Chapter Eight

Leadership Makes It Happen

This chapter presents three case studies that illustrate how leadership, teaming, and execution-as-learning vary across contexts. The Process Knowledge Spectrum, outlined in Chapter One, differentiates between routine, complex, and innovation contexts (see Figure 1.2 and, in Chapter Seven, Table 7.2). In this chapter, we look at real-life situations to see how leaders assess uncertainty, mobilize people, and meet their goals in each of these three contexts. To be effective, learning and teaming must be tailored to the context, taking into consideration the level of process knowledge available.

The first case looks at a company in a setting that is undeniably routine—the manufacture, sales, and distribution of mattresses to retailers across the United States. Unfortunately, the company’s performance had been deteriorating for a number of years, and a new CEO was brought in to reverse this trend. The second case tells the story of the chief operating officer in a complex operation, a Midwestern children’s hospital, who wanted to dramatically improve patient safety. Her challenge was to engage people in an organizational learning journey through which safer, better ways of operating could be discovered and implemented at the same time. The third case takes place in the renowned product design consultancy, IDEO, which epitomizes an innovation operation. Here company leaders and project team members routinely experiment with both small and large changes. Unafraid to fail, they do fail! But they learn fast, try again, and ultimately succeed in transforming parts of the operation to generate new lines of business while successfully providing innovative product designs to corporate clients of all kinds.

In each of these situations, ask yourself: What is the context? What is the goal? How is teaming used? What makes it safe for people to team? What does execution-as-learning look like in this setting? And finally, ask yourself at the start and finish of each case: Does the leadership style match the context?

Leading Teaming in Routine Production at Simmons

In routine operations, leadership is especially critical when a company has lost its way. It is a common story: an organization with a history of success fails to keep up with new technologies, shifting customer preferences, or heightened competition, and performance suffers. In this situation, teaming is a useful strategy for turning the company around. Leaders play a vital role in identifying a viable path forward as well as in inspiring teams throughout the company to help implement and improve the basic formula for serving customers. Examples we’ve seen in prior chapters in this book include CEO David Novak, who steered YUM! Brands through a period of remarkable growth and performance improvement, and Commissioner Charles Rossotti, who led a dramatic turnaround of the U.S. Internal Revenue Service to improve efficiency and customer service. This section looks in depth at a turnaround in the mattress industry, to show how leading teaming in a routine operation works.

The Context

When Charlie Eitel arrived at Simmons Bedding Company, the venerable 130-year-old mattress manufacturer that had once sponsored Eleanor Roosevelt’s radio show was struggling. Financial performance was anemic, morale was poor, and product and service quality were uninspiring. Eitel had a warm and easy-going manner and a solid track record as a turnaround leader of mid-sized manufacturing companies. He had been recruited by the firm’s new private-equity owners to join the company as its CEO. Eitel brought a simple vision to Simmons employees: “I want us, together, to create the kind of company where all of us want to get up and come to work in the morning.”1 He continued, “And the kind of company that others want to do business with.”

When he arrived at Simmons, it was pretty clear that few employees were eager to get up and come to work in the morning. Morale in some plants and divisions was abysmal. People worked hard when the boss was watching. Teaming was virtually nonexistent. Not only were relations poor within the eighteen manufacturing plants, but between them it was even worse. Plant employees tended to view each other as competitors rather than collaborators, and sharing best practices was virtually unheard of. In addition to suffering along with the rest of the U.S. economy from the fallout of the September 11, 2001, terrorist attacks, Simmons lost three of its biggest customers to bankruptcy three months later. Making matters worse, one of the company’s suppliers had shipped foam used for bed cushioning that was starting to give off a terrible smell.

Eitel recognized a lack of disciplined execution when he saw it. He saw low-hanging fruit everywhere. Processes could certainly be made more efficient. The workforce morale problem was an open invitation to make a difference. Eitel believed that his success depended on communicating a compelling direction to get people’s attention and, better yet, to inspire them to believe in themselves and in the firm. He was confident that the employees had what it took to do the work effectively and efficiently and he could see that they had not previously been supported in doing so. Eitel also believed in the power of a soft skills approach to make it happen. He decided to engage front-line employees throughout the company, site by site, in a program designed to build team skills and establish a culture of worker empowerment.

The Goal

Obviously, neither team building, nor even a vastly improved culture, will alone turn around a business. Eitel’s focus on personal growth and culture change had to be combined with clearly specified goals and skills, in order to channel employees’ new enthusiasm and teaming behaviors into performance results. In any turnaround, there are numerous problems and opportunities for improvement, but picking one reasonably clear target area to direct participants’ motivation into something measurable is key. For routine operations like mattress manufacturing (unlike DSL in its early days), this kind of specificity is realistic.

Eitel chose Zero Waste as the goal to rally and focus the teaming energy. Zero Waste had the right elements for this focus, for two reasons. First, everyone can relate to waste. No matter what your job, you can find opportunities to reduce waste, whether in materials, time, steps, or energy, and work teams can help brainstorm ways to do so. Second, many dimensions of waste are relatively easy to measure—allowing the demonstration of small wins and steady progress, if successful. Simmons’s focus on Zero Waste was intended to channel enthusiasm created by the team-building program into something measurable.

Much of Eitel’s confidence in the program came from a successful pilot he authorized in one of the firm’s eighteen manufacturing plants. The Charlotte, North Carolina, plant was one of the two worst-performing in the company. With eleven languages spoken by workers—whose duties included sewing, panel and border repair, flat panel cutting, creating new sewing methods, or machine maintenance and repair—perhaps this was inevitable. Plant managers relied on a dictatorial micromanaging style. Coordination between groups, such as panel cutters and panel sewers, was problematic—lacking precision and colored by finger-pointing. To test the premise that the program could help improve the company’s performance, Eitel proposed starting with Charlotte. A good test is a tough test.

In retrospect, it’s not difficult to see how the team program had a profound impact on almost everyone in the Charlotte workforce. When Eitel decided to try it, however, his decision was met with resistance by his own team as well as by the company’s owners. For one, money was tight and spending a sizable amount on training didn’t seem to some executives to be a wise move. Two, some people felt the command-and-control culture in most of the plants was too entrenched to change. But Eitel’s hunch—that bringing the program to the Charlotte plant was “the right thing to do,” as he put it—turned out to be right. The plant manager perhaps made the most dramatic change of all, from a highly dictatorial approach to an engaging and inclusive style. In his own words, “I thought I had to act that [dictatorial] way. It’s how I had always seen [plant management] done. But I didn’t like it.” Two people who worked for him had been planning to leave Simmons, but, as a result of his changed behavior, decided to stay. The plant saw performance improvement quickly, and within the next year was awarded “Plant of the Year,” followed, as improvements continued, by an OSHA safety award. Charlotte’s success emboldened Eitel’s team to spread the program across the company’s other plants. In this case, a roll-out mindset was appropriate, and was used, with minor improvements in logistics.

Building a Teaming Infrastructure

Facing a turnaround situation such as this one, many new CEOs might have sought to restructure, cut jobs and costs, or close plants. Instead, Eitel invested a substantial sum in a team-building program with outdoor “ropes course” activities followed by classroom learning, to engage people in personal growth and teamwork, and to focus their attention on the company’s goals.2 This certainly didn’t seem like a quick fix. Spending seven million dollars over three years to send plant managers and employees to off-site team-building sessions for two or three days each? But Eitel believed that turning around the business hinged on changing the Simmons culture. By putting people in challenging physical teaming experiences, where they experienced firsthand what it was like to depend on, and be supported by, their colleagues, Eitel hoped to reframe and transform poor work relationships to improve the company’s sluggish performance. Once people’s eyes were open, he hoped they would see the possibilities of being a part of a collaborative, learning-oriented culture, and become motivated to deliver the operational excellence that would restore Simmons’s profits.

Some managers opposed the plan and opted out by leaving the company, incidentally not harming the bottom line. Most, however, went along and found the program a highly positive experience. The program helped them reframe the situation, inviting them to view and participate at Simmons in a very different way. One plant employee called it among the five most important experiences of her life, “right up there with marriage and childbirth.” Many managers waxed enthusiastic about how time spent with colleagues during the physical challenges of the ropes course taught them to trust one another’s support, tap new strengths, and work collaboratively toward a common goal.

The team-building program built on foundational psychological principles by providing team experiences that require trust and cooperation, to give people who work together an experience of a new way of working. In this way, the guy who is afraid of heights and must climb a telephone pole is able to find the courage to do so because of the group’s support.

Execution-As-Learning

Teaming focused on improvement, whether in manufacturing or fast food, starts with the recognition that the basic process knowledge for achieving the products or services customers want is well developed. It’s codified—that is, there’s a kind of recipe for action that can be (and usually is) documented. Collective learning in this setting is thus usually focused on improvement—making the existing process better, more efficient, less expensive, difficult, or time-consuming. Execution-as-learning, then, is about driving continuous improvement for greater efficiency and reliability. This was the essential nature of the journey that Simmons faced.

Eitel and his team went to great lengths to ensure that the emotional impact of the team program would translate into the daily work of people in the company. Zero Waste became the rallying cry to help channel employee energy toward specific operational goals. Appropriately, for a routine operations setting, the Zero Waste initiative stemmed from lean production principles. It drew inspiration from the Toyota Production System, which includes the drive to reduce waste (muda) as a core principle. The goal of teaming on the manufacturing floor was to constantly modify, refine, fail, and learn toward this end.

Perhaps this seems too reminiscent of Taylor’s time and motion studies, intended to break up tasks into the most efficient—that is, the least wasteful—steps. Henry Ford, nearly obsessed with waste’s drain on efficiency, criticized the waste he saw in farming, noting, “The average farmer puts to a really useful purpose only about five percent of the energy he spends. … A farmer doing his chores will walk up and down a rickety ladder a dozen times. He will carry water for years instead of putting in a few lengths of pipe. His whole idea, when there is extra work to do, is to hire extra men. He thinks of putting money into improvements as an expense. … It is waste motion—waste effort—that makes farm prices high and profits low.”3

There’s one big difference, however. Zero Waste invited those doing the work to figure out how to make the tasks more efficient. For Ford and Taylor, that was the job of managers and engineers.

At Simmons, the drive toward Zero Waste, fueled by team training, produced $21 million in measurable cost reductions in the first year alone, while sales and revenue grew. Supplemented by follow-up training in teaming and problem-solving skills, people had begun to embrace a new culture of learning in the company, emphasizing the idea that Simmons’s employees’ fates were linked together.4 A new incentive program tied 25 percent of workers’ weekly compensation to a plant’s overall quality and productivity, encouraging cooperative effort. Final product quality, percentage of a product scheduled to ship that did ship, and productivity were tracked daily. Perhaps because of interconnected destinies, Simmons employees very often helped one another on the job.

Teaming skills development followed the team-building exercises for several months, supported by systematic assessment. This helped employees develop technical and interpersonal skills, collaboratively. Five stages of teamwork were outlined for each part of the operation. For example, the five stages for Teaming for Production were:

• Level 1: Employees could understand daily production goals, production zones, and learn manufacturing concepts.
• Level 2: Teams could monitor their work in progress, meet existing goals, clear zones, and understand lean principles.
• Level 3: Teams could set, measure, post, and report team production goals.
• Level 4: Teams could consistently meet goals and initiate production improvements.
• Level 5: A team could reevaluate goals and continuously improve, as well as coordinate production between teams and shifts.

Similar five-level trajectories were outlined for Safety, Quality, Service, Cost, Cross-Training, and Visual Management. When a team’s members thought they were ready to advance from one stage to the next, they made a formal presentation to the leadership team at the plant. This systematic approach tied on-the-job skills learning, personal growth, incentives, and results together in ways that were motivating and easy to understand.

Update

Simmons implemented a curriculum that raised awareness, built skills, and rewarded people for learning and teaming. Employees were helped in moving up the cognitive ladder from, for example, meeting preset production goals to independently setting viable production goals, estimating time, materials, and labor. This was a classic routine operations turnaround—accomplished through motivating and supporting teaming for continuous improvement. The company’s performance showed dramatic and robust improvements for the next six years, until the financial and housing crises of 2009 sharply lowered demand for mattresses.

Leading Teaming in Complex Operations at Children’s Hospital

In complex operations, leaders confront the challenge of ever-present risk. Whether global supply chain or tertiary care hospital, a Complex Operation faces the possibility of failure around every corner. In this situation, teaming is a strategy for identifying vulnerabilities, brainstorming designs to prevent failures, and analyzing those failures that do occur. Leaders play a vital role in inspiring and supporting teaming in this context. Examples of complex operations in prior chapters include NASA’s space shuttle program and Intermountain Health Care. This section looks in depth at a leadership initiative that transformed a large hospital to show how teaming in a complex operation can help identify and reduce risks in patient care.

The Context

Children’s Hospital and Clinics in Minneapolis, Minnesota, is a major tertiary care hospital for children, with six facilities located throughout the Minneapolis–St. Paul area. When Julie Morath took the job of chief operating officer at Children’s, she understood the complexity of patient care operations and clearly recognized the challenge ahead as one with neither a manual nor a successful predecessor to emulate.

All complex organizations face unknowns (Will the supply chain face disruptions? Will the aircraft carrier successfully land its aircraft in a stormy sea?), but hospitals confront more than their fair share. The timing and type of patients who come through the door of the emergency room or show up in a hospital bed, and the services they will need, can be difficult to predict. Moreover, treatment protocols and medications are constantly changing as a result of advances in science, technology, and clinical research. Chronic diseases such as cystic fibrosis or advanced diabetes require ongoing customized care, and new diseases, such as the H1N1 virus, periodically show up, demanding intense discovery and problem solving. Problems—small and catastrophic, unique and recurring—are the norm. The kind of teaming that is needed to find and solve problems involves keen observation from multiple perspectives, timely and open communication, and quick decision making. The stakes are high—particularly in the ICU or an operating room. Errors can have dire consequences. Yet, counter to expectations of achieving Six-Sigma quality in a manufacturing plant, hospital processes are seen by many experts as too complex to perfect.

To better understand the potential for safety failures, consider this episode in one young patient’s hospital stay. Nurse Ginny Swenson5 wheeled ten-year-old Matthew from the intensive care unit to Children’s surgical floor, despite needing medications usually reserved for the ICU, because of capacity constraints. Swenson described Matthew’s condition to Patrick O’Reilly, a newly graduated nurse, and instructed him to program the electronic infusion pump for the morphine dosage prescribed by the physician.

Matthew’s care was dependent, at the very least, on accurate communication between a physician and two nurses. O’Reilly, unfamiliar with the particular morphine pump, asked another nurse, Molly Chen, for help. Unfortunately neither she nor any of the other nurses in the unit had much previous experience using pumps for continuous pain control. Chen, an experienced nurse, felt rushed. She was taking time from her many other duties to help O’Reilly. A conscientious, capable professional, she peered at the unfamiliar machine’s dials.

To program the pump, one needed to enter both the morphine concentration and the appropriate rate of infusion. Neither Chen nor O’Reilly saw a concentration listed on the medication label (it turns out the label had been printed in a way that folded critical information inside the cassette where it could not be seen), but Chen used the information visible on the label to calculate and program the machine with what she believed was the correct concentration. She entered the rate of infusion as Swenson had instructed. Following hospital procedure, O’Reilly verified Chen’s calculations and settings. Then Chen left to care for other patients.

Within minutes, Matthew’s face turned blue. He was having trouble breathing. O’Reilly sprang into action, turned off the infusion machine, called for the doctor, and began ventilating the child with a breathing bag. The doctor arrived within a very few minutes and confirmed O’Reilly’s suspicion that Matthew had been given a morphine overdose—several times more than was appropriate. The doctor administered a different drug to reverse the effect, and within seconds, Matthew’s breathing returned to normal.

The Goal

In contrast to Eitel at Simmons, Morath’s challenge was not to inspire employees to follow her down a well-worn path of improvement in a routine operation, but rather to create a self-organizing learning system that would pioneer new terrain. Morath had a single-minded goal—to avoid harming hospitalized children. She aspired to achieve 100 percent patient safety at Children’s at a time when medication errors were rarely discussed among caregivers, let alone by senior management, and were widely considered inevitable by industry insiders. Thus, knowledge of how to improve safety dramatically was not only limited, but it was likely to differ in various parts of the organization based on the nature of the procedures. Counterbalancing this challenge of venturing into new territory, however, was the fact that this was indeed a goal that everyone could buy into. No one wants to harm a hospi­talized child.

When Morath interviewed for the COO job, she was already talking about patient safety. She had twenty-five years’ experience in patient care administration and had previously been a registered nurse. With her calm demeanor and ready smile, she exuded an unflappable, can-do attitude that was both reassuring and inspiring. After joining Children’s, she continued her “carefully constructed conversations around the topic of safety with people who would have to be on board with the initiative.”6 In the beginning, this was not easy. As Morath noted, it was “difficult to broach the topic of safety because most people get defensive. Talking about safety implies that we are doing things, ‘wrong.’ ”7 For example, recall the teaming failure that led to Matthew’s overdose. Fortunately, an episode of successful teaming was quickly triggered, and Matthew made a full recovery. This is not the kind of story that makes newspaper headlines or even one that would have necessarily been reported a decade ago in a busy urban hospital. It was, however, clear to Morath that avoiding these kinds of failures was of the utmost importance for the goal of 100 percent patient safety. To prevent this kind of failure in the future, it was important to understand who or what was to blame.

Looking at the string of events, this is not an easy question to answer. Did the problem lie with Chen, who programmed the machine? O’Reilly, who verified her settings? The administrator who placed the postsurgical patient in a unit where nurses were unfamiliar with using a pain pump? The pharmacist who delivered a morphine cassette with an ambiguous concentration? The computer programmer who made the medication labels too large to fit on the cassette, obscuring some text? Or perhaps Swensen, who left Matthew in the care of a novice nurse? In a word, yes. All of them contributed to the failure. We cannot single out anyone as the culprit; the events succumb to a multicausal analysis, which ultimately points to a system breakdown. A novel situation combined with a number of small deviations from optimal practice to produce a potentially fatal failure. Unfortunately, because of the complexity of the activities and the idiosyncratic nature of individual patients’ situations, incidents like this happen over and over again in hospitals around the world.

The power of teaming in complex operations is the ability—with the right leadership, interpersonal awareness, and discipline—to anticipate, problem solve, diagnose, and reduce system risks, so as to avoid consequential failures. How do leaders create this kind of learning organization? The answer is not exactly the same as what Eitel did to lead change at Simmons—communicate a compelling goal, make it safe to team, and support teaming for improvement throughout the company—but it’s not completely different, either.

Leading in a complex operation starts with communicating a compelling goal to motivate people to take action without easy answers. The need to tie that goal to a meaningful shared purpose that contributes to making a better world is far greater in complex operations than in routine operations. This is because people have to cope with greater uncertainty. They have to take greater interpersonal risks—such as admitting mistakes and pointing out flawed systems to bosses and others. The opportunity to make a positive difference in the world supports and promotes the greater willingness to sacrifice that these interpersonal risks require. Tying the work the organization does to the larger purpose of creating a better world is itself a reframing. Leaders in complex operations must pay even more attention to creating an environment of psychological safety, where people can tolerate the risks of learning, than in routine operations. The interpersonal risks in complex operations are that much greater.

When leaders inspire and support teaming in this setting, they are seeking coinvestigators: people willing to work together to seek out, identify, and solve problems that have never been solved before. They are embarking on a journey, facing many unknowns. In contrast, at Simmons, the path forward had the comfort of a blueprint.

Building a Teaming Infrastructure

Soon after assuming her leadership role, Morath assembled a core team that she called the Patient Safety Steering Committee (PSSC). This was a select group of key influencers who would help design and launch the “Patient Safety Initiative.” To identify those with interest and passion, as well as to communicate widely with as many people in the hospital as possible, she delivered a series of formal presentations about medical errors, presenting the then still unfamiliar data that as many as 98,000 people in the United States were dying annually from medical errors—higher than the number from car accidents, breast cancer, or AIDS. The PSSC was deliberately diverse—with doctors and nurses, department heads and front-line staff, union members and executives. It was a group that understood and represented the organization well.

Despite the pedigree of the PSSC and Morath’s compelling delivery, many pushed back against the idea of the initiative at first, reluctant to believe that errors were a problem at Children’s. They believed the national statistics, perhaps, but they did not believe that these data applied to Children’s. Tempting as it must have been to Morath to simply reiterate her message more forcefully—given that she understood that all hospitals, because of their operational complexity, were vulnerable to error—she did not try to argue the point. Instead, she thought­fully responded to the resistance with inquiry. “Okay, this data may not be applicable here,” she concurred. Then she asked, “Tell me, what was your own experience this week, in the units, with your patients? Was everything as safe as you would like it to have been?”8

This simple inquiry seems to have transformed the dialogue. Note its features. Her question is an invitation—one that is genuine, curious, direct, and concrete. Each caregiver is invited to consider his or her own patients, his or her own experiences, in his or her own unit, in the prior few days. Moreover, the question is aspirational—not, “Did you see things that were unsafe?” but rather, “Was everything as safe as you would like it to have been?” It both respects others’ experience and invites aspiration.

Too many would-be leaders forget about the power of inquiry, and instead rely on forceful advocacy to bring others along. As Morath showed, inquiry respects and invites. As people began to discuss incidents with her and with others that they had thought were unique or idiosyncratic, they realized that most of their colleagues had experienced similar events. As Morath put it, “I found that most people had been at the center of a health care situation where something did not go well. They were quick to recognize that the hospital could be doing better.”9 She led as many as eighteen focus groups throughout the organization to allow people to air their concerns and ideas.

To build the psychological safety needed for the inevitably difficult conversations about errors and failures, Morath frequently described her philosophy on patient safety—to anyone who would listen. In her words: “Health care is a very complex system, and complex systems are, by their very nature, risk-prone. The culture of health care must be one of everyone working together to understand safety, identify risks, and report them without fear of blame. We must look at ways to change the whole system when we manage to zero defects.”10 By emphasizing the systemic nature of failures, she sought to help people move away from a tendency to find and blame individual culprits.

Complex systems, as Morath recognized, also meant no easy path forward. She was passionate about her vision to direct the organization toward 100 percent patient safety but did not know how it would be accomplished. Admitting that she did not have all the answers, she enlisted everyone’s help to work together to “look at ways to change the system.”

Health care has had a long and painful history surrounding medical mistakes. Often called the “ABC’s of Medicine”—Accuse, Blame, Criticize—the culture of medicine emphasized individual incompetence as a source of mishap, rather than careful analysis of where systems may have broken down. This mindset made blame, shame, and disciplinary action the logical approach to producing high-quality care. Unfortunately, however, this approach neither produced error-free care nor pointed the way to reducing medical errors, even during a period of heightened scrutiny. The ABC mindset is not conducive to honest, rigorous investigations into what causes the failures that occur, but rather seeks individuals to blame. Moreover, it does not take into account the belief held by an increasing number of health care professionals: that many medical errors can be traced to a fault in the system rather than to any one individual.

In fact, what the ABC mindset did best, I would argue, was to silence reporting of errors. Most health care workers are rightfully protective of their reputations and jobs. Especially when an error resulted in patient harm, doctors and nurses involved in the patient’s care were frequently too afraid or too traumatized to discuss it. This left many dedicated and talented clinicians burdened with an internal sense of shame and nagging self-doubt about their value to the profession.

Stimulating constructive dialogue required a fundamental shift on many fronts: organizational structure, processes, norms and values, and leadership styles. Psychological safety’s most important role in a health care setting is to allow increased accident reporting, a necessary first step if a hospital is to learn from its mistakes and improve over time. Health care also has a long, entrenched history of professional hierarchy. Those on lower echelons often do not feel psychologically safe enough to speak up to superiors with questions and suggestions.11

Morath knew firsthand about the aftershock and emotional pain of medical accidents for health care workers. She never forgot one she’d witnessed thirty years earlier, when she was a young nurse: a four-year-old patient died from an anesthesia error. What Morath remembered, even more than the devastation of the child’s death, was that “the nurse who felt responsible ‘went home that day and never returned,’ guiltily giving up the career she loved. Doctors and other nurses ‘just shut down’ and never talked to one another about what happened. The hospital’s attorneys swooped in to do damage control. ‘It just didn’t sit right and it plagued me,’” Morath said, decades later.12

So she introduced a new system for reporting medical incidents called “blameless reporting.” The idea was to allow people to communicate confidentially or anonymously about medical accidents without being punished for doing so, so as to bring as many of these problems as possible to light, to determine their underlying causes, and to keep caring professionals in their positions. To support the new policy, members of the PSSC created a new Patient Safety Report form that asked caregivers to describe an incident in their own words rather than to simply check off appropriate boxes as they had in the past. Questions such as: “How did it happen? What was the chain of events?” and “What were the contributing factors? What could prevent future occurrences of the event?” trained the reporter to reflect deeply on the accident and to provide a full explanation.

Morath also instituted new language to discuss safety issues, encouraging people to, for example, substitute “study” or “examination” for “investigation.” She thought of an examination as learning how systems work and how the pieces fit together. An investigation, on the other hand, was more like a police line-up, assigning blame to someone or something in a linear search to determine a single cause. Although Morath emphasized avoiding words that implied blame and encouraged language conducive to learning from failures, the psychological safety this promoted was rooted in her vision that “accidents” (a term preferable to “error”) arose from faulty systems rather than faulty persons. “Blame” was to be replaced by the word “accountable,” defined as being responsible to the duties of a particular job and whatever knowledge it required, as well as to understanding the larger system in which one was a human component.

Execution-As-Learning

In a complex operation, a leader must use widespread teaming to find and solve problems. This means making changes in the organization’s operational structures to reduce barriers to teaming, as well as setting up and supporting cross-functional team activities, such as incident reviews. As we saw in the case of Eitel at Simmons, an essential leadership task is persuading those with control over resources to fund changes that look costly in the short term, but prove cost-effective in the long term.

Teaming to solve safety problems at Children’s started with Morath’s creation of the PSSC. This was soon followed by implementing focused event studies by cross-functional temporary teams after every significant safety incident. For example, within twenty-four hours of Matthew’s near-fatal overdose, Dr. Chris Robison, associate director of medical affairs, held a closed-door meeting with all those directly involved in Matthew’s care. No one would be punished unless malfeasance of some sort was discovered (an exceedingly rare outcome). This helped create the psychological safety to discuss and analyze causes of a failure, to inform preventative measures. Teaming was needed, as Robison commented, because “we could not have gotten as thorough an understanding of what happened to Matthew if I had talked with people individually. There was so much point and counterpoint during the meeting. We saw the event from the nurse’s perspective and then from the respiratory therapist’s and the doctor’s. It is not that people only perceive things consistent with their viewpoint, but that they have actually only touched one part of the elephant.”13 The teaming culture was essential in promoting execution-as-learning.

When leaders successfully engage employees in a collaborative learning journey, activities start to happen that were not designed at the top of the organization. Ideas start to bubble up, and activities start to take hold and spread. To a manager seeking to “get the job done,” this process might at first seem laborious and slow. But engaging people as active thinkers and learners is truly how a complex operation achieves its goal.

Many of the changes at Children’s originated from the front lines. For instance, a clinical nurse specialist named Casey Hooke came up with the idea for a “safety action team” in the Hematology/Oncology unit. This cross-functional team of eight employees decided to meet monthly to identify medication safety hazards. At one meeting, a nurse talked about a near-miss accident using a feeding bag; she had infused a large and potentially harmful amount of fluid into a patient. The group researched the question and discovered a safer feeding bag that could prevent this kind of accident in the future. The team needled and pushed and succeeded in getting the safer equipment implemented throughout the hospital. Soon, two other units, inspired by Casey’s efforts, launched Safety Action Teams. After a while, the Patient Safety Steering Committee directed the manager of each clinical unit to establish a Safety Action Team of its own.

Another bottom-up initiative was the “Good Catch Log”—an idea for a literal logbook, located in locked medication rooms on each hospital floor. If a nurse “caught” a problem that could have resulted in a medication error, he or she could record the events anonymously in the log. Safety Action Team leaders periodically gathered the Good Catch Logs and summarized the information for the rest of the team. During meetings, the team discussed the information and revised policies and procedures accordingly. As nurses realized their entries often led to concrete changes, they became even more comfortable writing in the logs.

Update

Morath remained at Children’s as COO for ten years, leading the organization’s slow but palpable transformation. During her tenure, the hospital earned national attention as a leader in patient safety. Over time, Morath, along with countless employees, found that blameless reporting and vigilant teaming had become integrated into the way the hospital operated. The case illustrates that leading in a complex operation often means providing more good questions than good answers.

Leading Teaming for Innovation at IDEO

In innovation operations, leadership is needed to create a fertile environment for exploration and experimentation. Teaming is essential for coming up with new ideas, winnowing them down to viable options, testing and refining them, and ultimately producing novel and useful new possibilities. Examples of innovation discussed in prior chapters include pharmaceutical research at Eli Lilly, the introduction of the first hybrid vehicle by Toyota, and the creation of the Water Cube, the iconic aquatic facility, for the Beijing Olympics. In this section, I’ll show how teaming works to produce innovation by looking in depth at IDEO, the most consistently innovative company I’ve studied.

The Context

The idea of innovators as particularly creative individuals who march to the tune of a different drummer and shrug off others’ criticism and skepticism has enduring appeal. But innovation today is almost always a team sport. Innovation occurs when new ideas and new solutions emerge at the intersections between areas of expertise, which happens through teaming. Consider what happens at IDEO, the product design consultancy whose prize-winning innovations include the first computer mouse (for Apple), interactive dressing rooms at Prada, and interiors for Amtrak’s Acela trains, along with a host of far more mundane household products like Crest’s “Neat Squeeze” toothpaste.

IDEO originated from a 1991 merger of three industrial design companies and an engineering firm. David Kelley, an electrical engineer and Stanford professor with an infectious laugh and boundless curiosity, was the firm’s founding CEO and inspirational leader. In 2000, when Kelley became chairman of the company, designer Tim Brown took over as CEO. IDEO employees bring expertise in mechanical, electrical, and software engineering, as well as industrial and interaction design, prototype machining, human factors research, interior architecture, and more. With locations around the world (Palo Alto, San Francisco, Boulder, Chicago, Boston, London, Munich, and Tokyo), IDEO serves global clients and regional companies alike. The company’s talented staff, its focus on diagnosing unmet end-user needs, and its disciplined innovation process have earned it dozens of Industrial Design Excellence Awards in categories ranging from medical and scientific equipment, to digital media, to consumer products.

The hard part of innovation, according to Brown, is not coming up with a great new idea, but successfully steering a new idea through an old organization.14 Of course, some of us think having a great new idea is hard, too, but Brown has a point. Innovation is part creative inspiration and part persuasion; part team problem solving and part organizational change. Taking a look at how IDEO innovates serves to illuminate important features of teaming in innovation operations.

The Goal

By the late 1990s, Kelley and other leaders at IDEO recognized a growing need to help companies figure out product areas to innovate, rather than merely responding to requests to design a specific new product. This could be characterized as a need for design strategy rather than for design. An experiment in new services to help clients “understand the world and innovate accordingly” as the company put it, was thereby launched, which became known as Phase Zero,15 because it would precede the other phases of innovation.

The new innovation-strategy services would set the context for further design initiatives by identifying new product or service opportunities. If a Phase Zero project was successful, it would likely generate new work for the core innovation business.

A project for Simmons became one of the early experiments in Phase Zero as a stand-alone service.16 Rather than being asked to design a new bed, a marketing executive at Simmons hired IDEO to help the company “understand the world in a new way and innovate accordingly.” Despite what appeared to be a positive response from Simmons at the project’s conclusion, Douglas Dayton, the leader of IDEO’s Boston office, where the Phase Zero team had worked, reluctantly recognized that the project had failed to achieve its potential. The team’s ideas seemed to him creative and feasible, but Simmons was not acting on them.

What had gone wrong?

The failure was not due to a lack of energy or imagination. Conducting interviews with mattress customers of all ages, using cameras, visiting mattress stores, and even shadowing mattress delivery people, the Phase Zero team had learned a lot.17 Its members worked hard to explore how the bed and its associated space, furniture, and other objects acted as a system to support the sleeper at different points in his life. This exploration had identified an underserved group dubbed “the nomads,” hyper-mobile single 18- to 30-year-olds. Between their parents’ homes and their own first home, nomads slept on futons, air mattresses, or second- or third-hand mattresses, because available bedding products were too unwieldy or expensive for their mobile lifestyles. Nomads did not want to buy large, permanent items. They expected to move frequently. They lived in small apartments or with roommates, and often used bedrooms for entertaining and studying, not just sleeping.

This idea gave rise to some product opportunities for nomadic singles. One was a self-contained integrated mattress and frame. Another was a mattress built of visually distinct, easily folded, lightweight modular layers, which could be customized and easily moved from place to place.18 Armed with beautiful sketches and compelling text, the team went back to see its client, from whom it received genuine, but unmotivated, enthusiasm. When it came time to see ideas converted into action at Simmons, however, IDEO would be disappointed.

Let’s step back. How does IDEO usually innovate so successfully?

Building a Teaming Infrastructure

At IDEO, cross-functional teams that combine engineers, designers, architects, human factor specialists, and many others are assembled and reassembled for particular projects and parts of projects. They work in an energizing, chaotic, yet surprisingly disciplined teaming process. In this process, the specifics of the many tasks that need to be done cannot be prescribed in advance, but the broad outlines of the process are clear and well under­stood by all.

As is characteristic of most innovation operations, IDEO teams relied on cross-fertilization. Transferring knowledge across disciplines within teams, as well as from project to project, IDEO team members routinely developed novel solutions to diverse problems. Not surprisingly, they had limited collaboration or cross-fertilization with clients. The outside world of greatest interest to IDEO was the world of end users—not the world of corporations, with their bureaucracies, hierarchies, politics, and constraints. In fact, it’s fair to say that IDEO once held disdain for corporate environments.

The core innovation process at IDEO had four distinct phases, all of which relied on teaming. In Phase One, Concept Generation, a team, inspired by the study of potential end users in the field, develops numerous abstract design solutions before selecting a single one for development. Phase One thus addresses the most basic questions about the product, the problem it solves, and the cost. Phase Two, Concept Development, considers questions such as, “How will this product work? How will we make it? How will we test it?”19 In Phase Three, Detailed Engineering, team members define product details and build and test prototypes. The output is detailed—a working design, reports and evaluations, a costed bill of materials, technical documentation, potential manufacturing vendors, and a work plan. In Phase Four, Manufacturing Liaison, an IDEO team prepares a product and supporting documentation to hand off to a client’s manufacturing partners, ready for high-volume production.20 Teaming is essential in this journey, because the team composition shifts throughout the phases, with different experts being recruited to help with different tasks to accommodate the wide range of work and areas of expertise needed in each phase.

To encourage creativity and learning, the company’s leaders had long cultivated a climate of psychological safety. To say that people at IDEO speak up freely would be a gross understatement. Designers act on their ideas with little concern about what others, including bosses, might say. Meanwhile, bosses also are not shy about speaking their minds. Letting colleagues know that you think a design is flawed is a sign of respect. But not during brainstorming, where criticism is explicitly forbidden. These rules are not just widely understood; they are codified. Conference room walls at IDEO are stenciled with brainstorming slogans such as: “Be visual.” “Defer judgment.” “Encourage wild ideas.” “Build on the ideas of others.” “Go for quantity.” “One conversation at a time.” “Stay focused on the topic.” It helps that IDEO’s learning environment is one of self-proclaimed “focused chaos,” where taking interpersonal risks such as offering crazy ideas is part of the game.

In this early foray into Phase Zero, the teaming did not include clients. What it would take to navigate a new product line idea through the client organization was not considered. The ideas and designs had all been developed in IDEO offices or out in the field studying end users. An important part of the innovation journey had not been traveled. What would it look like to truly team with clients in a Phase Zero project? Let’s take a look at what IDEO subsequently did.

Team members launched a revised Phase Zero effort by including clients in a new way, clarifying the project’s aims and determining the possibilities, together. One or two clients would even join an IDEO Phase Zero team. To make it work, IDEO needed more employees capable of doing the business and organizational facets of Phase Zero work. They deepened the firm’s “business factors” discipline, complementing the design and technical factors experts that dominated IDEO’s culture and capabilities. Business factors experts at IDEO today bring skills that include the ability to penetrate clients’ bureaucratic mazes and analyze client cultures. This, in turn, allows deeper collaboration with clients. Put simply, IDEO’s prior skills lay beyond the client—near the realm of “users.” Effective Phase Zero work called for IDEO to add understanding of client organizational systems to its deep understanding of user needs and technological possibility.

Execution-As-Learning

The Simmons project would, at first blush, seem a perfect Phase Zero match, given the mandate to find new opportunities for a mattress company. This is just the kind of challenge that would intrigue IDEO: take a mundane category and run with it. Indeed, the team displayed creative thinking and imaginative exploration. Yet, if a client is to implement what IDEO recommends (a product line, for example) or act on the expanded innovation space IDEO maps out, then the solutions offered would have to reflect what the client (not just IDEO) is capable of envisioning and executing. It is not enough to have one or a few senior executives enthusiastic about new ideas. A project would only support client innovation if it included teaming with clients. It became clear, as Tim Brown put it, that the firm had to learn more about how to usher ideas through the organizational systems through which innovations ultimately touched customers’ lives.

Update

A few years after the failed Simmons project, IDEO had dramatically expanded its emphasis on business factors and reconfigured and coached teams to integrate these skills. Thirty percent or more of its revenues were coming from Phase Zero work. The firm hired and promoted more people with business knowledge, expanding its business factors practice. IDEO’s evolving journey into a new kind of client collaboration showed its characteristic ability as a learning organization, innovating and expanding its expertise in new realms, cycling forward through experimentation, failure, and many unique successes.

Leadership Summary

Essential learning in organizations occurs not through individuals working alone to sort through and solve important problems but rather through people working and learning collaboratively in flexible teams. At Simmons, production, sales, and line-management teams learned to carry out the core tasks of the routine operation more efficiently and effectively, with greater skill and dignity. What looked like a leap of faith to Eitel’s new colleagues was actually a well-worn path for Eitel. At Children’s, clinical, managerial, and operational teams participated in the creation of new learning processes, making progress on a critically important goal in a frustratingly complex setting. At IDEO, cross-functional teams skilled at innovation also learned how to diagnose and befriend corporate systems—innovating not just a product but the company’s business model.

In all three cases, leadership helped make it happen. The flavor of leadership varied, however. Eitel had a blueprint for change and was a compelling salesperson, winning support day by day for the effortful team work ahead. Morath skillfully invited coinvestigators, high and low, to help her discover processes for ensuring patient safety. And Kelley, like many innovation leaders, seems to have merely gotten out of the way to let smart, motivated people sort through failures and dream up new experiments. Of course, it’s not quite that simple. Innovation thrives when leaders, such as Kelley at IDEO, provide several critical ingredients: extremely stringent hiring to find and keep unusually talented people, a diversity of projects to fuel cross-pollination, strict process guidelines, resources, and, of course, enthusiasm.

The good news is that execution-as-learning is a winning formula in almost any industry. Even in routine production, today’s best practices won’t be tomorrow’s. The bad news is that it’s an unnatural state of affairs. Working in this way requires people to fight against the desire for instructions that guarantee results. Execution-as-learning requires accepting that every process can be improved, and some must be replaced altogether. It’s not that the goal of learning is placed above the goal of meeting today’s performance standards. Learning from the work is part of the work. Efficiency still matters, especially in routine operations where doing things faster and more reliably than the competition is critical. But even there, people must keep learning to achieve long-term success. And fostering a culture of trust and respect where learning flourishes pays off in even the most deadline-driven contexts. It’s just not the place to start. Why not?

As we have seen, teaming and learning thrive when they are intensely focused on the work that must be done to find, keep, and care for customers. This was the case in all three organizations presented in this chapter. A learning-oriented culture is a valuable organizational resource, but creating such a culture is not an end in itself. I argue that a learning organization is created by focusing renewed employee attention on the work, not by trying to change the culture. A learning culture emerges as a by-product of practice with a new way of working—one that is more interdependent, more aware of others’ tasks and needs, and more willing to improve—not the other way around. For example, as Simmons employees experienced a new way of working, a new empowered, high-trust culture took shape around them.

Many change efforts fail because they focus on shifting the culture, and too often people at all levels—from senior management to the front lines of customer service—have a hard time making culture change a priority, compared to the piles of work they confront. Recall from Chapter Four that Arthur Ryan wanted to change Prudential’s culture to one that was psychologically safe. Although many employees liked the idea of safety for speaking up, they didn’t all understand how it related to business excellence in financial services. Despite leaders’ best intentions, they often don’t adequately convey why a new culture is needed and how it would help employees serve customers better.

Moving Forward

For over a century, we’ve focused too much on relentless execution and depended too much on fear to get things done. That era is over. Underlying the notion of a simple, controllable production system was the notion of the simple, controllable employee. In the factory model of management, it was easy to monitor workers and measure their output. But work today increasingly requires the applications of specialized skills and knowledge. Workers are expected to identify issues, analyze problems, and create new solutions. This shift has changed the dynamic of the workplace and the relationship between those in charge and those doing the work. The most successful leaders in the future will be those who have the ability to develop the talents of others. At its best, teaming clarifies and magnifies human capacity. But teaming is challenging and often counterintuitive. It conflicts with many of our natural and socially developed behaviors. Cultivating the conditions in which people can speak up, learn from each other, and experiment safely expands what can be created and what can be accomplished.

•   •   •

What did the Chilean miners, the astronauts on the Columbia mission, and Matthew, the ten-year-old patient at Children’s Hospital, have in common? Their very survival depended on successful teaming. Execution-as-learning is more than a new way to operate and a new way to compete. It’s a new way to survive in complex endeavors. You don’t need more examples of organizations today that face challenges, flounder, fail, or just make people unhappy, to understand the imperative for change. Yes, some of the practices in this book are difficult or unnatural to put into practice. (So, once, was discovering fire, organizing mass production, or creating the iPhone!) We may be hard-wired for power struggles, greed, and workplace conflicts. But as social creatures, we also derive enormous pleasure from creating, sharing, and implementing new ideas with other people. Some of the amazing accomplishments described in this book (the Chilean rescue, the Beijing Water Cube, the RAZR, Intermountain’s learning system) were created through teaming. Clearly, human and organizational obstacles to teaming and learning can be overcome.

Contagious Learning

Just as management in organizations of the past gave rise to an execution-as-efficiency mindset, the knowledge economy in which today’s organizations compete gives rise to expertise silos that inhibit the teaming needed to solve global-scale problems. It is becoming increasingly clear that teaming in the future will require crossing boundaries that are organizational as well as disciplinary. Few of today’s most pressing social problems can be solved within the four walls of any organization, no matter how enlightened or extraordinary. Climate change, education, transportation, urbanization, and energy use are just some of the areas in which innovative solutions are needed to ensure a safe, healthy, viable future for people and organizations around the world.

Old models of competition increasingly don’t serve these purposes. Businesses, as my Harvard colleague Marco Iansiti understood a while ago, thrive when they are part of healthy ecosystems.21 Dominating and weakening one’s competitors or suppliers is no longer a winning strategy. Technology companies like Microsoft and Google have been thriving in this new game. Now it’s time for older industries to take ecosystems, and the cross-industry teaming they involve, seriously. Organizations within, say, the automotive industry are less likely to collaborate to find solutions to global issues like fuel efficiency and carbon emissions if they carry the old execution-as-efficiency mindset into the future. When today’s efficiencies matter more than tomorrow’s sustainability, teaming and innovation both lose.

When organizations operate with an execution-as-learning mindset, sharing across boundaries is natural. Toyota has long sought to teach its suppliers and even its competitors how to implement its remarkable execution-as-learning mindset and production system. Intermountain Healthcare works tirelessly to teach other hospitals how to implement its unique form of “improvement science” into the fabric of their operations, too. IDEO happily assists other companies in transforming their cultures to support innovation. When execution and learning become intertwined, the focus appears to shift naturally to increasing the size (and quality) of the pie, away from fighting over pieces and scraps. Generating ideas to solve problems is the currency of the future; teaming is the way to develop, implement, and improve those ideas.

With the rise of knowledge-based organizations in the information age, unhealthy competition can make people reluctant to share ideas or best practices with colleagues in other groups and organizations. But without teaming, new ideas cannot flourish in organizations. Teaming across distance, knowledge, and status boundaries is increasingly vital, as old models (economic, political, organizational), old technologies, and old mindsets prove cumbersome in the face of new challenges.

Transcending Boundaries

Increasingly, businesses and nations confront problems that dwarf even the largest challenges in this book, such as building sustainable cities, developing new energy sources, and evolving new behaviors in everyday life to better conserve dwindling resources. Transforming health care delivery systems, creating radically new business models, designing innovative ecosystems for collaboration, and learning new ways to live together in sustainable communities in the future are just some of the collaborative challenges we face. Few of these can be addressed by single organizations or even by single sectors (business or government)—let alone by individuals—working alone. Progress will require teaming across disciplines, companies, sectors, and nations. There is no doubt that new endeavors in these arenas will produce failures along the way. Let’s learn from them.

Notes

 1. T. Casciaro and A. C. Edmondson, “Leading Change at Simmons (C),” HBS Case No. 406–046 (Boston: Harvard Business School Publishing, 2005), p. 5.

 2. L. Wilson and H. Wilson, Play to Win! Choosing Growth Over Fear in Work and Life (Austin, TX: Bard Press, 2004).

 3. H. Ford and S. Crowther, My Life and Work (Garden City, NY: Garden City Publishing, 1922).

 4. Casciaro and Edmondson, “Leading Change at Simmons (B),” 2.

 5. All of the names of individuals in this story, which is told in A. C. Edmondson, M. Roberto, and A. L. Tucker, “Children’s Hospital and Clinics (A),” HBS Case No. 302–050 (Boston: Harvard Business School Publishing, 2001) and is based on a real incident, are pseudonyms.

 6. Ibid.

 7. Ibid.

 8. Ibid.

 9. Ibid.

10. Ibid., 5.

11. I. M. Nembhard and A. C. Edmondson, “Making It Safe: The Effects of Leader Inclusiveness and Professional Status on Psychological Safety and Improvement Efforts in Health Care Teams,” Journal of Organizational Behavior 27, no. 7 (2006): 941–966.

12. Edmondson et al., “Children’s Hospital and Clinics (A).”

13. Ibid., 10.

14. A. C. Edmondson and K. Roloff, “Phase Zero: Introducing New Services at IDEO (B),” HBS Case No. 606–123 (Boston: Harvard Business School Publishing, 2006), p. 3.

15. A. C. Edmondson and L. Feldman, “Phase Zero: Introducing New Services at IDEO (A),” HBS Case No. 605–069 (Boston: Harvard Business School Publishing, 2005), p. 1.

16. The timing of this project occurred very near the beginning of Charlie Eitel’s tenure as CEO at Simmons. Eitel, perhaps unfortunately, was not involved with the project, which was authorized by a marketing executive.

17. Edmondson and Feldman, “Phase Zero: Introducing New Services at IDEO (A).”

18. Ibid.

19. Ibid., 4–5.

20. Ibid.

21. M. Iansiti, The Keystone Advantage: What the New Dynamics of Business Ecosystems Mean for Strategy, Innovation, and Sustainability (Boston: Harvard Business Press, 2004).