Derek and Domenico talk about how organizations get stuck, and how they can get unstuck.
Join Derek Hudson as he explores Essential Dynamics, a framework for approaching the challenges facing people and organizations. Consider your Quest!
Welcome to the Essential Dynamics podcast. I'm your host, Derek Hudson. Essential Dynamics is a framework that I've been developing that helps us think through tricky situations. And in the podcast, we test the concepts of essential dynamics through deep conversations with interesting people. In season three, we're focusing on helping leaders of organizations get clear on their challenges and their opportunities to help them with their organization's quest.
Derek:And today, I'm really excited to welcome Domenico Lapore to the podcast. Domenico is a systems thinker. He's an author. He's an advisor to clients all over the world, and he's written several books and developed management methodologies to support his clients and his work. There's a lot that he can, share with us today.
Derek:So, Domenico, first of all, welcome, and thanks for joining.
Domenico:Thank you, Derek. Thank you for reaching out.
Derek:What else should our listeners know about you before we start our conversation?
Domenico:Yeah. As this podcast is probably be listened to by, many Canadians, let me say that since 2018, I'm also a a proud Canadian. You know, I was born and I grew up in Italy. I developed myself professionally there. But then about twenty years ago, I started to travel for work extensively to North America.
Domenico:And since, 2010, I've lived in Canada. And since 2018, I'm a new Canadian. So I'm happy to say to our listener that I'm a proud Canadian, even if from the accent you might not detect it. But, you know, I'm Canadian.
Derek:Well, well, that's one of the things about being Canadian is that there are many accents, and some people have been here for thousands of years, and some people have been here, or there there people there people have been here for a few weeks. One of the things we say in Edmonton is, five minutes and you're one of us. So, love love love having you here. So, Dominico, I've read some of your material. We've had some conversations.
Derek:I really like the way you think. And one of the things that, that I would really like to talk about today is how organizations get stuck and then how to help them get unstuck. Because that, you know, I think there's sometimes there's a natural growth that happens, but then things change and organizations, if they keep doing the same things, they're gonna get the same results. They're not happy with that, but they don't know how to move on. Mhmm.
Derek:What are your what are your thoughts?
Domenico:Oh my. Yeah. This And we only
Derek:we only have 25.
Domenico:We only have twenty five minutes. Yeah. Okay. Let me say something as you throw this curveball. Let me let me try and hit it.
Domenico:People build their own prison. They're all cognitive prison out of language. So, what prevents us from seeing avenues and perceive a broader set of cause and effect relationship that might help in seeing avenues. It's severely limited by the way we speak. And the way we speak is obviously the consequence of the way we think and the way we, look at reality and derive, true cause and effect reasoning and understanding of our world.
Domenico:Language is a trap. It's extremely powerful, but it can be extremely dangerous. So, so I would say that after almost thirty years of work, I I come to the conclusion that that the the the first and foremost reason for people getting stuck is because they get trapped in, linguistic and cognitive loops that they cannot escape from. However, another important aspect of it is, sheer ignorance. Management schools and universities in general have done a very, very poor job in educating managers and leaders to the fundamentals of what it means to be competitive.
Domenico:And, cost accounting is single handedly responsible for a huge chunk of the mistakes the company make and prevent the growth. Clearly, the whole financial system, is geared to listen to Wall Street instead of Main Street. And so over the decades, especially in the last thirty years, there has been a huge divide between what is realistically possible, and what instead, banks, financial institutions, accounting methods allow us allow us to see. So it's a it's a good combination of, wrong conversations and sheer ignorance, both of which can be addressed.
Derek:Well, there's there's so much there. So I wanna go back. I don't I don't wanna miss anything. But I want to go back to, you said, cognitive prisons, and then you also said trap.
Domenico:Linguistic traps. Yes.
Derek:Linguistic traps. And, I think what I'm picking up there is when we say a word, we think we know what it means. Mhmm. But often our usage is narrower than the word could possibly mean.
Domenico:Right.
Derek:And so then we say the words and we think that's the way to express the thought. Mhmm. That's correct. But, to use my language, we've actually constrained ourselves, and we're thinking far more narrowly than we need to.
Domenico:Right. Yes. Yes. That's exactly right. And when you start stringing together, words in, sentences, and so you create reality through, this this language, the way you construct and the way you, act, sorry, and the way you, build these speech acts, creates, the the the the cognitive environment that becomes, if not challenge, the prison.
Domenico:So in other words, it's not just the grammatical, syntactical, structure, but it's also the semantic circles with words that when strung together, create images and create cause and effect relationships which do not hold true. And, if we are at the helm of an organization and this organization, is built, hierarchically where people are reluctant in a sort of command and control vertical way. And, people, are reluctant to challenge, images, mental models created by this language. Then, the past, the the neuro pathway in the brain becomes, more and more entrenched and become more and more difficult, to challenge.
Derek:So you you mentioned cause and effect.
Domenico:Right.
Derek:And if if I was to describe what I think I've learned about your work, it's that you believe that we should understand the reality of, the cause and effect in a system. And, your thesis might be that because of language and ignorance, sometimes we assume that if you do a thing you will get an effect when there's no basis for that.
Domenico:Right. A cause and effect, you know, was originated as a as a study, you know, philosophically twenty five hundred years ago in Greece and in more modern times by science that, has brought to life in a spectacular way, cause and effect recently. But cause and effect is not a linear thing. The the network, of course, and effect relationship creates a field of forces. And this field of forces is what, determines, the way we perceive reality, what we perceive, what we think is reality.
Domenico:So learning how to think force and effect is exactly the opposite of falling prey of the natural tendency that humans have, to see linearity when linearity doesn't exist. So, we are witnessing today, just to give a very, very, simple example, you know, the government of Canada, the the Central Bank of Canada has, is begging entrepreneurs not to build, expectations of inflations into the salaries that, so in other words, we are experiencing inflation today. And, the natural reaction is let's raise salaries because, you know, inflation comes, so salaries has to be raised. If we keep, going on to this spiral, we will create a mental model, an image of the fact that, we will expecting inflation to raise. And, if we do that, we will trigger, an a course a a series of negative cause and effect relationship that will make very difficult, to rein in, this moderate a modest amount of inflation that we're experiencing today.
Domenico:So this is a simple example, but in real life, you know, in the life of every day, we are, entirely surrounded by, these mental models.
Derek:So so we're in complex systems where you can't isolate the variable and say, if I push this button, this will happen. Mhmm. And then we also have these feedback loops so that the effect then creates the cause again. And so then you get a spiral either positive or negative. So, your position then is you can't think linearly, so you have to think a different way.
Derek:That's right. And how would you describe how people need to learn to think?
Domenico:Yeah.
Derek:You
Domenico:know, in previous conversation that we had, Derek, you know that, I had the great good great fortune, to meet early in my life, the work of, doctor Goldratt, who is the originator of, the theory of constraints, a body of knowledge that he began to develop, first from a mathematical standpoint, and then more of a methodological one, from late seventies, early eighties. The enormous success that he had in the eighties with books like The Goal, or The Race, the Haystack Syndrome, what is this thing called theory of constraints, essays on theory of constraints. The great success that he had with his books and implementation at the time mainly in industrial environment, solidifying him the fact that, the issue was not, you know, the the the rational understanding of why production should be run-in a certain way, why logistics should be arranged in a certain way. But the fact that, it was not, the the rational aspect of managing something as mundane as operation was not tackled at the most fundamental level, that a human being operate under, which is a cognitive level, at a subliminal level. So, he decided to, reformulate entirely his body of knowledge called serial constraints through a different language using an approach that he called, thinking processes that support the, you know, our ability to articulate our reasoning.
Domenico:Okay? And, that has been, since, 9394 when the first book came out called, It's Not Luck. There has been a a a gigantic amount of confusion on what this thinking processes are in a lot of literature nonwritten by Goldratt. These are labeled as logical tools, and, as logical tools can be used, in context where logic has to prevail. Unfortunately, the for, for the majority of people that have been following that path, the the the thinking process of TOC are just a gigantic monumental linguistic framework, to allow people to, garner, the, the strength of their emotion and channel them, in a way that can be used.
Domenico:They are the best that allow our emotion, to, generate results. This is because it was evident to all that that it wasn't the the the constraint, so to speak, was not, rational thinking because anybody can understand that in order to accelerate the flow, you have to squeeze the the tube. Yeah. But, but the problem was, how deep how deeply entrenched certain models of managing are, and so how deep, the changes, that need to take place have to go. And and in order to do that, he shied away from, psychoanalytical traps, and he embraced a very solid epistemological linguistic framework that enables everybody who's willing to tap into, the ability to, I you know, to to intuit, to to generate intuition, in the ability to create a full analysis of what the intuition provides and, with an ability to, string together a action plan that can affect the change.
Domenico:So, while the thinking processes might look on the surface something logical in the mathematical sense, in reality, they serve the purpose of of allowing the the biggest strength that we humans have, which are emotions, to be channeled in a way that can be useful.
Derek:So if I recall, Goldratt said, well, we're gonna start with emotion because if you don't care about something, you're not gonna put the effort in to make it better. And once we have emotion about something, once we care about something Right. The next step is actually intuition.
Domenico:That's right. Emotion is motion can be a powerful trigger for intuition. Absolutely. Yes. It can be.
Domenico:Yes.
Derek:But then he goes beyond that, And and and that's this is good for me because I tend to, be more intuitive. But then there's the rigor of applying the logic to the intuition and saying, well, if you think this is how you're gonna solve this problem, let's look at the cause and effect and see if we can actually make it happen that way.
Domenico:Right. Exactly. That's exactly right. And in fact, for, very, simple straightforward application, what he called the proven solution, you don't even need to tap that deep, into, your emotions. Because if you wanna manage a production flow or if you want to accelerate, a new product development or if you want to organize a better supply chain, there are ready made algorithm that you can use.
Domenico:But if you really, wanna breakthrough and you wanna sustain your growth, you need to be able to generate almost on a daily basis, mini breakthroughs that enable you to overcome hurdles that, if not addressed, become the prison that I was telling you before. And in order to do that, you need to embrace a way of thinking where you can connect all your emotions in a way, linguistically, in a way that allows can paste the way for you to generate a breakthrough, solution, which frankly is something that can be done, on a regular basis. I mean, this has been not just my I believed in that, but, it what it hasn't been my experience, over the last thirty years, almost thirty years. So you can whatever the context is, you can take a cognitive snapshot of what keeps people blocked and, surface very quickly, the mental models that keep, the the person or the company or whatever situation in the situation of blockage. All you need is people who are open minded to discuss their issues.
Domenico:And normally, that happens when the pain is too strong. So successful company very few successful company, accept, the idea of challenging what they do. But, the vast majority of the companies are not successful, and, they're not successful because they hit the roadblocks that they don't know how to overcome. And even the successful companies, they're not gonna be very successful if they don't do, a sort of maintenance, to the way they think. Because obsolescence, as doctor Bemming used to say, doesn't require any maintenance.
Derek:That's right. That's right. If if, if you're successful today, the world will change, and, you'll become irrelevant if you don't adapt. And so adapting requires getting stuck and then creating a new mental model. Yeah.
Derek:So, so, you write about this, and you speak about it. You also advise clients directly. Is that right?
Domenico:Yes. That's right.
Derek:And, so how do you help, leaders become unstuck? I presume it's through some kind of conversation like this, but how how does it work for you?
Domenico:You said it right. I mean, we, as a small consulting firm, we have produced a number of publications internationally. There is, you know, unheard of for, you know, companies as as small as we are. And the reason why we did that, it's because, a, at the very core, we are scientists, but also because, we enjoyed tremendously the feedback that will come from trying to implement, try to convey ideas that people would struggle, to cope with. So, over the years, instead of focusing on the the technicalities of material constraints or the technicalities of, implementing a system of, statistical process control, which are incredibly interesting but, you know, confined to the realm of how to make things work.
Domenico:We focused on, teaching people to think on how they think. And, and that was, that led us to develop a wealth of knowledge on how, the thinking processes of TOC, can be used in immediate circumstances. You were mentioning the work that we do with enterprises. I would say that 80% of the work that I've done over the last thirty years has been with companies of smaller dimension from 20 to 200, just to shoot a number. Sure.
Domenico:Sure. And so, we've only dealt and we have exclusively dealt with decision makers. The owner and manager, the the the managing director, the CEO, whatever you wanna call it, and the the core nucleus of decision makers. This has enabled us to understand more and more the thinking pattern, of people that are at the helm of an organization, and they need to take decisions. So we were able to dissect very clearly, a very precise mental trajectories and identify very quickly the elements of ignorance, quote unquote, that needed to be filled.
Domenico:And we came up with a template, which we have, published repeatedly, and we talk about almost on a daily basis on our blogs, a pattern that any organization can follow. And the pattern, just to answer, to be a little bit pragmatic about your question, it's always the same. First, identify what the jargon of TOC calls the core conflict of an organization, surface the prevailing mental models that keep us stuck, and then develop conceptual solutions which later can become operational plans via project. And as a result of this work day in, day out, we also came up with, something that we're very proud of, a generic solution, for organizational design that can help, any organization to scale up as quickly as they can, without incurring into the predicaments of a conventional hierarchy.
Derek:Wow. Domenico, there's a there's a lot there. So that, that, organizational model is based on projects. Is that right? And network of projects.
Derek:And, I've had a lot of experience in organizations that know they operate as projects. Like I worked for a big consulting firm. I worked for an engineering firm. But I've also seen that most organizations really function with a series of projects, but they don't manage projects or manage the network of projects.
Domenico:That's right.
Derek:And they draw org charts and expect that somehow that's gonna make the difference. Right. But the work get the work happens across the org chart
Domenico:Right.
Derek:Because that's the way it goes. If I could maybe ask, for a specific example, or maybe a composite example. You've got a leader that's stuck. You start working with them. You identify the core conflict, examine the assumptions, and then all of a sudden it's a new world.
Domenico:Right. Do
Derek:you have an example of that or or one that you could, share?
Domenico:How many do you need? I mean, we we, basically, all our work has been based on that. Actually, we have derived a complete generic solution. When, mister Cohen and I, mister Cohen or Ted Cohen, has been, the longest serving member, of the Goldratt schools and the Goldratt Institute since the late seventies, he was actually the first person in '79 that doctor Goldratt hired in his newly formed company. So That's fantastic.
Domenico:Been, Yeah. The point in, my older brother, my my mentor, my friend, my personal rabbi, and I owe him almost everything that I am professionally. With DODD, we developed, in mid nineties, and we published it in late nineties after four years of collaborative work, a book called The Decalogue. The Decalogue is, as the word implies, 10 systemic steps to build sustainability into an organization. And and, and, obviously, like everybody else, we started with a solution without, building the the problem to which, our decologue was the solution of.
Domenico:That came later. And, so, what we do is, once the core conflict has been, has been, identified and the core assumptions, have been raised, we show how whatever is the set of injections, it looks like magic, but it's reality. Whatever is the set of assumptions that they have, there are, five fundamental injections five fundamental solution to make these mental models go away. Obviously, it's not straightforward. It's not simple.
Domenico:It requires a pattern of change that last several months, in some cases, a year, and in some cases, even two years. But it's, the only way to sustain, the transition from, the the present situation of being stuck into a situation of,
Derek:unstuck. Unstuck. Sure. Unstuck.
Domenico:And this, this fundamental solution this fundamental the the lingo again, I apologize. There are a couple of words in POC. You just can't avoid, that the fundamental solutions to any situation of organizational blockage, they revolve around understanding variation in the system, understand how to synchronize, a process flow, or many processes flow, on a physical constraint. They have to do with creating a cycle of continuous improvement, what Deming called PDCA, creating, a channel an open channel of communication all through the value network, and how to present what Doctor. Golder called unrefusable f unrefusable offer, I e, penetrate the market in ways that conventionally is not possible through something called external constraint.
Domenico:So it's, they they very, very, these solutions are, not necessarily all these solution need to be applied to any organization. But, more often than not, two or three of them, they are, you know, critical to get a company and start and to make them see reality in a different way. In recent years, I'll be totally transparent with you, especially in the world that we live today, which is more like a, it's a it's a it's a it's a it's a it's a it's a cool economy rather than a push economy as it was in the eighties. We almost, invariably, we start with external constraints. So in other words, we create, for organization, the ability very, very quickly to break through into the market and and raise sales drastically.
Domenico:And everything then comes after how to organize to scale up the sales.
Derek:So dom Dominico, I'm fascinated by this, but we're fast running out of time as I as I knew we would. So let me suggest that our topic for next time, because we we will be back, if we could start with an example of a core conflict, because that ties into things that I've talked about on this podcast. Mhmm. And, and then we can move into some of those, particularly the challenging of assumptions. Right.
Derek:And walk through this a little bit more because I think if people have a little bit of that context, they go to your material, they can see more, and then they can reach out to, to you or us, or to me, and, you know, we can have further conversations. But I I think if we, if we visit again next time starting with the core conflict, we might be able to put something that people can manage together. So, if you'll come will you come back? Would that be okay?
Domenico:Absolutely. With great pleasure. Thank you for having me.
Derek:Okay. Well, how can people get a hold of you? What's the best way to look you up?
Domenico:We have a we have a, a huge website that we cultivate, you know, with great love and passion. And so it's, intelligent is, the the website is intelligent management, one word, dot w s. Don't ask me, y w s, which is Western Samoa. It's because fifteen years ago when we we, you know, .com wasn't available for intelligent management. So we went for something very trendy.
Derek:Oh, that's I thought I meant website.
Domenico:No. No. It's ws.wws.
Derek:And,
Domenico:Okay. Yeah. And, if, people are more interested in, solution based on, projects, we have another, website called essential,uh,.com, where essential the is, with, the second e is a three.
Derek:Is a three. Yeah. That's right. Yeah. I was wondering how you're gonna do that.
Domenico:And, actually, that is that is, there is a long but very readable, write up of, how we got to the solution with, with the with the wealth of material that people can enjoy reading.
Derek:Well, I I can I can, concur that there's a lot of material on your website? I've I've been through some of it. I'll just close by saying that the Essential Dynamics podcast is brought to you by Unconstrained, my consultancy, and you can learn more at getunconstrained.com. I'd encourage everyone to, share the podcast to like it and subscribe. And, we'll be back again next in a couple of weeks, I think.
Derek:So Domenico Lapore, thank you very much for coming on the on the podcast. Brynn Griffiths, thanks for your work behind the scenes. I'm Derek Hudson. Until next time, consider your quest.