The Truth about Performance

Business901

Podcast Transcription Implementing Lean Marketing Systems

Show Me the Money – The Truth about Performance Guest was Norm Meyer

Sponsored by

Related Podcast: Show me the Money – The Truth about Performance

Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems Dean Meyer is one of the original proponents of running sharedservices organizations within companies as businesses within a business, where every managerial group is an entrepreneurship funded to produce products and services for customers.

He has implemented this philosophy in corporate, government, and non-profit organizations through the careful design of culture, organizational structure, and internal market economics.

Dean is the author of seven books, numerous monographs, countless articles, as well as the Full-cost Maturity Model. He invented FullCost, a business and budget planning process based on an internal product/service costing solution. He researched the science of organizational structure, captured in his Structural Cybernetics framework and reorganization process. He developed an approach to corporate culture that leads to meaningful change in less than a year. Dean coaches executives on organizational and political issues, and personally facilitates transformation processes.

From a small office in the New England village of Ridgefield, Connecticut, Dean Meyer writes, invents, coaches leaders, and implements organizational transformation -- all based on 30 years of devotion to the business-within-a-business paradigm.

Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems Transcription of Podcast Joe Dager: Welcome everyone! This is Joe Dager, the host of the Business901 podcast.

With me, today is Dean Meyer. He is one of the original proponents of running shared services organizations within companies as business within a business, where every managerial group is entrepreneurship funded to produce products and services for customers. Dean is the author of seven books. He invented “Full Cost”, a business and budget planning process based on internal product service costing solutions, and he’s researched the science of organizational structure captured in his structural cybernetics framework and reorganization processes. His latest book is “Internal Market Economics”, which is one of those books that raise as many questions in my mind as it did answers, and that is meant as a compliment. Dean, I would like to welcome you, and could you start by giving the elevator speech about you and your company, NDMA? Dean Meyer: Thanks for having me on your podcast! The elevator speech, well as you pointed out I am a long-time proponent, one of the earliest proponents of funding organizations as a business within a business. What I mean by that is not just that the IT as a whole is a business, but every managerial group, every manager should think like an entrepreneur running a little business within a business. What I do for a living is help executives -- CIOs and their leadership teams, for example, implement that vision systemically. That is through changing the organizational ecosystem, or the organizational environment that we all live in. So I work on three things. I work on culture, which is contrary to popular opinion, the easiest thing to fix. Structure, which is a very mature Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems science, I get myself into trouble on airplanes sometimes, I’ll be sitting next to a guy, and they find out I’m a student of structure, they say oh let me show you my organization chart! I’ll say well, this guy’s fighting with this guy, this guy’s not making objectives, that guy has ulcers. It is that predictable! So it is also a dangerous science because the guy gets all upset, I deny all of that, “Who have you been talking to?” and then they do not talk to me for the rest of the flight, so I guess that’s okay. Structure is my longest standing area of research. Then most recently, just the last 15 years or so ago, I’ve been studying the application of market economics inside of companies that sort out the resource governance and financial processes. That is what I do for a living: culture, structure, and the internal economy.

Joe: Well your new book, “Internal Market Economics”; I guess I’d like to start out there.

Can you tell me your target audience for the book?

Dean: I’ve targeted not just to my traditional audience which would be CIOs and their leadership teams but to any shared service organization and to CFOs who are considering how the whole company works. The internal economy includes things like budgeting, catalogue with rates, governance processes, charge-backs or show-backs if any, all of those financial mechanisms. The way it looks to me in a lot of companies is we’ve designed all those processes around a central Soviet approach; some sort of committee handing out money and telling you what to do with it. What I’ve been trying to teach through that book and through my work over the last 15 years is market economics, where customers decide what they buy within the limits of a finite checkbook, and suppliers like IT or any shared service organization strive to be the vendor of choice offering best value and great Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems customer relationships. So that’s what internal market economics is about.

Joe: On my first pass through it and I don’t think it’s one that you’re going to make one pass through if you read the book, I think you’re going to make a couple -- it seems to be a budgetary way of determining structure. Is that way out of focus?

Dean: I think you’re right, that’s very insightful. When we fix the internal economy, there are two pieces to it: there is a planning piece and then there’s the actual side. Once a year during the planning piece, we lock down or revise the catalogue. We forecast what we’re going to sell, not only to clients outside the shared service organization but to one another, and then we figure out how we’re going to fulfill those sales which is where cost comes into the equation. Driving that through a very advanced cost model, well beyond ABC, we come out with two things. we come out with what I call investment-based budget, a budget for what you want to sell, not what you want to spend. Not a budget for compensation, travel, training, you’re just begging for micromanagement that way -- but a budget for the products and services.

In IT, for example, you want help testing 24/7 multilingual. Happy to do it, here’s the price. Oh gee, can’t afford that? What do you want to do? Sixteen hours a week, English only, whatever you’d like. So, it totally changes the budget negotiation, it changes the dialogue with the business, budget decisions are made on the investment opportunities at hand and the of the business rather than last year plus or minus a percentage, and we come out of the budget with a very clear understanding of what is expected of you for a given level of funding. Oh, and we also come out with rates that go back on the catalogue, Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems that is the unit cost. But in order to do all that, Joe, just as you intuit it, we’ve got to understand every manager’s group as a business within a business to figure out their catalogue and what they sell to one another as well as to clients. So while, the full cost process -- that’s what I call it, and you can check this out on FullCost.com -- the full cost process doesn’t itself change the structure, it uses the structural cybernetics framework, the building blocks of structure, to decipher what business everybody’s in as a basis for business planning.

Joe: I come from the Lean world -- when we look at innovation, when we look at a business and how we’re going to grow a business, we think about people, processes, and products. Everybody looks at the budget and the finance side as the restrictive side. But, come back from your book, and it’s the way you go about it!

Dean:

It’s the enabler, it’s not the restriction.

Joe: Yeah! Do a lot of people look at it the same way I do?

Dean: I think a lot of people are used to the traditional approach to budgeting and resource governance. The traditional approach goes something like this: Joe, you submit your budget, and it’s for compensation, travel, training, etc. Of course, CFO and executive, they’ve got to talk about something, so they say, Joe you don’t need all that travel, do you? So there they are trying to micromanage you, trying to make decisions they’re not qualified to make, you’re having totally the wrong discussion with your peers. It’s a discussion defending your costs, rather than treating IT as an investment opportunity. And Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems then at the end of the day, we give you less than you ask for, but it’s still a lot of money to us, and in trade for that, we clients get to scream at you for anything we can dream of all year long, and it’s your fault if you can’t provide infinite service on a fixed budget. Is that a setup or what, man? It’s crazy! And it’s not the way the real world works, right? The way the real world works is, you go to the store, it’s not like you pay the manager for your share of the rent and the checkout clerk and then you get to help yourself to whatever the cart will hold. No, the products and services have prices, you know how much is in your wallet, you know what you can afford, and you optimize your family’s well-being by buying what you most need and leaving behind the rest.

That’s how it should work in budgeting. And then throughout the year, in the resource governance process, what we’re looking at is a process where the executive team has to decide how much to fund -- let’s use IT as an example for today -- how much to fund IT based on what they want to buy from IT. Then we leave the budget discussion with a very clear understanding of what’s funded, and those processes, those services and products that they've chosen are fully funded. It is not as we’ve got to make up time and money out of thin air or rob Peter to pay Paul. The few things we do, we do well, and the rest aren’t expected. So I think it’s going to improve our processes and improve effectiveness, improve quality, improve our sanity, by fully funding the few things we want to do well.

Does that make sense?

Joe: One of the things that jump out at me when you say that is the old saying that people act; by the way, they are measured. But what you’re saying is people really act the way the money is budgeted.

Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems Dean: Remember Deep Throat? Follow the money! Exactly right, exactly right. I think if we want to align IT with strategy, we fund those deliverables that have a direct impact on strategy, and we don’t fund the boring stuff. Now, 70 or 80% of the budget goes to keeping the lights on, that’s true, but maybe our business clients are willing to turn some lights off in order to free up funding for more strategic things. So it’s a win-win. We serve the business better, and we’re more important to the business, and our lives are saner.

We’re not expected to deliver a Rolls Royce for the price of a Chevrolet.

Joe: One of the things I probably struggled a little bit in your books is defining some of the nomenclature in the book. You use “customers” and “clients” in a little different way. Can you explain how you use those words?

Dean: I’m glad you asked, not only because we need to have our terms straight to understand one another because there is a subtlety here that’s important. I’m going to use the word “client” to mean people outside your organization. If we’re talking about IT, it’s a new word for user. Anybody outside of IT is a client. I use “customer” and “supplier” to speak of a relationship. So those clients may be customers to you, but there are also clients that may be suppliers to you. And here’s the key: one manager within IT may look at another manager within IT as a customer or as a supplier. So, customer and supplier work within the context of relationship, whether we’re talking about two people within IT or IT and clients out there in the business.

That concept is powerful in its implications for teamwork. Let’s say a client comes along Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems and buys something, well based on a clear structure we know exactly who in our organization sells that product or service to the client. When I say sell I don’t necessarily mean that money changes hands, I’m not advocating charge-backs. I’m talking figuratively as a business within a business, okay? So when one manager sells something to a client, let’s call that the prime contractor, and the first thing the prime does is a subcontract with peers within IT, other groups within IT, for help. If, it’s an application project, they may need to subcontract, for some data analysts, to do a logical data model or some DBMS experts to do the physical data model. They may subcontract with the project management team.

Then one applications engineer may subcontract with another for a data feed. We may subcontract with operations for installation into production. Of course, each of those subs may in turn subcontract for help from others and so on, and so through this process and through the concept of entrepreneurship within the organization, teams form automatically, laterally. We’re subcontracting for deliverables not just warm bodies. We have clear individual accountability, and a clear chain of command. And in that way we can assemble processes fluidly and dynamically. It’s not like an assembly line where you define the process, and we do the same thing day after day. Each project’s a little different, and yet we get just the right people at just the right time.

Joe: In your book you talk about systems and tools and a few other things, but your example I believe on what may be the plan or the org structure is not your typical org structure, it looks like more of a cluster diagram where you have different people responsible, all these different people and different roles, or a value network type drawing.

Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems Dean: Well I don’t by any means mean to say that we’re getting rid of hierarchy. I always draw org charts as a hierarchy; you’ve got to know who your boss is. But I may have portrayed the building blocks of structure as a sort of clustered concepts, but the process of restructuring takes that language, that framework of the building blocks of structure and assembles that in to a traditional organization chart.

Joe: Is this model counter-intuitive? Is this something that you have to struggle with, or is it something that once you understand it it flows?

Dean: I think there’s a little struggle at first, but you know they say “Common sense is what you learned yesterday?” Once it clicks, it’s going to be so obvious, it’s just what we observe in the real world. Shall I give you an example?

Joe: Sure.

Dean: Do you know the difference, Joe, between Boeing and American Airlines? Of course, you do. Boeing makes planes; American buys planes, runs them, and sells the transportation service, right? You see that same sort of relationship; look at Ford vs. Hertz Rent a Car. Look at Hewlett Packard vs. AOL. Look at Cisco vs. Telco. If you look at any technology, you’ll see some businesses that are essentially engineering businesses that are there to design, build, repair, and support solutions. Whether that solution is a piece of infrastructure, or an application, there are other businesses that may buy that solution, own it, and run it, and sell use thereof to others. We have a group of infrastructure Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems engineers who sell boxes to another entrepreneur, infrastructure operations that in turn uses those boxes to sell cycles or sell storage or sell telecommunications services. Pretty obvious in the real world; you understand the difference, right Joe? Joe: Yeah, that’s an excellent description, because you’re saying the same thing happens internally.

Dean: Exactly! And, by the way, you know there is a huge, huge difference between an engineering company and a services company. They’re both entrepreneurships, they’re both vibrant and interesting and creative, but they’re real different in their business models and their cultures and their competencies and so on. Within IT, what happens if you mix up infrastructure engineering and infrastructure operations? I was talking to one group out in Californian, and we were going around the room identifying our lines of business, and this guy said, well I do database. And I said, you probably mean DBMS. He said, yeah DBMS. So I said okay, are you Boeing or American? Are you Cisco or Telco? And he said, yes.

Both, right? He was the DBMS engineer, and DBMS operations. And you might guess what that looked like! First of all, operations had none of the discipline that we expect in the glass house. Essentially, he was running it under his desk.

Meanwhile, he was using very expensive engineers to do stuff that $20/hr. operators should be doing. It dragged those engineers down into the day-to-day detail, when they should have been out there being creative about the next generation, searching big data and so on. In doing so, it made those engineers since they're responsible for keeping things running smoothly, a little reluctant to innovate, because innovation disrupts smooth Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems operations. So by mixing up under the category of infrastructure of DBMS or whatever, by mixing up Boeing and American, the engineers and the operators, we’ve created all kinds of problems. That’s bad structure.

Joe: I’m sitting here and the reason I’m quiet is because I’m taking in all this. It’s great.

Dean: Well, you know why people do it -- I mean it sounds so obvious, but you know why people do it? If the engineers don’t respect the operators as a customer if HP doesn’t look at AOL as a customer, if instead Hewlett Packard says, I’m going to be the one that decides what goes on the floor of AOL’s data center, and I get to play with all this new tech stuff, so I’m going to put all kinds of crazy wild stuff in there, then there’s absolutely no chance AOL can run operations reliably. So if, you don’t have that internal customersupplier relationship and respect that goes with it, then things fall apart. Teamwork falls apart. So then we say, well, put them all under the same person, and that way we’ll at least get something done. So the lesson there is that you can’t specialize -- and specialization’s key, specialization allows you to be good at something -- you can’t specialize if you can’t team. You’re going to have to mix up these different lines of business if you can’t team well across boundaries.

Joe: That measure of trust is what we might call financial transparency. It is realizing the cost that exists between each other.

Dean: It is that. And you just mentioned trust, which is an outcome of culture, the way we behave around here. If we behave in ways that inspire trust, then people learn to trust Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems one another. For example, we never make a commitment that we can’t keep, and we keep every commitment. That’s a cultural principle. We respect internal customers just as much as clients as customers, again, a culture principle. Culture’s part of it, the money’s part of it, what if my highest priority is your lowest; they are all part of it. Well, we may be good buddies and quite willing to work together, but if my highest priority is your lowest, I’m not going to get any work out of you, am I? That would be an internal economy problem. Or, the problem could have its root problem in the structure. It could be that we’ve designed groups that don’t even know that their customers are peers within the organization; they’re strictly focused on selling outside. All three of those things work in concert to create that business within a business environment.

Joe: Is there a way to do something like this incrementally, or do you just have to change?

Dean: Well in the area of structure, I hate to ruin your morning, Joe, but doing incremental change in structure is like picking at a scab. How’s that for a graphic metaphor? It just keeps the wound open: when is the next change going to hit me, what’s going to happen, it keeps the whole organization destabilized, and the other thing it does is it keeps everybody defending their little territories, you’re not taking that away from me, that’s mine! Whereas, a clean sheet of paper approaches to structure, while it sounds scary, is actually less painful. It goes a little more quickly, and it is far more effective. So you can use the structural cybernetics framework, it’s all outlined in that little blue book I sent you, “The Building Blocks Approach to Organization Charts”, you can use that to tweak your current structure, a little bit here, a little bit there if that’s all it needs. But if you’re planning year after year of tweaks, you’d be far better off to stop, engage a Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems leadership team in a participative clean sheet of paper process, and be done with it once and for all.

Joe: So you’re saying you need to go all-in.

Dean: I think that’s by far the most effective. It is oddly enough, least painful. See when you’re going clean sheet of paper, you don’t have a rice bowl to defend, right?

Everybody’s out of a job, everybody’s going to get a job at the end of the process, but now we’re all sitting with the CIO trying to figure out what the future will look like on a clean sheet. Whereas if you’re doing horse trading with your peers, I’ll give you this, you give me that, it's constant defensiveness and sub-optimization.

Joe: When I start thinking business within a business and about the different things you say, the first thing it sounds like is I’m creating more structure and more -- that terrible word, maybe -- paperwork, to implement all this because of budgeting and understanding the cost associated with everything. Is that true?

Dean: I don’t think it’s entirely true, but there’s some additional work involved. It’s like if look at our marketing economy, people do have to issue invoices and write checks. I guess that’s not quite as simple as a central soviet that just determines what every factory produces and gives them the money to do it. But obviously we all believe in market economics, at least outside the office, and that paperwork and invoicing and paying bills and such doesn’t seem like a big obstacle. I think we can make those administrative processes of market economics very streamline, very efficient, and the benefits are just so, Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems so outstanding. By the way, you need charge-backs to implement market economics. As I point out in that new book, “Internal Market Economics”, we can create most of the benefits of market economics without charge-backs. It doesn’t need to entail a whole lot of bureaucracy. It’s the opposite of bureaucracy; it should be much more fluid, customerdriven, and entrepreneurial.

Joe: Now, you wrote like I said earlier, seven books, and most of them were more the handbook style of the book. Why did you change the format and publish what I would call a more traditional book with “Internal Market Economics”?

Dean: Interesting. “Internal Market Economics” is the capstone of the last 15 years of not just study but practical experience out there implementing it. I found that I had to, like the little books that you mentioned, I had to teach a concept to an executive in one airplane ride, but I also had to explain a lot of detailed mechanics for the people who are out there actually building those processes; designing the budget process, designing the governance process, and so on. So the book is two in one; the front part is meant to explain the vision of market economics inside of companies, and the implications of that vision. Implications for things like metrics and sourcing and shared services and cost management and so on. So that’s kind of the executive portion of the book. And then the back half of the book is how you actually go about implementing it, right on down to the gory detail of the systems; there’s whole systems architecture in there and the processes that you need to design to make it happen. So it’s a full size book, this one. It’s more than one airplane ride.

Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems Joe: Right. I enjoyed the fact that you actually changed the type of page when you shifted from one to the other, and the two parts, because it automatically frames you in what you’re actually looking at and thinking about at the time. “Oh, I’m on a yellow page now, so I understand”, or it’s a beige, or whatever.

Joe: I see Lean companies discussing value streams, where the organizations are designed around a particular value stream, a more decentralized approach. Does internal market economics conflict with that model?

Dean: Absolutely not, in fact, it prices out that value stream and points out where we are the best value and where perhaps we should consider sourcing alternatives, where the process gets expensive, is an area where perhaps Lean should be applied. Lean works best, in my understanding, when you have a pretty well-structured process, a value chain from raw materials to the final product that happens day after day, fairly routine and well structured. When you get into a white collar setting like IT, you’ve got a variety of skills that mix and match in unique combinations on every project. Sure there are some methods that they have in common, but it’s not an assembly line.

So the challenge is far more difficult, it’s getting just the right talent on every team at just the right time, and engaging them in just the right accountabilities for each unique project.

On the services side of IT, even there while it’s more routine, the diversity of services is such that we’re taking the same basic capabilities, infrastructure, and talents, and mixing Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems and matching them to produce a whole variety of services. Whether it’s a virtual data center, or Windows instances, or Linux instances, or storage, all of these things are often sharing talent and sharing infrastructure. Getting all those combinations to work right is not a matter of a simple assembly line. So the beauty of market economics -- well, the whole business within a business paradigm -- is that it allows you to recombine the same set of skills in a variety of ways for different projects and services. That way people can really specialize in their particular competency and serve multiple processes and not be embedded in a single process.

Joe: Dean, would you explain how you perceive Lean and your model fitting together?

Dean: Once we have done enough of these walkthroughs so that we know who’s prime and whose sub on all these different kinds of projects and services, you’re going to start to see some subroutines, as it were. You’re going to see some “prime goes to sub goes to another sub” happening again and again. As soon as you see those patterns, then it would be worthwhile to come in and with the more traditional Lean toolset, look at how that flows and see if that can be optimized. Then you can come in and with the traditional toolset optimize those processes. I think a wonderful example of that is the DevOps movement, which is not making a recommendation about structure.

I think the spirit of Lean is right on. It’s exactly what we need. The tools that the Lean community began with came from, I think, a manufacturing world of routine, wellstructured processes. I hope what I’m offering here is another toolset that pursues that same spirit of entrepreneurship and best value and proper treatment of people. A toolset Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems that applies, in cases where you have complex processes that are different each time and where we’ve got to re-combine skills, the same set of skills in many different processes at once, essentially, the white collar world.

Dean: Yes, the white pages are the executive concepts, and the back buff colored pages, those are the details for the implementers.

Joe: When you look at this type of process, who needs to be the driver of it? Does it need to be the CFO, or the CIO? Who’s the driver of this, who needs to take hold of it?

Dean: Ah, well, if you’re going to attempt a significant restructuring, obviously this is got to be an executive decision. So a CIO or a C-level, whatever your function and the leadership team at the next level, really has to want to do this. I don’t think a C-level can force this on a leadership team that isn’t prepared. It just won’t work right. Everything I do is done in a participative way. So we’ve got to engage the leadership team because they know how things really work and they’ve got to buy in to make it work. So it becomes a significant transformation project at that level to get it right. But with that said, I think everybody, even entry level if they start thinking of their jobs as entrepreneurial and understanding what their products and services are and who their customers and suppliers are, if you just start thinking that way, and start behaving that way, you’re going to succeed better. It’s going to help you. I would say the concepts apply to everyone all the time at every level. The transformation requires leadership team commitment.

Joe: Is there a certain type of company that benefits from this model, and maybe another Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems type of company that shouldn’t try this model?

Dean: I haven’t seen that, to be honest. I’ve implemented the business within a business paradigm through all of those dimensions -- culture, structure, and internal economy -- I’ve implemented that in the federal government, state government, local government, not for profit, charity, as well as a bunch of corporations around the United States, Canada, and Guatemala. People are people, and human nature is what it is. The principles we’re talking about are the way we treat people and the way we set up an environment in which people work with one another and prosper. And I don’t think that varies by industry. Certainly the content of their work is going to change, but the organizational issues seem to be pretty much the same wherever I go.

Joe: I found the books, and your books, even the ones written in the 90’s are very interesting because they’re people books. You first pick them up thinking you’re going to get more of this structure, this elaborate structure, and all this other stuff, but they’re about people and interactions between people.

Dean: Absolutely right. I think of organizations as machines that send signals to people that guide their behavior day by day. Not that, people are machines, not by any means, but the organizational ecosystem we all live in is a fairly predictable environment. And it sends signals that either guide people to do good stuff or bad stuff. Let me give you an example. Let’s say I tell you we’ve got to run lean and mean, we’ve got to save money, I need you to conserve head count, I need you to focus on value and keep your budget down. But, let me explain in this fictitious company, your title, your political clout, your Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems ability to get things done, in fact, your salary and benefits, all depend on how big of an empire you run.

Well, what would a rational person do? You wave your arms about saving money, and you build empires! That’s what we’re paying you to do. That’s an example of a perverse signal built into that ecosystem that would cause great people to do the wrong thing. So we say well, let’s get this guy Joe out of here, he’s not a team player, he’s building his empire instead of teaming, bring in a more capable person. What’s the more capable person going to do? Build empires faster. It’s systemic.

My focus, throughout the 30 years of my career, has been on identifying where those signals come from, and I believe the first and foremost job of a great leader is designing an organization in which everyone can succeed with or without her, by systematically programing those organizational systems. And the big three -- culture, structure, and internal economy -- are the transformational ones. They determine the character, the shape, the feel of an organization. There are two minor dimensions -- methods and tools – IT, for example, would be, the best practices, and last, metrics and rewards, the dashboards. You know the people who say, you want to fix it, measure it? Those are the people who are doing minor change. Change on the margin, not transformation. Because in fact, those are used to lock down the new paradigm and to fine tune it over time. So the big three, culture, structure, and internal economy, create the shape of the organization.

Methods and tools, metrics and rewards, come later for institutionalizing and fine tuning.

Joe: What is upcoming for you? Do you offer some webinars or some different structure for Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems people to learn more?

Dean: I love teaching, and I love implementing, so I’m always happy to meet someone on the phone, I do executive coaching, I sometimes come in and do a workshop, typically within an organization or a webinar for an organization, and ultimately for the great leaders who are out to build a legacy of a great organization, I work side by side with them on implementing all of these concepts. I’m involved in implementing Full Cost, that’s the planning part of internal market economics, in a couple of organizations right now. I’m working on the structure in another organization for the CEO. There’s always a new challenge out there.

Joe: What’s the best way for someone to contact you?

Dean:

I love hearing from people! Email us or give us a call.

Joe: And your website is. . .

Dean: The website is NDMA.com. If you are interested in internal market economics go to FullCost.com. In both cases, you’ll see a navigation bar on how to contact us. Let me hear from you! I love talking about this stuff, I love hearing what you’re grappling with and helping you figure out what your next steps might be.

Joe: I do have to recommend your “Building Blocks Approach for Organization Charts”. The deeper dive, “The Internal Market Economics” book is excellent, and I went through it Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems thinking, I’m going to browse through this and do an interview and stuff, and I found myself caught up in it, there’s a lot to digest in it! I think this is a book that I’m going to have around for a couple months on the side of my desk.

Dean: Thank you for saying that Joe, I’m honored! Behind these things is what I call studies. So for a leader who’s actually ready to implement it, you know that little blue book, what is it 110 pages? That gives you the basics of structural cybernetics; the lines of business within organizations, those questions on how to combine the building blocks into a great organization chart, how to build the processes, it gives you an overview. Behind that is an 800 page study that we use for actually implementing the process. “Internal Economics”, what does that come out to, 370 pages, behind that are studies, multiple studies for various modules within that framework for implementation.

When we actually implement transformations, it is a fine process; here’s a workshop, here’s a homework assignment, here’s another workshop; and here’s all the documentation to go with every step of the process. These are tested processes.

Joe: I do appreciate it. The podcast will be available on the Business901 blog site, and the Business901 iTunes store. Thanks again, Dean.

Dean: Thank you Joe, it’s been fun talking to you.

Show me the Money – The Truth about Performance Copyright Business901

Business901

Podcast Transcription Implementing Lean Marketing Systems

Joseph T. Dager Business901 Phone: 260-918-0438 Skype: Biz901 Fax: 260-818-2022 Email: jtdager@business901.com Website: http://www.business901.com Twitter: @business901

Joe Dager is president of Business901, a firm specializing in bringing the continuous improvement process to the sales and marketing arena. He takes his process thinking of over thirty years in marketing within a wide variety of industries and applies it through Lean Marketing and Lean Service Design.

Visit the Lean Marketing Lab: Being part of this community will allow you to interact with like-minded individuals and organizations, purchase related tools, use some free ones and receive feedback from your peers.

Show me the Money – The Truth about Performance Copyright Business901