Making the Organization with Tom Foster - Part 1

Transcript Making The Organization With Tom Foster - Provided by the courtesy of Teleios Collaborative Network www.teleioscn.org 00:01 - Melody King (Announcement) Everything rises and falls on leadership. The ability to lead well is fueled by living your cause and purpose. This podcast will equip you with the tools to do just that Live and lead with cause and purpose. And now author of the book the Anatomy of Leadership and our host Chris Comeaux. 00:22 - Chris Comeaux (Host) Hello and welcome to the Anatomy of Leadership. Our guest today is Tom Foster. He is the resident of Foster Learning CorporaMon. It's good to have you, Tom. Thanks for being here. 00:33 - Tom Foster (Guest) Great to be here. 00:34 - Chris Comeaux (Host) All right, I'm going to read from Tom's bio so you, our guest, could get to know him a liTle bit, and obviously you're going to get to know him a whole lot more. Tom is an internaMonal speaker and I had the privilege of hearing him speak as an amazing speaker because he has so much wealth of informaMon and knowledge and tools in his toolbox and again, that's what we're going to unpack. He's a recognized expert on organizaMon structure. In fact, what we're actually going to Mtle today's podcast is Making the OrganizaMon. His book I have right here Outbound Air Levels of Work and OrganizaMon Structures, based on 50 Years of Research by the late Elliot Jacks. Tom's book also Hiring Talent, levels of Work and the Behavior Interview, helps hiring managers and HR professionals apply the science in the interview process. Tom works with CEOs as an execuMve coach, with more than 17,000 hours of one-to-one FaceTime. In other words, he knows what the heck he's talking about because he's been in the trenches. His organizaMonal disciplines include construcMon, manufacturing, wholesale distribuMon, retail, export, educaMon and service companies, and also nonprofits. Tom is a member of the Kaiser University Board of Trustees, which is a large university system in Florida preTy innovaMve university system, I'll say as well. It has 26 campuses and over 25,000 students In Tom's background. 01:53 He spent 14 years as a television director producing commercials, sports, corporate and broadcast programs. And this was followed and this is interesMng, Tom, I didn't know this, so I was reading your bio 10 years with the Lord CPA firm supporMng client informaMon and accounMng systems. And since 1995, tom has chaired an acMve CEO peer group in Fort Lauderdale, Florida. He and I were talking about that in show prep. He's also a former instructor of Dale Carnegie Training. He has a master's degree in communicaMons and a bachelor's degree in radio television film from the University of Texas of AusMn, hook Em Horns. And so, tom man, what did I leave out? I think you got it all. Anything just interesMng about you, anything else that would be interesMng for our audience to know? 02:37 - Tom Foster (Guest) The transiMon. People always ask me what my background is and I always tell them I have a checkered past. That transiMon from working in television to working for a CPA firm always throws a monkey wrench into the understanding. I know that you've got somewhat of an accounMng background yourself, and so you can appreciate that I never took an accounMng course in my life, ever. Yet I managed to survive in a CPA firm for over 10 years and it was an interesMng Mme, 1986. I don't know if you remember what was happening in 1986. 03:19 Computers were just coming into and they had actually purchased two IBM XT dual floppy drive computers. They had them set on folding tables in the hallway with a big sign on them that said do not touch. They had no sohware, no operaMng system, they just had, you know, bare bone machines, and they had. So they asked me if I knew anything about computers. Now my television background. 03:46 When you think about you know what is a TV camera. A TV camera is simply a computer with a lens on the front. So of course I raised my hand. I said, sure, I know lots about computers. What do you want to know? Now you must admit that it was a very poor interview quesMon If they'd asked me if I knew anything about computer accounMng systems, I probably would have had to do some tap dancing. But that was the transiMon, stayed there for 10 years and brought them into the computer age and we started off with Novell networking where we had, I think, three whole megabytes on a file server and all the way up into peer-to-peer networking and eventually I leh all that behind because it just got too hard for me to keep up with. 04:31 - Chris Comeaux (Host) Yeah, I could totally see that and it's interesMng I'm reflecMng, Tom. So I graduated high school about the Mme you were doing that. So when I got out of college I now looking in the rearview mirror got the benefit of having kind of the early implementaMon of that and then being part of teams of moving it forward. I can remember going out to my first client and it was, you know, this was the version of a laptop, it was basically a Mac and it was like carrying a toilet on your shoulder because you had big old thing and so, yeah, really interesMng Mme. Another thing I'm reflecMng upon because my guess is you're much more right brain, creaMve, than leh brain, which is your typical CPA. Probably one reason why you're so successful there is you probably push their thinking would be my guess. 05:11 - Tom Foster (Guest) Well, I stayed three days ahead of them. I mean, they had no sohware, so they didn't even know. They knew what a spreadsheet was. It was a piece of paper that was about, you know, 14 inches by 17 inches. That was about 14 inches by 17 inches and I said we're going to translate that onto the screen on something called spreadsheet sohware. Now, of course, at the Mme I don't know if you remember you obviously know Excel now, but the predecessor to Excel was Lotus 1-2-3. But the predecessor to Lotus 1-2-3 was a sohware called sohware, called Visicalc. So that's where we started. Wow, Visicalc. So that's. That's how old all that was oh my gosh. 05:52 - Chris Comeaux (Host) Well, this will be interesMng. Then segue tom and so um, I love asking this quesMon because the the answers have been preTy incredible. But what's your Superpower? 06:02 - Tom Foster (Guest) Well, you prepped me with the quesMon, so I've had some Mme to think about it. I think one of my unique abiliMes is I have the ability to sneak into a company at night and place a microphone in their execuMve conference room so that I can listen to things that are going on. I've been publishing a blog, I guess, since 2004. So that would make 20 years, and very ohen I'll get a quesMon on my blog post that begins something like this Somehow you managed to sneak into our conference room and listen to something that happened, because what you just wrote about today is exactly the conversaMon that we were having. What you just wrote about today is exactly the conversaMon that we were having. 06:52 So, to step back from that, I think the ability, my superpower, is to look at an organizaMon and without a lot of background, I can figure out what's going on in terms of the kinds of difficulMes that they're faced with, the challenges they're faced with, the decisions that they're trying to make, just based on some rudimentary informaMon. You know what's their headcount, what are their revenues, how long have they been in business, and I can preTy much tell you what their challenges are. Or, on the other hand, they can tell me what their challenges are and I can preTy much tell you how big they are and how long they've been in business. Wow, tell me what their challenges are and I can preTy much tell you how big they are and how long they've been in business. So there's some great predictability that lines through organizaMons, that once you see these paTerns, you can begin to spot your own problems in the organizaMon much quicker and the resoluMon for those as well. 07:43 - Chris Comeaux (Host) That's amazing and that makes me even more excited what we're going to talk about, because I can see how that is your superpower. But the cool thing is that you have it. You have a toolbox of tools that can share that superpower with other people. Would that feel accurate, or would you reframe that? 07:58 - Tom Foster (Guest) No, that's. That's preTy accurate. There's a, in fact, if I show you a liTle card, almost everything I talk about is summarized on this liTle card, which is a pocket card, so you can carry it around for the rest of your life. But it's a framework. There are two big frameworks that I use. They're from legacy pieces of research that were created in the late 1980s, research that were created in the late 1980s. Most of it is based in Elliot Jack's research and requisite organizaMon, which goes back to the 1950s. Now I use these two basic models because they've stood the test of Mme. They're sMll absolutely relevant today, in 2024, absolutely relevant today, in 2024. And yet they're so foundaMonal in their principles that we can use them in almost any organizaMonal applicaMon. 08:53 - Chris Comeaux (Host) So let's put a pin in that I want to back up just for a second and then we're going to come back and jump off right at that point. So, tom, as you know, I've been using the framework work of my book, the Anatomy of Leadership, and I really wrote the book. I'm an accountant. I try to organize stuff. It's like a meta framework of what is leadership. You Google the word, you get 6 billion hits. We're trying to create like a meta framework for what is this broad concept called leadership. 09:15 But what I realized around the book came out December 2023, like this is about 10 miles wide, maybe two inches deep. It'd be great to do a podcast. Bring incredible people like yourself, because if it is a efficacious framework, you could just keep going deeper and deeper and deeper, because an incredible body of wisdom like leadership is like a diamond. You could just take it and just keep turning it and you got all these kind of different vantage points. And so what we've covered so far is self-mastery, caring for others, influence, intenMon, cause and purpose, mission margin, meaning management, making people. And now we're to making the organizaMon. And immediately when I thought like who's the best person to talk about that? And our mutual friend, Bruce Peters, Dr. Lee Thayer kind of their lexicon is really composing the organizaMon. I had to make it fit the 7M framework so I called it making the organizaMon in chapter 12 of the book. So, tom, here's my kind of take on this concept of making the organizaMon and I'd love for you to kind of take it and I think it'll be a perfect jumping off point back to where you were. So making the organizaMon or composing the organizaMon. Quite frankly, when I looked through my rearview mirror I didn't even realize it was part of my role. Like, oh, you're supposed to have a CFO, you're supposed to have an HR person, but to apply thoughnul, also creaMve thinking in how the organizaMon is composed, to realize your cause and purpose, to realize the desMny of the organizaMon, is the role of the leader. And this probably is not going to be the best analogy because I think you're about to blow it up a liTle bit. 10:50 But I didn't know about soccer growing up. We only had football in South Louisiana. So I had to coach my kids in soccer and a friend of mine gave me a Mp and he said first pracMce, just ask the kids their superpower. And here's the four basic skills at soccer at that age which is basically running down the field, kicking the ball, stopping the ball and generally geong to work kind of as a team, like those four skills. So first pracMce. 11:14 I asked them their superpower and then, interesMngly, at seven, eight years old these kids have a lot of self-awareness and they don't have all the baggage we then have later as adults, and took their answers and kind of composed the team based on that and we did incredibly well Now understanding their superpowers, understanding the basic skills needed at that level of the game, which obviously is a whole lot simpler compared to an organizaMon or, you know, a professional soccer team, et cetera. So I use that as an analogy in the book of composing the organizaMon because I think, like myself, a lot of leaders, they don't even think that's actually part of their role. So that's my take at making the organizaMon. How would you clean that up? Or even say it totally differently? 11:57 - Tom Foster (Guest) Now let's expand it and let's start with just a body of work that you're familiar with, and then that would be Lee Thayer just a body of work that you're familiar with, and then that would be Lee Thayer. His most famous signature book is called Leadership Great one-word Mtle, you know thinking being doing. But as Mme went by, his next most famous book was called the Competent OrganizaMon, which means even Lee made a transiMon from just thinking about leadership as an individual role and then beginning to focus on okay, what is this organizaMonal stuff? When you think about the specific skills on the soccer field running and stopping the ball and kicking the ball those are really great, but at some point you have to pass the ball to someone else. And now, all of a sudden, we've changed from individual skills in a role to two roles that have to work together. 12:57 People ask me about different kinds of problems and challenges they have in the organizaMon, and what they don't realize is that I'm a structure guy. I look at most everything through an organizaMonal structure lens and when I look at organizaMonal structure, the simplest definiMon that I can give is organizaMonal structure is simply the way that we define the working relaMonships between people, which seems odd, because most of the Mme we focus on okay, what do we want this person to do, what's the role, what are they supposed to do, what are we going to hold them accountable to, and that sort of thing. What we don't really realize is that we get people together inside of a company and they now have to work together, and how we set up that structure, or the way we define the working relaMonships between people is incredibly important. Two concepts that we have to focus on. First concept is in that working relaMonship, what is the accountability? Now, if we've got two people in a working relaMonship, each has their own accountability. We also have to ask in that working relaMonship, each has their own accountability. We also have to ask in that working relaMonship, where is the authority? And now we have to get back to a concept called and this is one of my favorite concepts. I talk about this to groups almost all the Mme it's a concept called work. 14:22 Most people don't talk about work. They talk about things to do. They talk about tasks and that sort of stuff. I talk about work. People call me in and they introduce me and the first announcement that I have to make is that I'm not there to help you become warm and fuzzy with your team. That's just not my role. My role is to get you used to talking about work. 14:48 Now, when I talk about work, two very specific things that I focus on are decision-making and problem-solving. When we think about work, let's take a typical machine operator. Someone's going to operate a machine. Well, what's the work in operaMng a machine? And people say, well, you know, there's a green buTon on the machine. They're supposed to push the green buTon. And I said, well, yeah, but if that's all the work was, we just get a robot to do it. 15:17 The most important quesMon you can ask is for that machine operator what are the decisions that they have to make and what are the problems that they have to solve? Now, when I talk about work, I will refer to levels of work, and when I talk about levels of work, what I'm talking about is levels of decision-making and levels of problem-solving. I think you would agree with me that there are some problems in the world that most people can solve and have solved in their lives. But as the complexity of the problem increases, some of those people are going to struggle. And as the complexity of those problems increases, some of those people are going to struggle. People are going to struggle and we can actually look at the level of problem solving and the level of decision making as to the part and parcel of every role. And so we begin to build this web of accountabiliMes and authoriMes between people in an organizaMon. 16:24 And that's where I come in. I'm a structure guy and People call me on the telephone and they generally have two problems. First, they tell me that we have a communicaMon problem and I say okay, okay. Or they call me and say we have a personality conflict in our organizaMon. Can you help us? And I said okay, tell me what's going on. So, whether they describe a communicaMon problem or they describe to me a personality conflict, I let them drone on for about 10 minutes and I finally stop them. I say I don't actually think you have a communicaMon problem. I think what you have is an accountability and authority problem is an accountability and authority problem. 17:09 And what you fail to define in that working relaMonship is what is the accountability and who has the authority? Authority to do what? Make decisions and solve problems the way I would have them solved. So you can begin to see that, with just a few basic concepts of understanding, you know what is work, what is decision making and what are the decisions that people have to make, what is problem solving and what are the problems that people have to solve. And in that working relaMonship, who's got the authority to make certain decisions? And now we begin to get into how organizaMons are put together. 17:50 - Chris Comeaux (Host) Let's back up, boy, there's so much here, so much to unpack. Let's back up for a second, because I want to go to the body of knowledge that you pull from Elliot Jock's work, and so one of my assignments over spring break this past year was to reread the requisite organizaMon. Honestly, I never got through it the first Mme, but there's something about it. 18:10 - Tom Foster (Guest) I'm surprised you got through it the second Mme. 18:12 - Chris Comeaux (Host) Well, maybe I just it was a full week and I'm like I'm going to get through this book and I feel like so I'm tracking with you, because I have now the framework of that book that Eliot believed that there was a there's a hierarchy, a structure like composing an organizaMon, that there is a hierarchy of work. And if you do not understand that's what you're dealing with, you're literally almost trying to defy gravity, so to speak. Hence the term requisite organizaMon. Can you take that from there and just unpack that a liTle bit more Mme, because this feels very foundaMonal to what you're saying. 18:47 - Tom Foster (Guest) Well, you've introduced a number of very interesMng words into the conversaMon, so let's start with the word hierarchy. You know, there are there are people, consultants in the world who would tell you that hierarchy is bad especially that's very in vogue right now teal organizaMon completely flat yeah, let's just. 19:07 Let's just get rid of hierarchy. And there's a huge misunderstanding. First of all, hierarchy is not a social construct, meaning hierarchy is not something that humans invented. Hierarchy is actually a biological process that occurred millions of years ago and all you have to do is look at the species of living organisms to understand how they relate to each other. In most species, that turns out to be dominance. You can look at any species and you can visually see a hierarchy of dominance. So you look at a group of lions or a group of wolves that run in packs and there is a hierarchy, and a lot of it is built on number one, gender. It's built on size, strength. It's built on experience and age and maturity. 20:11 Now some of those things translate into humans and human organizaMons, and the biggest misunderstanding that people have about hierarchy is that they believe that companies, or what Elliot would describe as a management accountability hierarchy or an MAH, is built on a hierarchy of dominance, which it is not. In Elliot's world, the hierarchy is created on a hierarchy of competence and when you look at you know most people ascribe hierarchy as being bad if they're a consultant and they project unproducMve characterisMcs into this hierarchy, one of which is, of course, dominance. Even if you look at things like gender, they begin to define hierarchy as a patriarchy and a lot of nonsense that goes along with that. But if you come back to a hierarchy of competence and understand that number one hierarchy is a natural process and that we can create a social organizaMon based on competence inside of a management accountability hierarchy, now we can actually begin to structure those working relaMonships inside of a company. And there are two types of working relaMonships in that structure. One is verMcal, up and down, and we understand those preTy clearly. We understand those as managerial relaMonships. I mean, every producMon technician understands they have a supervisor, every supervisor understands that. They have a manager, every manager understands they have an execuMve manager and every execuMve manager knows they've got a CEO. We understand those verMcal working relaMonships as managerial relaMonships preTy clearly in relaMonship to those two things, accountability and authority. We understand where the accountability lies and we understand who has the authority to make what decisions and solve problems the way they would have them solved. So that's the first type of organizaMonal structure working relaMonship. But there's another type that creates all kinds of havoc inside of companies and those would be the horizontal working relaMonships. 22:41 In a relaMvely sophisMcated company that has a number of of discrete funcMons, like, say, markeMng as a funcMon and sales as a funcMon. So I'd ask you would it be a good idea for the sales manager to coordinate with the markeMng manager? Answers yeah, that'd probably be a good idea for them to coordinate together, yep. My next quesMon would be well, is the sales manager, the manager, the markeMng manager? Answer no, is the markeMng manager, the manager, the sales manager? The answer is no, but it would be a good idea for them to work together. So then, my next quesMon is well, if the sales manager calls a meeMng with the markeMng manager, is the markeMng manager obligated to go? Now, the first response that I get from most people is well, no, he can't just tell the markeMng manager he has to come to a meeMng, and I let them think about it, ruminate over it, and then I say no, the markeMng manager is required to go by virtue of a horizontal coordinaMng relaMonship. Where we require we don't just suggest, we require, and, of course, require being the root word of requisite, requisite organizaMon this is a requirement in a horizontal working relaMonship. They are required to coordinate, which means, if the sales manager calls a meeMng with the markeMng manager. The markeMng manager is obligated to go. Now they've got to figure out the schedule so they can both meet at an accommodated Mme, but they're required to coordinate. 24:21 A lot of Mmes people hand me their organizaMonal charts and, believe me, I love to look at people's organizaMonal charts. In fact, people love for me to look at their organizaMonal charts, but just about the Mme someone's about to hand their organizaMonal chart over to me, they always snatch it back and go. Just wait a minute, tom. There's a couple of things that I need to make some notaMons on this chart, and it's these notaMons that I find very interesMng. The first is the doTed line responsibility. 24:51 DoTed lines create ambiguity, and ambiguity kills accountability. 24:58 Get rid of your doTed lines Now. 25:02 I say that tongue in cheek because you actually put those doTed lines there for a reason. 25:08 But when you put the doTed lines there, you created ambiguity, killing accountability, because that's what you failed to define. 25:17 You put the doTed line there because two people have to work together, but they're not each other's manager. 25:24 But what you failed to define was, in that working relaMonship, what's the accountability and what's the authority? Hence you're going to have something that looks like a communicaMon problem, which means you're going to pick up the phone and you're going to call me and you're going to tell me about this communicaMon problem. You're going to tell me you had a communicaMon seminar and everyone high-fived aher the communicaMon seminar but two weeks later you realized you did not fix the problem. And it's because it wasn't a communicaMon problem at all. It was a structural problem and in that working relaMonship we failed to define what's the accountability and what's the authority. When you define those two things, the communicaMon problems disappear. They disappear almost overnight. Same thing happens with personality conflicts. Something looks like the problem presents as a personality conflict. It's not the problem. The problem is we fail to define in that working relaMonship what's the accountability and what's the authority. One of Elliot's observaMons was you fix these structural issues. Your problems related to management and moMvaMon disappear almost overnight. 26:41 - Chris Comeaux (Host) So let me wow. So much to unpack here no-transcript. 27:20 - Tom Foster (Guest) One started around early 1950s, so around 1952. It was with the Glacier Metals Company in London, England. Glacier Metals Company was a component manufacturer. They made precision ball bearings that were used in machinery and equipment around the world. Elliot was with that organizaMon for about 10 years so it was one of his major consulMng assignments and he always said I never consult with any company that has not invited me in. So he never went out looking for work. People would invite him into the company and he would stay there for a long Mme. 27:58 But most of the fundamental pieces of his, of his theoreMcal framework were created with the Glacier Metals Company. His first book that he published that really outlined all this stuff was called A General Theory of Bureaucracy. You can imagine I mean that's a scinMllaMng Mtle, you're going to run down to the bookstore and pick up a copy of that straight away. But if you look inside that book you will see that, based on his work with the Glacier Metals Company, all of what eventually became much more polished frameworks it was all there in the very beginning. By 1966, he had laid all this out and then began to simply refine the graphics that went along to explain some of this stuff. 28:48 The second major consultancy that he had was with the US Army War College, working with Max Thurman and Colin Powell. In fact he received a commendaMon from Colin Powell for his work with the US Army War College. He was brought in as an industrial psychologist. He was brought in as an industrial psychologist primarily to figure out officer candidate selecMon who would be the next generals. That, as a four-year college program, was to wash out about 380 of the students, leaving about 20 standing. Those 20 people would be the next generals in the armed forces as Mme went by. 29:42 His third major consultancy was with the CRA Mining Company in Australia. He was brought down there by a McKinsey consultant called. His name was Sir Roderick Carnegie. He went down there. In fact they had to get permission from the US Army War College to go down to Australia and share these concepts with a private company. In fact, they had to send Stephen Clement, who was the US Army assigned person with EllioT, to make sure that he didn't share any trade secrets that the military had with the CRA mining company. 30:26 Now you've heard of the CRA mining company, I'm sure, and you're going to go. No, I don't think so. But you are familiar with the successor organizaMon, which would be Rio Tinto, which is a global mining operaMon. You've probably heard of Rio Tinto Stadium in Salt Lake City. So anyway, they had a very, very large budget to take all of EllioT's concepts, which were now no longer theory but pracMcal applicaMon, and apply them into an industrial mining operaMon which you can imagine is extremely dirty work, different levels of work inside, lots of machinery technology and everything that was going on. So those were the three major consultancies where he not only developed the theoreMcal principles but then began to apply them through the US Army and officer candidate selecMon and then finally into the CRA mining company in Australia. 31:26 - Chris Comeaux (Host) Well, and I want you to. Maybe the next good place to go, tom, is that card that you pulled out, and of course, some people are just listening, so we'll have to paint a picture. But, if I recall correctly, so in his work in those places, what he started to because he was, as Dr Thayer would say, always in the learning mode and he noMced people's language and some people that were very like this and that very black and white short Mme horizon in their language, versus people that could hold almost, I would say, mulMple if then statements in their brain at the same Mme, generally had a much broader Mme horizon in their outlook, thereby starMng to idenMfy this kind of strata of humans in terms of our ability to think on a Mme horizon, and that every human being can grow. So this is not like an eliMst thing Every human being can learn and grow, but there is sMll a general strata that a person can grow within. Can you take it from there, maybe clean that up, and I'm sure you'll probably say it in a different way. 32:28 - Tom Foster (Guest) Well, it's interesMng because I can tell that you did read Elliot's book Requisite OrganizaMon, which contains all kinds of different interesMng perspecMves on the way that we look at work and what is work. What happens when people especially read that book is they'll focus in on a piece without really understanding the enMre context. So as you piece some of those things together, I find that the context or the framework helps us understand all the liTle pieces of it. What you began to describe was a problem-solving methodology that has to do with the thinking state inside of a person. But rather than go into that and try to explain it without the context, let's go back and take a look at the context and then we can begin to piece things inside the framework. When you look at and I'll go back to the quesMon I asked earlier are there problems in the world that most people can solve? The answer is yes, but as the complexity of those problems increases, some of those people will begin to struggle. So we have two paths that are going along. One is the path of the problem complexity and the other is the path of the the person's capability to solve those problems, and so you can just look at at problem-solving and look at the nature of the and the complexity of problems as they increase and especially as companies run into problems and struggles and issues and challenges, their problems increase. 34:08 I actually don't start with EllioT's model. I usually start with another model created by a fellow named Ichak Adizes, in a book that he published in 1988 called Corporate Life Cycles. That parMcular book is instrucMve because it looks at things from an organizaMonal point of view. It looks at things from an organizaMonal point of view, Just focusing on organizaMonal life cycles. Adizes idenMfied five different levels of organizaMonal maturity, which I find interesMng because he created that or published that book in 1988. And what he was describing organizaMonally was exactly the same model that Eliot had created in the 1950s, some 30 years apart. Yet Adizes at that Mme didn't know Elliot. Elliot, of course, had never heard of Adizes because he hadn't come on the scene yet. But looking at the Adizes model, he starts out by looking at the startup organizaMon and that startup organizaMon has some very specific characterisMcs and a specific problem that they have to solve. First characterisMc is there's a high level of risk. Most startups fail. 35:19 - Chris Comeaux (Host) Is it like 70% or 75? 35:22 - Tom Foster (Guest) I use somewhere around 80%. So four out of five fail. One out of five survives, and so they have to focus on one thing In the beginning. Every startup has to focus on this one thing and absolutely nothing else maTers. They've just got to make some sales. They have to get their product or service in the marketplace and please find a company to buy it. In the beginning, these don't even have to be profitable sales, because in the beginning they're going to put all the expenses on a line of credit credit card, whatever it takes to get this company out of the ground. 35:52 So the biggest challenge for every organizaMon in the beginning in that startup is always revenue. If they're able to create a sustained momentum of revenue, they move up to this next level, which Adidas described as the go-go organizaMon. Now, this go-go organizaMon you probably heard the term of a go-go company. Well, this is the model that that terminology comes from. So a go-go organizaMon has a sustained momentum of revenue. They're out of this infant startup mode and they're now into go-go. And of course, in go-go they have this invincible feeling that they did not die during startup. So they now think they could conquer any business model they so choose. Their behavior is very opportunisMc. They have difficulty focusing on any single thing. In fact, of all the things they're able to do, the one thing that is most elusive for the go-go organizaMon is profitability. 36:49 They got the revenue but they're not making any profit Now, as we look at the correlaMons with EllioT's model, which was actually created some 30 years earlier, when you look at that first level of work in EllioT's model, which would be for an infant organizaMon, it's just a focus on producMon. We have to get that product or service out there in the marketplace and that's the first level of work in producMon. But then as the organizaMon grows, sustained momentum of revenue we now grow out of infancy, we grow out of startup, we get into go-go, we now have headcount is also increasing in the organizaMon. We're now creaMng these working relaMonships. We now have a producMon technician who now has a supervisor. 37:37 And of course I have to go back to the founder. The founder is puong all this stuff together and of course the founder in the very beginning had high performance standards and met those performance standards because the founder self-performed everything. But as headcount increases and now we're creaMng this organizaMonal structure as headcount increases the founder has to delegate things out to other people, which is one of the first misunderstandings that companies have. They think that delegaMon is simply task assignments. But if delegaMon was only a task assignment, the company would never grow, it would stay stuck there. What we really have to learn to delegate is decision-making and problem-solving, which now get back to accountability and authority. So now we begin to see this organizaMonal structure becomes part and parcel of every growing organizaMon as headcount increases in Elliot's second level of work. 38:37 What we really have to do at this point is now define and document our methods and processes, because in the beginning the founder was doing all the work, so the founder didn't have to think about this stuff. Because in the beginning the founder was doing all the work, so the founder didn't have to think about this stuff. But as we delegate decision-making and problem-solving out in the organizaMon, we have to define and document those methods and processes. And that's part and parcel of the Adiza's GoGo organizaMon. But what's sMll missing in that organizaMon? Remember, revenue was always the biggest struggle for the infant organizaMon, but in GoGo, gogo is trying to spread and distribute the work around. But the one thing that's sMll elusive is profitability. And we've defined methods and processes and we think that the right sequence for those methods and processes is one, two, three, four, because that's how we learned to count in accounMng school. Right, but are we making a profit? The answer is no, we're not making a profit. We have revenue but we're not profitable. In the pursuit of profitability in the Adesys model we move up to the next level in which we inspect our sequence and realize that it's not 1, 2, 3, 4, because if we do it 1, 2, 3, 4, we're not profitable. But if we stare at that sequence and go it's not 1, 2, 3, 4, it's 1, 4, 5, 2, 3, suddenly we've become profitable. 40:02 That third level is all now a system focus. When we look at EllioT's model, that third level is all now a system focus. And we look at EllioT's model, that third level is all about creaMng a system. So just looking at those three levels of work in EllioT's model at the first level is all about producMon it's a producMon technician. That second level, which is all about methods and processes, is all supervisory roles inside the organizaMon. And at third level, which is the first level of management, we now have a system focus. 40:33 So what's the problem for the producMon person? It's mostly pace and quality. Problem for the supervisory is to make sure all of the work is geong done according to specificaMon and on deadline. But what's the strategic focus for the third level, or the management level is now a focus on the system. So we have a problem. It's not let's go fix the problem, it's let's go fix the system. So those boTom three levels are absolutely criMcal in terms of geong work done. Elliot calls this your basic building block of every organizaMon. As your organizaMon builds out funcMons inside, they're going to be populated by these basic building blocks all over the place. 41:16 - Chris Comeaux (Host) Tom, let me ask you. Something occurs to me and you push back if you disagree. I grew up in manufacturing, but I've spent the vast majority of my Mme in health care, health care being a service-based business, which is a very complex um. I mean, we're dealing with a very complex issue which is, you know, the human body and whatever, and, of course, you know, a lot of my work is in hospice and palliaMve care. I'm not trying to raMonalize and also not throwing the bath water, but occurs to me is it a liTle bit easier to apply this in the manufacturing, where you're making a widget, versus a service-based business? Again, it all applies, but it's just more complex to apply it. 41:57 - Tom Foster (Guest) No, let's jump in and apply it right there. You probably knew that I would, because I find that there's universal applicaMon for this. I have not found a single work discipline where this just doesn't apply. So let's take palliaMve care, hospice care. I worked with a hospice organizaMon West Palm Beach. So at level one in manufacturing, we call them a producMon technician. I'm not sure what you would call them in a hospice seong, but this would be the direct care service provider who's actually working with a. I don't know if you call them a client or a paMent, so you know in a larger healthcare context, that would be a nursing operaMon, bedside nursing, someone who is directly delivering services. 42:49 So my first quesMon that I would ask you is is that an important funcMon in the organizaMon? 42:54 Yeah absolutely and you're going to say absolutely. That's actually where the rubber meets the road. Yep, there are certain skills that are associated with that. There's certain capability that's required that are associated with that. There's certain capability that's required. That capability is to be sensiMve to the paMent's needs and directly respond to those with the real tools that are available to them, and those tools could be anything from occupaMonal therapy to administraMon of certain drugs to simply paMent comfort, bathing, fluffing pillows, asking the paMent how they're feeling, which is a diagnosMc set of principles, and so that's all highly skilled work. And yet Elliot would describe that as that's level one work. 43:54 You talked about Mme span a liTle bit before, and so let me lay in. The Mme span associated with that level of work is typically somewhere between one day and three months For most nursing care. At that level, you're going to have probably one day to two weeks in terms of what they're thinking about relaMve to that parMcular paMent. When you look at the schedules and things like that, their schedule may only go out two weeks into the future, the published schedule that gets put in the lunchroom. Now let's move up to the next level of work. So the next level of work would be a supervisory posiMon and now we begin to look at that schedule. Somebody's going to create that schedule. It says here's our paMent load, here's our nursing resources and here's how we're going to allocate those resources. And here are the specific schedules for the next two weeks. Now, to do that, that supervisor's got to really look at their resources available and understand also what's coming in in terms of the service providing. That needs to happen. In other words, how many paMents will we have in this facility? Now, some of that paMent load may be defined by the facility, the building itself. We only have a certain number of beds and, of course, in a room. Well, maybe now we can have two beds in a room. So now we begin to look at certain capaciMes. But at level two, the supervisor's got to figure out what are the constraints that I'm working inside of and what are my resources and how am I going to allocate those resources in a very real sense, when I look at what's the output at level two, the output at level two is it's a physical schedule that says this person is going to be assigned to these five paMents and this person is going to be assigned to these five paMents, and so it's a real, tangible piece of output. Now, of course, you know that every schedule starts out on Monday as a perfect schedule. You know that every schedule starts out on Monday as a perfect schedule, but someMme around lunchMme on Monday something happens to that schedule. So now that supervisor's got to go in and reform that schedule to make sure that there's sufficient coverage to make sure that we've got everything that needs to be done. 46:19 The third level of work, which is real management work and we talked about ascribing it as a system level of work, which is real management work and we talked about describing it as a system level of work is to really look at the system in which we deliver that care. What are the systems? And you look at, let's just say, physical therapy. There is a physical therapy system that has to be followed. In palliaMve care, I mean, some of the paMents may be bedridden and we've got to be really careful about something as simple as bed sores. Now, level one the nurse is going to take a look at and inspect and ask the paMent how they're feeling. DiagnosMc to prevent the actual occurrence of bed sores. The supervisor is going to make sure that no one, no paMent, gets bed sores. 47:14 But level three the management, is going to say okay, here's the system in which we check for that diagnosMc problem that we've got of bed sores. We're going to go here's how many Mmes a day we're going to check. We're going to do physical inspecMons. We're going to do verbal interviews with paMents. This is the way it's going to work and we have to follow this system. And if we follow this system, none of our paMents are going to get bed sores. They're going to be as comfortable as possible at this stage in our life. Now, every once in a while you're going to get a bed sore. We can fix that by fluffing a pillow here or there, moving the paMent around, readjusMng the bed, something like that. But the real quesMon for that level three manager is how come our system didn't anMcipate this problem from occurring? How come our system didn't prevent that from occurring? Let's go back and adjust the system. So, while we can easily see these levels of work in a manufacturing sense, you can apply them even to palliaMve care is and what's? 48:24 - Chris Comeaux (Host) Can you talk about level four because like just for our listeners he nailed it Like our IDG team members is level one. Generally we call those team leaders level two. Generally the level three person might be like the regional director of nursing et cetera, but then kind of beyond that. Can you just talk about what would be more of a level four role funcMonality? 48:46 - Tom Foster (Guest) So Elliot calls the boTom three levels your basic building block. In other words, that's where most things happen. There's producMon, there's supervision of producMon and then there's the producMon system, the producMon system. But then we have to understand that we've actually created now an organizaMon that doesn't have a single funcMon. It has mulMple funcMons or mulMple systems and subsystems in palliaMve care, and I know you're associated with a palliaMve care organizaMon. Let me ask just a real simple quesMon Does that facility have a website? 49:28 - Chris Comeaux (Host) Yeah, most of them do, Yep. 49:29 - Tom Foster (Guest) Yeah, which means that simply by having a website, they actually have a markeMng funcMon. Mm-hmm. 49:37 Do you have some sort of an intake funcMon? How do people find out about you? How do they contact you? How do you conduct an intake diagnosMc for people who are eventually going to become your paMents In palliaMve care? That would be a sales funcMon. Think about that. And then so we have an intake diagnosMc. We now have a paMent that paMent's going to be assigned to. 50:02 In business we would call it an account manager. You have a different designaMon for it. In business it'd be account management or project management however you describe that there and then you're going to have certain operaMonal things that go along with. You know, how clean do we keep the facility? How do we manage the bedding and the linens? How do we manage the mechanical things that break inside the facility? How do we manage the bedding and the linens? How do we manage the mechanical things that break inside the system? And you probably also have a funcMon that's related to quality, quality. Assurance. I mean, how do we know that we're delivering the quality care that's in our mission statement? So you have a quality funcMon. So now the organizaMon is just like. It's now become structured and we can see these things that you may describe as silos. We've all heard that you know we've got silos inside our organizaMon. Now You've probably also been taught that you need to get rid of your silos. In fact, ken Blanchard remember Ken Blanchard? 51:02 the old one-runner manager guy. Yep absolutely. One of the covers of his most recent books. Is you got to be a silo buster Now? With all due respect to Ken Blanchard, he has no idea what he's talking about. 51:14 - Chris Comeaux (Host) Yeah, because that is very popular, especially like with the whole movement towards. There's something about Teal. I think that kind of applies to healthcare. There's something about teal. I think that kind of applies to health care. Um the concept of teal, which is a very flat based organizaMon. Tony Heisinger Zappos, the only real example of supposedly a teal type organizaMon health care is um Berksarg um, which comes from the Netherlands. So please pick up back up. So site busMng silos is not a good idea is what I just heard you say it's not a good idea. 51:44 - Tom Foster (Guest) And the reason it's not a good idea is you put those silos there for a very specific reason. You want your web guy and markeMng to be focused on website development. You want your intake diagnosMcs to be pulling in the paMents that are best suited for your facility and your facility to be best suited for the paMents that you pull in, and you want them to be laser focused on that stuff. In fact, you want them to be nosedive down, internally focused on that. You want your nursing staff to be laser focused on the paMents. You want them to be internally focused on that paMent relaMonship and then keenly sensiMve to all of that stuff. You want all of these funcMons to be internally focused on that paMent relaMonship and keenly sensiMve to all of that stuff. You want all of these funcMons to be internally focused but at the same Mme, they all have to work together. It's not a maTer of geong rid of your silos, it's a maTer of integraMng them together. So if we begin to look at now that level four, that level four is all about the integraMon of our now mulMple systems and subsystems, because we have them Now. 52:54 IntegraMon is a fancy word. I grew up in the great state of Texas, university of Texas, longhorns. We don't like fancy words, so when I use the word integraMon, there's two things that I look at. First of all, in every organizaMon, as we look at these funcMons side by side, we begin to understand that work moves sideways. You know, in a company it starts with markeMng, goes to sales, goes from sales to account management or project management, goes to operaMons, goes to quality control. Work moves sideways and every Mme it moves from one funcMon to the next funcMon there's a handoff. So the first thing that I look at, the first thing I inspect, are these handoffs. What are the outputs of one funcMon that become the inputs for the next funcMon and what are the outputs of that funcMon that become the inputs for the next funcMon? So first thing in integraMon is outputs and inputs, outputs and inputs, outputs and inputs. What are the work handoffs? We have to inspect those Because as a funcMon, my output may not match the input of the next funcMon. So at level four, it's integraMon. 54:13 - Chris Comeaux (Host) Get those silos together to talk about their outputs and inputs, so that the output of one now becomes exactly the input that the next funcMon needs service-based business. It applies to every business, is my takeaway from what you're saying. I think we'd also probably tell ourselves in healthcare, but so much is so. Listening to Tom. This sounds incredibly complicated and oh, by the way, it feels like the game is changing under our feet right now. That where the future of healthcare is going, the reimbursement, who's really paying you for those services? All of that feels quesMonable right now, changing as we speak. 54:49 How do you reconcile the complexity that what you're talking about to do this work when the game is changing? And there's an old. Years ago Stephen Covey said, I think, he was differenMaMng between leadership and management and he said you know the managers, if the job is cleaning out the jungle and the manager sharpening the machetes, helping and teaching people how to clean out the jungle, the leader's up at the top of the tree going wrong jungle. And so can you take that and kind of clean that up for me? 55:17 - Tom Foster (Guest) So first of all, let's talk about this issue of complexity. What is complexity? And you acknowledged that this framework has some complexity to it. Now, my response is it's actually a simple framework, but it does help us understand the complexity, understanding the problems that have to be solved and the decisions that have to be made. And when I talk about complexity, there are two types of complexity. The first type of complexity is detail complexity. Now, engineers love detail complexity. They write computer sohware, scalable databases to handle all of that detail complexity. But that's not the complexity that I'm talking about. The complexity that I'm talking about is the complexity that's created by the uncertainty of the future, the complexity that's created by the ambiguity of the future. 56:16 You talked about healthcare. Now, one of the things in healthcare that we didn't talk about in terms of funcMons, we talked about the direct service funcMon and those kinds of systems inside, but there's another funcMon that's going on in healthcare, and that funcMon is how the heck do we get paid? Now? We get paid by insurance, we get paid by private expense private expense, we also get paid by government funding. We also get paid by grants and projects from research universiMes. All of a sudden, just how do we get paid becomes very complex, and you also said it's changing. Now, remember I said that my definiMon of complexity, or the complexity that Elliot's referring to in requisite organizaMon, complexity that's created by the uncertainty of the future, and you described that the future of the way we get paid is uncertain. It is changing, it is shihing. Now how do we anMcipate some of those changes and shihing? Well, we can begin to look in our crystal ball, and what's inside that crystal ball is uncertainty and ambiguity. We don't know. 57:36 Let's go back to Mme span for a second. We talked about. You know that producMon technician is looking for decisions and problems that are between a day and three months. That supervisor is looking for decisions and problems that have impact from three months up to 12 months. That system manager is looking for problems and decisions from 12 months up to 24 months. But at level four, we're looking for problems and decisions that are from 24 months out to 60 months, from two years out to five years. And the quesMon is what's going to happen in the next two to five years in terms of how we get paid? And the answer is we have no clue, we have no idea. We have no idea yet. We have to make decisions today that are going to have impact on our ability to collect money that we need to operate coming in the next two to five years. How are we going to do that? How are we going to respond to that? So we look at this understanding of Mme span connected to uncertainty and ambiguity, and now we begin to look at work and how we do work and what is it in work that we have to anMcipate. And that's where the demarcaMon between these levels really becomes very specific. 59:07 We talk about organizaMons that think that they are very flat. Let's take you menMoned a company out in Las Vegas named Zappos. Zappos would tell you that they have no managers. I'm sorry, I got to call BS on that. They have managers. They may not have a manager Mtle. In fact, I think they may call them lead links. Somebody in that organizaMon is making a decision as to who gets on the team and who is no longer part of the team. Somebody's making that decision. Somebody is making a decision on work instrucMons. 59:51 What is it that we do? There's something interesMng how many team members can one manager be in charge of? And we go well, maybe that's eight, eight, 10, 10 would be like a too big of a team. And of course, Elliot looks at it and goes no, I think 70 would be a beTer number. And you go, my gosh, how could a supervisor manage 70 people? 01:00:22 Well, let's go take a look at Zappos. Manage 70 people? Well, let's go take a look at Zappos. You go look at it and Zappos is primarily a phone bank organizaMon. You got a huge call center. You got people who are out there in that call center and what are they doing? Well, they're preTy much doing the same thing they did the day before. In fact, how do they know what to do tomorrow? Well, they're going to come to work tomorrow. They're going to do the same thing they did today. There's not a lot of variability in the work that they do, which means that their manager who Zappos says we don't have managers, which is not true, they do have managers is likely managing 70 people. Now, how could one manager manage 70 people? And the answer is there is very liTle variaMon in the work that they do. Day in and day out. It's preTy much the same. But now let's take a more specialized team. Let's take a Navy SEAL team. How many people on a Navy SEAL team? 01:01:24 - Chris Comeaux (Host) Isn't that like seven? 01:01:25 - Tom Foster (Guest) Yeah, six or seven. Why? Why is it such a small team? It's because the variability in their work is so highly variable from one day to the next that you really need a small team. So now we begin to look at teams and structure and flat organizaMons and hierarchical organizaMons and you see that the levels of work are sMll there. They may be more difficult to detect, but they're sMll there. 01:01:54 - Chris Comeaux (Host) This is good, Tom. Well, Tom, you're a treasure. I think we should do. My guess is and we have lots of listeners and a lot of hospice and palliaMve care leaders I'd like to get their quesMons and give them to you, and then you and I do a follow-up show of just their quesMons. This has been great, Any just final thoughts. 01:02:18 - Tom Foster (Guest) I think the biggest challenge for most companies is really looking at and asking themselves what's the work. We rarely sit down and figure out what's the work. That boils down to two things In this work what are the decisions that have to be made and what are the problems that have to be solved? The most important quesMons that any manager can ask of their team members is in the work that we do together what are the decisions that we have to make and what are the problems that we have to solve? Because that's work and of course that's my favorite subject is it's all about the work. 01:03:00 - Chris Comeaux (Host) That's really good, Tom. Wow. Again, there's so much to unpack there. You're a treasure. I appreciate the. I can't remember how you and I first met, but we actually brought you desk. That is sMll on my desk and um, but obviously I sMll have a lot of understanding to do. So thank you for the work that you're doing. I have a film. We'll have a ton of quesMons, um, and I did not realize that you've actually worked with one Hospice organizaMon, so that was a really good Mp as well, that this does apply, and I do think this is fascinaMng Mmes in Healthcare. 01:03:42 So figuring out what is the work. We always say this. Now I feel like it's even more true. We are flying the current airplane while we're trying to build the new one, trying to anMcipate where it's going, which makes this hard. Some days it feels like mission impossible, but without these principles, we're probably wasMng a lot of energy and effort. So well, to our listeners, at the end of each episode, we always share a quote and a visual. The idea is we want to create a brain bookmark for you, a thought prodder, and today's show is going to be really interesMng to see the one we come up with. But it's to help with the podcast subject to further your learning and growth and hopefully create like a brain taToo so it actually sMcks. 01:04:25 Be sure to subscribe to the channel, the Anatomy Of Leadership. I'm going to get a couple of links from Tom in case you want to reach out to him, and a couple of those visuals will probably put his links as well. If you're interested in the book the anatomy of leadership, check it out on Amazon. Tell your families and friends, subscribe to our channel and you know it's easy to rail against the world and be frustrated by it. Let's be the change we wish to see in the world. Thanks for listening to today's show, tom. Thanks for being here. And here's our brain bookmark to close today's show. 01:05:00 - Jeff Haffner (Ad) "OrganizaMonal structure is simply the way we define the working relaMonship between people. By Tom Foster. Thank you to our Anatomy of Leadership sponsor, Delta Care Rx. Delta Care Rx is also the Mtle sponsor for our April and November 2024 leadership immersion courses. Delta Care Rx is primarily known as a naMonal hospice, PBM and prescripMon mail order company. Delta Care Rx is a premier vendor of TCN and provides not only pharmaceuMcal care but also niche sohware innovaMons that save their customers Mme, stress and money. Thank you, Delta Care Rx, for all the great work that you do in end-of-life and serious illness care.