E078: Importance of Leadership Systems for Improving Nonprofits and Government

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In this podcast, I interview Daniel Edds, Lean Leadership consultant and author. We discuss his work with nonprofits, government agencies and manufacturing companies.

His recent focus is the importance of creating a strong leadership system to create proper structure and support of your continuous improvement methods.

You can watch the full video here…

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Have you ordered the new book, “Lean Six Sigma for Good: Lessons from the Gemba (Volume 1)?” The book is made up of 8 chapters written about experiences from Lean and Six Sigma practitioners, to give you tips and tricks to help you work with nonprofits in your area. All proceeds donated to charity. We are also close to releasing Volume 2, so check back for the latest news.

Transcript

Brion (B): Welcome. This is Daniel Edds and he’s going to talk to us today about how he’s applied some process improvement methods into the nonprofit world and also some government work that he’s done over the years. Dan, do you want to just kick it off and tell us how you got into this line of work in some of your past background?

Dan (D): Sure. Thanks, Brion. Appreciate this opportunity to be with you and your listeners. My experience with process improvement I guess would really have to go back to graduate school when I was getting my MBA and the classes that I enjoyed the most were in operations management or where they were talking about excellence and quality and process improvement and process management. Those classes just really resonated with me. I thoroughly enjoyed them.

I actually got into the consulting world when a friend of mine called me one day and he was the business manager of a local school district and said, “I have this department up here that needs some help. Can you come up and help?” I, quite frankly, didn’t know what he wanted me to do. I figured out he wants it’s a process improvement organizational redesign kind of a thing and, of course, I said, “Sure, I can do that,” and gave him a price I thought, literally, was twice what he’d be willing to pay and he paid it, so I thought there must be a business in here someplace.

B: That’s cool. That’s great. I think that’s some big opportunity as well is bringing these concepts into the school systems and looking at the workload of the teachers, I find that really intriguing, and the outcomes of the students. Very cool.

D: The opportunity is there or at least the need is there. Now, whether or not, institutionally, organizations will adopt those opportunities, really see their value, implement them, that’s a different question, but the opportunity’s definitely there.

B: Cool. So then you started off in consulting or were you working somewhere else first before that opportunity came up?

D: Yeah, actually I was in a dead-end job that I was bored silly with. That’s the reason I went back to school. When I branched out of that, well, I don’t really know where the business is at in doing these kinds of projects, but I figured there was a business in there someplace. Then I stumbled on a company that actually turned out to be the largest nondefense consulting company in the country. I was doing a lot of what we call cost of service studies, which is where a government agency would come in and ask us what does this system cost, what does this process cost, and so I started using basic process analysis and looking at what their costs were. People say, “Are you like an accountant?” No. I know enough about accounting to be dangerous and I don’t want to do it.

But when I started looking at how organizations ran their internal processes and their systems and started applying process analysis to them, then the costs really made sense. Now, whether or not they actually wanted to know those costs after I showed it to them, that’s a different question. But those organizations, in government and outside of government, healthcare, nonprofit, when they do apply the principles of Lean process improvement, and actually, my first book was called Transformational Management, which was really about how process analysis and looking at internal processes and systems can really transform an organization, and along with it, it transforms the work environment and the people that are working in those organizations. Frankly, that’s now where my interest is really at.

B: What are some of the projects and work you’ve done? Is there some examples you think would be good to share? maybe if you have one on the nonprofit side or maybe an example of another government agency?

D: One project I did, it was really quite fun, it was for they’re called educational service districts. They’re organizations that provide services to a multitude of smaller school districts where they can’t afford their own financial system, they can’t afford their own dedicated HR systems. Various states will handle these differently, but they’re sort of like umbrella organizations. This one group asked me to come in and look at their insurance program. They provided labor insurance for 35,000 teachers, both private school teachers, public school teachers. It was taking them weeks and weeks and weeks to process work-related accidents and getting their teachers up healthy, back working again, or just getting them the correct medical care.

When I started out working with them, this happens all most always, we put a team of people together and we say we’re going to map out your processes. In this group, we ended up creating a gorgeous value stream map. A two-year-old could’ve pointed to the spot where the bottlenecks were happening. It was really obvious. That’s one of the beauties of visual management, visual communication is when you see a value stream map up on a wall, anybody can look at that and go, “That’s where the problem is at.”

When I started with this team, and we had designed to think it was like a four-day project, several people quietly came up to me and said, “We tried to do this kind of thing before, but the reality is no one listened to us.” I don’t know what the deal was, but maybe it was because they had a new Director and he decided to listen. Within it was just a few months, they had radically transformed the way they do business. Actually, their Board of Directors was so impressed with what they did that they actually increased their budget by 25%, which didn’t sound like much, but this is what I find with government agencies is that when the governing body sees the way you’re handling money and people and staff and the resources, they actually give you more money because they trust you.

Here, in the state of Washington, I’ve not been a part of it, but I know the guy who was the Director of one of the transportation departments within state government. In early 2000s, the Governor was ready to pull his funding. In fact, the Transportation Secretary, like a week after he took the job, said, “You’re not getting a dime out of me. I’m going to vote to defund you if I possibly can,” so he got serious about looking at their systems and their processes. He was a full implementer of Lean and, within a couple of years, he totally transformed the organization. Right now, they actually have pending bills to increase their funding, and they’ve had standing bills for several years now to increase their funding, just because people see what they’re doing with the money and how effective they are with it and how much value they’re adding to their customers that the government, the political leaders are saying, “Yeah, we’ll give you some more money. How much do you need?” It sounds crazy, but that’s exactly what happens.

B: Yeah, because you have more confidence. There’s structure there, there’s processes in place, there’s results and success. And so maybe things that are should we give it to this agency or this one, you’re going to maybe go to the one that’s showing they’ve got a better control or handle on how things run and there’s consistency and outcomes.

D: There’s something to be said that when a customer calls up their legislature and says, “I just want to let you know that this organization, they know more about what I need in my city or my county than I do because they’re monitoring data. They are actually providing me with a service that’s so incredible I can’t even believe it’s from government.” A city Mayor or a city manager calls up a state legislature and says, “I just want you to know what’s going on here with this agency of yours,” and starts praising them for the kind of service they’re getting. Bureau of State Legislature, you’d be a fool not to give them more money.

B: How did you get involved with that particular project? is it through your consulting firm or was this through some connections you had there?

D: Everything is connections, but yeah, this was through my consulting firm where I do a fair bit of work with Lean process improvement, process analysis. Frankly, a lot of it has been team dynamics within the context of improving processes. That always seems to be, and maybe your experience would be similar, you can’t just walk in and start moving dominoes around on the process improvement board because people are always going to be impacted by that. In my judgment, you have to take into consideration how these changes are going to impact people, bring them on board. In my worldview, I think that the best process improvement happens from the bottom up when the people doing the work actually can start making the changes, do the analysis, make the changes. That way, they’re doing it with themselves as a team as opposed to some Director coming down and saying, “No, I want you to do it this way now.”

B: Yeah, I think that accountability is there with the team that it’s their idea and so they’re going to make that work. When it’s our idea or management’s idea, all they have to do is find one problem with it and say, “See? that’s not set up for us well and so it’s not going to work.” I think that is build that engagement, it’s going to have a better chance of success. I’ve been humbled many times by what I thought would be a good solution to what they come up with. I was like that’s working much better than I thought, than I could’ve come up with. You learn quickly that they actually have better ideas than what you think.

D: I always start out my consulting gigs with a couple of sermons, one of which is all the good ideas are already in your head; they’re not in mine. My job is just to get those good ideas out and let’s put them up on a wall or some paper someplace so we can all see them and analyze them and talk about them.

B: I think that’s a big part of it. Maybe I can tweak a little bit of the ideas to help you with some of the concepts, but you’re right, I think a lot of the people have a good idea of what they want to do or need to do. It’s just giving a forum for them to speak and work through that or talk through those ideas as a team and find out what’s going to work for everybody, not necessarily it’s going to make their work easier but maybe it causes problems somewhere else. But if they get all the right people together, I think that’s half the battle.

D: It’s really magic when you get the right people in the room and you start graphing, you start creating value stream maps. A couple of years ago, I did a project. It was actually a beta test for a different way of doing process improvement, organizational improvement. We had like 20 people in a room and these folks were property assessors. They’re the folks who would go out and they go out and assess the value of your home so they can tax you.

First question was what do you do? what are your processes? Initially, they were all over the map. They were like, “We do this, we do that, and we do everything,” but then as the conversation began to unfold, there were two very clear processes that they did on an annual basis. We got done at the end of the day and it was really interesting. They all looked at what they did and they said, “Wow, we didn’t know we did all that.” They were looking at it and say, “If we fix that part right there, that’s going to impact this thing over here, which is going to impact this thing over here, and gosh, we can go home on time once in a while.”

B: I’ve heard that feedback too is just doing the current state map was really helpful for that team. They said, “We know what we do, but we never documented it and never captured it, and that we have something we can show others what we do.” That was so valuable for them and like, “Okay, we can go further than this. This is step one of many steps we can do,” and they were like, “Actually, this works really good for right now. We just never had this before.”

D: I’ve had that too, like, “No, no, this is enormous just what we’ve done right here. We’re going to tweak one thing and that’s going to open up all these other opportunities, so we’ll see in a year or two.”

B: Yeah. Okay, that sounds great. If you’re happy, that’s great.

D: This is kind of where I’m at right now with my own practice is to give the team or the workgroup the freedom to look at their own processes and make changes really requires a different approach to leadership. This is one of the things that I don’t think we talk enough about in the Lean world and process improvement world, and I’m sure it’s the same with Six Sigma, is that to really make these tools work well the way they’re designed to work really requires an approach to leadership. Individual leaders really need to understand that their job is to empower their workforce, to give their workforce the respect. The whole idea of respect, a lot of organizations, we have core values and there’s always one of respect in there, but we’re not going to trust you to do the job well, which is a little bit of an oxymoron.

One of the case studies in my book is a hospital. It was the first hospital in the country to adopt the Toyota Production System as their methodology of delivering healthcare, which if you think about it, it’s odd. We use the Toyota production method to manufacture cars, not do healthcare, but they do it that way. In fact, Toyota, they are so good at implementing Lean in the Toyota Production System that Toyota actually sends their people to this hospital to learn how to apply the Toyota Production System in healthcare and they now teach Lean all over the world. They’re the world’s leader in implementing Lean in healthcare.

If you look at them from the outside, you look at how they’re doing healthcare, you say that’s Lean, but what they don’t talk about so much, but they will tell you very directly, that you really can’t separate Lean as a process improvement tool from the management system or what I’m choosing to call the leadership system because you have to have both if you’re really going to maximize the value of Lean. In fact, there are some studies that show that 90% of all Lean engagements don’t produce a nickels’ worth of value. Obviously, the other 10% produces a ton of value, but from my perspective, the missing ingredient is how you do leadership because you have to do leadership in a different way.

B: I’ve seen that as well. The people doing the work, they need to redesign their processes to incorporate these principles and concepts. We’re going to manage the same way we’ve been always managing through rewarding firefighting, not really engaging in understanding the processes, and not realizing our role in driving this behavior and this culture. Then they get surprised that the results aren’t showing up there because we’re trying to do two things and we’re not changing the whole system, which is, like you said, that management piece and the leadership that they bring is part of that system. If it’s not based on coaching and mentoring and it’s more about driving short-term results, the system will not work.

D: Exactly. Couldn’t say it better myself. In fact, one of the organizations I looked at was a small manufacturing company and they did exactly what you just suggested to the extent that they changed the titles of all of their production leads and coordinators and all of the various manufacturing hierarchy. Everybody is now a mentor. I tell this story because it was just amazing to me. In my tour of their facility, there was a woman explaining how she had seen this opportunity to get five parts out of foam core material, because they’re manufacturing furniture, she saw the opportunity to get five parts for this particular piece of furniture instead of getting four parts if the raw material was just configured slightly different. As she’s explaining this to me, she keeps saying, “I went to my mentor. I talked to my mentor about this,” and there’s this quiet lady standing right next to her. Finally, she gets done I have to ask the obvious question. I said, “Who is this lady? is she a supervisor or something?” and she looks at me like I’m from outer space and she says, “I guess so, but we just call them mentors.”

But the job of a supervisor, as you just pointed out, is to be a mentor to their staff, to coach them, in that case, how to conduct a kaizen, the word they use, in finding and eliminating waste. When everybody is trained, you’ve got a culture like that where the leaders are expected to serve, to be the frontline servants, if you will, because they start practice servant leadership, to help their staff find and eliminate waste, it’s pretty exciting what happens. In that case, 200 employees identify 1000 to 1250 opportunities to improve their systems and processes internally. Each one saves the company about $1000, and that’s been going on year after year after year after year. The annual savings I calculated to be somewhere around 4% or 5% of gross sales that they’re pulling out of their cost structure each and every year.

B: Plus, the engagement they’re getting from the team. I’m assuming that there’s less turnover and there’s more productivity, in addition to the cost savings of the ideas that are getting implemented. Yeah, I think it’s a no-brainer, but it still seems difficult for I think organizations to give up that, I don’t know if they feel like it’s control, over the decisions being made or they’re fearful or feel risky that they’re going to let their employees make those decisions or implement those ideas and they’re not sure if it’s going to work, so they’re putting up barriers. I don’t know if you’ve seen some challenges with that?

D: I think there’s a number of things going on. One, it’s basic power and control. If you have power, you generally don’t want to give it up for some crazy reason. But the other thing I think is the way we talk about leadership, we train leaders, we coach leaders. Now, I’m going to get on my soapbox here really strong, but if you think about the rhetoric, the language that we use with leadership, it’s always your leadership, my leadership. You’re going to change the world. You’re going to have all the power you need to make you great. The reality is we need to totally change that dynamic, that leadership isn’t about you or me.

Leadership is about giving our staff what they need, giving our staff an experience that they want to come back to every day, giving our staff a reason to get up in the morning. Frankly, it has little to do with inspiration but has everything to do with our relationship. There’s actually a lot of research coming out now, especially from Gallup, they’ve been quite blunt about the whole thing, that says 70% of that engagement variable within employees is a direct correlation to the relationship with their manager. At some point, we have to start concluding that the way we approach leadership isn’t working. In fact, George Clifton, the chairman of Gallup, a couple of years ago said, “Frankly, the American leadership philosophy simply doesn’t work anymore.” At some point, hopefully now, soon, we need to radically rethink our entire approach to leadership and what does it look like.

B: I think you’re seeing that this year. I think we’re seeing that the companies that have this culture around engaging their employees and having that flexibility and agility to adjust to what’s going on and quickly respond, they’re getting up and adjusting quickly. The ones that are not in that mindset or have that culture are taking longer and they’re struggling and maybe not going to make it. So not only is that good on those metrics, but I think we’re seeing, at least anecdotally, it seems like there’s real business results that are coming from organizations that say, “This is what we’re trying to accomplish. We have all these employees. How do we involve them all in this process?” Not, “We’re going to come up and have a meeting, and then we’re going to dictate down the perfect solution that we came up with in a conference room.”

D: I hadn’t thought of that, but that’s a great insight and I think you’re absolutely right. In fact, as you were mentioning that, I’m thinking the same manufacturing company, and they design and manufacture really high-end custom commercial furniture. No one’s ever heard of them, but if I rattle off their customers, you would instantly recognize every one of their customers. They’re all major national brands. But in, I think it was late March/early April, when we’re all hearing the doctors and nurses and hospitals didn’t have enough face masks, they partnered up with one of the nation’s largest healthcare providers and, within 24 hours, they flipped their production from manufacturing furniture to manufacturing facemasks. I don’t know where they’re at now, but their objective was 100 million facemasks. They had to get some help with some of their partners, but to go from manufacturing furniture to facemasks within 24 hours, they were fully up and running, cranking out 100 million facemasks. I don’t think you could do that unless your employees are really engaged, really on board, and fully committed to what you’re trying to do.

B: They’re not stopping to say can I do this or can I do this or there’s no way they could do that kind of speed.

D: Exactly. That’s a great word. You can’t have speed like that unless your employees have the freedom to act, they know that they’re respected, they know that if there’s a miscue someplace, they’re not going to get hammered. It’s going to be, “Okay, we learned something from this. Now let’s move on and get on with it.”

B: Absolutely. Have you noticed anything different with for-profits versus nonprofits or governments or public sector with the leadership’s approach or style or do you think that’s pretty much similar across the board in terms of these challenges?

D: I would love to say that the lack of thoughtful leadership is just in government, nonprofit, healthcare, but frankly, I see it everywhere I go. I don’t think there is a sector that has a handle on how to do effective leadership in a systemic way, which is what I’m working on now. To do what we’ve been talking about, like this manufacturing company, you have to have a unique approach to leadership. In fact, when I got the President on the phone, I told him about this research I was doing about looking at leadership as an organizational system and he says, “I want to know how to do that,” even though it was clearly obvious that he was doing it; he just didn’t know he was doing it. But he was quite upfront with it and he says, “We practice servant leadership,” and then he explained to me what that meant. A lot of people talk about servant leadership, but he explained to me what it meant and it blew my mind.

Just to give you an example, this guy, 200 employees, a lot of their employees are new to the country. You go into their area where they have lunch, their lunch area, and it smells like an international food bazaar. It’s like can I just sit here? can I sample some of your lunch? it’s a wonderful place to walk into around lunchtime. He trains his people so well in Lean, or what they call kaizen, he rewards people for kaizen with paid time off. He will give his employees paid time off if they do a kaizen for the company or even a personal kaizen. I heard stories of one guy who did a kaizen on his sailboat, reorganized the sailboat, and got PTO for it. Another guy did a kaizen for his wife’s kitchen pantry. Thought he would do her a favor because she was pregnant. After he did it, he realized probably not the smartest idea for a good marriage.

B: I was going to see uh-oh.

D: Yeah, uh-oh, but he still got his PTO for it.

B: I’m sure he learned.

D: He learned, that’s right. No blood was spilt as I understand it.

B: That’s good. Luckily for him.

D: So his staff are so trained and kaizen is so ingrained of how they work, it’s so ingrained in the culture that you could imagine other manufacturing firms in the area would get wind of this and start picking off his people, which is what they started to do. Jeff is a guy that I don’t think he’s the kind of guy that can separate personal values from professional values, so he had a decision to make when he started seeing this happening. He’s practicing servant leadership, so does servant leadership mean that when a different company starts picking off my best people, what do I do? Do I put up roadblocks for that or do I facilitate that? He concluded that servant leadership meant that he had to facilitate them.

He actually went to some of the larger employers that are around him, manufacturing companies, and said, “How can I prepare my people better to work for you?” Because a lot of these companies could pay more, and so he wanted to have his people have opportunities where they could make more money to take care of their families, and so he actually started building, and I don’t know what they were, but he actually started building some of those other training modules, if you will. And so it was the training of his employees so that when they had the opportunity to go to a different company, make more money, they could.

Now, that sounds crazy for most of us, but what does that do for the engagement levels of your employees? it makes them want to work for you more.

B: Right. Ironically, they want to stick around longer.

D: They want to stick around longer, yeah.

B: It’s the same thing with the training too, just even offering up improvement training or Lean training to your teams and you’re teaching them skills that are very broadly applicable outside not just their company but anywhere. People are afraid that they’re going to have these skill sets and they’re going to take those skills and get a better job somewhere. The thing is if you don’t do that, they’ll definitely leave. If you do train them, you’ll get some benefit out of it and they might stick around because they see that they’re being invested in and they’re getting this skill set. And so I think his approach, it is very different than what people would think to do in that situation, but it’s actually probably working out better for him. It’s counterintuitive, but it makes a lot of sense to me.

D: It is counterintuitive. I think it goes back to that whole thing of institutional power. In some ways, I think the simplest way to understand the whole idea of a leader, not leadership but a leader, a leader is one who exercises institutional power. Right, wrong, good, bad, somehow, they’re exercising institutional power. Our tendency is to want to clamp onto that power, which if you think about it, means that if I hold all the power, that’s all the power that we’re going to have in this organization is in my hands. But when I give that power away, do I lose any power? The reality is that I gain more power. The math changes. Have you read David Marquet’s book, Turn the Ship Around

B: No, I don’t think I have.

D: It’s a good book. It’s when he took over command of the USS Santa Fe which, at the time, was the lowest-performing nuclear-powered submarine in the Navy’s fleet. In two years, it was the highest performing submarine in the fleet. He simply changed the power dynamic. Instead of all the power being in his hands with all of his other officers and sailors standing around and waiting to be told what to do, he, in turn, empowered them to make decisions. The result was there was more power to make that submarine work more efficiently all the way around. And so instead of all of it being in his hands, he created more power to improve the performance of the ship by giving power away.

B: It’s coming back to me a little bit. Didn’t he refuse to even make a decision on things to force them to come up with- like he would not make a decision. He said, “I don’t know. I’ll ask you questions, but you have to make that call,” or something? it was something pretty radical in that culture.

D: It really went against all of his naval training as a leader, as a naval officer. But the deal was he was scheduled to take over command of a different shape and he had spent a year studying every nut, bolt, wire, and system, and valve in this other ship. At the very last minute, literally, I think it was like a week or two before he was scheduled to take command, they said, “No, we want you to take command of this other ship.” It was still a Los Angeles class submarine, but it was an entirely different ship, different reactor, different acoustical systems, different weapon systems, and obviously a different crew, and so we had to respect his crew and what they knew and their intelligence and their training.

He had to take his normal system, and actually, the way he describes it, I’m not sure if he’s aware of that he’s saying this, but he had to totally abandon the system of leadership that he had been trained in and he had to design a brand-new one from, instead of saying the ground up, it’s really the keel up, but a system that respected his sailors. He would say, “My intention is to do this,” and they would say, “Okay, we’ll get it done.” That’s my very rough interpretation, but he changed that power dynamic. Instead of one guy giving orders to 134 other men, in those day’s men, it was 135 sailors trying to make worship work at its absolute maximum efficiency.

B: Powerful.

D: It is.

B: You also have a newer book out, Leveraging the Genetics of Leadership. Can you talk to me about where that came out of and what the intent of this book is and who the audience is?

D: Love to, Brion. It’s only taken me four years of my life, so I could talk about it for four days and maybe come up for air. It really came about looking at some of the things we’ve been talking about. You’ve had experiences with organizations where you go in and they say here’s this team, here’s this group, fix them. You go in there and you do this work, you design some new processes, you come up with some new initiatives and everybody’s excited. But then you come back three months, six months later, nothing has changed and you ask why and they say, “They,” the people upstairs, “they wouldn’t listen,” they wouldn’t do their part, or they didn’t care or whatever. I’ve heard various versions of that way too many times.

One project I did for a fairly large state agency, it was a regulatory agency, they regulated a license to 450,000 healthcare providers in their state. They were a mess for a lot of reasons, but got done with this project and there was some real hope at the end of the tunnel. I’m having my last meeting with the Deputy Director and we’re done talking and I’m ready to walk out the door and almost in a confessional tone, she says, “I don’t even tell my friends where I work anymore.” “You don’t tell your friends? why not?” She said, “It’s just too embarrassing.” I’ve heard various versions of that dozens of times. Not quite with that poignancy, but that really got me thinking. This was a crime. This is awful when smart, dedicated people, and this woman was, by any measure, a smart, dedicated, terrific civil servant. She could’ve gone anyplace and done exceedingly well and when she says it’s just too embarrassing for me to even tell my friends where I work anymore, that hit me almost in my stomach. This was a crime.

Most people that write books on leadership, what they do is they look at the individual leader. They look at the Nelson Mandelas of the world and the Abraham Lincolns and the Steve Jobs’ of the world and whoever else is now in the corporate CEO world of greatness, and they say if you could just be like this person, you too can be a great leader. They forget that when a person, even if they are a terrific leader in their own right, walks into an organization, they walk into an organization that’s made up of interlocking systems. They might be good systems, they might be dysfunctional systems, but they are all- An organization, a business, a company, a government agency is a series of systems that, in theory, are designed to work together just like your body and mine. Our bodies are made up of 11 different systems, all of which are designed to work in harmony and alignment with one another to produce life.

I got looking at how high-impact organizations, organizations that perform really at an elite level and not just for a year or 2 or 3 but 4, 5, 6, 8, 10, 12, 15, 20 years, how do they approach the practice of leadership? What I found out was they don’t rely on inspirational, dynamic, charismatic leaders. They actually design a system of leadership, and I would even add that most of them are not aware that they’ve designed a system, but they actually design exceedingly clear systems of leadership. It sort of takes you back to Deming’s statement where he says most problems in the organizations are problems of the system; they’re not problems of the people. Therefore, if we can understand leadership as a system, we can actually change, modify that system to produce a kind of experience for the workforce, value a kind of value for the customer, a kind of experience for the customer, and that will really set us apart.

So this manufacturing company I mentioned, without exaggeration, they have people lining up at their door wanting to buy furniture from them. They’re as picky as their customers as they are about their furniture. I think I mentioned the hospital that adopted the Toyota Production System. You look at what they are doing in developing their people. In fact, I spent a morning with them and one of their transformational senseis who does their Lean training all over the world. This woman gave me a half a day, which I was amazed at her generosity. When I saw the way they approached developing their people, and not just the professional parts of their people but they actually want to make their people better human beings, they want to see their people more self-confident, more personally empowered, I was stunned. Nothing in my professional career prepared me for what I saw.

This is a side story to the book. I was so shocked that I contacted a woman at Harvard University who had been a mentor for me in this project. She was more just of an encourager, but I thoroughly appreciated her encouragement. I got her on the phone and I said, “This is what I’ve seen. Can you help me process it?” and she immediately knew what I’d seen. She said, “You need to read this book called An Everyone Culture,” which I would highly recommend. She said what they are doing is what the subject is this book are doing, which is putting as much emphasis on developing the whole person as well as creating better doctors and nurses and medical assistants. When they do that, they create so much value for their customers and patients. This particular hospital, all through the recession when every other hospital in the country was laying off people, they didn’t lay off anybody and they continued to pay bonuses for the people who got financial bonuses. By the way, they’re also considered one of the safest hospitals in the country. Some have even speculated they might be the safest hospital in the world, which doesn’t sound like a big-

B: That makes sense given their focus on the person and the goals.

D: Yeah, but it takes a very different kind of leadership. They’ve got 9500 employees. They can’t treat do what they’re doing and treat leadership as it’s your leadership style and my leadership style and you do leadership your way and just make sure it works. 9500 people, they’ve got probably 1000 clinic managers and leaders and directors or whatever. You can’t do what they’re doing in such a consistent fashion and let everybody approach leadership based on their own personal values and ethics or whatever. They have a system of doing leadership and they are very clear this is how you will do leadership at this organization. If you don’t want to do it this way, the door’s over there, and they’re very clear about it. But it works and when you see it work, it is an inspiration.

B: Very cool. There’s something really enjoyable. Appreciate your time here. Is there anything else you wanted to share or discuss? I have a lot of links here to put in here to your books.

D: The book really came out of the question of how do elite organizations, how do organizations that consistently perform at really an elite level and do it over a long period of time, how do they approach the practice of leadership? I’ve got case studies from healthcare, several from healthcare, education – one of the most amazing conversations I had was with an elementary school principal, of all people, doing some incredible work – manufacturing.

One of the personal interviews was with a retired four-star general of the Army who went on, after he retired, he held a cabinet position in the Clinton Administration. When I got him on the phone, I said, “I want to talk to you about how the Army practices leadership,” and he said, “We practice servant leadership.” In the next breath, he was using a word I would never have expected a four-star general to use, certified war hero. This guy has three Purple Hearts from wounds he received in Vietnam. But in the next breath after servant leadership, he’s talking to me about love. In fact, I didn’t even really understand what he said until I was reading the transcript. I was reading the transcript and I said, “He said that?”

The book just lays out this is what an organizational leadership system looks like, here’s how it’s structured. It’s not a one-size-fits-all. Different organizations approach it differently, but the structure is identically the same that I’ve found. There’s a lot of commonalities in how they approach things, but the US Army is going to approach servant leadership a little differently than, let’s say, a hospital that says we practice servant leadership. It’s still the same concepts, but they’re going to end up applying those concepts differently as would be appropriate. So it’s not a one-size-fits-all, but the structure is the same.

B: I think that word love is really becoming more relevant in work. I’ve heard that pop up more frequently in the last couple of years too. I think to get out what you’re talking about is a system where people want to come to work each day and they have to feel like they’re needed and valued. You can only do that if you really understand that person and what they’re looking to do. Whether that’s develop them to move on to something else, that seems like a bad thing for the company, but actually, that’s how you get them engaged is they knew you have their best interest in mind. You can’t be motivated to do that if you don’t care about them and you have to understand what they’re trying to accomplish in the world. That whole individual piece, I think that’s really important.

D: Unfortunately, we think of caring for our people, when you hear a general talk about love in a military institution, it sounds like a moral argument. It sounds like morality. In fact, the way he talked about it, it was almost in religious tones. I was really stunned. The other side of that coin is a very hard economic driver or a driver of good, solid economics. When you think about in 2019, 45% of the US workforce turned over. That is an enormous cost. Unfortunately, it doesn’t show up on anybody’s balance sheet, which is a great disservice to stakeholders I think.

If you start looking at how high-performing organizations do leadership, caring for their people, and the United States Army loving their people, giving their workforce an experience, as you point out, where they want to come to work. Yeah, it’s taking care of people as people, but it’s also driving economics, it’s driving innovation, it’s driving the customer experience, and then it becomes not a moral discussion, but really a value discussion. If there’s one word that I would describe these organizations and looked at is that they’re crazy about delivering value and developing value. In any place they see an opportunity to develop value, they develop it because, ultimately, it means they’re delivering more value to their customers.

B: That’s a great point is that it isn’t just a nice thing to do. Actually, it’s a good way to run a business.

D: It’s a good way to run a business too, right.

B: Or the organization or agency or whatever you’re working on.

D: Right, absolutely.

B: How can people get a hold of you or reach out to you? do you have your consulting website?

D: Yeah, LinkedIn. I’m pretty active on LinkedIn. My website is danieledds.com, best place to get the book too. The book’s on Amazon, but you actually get a better deal if you get it through me because I do free shipping.

B: I’ll put the links there. Cool.

D: I also have a couple of special reports that I will often throw in the envelope too. Love to talk to folks about this, talk to people’s work teams, work units, or whatever. As you can probably tell, it’s the passion of my life right now.

B: That’s great. I really enjoyed the conversation. Thanks for your time.

D: Brion, thank you. I’m totally honored to be with you here this morning.

B: Maybe we’ll talk in the future.

D: Love to.

B: Okay. Bye. Thanks.

D: Thanks, Brion. Take care.

B: Bye.

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