In working at LivingTV, Tim would often hear the same conversation over and over in LivingTV Interactive’s hallways. The basic gist was the following…

If LivingTV Interactive put its limited resources into developing a nationwide service then it could attract the interest of major advertisers and in turn generate the revenues LivingTV needed to be profitable. The negative to this approach is that LivingTV would have a very broad nationwide market, but it would also have very limited programming options for its subscribers, as LivingTV could only support a few sporting events and a handful of drama and game shows.

The arguments would then go back and forth. LivingTV Interactive simply did not have the funding to do both. It wanted a nationwide service to get more advertising, yet at the same time it needed to expand programming to generate more subscriber revenue in the markets it was in. Without a clear resolution or direction, LivingTV Interactive was simply stuck .

Tim thought about the company discussions for a while—then it dawned on him. The discussions were really a conflict and Tim had the tool to try and find unique resolutions to conflicts, the TOC Cloud.

The first part was to draw out the cloud to help him visualize the conflict. It took about an hour to get all the wording right, but Tim was able to work through it and had sketched out the following diagram.

On the other side of the conflict was to invest our limited resources into creating and acquiring more LivingTV programs (D’). The reason was with more programs we could increase our subscriber reach and revenues for a given market (C). This was the ”Go Deep” strategy.

The conflict was that there just was not enough money to do both strategies and people had ongoing disagreements about which strategy was better or they simply wanted to do both. The good part was now Tim was able to summarize, visualize, and look for ways to challenge and resolve the conflict.

Based on the conflict cloud, Tim had three areas to challenge and see if he could find a resolution .

The first area was the direct conflict (D and D’). Was there a way to invest resources into both creating a nationwide service (D) and create more programs (D’)? They could try and borrow enough money to do both, but that was unlikely. They could try and cut corners on both to spread the money around, but that really would not work well either.

The second was to look at the assumptions both sides were making. Tim looked to see if there were ways for LivingTV Interactive to reduce the cost of building a network (B D). Were there new technologies that could do more with less? Unfortunately no. Was there a way to deploy a low cost barebones LivingTV Interactive’s service in more cities? Tim checked, no. Could LivingTV Interactive leverage someone else’s existing infrastructure? No, nothing existed or could be modified to fit LivingTV Interactive’s needs. At this time, their network was too specialized. Could LivingTV Interactive partner with another company and share the costs? Possibly. So some good thoughts, but nothing solid.

The last place Tim looked was to see if there was a way to get more programming in a less expensive way (C D’). Is there a way to get broadcasters to charge us less? Nothing apparent at this time. They either didn’t care about LivingTV or just wanted the royalties. Would it be possible to partner with the broadcasters? It has been tried and there was just not much interest.

So overall the conflict held. Tim was able to better verbalize and challenge some of the conflict’s assumptions, but he seemed just as stuck as everyone else.

A few days later, Tim talked with Lori, one of the programming directors. “Lori, what limits LivingTV Interactive from doing more shows?”

“It depends on the show,” responded Lori. “For sports, the events are done in real time. Since the show is publicly broadcasted, we do not need to pay for any royalties, so our costs are mainly around our people and equipment. The only issue is that there is no way for LivingTV Interactive to survive on just producing for the sports audience alone.

The segment our business really wanted was primetime dramas. It has huge audiences that we could tap into. To do that, we need to see the show in advance so we can create the LivingTV interactive script. To legally produce something in advance, we need permission from the broadcaster so we end up paying huge royalties. Since the royalties are based on the show’s popularity, we can only do a handful of less popular day time dramas; forget anything in primetime. It’s just too expensive for us.”

“Isn’t there a way to create a TV show script in real time like sports? After all if the TV show has been broadcasted you would not need to pay royalties,” Tim asked.

“It has been looked at, but just did not make sense. There were just too many variables to try and do something on the fly. Certain events in sports are binary—either the player hits the baseball or does not. This does not translate as well over to dramas.”

“What about having something right after a TV drama?”

“It’s a nice thought Tim, but it takes a few hours to put together a good script for a show. By the time you have the script done, that show’s audience is long gone.”

Tim kept looking for ways to challenge the assumptions. “If we can’t afford to pay to get all the dramas in advance, and we can’t produce the dramas in real time, and it takes too long to create something for right after the TV drama, what is left?” Then it dawned on me pretty much every show is a weekly show. “Lori, what if we created a show that was based on the prior week’s show. Then we could show it ten to fifteen minutes before this week’s show. It would be a warm-up or pre-show before going into the main TV show. People could compete based on their knowledge of the show and last week’s episode.”

“Tim, given that it would shown right before next week’s show, it would give us plenty of time to script out the show. Since it is based on an already broadcast show, the events in the show would be public domain so no royalties. Since we would not have to pay royalties, we pretty much could do as many shows as we want, even the primetime ones that we could not afford before. I think you might be onto something! Let me run it by my manager, if you can run it by yours, we’ll see if there are any initial issues. We could also put together a proposal for your pre-show idea and run it by the weekly manager meeting.”

Tim was feeling pretty good. He had hit upon the idea that might help break the organization’s conflict. Going back and looking at his earlier cloud diagram, what assumption and connection did he actually break?

Tim’s idea basically challenged the assumption that a LivingTV Interactive show has to be shown at the same time as the broadcast show. In looking at the diagram, in order for them to focus on user subscription revenues (C Need), they must invest resources into creating and acquiring more programs (D’ Want). The underlying assumption was that there was no way to get programs without paying royalties. Tim challenged and broke this assumption with the what he called the pre-show concept. By building a game off a show already broadcast, LivingTV Interactive did not need the broadcaster’s permission or to pay any royalties. LivingTV Interactive was free to develop as many shows as it needed (C Need) without needing to pay expensive royalties and thus would be able to focus its limited resources on building a larger market (B Need). Win win. Neither side (or need) of the LivingTV Interactive conflict loses out.

Tim caught up with Mike, his manager, and gave him a quick run through of the concept. Mike felt pretty comfortable with it and agreed to add a quick 15-minute intro of the idea to the weekly manager meeting. Then Tim caught up with Lori and worked on the presentation. The only part left was to choose the snack that went with the presentation. LivingTV Interactive had a tradition of having a snack that related to the newest concept pitch. So for sports there were mini pretzels, for game shows there were animal crackers in the shape of letters (so you could spell things out). For the pre-show concept Lori and Tim agreed on Lays Potato Chips since they advertised that “you could not just eat one.” Their hopes with the pre-show was that it was so fun that “you could not play just once.”

At the meeting, people felt the pre-show idea had some potential. The “are we sure we can legally do this without getting sued” and “are we willing to do this” issue came up multiple times. Lori agreed to follow up with legal. The managers did agree that the concept was good enough so that it should be shown in the upcoming Exec review. There the goal would be to get approval to move forward with the idea to develop the concept and if approved, then on to the engineering development.

Tim was feeling pretty confident and thought after the Exec review, engineering could start working on the concept, but Lori was a little more cautious.

“Tim, getting the go-ahead to present in the Exec review is very good, but there is no guarantee. I’ve seen promising ideas proposed before only to have a few Execs hold out, ask for additional reviews, and basically drag out the approval process for months until people just give up. So take things with a grain of salt.”

“Lori, that does not sound very encouraging. Do we know who the key people that are in the Exec review?”

“Pretty much. There is John who heads up my group, programming. Your manager Mike who heads up engineering, Bill heads up advertising, and Jim is the VP of operations. Those four are the key players. I’ll talk with Terence in legal since we already have a copyright question. Human resources and IT are not involved in concept approvals, so we are okay there.”

“Lori, I think I see your point. If we just give a 15-minute pitch in the Exec review where no one has seen or heard the idea before, we will get a whole bunch of questions, issues, and concerns that could cause the review process to drag out. What if we meet up with the key players before the Exec review? In this way, we can give them an overview, have them ask questions, and give us a little time to develop some answers to their concerns.”

“Tim, that sounds possible. We can certainly meet with our managers. Bill is pretty approachable. Jim will be tough. His schedule is always booked.”

Meeting with Lori’s manager John, the head of programming, went pretty well. Overall he had been pushing for over a year to aggressively fund and expand the number of shows LivingTV Interactive supported. So anything that helped with his goal was an easy sell. The fact the pre-show concept did not require any royalties and could be created for any show was just ideal. The fact that the scripting team had a full week of real time to create the questions and interactions for each week’s pre-show addressed his key logistical issues. Like everyone, he just had the concern about checking with legal.

The engineering meeting with Mike went pretty smoothly as well. He thought the idea was an interesting one. From a development perspective, the pre-show format followed similar games LivingTV Interactive had done, so he felt technically it should not be too hard to do, just a matter of getting approval. He asked Tim to review the idea with one of the senior engineers, Peter, just to get his take on it.

It took an hour of walking through the concept for Bill in advertising to understand how it all worked, but once he understood that a pre-show could be developed for any show and this could significantly increase the number of shows and programs LivingTV Interactive could support, Bill got excited. More shows meant a larger audience and more time with the audience. Even better, was prime time. With larger numbers, better demographics, and prime time, it would significantly boost Bill’s opportunities to work with advertisers to sponsor and promote their products through LivingTV Interactive’s network. Granted, LivingTV Interactive was available in only three cities at the moment, but with more shows they could have much broader coverage in those cities and set up to expand from there.

The last person left was Jim, the VP of operations. In talking with his admin, Jim was regularly traveling to broadcasters, seeking venture capital, investors, and advertisers, trying to get support and investment money that kept LivingTV Interactive alive and going on a daily basis. He did not have an open spot for months. Yet he was also the most critical person.

Lori and Tim strategized for a while. They could just wait for the Exec review, but this was risky. Calling Jim without an appointment was out. They could try e-mailing him, but likely their e-mail would be lost. Then again, Tim thought if something stood out that caught his attention, it might get them the meeting they wanted. He looked at Lori and said he had it covered. “Let me double-check something and I’ll get back to you.” She looked a bit perplexed but decided to go along with it.

A few days later Tim got back to Lori and said they had a meeting next Thursday at 1 PM, Jim had a recent cancellation and wants to see what we have to show. Lori was floored.

“How did you get the meeting so quickly?”

“I’ll tell you later,” Tim coyly replied.

Thursday came around pretty quickly and Tim and Lori headed up to the third floor corner office. As they entered the office, the floor to ceiling windows offered amazing views of the LivingTV Interactive campus. Sunlight filled the room with warm light. Two paintings adorned the walls. Jim himself sat behind a large oak desk in an overstuffed recliner chair. It was quite a contrast from the grey engineering cubes and black ergonomic chairs three floors below .

“So… please come in. I’m anxious to see what you have to share,” Jim said. “It’s exceptionally rare that I get three e-mails all at the same time from my programming director, advertising director, and engineering director encouraging me to meet with someone. Usually they’re busy arguing with each other over corporate strategy, funds, resources, and the like.”

Lori looked over to Tim, “So that’s how you got his attention to set up a meeting.”

Tim smiled.

Tim and Lori spent about 20 minutes reviewing the pre-show concept. Jim nodded here and there and then looked over to them. “It’s an interesting concept. I like the fact that it gives us the opportunity to produce any show and as many shows as we want without putting us through the ringer paying for royalties. We will have to double-check the royalty part with the lawyers of course. The other concern is that it is important for us to strategically align with broadcasters. We want them to see us as a way to leverage their content assets, not a parasite taking advantage of their work. Right or wrong, they could sue us out of existence if they wanted or cared. Let me mull this over. You have done a good job addressing my initial questions. We have an upcoming Exec review, so we can revisit the idea there. Thank you for putting so much work into this.”

Lori and Tim had about two weeks before the Exec review. Lori had already had a few meetings with the lawyers over the whole legality of the pre-show concept. Finding an identical case was proving unlikely given that LivingTV Interactive and its interactive service was a “never been done before” concept. Jim’s major concern about being sued out of existence by the broadcasters if LivingTV Interactive was legally wrong was a bit haunting.

In the meantime, Tim decided to follow up with Peter, the senior engineer Mike had suggested. Tim reviewed the overall concept with Peter and he picked up on it pretty quickly.

“Tim, the pre-show interaction seems pretty straightforward,” replied Peter. “We already have a scripting program for game shows. If we dropped some of the game show specific parts and focused on the trivia aspect of the pre-show, and simple interactivity, we could have a pretty quick prototype for your pre-show idea. So if you were able to get approval, I think it would take just a month to develop.”

Tim thanked Peter for the insights and compared last minute notes with Lori as the Exec review approached.

So there was one last item before the Exec review . Tim anxiously asked Lori about the legal status; it was one of the few things that could kill the whole pre-show concept.

“Legal got back to me,” said Lori. “Basically they say it’s our call. The shows themselves are copyrighted of course. But once the TV shows have been broadcast we can create trivia games asking our users what happened. For example, did John ask Jane out? How many times did Bill ask about the movie tickets, and so on.”

“Sounds good, then I think we are ready.”

“Agreed,” said Lori.

The time for the Exec review came and Lori and Tim finished up their last-minute preparations. As with the management meeting, there were plenty of Lays potato chips to go around.

Jim, the operations VP, went through a few key items and then went to the pre-show concept. “So are we ready to introduce the the pre-show concept?” He looked at the murmurings around. “Is anyone here not familiar with the pre-show concept?” No one answered. “Hmm, Tim seems like you and Lori have been busy and saved us some time. Does anyone have any open questions or concerns about the concept?” A few minor questions here and there, but basically it distilled down to the willingness to move forward with it. Jim sighed…

“I basically see it this way; we have been trying to get the broadcaster’s interest for years. This concept gives us a chance to be able to expand our content and create interactive trivia shows for almost any TV program we want. I think it’s worth the risk. On one side the broadcasters just ignore what we’re doing. On the other side, we get their attention and it gives us a chance to discuss our company, possible partnerships, and advertising opportunities with them. All in favor of moving forward with a pilot show?” Everyone’s hands went up to move forward.

Jim turned, “Mike how many months will it take to get this concept developed given the number of projects we currently have in the queue?” Mike looked over at Tim, “Tim, do you want to explain?”

“Jim, it’s basically done,” Tim happily stated.

“What do you mean, done?”

“In between our meeting and the exec review, Mike had me talk with Peter. Peter looked at an existing application initially. He thought it would take about a month to develop. He had a few days free about two weeks ago while he was having a project go through quality testing. He pretty much completed the pre-show concepts in a few days. He did not have to really code anything; he just stripped out a bunch of code from a prior game show project he had done before. Since quality assurance testing had already tested the original game show project, the pre-show just needed some simple sanity checking. We can start our first show next week if we want.”

Both Mike and Tim smiled. Jim was surprised, “Impressive. Alright then. Let’s get something on the programming schedule and start our first pilot next week. We can start with something small and then w e can branch out from there.”

The meeting finished shortly afterward. Lori looked over at Tim and said, “Good job.”

Jim then pulled Tim aside. “Nicely done, Tim. You really went all out and did your homework. Usually, we spend weeks discussing and debating issues in the Exec review, but you addressed everyone’s issues upfront so when we got to the Exec meeting, the main concerns were already resolved. It was just a matter of everyone seeing that they all agreed. You were even able to get a prototype up and running. I really appreciate the work you have done and hopefully it will help a great deal to make LivingTV Interactive a success.”

The following week LivingTV Interactive started providing a pre-show for a primetime sitcom. It quickly became one of the most popular shows with LivingTV Interactive subscribers.

Tim thinks for a few more minutes. “So Randal, at the base of the CRT is a core conflict. A central struggle that the organization is faced with. In the LivingTV Interactive example, their main conflict was between trying to go nationwide versus increasing the number of programs. So for our issues what is the core conflict driving the company? What are some of the conflicts we are seeing around the issues we are facing?”

“Well Tim, there is certainly ongoing tension between marketing and engineering. We could start there.”

“Sure, can you explain it a bit more?”

“When I talk with Micky and Ashley about marketing, the focus is certainly on how to do more, go faster, and not lose quality. Micky wanted Exec reviews to ensure quality products were going out; he wanted to add urgent customer requests to the development schedules to show the customers that we can be responsive and attentive to the customer’s needs; and he wanted to expand and add new products.”

“Okay, that makes sense. So Randal, what is holding marketing back?”

Randal thinks for a moment, “Engineering I guess. They have only so many people and they are only able to get so much done, in fact it seems less and less of late.”

“What is holding up engineering?” Tim thinks out loud for a moment. “The company is contractually obligated to deliver certain features and if marketing wanted future contracts then they needed to deliver a quality and innovative product on time. At the same time, the company needs to grow and take on new customers. Ahh…that is it!”

“What?” asks Randal.

“I’m not completely following you, Tim.”

“Here, it’s like the LivingTV Interactive example,” Tim then sketches out a few boxes, crosses them out, and then draws a few more. After a few minutes, he settles on one. “Here, I merged a few sample clouds together and created this. It might not be perfect, but it is good for now.”

“So this is another conflict diagram thingy.”

“Sure Tim. Pictures help and you certainly seem excited about it. And I’m now the champion so I might as well try and be familiar with what I can. Feel free to continue.”

“So this cloud captures the struggle of your company. Everyone wants A) the company to be successful. On one side in order for A) the company to be successful, it must B) meet its existing commitments. In order to B) meet existing commitments, it must D) focus on the original requests. For example, engineering must work on the contracted features, deadlines, and quality expectations.”

“Makes sense. The company needs to meet our current obligations.”

“Correct Randal. At the same time in order for A) the company to be successful, it must C) grow and adapt. In order to C) grow and adapt, it must D’) focus on new requests. For example, it must respond to urgent customer requests, make adjustments based on Exec reviews, and accept new projects.”

“Ahh…this is the company and marketing needs to grow and expand the company.”

“Yes, but it is struggling to do both.”

“Hmm, let me redraw it as part of the bottom of the CRT. Like I said, if it is the true core conflict, you should see that it drives all the key issues you are facing.”

Tim takes a few minutes and starts sketching and adding boxes to the CRT. He adds the boxes from the conflict and bolds their lines so they stand out. Then he sketches out some additional boxes at the base and bottom of the CRT diagram .

“Okay Tim, you added a whole bunch of boxes. Care to elaborate?”

“So I added the core conflict to the bottom of our CRT diagram. The bold boxes relate to the cloud we just talked about. The other boxes add more clarity. So if we 1) want to be successful and 2) we are obligated to meet our contractually agreements with customers (deliver specific features, on-time and of high quality) then the company must 3) focus on meeting our existing commitments. If we must 3) meet existing commitments and 4) we only have enough resources to meet our existing commitments, then 5) we must focus our efforts on meeting our original requests.”

“Makes sense. This is the area Gary and engineering struggles with—meeting existing commitments. And he always talks about wanting more resources. So yeah, I can see that he has some struggles there. So what next?”

“At the same time if we 1) want to be successful and 6) adding new projects (grow), responding to Exec and customer requests (adapt) helps us maintain and gain new contracts and customers, then 7) we must grow and adapt. If we 7) must grow and adapt, then 8) we must focus on new requests. But why? Sure Micky and marketing wants to grow the company, but are they pushing impossibly hard?”

“I can answer that one, Tim. Part of it is that Micky wants to make his mark, but even more so Micky feels that the company has fallen farther and farther behind and that the competition will overtake us. Once that happens, the competition will start pulling away critical and long-term contracts that have sustained our company. He feels we have to keep growing to ensure our survival.”

“Ahh, that makes a lot more sense. So in order to 7) grow, we must 8) focus on new requests because 7b) the competition is catching up and putting the entire company at risk. This helps to explain why Micky is so driven.”

“Yep.”

“Randal, it also explains that Gary and the company must be under intense and impossible pressure. On the one side, everyone is trying to 5) meet current expectations at the same time 8) there is all this pressure to focus on new requests and 4) we only have enough resources for the original requests. So we either focus on one or the other or oscillate between the two and do neither particularly well.”

“And that is why engineering is not only struggling with the original contracts, but they are falling more and more behind. They are getting pulled into growth work as well.”

“But the current product development system can’t support both areas. So 8), 4), and 5) all lead to 13) many departments resources are stretched more and more and the problems get worse and worse.”

“I think you need to rename your CRT the doom cloud. It doesn’t paint a very pretty picture.”

“True and if I keep talking theory we’re going to be in trouble,” Tim says, thinking back to the LivingTV Interactive layoffs all over again. Too little, too late. “Randal, we need to get moving.”