Host Intro (Gene Kim)

Okay, I am so honored and delighted by who is speaking next.

Dr. Ron Westrum is Professor Emeritus of Sociology at Eastern Michigan University.

His name will be familiar to anyone who has read the State of DevOps Reports, which I had the privilege of working on for six years with Dr. Nicole Forsgren and Jez Humble from 2013 to 2019.

It is a cross-population study that spanned over 36,000 respondents that allowed organizations to understand what high-performing technology organizations look like, as well as what are the architectural practices, technical practices, and cultural norms that predict high performance.

And without a doubt, what those cultural norms might look like were made possible by the work of Dr. Ron Westrum.

He received his PhD in sociology from the University of Chicago, and he spent decades studying complex organizations, including healthcare, aviation, and the nuclear industry.

And one of the models that he created was the famous Westrum Organizational Typology model that brilliantly categorized organizations into pathological, bureaucratic, and generative.

It's difficult to overstate just how much the work of Dr. Westrum influenced our thinking, and it's featured prominently in the State of DevOps research, in the DevOps handbook, and the Accelerate books.

And when Dr. Forsgren CC'd me on some correspondence that she had with Dr. Westrum, I almost fell out of my chair.

And after a quick conversation with Dr. Forsgren, I emailed him to see if he'd be willing to be a guest on the "IDEALcast," and I was able to interview him for over four hours.

So up next is a talk from Dr. Westrum in two parts.

First, he will be teaching us about information flow in organizations, as well as providing a case study on Boeing, which we aired earlier this year.

And in the second part, he will talk about the continuation of that research, which only underscores the importance of his work.

Here's Dr. Westrum.

Ron Westrum

Today we're going to talk about information flow cultures, and we're going to talk about the cultures of organizations.

So what the devil is organizational culture?

Well, organizational culture is a complicated thing.

For instance, it has the following characteristics.

So organizational culture is practices, organizational culture is thoughts, organizational culture is feelings, and it is symbols.

So while all these are important, we're going to use another index, the flow of information.

Why is information flow the right thing to do?

The reason is basically information is the lifeblood of organizations.

If the organization has a good flow of information, the organization will do well.

If it has a bad flow, it's not going to do very well.

Information is also a powerful index of how an organization functions.

And information flow culture, in fact, reflects how managers shape values and behavior.

And we're going to describe three different information flow types.

One of them is generative, where you have a high flow of information, the best.

Then there's bureaucratic, which has a medium flow of information, and pathological, which has a low flow.

So let's look at pathological flow.

In pathological organizations, you get a low cooperation, very high conflict, an emphasis on taking care of the leaders, strict boundaries, messengers get shot, you have low creativity.

So you have a toxic environment.

In a bureaucratic situation, you get modest cooperation.

The emphasis is on rules and regulation.

You have problems with silos.

Messengers are tolerated, not necessarily encouraged.

Conflicts are tamped down, and creativity is allowed.

And here is my slide, which I think reflects the flow of bureaucratic information, which is that it's slow.

Now, what we'd really like to have is a generative flow of information where we have high cooperation, we have emphasis on the mission, we have boundaryless organization where things move quickly over the boundaries.

Speaking up is encouraged, and in fact, people have psychological safety and high creativity.

So here is my example of how a highly creative organization is supposed to function.

I think "Star Trek" is a perfect model.

Now let me emphasize one of the features that goes with generative information flow.

At Google, they had a project called Project Aristotle, and he studied what made for an effective team.

The number one feature of an effective team was psychological safety, the ability to speak your mind without fear of punishment.

When communication is easy, there is more of it, but it's also the right kind of communication.

I like to say that a high flow of communication has these three characteristics.

Number one, it's timely.

Number two, it's easy to understand and comes in a form that's easy to make sense of.

Number three, it meets the receiver's needs.

Now, there's a classic example of this.

During the famous Redstone rocket program, which was one of NASA's first, a prototype went off course and crashed.

Wernher von Braun, head of the project, tried to figure out by many analyses what had happened.

The analyses did not suggest a cause.

Now they were going to have to start from scratch to redesign the missile.

But then an engineer came to von Braun and he said, "I think I did it." "But how?" von Braun wanted to know.

"Well," the engineer said, "I touched a part of the circuit with a screwdriver and got a spark.

I checked, and the circuit seemed to be fine, but maybe that was the problem." Well, it turned out that was the problem.

Okay, so the problem got solved, and then von Braun sent the engineer a bottle of champagne. So take a moment to think about your organization.

What would happen when an engineer admits to making such a big mistake?

Does he get a bottle of champagne?

Generative cultures are often found in high-performance organizations.

They are common in high-reliability systems that require greater cooperation for success.

They're typical of elite military units whose cooperation is legendary, for instance, the Navy SEALs.

And they are often seen in consumer and service industries when exceptional consumer satisfaction is the goal.

And they are often led by technological maestros.

So what is a technological maestro?

Well, this word was coined by Arthur Squires in his book, "The Tender Ship," about leadership and technology in World War II, and it meant the top leaders had these characteristics.

Number one, technical virtuosity.

Number two, a high energy level.

Number three, an ability to grasp the key questions.

Number four, the ability to grasp the key details, high standards, and a hands-on attitude.

Now, here's another example of a maestro.

In June 1978, an engineering student called an architect named William LeMessurier, who had designed key parts of the Citicorp building in downtown New York.

The 57-floor building had an unusual footprint.

The student wanted to know whether the building was stable or not.

Was it going to be stable in a high wind?

LeMessurier assured the student that it would be stable, and he personally had designed a special mass damper on the top floor to steady it.

But then he had a second thought, and that thought was that if the building was built according to specifications, there would be no problems.

But had it actually been built that way?

So LeMessurier called up the builder.

Well, the builder said they had pretty much followed the plans that they'd been given, but there was one detail that was different.

They had used rivets instead of welds to hold the building together.

On a short building, this would not matter, but on a 57-story building, a quartering wind strong enough would bring down the building.

How often would such a wind show up?

The answer was about every 16 years.

So they had to fix it, and they did fix it.

They told the newspapers about it but asked them to hold the story.

So for several months after the secretaries had gone home at night, contractors pulled off the wall panels and welded the girders together.

After they fixed the structural problem, then the newspapers published what had happened.

Oh, by the way, what is requisite imagination?

It's the fine art of anticipating what might go wrong.

So here is a prime example of requisite imagination.

And remember, mastering the key details is one trait of a technological maestro.

So maestros build a generative information flow, and this creates the complex web that allows the organization to build things.

For instance, this is how you build airliners.

So we're going to look at how Boeing created airliners.

So building airliners is big business, and I have a law about this.

The higher the stakes, the rougher the play.

So when Boeing builds airliners, this is rough play.

It involves very high stakes and high risk.

Yet Boeing did it well for many decades.

For instance, we have examples like the Stratoliner, the Stratocruiser, the 707, 727, the 747, and finally, the 777 airliner.

So how did Boeing do this?

Well, Boeing had a lot of money, a lot of people, and a lot of machines.

But Boeing also had a secret weapon, and that secret weapon was a culture that held all those assets together, a culture like a family, in spite of crises like business downturns and strikes and so forth.

Culture is actually a form of capital.

Any company that manufactures something as large and complicated as a jet airliner forms a complex web of knowledge.

So if we take the cultural capital and put it together with the technological maestro, we get planes like the Boeing 777, a marvel of precise engineering.

Understand that this human web of knowledge and competence is fragile and may degrade under rough handling.

So if you interfere with this culture of human competence, bad things can happen.

And at Boeing, this seems to be what happened.

After Boeing merged with McDonnell Douglas, the merger caused damage that undercut the web of manufacturing know-how.

And here is one of those pictures that is better than a thousand words.

We have Carl Condit of Boeing listening to Harry Stonecipher of McDonnell Douglas, and you can tell this was not a happy marriage.

So as Boeing's culture went out the door, its aircraft maestro, Alan Mulally, went to Detroit, where, by the way, he took over Ford and did great.

Harry Stonecipher of McDonnell Douglas soon became the new CEO of Boeing, and under him, the culture rapidly declined.

Stonecipher wanted the new culture, what he described as going from family to teams.

And this is a very important set of words because even though those things don't seem to mean a great deal of difference to the ordinary person, at Boeing, it made a huge difference.

One employee told Harry Stonecipher, "My God, Harry, don't you know you're changing the culture of Boeing?" Stonecipher leaped into the air and he said, "My God, that's what we want to do." That's what Stonecipher did.

But was it a good idea to do it?

What culture was being replaced, and what would take its place?

Suppose that Boeing's great accomplishments had only been possible thanks to its culture.

What was this culture?

Boeing's employees described it as being like a family.

But this culture was actually a high cooperation, generative culture.

Yet Stonecipher was not happy with the Boeing culture for making planes.

He wanted a culture focused on making money.

So the generative culture got replaced by a bureaucratic culture.

But the former culture, the generative culture, had been the key to Boeing's success.

So as the price of Boeing stock went up, the price of its technical products fell.

So the next airliner that came down the pipe, the Dreamliner, was beautifully designed, but messed up on batteries and other manufacturing issues, and I understand it's still messed up.

Stonecipher, meanwhile, had left Boeing in 2005.

Other CEOs followed, but success did not return.

Then Boeing made a more serious mistake.

It put fatal flaws in a new airliner.

The new 737 Max had major defects.

This airliner had to work to beat Airbus, but it didn't.

The 737 Max had a new MCAS software installed that caused unexpected motions.

This is a perfect example of a latent pathogen, using the term of James Reason.

Pilots should have been trained for the new software, but they were not.

The full toolkit of the knowledge to operate this plane was not supplied.

One US pilot, after suffering from MCAS problems, said, "I am left to wonder what else don't I know?

The flight manual is inadequate and almost criminally insufficient." So if culture breaks down, things get missed.

No maestro in a messed up culture, you could be flying without a parachute.

The flaws in the 737 Max soon led to two crashes, killing a total of 345 passengers.

A broken culture had led to a broken airliner project and a huge reputational loss.

So what are the lessons we learn from this story?

The most obvious one is that if you have a working culture, don't mess with it, and if your culture is not working, you better find out how you can fix it.

And finally, if you don't know whether your culture is working or not, shouldn't you find out?

Very good.

So I wanted to make some additional comments on corporate culture. Next. The famous Harvard philosopher William James once wrote about something that he called the will to believe.

The will to believe had to do with groups of people and what they felt they could accomplish together.

He said that with the will to believe, much could be done that was otherwise impossible. Next. Here's William James, about 100 years ago. Next. Then there was the physicist Enrico Fermi.

In the process of creating the world's first controlled atomic power reactor at Chicago, Enrico Fermi talked about the will to think.

He said that when the inventor came to believe that his or her invention would be funded, this created a will to think.

Fermi's immediate situation was the creation of an atomic power source under the University of Chicago's quadrangle tennis court.

He said the government support was what supplied him with the will to think so the project could be created, and thus the first atomic pile was created. Next. Here he is, Enrico Fermi. Next. And finally, collective efficacy.

Some 50 years later, a University of Chicago neighborhood study brought up the concept of collective efficacy, invented by yet another Harvard professor, Felton Earls.

He used it to describe a neighborhood's feeling about its own powers.

Collective efficacy was the feeling that people in the neighborhood could work together in solving its problems.

This included people stepping up to do acts such as benefiting the public good, such as protecting against crime, helping old people across the street, et cetera.

It is this concept is what we need here. Next. So here is Felton Earls. Next. Why is collective efficacy important?

If we want to understand why legacy Boeing culture was so strong, we need to see it expressing a collective ability to work together for success.

As I indicated before, building a new airliner is a masterful work of creation.

The more one delves into the history of Boeing, the more this factor becomes evident.

Building a new airliner is a massive act of collective faith.

Without this faith, the parts that make up the new airliner will not come together.

There has to be a collective will to believe to get the effort. Next. So what is it that builds collective efficacy?

The most obvious answer is promises kept.

To understand this, we have to look at the context, at Boeing's history, in fact.

So first, Boeing had been building airplanes for nearly two decades before World War II.

But in that war, Boeing built a bomber that, for all its faults, was absolutely key to winning the war.

That bomber was the B-17 Flying Fortress, and then Boeing had built the B-29 Superfortress, an even more impressive aircraft. Next. So to put the value of the B-17 in context, I'm going to read you a passage from Robert Serling's fine book, "Boeing Legend and Legacy." The specific event was the US Armed Services Committee in 1956.

The issue at hand was the profits of airplane companies during World War II.

On the fourth day of the hearings, Boeing representatives, including controller Clyde Skeen, held forth about prices and costs.

After Skeen spoke, Boeing CEO William Allen was asked if he had any remarks to add to Skeen's testimony. Next. So here he is, looking very handsome. Next. So William Allen, Boeing's CEO, got up and testified off the cuff without a single reference note for 20 minutes. He pointed out that for $600 million in gross income, Boeing had made only $6 million in profits.

He pointed out that pending legislation would only allow them to make 12% in profit, and they never even got close to that.

He said that Boeing was plowing 75% of these profits back into research and development, higher than the industry average.

He urged them to consider not whether Boeing had made too much, but whether it had made enough. Next slide. So had Boeing helped to save the free world?

The Armed Services Subcommittee gave Allen a standing ovation after his speech.

One committee member then told him, he said, "I think Boeing was performing a tremendous service not only to the United States, but for the entire free world, because if it were not for Boeing today, perhaps there would be no free world." So here was a promise that was kept. Next. Boeing's military and space experience was important for the country and for Boeing itself.

This included not only vital warplanes such as the B-17, B-29, C-135, B-47, and B-52, but strategic missiles such as the Minuteman, space efforts such as the Lunar Orbiter in the first stage of the Saturn V rocket.

Skilled engineers moved from one project to another, moving expertise and ideas. Next. But I wanted to focus on faith.

Boeing, as a company, worked on many projects at once.

Engineers would be shuffled back and forth as new projects arose and others reached their maturity.

Yet one of the truly great projects at Boeing, the huge 747 project, did not seem born under a lucky star.

Indeed, the supposed high talent of Boeing in the late 1960s was focused not on the 747, but on designing a supersonic transport.

Joe Sutter, the chief engineer for the 747 project, remembers coming into Washington one night tired and looking for rest. Next. And here he is, tired and looking for a rest. Next slide. So Sutter found himself among 20 of Boeing's star power engineers who were working on the supersonic transport.

They took him to the bar for a drink and tried to encourage him by saying, "Do okay on the giant jet and we will find you a place on the SST team." Well, Sutter was taken aback.

Was the 747 project a backwater?

Clearly the big money was on the supersonic transport.

So were the top engineers.

What was he to do? Next slide. So here he is with the supersonic transport at the top and a 747 at the bottom. Next slide. So Sutter was not about to leave his assignment until it was a big success.

One evening, he had a long talk with his number two engineer, who was feeling depressed.

He was able, he writes, to make the man feel a lot better about the project.

And from that moment, he realized that everybody on the team needed to feel a lot better as well.

So he took it as his task providing the leadership information and faith that would see the project through.

But this was only one of his challenges. Next. So the challenges for the 747 project.

First, Sutter had to make sure that the project was coherent, that the plane design was a plane that was needed.

Second, he had to come up with the funding to pay for the thousands of engineers and designers involved.

Third, he had to parry challenges to his authority by others who had different ideas.

And finally, he had to keep everybody on track and believing that the project was doable. Next. So Sutter was able to do all this because he had faith in his design instincts, in his company, and above all, in his engineering team.

Six thousand engineers he called The Incredibles.

What he expected and what the situation required was long periods of 10-hour days and seven-day weeks.

He may not have rounded up all of Boeing's smartest engineers, but he had a circle of faith that got results.

He believed that it could be done, and so did his team. Next. So here is their logo, the Boeing 747 Incredibles. Next. The 747 was to be bigger and better than other airliners, but it also had titanic problems of its own.

Where was it going to be built?

Where was a big enough space to build the behemoth?

Second, Boeing had other airliners to build against which the 747 had to fight for resources, like the 737.

Third, it took a long time to get the engines to work right.

And finally, Boeing was running out of money for the startup. Next slide. Joe Sutter said, "I had trouble getting everything from good people to facilities priority in the wind tunnel.

I had to fight City Hall, as it were, every step of the way to get the 747 designed, built, certified, and into service." And then as the rollout began, there were major engine problems and Boeing faced running out of money.

A recession arrived, layoffs began, and went up to 60,000.

Boeing was headed for the dumper. Next. But then they solved the problems.

The recession went away.

They got the engines working.

They got the funds.

They started producing 747s.

And yet there had been some very bad years in between.

Boeing nearly came apart.

So why did they not give up and liquidate the firm? Next. They built the world's largest factory.

Look at how big this factory is. Next. And they built a lot of 747s. Next. So 747 changed how people flew, and it thus changed the world. Next. That moment of truth brings us back to the issue of faith.

Boeing's collective efficacy meant that they had faith in themselves and their ability to continue the job and to finish it.

Faith came from all the promises that had been made and kept.

They had built the bombers, propeller and jet.

They had built the jet airliners, the 707s and their derivatives.

They were building the 737, which was the most popular airliner ever.

They built the 747, a world-changing passenger plane.

The baton had been passed again and again, and they completed big projects. Next. Then on the way from the 747 to the future, Boeing brought out a completely new airliner, the Boeing 777.

This airliner was the first one designed completely on the computer, and its crafting was a work of genius, led, as we have seen, by Alan Mulally.

This airliner not only showed how legacy Boeing could triumph, but brought in new skills as well.

A new philosophy forged by Phil Condit, working together, brought manufacturing input into the design process.

In addition, foreign and domestic airlines were brought in to provide customer input. Next slide. Here's the Boeing 777 taking off. Next slide. But as the new century dawned, Boeing was about to enter turbulent skies.

Boeing's management had entered a period of deep unrest.

Unlike the 20th century CEOs, William Allen and T. Wilson, both highly principled men, the leadership that followed was very problematic.

Scandals about military payoffs and illicit affairs caused loss of reputation.

A Boeing merger with McDonnell Douglas caused a clash of cultures that would not be resolved in any easy or good way.

Interference by the federal government did not help. Next. With the merger, doubt entered in.

Boeing had helped to create the USA of the late 20th century, but the airliner business was a technical success.

It did not make as much money as it could, and therefore some thought the airliner business needed to be tweaked so that it was going to make more money.

Never mind that it had already done the impossible.

Never mind that the 747 team had been the Incredibles.

Boeing needed to become, said one school of thought, incredibly financially successful. Next. The merger with McDonnell Douglas led to problems.

The new personnel from McDonnell Douglas brought the Harvard Business School approach to something that was a working cultural icon, insisted that it change.

Now it needed to be financially successful.

Well, who could argue with that?

Who would argue with that?

Then they moved Boeing headquarters to Chicago.

Why?

To be closer to the financial center of the United States. Next slide. And here it is.

Here's the Boeing headquarters in Chicago. Next slide. But what about keeping faith?

The move to Chicago would take management further from the engineers.

No longer was the goal of Boeing to be making planes.

Now it was to make money.

This was a breach of faith, a broken promise.

If you break a covenant, there's a price.

The price was that Boeing was no longer to be a great organization whose purpose was to do the impossible.

This potential loss of meaning was serious. Next slide. Corporate integrity broke down.

The new century witnessed the failure of corporate leadership to maintain a high standard of integrity.

William Allen, the CEO, would not abide deception and dishonesty.

But when Harry Stonecipher was fired for having an illicit affair and Phil Condit was forced to resign over the actions of his subordinates, Boeing looked bad to the public and to its workers. Next slide. Morale sagged.

Major studies of morale at Boeing show the new corporate culture of teams instead of family reflected a decline in morale.

Reams of worker email show that now Boeing management was not being taken seriously.

One email spoke of planes, quote, "Designed by clowns, being supervised by monkeys." The corporate shenanigans reflected badly on corporate leadership and it demoralized the workforce. Next slide. The shady maneuvers around the 737 Max added to all the other problems.

The shaky development of the 737 Max brought all the negative forces to the fore.

The idea of Boeing regulating itself by absorbing the FAA function internally with all the conflict of interest that involved was clearly dishonest.

It was the opposite of good practice.

Then the failure to explain the new MCAS software, not embedding it firmly in training and simulation, made people feel rotten.

This was the opposite of the legacy Boeing's conduct.

People knew that things were not right. Next slide. So the accident merely confirmed what Boeing workers felt.

When the organization is not right, the planes are not right.

Legacy Boeing had not been a perfect organization, but it had been an organization, workers felt, that was trying to do the right thing.

But now that organization was bent.

Whereas pilots in the late 20th century had trusted Boeing more than Airbus, now this seemed to be reversed.

The circle of faith had been broken and repair would take time, if it took place at all. Next slide. Another circle of faith that's very interesting is the building of the moon lander at Grumman.

So let me speak about this circle of faith, the faith that unites the creators of technology and its users.

To do so, we will have to go to the aftermath of the Apollo 13 space accident.

As you may remember, the Apollo 13 suffered a blowout on the way to the moon.

"Houston, we have a problem." The three astronauts on board Apollo 13 were guided to do emergency repairs, reprogram their course, and eventually brought safely back to Earth.

This was a saga, but it did not end when the astronauts got back.

There was one more thing to do. Next slide. After the three astronauts got back, they had to thank a group that had helped save their lives.

That group was the Grumman Corporation, located in Bethpage, Long Island.

The Grumman Corporation had designed the moon lander.

In their voyage home, the astronauts had used the moon lander as a lifeboat to cut down on energy consumption until they could reoccupy the command module, which they needed to come back through the atmosphere.

But that use had been anticipated in Grumman's design of the lander. Next slide. The use of the lander as a lifeboat had been anticipated by its designers at Grumman.

It had been designed with extra supplies and utilities that allowed a crew to survive in it for a short period of crisis.

When the blowout occurred, the crew could go into it for a while.

An emergency had been foreseen, although its exact shape was unknown.

The astronauts went back to Grumman to thank the designers for their foresight, for what one might call their requisite imagination. Next slide. So here it is, the moon lander, the command module on the right, the service module, which suffered the blow-up. Next slide. But the design of the moon lander harked back to World War II, when Grumman, having already designed the F4F Wildcat, an excellent aircraft, upgraded it to the F6F Hellcat, probably the finest carrier plane in World War II.

Grumman had listened carefully to its pilots in the Pacific, and Jake Swirbul, a Grumman vice president, had gone to the Pacific to find out what they wanted.

But the underlying philosophy was to protect the pilot.

Grumman planes were part of the circle of faith between makers and users. Next slide. So an aviation expert wrote about this.

He said, "This aircraft design philosophy embodied a very rugged structure with reliable systems able to sustain significant damage that would allow the pilot to complete his mission and return home safely." Pilots got that message.

Their planes would get shot up and they'd still return home.

The Grumman ironworks had protected them.

Their faith in Grumman was justified by their experience and their victories in the Pacific War. Next slide. Now, this was also true of the Sidewinder missile and of China Lake, which had designed it.

China Lake was part of a system of faith with the naval pilots dependent on China Lake's design of air-to-air missiles.

China Lake did everything in its power to be sure that the pilots had good weapons and the proper training and maintenance so that everything worked.

They even helped the Navy design the missiles so they could be used effectively on aircraft carriers. Next slide. Here it is.

Here's a Sidewinder missile. Next slide. Frank Niemeyer, technical director at China Lake, told me the following.

He said, "In Korea and Vietnam, we actually helped pilots accomplish their mission and saved their lives.

Carrier skippers and carrier air group commanders would come here before they deployed.

We would spend a day with them here telling them everything about our systems, everything we knew about their idiosyncrasies, and in some cases, we helped train them here.

We would also send people out to the carriers to help them whenever they ran into problems, everywhere from the technical, even to helping them with their tactical problems." Next slide. When these people came back from deployment, they made it a point to stop here and tell us how they made out, how our systems worked, what were the bad points, and basically how it saved their lives.

That is not a monetary reward.

That is one of the richest rewards you can get.

Thus, a circle of trust was maintained by listening to constant feedback from the pilots. Next slide. So in conclusion, from the building of big planes to the effectiveness of air-to-air missiles, we see the importance of collective efficacy, working through a circle of trust that comes from promises kept and a steady cooperation.

When trust is present, we can fix the problems before they cause failures and avoid catastrophe and ruin.

But trust is fragile.

It needs to be maintained by words and by deeds.

It needs a constancy on the part of managers that inattention and neglect can impair. Next. Culture is the glue that holds these vital processes together.

Culture binds the person to the work and makes the worker feel that his or her work counts.

And the right kind of culture also provides a great flow of information and inspiration that brings to bear the extra consideration, the second thought, and the requisite imagination that allows the right designs under the right conditions to bring about continuous success.

Important human activities will not succeed without a strong and good culture.

So here's what I'm looking for.

Dialogue and useful critique, case studies, potential consulting, any questions about the concepts.

Thank you.