Behind the Ops Episode 26 === Intro: You are listening to Behind the Ops presented by Tulip. Madi: Natan. Natan: Hello. Madi: Guess what I was reading the other day. Natan: You were reading the New York Times, uh, business section? Madi: No. I unfortunately rarely read the New York Times business section. I was however, uh, looking through the CIA espionage manual. Are you familiar? Natan: Somewhat. Why? Why would you read that? Madi: Uh, there was a lot of, uh, coverage, maybe viral coverage on the CIA espionage manual and how some of these things, and like some of them were like... Natan: Mm-hmm. Madi: You know, um, let blades go dull so people can't sharpen their saws. And, you know, other stuff that's like really specific to, um, sabotaging factories. Natan: Mm-hmm. Madi: Um, but a few of the things in there were more about communication and collaboration and they seemed really similar to bad working environments. It was basically like create a bad working environment. And it seems like they understand that messing with people, like people as like the core of an organization, can in a lot of ways be more effective than like blowing something up. Natan: Yeah. Madi: And had a lot of interesting tactics that they were intentionally using, but I think a lot of teams may unintentionally have in place that, uh, hurt their productivity. Natan: Yeah, I guess, um, they have a track record of using it on governments too, so make those things for dysfunctional. Madi: You could, uh, let our, our listeners draw their conclusions all the way across. Natan: Yeah, I mean these, you know, when it comes to special operations, like some of them got declassified I guess, but, um, espionage is, uh, it's a human business. For sure. Madi: And I like this idea you're bringing up of like bureaucracy, like whether it's a government and it's bureaucracy or a large corporate bureaucracy, some of the elements of that culture and structure can really prevent innovation and improvement and really like the individuals in these organizations from having good wellbeing and enjoying their work, being productive. Natan: Yeah, I mean, maybe it's not fun to say, but you know, most large scale organization, they can say what they want, but they're really designed to control and get predictable output, which usually is in, uh, tension with what we consider innovation and, you know, fast moving startups and all that kind of stuff, right? So some of it is just like facts of life. You know, we, we need structures for making big organization work. Madi: Mm-hmm. Natan: But, uh, that's the struggle, like to keep them a place where humans can flourish. And, uh, I think, you know, not everybody needs innovation. You know, people also can need, need other things like support for their growth. Madi: Mm-hmm. Natan: Or like, um, flexibility for how they want to live their lives and or opportunities to change course and you know, you can start a list, a long list of things. I dunno, I think that like the traditional way of, um, and again, I'm not trying to condense like several decades of organizational development, you know, theory and practice into our 15 minutes here. But, you know, since we're talking about this, if you think about organizations that really came from the bureaucracy or, or things like, you know, the military. Ford is very famously in like, uh, adopted military type structures to develop large organization that suddenly employed a lot of people, uh, and did this thing we call mass production. Madi: Mm-hmm. Natan: So that used a lot of hierarchy and departments and siloing and all those kind of things. Right? Madi: Yeah. Natan: And then fast forwards to Toyota Production system and lean and like, sort of, kind of break the silos and like having like one piece flows and all the things that kind of go actually not a, not a smaller organization. Madi: Mm-hmm. Natan: But structured completely different, but still have elements of some hierarchy and then like, fast forward again, and then like suddenly, like we in the agile scrum tech world that we roam, you know, it's like startups that become larger companies and they all like do huddles and standups and uh, you know, throw away the traditional waterfall stuff, but still do technical product and project management. And still, you see the, the small company trying to like, become better and more organized. And you see the established companies say, well, you know, we have to hire a scrum master now. Madi: Mm-hmm. Natan: Because we have to adopt scrum. Madi: Right. Natan: So like all these things are kind of coexisting, which I think is like pretty interesting. Madi: I like the scrum example because the way you're talking through like tech companies culture in a lot of ways becomes the structure there and your example of like the bigger company hiring the scrum master is like starting with the structure, expecting that structure will build culture, which kind of shows... Natan: It's so, it's so true and it's, it's like so funny. Madi: Well, I thought we could play a game. Natan: Okay, another game. Madi: A game based off of the CIA espionage booklet. Um, so I have five examples and I will read them to you and I wanna know which ones you think are from a few online articles about bad corporate culture and which ones are specific tactics included in the CIA espionage manual. Natan: Mm-hmm. Madi: This is a pretty hard quiz, so some forgiveness if you don't get these right. Natan: Okay. Madi: Um, so haggle over precise wording, delay putting calls through, or disconnect them accidentally. Make speeches and points with long anecdotes. Advocate caution, tell colleagues to be reasonable, and avoid haste and promote undeserving workers. Natan: Mm-hmm. I think all of them can be in the CIA espionage book, how to like, uh, infiltrate a company and, uh, kind of take it over from within. Madi: This was a trap quiz. They were all from the espionage book. So A+ to Natan for, uh, getting a perfect score on the quiz. Natan: Okay. Madi: All, uh, all specifically mentioned as, uh, tactics to undermine your organization. So if you're hearing this, and these things sound like things happening on your team. Something to uh, correct. For sure. Natan: Also, if you're observing it in your workplace, you know, you might wanna look for a different work. Madi: Yeah. Natan: Just do something else. Because there's two options. Either your company really sucks or this, it's taking over your workplace. Both not great. Madi: Well, I, when I was thinking about this like article and, and just how organizational cultures work, uh, one of the things that came to mind is your obsession with the "Fractal Company." Natan: Yeah. This is, it feels like confession every time I talk it's like you... Madi: Your deep secret. Natan: Yeah. Because every time we talk, you just reveal one more thing that I always like talk about. So, yeah. What do you wanna know about "Fractal Company?" Madi: Well, I don't know that our listeners know what that is, so why don't we start with what it is. Natan: "Fractal Company," since you've asked... Madi: Yes. Natan: Is, uh, the most exciting, boring book I've ever read. Madi: Okay. Natan: It's a book. The full, the full title is "The Fractal Company: A Revolution in Corporate Culture." It was written by, uh, Hans-Jürgen Warnecke and with a bunch of his students, and it was published in 1993. And this research, basically, it's mostly focused on corporate structure and development of, uh, Manufacturing organizations. And the main theme is like, how do, you can think about the atomic element that creates an organization more as a fractal, as opposed to, you know, different things that we are hearing, like pods or tribes or like leafs in a tree, like hierarchy of an org chart. Madi: Mm-hmm. Natan: First of all, it's like very nice, um, overview of, uh, org development for the org development nerds out there. Um, really great stuff in the beginning, but then it's kind of like developing this ideas around, uh, fractals. Fractals are, you know, naturally occurring. There's many types of fractals and they're mathematical, so they're organized, but they're also chaotic. Madi: I love the science connection here. Natan: Yeah. Madi: Especially when you're talking about like natural shapes and the strength of a natural shape versus what are the words that come to mind when you talk about big organizations? You talk about rigid hierarchy, like box shape, things break if they need to change, and so it's really a, a beautiful math science metaphor for how people can work together. Natan: Just to build, it's more than that. It's like the board that come to my mind is like artificial. Madi: Mm-hmm. Natan: And, uh, complex. Madi: Mm-hmm. Natan: And in, in a way, it's like we organize in society naturally, but we use pretty abstract things like, you know, a company or you know, a stock market. All these concepts like to organize larger group of humans in the system to do something. Madi: Mm-hmm. Natan: And those are very hard to understand and figure out how they work, but like they're, they're built on like principles that we all understand. Like, how many times you heard this now? Oh, we, we have a really flat structure for a company. Madi: Mm-hmm. Natan: And to me that's like the most like silly thing to say because like hierarchies are, you know, they're there because that's how we build societies, but, If you're trying to build an organization and say like, okay, this is the hierarchy and this is why it works. And that's like the old world where power was, was driving the hierarchy. Like who has more direct reports and who has more subdivisions and what, whatever. And now it moved to network. So it's not like there's no hierarchy. But the hierarchy is more like in how the information flows in in the company. And then it becomes like, okay, well what's a better description of the form of a, of an organization? It's just so hard to capture. Like you look at an org chart, but it's okay. See, I see this person, this is his boss and that's their boss or whatever. But does it really tell you like how it works? Madi: I love this, like extending the network piece like that you have people as these different nodes, right? And the information that they're sharing is like knowledge and also their domain expertise, their experience, and they can kind of jump between and work with other interfaces, I think is a word you use often. Natan: Yeah. Madi: So it doesn't necessarily have to be someone who reports up and over, like have lines. Natan: Yeah. Madi: They kind of naturally find and negotiate difference in order to accomplish things. Natan: Yep. So I can do a quick read of like the key ideas there that were like so fascinating to me. So it's like, for example, around order in kills, two complimentary views of the world, but also really fits the type of orgs I like, which is like early stage that they're almost, by definition chaotic. So this comes from Henri Poincaré, you know, who is like the, one of the main thinker, uh, French mathematician's. Like he attempted to predict plain orbits, you know, and he was taken to account the influence of each other and he arrived in, in this conclusion that sort of minimal deviation changed the calculation, but also shows them the order in the same time and it, and it's like, that's exactly what I'm feeling every day. You know, at work, it's like there's like, I figured out some stuff. Madi: Mm-hmm. Natan: But then all the stuff that I figured out, or is that, okay it solves the problem now. Is that noise later or is that like how the order is gonna be and for how long? Because like early stage organization are so dynamic, you know. I also think like later stage organization dynamic, I've just like kind of left them. More than a decade ago. So, you know. Madi: I think that's the piece maybe if we pull it, if it's one thing to apply and kind of live in that type of environment in a startup, uh, but if you're at a big company or even in a place that needs a lot more structure because of compliance or like specifications or whatnot, what are the learnings from like "Fractal Company" for shop floor? Natan: For shop floor, I think they span more than shop floor. So, but I can tell you like the, the key traits, so factos are self-similar. You know, they have this idea of self similarity. So it's, it's good, you know, cuz you're, we talk about the culture and like, we're, we're very different, you know, cuz we're different. Madi: Yeah. Natan: But, but we're also part of the same cultures. That's nice. That works with fractal. You can have a big one, you can have a small one, you can have a composed one. Uh, they self-organize. Madi: Okay. Natan: So procedures are organized, uh, by rationale, but also by physics. Like thinking about how snowflakes fall, like... Madi: Mm-hmm. Natan: Looks like all uniform, but it's all just a bunch of fractals and like, look at that and say like, is this a mess? No, it's like beautiful snow, you know? And, uh, self optimization. So apply that to teams. I think teams that kind of, uh, learn how to like, measure themselves and self optimize, and we call this sometimes data driven, that that's like pretty obvious. Um, goal orientation. So some fractals, you know, if, like, I'll give you an example. Like on Tulip, you know, we start building all those, uh, subsidiaries overseas to kind of support our global customer base. Madi: Mm-hmm. Natan: And so it's like new fractals kind of forming. Madi: Mm-hmm. Natan: They start really small, but you know, so the first, like when you have a goal of the fractal, like right now the big HQ fractal is trying like to scale up itself, like from the scale we got. But the small one is actually trying to do different things. So they have different goal orientation, but they're like the same fractal. So it's kind of interesting. And that's, that's what this book is all about. It's like really applying on like the decentralized, highly measured systems that, kind of emphasize on, on the value of the information in the network and how it operates over, uh, rigid control and highly processed, sort of centric as opposed to emergent process type of, uh, reality. That... Madi: And I think on your point of goal orientation and just, you know, like why, why would we care other than like, this is a good place to like work. Natan: I, I'll tell you because self-organization means that, uh, you're getting freedom. And so if you're getting freedom, it's like means that you have to deal with like what responsibility means, means you're just gonna care about it. And, uh, if not sort of like the elements or your facto or the factos around you will notice cuz they have the same thing. And so it's like self-balancing system, honestly in, in extreme, uh, the anarchist manual, which like, maybe, I don't know if somebody wrote that, but that would be like an interesting... Madi: TM. Natan: Yeah, would be like, you don't need managers. Madi: Mm-hmm. Natan: All, all you need is data. I know what the customer want. You don't need structure. Like the, the only thing that rules this customer, I think that this is too utopian, you know, I'm, I'm not an anarchist... Madi: But some amount of freedom is required to truly have innovation. Natan: Yeah. Madi: When you have, you can't have great people innovating and not give them some freedom. Natan: Yes, because the innovation doesn't happen when you're in total structure. You know, you have to do different things like to make sure innovation happens. I think we're doing innovation here on a daily basis, but like when we want more, like we actually create artificial environments, like we call this a hackathon, but is it really artificial? Maybe the date we set and with the topic we set, but I see all these like mini hackathons happening all the time. Madi: Mm-hmm. So people have space to come up with... Natan: Yeah. So it's more like ceremonial or something like that in the shop floor. We say, oh yeah, they go and they do, they found a better way to do it poka-yoke you know, it's like continuous improvement, whatever, but it's people solving problems. Okay, so it's a different environment, but to me it's also innovation. Madi: But we will link the, for those of you who really want to read the "Fractal Company" book... Natan: Yeah. Madi: We'll share the title as well as a few articles that engage with the concept as well as the CIA manual. Well, until next time, or we can haggle over precise wording and do a speech for the listeners at the end? Natan: Yeah, I have to like figure out if the CIA has infiltrated Tulip by now. Madi: No. Natan: I got paranoid. Outro: Behind the Ops is brought to you by Tulip. Connect the people, machines, devices, and systems used in your production and logistics processes with our frontline operations platform. Visit Tulip.co to learn more. This show is produced by Gaby Elanbeck, and edited by Thom Obarski. If you enjoyed listening, support the show by leaving us a quick rating or review. It really helps. If you have feedback for this or any of our other episodes, you can reach us at behindtheops@tulip.co.