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. Welcome to deep conversations with interesting people about Essential Dynamics, a framework that we've been working on to help people and organizations figure out what to do in challenging times. I'm joined today with my colleague, Dave Kane from Unconstrained. Dave, welcome back.
Dave Kane:We got some positivity today.
Derek Hudson:Positivity. Yeah. Yeah. The last couple episodes, we've been talking about dysfunction. And, I think we wanna I think we wanna bounce into the the opposite side of that.
Derek Hudson:So do you have any specific directions that we you think we should take this?
Dave Kane:I like, you were sort of teasing at the end of the of the last one, but I I do wanna just dive into the whole system flow, and maybe we just start off jumping right into, well, what is it? And then we move
Derek Hudson:on from there. What is flow? Well, and, you know, in some ways, we we spent a number of episodes talking about when when things aren't working well and when you're stuck, that's typically not just one cause, it's an interrelated thing. It's the system. So we call that system dysfunction.
Derek Hudson:So the opposite is when the system works together and you get to flow. And there's a bunch of different ways to look at flow. But as a if you think about an organization level, it's when we know what we're trying to do, why we're here, what we're trying to do. And we actually know how we do it. And all the pieces kind of line up and you do it.
Derek Hudson:And here's the thing, is it's hard because we still, you know, we still face opposition. We're still trying to change the universe by adding value somehow. It's hard, but it feels good. And so maybe that's, you know, one of the conversations we've had with clients and others recently is what does it feel like? And it's not, it's not sitting on a beach with, you know, your bank account filling with money.
Derek Hudson:It's doing something meaningful that's hard and feeling like you're, you're in the zone, you're accomplishing something, you're doing it with your team. Anyway, that's those are some early thoughts. Yeah, I agree with that. I mean, it's
Dave Kane:it's not, it's not easy. It's not not everything's just just coming to you. It's just you're hitting your stride, but there is that that challenge in front of you. And to me, like, on a personal level, you can hit flow. And I I keep coming back to, you know, early on in my career, working on on business cases that had, you know, significant consequences for the company.
Dave Kane:We had excellent technical side. We had excellent marketing people. Everybody contributing long hours, huge challenges. But we all loved it. And we just we worked hard, and things just came together.
Dave Kane:And you every day you felt you hit your stride. And to me, that was like a flow. And I was just and I keep coming back to surveying, okay. So now we just need companies to feel that where the pieces are fitting together. There are still obstacles, but you just you take them on and you overcome them, and things just work.
Dave Kane:Is that is that kinda how you see fit?
Derek Hudson:Yeah. And so I like I like the way you say that. Things just work. So then it sounds like, well, it's, it's easy.
Dave Kane:Well, you need the conflict. Right? It can't just be easy because what in life is meaningful without a challenge to it?
Derek Hudson:Mark Goren: That's right. So it doesn't just work, but we figured out a way to work together to do the hard thing. Right. Mark Goren: I was in a session just a few weeks ago when we were talking about flow. And it was a great quotation somebody just threw out out of their own head.
Derek Hudson:When you have system flow, you're challenged in the best way possible. And so it's not that we yeah, it's not that we don't have a challenge. It's that we've we feel we've got a system we can trust, people we can trust. And it's worth but I guess going back to this well, it just works. It just works because we've deliberately set up a system that works in the environment that we have.
Derek Hudson:Have. So there's a lot to that, but when you have it, it feels to some degree, effortless, or if not effortless, then at least there's a return of energy. And so you, you have you have the capacity to do the hard thing.
Dave Kane:I I like that return of energy, because it is not effortless.
Derek Hudson:It is It's not effortless.
Dave Kane:Yeah. It is everybody sort of putting in their peace. But, I mean, we've touched on the flows, so maybe there's a question for you. So we've talked about value flow, cash flow, information, and energy flows. Mhmm.
Dave Kane:Do you wanna sort of touch on how is that different than system flow?
Derek Hudson:Well, system flow is when it all comes together. And the way I think about it is that your system has a purpose. In fact, we talk about 2 purposes, purpose x, purpose y. Some complementary, but sometimes opposing or contradictory purposes that we're trying to reach. And it's our job to balance to balance them and to find how they all come together.
Derek Hudson:And when we have system flow, then we have confidence in the way that we accomplish that. And so if you talk about those other flows that we've talked about, I would go straight to value flow as that's the overriding thing is we are accomplishing step by step, our purpose. We're proceeding down the path. We are advancing the ball. We're moving forward.
Derek Hudson:And so that's value flow, and that's critical. I think I haven't done enough thinking about it, but I think that these other flows, also to apply to our personal lives, we talk about biological systems and mechanical systems, and I think they apply there, but I've thought most about it in organization sense. Cash flow is like the flow of resources, the flow of capacity in your body. It might be the circulatory system or the respiratory system. You're getting the oxygen to where to where it's needed by the by the muscles and the organs.
Derek Hudson:But cash flow isn't value flow. Value flow is accomplishing the purpose. And in an organization, like a business, you accomplish a purpose when the customer gets something that they need, and they happily pay you. That value doesn't it doesn't attract the cash flow exactly. In fact, accrual accounting was invented a long time ago because there's a difference between when the cash changes hands and when the value is actually created.
Derek Hudson:And I don't think people understand that enough. So there's value flow and there's cash flow. And cash flow is an important part of system flow. If the cash doesn't flow, the system's gonna dry up at some point. It's it's not gonna have the capacity.
Derek Hudson:And then the other other flows also support sys or part of the system and support system flow. That's of information, that's so that you can make good decisions about what's the best way to operate the system to add value. And then the energy flow is, how do you get the capacity and mental capacity that the motivation to do the work, which is hard. And what I guess maybe, could we talk about this idea? When you've achieved system flow, you have to have the energy flow has to be there.
Derek Hudson:And it's you know, it's not like you said, it's not effortless, but it's natural. And so you can do hard things because you're in the system, if that makes any sense. Yeah. It does. So maybe you could talk about that time in your early career.
Derek Hudson:What was it about that where you worked long hours and you loved it and you kept going?
Dave Kane:Useful energy flow. I guess. No. It was it it was seeing those parts of looking back now of those different flows. Part of it was the energy flow, and it was more of just because you felt you had purpose that was making a difference.
Dave Kane:But what made it work really well was the information flow and just the communication, between all parts contributing into the system. You you were never at a at a loss or trying to figure out where do I get the piece that I need or waiting for it to come. Okay. Just those those pieces were there. It wasn't so much of a cash flow thing because we were business planning.
Dave Kane:But it was just thinking back to it, it was probably the energy of everybody in the system sort of feeding off each other. And you didn't really get to that point where, you started running out of energy because somebody else and whatever they were contributing brought it back up. And that's what allowed you to sort of push through and and get to it.
Derek Hudson:Yeah. That I I think that's great. But I gotta go back because you said a lot there, the purpose that was making a difference. So I think that's where you have to start. That engagement.
Derek Hudson:Yeah. And so we've talked about purpose on, you know, 57 of 103 episodes, Because it's that important, because it's that foundational. Why are we here doing this thing that we're doing? And if we really identify it with it, we believe in it. We agree that that's the thing that we're trying to accomplish.
Derek Hudson:That's why we're here. That aligns efforts, that gives you that sort of synchronicity in your energy flow. And without that, I mean, it's easy to see where, if people have different objectives, the energy starts to collide, and that breaks flow. But when you're united, the purpose is motivating, and then the alignment resonates. And The
Dave Kane:purpose is motivating, but also that you see yourself or you see your contribution, in that purpose, right?
Derek Hudson:Well, you talked about that in terms of information flow, you know, in one sense, which is, I know how I can contribute. I get feedback when I can contribute that it's actually working or not. You know, I kind of know my place, and I don't mean that in terms of an organization chart. Heaven forbid anyone think that, but it's, I can contribute, and I know how to contribute, and I can get feedback from others and from the system when I do contribute. I I think Let me let me
Dave Kane:touch on that because that isn't actually how I would have thought of of that information flow. To me, it's always been, more of the availability and synchronicity of the information, and everybody has what they need to know in order for it to run properly. But you're tying sort of that information flow to that also understanding of where you are in the system and how you're contributing. Yeah. I
Derek Hudson:it's I think it's all it's all related. So one of the things, of course, that so many organizations in the modern economy are in some sense, working in the knowledge economy and some intangible process, which you can't see. And then if you talk about remote work on top of that, you know, the only thing you see is what you see on your computer screen and what you might hear in a meeting or something like that. And it's very easy to get isolated. And to not be able to go down, you know, walk the shop floor and see where things are flowing or where they're not.
Derek Hudson:And so I think it's I think it's critical that people can see how how things are flowing in the system and how they contribute to that. If you get that and you have smart people and they're committed to the purpose, then you'll get creativity that you didn't expect. Right? But if you carve people's jobs up into an inbox, a process, or an outbox, and some other party defines that, and that's the whole perspective that they have. You can't expect them to do anything other than protect, protect that, that desk and that cycle between inbox and the outbox.
Dave Kane:You won't see any gains coming between the flow through that system?
Derek Hudson:Yeah. And then the other thing you talked about is energy feeding off of others. You know, if you're the more isolated you are, the less that's likely to happen either as your receiver or a contributor. I I think this is a good time to talk, to to take the analogy to, like a sports team, which one of the reasons I think we like sports so much is you can you can see the process happening. The objective is very clear, and you can see all those flows happen.
Derek Hudson:And we're here with, with our buddy, Brynn, who's gonna be spending the next hockey season with and talking about the Oilers. And so their playoff run wasn't completely consistent, but from game to game to game, you watch that system flow develop. And, you had people contributing in ways that were expected and contributing in ways that weren't expected. You had sometimes the team followed a system, like even when the performance didn't seem to be there, but it came back. The system eventually worked and they prevailed.
Derek Hudson:And the lucky balances can't prevail in a 7 game series, but they can in a one game. And so I think there's a lot of lot we can take from this this idea of looking for system flow in these different areas and and then having the experience of participating in it.
Dave Kane:Yeah. I like that because, you know, the one of the 2 things that sort of one that you drew on before was that analogy certainly has the conflict there. Right? There's certainly that opposing force, and it's it almost makes the system work better sometimes, right? It's and the other piece that I kind of come back to is, it's the process.
Dave Kane:It's not the outcome that you're sort of focusing on. If you just focus on the outcome, it's hard to be repeatable. It's hard to recover when that outcome doesn't happen. But if it's the process or the system, pardon me, I guess, is where I should be using there, and you're focusing on that system, then the outcome sort of takes care of itself. It's not it allows you to be more resilient, I think.
Derek Hudson:Absolutely. And and I think we're we're probably gonna take that as the major topic of the next episode. We'll see where we go in the next 10 minutes here, but because that's a big thing. So we're focusing on achieving system flow. It feels good when you're in it, even though it's hard.
Derek Hudson:There's this different aspects that have to flow. I think one of the things that other things I want to highlight about system flow is, when you have flow, and something happens, it's easy to spot. When you don't have flow, you don't know where you're stuck, how many different places are gonna rear their ugly heads before you get the, you know, the product out the door. But when you have flow, you expect things to move and when they don't move, it's a trigger right away to go and find what's going on. And I think that's, that's something that we don't think about enough is, you know, a clean flow that everyone understands.
Derek Hudson:You know when you lose it, or when there's, there's an imposition that might challenge your flow.
Dave Kane:And so you're saying it allows you, I mean, both to to recognize that there is something wrong, but it also helps you find it faster.
Derek Hudson:Oh, yeah. Yeah. Absolutely. You know, and and we talk about, you know, these simple principles, drivers, and constraints. Well, the idea of constraints is the only constraint that that, impacts your flow is the one that's, you know, the got the least capacity.
Derek Hudson:And you design your system so you understand which which one that is and make sure that nothing else, dips below that capacity, because then you start to get sort of a chaotic system. So if that's if that's the case and that's the flow and something happens outside the constraint, you've gotta find it and but you have time because it's not the constraint. And if the constraint goes down, everyone knows right away, and, you know, all eyes are on it to to fix it. And I think most organizations can't say that they they can do that.
Dave Kane:What I'd like to do actually is is circle back for a second to and the question I'm gonna ask you is, is how do you know you have flow? Because we talked about, you know, the flow within, you know, the value flow, the cash flow, the energy flow. But I'm guessing when you come into an organization or if you're a leader in an organization and you're trying to figure out whether you have flow and what you need to do to make it better, do you automatically jump to, okay, I need to start looking at the value flow and the cash flow? Or is there an order that you do it? Or do you ask other questions first?
Dave Kane:So because it's it's kind of one of those I know it when I see it kinda issues. But what I'm curious of is if you're trying to stop and look at your company, you step back, you're looking at the MediView, or you're, you know, you invited Derek in to talk to your company and and figure things out. Where do you start when assessing how
Derek Hudson:good the flow is? That's a great question. I I think we go back to the the what's being stuck feels like. And you don't know anything about the process of creating value. Maybe you don't even know the value, you know, what the purpose is, but you can sense the frustration.
Derek Hudson:And you can sense well, you don't you don't have your senses don't have to be that good because when people start talking to you, they tell you. They tell you that, that they're they're frustrated because they don't know if they're performing well. Or they've got an idea where performance isn't happening somewhere else. Or you just ask the customer, how's it going? And the customer says, we don't get our stuff on time.
Derek Hudson:Or you ask the employees, and the employees say, I've been here 5 years, and I don't know how to get ahead in this organization. And so all those, you know, sort of negative things that we've been talking about are indications that you don't have flow. I would say that if you do have flow, it's because you're trying for it. And if I sit down and and talk to someone and say, tell me about your business, and they they start describing it in the sense of a system, and they're using the words that we just used about what flow is, then, you know, they've got flow. You don't have flow accidentally.
Derek Hudson:It doesn't, it doesn't sneak up on you. It's nature is dense to entropy and chaos, and we have to be on top of it to get flow, I think.
Dave Kane:So you can you step in, and you get a sense from whether there's this feeling of of, unrealized potential or how they adapt to challenges and tension. And that sort of gives you a bit of an indication on on the quality of the flow there. My sense is you don't necessarily jump to starting to address each of the subflows. Right? You go back to first principles of purpose, path, and people and and those types of things.
Dave Kane:Right? And then you have to do a few steps before you get to flow.
Derek Hudson:Oh, absolutely. Figure out how
Dave Kane:to make flow better. Unfortunately, it's not it's not the the first thing you fix. There's there's a few steps in between, and it's the outcome.
Derek Hudson:Is that Absolutely. Yeah. Well, you know, it's just the process is the outcome. Well, the the outcome of the work that we do is we wanted to get to a process that flows. And then, I'm reminded of Simon Sinek's book, The Infinite Game.
Derek Hudson:It's not a game you win because there's, there's no final buzzer. And so you keep playing and you want to optimize, you know, the value for your inputs in a certain period, but you keep playing. You have to set yourself up to be able to play again and again and again. And so that's another aspect of flow. That's what we help organizations do.
Derek Hudson:That's what leaders should be doing, is to build that capacity to continue to have flow in an organization. And, yes, we we based that on foundational principles. I was in a conversation today. We spent an hour and a half talking about purpose x and purpose y. And, great, kind of new understanding about different ways to make decisions in the business because the the purpose was narrowing in.
Derek Hudson:And I I don't think you can have flow if you're not really clear about why why you're there and what you're trying to accomplish and what value is. So following that logic then, flow is not
Dave Kane:the outcome and the goal. It's the because you're focusing on the process. And and you sort of said, it's the process, not the outcome. So flow is not the objective. It's getting the right process?
Dave Kane:Is that fair and twisting your logic there?
Derek Hudson:Well, let's, we'll have to draw this on a whiteboard that we don't have in front of us. But the purpose of an organization to is to accomplish something. The purpose of a leader in a sense is to build a system to do that. And then what's the characteristic of that system that you ultimately want? Well, you want that system to flow.
Derek Hudson:It. And then that system, when it flows, it can create the value. But there's always gonna be shocks to the system, so you have to protect the system's capacity, and you may have to expand the capacity. You may want to expand the capacity. But the leader is working on the working on the system, and the objective of the system is is flow.
Derek Hudson:And then the objective of the organization is to direct that system to accomplish its purpose. So there's a there's a couple of layers there, and depending on which one we're talking about, we're we're actually putting stuff on the truck, or we're talking about how we make the stuff that we put on the truck. Well, I think there's probably
Dave Kane:a a favorite more we can get into with that, but maybe we should park park that truck till next time and and then start to dive into the process at the
Derek Hudson:end. Okay. Okay. Let's do that. Great conversation.
Derek Hudson:I love talking about this stuff, and thanks for the questions. I'd like to thank my colleague, Dave. Dave and I are at Unconstrained. Brynn Griffiths is, helping us with the recording. And until next time, consider your quest.