Interview with Ken Shepard about his career and founding and leading the Global Organization Design Society

Josh Fowke 

All right, today I'm talking here with Ken Shepard, who's led the global organization design society for about 14 years now. Is that right? And he's a management consultant. Many years experience in the field. So can you give us a bit of a background about how you got into consulting?

 

Ken Shepard 

Let's see where to start. And II one, I finished a doctorate I, it was a mid career doctorate at UCLA and management and I moved to Canada to be at the Niagara Institute. And there I was director of the management of change of Public Affairs programs. So I was exposed to a network of corporations were really at leading edge in Canada. And part of that job was to begin certain consultations, bringing government business and labor groups together. And then they're developed into a series of projects, which was the beginning of my management consulting, so it was during the 1980s at the Niagara Institute, and I would say really developed when I one of the provinces, New Brunswick really took an interest in our methods. And I was consulting there for three or four years with the head deputy minister and deputy ministers of May the departments and begin to use some requisite ideas toward the end of that. And that's how I got into management consulting. But my background was in org behavior. And I had previously been a city planner. So I had some planning technology and frameworks, mental maps. And then I had always been interested in behavior. I had been trained at National Training laboratories and all kinds of group work, and then at UCLA. And I had been to a lot of therapy and a lot of personal development of soaking in hot tubs that are sullen and kind of awareness building. And so I knew that to be a consultant, I had to be aware of myself and and so that that's those the early days of consulting.

 

Josh Fowke 

So when did you first come across requisite?

 

Ken Shepard 

Well, it wasn't called requisite I would, I was doing my doctorate at UCLA, and was one of the professors that asked me to teach a course while I was on vacation parts of the course. And that was University of Southern California. And I was walking through and this fellow was giving a lecture. And it was their 50th anniversary of the School of Public Administration. I didn't know this guy was Elliott, Jack's man, he had his slides, and I stopped and I listened. And all of a sudden, I see the sky as the answer. I've been struggling to the doctrine, many, many theories. And Elliott says, it's really about time. The time dimension that's important. And I remembered, one of the theories in school was Rensis, Likert. And I read his book several times, who was in the early, I guess he was writing in the late 60s and 70s, about leadership and organizations. But when it came to the management of change, he had one line in his whole book. He says, I think it's about time. But we don't know much about that. So reading that, and then here, it's about time. And I said, Yes, and time horizon that fit with my planning. And it also fit with some of the mental maps because I knew the people I was with working with in different maps of the world. And they were, and he had a framework for that. So I was delighted. That was 97 years. So we didn't, then next next came up, I was head of a professional association called a cord in Toronto. And there had been to one had been the Association for creative change, more religious change agents, and the other one was the Canadian Association for Applied Social Science. And we had merged the two into a group and it was a small, smaller group that was about 35 that grew to about 100. And it was about that time we were expanding our professional development, we sat in the circle, who would you most like to study with? And each was way around and then bike. So some of my friends had been out to California to study with Elliot Jackson, I've had a consulting assignment. I couldn't go. So I'm gonna study with La Drax, because I couldn't go and they were very excited about Yeah. And so I called him up and said, we'd like to run a workshop. Would you like to do a workshop for us? And he came up and we did a one day workshop. And then it went so well, that we talked and he said, I'm really this is a good group. I really like I think we should have a seven day workshop. And that started, I think around 1991. We did three or four For seven day workshops, and we did 3d workshops, we did large one day workshops with as many as 300 in the room, big hotel plenaries. And all the big banks each had a table of eight, we had all the banks there. And these were big days. Yeah. And so I had been head of the organization. And so I sponsored and produced these things with Elliot Jacks from about 9091 to 98. So that's kind of how I learned about it. And I first moderated the first seven day, then the next one, I sat and learn, and then I sat through about four or five of those. So I'm a slow learner. And I'm slowly getting, and I started putting these things, these concepts in my practice, one by one, it took me eight or 910 years, to really put it all together. And was done very deliberately and slowly.

 

Josh Fowke 

What would you say was one of those things that at first, you, you didn't quite appreciate about it or understand about it, but really, you found most useful now that you're more familiar with it?

 

Ken Shepard 

I don't remember, anything I didn't understand about another probably were things but I repressed those. Yeah. I can tell you the one thing that that attracted me to it. That's kind of what I had, I had gone through the doctorate took about seven years, and including about three years on the dissertation. And this field organization development, I thought it was like a marshmallow like clouds, like there was no foundation, it was just, it seemed like everything was participation. And the more participation, the better. And there were all these pieces of theories. And so I did a Delphi study of 70 experts. I said, Where is this field going? That was basically it was a very elaborate took me a year and a half to do and I was looking for, how do you put all these different ideas together? I'll tell you, when I listen to Elliot, Jack's that first session. I said he has an integrative framework, I actually can figure out where each of these pieces of theories, everybody didn't mention invented these pieces, how they could be fit together. And some of them were nonsense, and shouldn't be there at all and others couldn't be done much better using a requisite framework. I mean, the doctoral program, there's a famous article, one of the best sellers of All Times called by how to Koons Harvard Business Review, the management theory jungle, and then their management theory jungle revisited. And what it says is management theory is a soup of nothing. Yeah. And so this theory really put it all together. And I had a framework that had levels of organization, no other theory had ever talked explicitly about levels. Yeah, yeah. And then, accountability was a major concept. I mean, there had been management by objectives. But the thing had never been able to work. And because they were all on one year time horizons, if any objective should be on three and five and tenure, and they didn't, they didn't have those insights. So when you put Elliott's theory together with management object of objectives, that would have been implemented entirely differently. Yeah. So anyway, I would say that Ha is, this is a broad system of interlocking pieces. That gives me a way to see the field. And now when I talk about participative methods, or asking questions of people, I now ask questions at the proper level questions that people ants can answer. Hmm, we used to ask questions, we used to ask people at level one, which our mission is not an appropriate question for level one person. Okay, so you learn to ask the questions that are appropriate to the level. So an exec give me a sense.

 

Josh Fowke 

Yeah, that's a really good background of where I'd want to go with this next, because I know there's a lot of people, especially in my age group, but that are still unfamiliar with management in general as a concept, and especially with requisite ideas. And so I think Elliott said something like it would take 100 years for these ideas to become, you know, accepted and understood. So can you give me a like, how are we doing on that track? You give me some examples of companies that have been using it or places it's been implemented?

 

Ken Shepard 

Well, what, one way I like to frame it is compared to what else? What are the theory? How are we doing compared to other theories? And I'm trying to think of another total integrated theory to compare with good point I can't think of it. This is a pretty radical integrating theory. Other theories are quite partial. Yep. Then a friend of mine, very great was Dean of the Business School University of Manitoba. He says, think of all the management frameworks and techniques. None of them are actually taught in the university quality was never taught Deming stuff was very important, never taught there. He says the management textbooks are kind of the fate of short introductions to 100 different concepts, not put together any upgrade away. That's my experience. That's your experience. Yeah, and they're all fractional, and let me go back. You're in school now going through, you may do a graduate degree. Generally, graduate degrees, well, even undergraduate engineering, architecture business. Generally, they don't teach anything about the career progression in your field. They don't teach anything about management. I'll just take take for an example. I got a master's in city planning. So there was a lot about teamwork. How do you get along in teams to produce a solution to this problems? Well, that's very good, we're gonna fight with each other, we learn how to pretend not fighting each other. But they did not really even teach us any skills and how to get along. They just put us in teams. And we fought it out and very unhappy, many ways, make reasons. But one example that I think really works, well is one of our colleagues in Argentina, was a president of Argentina. He is an engineer, he was hired on the faculty to teach an engineer undergraduate engineering school. And I believe they also have a master's. And somehow he learned the Elliott jokes, methods. And somehow he convinced the school to put in a career or management course. So in every undergraduate engineering student, has a semester with Ricardo Gutierrez is a wonderful professor. And he teaches them not only Elliott structure, but something about their career and its progression. So we now have this eLearning, which is you can collapse down to maybe five or six hours, and with some reading 10 or 15 hours. My my sense of what would really be great is that every professional school like for doctors, lawyers, architects, engineers, that there'll be at least 10 or 20 hours, maybe exposure to elearning, about how organizations work, and then have careers work in their progression. What's what's a doctor's career path look like as they move up management in a hospital or in some kind of a public health network? And how, because they,

 

Josh Fowke 

yeah, they have none of that. It gives you the awareness of stuff to expect. And generally my experience is when you when you give people with information, it's a big aha and a motivated. And it also says something like, so you point out, they might have potential in a couple of years to be doing something they didn't think they could it says, well, wow, I really need to get myself ready for that.

 

Ken Shepard 

Exactly. I can see student assignments where they need to go interview people at different levels of career, maybe they do in a group. But it wouldn't be hard to get interviews with somebody who's a recent grad, an engineer working at a desk, individual contributor, then you get an interview with that person's manager, their job, and then you somehow do a group interview, and maybe at the highest level shift, record them on video, and you don't get access to the CEO who was an engineer and got there, but at least they get to hear what they're dealing with and how it sounds differently. They get a sense of the career. And then they get a sense of the lateral relationships, and they get a sense of the practices. I wasn't taught any of that. So when I went to my first job, in city planning was a big transportation study. We were doing computer simulation of transportation or regrowth. We had 100 people, probably no more than 10 of those people were working effectively. Why? There were a lot of engineers that were operational researchers. I don't think a single person in that organization ever this was in the 60s and early 60s has ever been trained in management at all, nothing. There everything so and then I went through a period and some other jobs. I don't think I ever worked for anyone who had had any training in organization management for design, many painful experiences. And yet they sent us off to places like National Tree many laboratories to learn how to get get along in groups. Well, what you do in those in those trainings is you wake up. And you realize you don't want to be in these terrible organizations anymore. These paranoia inducing organizations that led Jax talked about their poorly designed, poorly managed. So when people use the word hierarchy, what they basically mean, is an organization designed by nobody, with no theory, staffed and appropriately, and it's basically it just stress inducing, it makes people crazy. And it's really painful. It's it's a miracle, anything gets done. Yeah, well,

 

Josh Fowke 

I have a couple ideas sort of about, because I'm coming from that generation where our first, the general connotation around hierarchies is quite negative. And I think that there's a couple things I'd run by you on that is one is that there's a difference between a dominance hierarchy and competence hierarchy. And so yes, some organizations are playing power games, and whatever, and those things aren't very good. But when you have something from our Oh gives you a framework to objectively get people in the right role, so that it not only get themselves in the right roles, but everyone else so that you're getting the context, you need to do your work, you're in a position where you, you're at the right level of challenge, and it works better for everyone. And that's based on the competence of the person. So it's not based on arbitrary power. And I think that there's a big distinction because like, most people will say when they say hierarchy, they mean dominance, hierarchy,

 

Ken Shepard 

or status. Or, I mean, when Elliot was studying levels of organization in the UK, and he came up with 33 levels and the British Navy. Or I think he did some work for Nortel here in Canada. And I think they had 18 months. Now, they sent a bunch of their VPS, down to study with it, and they got it down to 12, and 11, and nine, getting closer, getting closer. But the hierarchy that is well designed over levels of complexity and people is very different from the reason they had 32. Or the reason we had a team is because if you want to promote someone, you've got to give them a couple of subordinates. Yeah. And then you want to promote subordinates, you got to give them a couple of subordinates, you start building layers based on a system, I don't know what you know, some kind of personnel considerations. And it may not be only power, but it's basically just so you can promote and pay people a little more as these things grow over the years, and their various functions.

 

Josh Fowke 

And so if you understand the levels of work and human complexity and capability, you can reward performance or change pay without messing up the whole the whole hierarchy system. Yeah. And so just for viewers who wouldn't be quite familiar, what is like how many we're talking about? Most organizations, so if you had about a, a general business would be about a five levels. And then if you had like, you know, a corporate business, you're looking maybe six, let's say

 

Ken Shepard 

guy has either a handyman or neighborhood garage, that's a level one organization. Okay, there's a mom and pop store at the corner, they have an employee, it's a level two organization, then there's a local bookstore and they actually have two layers of management there's the store, maybe the owner or the person who runs a store, then there's a level of managers and then their staff into that it's a level three organization okay for to get up to a plant level perhaps manufacturing plant. Now there are full businesses at for chemical plant there, this the five unit business, the five level business unit was first in fairly large corporations that was named by McKinsey. In fact, a guy by the name arrived at Carnegie who was a big star leader and Brexit organization. He worked with GE, and he's the one who first formalized the five level business unit as the place for you can really run and do the books on a profit basis. And so that's kind of my ideal form for a fairly large business unit. Although their business units and all those other levels. Yeah, the handyman has got a business unit.

 

Josh Fowke 

There's examples of a professional whose business for example, if you had a couple of lawyers, their business may only be a level three business but then they're working at whatever level on their casework and all that type of stuff. But if you see an organization that has anywhere, anywhere above each, you're probably in most cases you're in blocks for layers.

 

Ken Shepard 

Seven suppose we can handle a global corporation these say eight in the US Army during wartime maybe. Many organizations have eight 910. So there's some compromises and there's little dysfunction. But with this theory, you can predict whether dysfunction is and how to mitigate it. But it's not it and use it if you need to strategically. So the other idea about hierarchy where I think this is my grandfather Don's idea, actually, so he did some work looking at the Flynn effect, which is how IQ increases about 3% a decade. And if that's the population, a lot of population at

 

Ken Shepard 

large, yes. But he said, I would like to think that my IQ three points per decade ago, yeah, well, so he was doing some modeling, looking at the stratum and mode of populations based on that projection. And what seems to be increasingly happening is that the really bright guys coming out of school or at three, but they're putting in level two job, and then they think they, they blame the hierarchy, as opposed to being misplaced. You know, they don't feel respected, the works too easy, and your boss is not in contact, and it's just not a it's not a conducive place to good work. So I think there's a bit of that. And then there was those are the smart people coming out of school at three are going to be leading organizations and they move away from hierarchy, when that wasn't really the the alignment, high

mode, people are often misplaced.

 

Josh Fowke 

So another idea I was talking to Don, earlier this week about some of this hierarchy stuff. And he'd said, what what he really liked about Elliott was that it was it seemed to him that at the time in the history of sort of organizational studies, that there was a lot of emphasis on the idea of consensus and on sort of having a voice as the other the rest of the people in the organization. And then people were trying to do all this consensus stuff. And it was a marriage between keeping that voice with stuff like you need to give your manager the best advice, and they need to seek that from you. But making it a hierarchy of accountability and authority to make decisions that allowed the simplicity. So so actually got done, while trying to keep some of that voice and making sure that the communication was working. So I really liked that sort of take on it.

 

Ken Shepard 

If I understand you correctly, there was a pretense with the McGregor theory wise that there had to be these large discussions, almost there had to be consensus, which really got in the way because decisions had to be made managers were accountable. So and at the right level, at the right level. So McGregor was saying, Theory X is where managers tell you what to do. And they're bullies in there. It's one way communication. And Elliot really talked about two way communication. So it doesn't mean I'm not a manager, and you're not a subordinate. It means that we need to have an open channel. And and it's not always possible in every culture. I mean, you may be in an Indian culture, or a Chinese culture where there's fear and deference to authority figures, and an employee would never tell the boss what he thinks, or she thinks, because it's too dangerous, because that's not what they do in that culture. Yeah, or some friends that worked in Russia. And they said, Look, requisite depends on open trusting communication. In Russia, there's very little trust. So it's very hard to how do you put in requisite, which depends on open, trusting communication, even between the manager and subordinate? And between the team? How do you design that when there's really low trust and fear? Yeah. So, you know, I think that's what we're working with today. And I think the new problems with people working in distance online is you don't even have face to face now. Or even dealing with email. Sometimes we have these video meetings, and we're trying to pick up cues and do it but how do managers behave and in his new network, sometimes working on 10 teams at once? You know, that's the new puzzle and representatives need evolved to kind of work with that.

 

Josh Fowke 

Yeah. So I want to back up a little bit for for people who are less familiar with the whole idea of management Well, how would you describe that to somebody or what what is management? Why is that important?

 

Ken Shepard 

Starting clearly, basically, yeah. Management. Why is it important? Well, someone owns or controls a business. Let's just say that. I have some capital, and I want to set up a coffee shop. I need help. Do I need to make some decisions do I don't hire several people, when we sit down necessarily and talk about everything, I need to get the store built, I need to design. So I've got to design the roles, contract people, then I have to hire staff, I have to train them, I have to make sure that things are done, I've just scheduled. Now you can say, Well, why can't people schedule themselves. I mean, there's some people try to do that. If you have guidelines for the scheduling, and you say, here are the requirements, and if you can sort out among yourself, who's going to be here and you commit to that, that's okay with me. But at least I've set up the guidelines to make sure the store is open at the Hours of these bill. Now, on the other hand, if the employees buy me out, and now maybe we have several stores, and we have 100 employees 100 employees can't be the boss. So now we need some representation onto a board. So the employees elect a board, and it's now employee owned. So well, the board, how many are on the board? Eight, can you have eight managing directors, the board? Well, they generally appointed executive committee, Executive Chairman, or they hire someone to be the CEO. No matter what you do, when it gets complicated more people, you need someone to make decisions and to convene and have the right discussions and to prioritize and allocate resources, allocate time allocate money.

 

Josh Fowke 

So my general experience is sort of, at least from a business school is okay, you're gonna go run a business, or you're going to be a part of a business. And management is just, well, you're managing it, that's it, but there's no, you know, there's no theory behind it, there's no principles or advice on how to do it successfully, and how to take, for example, take a strategy and make sure that the things you're doing management wise, make that strategy into concrete, actually happening on the ground stuff. So it's always tough, I just want to go back as well to, could you give us either from your experience, or somebody, you know, knows experience of the power of getting the management, right. And so maybe going through an example of a company that's been consulted with or that's adopted some of these principles and the before and after what they their experience was.

 

Ken Shepard 

So, there are a number of major companies around the world who have used all are part of a system with amazing results. So a smaller company that used it for over 20 years, Novus international down in St. Louis spinoff of Monsanto. They've worked with this, almost the same consultant, they've gone through three CEOs. And I had the opportunity to go in and interview people from the CEO down to the receptionist. And we've gotten case studies written up, there's a book about it, we've got videos, if it really documented that case on what it means. And we asked people in the video interviews, how is this different from other companies you've worked in, so you can hear their excitement, enthusiasm, and they've had they had good performance over the years. So that's a kind of a that was a company of 500. That's growing up to about 1000, high tech, a lot of PhDs working. But there's another major corporations that over the years of use, the one is probably one of the largest in the world is Unilever. And they worked with David Dulles, who had been one of Elliott Jack's protegees at Brunel, and, and Brian dive and there's a book, I think it's called the healthy organization about the Unilever experience. And that had many spin offs. They worked a lot on getting the levels right executives, getting the talent pool going. And actually one of the representatives of Unilever in India actually left and went with Tata, which is one of the largest really a huge corporation in the world, Tata does everything. And he took requisite organization and what he learned in Unilever into Tata, and they used it for their management system for all of their many companies, not only in India, but around the world. And so requisite. That's going cross cultural. Yeah. Yeah. So then a major oil company whose name will come to me in a second. The Royal Dutch and one of the largest companies in the world had operations. They must have operators In 120 countries, and the way they were organized, each country was like a separate company and they had their own financial reporting. And it took them about nine months to roll up a financial statement. Because, yeah. So John Hofmeister had worked at GE, when Jack Welch for there, he'd gone with a couple of spin offs whose names are slipping, slipping right now. But eventually he went in, I think it's a level five, and then a level six executive VP at Royal Dutch Shell. And he spent 10 years reorganizing into one company. And they use the levels to level the country companies that they had. Now, before all of them all the CEOs of each country, were saying, look, but that doesn't make sense, because in Bolivia, all it was was a level three distribution unit. You know, and then in Brazil, it was a level five company, and in the United States was a level six company. So now you had a way of leveling the jobs. Now, that doesn't mean the CEO in each country didn't have a limousine to drive to see the president of the company. So you have to have some status symbols, but their salary and everything else was done using requisite levels, will took him about 10 years from 1995 to 2005. To do that, that's a remarkable example. Now, right here in Canada, if you think of the companies that have used this, I mean, early on the first company to really bring it here, I mean, there were some sonko. And back in the early 70s, they brought Elliott to speak, but in the mid and late 70s, Elliott was advising in parallel on their structure. And then George Harding was head of Eau de there, he had a group of about 22, organizational development people. They had hired one of the guys Eric lucking from Glacier to come over. And then they brought in a console on their store, that George Harding is the one that introduced it to many of us in Toronto. Just the way the thing so Imperial oil used to print it spun off to some of the oil companies, then some of the bank shoes that was used in the visa unit. CIBC used extensively parts of RBC used it. Then, other companies in Canada big ones inco used it for years before they were bought by the Brazilian company. Even Chapters Indigo, organize their stores using my hunches, there are probably 150 Canadian companies, many of them

 

Josh Fowke 

you'd recognize, I think Canadian Tire was a

 

Ken Shepard 

Canadian Tire was early when Canadian Tire acceptance over many, many Canadian companies. On our website, we have over 300 companies worldwide that

 

Josh Fowke 

this is the go to Cisco Society's website.

 

Ken Shepard 

And then we have a census of senior practitioners around the world. There must be approaching four to 500 of those people use this methods. But if that gives you a sense of scale and accomplishment, and how seriously it's taken. Yeah. Well, now I mentioned the US Army, they started in 1981. And almost all branches of the uniformed and non uniformed I've been through aspects of requisite has been used. But the met some of the methods were developed with the General Staff usrm Very impressive workers on our website, the documentation of us probably over almost 20 years. Yeah.

 

Josh Fowke 

So this gives me a sense of freedom as aro when you're looking at it as a total integrated system and from an organizational design perspective. Now, if I were an individual, and I'm in a company and I'm in a new manager, like I'm in a management position, and I'm trying to figure out how can I use some of these ideas without having to control the change or the company to really be a better manager myself and maybe affect things in the team around? What would be some ideas or principles or takeaways that might be useful.

 

Ken Shepard 

One of the first things I do is come to the ghost society site and take the elearning and read some of the basic reading. So to do the elearning. It's very inexpensive. Five hours of that reading the articles, watch some other videos, maybe 1015 hours, you would have a very good overview. Very good then you can explore now as a manager without a lot of power. The things I would start with is the man management practices. So I had I had one of my clients in Canada was the Victorian order of nurses, which had 1000s, of visiting nurses across Canada, and they had regional offices. And so I had encouraged them to send some of the regional managers to one of our trainings and our conferences. And I interviewed him afterwards, after he'd gone through a three day training in the conference. And he said, You know what I learned, he said, I went to the pre conference workshop on management practices. He said, There was a concept called setting context. He said, I realized, I didn't have a ghost an idea, he said, Without context, and then I learned how to delegate, give context, and then delegate and delegate effectively, I had no idea what it was to assign a task. He said, it's a lot more work. He says that now, when I give context and assign a task with context, the probability of it actually getting done on time within resources, goes way up, way up. He said, Just that learning to really learn how to delegate to design the task and give context and really give it well improve my performance remarkably, so I would say, learn the practices, and study them one by one, you do not have to change the organization to do that.

 

Josh Fowke 

It's a perfect place to start. And from my experience, when I when, for the work that I've done, when I've been in a managerial position, I found that it's a lot of work, but it's making sure that you're communicating properly. And making sure that you've assigned the task properly is like, writing the key to getting the stuff done. I think it's

 

Ken Shepard 

another thing to do is probably on our website. I don't know if the camera can see this. Yeah, we published this book, and it's for sale on Amazon. But you can get it free on our website. And I will just read sections of it that are interesting to you.

 

Josh Fowke 

Yeah. And that's organization design, levels of work and human capability. And I know, there's, if I'm correct, there's a lot of people who've contributed to this,

 

Ken Shepard 

oh, there are 30, some people from around the world the idea when Elliott died, he had not really written up any of his cases, because he believed in client confidentiality, and he said, lead a book about implementation. So we got in touch and recruited 32 of our best people. And they each wrote chapters, some different aspects of their implementation. So this is a really good reason. Very good.

 

Josh Fowke 

So one of the other things that struck me when I was looking at requisite was the idea of trying to get a common language, to speak about things and to speak about management. So this goes back to the idea that your management's big super nothing and you go into an organization and all these, there's no common definition of anything. And so a lot of what I see from Elliott is there's sort of an emphasis on making sure that you're able to communicate because you have the same language. So if you talk about a bit what how aro tries to make a bit of a common language for people to use.

 

Ken Shepard 

He insisted on what he called univocal definitions. It means this, yeah. And so here is what a manager is, there is no definition of manager in the literature, it just doesn't people will give you many different. So do you have to use the requisite organization? Vocabulary? Well, the trick is, you ask the company to name their own management system. So here in Toronto, big pharmaceutical company called Hoffman Roche, pharmaceuticals, they had the Roche management system that was all based on requisite, the definition for requisite, but they say this is how we talk about management in Russia. And this is the Roche management system. And they trained and gave a lot of reinforcement and made sure the definitions were used. They did the same thing. There is the novice management system for novice International. So we encourage people to have their own and if they only change the definition of a word, and change it, but have it in the glossary, so that people know what it means and they use it that way. When that cleans everything up,

 

Josh Fowke 

you can prepare it a nice little glossary for new people. Give them a good a good thing for onboarding and it part of my experience, I worked as an internship at a pharmaceutical company and, you know, I got in there and by the time the internship was done, it was just learning what they were talking about. I mean, it's you want to help help bring people into the culture into the organization and stuff like that. It makes it easier.

 

Ken Shepard 

I mentioned Novus international who would use this method for about 20 years while they were developing offices in different countries around the world, it is very expensive to train people. And when new people came in there, maybe two or three people here, too, you can't travel to home office to be trained, it's very expensive. That's when they develop this eLearning modules, five or six hours. So everyone who joins the firm takes the elearning, even the receptionist, then they have group discussions. And now, of course, they can talk and have workshops on the web in the discussion groups. But everyone who joins the company learns the management system, and they have not only represented the novice management system, but they have a series of maybe eight or 10 other videos that are all part of the orientation process that they have to go through and discuss. So that's where you're on board.

 

Josh Fowke 

Yeah, I like that. So another thing, and this came up sometime, we're having lunch a while ago, but you talked about one of the books that really ideas that had taken you in the past, why was the exponential organization, you want to give a brief sort of overview of what what took you about that book?

 

Ken Shepard 

Well, when I was in school, in the 50s, and 60s, basically. And this was every line went up to the right. It was linear. Yeah. And we did all kinds of projections with vendors and transportation study and regression analysis, and we would do our projections. Well, when digitization came in, now, we started having exponential growth. Today, as a society, we do not understand exponential growth. So the question that they stumped people on, you know, if if a little lilies in a pond every day, and Lily, lily pads cover the pond in 45 days, on what day was the pond, half cup, day before. That's what exponent ends, that's what we don't get, we don't get these trigger points. And that's why many of the forces we deal with, especially in computers, and everything is now possible, and people don't realize how fast the change will come. Now I represent organization was developed in an era of linear growth. And Elliot was writing his book with fountain pen. Okay. So you know, he died in his late 80s, around 2000. So, basically Skype when we started this organization, that ghost society, we do it globally, because Skype was founded in 2003, the year Elliott died. And if you look at what's happened to our computers, and our internet connections, our speed and our memory, it's all been from about 2003 2007, everything took off, everything was founded around 2007. And so it's a whole new world, and we network and work. And the speed is amazing. Now people say what effect is is have on time horizons. And we don't know yet. Some people say that, yes, we work faster and more intensive, but you still have to see broad patterns. And there are still 20 year timelines. Yeah. And we're gonna look at we're in bad shape.

 

Josh Fowke 

Well, and the I've sort of two thoughts about that as well. One of them is that you still have to look at the, the amount of time that you're sort of having intentionality over like there's still time horizon still is a really useful thing to look at. But on the other hand, like I've run across people whose jobs are really complex, and they're only two week projects, and I don't know quite how to deal with that, you know, like, it just starts to muddy the waters of it.

 

Ken Shepard 

So Josh, you're asking me about complexity at lower levels have a complex task, but it really was a call. You heard God, please help me think about this. Many consulting firms use very bright young consultants who might be capable at level three or level four. Almost all their consulting projects can be weeks or months. And they're one after another. Now, what his sense was, that we all need to be able to stretch and use ourselves and that if we're, let's say we're low level four capable, but we're always working on things no longer than maybe a year. Yep. That actually we're, we're compressed, stressed and burning out, we can only do that for a period of time we need time out. Well, that's exactly how consulting firms work, they'll hire young people, they'll burn for three or four or five years, let him go work for somebody else. It's not sustainable. And they'll take some who will become partners. Now the partners do not work on those short projects so much they're into their into really client development, building the business expanding into new markets, they have these longer tasks. And they say that in consulting firm, one of the die, Don told me one of the longest tasks is managing your own career, because these tasks are too short. So when you say let's just take high tech companies, and the way they're organizing, they often organized with high load people on contract for short periods, and they hire them and get rid of them, they hire them get rid of them, they're literally burning people at find it very hard to work at that level of intensity. And so they want everyone craves this ability to work at their natural with space. So they can juggle and work the rifle challenge for the right level of challenge for them. And, of course, during wartime, some of the examples Elliott gave, you know, five star generals during World War Two is to normas complexity at very high speed. And they do it for relatively short periods of time. And you need that extra capability to be able to handle that complexity very short. Because in battle with the complexity, the changes, everything is unpredictable. Things are happening very, very fast. There's tremendous complexity, but it's just not sustainable. Now, in this new world of tech, so we're getting into product development. And it may be good to look at some of these new on these high tech companies and how they're organizing. But my hunch is that there are strategists, and then a lot of individual contributors who move around and work on different things. But most of the pace they're working at is probably not sustainable place.

 

Josh Fowke 

That resonates with me a lot. Yeah. What do you want?

 

Josh Fowke 

Well, it's a couple of days ago, I was sort of thinking about it. And I've always been paid about always making sure that I'm working out and making sure that I have time on my relationships, even when I'm working a lot. And my rationale for that is that I'm taking a I'm looking at long term sustainability. And if I do if I keep those things, which keep me healthy, and I mean working out, it also keeps my fluid intelligence from going down stuff that if I take the long route, even though I didn't get as much done this week, I got a lot more done over my career. And I think it's a mismatch. And there's a conflict between organizations and individuals now, because you're not at a company for one time. So they don't care about your long term productivity. They just want you now and so there's a its to me, it's a big, big conflict on incentives between the organization and the individual. I'd make the argument that if you can, I think there's things you can do to start fixing the turnover problem of really high turnover, that makes a business case for aligning the ascent incentives to look at more longer term productivity.

 

Ken Shepard 

There was a firm that presented a good client of Jerry Krantz at LeMans when the company is superb. And say, Texas, paramitas. It's a Texas software company that's continually been raised is one of the best consulting firms to work with. They're working in technology and management consulting. And they focus on picking very high mode people and putting a lot into their personal development and balance. And it's one of the few companies that really we've seen doing doing that. And so I think there's a lot we don't understand, in that many of our companies are actually using people and throwing them away. And that we need to take some responsibility for ourselves. But if we try to protect ourselves in those environments, we may get fired, because we're not putting in we're not showing our face for the number of hours. We're not working online on this projects. So I don't know. In requisite, we don't have a way of thinking about work life balance or balance between the organization and the person, I think we need to get those thoughts from another theory. In requisite, we say, generally well organized, you can do the same work with fewer people, some people misuse it and make the organization overly lean. And then they drive people. Well, is that moral, to use people up that way. So reps is a tool that can be well used or poorly used. And there are some who are wanting to make things leaner and leaner and leaner, and drive people harder and harder. And I don't know how, as a society, we start, you know, Francis had an idea. And in Europe, people have longer vacations. But in in our society, people are driven pretty hard and have fairly short

 

Josh Fowke 

relations. Well, I think there's an appetite and at least from my perspective, coming into the workforce of, I would, I really want to get a lot done and I have, I have a drive to naturally work, I'm very conscientious and so creative, and I want to, I want to work and be very productive. But at the same time, I'm aware of the long term productivity. And so I think there's an appetite for people like that, who are going to be very productive for you, that are interested in companies that are able to make that balance, I think there's, there's a potential opportunity there for a shift in strategy of a talent pool management, where you can start to get some of the bright young up and comers. And actually, if not keep them but get them at. You may not keep them their whole career, there's always going to be turnovers, but there's, you're gonna get a lot more out of the Meineke if you if you Align yourselves with them.

 

Ken Shepard 

So one thing requisite talks about is still fair pay. And the thing that's out of kilter in I think North American and increasingly other societies, even Japan, this making CEOs into kings, that they make such a little player, even out their next reports, that there's so much competition to be the next king, and I live like royalty. And what it does is it breaks down trust, and to get those rewards and to get those high salaries. They have to milk and, and produce profits. At the cost of short term really destroying value in the company. Yes, Mark Van Cleef, one of our associates who's done our work on CEO value in these compensations shows that we're now paying our CEOs to destroy wealth. And he's got an amazing analysis show that and until the pension funds and the stockholders start holding the boards, and the CEOs counter and get that trust reestablished. It's very unlikely these companies are going to treat people well, because as long as the king is extracting wealth for his own or her own private gain, he's going to abuse the company, because that's the only way you're extracting wealth. In the short term.

 

Josh Fowke 

Yeah, well, two things go through my mind. One of them is at the New York Conference that we were at a couple of years ago, I remember Fred Stanford giving a speech. And part of what he was talking about was in, I think this is from McDonald's work, if I'm not mistaken, but it's the importance of the symbols and of the artifacts of the culture. And so one of those is, you know, you have all these, you have the executives living like royalty, and they get the nice parking spot and whatever. And I remember that one of the big changes they made a company was that the parking spots near the door weren't for the executives, or for the people who were in and out all day doing repairs, or maintenance, and that there's things that you can do, where I don't know, I don't quite know how to say this. I mean, I'm not exactly against status, per se, but there's things that you can do that. Make sure that the CEO is part of that company, and that it's that the company feels that they're all in the same boat as opposed to this sort of, well, they're up in the executive suite and they're the big kings somewhere else.

 

Ken Shepard 

So he found a company and then grow to a low five and you have good values. You can hire a McDonald, your value analysis was done very nicely. However, as you become successful and as you age, and if you don't have a son or daughter to take it over. You will go public and you will sell it. The holding company that buys it doesn't care. Oh, it's now cheaper to produce in China. We closed all operations in the States, it's what happens to your value system, the trust or whatever. And what are you now doing? Are you maybe hiring illegals, illegals or slave labor to produce the thing? So the more the wealth is concentrated, the more there's financial measures and the only matrix financial. And the more it's in the stock market, what happens to all those values we intended when we founded the company? That's what that's and that's what's happening to many very idealistic companies, is they get sold?

 

Josh Fowke 

And yeah, well, what what I would say is that if you're, if you're a CEO is coming into one of these companies, and it's, it's coming from upstream in the ownership category. But if you're looking to turn around a company, or if you're looking to run a company, that there's that, getting these things, right, some of the McDonald's stuff, some of the requisite stuff, and establishing a culture of trust, will outperform cutting the costs and moving to China potentially or will like, in my mind, I think it's more powerful. We

 

Ken Shepard 

need more studies to prove that that's true. Yeah. But thus far, most have moved to China. Most have moved to Mexico. Yeah. That's so it's hard to know where the leverage is.

 

Josh Fowke 

Yeah. Well, I think this was a good place to stop, I want to give you a chance to say for our viewers who are interested in learning more about this, where to go what to do?

 

Ken Shepard 

Well, I would suggest going to the global organization design Society website, taking a look around but then doing the elearning is one of your first ventures just to see get, take a taste. It's a relatively modest thing. And then read a little bit, it's not a bad place to start.

 

Josh Fowke 

And if you're a CEO who is looking to maybe get some work done or talk to somebody about some of this stuff,

 

Ken Shepard 

call, well, you can call us and we'll refer you to a consultant in my fit. There's a chapter in here just for CEOs toward the end of the book. What should you do? Parent recommended?

 

Josh Fowke 

Well, Ken, it was a pleasure. Thanks for coming on.

 

Note: The video interview is available at on Youtube