The power of causal mechanisms that can drive a continuously self-improving system
Clayton Christensen’s high praise of Steven Spear and this book is well-deserved. Do not be misled by its subtitle, “How Market Leaders Leverage Operational Excellence to Beat the Competition,” a claim made for dozens (hundreds?) of other business books published in recent years. Much of the material was previously published in a book whose title is Chasing the Rabbit: How Market Leaders Outdistance the Competition and How Great Companies Can Catch Up and Win (2008). (Those who wish to purchase a new hardbound copy of Rabbit will need to spend about $175 for one.) The remarks that follow focus on the most recent edition published about 18 months ago.
Christensen is quite correct when noting that companies that achieve a competitive advantage (if not market dominance) are led by those who “discover ways to be better at what they do and develop products and processes that are better than anyone else’s, operating with such velocity that pursuers are frustrated….[They] create and sustain unassailable rates of broad-based, internally generated improvement, innovation, and invention.”
Do not underestimate the significance of the reference to “internally generated improvement, innovation, and invention.” With rare exception, a company’s #1 competitor tomorrow will be who it is, what it does, and how it does it today. To paraphrase Marshall Goldsmith, not only will what got you here not get you there, it won’t even let you stay “here.” After explaining how to “get to the front of the pack,” how and why complex systems either succeed or fail, and then examining high velocity “under the sea [the U.S. Navy’s Nuclear Power Propulsion Program], in the air [Pratt & Whitney], and on the web [Avenue A…later known as aQuantive],” he shifts his attention to four absolutely essential capabilities that must be developed with continuous improvement, and devotes a separate chapter to each: System Design and Operation, Problem Solving and Improvement, Knowledge Sharing, and Developing High-Velocity Skills in Others.”
I was especially interested in what Spear has to say about how and why applications of those capabilities within a complex system either succeeded (Alcoa) or failed (the AEC’s Three Mile Island and NASA’s Space Shuttle Columbia). “The argument of High-Velocity Edge,” Spear points out, “is that the way complex systems are managed has direct and predictable ramifications for performance. Manage systems so that there is a poor view of how the pieces fit together and insist (explicitly or implicitly) that people work around problems when they are encountered, and the results will range from disappointing to catastrophic.”
Hence the importance of being alert to anomalies when a system (especially a complex system) is operational. In this context, I am reminded of Isaac Asimov’s observation, “The most exciting phrase to hear in science, the one that heralds new discoveries, is not ‘Eureka!’ but ‘That’s funny…’” Those involved in a high-velocity culture are constantly alert for anomalies, for whatever “just doesn’t seem right somehow.” One of Thomas Kuhn’s most important recommendations, in The Structures of Scientific Revolutions (1962), is that the best way to test a theory is not be accumulating evidence that it works but by seeking out any/all instances in which it does not work.
Only the continuous pressure of what I call a “crucible of scrutiny” will ensure the validity of “unassailable rates of broad-based, internally generated improvement, innovation, and invention.” Therefore, high-velocity also includes the speed with which we are prepared to complete verification as well as the speed with which we are prepared to expedite further development of what works and elimination of what doesn’t.