Host Intro (Gene Kim)

Usually at DevOps Enterprise, we open up with three experience reports. But this year, we're going to bring you an expert talk because the next speaker validates so many of the decisions that you've heard of today, and you'll hear throughout the next three days. One of the most impactful learning moments for me was taking a workshop at MIT in 2014, which tremendously influenced my thinking. I went to this class because it was taught by Dr. Steven Spear, who I already mentioned in my opening remarks.

He is famous for many things, but he's probably most famous for writing one of the most downloaded Harvard Business Review papers of all time. In 1999, it was published as "Decoding the DNA of the Toyota Production System." This was based in part on his doctoral dissertation that he did at the Harvard Business School. In support of that, he worked on the manufacturing plant floor of a tier one Toyota supplier for six months. Since then, he's extended his work beyond just high repetition

manufacturing to engine design at Pratt & Whitney, to the building of the safety culture at Alcoa, and how to make healthcare systems safe. Recently, he was part of a US Navy initiative to create a high-velocity learning dynamic across all aspects of the enterprise. He has spoken at this conference three times, including that remarkable panel with Dr. Sidney Dekker and Dr. Richard Cook. Steve is a person who introduced to me the term dynamic

learning organizations, which is all about creating a culture of experimentation as opposed to a culture of compliance. So here's Steve, who will share one of the most remarkable historical examples of creating a rapid learning dynamic at enterprise scale. Thank you, Steve.

Dr. Steve Spear

June 1942 should have been a source of huge celebration for the Imperial Japan Navy. And why is that? Because December 1941 utterly stunk for the United States Navy. The Japanese Navy had attacked at Pearl Harbor, surprise attack, destroyed Battleship Row, and immediately after that, go on a wave of conquest through the Pacific, Guam, Bataan, Singapore, this place, that place. And June '42, this was going to be the coup de grace.

The Japanese Navy was going to sail out from Japan out to Midway Island, start bombarding the heck out of that island, lure the US Navy out of Pearl Harbor, and sneak attack them there and destroy the remainder of the US force. This time, the aircraft carriers, now that the battleships were still burning. Well, anyway, it didn't work out exactly that way for the Japanese. And in rather than June '42 being that momentous triumph, it actually turned to be pivotal, and

after the defeat suffered at Midway Island by the Japanese Navy, they couldn't wage a meaningful offensive for the remainder of the war. Now, that's not to say that it was easygoing for the US Navy. Japan staged a brutal, bloody, prolonged, retreating defense, but it was retreating defense. And so you might ask yourself the question, so, with these great plans that were being cooked up and operationalized in June 1942, what went wrong

and when did it go wrong? Now, let's think about it. What's the Hollywood answer? Well, the Hollywood answer was in a movie recently, so we know what the Hollywood answer was. Late in the afternoon on the 4th of June, Commander Wade McClusky, flying his airplane attack, came in, saw a break in the clouds, came through the clouds. As he's diving down, whoa, there's the Japanese flagship. He radios his compatriots to come and attack the same flagship, and he leads

the attack, and it's decisive in the battle. Well, that's what Hollywood tells you. So here's the thing. On the left side of the screen are these two authors wrote this enormous book. It's a gigantic book. Hundreds and hundreds of pages detailing the Battle of Midway from the Japanese perspective. And you know that if someone sits down and writes a book which is 300, 400 or 500 pages in itty-bitty little bit of type, they're not going to reach the same conclusion as Hollywood.

So then you start reading through the book and say, "Oh, I wonder what they have to say." And in fact, at the almost end of the book, they say, "Hey, reader, you've just plowed through all this dense detail. When do you think the Japanese lost the Battle of Midway?" And so, it's a trick question, right? It's like, it can't be possibly when Commander McClusky saw the flagship. It's got to be earlier. You start thinking, well, when could it be? Could it be at noontime?

Nah, it's too obvious. Early in the morning? Too obvious. I got it. It had to be late in May when the Japanese Navy was late and discombobulated leaving the harbors around Tokyo, and maybe, I don't know, what do you say? If you get discombobulated, you get recombob-- whatever. Get reorganized. That they didn't get reorganized around Midway by the 4th of June, and that was their undoing. So anyway, having flipped through all the way to the beginning of the book, you go to the back of the book again, and the authors, it's kind of

funny, right? They go from this very sort of dry prose to almost slapstick. They say, "Hey, reader, I bet you went all the way to the start of the book and found May as when the Japanese Navy lost this because they got discombobulated. And guess what? The Japanese Navy lost the Battle of Midway no later than 1929." And you're like, what the? Because 1929 is not even in the book. But here's the thing. My reaction to that book was 1929. What the?

All right, let me offer another offer is that the Japanese Navy may have lost by 1929, but the US Navy won by 1895. Now you probably go, "What the?" So anyway, let me explain that. In the late 1800s, the United States Navy was faced with huge, huge change, both strategic and technological. And as I start talking through this case, start thinking about all the strategic and technological changes we have in 2020.

So you got your Internet of things. You got your Industry 4.0, you got your 5G, you got your AI, you got machine learning, got data mining, and all that lumped together. How often do you see in an article where the headline is basically, "Ah, throw your past away. Your history hasn't been written." You're going to have to completely rethink not only what you do and how you do it. Well, anyway, that was a real problem for the US Navy in about

1895, and I'll tell you why. Up through the mid-1800s, the United States had a very continental focus. You started off with 13 diminutive, weak colonies on the Atlantic coast. But you got the Louisiana Purchase, you got westward expansion, you got Lewis and Clark finding-- Other people knew it was there. They found it for themselves. The Pacific Ocean, on and on. But by 1900, just to scale this,

by 1900, of the 50 states in the union we have today, and you can peel off Hawaii and Alaska, so we're down to 48. So the 48 continental states, 45 were already in the union, and Oklahoma was a territory, so it wasn't quite a state yet, but was on the way. And so by the time you get to 1900, you have the United States sort of having solved the manifest destiny problem and the continental expansion problem, and it starts thinking of itself less and less

as only a continental power and more and more as also a transoceanic power. Now, what does that mean for the Navy? Well, the Navy's got to redefine its job because its job had been coastal defense. Now it has to start thinking about how it expands itself transoceanically. Big oceans, the Pacific in particular, and the thing is, it's more than just the distance involved because on the other side of the Pacific Ocean, guess what? The Japanese Navy's going through a

same, similar kind of self-reflection. Because Japan had been in a self-imposed isolation for the better part of, what, 400 years? And coming into the late 1800s, Meiji Restoration, all of that, they started thinking in terms, "Well, how can we be a world power, transoceanic?" So one of the ways they started that exploration was kicking the stuffings out of the Russians in 1904, 1905. So anyway, you have the United States Navy now having to think about projecting power and protecting interests over the Pacific.

And on the other side of the Pacific, there's a potential adversary somewhere, someday, about something. All right. Now, that's just strategic element, changing what we do. But there was also a huge amount of technological change that the US Navy had to worry about. Now, here's a great side-by-side comparison. Two battleships, right? And say, "Oh, battleship, battleship." What? All right. But take a look on the left-hand side of your screen.

USS Texas, commissioned 1892. Maybe keel laying was 18-- But 1892 is a good enough guess. 1892. You take a close look, you see, all right, so she's got a steam-based power plant. She's got a steel hull. If you start looking at where the guns are, the guns are in exactly the same places on the USS Constitution or what Admiral Nelson might have fought at the Battle of Trafalgar. It's side-mounted. And the tactics to fight with this

ship and fight against ships like that, it hadn't really much advanced. Yeah, you had more control where you went. You didn't have to depend on the wind quite so much. But kind of the same tactics, strategy, et cetera, would've applied in 1892 on board the USS Texas as in 1792 on a comparable ship. Now, look on the right-hand side of the slide here. You have USS Indiana. Three years younger, that's it.

But you know the big difference, that the Indiana, she's got gun turrets. And you say, "Oh, what's the big difference?" And the difference is huge. Huge. Because when you have side-mounted guns, what can you do? You just kind of try and cross the T, as it were. But turreted guns. Take a closer look here. Turreted guns. What does that give you opportunity to do?

Well, it gives you the opportunity to aim at anything you want because you've got two, three, sometimes four turrets on a ship. Each gun is independently aimable. And when you've got that capability, what that does is it lets you aim at all sorts of different places, which the whole side-mounted thing never allowed. As you put these two things together, what do you have for the US Navy? One, they're facing this huge strategic change.

And that'd be enough already, as it is for most of us, when we have to really repurpose what it is we do. But then this huge technological change, which is they had to repurpose how they did whatever they were going to end up doing. Now, at that moment, the leadership of the United States Navy, these guys, they had a choice. Now, I just want to this, is that in 1900, who were the leaders of the United States Navy?

Well, the leaders of the United States Navy were men. They were white men. They were Protestant men who had grown up with a sense of elitism, classism, hierarchy, status, et cetera, et cetera. And you start thinking about what folks who've got all those isms, it's to their advantage, not to their disadvantage, what people with all those isms working for them do. Normally, what they do is they say, "Oh, well, everybody else,

that's a bunch of jerks. What do they know? We're going to do all the thinking here. We don't want to get our pretty hands dirty. And we'll do the thinking, and we'll push out and tell what all those other folks should do." So that was a choice. That was a choice, which is they could have consolidated the thinking and the decision-making to the Navy Yard in Washington, DC. And once they had thought through the strategic question, what are we going to do, and the

technological question, how are we going to do it, they could have pushed instructions out to the Navy with the expectation they push the instructions out. And what do they get in return? "Aye, aye, sir. Away we go." And that would've been the natural thing to do. But that's not what they did. Instead, those leaders, with all the social, societal, economic advantage they had, when it came time to the question of

what do we do, how we do it, they got together and said, "We got no idea what to do and how to do it. It's so far beyond any experience we've had to allow us to approximate, analogize, extrapolate, et cetera. We got no idea." So what do they do? They say, "You know what? We got to get

the distributed problem-solving capability of the whole Navy involved in this." And so they go through this series of exercises to push out to the fleet, to push out to individual ship skippers, with ship skippers pushing out to their individual crews problems, like how do you fire a gun? How do you aim a gun? How do you aim a gun in rolling seas? On and on. And what did they want done? Not the, "Aye, aye, sir, Anchors Aweigh." What they wanted done in return was experimentation

with the idea that whether the experiment worked or not, the lesson learned would come back for consolidation, then synthesis, and then redistribution as a collective lesson learned as way better than anybody else has. All right. So anyway, where does that lead, and how does that get operationalized? Well, they go out to the squadrons, the

squadrons go out to the ships, and even on board the ships, the ship skippers go out to their crews and say, "Hey, they handed us these guns and these weapons and these turrets, and they're wildly complex. And hey, so Chief Petty Officer, why don't you try a couple of different things with your gun turret crew, and the guys at the stern, while you're up in the bow, they'll try some other things. And on board the ship, we'll come up with some

sort of synthesized, consolidated lessons learned package, so when we go out and experiment and test and go through drills and exercises with our ship, we got the collective best understanding of everybody on board the ship and not just what the captain thinks." Well, anyway, that was one round. Now, another round of this is you have these ships where you've now introduced really advanced power plants and really advanced navigation and really advanced

weaponry and really advanced communication. You know what you've done? You've created the risk that you're going to fry the brain of the captain. Because back in the day of sails, he's going around this way, that way, sailing around. You got somebody, "Hey, Captain, here's what's happening." "Oh, thank you. I'll think about that. I'll tell you what to do." "Oh, Captain, here's something else." "Oh, I'll think about it." And you get on board one of these then-modern ships, and the amount of information flowing,

if it goes to the captain, his brain's going to melt down. So the Navy invented this idea of a combat information center. And the idea was to have the information coming in from this division, this department, this division, this department, come into the combat information center, where there would be a methodical way of absorbing, digesting, scrubbing, reinterpreting. So the information that went to the captain was only the things the captain needed to know to make captain decisions.

And other information, which wasn't captain decisions, it was department decisions or division decisions or watch station decisions, that information would be parsed and go to the right places. Now, when this idea of a CIC, combat information center, came up, guess what the Navy knew about the appropriate design and use of those things? Nothing, because they had never been designed and used before. And so what did the leadership of the Navy do? The same thing.

They said, "Hey, that's a problem. We don't really understand how that thing works. So here's what we're going to do. We're going to push out to the ships the opportunity, the authority, the responsibility to experiment with those CICs. And what we're asking is not that they use them right, because no one knows what right is, but what we ask them to do is use them creatively and capture the consequences of using them creatively this way or creatively that way, or creatively some other way."

And, in fact, they gave so much authority to ship captains that if a ship was still being built, the captain could go to the shipyard and talk to the engineers, the designers, the builders, and personalize it. Think about it. We tend to think of the military, oh, well, it's highly standardized, command and control, top-down, da, da, da. Martinet, right? "No, no, no, Captain, look, you're a young guy, and we're a bunch of old guys, but we want you to go to the shipyard and tell them how you want your CIC

configured so you can run the creative experiments that only you can think about." Now anyway, this continues forward. So think about the scale we started at, which is getting the petty officers and the chiefs to figure out how to operate the crew within a gun turret. And then we go to the skippers and say, "Well, how do you coordinate the guns and everything else through the combat information center?" Well, we got another unit of analysis, which is the task force. And you had this question, then.

Now think about the change, right? Because now that you've got all this advanced technology of communication, propulsion, armaments, et cetera, you get a lot of different kinds of ships. You got your battleships, you got your cruisers, you got your destroyers, et cetera. And the question is, how do you take all those pieces and put it into a meaningful whole? Not hull, but whole, complete,

so that the pieces come together in a sum greater than the parts. And so again, now think about the dudes in the Washington Navy Yard who'd grown up with status and hierarchy and privilege and elitism. And the question comes down to, so what do you want to do with these task forces of disparate ships? And they said, "Well, you know what we think we should do?

We don't know. We never know. We've never done this before. So you know what we're going to do? We're going to run a series of..." I'll be careful on the wording here. We're going to run a series of exercises. I'm using little E there, because that's not exactly what they called it. They said, "You know what? If you want to project power across the Pacific and protect interests across the Pacific, and you're trying to do it with these brand-new, diverse sciences and technologies, you have a lot of problems, because we

don't know how to do that." And so from the 1920s through the end of the 1930s, right into 1940, the United States Navy ran these exercises, but it's very important what they called them. They didn't call them exercises. Because exercises sounds like, I don't know, Gene writes up a plan, and then Steve has to look at the plan and say, "Oh, Gene, I got the plan. I'm going to execute it." And I get graded on

how well I adhere to the plan. But they didn't call them exercises, they called them problems. Now, think about what a problem is. A problem is, we got in a situation, but we don't know what to do. Like, wow, if we're going to be transoceanic in the Atlantic and the Pacific, we might have to defend the Panama Canal for merchant shipping, for military shipping. Well, how do you defend the Panama Canal?

And everyone said, "I don't know." They said, "Well, that's a problem. Go figure it out." And so what did they do? In 1923, they send out many ships and thousands and thousands of sailors, said, "You know what? Try to defend the Panama Canal and let us know what you did and how it worked." And then, as you can see through these titles, they attack and defend the Panama Canal more than once. They try to figure out, well, geez, if you're going across the Pacific, a lot of little islands

could be useful. How do you secure an island? Everyone says, "I don't know." Well, that's a problem. Why don't you go find out? So 1931, it looks like. Amphibious landings. Go try to figure out how you get soldiers and marines off of ships and get them safely ashore so they can exert control. And it goes on and on, these dozens of problems. And again, it's the same basic philosophy.

We've got a situation. We don't know what to do. Rather than trying to sit around and think through an answer based on complete ignorance, what we're going to do instead is let people go and experiment in a distributed fashion. And what our job as the central folks is to pull in those lessons, synthesize those lessons, consolidate those lessons, and go back with what the collective wisdom is versus the individual wisdom. Now, where does that lead us?

Is that you've had this series of fleet problems all through the '20s and the '30s. All right, so now let's bring us back to Midway. What's going on? Get back to Midway, and the Japanese send their armada out to Midway Island to lure the US. Now, think about it. The US, if you have to think about their battle plans for Midway,

would have depended on battleships. One would've assumed the battleships show up, but they didn't. And so the Japanese are thinking, they would've been planning on aircraft carrier plus battleships. They don't have the battleships. We're going to clean their clocks. Now, this gets back to the part about when did the US win,

1895, through this distributed experimentation approach to problems with no way to think you through to the answer. But anyway, these guys who wrote "Shattered Sword," how'd they come up with 1929? So this story goes something like this. They say, 1929. By 1929, the Japanese admiralty had decided. They decided. Think about the arrogance of that. In 1929, they had decided how war would be waged against the United States in the Pacific Ocean.

Now, it's not clear that they had sort of, I don't know, had a conversation with the Americans. "Oh, well, what have you decided about war in the Pacific?" No. But the Japanese admiralty had decided how war would be waged. They had made their decision in 1929 about how war might be waged in the 1930s, 1940s. They decided. But anyway, here's the thing about making a decision like that. Once you decide that this is what's going to happen,

everything else flows out of that decision. How do you design an aircraft carrier? Well, it's got to be compliant with the decision of how we're going to wage war. How do you design an aircraft? Boom. Compliant with the decision we made in 1929. How do you think through things like fueling, arming, rearming, refueling, launching, recovery, relaunching, repurposing, navigation, communication, reconnaissance? Well, we've got, and I mean this pun intended, we've got an anchor

point. We made a decision in 1929 how war will be fought. All right, now carrying this through a little bit further. So these guys, Parshall and Tully, they describe what happened here based on this 1929 decision. So going into the Battle of Midway, the Japanese admirals had written a battle plan, and the battle plan detailed what was supposed to happen.

So they decided to do a war game, kind of little tabletop, little wooden ships and whatnot. They would decide to do a war game to rehearse for the Battle of Midway. So what they do is, let's use this as our table. They've got a table with the little stuff on top, and the admirals are standing over here. And standing over here is some poor junior officer who's supposed to stand in for the Americans. So he's got this battle plan in front of him.

He's looking at the table, and he says, "If I had that kind of fleet, I'd never fight this way. I'd do something different." He starts fighting, and then after a few moves, the referee kind of blows the whistle, throws a flag, and says, "Oh." And you know what he said? He said, "Well, no. The junior officer, he's too stupid to read the very elegant, sophisticated battle plan. He's not following it. And because of that, we're going to disqualify him and do this again." Now,

really, you know why they stopped the war game. It's because the junior officer who had looked down at the table and looked at the battle plan was like, "He's winning. He's winning." Because that's a losing battle plan there. But all right, start thinking about what the Japanese admiral should've done at that moment. They should have said, "Hey, junior officer, what are you seeing as flaws in our plan?"

And now just think about how hard that is, and it was hard for them. But instead, you know what they did? They fired the guy, and they got another junior officer. And this thing becomes like "Keystone Cops," right? Because the next guy, he looks at the battle plan, he looks at the table with all the fleets arrayed as little miniatures and says, "You've got to be out of your flipping mind to fight that way. I'm going to do something different." And the way this book ends, they describe the

Japanese admirals as firing one officer, and then firing the junior officer, and then firing a petty officer, and then a sailor, and then they're getting people off the streets of Tokyo. But it turns out anyone who can read the battle plan looks at it and says, "This is idiotic. Who would fight this way?" Now, what's happening on the US side is that they had gone through these exercises, these problems in the '20s and

'30s. So they didn't have a battle plan. They had a portfolio. And when they didn't have battleships, they said, "Well, let's flip a page here and let's see what we got in our book. Well, page one we can't use, but oh, this one will work. Let's go with that one." And not only that, in terms of having plays to pull upon, they had a mindset. And what was their mindset? Life is going to throw you situations where you know what?

You just don't have the answer. You may not even know what the problem is, but you can go out and you can experiment and learn as quickly as you can. So the Japanese Navy shows up at Midway Island, and you could argue they had a bigger fleet and they had more planes and certainly had more experience in terms of pilots and sailors, but they showed up to wage war against a navy that innate, innate in the fiber of its being was this

certainty that they didn't necessarily have a right answer, but if they behaved in a certain way, an exploratory and experimental way, they could discover the right answer. Anyway, the Japanese Navy showed up at Midway, and they got their clock kicked because they showed up and they fought folks who rather than have this compliant form of leadership over the last 20, 30, 40 years, they showed up with a navy that had had this very engaging,

experimental, distributed problem-solving culture. And smart beats stupid just about every day. So anyway, folks, I'll hold to this storyline that when in doubt, having a way to get smarter faster, that's going to win, if not every time, it's going to win most times, and when it

wins, it's going to win by a whole lot. So anyway, I just want to thank the invitation from the IT Revolution people to talk with you or at you, I guess, in this format, and I appreciate all of you being talked at. For those who want to talk with, visit our website, get in touch. Got any questions about what I said, objections, criticism? You know, if you just want to say, "Hey, Steve, you're full of it," that's fine,

too. Look, we've spent the better part of the last 20 years trying to change behavior from this command, control, compliance, audit approach to a much more distributed, engaged, experimental discovery approach. So anyone who wants to partner on trying that out, wherever you happen to be, let us know. We've created some software tools to kind of help that behavioral change in certain circumstances. So if you're curious as to what we've cooked up around that, get in touch.

But let me just offer this last encouragement is when in doubt, do. Because if you're in doubt, it's because you don't know. But if you do something, you might learn something, and learning something's a good thing. So that's what I got to say, and over and out. Bye-bye.