Steven Spear SM '93 analyses the framework of relationships and interactions by which an organisation runs to better harness the intellectual horsepower distributed throughout the enterprise.

In almost any industry, some few companies dramatically outperform their peers and near-peers, generating and delivering far more value to society by getting far more yield out of the resources and opportunities available to them, says Spear.

These companies do so because they far better manage the organisation’s 'social circuitry' – the overlay of processes, procedures, and routines by which the work of individual specialists is integrated into collective action towards common purpose.

Getting social circuitry right means far less distraction for people trying to figure out where they fit in and how their efforts must coordinate with others, leaving much more of their intellectual horsepower to focus on hard technical and social problems, says Spear.

"The very best enterprises give a lot of attention and have uncommon skill in creating the conditions in which all brains can be engaged consistently on the hard technical and social problems in front of them, without the huge overburdens of communication, coordination, and the like that too often suck up those cognitive resources.

"As a result, the very best predictably outperform those who did not manage in this way," says Spear, a senior lecturer at the MIT Sloan School of Management and principal of the See to Solve software and management advisory consulting firm in Newton, Massachusetts.

 

In one recent example, Spear worked with scientists at a pharmaceutical company to harmonise efforts in an early-stage phase of drug development called hit-to-lead: taking molecules that have been identified by high-throughput screening as potentially effective treatments and figuring out how to turn them into bona fide candidate compounds warranting further development.

“By mapping better who should be in conversation with whom, about what, when, in what fashion, we were able to get that flow of ideas from gestation through maturation to delivery, a process that typically took more than a year, and get it accomplished in less than six months,” says Spear. “And the candidates passed on as leads for development were better.”

A similar earlier effort, described in Spear’s book The High Velocity Edge, helped Pratt & Whitney cut by a quarter its jet engine development time while simultaneously delivering unmatched performance. After losing a series of contests for both commercial and military programmes, the company won the contract for the F-35, a fifth-generation fighter jet for the US Air Force, Navy, and Marine Corps.

This emphasis on getting right the social circuitry of an organisation is so critical because all work is knowledge work, even in the most industrial and technology-intensive situations, he emphasises.

“The job of leaders is in part to create conditions in which everybody can give fullest expression to their knowledge and skills. This whole engagement of everybody’s brain – individually and in collaboration – is so critically important because in most of the problems we encounter, across any societal or economic vertical and across any phase of value creation, we're engaged in a process of discovery,” says Spear.

“We have to figure out what problem we really need to solve, why it’s actually occurring, what corrective actions will address it effectively, and how to bring those ideas into action.”

Cutting the cost of coordination

Organisations that fail to continuously develop, deploy, and constantly fix the social overlay face grave consequences, he says. People end up stumbling on tasks when they don't know how to reach out quickly and effectively to their counterparts who can respond with needed information, insights, or decisions.

Instead, getting things done too often requires those in frontline work to reach up five, six, or seven layers of administration, hoping that those at the top will cut across to some other silo and then reach down several layers to effect change.

This was exactly the problem engineers faced at Pratt & Whitney, before the changes affected during its pilot – having to escalate any problem to the most senior engineers before getting resolution, says Spear. This issue impacts everybody, be they mechanics in large-scale industrial operations, clinicians in medical practices, or software engineers in the most 'cutting-edge' tech firms.

Economists have a term for this problem: the cost of coordination. Practitioners in such situations have a less esoteric term, says Spear: it’s an (expletive) headache. The cost can be huge in terms of aggravation, time, and lost creativity, and the cost grows steadily with the ultra-fast evolution of technologies and markets and the increased complexities of the systems we have to design, deploy, and operate, he says.

 

His fascination with the ways in which managers and leaders can create the conditions in which individual employees can give much fuller expression to their intellectual potential goes back to Spear’s arrival at MIT, where he graduated in 1993 with master's degrees in management and in mechanical engineering.

“American industry was getting clobbered by Japanese companies,” he remembers, “and there was this institute-wide commitment to figure out why and do something about it”.

MIT launched several efforts under the Industrial Liaison Program, the Japan Program, Leaders for Global Operations, and other groups aimed to better understand the challenging work of managing people responsible for inventing, producing, and utilising complex technical systems.

“What kept coming up was that the competitive advantage wasn’t gained in a first-order fashion from the engineered objects on which people worked – those were ultimately outputs people generated,” says Spear.

“Nor was long-term advantage contained in the technical equipment through which people worked – that too was the output of a collaborative design and development experience. Instead, advantage was the result of the management systems by which those tools and those objects were invented, with innovative ideas created about their best possible use. The interaction of social systems overlaid on and generating technical systems was [and is] the key.”

Clearing the way for discovery

Spear’s client engagements follow the MIT ethos for discovery and exploration. “We take quick, small, non-disruptive steps first, to get feedback that's fast, that's frequent, that has high fidelity to the operating environment, that has high accuracy and that's easy to interpret,” he says.

“When we get confidence from iterating at one scale, we can scale up to the next. In effect, we try to bring the discipline and rigour of laboratory sciences into the field of social systems.”

Starting with the pilot, Spear works with his clients to dive deep into the nitty-gritty details of the individual component functions that must be performed in order to meet the given goal. “Then we start figuring out the dependencies among these different tasks, the natural sequencing of work, out of which the enterprise’s 'architecture' emerges, defined not only by role and responsibilities, but also by relationships.”

That part is critical. Most organisations, he says, give too little attention to relationships and the practical questions of who depends on whom to get work done, and how those interdependencies should be managed in terms of work flow, communication, and coordination.

“Once we start getting into these questions of roles, responsibilities and especially relationships, then we can start to see what the circuitry looks like,” says Spear.

“And then, once it emerges out of this recursive identification of interdependencies, we try to formalise the circuitry, so people are in the right collaborative, creative conversations with the right other people. And if the circuitry isn’t working, and coordination and collaboration become viscous again, we rewire it.”

Spear has proven this approach works in many high-payoff engagements with manufacturers, military organisations, and dozens of other large enterprises.

“The time and energy required to coordinate goes way down,” he says. “How your work and my work fit together becomes natural, obvious, and intuitive. And we can use our creative energy to focus on the problems for which we assembled in the first place to solve.”

After 30-some years, Spear’s enthusiasm about creating outstanding management systems is greater than ever. “Whatever people can contribute towards common purpose, all of those individual contributions can harmonise and integrate in such beautiful fashion to generate so much more value that can be delivered into society than otherwise would be the case,” he remarks.

“Managers have this huge opportunity to provide their colleagues with much richer, more rewarding experiences each and every day and, in doing so, contribute to society’s wellbeing. Who wouldn’t want to get out of bed in the morning with that as a possibility?”