so so uh the very the very first day first day of first grade uh I’m six I’m six years old it’s my first day of school in my entire life uh the very first assignment the first thing in the morning uh the teacher uh and bless her heart I love her to Pieces Mrs dude and I still think of it she was great she she hands out an outline a little outline of a buffalo a bison and she she gives us the instructions we’re to take out our crayons and color the Buffalo Brown well I I grew up in the state of Montana uh I I I’ve seen Buffalo um I grew up in the west and so Buffalo were not like new to me I knew what a buffalo looked like and I I believe that there uh their heads and their their the fur around their uh shoulders uh was actually black and not brown and so I I colored the front of the Buffalo black and I covered the back of the Buffalo Brown and I I and she was she was uh nice but she said I I really didn’t do what I was supposed to do I failed the assignment so I literally failed the very first assignment on my very first day and my first morning of first grade uh you know life was not looking good rough start man it’s a tough start but uh you know but I I kind of was thinking well why shouldn’t I be able to you know why should we not be able to be creative you know and and use whatever colors we wanted and so uh it started to feel that tension between Authority and creativity uh early on that’s amazing very first day six years old and a fantastic story and thank you George for bringing that up oh that’s beautiful um it kind of brings me back around to my next point that I think we’d probably like to touch on and this is something that I’m starting to see a little bit more in myself is this just that creativity the painting example is a fantastic example but making work play you know what I mean that kind of old trophy it’s like work as play if you enjoy what you do it’s not work it’s it’s play and and how were you able to sort of capture that uh childhood Vibe you know what I mean to to bring into work it seems like you know and now perhaps even putting your Consulting out on we don’t have to talk about Morningstar in the past but like how would you recommend to somebody perhaps in the future how did they make that transition from these structured setups and organizations and being stuck in your box to to enjoying and being more creative and and having work be played how would you go about that then yeah so I think uh it’s important for people to have feedback mechanisms and feedback should be um very close to real time uh people should get very accurate timely uh performance feedback not from a boss but from systems that tell them how they’re doing so if I’m a forklift driver uh what is my uh put away rate uh uh and perhaps Modified by my safety record so uh you know how well am I performing in in my role uh it’s like a a a taxi driver you know I I only make money when I pick people up and deliver them to a destination so how am I doing on an hour to hour day-to-day basis uh so we need those kinds of feedback mechanisms as close to real time as possible so that people can can play the game of work uh themselves and compete against themselves as well as other people uh we really believe uh at Morningstar and the principle of competar which is the Latin term for competition which is not fighting or or you know uh you know trashing somebody else but it’s about learning and seeking together literally that’s the definition so we want to have systems that give us that kind of instant feedback upon which we can act uh close to real time make real-time course Corrections and improvements and and keep getting better so those kinds of systems are crucial uh you can’t uh you can’t play games without keeping score right um so games severals games have boundaries uh games have scores and so uh we have to be able to have uh score keeping for people to play the game of work and that alleviates the need for supervision and management and bosses and and all the rest and uh so that’s that’s really the heart of it Morningstar these these metrics are called Stepping Stones because they are considered Stepping Stones toward perfection right so Morningstar benchmarks Perfection it doesn’t necessarily Benchmark other sectors other Industries other competitors but at benchmarks Perfection so Perfection for a cost metric is zero Perfection for an efficiency metric is 100 Perfection for a quality metric is zero defects so um benchmarking Perfection uh tends to unlock Blue Sky Innovation thinking um maybe I can eliminate the steps in process and I don’t have these costs at all so I can get them to zero in some cases so um Benchmark marking Perfection Stepping Stones toward Perfection are are the term for metrics at Morningstar and everyone who works at Morningstar uh identifies uh and acquires these Stepping Stones so that they can measure their performance and as close to real time as possible and that those systems are always being worked on always being perfected and developed to give people that that self-managed sense of freedom to work on their own development I love it it’s like playing a video game setting a high score and trying to beat the high score you know what I mean just Improvement and Stepping Stones uh is a beautiful way to uh to verbalize it to be honest it’s it’s it’s super important it strikes me as being ever so slightly traditional to have these you know these feedbacks uh but since they’re from colleagues and not from this authority figure in the sky and to get authentic feedback to be able to improve I mean chef’s kiss absolutely beautiful and uh and thank you for sharing um if we can just go maybe back to the chat for one more from Matthew Turner hey Matthew thank you for joining us today says he’s enjoying the talk and uh how did being featured in Reinventing organizations help Inspire Morningstar and help you uh spread the message of self-management and if I may just before you answered Doug I found this extremely interesting that you and your guys were an inspiration for the book that ended up kicking off this entire wave right so you predated Reinventing organizations and you were a case in that in that book um to Matthew’s uh comment how did this sort of uh did it Inspire and help you spread the self-management by with the success of uh of Frederick Lulu’s book well uh Frederick’s book um uh certainly uh put the idea of self-management uh out into the world and and so um but so did the uh Harvard Business review article from Gary Hamill uh and uh so I’ve written a couple of books as well but other people have as well and uh so there are lots of organizations and conferences and and uh thought leaders out there they’re speaking and writing and Consulting around these topics uh I could start to name names but there’s too many to to list uh really great people including at life sciences and so um Frederick’s uh book sort of turbocharged interest around the world uh it absolutely did uh Frederick came to Morningstar uh he engaged with us at a self-management Institute event uh that we put on for uh the public uh and uh and then Reinventing organizations came out shortly after that uh certainly turbocharged interest around the world in different ways of working uh and for that uh we’re all grateful to Frederick I’ve been fortunate to to share a stage with him uh here and there occasionally uh and uh he’s a fantastic Advocate uh for the the benefits and uh organizational self-management fantastic guy and does a great job with his uh writing and speaking tremendous now really cool stuff and and I mean just uh personally I’m just very grateful for everybody who’s brought it this far because I’m actually reaping the rewards daily at the moment so um feeling just renewed refreshed energized in in my role and it’s all thanks to the hard work that’s been put in before so um perhaps one final question I think we’re about five minutes to go Doug so if we can just wrap it up and it’s something that I think Rosanna spoke on earlier they’re struggling to get across the the bridge between you know a traditional setup and self-organization so I just have my final question it’s what advice do you have for leaders who are interested you know if they’re interested in adopting self-management practices is there any advice to kick start that get that ball rolling and kind of overcome the the doldrums in the middle I know that uh do exist in certain efforts foreign advocate of tapping in to the collective intelligence of a group a team a company uh set of leaders um a very much Advocate um if you are a Visionary leader who is interested in pursuing this path um I very much would encourage you to invite other leaders into an experience you could call it an obeya of collective intelligence and open social Technologies and to think about uh how you can what you want your future organization to look like and how you can possibly get there um this kind of uh an experience would probably uh involve the top uh 50 or so leaders of a larger organization or the top all the leaders perhaps of a smaller organization uh probably uh in entail two or three days it would be uh an experience where the Visionary would invite people to share their best ideas and some kind of a a keynote uh to kick it off and then we would go into some sort of uh set of exercises facilitated open space or World Cafe uh where we collect the best ideas uh and we would crowdsource experiments uh experiments are a great way to learn you can crowdsource experiments from a group for which individual leaders can take well responsibility and accountability for monitoring and measuring the results um you can have uh uh kill the experiments that don’t work feed the ones that do work uh continuously crowdsource new experiments as you go uh but a continuous process of experimentation and learning is a great approach uh it probably wraps some assessments and coaching into that uh initial experience and uh it would uh invite people to um tap into the larger organization and crowdsource experiments from a larger organization as well and at some point the organization needs to decide is this a go are we really going to pursue self-management or not and if you do uh then there’s a point at which um you’ll need to create contracts like Morningstar created the colleague letters of understanding and what do those contracts look like uh and how do they adapt to the culture of the organization there’s some kind of initial experience some kind of portfolio of experiments that go forward from that and some kind of a decision on the part of leaders that yes this is something we want to pursue and so we need to get real about creating agreements around this journey forward it’s phenomenal and practical and sage-like Well Done Doug honestly that’s really really Illuminating for me as a as a new learner on this journey to hear sort of that high level approach is fantastic so thank you for sharing um with just a few minutes left I believe if uh we have a few events to promote on our uh on our social media channels so the first one if you can see that life science Performance Management is a German speaking event that QR code will get you to Eventbrite where you can purchase tickets to the event in German and I believe that’s for Banking and insurance leaders please don’t hesitate to sign yourselves up um should be really intriguing that’s what our colleague Claudia from Life Sciences and the following to living room conversations you can see on your on your screens there may the 31st and June the 14th will be our next editions of this type of uh unedited raw conversation and I think on that note Doug any final thoughts from you is there anything on the top of your head you’d like to share and like before you do I’d just like to really say thank you for your time today I’ve thoroughly enjoyed speaking with you and I’ve learned a lot so uh anything from you to wrap up I’m grateful to you Ann for uh facilitating for asking the great questions for doing such a great job uh if I’m not mistaken this is your first time uh moderator uh for this event so great great work on your part and a lot of gratitude toward Life Sciences as well uh there you all are doing fantastic work in the world so grateful to you no it’s been wonderful time Doug and I’m wishing you every success if there’s anything anybody needs to get in touch with Doug for I believe the website’s in the comments and has been shown in this video a few times and there it goes again well done team um and it’s been a really enjoyable afternoon Doug and with that I think we can close it though so I appreciate your time and thanks very much for watching everybody at home thank you
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