Join Derek Hudson as he explores Essential Dynamics, a framework for approaching the challenges facing people and organizations. Consider your Quest!
Welcome to Essential Dynamics. I'm Derek Hudson, and I'm with Dave Kane from, our firm Unconstrained. Dave, welcome back on.
Dave:Thank you.
Derek:I gotta get right to this. Holy smokes. This is episode 100.
Dave:Congratulations. That's,
Derek:Like, that's, that's amazing. I can't, I can't believe we've, we popped a hundred of these out. We started, just looking it up here 11/09/2020 was our teaser episode one, which was, just set it up. And, here we've had conversations, deep conversations with interesting people. We're now in our hundredth episode, and I'm, I'm quite amazed.
Derek:Sometimes I feel tired, but mostly I feel just really grateful for the great conversations that we've had with, really interesting people and the stuff that we've learned and shared over the time. So Dave, thanks for being on number 100 with me.
Dave:I know, that's an honor. I mean, this, when you, when you look back at the, the first ones and sort of the exploration of essential dynamics and getting into all the, the nuts and bolts of that and how it evolves and changes and, and you've had some really cool people on. I think that's actually pretty impressive, the the voices and and different guests you've had on along the way.
Derek:Real really cool people, and we've, I think we've really stayed true to the concepts of essential dynamics, and and they've held up for us.
Dave:They have. A sense Sir, test of time.
Derek:So so that's, you know, actually, in fact, I think I've said that at the beginning of a number of episodes is that we test the the concepts of essential dynamics through deep conversation. I don't know that everyone who listens to podcasts pokes around and clicks links and stuff like that. But for every episode, we have show notes that we post on our Central Dynamics Wiki, and they're all linked in terms of the concepts and the links probably aren't complete, but we're trying to build a body of knowledge where we can use Essential Dynamics to think through things. And, we haven't run out of things to talk about in a hundred episodes, which I find just fascinating.
Dave:Yeah. And I mean, I I joined the train a little bit later on, and so those early episodes are just great reference points to go back to, pick up the basics, the show notes, the Wiki. It's fun to explore Essential Dynamics and kinda bring it along to see how we can apply it into every conversation, business, personal, social, it's fun.
Derek:Yeah, it's fun. And, we hope it's helpful. And so we're going to keep doing this. The format may change, but we really want to help people think, probably at a higher system level, be just a little bit, more comfortable with, getting to the root of issues and finding the leverage points to solve problems. There's, there's lots more out there.
Derek:So, so Dave, we, we actually, in episode 99, we actually did set up some expectations for what we're going to talk about today. So how do you want to set that up?
Dave:Well, yeah. So very much like the, the podcast. I think we wanna talk a bit about momentum and and how just, you know, once you start getting good things going, how it builds. Because we were talking about, getting unstuck, whether in the context we were doing, it was sort of that comfortably stuck, but it applies to to, you know, the big challenges you can't chew through and and the other forms of of of it as well. So I wanna kinda just get you going on the idea of building momentum and showing how these consistent small improvements kinda create this force.
Dave:So
Derek:So we're looking for a force. Okay. So let's go back to essential dynamics. We take the idea of an epic quest and look at the fact that things things that we do that are meaningful are done in the face of opposition. And so the way we've captured that is there's always a purpose, to your quest, and the dynamic tension is between conflicting purposes.
Derek:We call it purpose x, purpose y. Last few episodes, Dave's really helped us understand the power of having that that tension in terms of elevating our game as we as we continue to try to resolve something that is always gonna continue. Then we have the people, in the quest, and, the people have to bring their own individual aspirations and then deal with the fact that they are working in a group, in an organization, and and we have to work together to accomplish big things. So there's a lot of dynamic tension between the individual and the group. We've talked about that a fair bit.
Derek:And the people have to go on a journey, which we call the path, and in the past there's forces, moving you forward and forces holding you back. And we, we talk about drivers and constraints. And one of the things that that came to me is you can't not have constraints. And so this idea of dynamic tension makes a lot of sense in a lot of ways. And so-
Dave:So why can't you not have constraints?
Derek:Because then we can't pull things together and focus. So if you want to, if you want to accomplish something, you have to, you have to like bring your energy together. You have to focus your energy. Right. So like, for example, a welder uses a settling torch and, as I understand it, even the flame is focused to a point and that's the point that the point of that hot flame is, is where the highest temperature is and where the most effect is.
Derek:I I, have a friend who grew up in, his dad was a welder, and I think he told me a story once they filled the garbage bags with, acetylene and then, you know, set them off. They probably got nowhere near the temperature because the energy wasn't focused.
Dave:Right.
Derek:And there's lots of examples of where you actually need to take the drivers and constraints and put them together, to accomplish something. And when you do, that's what I like to call flow. So, when you are skiing, in my mind, the two forces that you're dealing with are gravity and friction.
Dave:Right?
Derek:You start at the top of the mountain, and there's kind of like only two forces. There's 9.8, meters per second squared pulling you down, and then there's whatever resistance your skis have to the surface of the snow. And the reason it's fun to do it on snow is the resistance is low, but, we also put edges on our skis and, so we can apply force, so we can put resistance in place so we can steer, where we can go where we wanna go. We can control our speed and we can stop when we wanna stop. And when you put all that together, you have this like exhilarating experience of flow, but it's not free fall.
Derek:And so there's, the skill is in balancing the two forces. And so there's flow that way. I've, also looked at psychological flow, and there's a great book called Flow By, and I'm gonna take a run at this, the pronunciation, but it's by Mihaly Csikszentmihaly, And, he talks about, like, mental flows, psychological flow. But he really talks about the same things is that you need to have, something, a task that you find interesting, but also challenging. It can't be too easy or you won't have flow.
Derek:It has to challenge you to the right degree. And so that's a drivers and constraints that's going on in your mind. So we're looking for flow, and we're also looking for the, the ability to kind of reinforce that flow. Like how do we get, energy coming back into the system? And you've talked about that in a few ways already, and I think that's definitely worth, exploration in in this episode.
Dave:So so hang on. So when we're talking about this this flow or achieving this state, are are you referencing it at, the the level where we're we're managing the system and we're trying to manage our focus on our drivers and our constraints, or is this within the operation and trying to find flow? Because a lot of people on the production side, or the create the creative art side, are all these they're also gonna be finding flow of their sorts, so
Derek:Yes. Yes. Well, this is probably, we need to put in the parking lot for another episode, but in my mind, there's kind of two levels of systems thinking in an organization. One is the production line and the flow of creating value in the organization. So, that's where we can see the drivers and constraints of play and the value being moved through from input to output in a system.
Derek:And then I like to think about there's a system where we think about that system, and I call that the meta system. And so we can work in the system and work on the system to prove it, and then we can get above that and think about how we work on the system. And at both at any level, we're looking for flow. And actually, if you take, if you take if you look at the work that you do, you can go down into another level and look at individual operations in that, and and you want flow. And flow involves drivers and constraints and, and, and some other things that we can talk about.
Dave:Okay. So when we're looking at the flow, you threw the word of energy in there. So, I know there's other flows out there and I've heard you reference them, But let's look specifically then, we'll call this at the energy flow. Mhmm. And so it's sort of where the system or where the organization drives its, as I say, its motivation or its, its reason for pursuing change, reason for for doing better, reason for driving value.
Dave:Right. Is that safe to sort of call it an energy flow like that?
Derek:Yeah. That's that's the way I like to think about it. And and I have a, a very real example that I've seen actually over and over again, particularly in owner managed businesses, where the owner was the motivating force for starting the organization, continues to be the motivating force. And this was the analogy that a client and I came up with once, is that, he comes into the office Monday morning, and, everybody in the organization caught up on his back. And, he carries them through the week and, they drop off, Friday afternoon.
Derek:They're feeling pretty good and they go off to the weekend and, there's still more work to do. So the owner manager does that, collapses, tries to catch a little rest, shows up again Monday morning, and everyone climbs up his back again. So that's not sustainable.
Dave:No. And that's the owner manager, I've seen it. I've seen it in a lot of other even not for profit organizations, all sorts of places where everybody's deriving their energy and their their their drive from that single point. Yes. From that leader.
Derek:Yes. From that leader. So that's not sustainable. When we we talk a lot about the theory of constraints, on this podcast because I I think it's very valuable, but I think it, is completely silent on this idea of where does the energy how does that come into the system? It's assuming it's there, and we're looking for the constraints, but let's step back and say, how does the energy come into the system?
Derek:How could it come into the system? And, and can it, somehow be replenished? Can it replenish itself? So I'm gonna park that for a second because I I wanna introduce a concept that you've mentioned probably last episode that's related or it's maybe, I think it's a specific instance of how we can look at energy flow. And that's from, Good to Great by Jim Collins.
Derek:And he talks about, I think it's the part about the hedgehog concept, hedgehog concept, which is, what are you good at? What's your economic driver? And what does like the world need from you? I might have those wrong, but there's this like, in this part that overlaps, there's a real reason for doing what you do. And so he started talking about the flywheel, when that when that's happening right, you get self reinforcement.
Derek:So that's the flywheel. And the example he gave, which is really interesting was, he was asked to go speak to Amazon in the early two thousands. You know, our conception of Amazon has certainly changed since the pandemic, but at one point it was a place that you could buy books online. And, he went through his concepts, including this idea of a flywheel. And, I'm going to pause for a second because the flywheel, I think, is an interesting mechanical contraption.
Derek:And the thing about a flywheel is it's, it's a very large disc that spins. So there's some friction in the system on the axle of the flywheel. Because it's big and has large diameter and it's heavy, it takes a lot of energy to get it up to speed. But when you get it up to speed, the energy that of the of the spin is so much higher in proportion to the friction of the axle that it doesn't take very much energy to maintain the spin at a really high capacity. And so then you can power the flywheel, and then the flywheel can drive other parts of your mechanical system at really high efficiency, once you power up the flywheel.
Dave:Right, so this goes back to our first comments about momentum, but it's, it takes more energy, more force to get it moving, but once you've done that work, it's far easier to sustain.
Derek:Yeah, you can sustain the momentum. And so, Colin's question was, what's the flywheel in your organization where you can inject the good results back into the system? And so the conversation with Amazon, was interesting, but then they took it away, and then sent Jim Collins some stuff back, and he's like, I had never thought of it that way. So the what Amazon said was, we have a reasonably low cost per transaction with our online sales system. But if we sold even more products, we would have an even lower cost per transaction.
Derek:Therefore, we could have even lower prices. And, if we did that, then we could probably attract more business. And in fact, we could attract business faster if we had third party sellers. So we won't warehouse the stuff. We won't come up with any of the material to sell it, we'll just post the platform.
Derek:We'll put it on our platform. And if we have more in our platform, the cost per transaction will come down even lower, and we'll be able to attract even more third party sellers, and we'll be able to bring the prices down even lower. And, they drew that out as a flywheel. And, of course, that actually happened, and it was doing fine until 2020, in which which case you couldn't go into a bricks and mortar store. They were already spinning up at a the flywheel was already there, and they were able to handle massive increases in capacity, or in demand because because they had that self reinforcing system set up.
Derek:Yeah.
Dave:The the the idea of of that flywheel to me fits really well with the conversation of flow. Mhmm. And once that thing is spinning, you got flow. Right? Things are going great.
Derek:Yeah.
Dave:So how do we tie that back into energy? How do we get energy in that same state?
Derek:Yes.
Dave:If it's not just a leader?
Derek:Yeah, so it's easy. The mechanical flywheel's easy to understand. The supply demand flywheel that Amazon does is a little bit of a leap from that, but it's consistent. Now what we're talking about is, can we create a system where we can, the results of it, create energy such that we can reinvest that in the system? And so I'm gonna go back to the owner manager, who's dragging people across, you know, day by day across the week.
Derek:Where can the owner manager get his or her energy replenished? And where can the team get their energy if, if and can they get it in a way that doesn't suck, suck it out of the owner manager? So we talked about this in the last few episodes, like one of the things that can happen is, well, you could be connected with the customer, and you could be providing value to the customer in a way that the customer appreciates, and in a way that you can detect as a supplier to that customer. And, so when you have the experience of conveying value to the customer, it provides you with a boost of energy, and you can go serve the next customer, you're not depleted. And and I would say for me, I experienced that personally as a guide when I meet with a client, because there's a thing that I'm looking for, and that's the moment where we have a new insight.
Derek:And a problem that used looked big and ugly, now has kind of taken its place, and we have energy around how we're gonna solve that. So the the client that I'm working with, they take that back into their business, and, they're able to take on a on a problem with, you know, with some motivation and energy and confidence behind it. But my experience as a guide is I get energy from that too. And I can go to my next meeting and I'm I start up and I expend a lot of energy in a conversation with someone who's dealing with a really tricky thing. And if we have one or two of those moments, then my tank gets filled again, and I can leave and go to the next one.
Dave:Yep. So I think as you're sort of saying that, the interesting sort of thoughts on my mind are, there are sources of energy that can be input into the system, and and your client interactions seeing the value is one of them. But in order to leverage that best within the organization or the system, you need to make everybody be able to see that or or feel it, right? Because a lot of times it's the person who owns that relationship who gets that and then all the support within the organization that doesn't, doesn't always necessarily feel or see or or get the same benefit. And so the energy isn't compounding off as many individuals.
Dave:And so when I keep coming back to, kind of my broken record here, when I keep looking at things as as a system and and everybody in there knows where they're contributing value, they're also getting that same feedback loop of seeing the impact of the value they're creating. Right? And so Absolutely. You're multiplying the effect of of that energy source by letting everybody as best you can connect with it. So don't
Derek:Yeah. Yeah. And there and there's lots of there's lots of ways to do that. I mean, I I listened to, a podcast, and I think I read an article about an organization that was the sole purpose was to make money. And, everyone's was motivated by money.
Derek:And so the opportunity to make more money was like, that was the energy flow of the organization. I can't get my head around it. It seemed to work. I I think it's got limited value, but that was it was the design of the organization. We talk about these, high purpose organizations where you can be sitting in accounts payable, feeling great about the cause and and doing your job, and the energy just comes from being part of it.
Derek:But I think your your, the example you give, Dave, is the more common one. You're in the middle of the organization. You're not getting feedback. You're not seeing the benefit to the customer. You're not that's and that's not coming back to uniform energy.
Derek:So how do you design that into your system? Well, the first thing is, now we we can talk about it. There's an energy flow to a system, and you can design it. So what does that mean? Well, it could mean that, people in in the middle of the system have access to information about the the ultimate product or the conveyance of the ultimate product.
Derek:Or it could be that they get feedback from the next stage of the process that they supply into. And, so, engineering hands the drawings over, to, operations, and, there's a handover meeting and operation says, gee, thanks. These are great drawings. We'll, we'll honor and, and respect these drawings and create great stuff. And when we make it, we'll we'll bring you in and we'll show you around and you'll be part of it, as opposed to the, the over the wall hand off.
Derek:I think that the stuff that's inherently part of the creation of value is better than, trying to design or impose an incentive system that that doesn't match that flow. Yeah. But that happens, and and maybe there's some value to that. But I think inherently alignment, as we've said many times, alignment with the purpose, alignment with value to the customer are ways that, that people can connect. Also, we talked about in our last episode, we talked about even just connecting to excellence or being part of the team.
Derek:Mhmm. In which case, maybe there's some energy from that. Now, Dave, you talked about energy is one of the flows. The one we've talked about a lot is the value creation system. That's where the organization takes inputs, adds value to them, and gives to the customer something that they couldn't otherwise get.
Derek:That's the value flow. Energy flow is, what we've been talking about, which is how do we get the motivation throughout the organization to do that value creation at a high level? But another one I'll add to that is, information flow. And I think information flow can be really tightly tied to energy flow. If you know what's going on, if you get the feedback, if you see the benefit from the work that you do, there's more chance that you can pick up energy for that.
Derek:If I was having a conversation with a client, by text, and I didn't see the body language, hear the tone of voice when the insight happened, it would be harder for me to pick up that energy. If I had a client that was just reading random stuff I said, and getting value from that, and I never was involved in the interaction, I don't have any I don't get any energy from that. And so that that's where, you know, people are inside a system. What feedback? What information?
Derek:What do they see? What do they experience that, can for them create great value.
Dave:Hey. So there's there's a lot there. So we've got, the various flows between information flow, the value flow, the energy flow, there's probably a cash flow in there as well. Let's park those because that's there's a lot of there's a lot to that and how they interact with each other. So if we're staying on the energy flow piece, and building that momentum and just the value of growing that within your system, just it it it compounds, all the other pieces.
Dave:We sort of talked about, as I kinda heard it, there's this external energy you wanna be bringing in to the organization, and it can either come from the leader and and just the the general drive and dynamics that they bring in. There's almost a team energy and there's a system energy. And any opportunity you can have to grow these, and so one of them was the customer interaction or seeing the value feeds energy, and so you can set your system up to drive that. From a team energy, you know, pursuing innovation, letting everybody understand their part and how they're contributing value, there's lots of ways to get the individual to generate their own energy into the system. Yes.
Dave:We're giving the autonomy, giving them the the empower, having them just love what they're doing, all those pieces. So I think if you sort of look at we're trying to build momentum, and there's just various ways of doing it through energy. And so if you focus on how can I bring energy to my team, how can I bring energy as a leader, and then how can I design a system that brings someone energy and then self reinforces it to div out the flywheel? Those are all things you can do outside of the value creation system and how am I making my product or my value that's just going to, you know, get the snowball rolling downhill, and so the organization itself just starts to starts to move.
Derek:That's that's exactly right. And so if we go back to that idea of psychological flow, having an individual on a team in a system where that system is designed to put them in a flow state, may be very, very real or, more metaphorically.
Dave:Wait. It's great because I think everybody can sort of think about when a time when they hit their flow. May maybe it was some work that they're doing and they just hit that rhythm and everything was coming. Maybe it's with the sport, maybe it's with your arts. Yep.
Dave:It's that feeling and that piece that you're trying to bring in and sort of have the organization and the individuals within the organization each feeling that flow.
Derek:And that Absolutely. Absolutely.
Dave:Everything is just just rolling.
Derek:And, and that flow follows, systems dynamic principles, but we have to look for it. We have to look at energy flow separately, and, you could put a team in respo- responsible for its own energy. The leader creates an environment where that energy can flow or not flow. And, so I think that, you know, I don't I don't know if this is the first time, but we're creating the conversation about the flow of energy and organization today in this episode, and I think there's tremendous potential for organizations to do better and for people to enjoy their jobs better if we could tap into energy flow.
Dave:Oh, absolutely. And then let's tie it back to the previous two, three podcasts of, of when you're stuck and you're comfortably stuck or you're fine. It's a lot of that has to do with the energy.
Derek:That's right.
Dave:If if you can just break that cycle and and get get the energies up, and then that brings in the initiative and the motivation for change and consistent improvement, makes a big difference.
Derek:So we call that the positive self reinforcing loop.
Dave:Yep.
Derek:And, it's better than the vicious circle, which is the negative self reinforcing loop. So, I feel positive. I feel like, Dave, you've, you've helped us, put our finger on, on this, this energy source.
Dave:And we we've learned about hedgehogs and and not being downslope of Derek while skiing and and all sorts of other things. So nice.
Derek:Yeah. It's a good one. It's it's you gotta have you gotta be bouncing the metaphors around, mixing them up too. So Dave, thanks. We'll we've got some notes for, for future episodes, which I which I like, and I think we've, learned some stuff today.
Derek:So Dave Dave Cain and I are with Unconstrained. Brynn Griffiths is our, is our studio man, and we're grateful for, for his work. So everyone as you, as you think about energy flow, find out, find out where yours where you get yours and how you can reinforce it so that the work you do can, can feed itself. It's just so as there's so much it's a better way to live. It's just it's amazing when you can get it.
Derek:And yeah, you do get tired, but, but your rest, your rest is effective when you know you're gonna be able to tap into energy when you when you get back on your job. So until next time, everyone. Thanks so much for listening to the hundredth episode of Essential Dynamics. And for the hundredth time, consider your quest.