June 29, 2023 • 41 mins
In this episode, Pascal Dennis answers the question "Is Lean enough?". Looking at where the Toyota Production System has taken us so far, and why it falls short to tackle the complexity of the modern era.
Pascal explains that whilst TPS provides an excellent foundation for organizations, it takes more than that to set the future for innovation in the digital world.
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Episode Transcript
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(00:08):
[James] Hello, and welcome to anotherepisode of the Strategy Hero Podcast.
The podcast that's all about divinginto the world of business strategy,
transformation, and operational excellence,
featuring insights and experience from someof the most successful leaders in the field.
Today, I have another fantasticguest that I cannot wait to talk to.
Pascal Dennis.
Pascal is something of a Lean legend,
(00:28):
an entrepreneur, engineer, and author.
Pascal is a four-time winner of the ShingoPrize Winner for Operational Excellence.
But he's also a co-founderof Digital Pathways,
which helps forward-lookingorganisations design, build,
and scale compelling digitalproducts and new business ventures,
which is something that I'msure today we'll get into.
(00:50):
And it doesn't end there.
He's a composer, musician,and also a student of Aikido.
But for us today, he is our strategy hero.
Pascal, lovely to see you.
[Pascal] Thank you, James.I appreciate the invitation.
[James] Lovely to have you on board today.
Although I know a lot of our listenerswill already be familiar with your story.
(01:13):
Having read the likes ofGetting the Right Things Done.
Could you just give, forthose who aren't so familiar,
just a really quickrun-through of your background
and how you got introducedto the world of Lean?
[Pascal] I'm a chemical engineer bytraining. I spent the 1990s at Toyota.
I was lucky enough to experience thewonderful mentors and great senseis.
(01:39):
I started Lean Pathways in the year 2000,
hoping that we could do for our partners whatour Japanese senseis did for people like me.
And about five years ago,I started Digital Pathways,
which reflected my growing interest indisruptive innovation using digital methods.
(02:02):
And here we are.
All these years later, I'm still having a lotof fun working with wonderful, marvellous
partners and lucky enoughto still be learning.
[James] I've personally enjoyed getting to knowyou over the last six or so months, Pascal,
and I think having readquite a few of your books,
myself and some of mycolleagues, one of which
(02:24):
is I'm fairly sure obsessedwith Atlas Industries.
I think it's an honour for us tobe able to have you on the podcast.
[Pascal] Thank you.
[James] It'll be greatto get your thoughts.
I mean, as we're going through kind ofwhat we could be talking about today.
One thing kept coming up, and I think
(02:45):
it's something that our audienceis going to love listening to.
So without further ado,
is Lean enough?
[Pascal] I don't think it is anymore.
I don't want to be misunderstood.
The methods of the Toyota productionsystem are as powerful as ever.
(03:05):
They're simply no longer sufficient.
So Lean Toyota production system
provides an excellent foundationfor protecting your core business.
But nowadays,
you also have to be ableto ignite new growth using
the digital methods pioneered inthe innovation hotspots of the world.
(03:29):
Places like Silicon Valley and Singapore,
where I've spent a lot of timethe last five or six years,
and it's been really transformativefor me. So the good news is that
Lean slash Toyota's productionsystem lays a wonderful foundation,
helps you protect the core business.
The challenge is we have to learnnew mindsets, new skill sets
(03:52):
to ignite new growth in a very differentworld than perhaps what we were used to.
[James] So one of the things thatI feel that we find a lot with
our audience over [inaudible]is that they have a very clear
mindset and culture coming fromsort of the Lean background.
(04:14):
And what comes with that isa very clear set of skills.
Is there a world that youcan go beyond that sort of,
this is how we've alwaysdone it, sort of mindset.
Is there a world beyond common lockers
and countermeasures and
really a way that people whohave grown up on this system
(04:37):
can take what theylearned perhaps and either
put it to the side orbuild upon it effectively?
[Pascal] Yeah, I think the keyis to understand something that
Aristotle, the great philosopher,
arguably the father of modern philosophy,
(04:57):
something Aristotle said many years ago,
he observed that thereare two worlds, in fact.
One world is that in whichthings cannot be otherwise.
In other words, the worldof science, physics,
I'm a chemical engineer of theToyota production system of Lean.
And in that world, thingscannot be otherwise.
(05:19):
If you define and implement agood value stream, a good process,
and you understand your bottlenecks,you elevate the bottlenecks,
you reduce waste, delay, etcetera,
throughput will improve.
Lead time will decrease.It'll happen every time.
That's the nature of thatworld. It's predictable.
(05:39):
But there is anotherworld Aristotle tells us,
and that is the world ofthings that can be otherwise.
And that's the world of taste,of public opinion, of psychology,
of politics, for example.
And in that world, things can be otherwise.
(06:01):
For example, a customercan say in a focus group,
oh, yes, I really like that.
I would definitely buy that.And then they don't buy it.
That's very, very common.
This other world, in fact,
is volatile.
It's uncertain, it'scomplex, and it's ambiguous.
And the skills that we learned in thefirst world do not necessarily apply.
(06:24):
As I suggested earlier, theydo lay a nice foundation,
they'll protect our core business. Butif you want to excel in the second world,
you have to develop differentskills and a different mindset.
And I call this becoming ambidextrous.
Much of my personal practice now isworking with boards and senior teams,
(06:44):
helping them understand ambidexterity,
it's no longer enough tobe good in the first world.
It's no longer enough to be good at Lean.
If, for example,
you are a supplier of a combustion engines
or parts for combustion engines,
you could have the best changeover,the best production lines,
(07:06):
the best supply chain in the world,and your future will still be bleak.
So it is what it is.
And, in a sense, we'revictims of our own success.
You know.
But, on the other hand,
it's a wonderful opportunity togrow and to learn something new.
(07:27):
[James] I think for people likemyself that come from probably
the former world that Aristotle spoke of,
talking to someone like yourself andlearning about the Toyota production system
and learning abouteverything to do with Lean,
it's challenging because you comefrom a very clear background,
(07:50):
that is probably more creative.
There are elements ofscience definitely involved.
And I guess for me, whatis very interesting is that
from our conversations, it soundslike you have found a way to almost
merge those two sort of worlds. Theyare quite similar. I mean, sorry,
they are quite dissimilar in many ways.
(08:13):
But also, there is a way thatyou can bridge that gap, I think.
In terms of skills.
What sort of challenges are youseeing, you know, in your engagements,
when you go into thesebig, big organisations,
what are people responding to in theC-suite? How are people responding? Sorry,
(08:34):
in the C-suite,
when you are asking themabout changing, you know,
well-formed habits and, and mindsets.
[Pascal] What I've experiencedis a sense of anxiety
because these are veryaccomplished people, good people,
(08:54):
that wanted to do the rightthing for their team members,
for their company, for the community,but they don't know what they don't know.
So, really there arefour blockers that I help
boards and c-suites withwhen it comes to creating,
developing this ambidexterity,
(09:15):
this dual capability if you will.
The first blocker is ignorance.
So people do not knowthe required skill set.
They do not know the basics, for example,
of design thinking oragile ways of working,
or Lean experimentation.
Let alone the transformative technologiesthat are changing every day and every week.
(09:39):
There's a new ChatGPT,
and gosh, what does that mean for us?
What does it mean forour marketing department?
What does it mean for our customers?What does it mean for da, da da?
So,
there's ignorance of the skill set.
Ignorance around the mindset.
So for example, maybe I am a chemical engineeror a superb auto plant factory manager
(10:04):
or executive.
But do those skills applyin this uncertain world,
volatile, uncertain,complex, ambiguous world?
So
That's a source of ignorance.
A third is what kind of a culture do Ineed to succeed in this second world?
(10:27):
The second blocker is fear.
As I said, there's a lot of anxietybecause these are good people
that want to do the right thing,
and they don't know if they can do it.
So a big part of mypractice is helping them
work through the ignorance andthereby start to assuage the fear and
start to feel,
okay, I think I get this,
(10:47):
and everything I've learnedup until now is not wasted.
It's a good foundation. butnow I need to learn new things.
Just an example of how what you've learned inthe first world applies in the second world.
So Lean experimentation is the meansby which you dispel the uncertainty,
the fog that you deal with whenyou're trying to create something new.
(11:10):
A new customer journey. A newoffering, our new business.
And the way you dispel that fog,the way you illuminate the darkness,
the unknowns, the known andunknowns, is through experiments.
But the experiments have to be much,
much quicker than we're used to,
say in a factory or in a supply chain.
Because you're in this volatile,uncertain, complex, ambiguous world.
(11:33):
It's not as predictable as thesupply chain or as the factory.
At any event.
So the first block isignorance. The second is fear.
The third is guesswork.So to ignite new growth,
you've gotta create new journeys,new offerings, and we have no data.
So how do you move forwardif you have no data?
(11:56):
The answer is you create your owndata through Lean experimentation
and related methods.
And that takes time and thattakes capability building.
But it can be done.
And the fourth blocker is one thatwe're familiar with in both worlds.
And that's scatter,
that's a diffusion of effortbecause we don't understand
(12:21):
where we are in this volatile world and we'repressing buttons hoping something works,
and that creates thisscatter and diffusion.
So yeah,
those are the four biggest blockers.
And as I say, I spend a lot of my time withboards and C-suites on those very things.
[James] What are some of theexamples? What are some of the tools
that you put to use when you are trying to,
(12:45):
I guess, ease some of that worry,
some of that anxiety overthe change that comes with?
This is unfamiliar, this is somethingthat I cannot apply this toolset to.
What are some of the examples andtools that you would normally put
to use in that sort of situation?
(13:07):
[Pascal] We have one methodor offering that we call
The Digital Executive Forum
wherein we connect a senior team with theircounterparts in the world of innovation.
So, for example, tech companies that
(13:28):
can demonstrate the best in class practice.
So, for example, if I'm abanking or insurance executive,
we can create a digital executive forum withtheir counterparts in the FinTech community.
And the Fintechs will show here isthe best practice in a given field,
in a given endeavour, in a given business.
(13:49):
And, you know, you talkwith them, you have coffee,
maybe we have dinner together, and thenmaybe we take a group of executives
to an innovation hotspot.
So we've done this inSingapore, for example,
where I've spent a lot of timein the last five or six years,
and let's visit some innovation labs andaccelerators in that vibrant ecosystem.
(14:11):
And then you start to see,okay, yeah, I think I get this,
I think I get this, this can bedone. And it's not that dissimilar.
I see a lot of experimentation,a lot of visual management.
We have a lot of playbacks, alot of stand-up meetings, and
yeah, that I understand.
So you start to desensitize the seniorleader and say, well, maybe I can do this.
(14:32):
That's just one example. Theother key countermeasure is,
just executive mentoring.
We've developed an "I offer 101",
which is protect your core business.
"201 Ignite New Growth."
And that's biweekly executive mentoring.
We have three-hour sessionswherein we learn by doing.
(14:54):
So this week's session ison Lean experimentation.
Here's a demonstration, here's anexample of a video or a case study.
So now let's go to the innovation lab,
and if we don't have aninnovation lab internally,
let's go to one of our partnersand see what that looks like.
Oh!
And then they see rapidideation, rapid experimentation,
(15:17):
the reflection, what have welearned, what does it mean? Okay,
what are the next experiments?And then they start to see,
whoa,
this is different than what I'mused to, but it's also similar.
I think we can do this, you know.
So two answers.
Digital executive forumand executive mentoring
is a good countermeasure I find.
[James] What do you find the typical lengthof time it takes for one of these executives
(15:46):
to go from,
this is the way that I do things to, okay,
now I've seen that itcan be done differently.
And then how long would it takesomeone typically to go from that,
Oh, I'm not quite sure,to now I have the tools,
I have the know-how, andI'm putting into practice.
Is there a standard or atime or does it really vary,
depend on industry andexperience, etcetera?
(16:10):
[Pascal] Probably on the order oftwo years, of course, you know,
plus or minus is based on experienceand the depth of commitment,
the culture of the company, etcetera.
One of my...
I had a session with one of myfavourite mentees if you will.
He's the president of awealth management company.
(16:32):
And he's, you know, a showcase for us.
We're very, very proudof Louie and his team.
And it took him about two years
to lay the foundation to protectthe core business and then
build, ignite new growth,you know, the second gear.
And they're just doing great.
And he's proselytising and he's saying,this is really great, you can do this.
(16:54):
So, we have other wealth managementexecutives that are, you know,
sort of tugging on my sleeve saying,
you know, can you help us do this?
How long will it take?
So, okay, well, sure.
[James] What sort of results do you see?
Do you think that it'simportant for Lean to be
(17:15):
at the foundation andthen to build this on top?
And if that's the case,
what's the results? Whatthe difference from,
okay, we're running, you know,
we're running our operational excellenceprograms and they're delivering X, Y, and Z
by layering these new skills on top.
(17:37):
What sort of material changedoes come about in terms of
whether it's revenue, whether it's savings,whether it's taking new products to market?
What is the, you know,
what are those sort of key numbersthat you can point toward and say,
this is clearly making a difference?
[Pascal] Yeah. We've gotquite a bit of data on that.
(17:57):
In terms of speed to market,
the improvements are 50%.
Terms of improvement and throughput.
The number of innovations youbring to market it's typical
to double the throughput a profitability,
increases 30% roughly.
Because,
there's so...
(18:18):
the method we use is,
you map the existing customer journeyand then map the value stream,
the internal processes that created it.
And by mapping pain points in the customerjourney to blockers in the value stream,
you unleash enormous amounts of value.
(18:39):
What we find interestingly enough is that
the most painful points inthe value stream coincide with
the biggest waste in the value stream.
What we're doing is bufferingweaknesses and it doesn't work
because we still have this awful pain.
So, in any event,
by mapping the two pain points in thecustomer journey with the internal blocker,
(19:02):
you unleash,
release an enormous amount of waste.So on top of the improved throughput,
new offerings and improvedcustomer experience,
you also tend to reduce costs as well.
In one particular, this wasa major bank in East Asia,
the pain point was the so-calledknow-your-customer process.
(19:22):
In other words,
how long does it take for me whenI apply for, you know, an account,
let's say I'm a business,
I want to get a commercial accountgoing in whatever Hong Kong or,
you know, Bangkok or something like that.
And the cycle time wassomething like two weeks.
And to provide that awful service,
it was something like 800full-time equivalents,
(19:46):
20 software systems internally,and a bunch of other buffers.
So that terrible customer experiencecoincided with this huge cost.
And that's a pattern that we see.
[James] That's incredible.
[Pascal] Yeah.
[James] That's a lot of wastage.
[Pascal] Yeah, often thereport out to the C-suite is,
(20:07):
did you know?
Did you know that to provide this awfulexperience to prospective new customers,
we are spending this amount ofmoney and hassle and software.
And usually it's:
What? What?
[James] Something that I'venoted as we've been talking
(20:28):
is it sounds like the, you know,
you're talking about value streamsand customer journey mapping,
ideation and Lean experimentation.
It sounds like there are,
there must be, correct me if I'm wrong,
there must be a lot of crossover here ofexisting tools that you might be using.
So that,
(20:49):
am I right here thinking that light bulbmoment is not just because people are
being shown how to do this? It'slike, okay, now I noticed that tool.
Well, that tool is a little bit similarto the other tool that I might use.
Is it fair to say that
one of the, perhaps, the accelerators inthis sort of journey that execs take is
(21:14):
familiarity with a toolset
and being able to transfer it?
[Pascal] Yeah, so as I said,
if you have, a good Lean slashoperational excellence system
that gives you a nice foundation to do thecustomer experience reform I just described,
to create new customer journeys
or new offerings because manyof the tools are transferable.
(21:39):
So, as I said,
the most basic level of innovation iscustomer experience reform, as I described.
We have an existing customerjourney. It really sucks.
We map it back to the internal value streamsand processes that are creating that.
And the most immediatebenefit is you can see
where you should focus yourvalue stream improvement.
(21:59):
So initially, you'll haverapid improvement events.
So typically, in our partners,
the first year or two might be somerapid improvement events at pain points
highlighted by theprocess I just described.
But then we have to take to the next level,
which is let's improvethe customer journey.
And that entails working externally,Lean experimentation, often,
(22:22):
digital methods to understandthe customer's journey.
I know, I like, I trust, I'lltry this product, I'll buy it,
I'm going to buy it again,
I'm going to tell everybody.
That's the customer funnel as we call it.
And that requires understandingthe conversion rate set every step,
and thereby understanding the bottleneck
and elevating the bottleneckthrough Lean experiments.
(22:47):
I hope that's not too technical,
but just give some idea of how this works.
[James] Okay. Definitely notfor this for this audience.
One thing I'd be interestedto know about is,
in my experience when Ihave learned, you know,
dipped my toe a bit more andmore into Lean and into Hoshin,
(23:12):
and PPM,
I've been able to borrow from the learningsand the experiences of my colleagues.
I've learned a lot of stuff fromtalking to yourself, Pascal,
and there's a lot morepeople like yourself that
I've had the chance, thefantastic chance, I should say,
to talk to and learn from.
Internally, then I just wanted to kind of,
(23:34):
to kind of look towards maybe someblockers to this, because in my mind,
this is, you know,
this is no different fromdeploying a strategy.
And what are the, you know,
when we talk about blockersto strategy, execution,
and successfully deployingthat and delivering results,
there are some very, veryusual suspects that pop up.
(23:57):
Am I right in thinkingthat those do pop up?
And, if so, what are they
and how do you normally overcomethose things like Silos and
communication issues when trying to spreadthis new approach throughout the organisation?
[Pascal] The most common blockers tooperational excellence, Lean, if you will,
(24:20):
remain as you said, Silos, misalignment,breakdown in communication,
lack of visibility, theabsence of prioritisation,
those all,
those all exist and we have to address themin the ways that successful companies have
for some years.
(24:42):
The additional blockers toigniting new growth are, as I,
or similar to what I talked about earlier.
There's ignorance of the skill sets
and the mindsets.
Some of them are similar.
So Lean experimentation isnot dissimilar to the kind of
(25:02):
controlled experiments we might run in aproblem-solving exercise in the supply chain.
But they're different in fundamental ways.
One is the speed.
So for example, we have to learn how torun experiments much, much more quickly
than we do in the factory.
We have to master social media tools.
(25:25):
One of the nice things about digital isthat you can accelerate a customer through
the customer funnel through short videosthat are engaging, that are funny,
that are based on thecustomer's jobs to be done.
So you can, as a smaller company challenge,
you know, a giganticcompany, very effectively,
(25:47):
there are many, many stories about that.
A cultural element isa very common blocker.
We're facing to a certaindegree, the innovator's dilemma,
and we have to get over that.
The innovator's dilemma,
famously described by one of my heroes,Dr. Clayton Christensen, is that
(26:10):
the return on investment of POVs, proofof values, innovations, if you will,
is very low initially.
So the quote-unquote rationalthing to do is to continue doing
what you've always done.
So a rational accountant, accountantwould look at your existing offerings,
(26:32):
and you get an ROI of 10%.
And then you look at an innovationportfolio whose ROI is zero,
and all the conventionalaccounting methods,
what's the revenue? Zero.
What's the market share? Zero.
What's the profit? Zero.
So the rational things to dowould be shut down the innovation.
(26:54):
So we've gotta get past theinnovator's dilemma, and that entails
learning new tools likeinnovation accounting
with an innovation portfolio forthe first part of it at least,
and often well into theearly stages of the launch,
we're using traction metrics and notgenerally accepted accounting principles.
(27:17):
At some point, you switch to revenue,return on investment, etcetera.
And that takes skill to knowwhen to change the scorecard.
So that's a common blocker. A thirdone, and this might be the biggest one,
is that innovations often
threaten the existing business.
(27:37):
So, for example, this is a case in banking.
It was a commercialdivision in a major bank.
And we were working on aninnovation which would allow
a commercial customer,let's say a small business
to make an application and receive theloan in 48 hours from their smartphone.
(28:04):
And the results were extremely promising,the customers loved it, etcetera.
But it met with resistance fromthe existing commercial leadership,
commercial banking leadership because,
and he was quite honest with me.
He said, look, you know, we've got2000 people in this group here.
(28:25):
If this proof of value goes tomarket, what happens to those people?
Or are they all out of business?
So that's an understandable tension,and you've gotta address that.
So you've gotta create strategic space,
physical space, financialspace, emotional space,
cultural space for innovation.
(28:46):
That might be one of the biggest blockers.
Because what will happen otherwiseis the innovation will be handed off,
quote-unquote,
to the business and quietly decommissionedand you never hear about of it again.
Which is why innovation is so hard in,
especially in larger organisationswith the best of intentions.
[James] Yeah, I know that experience.
(29:11):
I worked for a Teleco.
I was leading the product marketingside of developing a new product.
And it did require a significantchange to the business model.
One, which after a coupleof rounds of travelling
(29:32):
did suggest that thatshift would result in,
you know, those things that you mentionedthere in terms of there's an emotional impact,
there's potentially a humanimpact, with personnel.
It did get shelved. And I think, it'sgreat that there's something like this
that you are offering that couldhelp executives to navigate
(29:56):
those tough challenges thatcome along with innovation.
Out of interest, in thatsort of situation, therefore,
how would you coach, in my example,
that executive who was presented with a newproduct that would alter the business model,
but would not only generate mass savings,
(30:21):
but change the revenuetrajectory of the organisation.
How would you deal withthat positivity there,
but also that negativity of it wouldlead to some sort of structural changes?
[Pascal] Well, it's an impossiblediscussion to have at that moment.
(30:41):
You know, it's really too late.
What needs to happen is we have tohave that discussion two years earlier
with the board and with the C-suite.
And we have to educate them onthe nature of dual capability,
protect your core business, ignite newgrowth, and in the likely scenarios and
(31:04):
blockers that we're going to face,
and we have to commit asa board and as a C-suite
that we're going to see this through.
We're going to create the space,financial, physical, emotional,
cultural, strategic space forour innovation activities,
whether it's an innovation lab or anaccelerator or call it which you will.
(31:26):
And we're going to provideexecutive air cover
when the blockers inevitablyarise, whatever they might be.
And we're going to commit to ascale-up process that's fair.
That's just that offers peoplethat are affected by an innovation
(31:49):
retraining, for example.
Or if they don't want to be retrained,
coaching and how to start a new careeror how to retire, whatever it is,
you've got to plan all that out in advance.
That relates to one of the keyelements in our model, you know,
(32:11):
it's the pragmatic innovators network.
We have to create internalcapability to sustain innovation.
We have to be able to generateideas, screen ideas, monitor ideas,
and then launch the successful ones.
And that requires building businessin the so-called middle management.
So, that means,
(32:33):
you know, a program to build thecapability, to build the skill set,
to give them practice and the meansfor them to get involved in innovation.
And that could be as simpleas a Shark Tank-like process.
We've used that successfully.
So people pitch to, we callit an innovation council,
but it's an internalShark Tank if you will.
(32:58):
So these are the kind of discussionsyou have to have in advance.
In fact, our transformationmodel has three parts to it.
I can describe it if you'd like.
If that'd be helpful, butthere's three parts to it.
And the intent of the model is to answerthese questions in advance so that
we're not faced with the scenario youtalked about where an exec says, okay,
(33:19):
this puts, you know,2000 people out of work.
Well, that's too late.
We should have had this discussiontwo years earlier, you know,
so that we'd have a countermeasure.
So no, they're not going to be out of work.
They're going to be dot,dot, dot, dot do, right.
They'll be taken care of becausewe've made that commitment.
[James] So I think, I mean, that would'vebeen very useful in that situation.
(33:42):
It would've been very, very useful.
But I think,
for anyone listening that has gonethrough something like that in terms of,
new product introductions,
it's challenging and I think there'sa lot that we've heard from you today,
Pascal, that I think wecould probably, we have...
we have spent hours talking about.
(34:05):
If I were to challenge you for onesecond to offer one piece of advice
to leaders who want to adopt
a new mindset, a digital growth mindset,
what would that one piece of advice be?
[Pascal] I think it would be
(34:26):
create the space for innovationin the ways I described.
Strategic, cultural, financial, physical.
Understand the blockers are powerful,
work through the kind of scenariosthat I've described earlier.
It would be secondly,
to provide executive aircover for innovators,
(34:49):
understand the blockers.
Understand the blocker's point of viewand address it as well as you can,
build the needed capabilitythroughout the organisation.
So, our model fundamentally isexecutive development through mentoring.
The second element iscreating what we call,
a pragmatic innovator network internally.
(35:12):
It's a critical mass of peoplethat have the fundamental skills.
And then the third element ofthe model is innovation projects.
A balanced portfolio and thesethree support one another.
So, in summary, give people the skills,
create space for innovation,
(35:33):
and provide a culture that willsupport and sustain innovation.
There's another metaphorthat we use for that.
It's a tree metaphor.
The metaphor begins with the soil.
So you've gotta create arich culture skill sets.
The mindsets are there.
So the necessary nutrients.And then you create this trunk.
(35:56):
The trunk is a pragmatic innovator network.
People understand thefundamentals of of innovation,
not just the technology, theeight essential technologies,
but also the methodologies, the Leanexperimentation, design thinking,
and the rest.
And then you strategically decidewhat kind of fruit do we need?
So you want an innovationportfolio that's balanced,
(36:18):
so you've got both,
you know, customer experience reform,
fixing existing journeys, andyou've got more advanced innovation,
creating new journeys, andthen the most advanced,
creating completely newofferings and new businesses.
So those are the fruitsof the trunk and the soil.
So, you have to make this treecome to life and sustain it.
(36:42):
So I wish I had more time to describe it.
There's a lot to that.
So I've given some images,hopefully that's useful.
I wrote a book about it.
[James] I was about to say.
Just before we wrap up,
(37:03):
for those people listening todaythat perhaps are not in the C-suite,
that are maybe man on the shop floor,
maybe they're middle management andthey want to help affect change,
towards the senior leadershipteam, towards the C-suite,
is there a way in yourmind that they can do that
(37:26):
by raising awareness in whatwe've been talking about today?
[Pascal] Yeah, there is a,
I've been scratching my head aboutthat the last five or six years.
As I said, I've been focused on innovationand the hotspots around the world like
Silicon Valley and Singapore, and
I've realised in the last yearthat I really need to share
(37:48):
all the stuff that I've learnedand my team and I have learned.
So we've come up with aseries of workshops that
hopefully will share in auseful way what I've been able
to learn in these placesand with these experiences.
This one workshop that we'rejust launching now called
Getting the Right ThingsDone in a Digital World,
(38:10):
and it's the first of a series.
The next one will be whatwe call Smart Growth.
Then there's one on what we calla Transformation Lighthouse.
Building your TransformationLighthouse, Digital Strategy Compass,
the nuts and bolts of igniting new growth.
These are meant to be accessible and atranslation of everything that we've learned.
(38:33):
So I recommend that,
to build your own muscles,
understand the nature of ignitingnew growth and of dual capability.
And then I think you can influencea senior leadership in a good way.
[James] Yeah, absolutely. I think that leads toa very natural segue to wrap up this episode.
(38:59):
I think...
I wanted to say, first and foremost,
on behalf of myself and everyonein terms of production team
and our listeners,
it's been a pleasure talkingto you and hearing more about
how people can ignite digital growth.
In terms of next steps, you'veobviously mentioned the workshop.
(39:26):
I assume that in terms of peoplegetting in touch with you,
they can reach you on an email address.
Am I right thinking that'spascal.dennis@leansystems.org
[Pascal] Great.
[James] And in terms ofyour social handles,
that's Pascal, this is one word,
(39:47):
Pascaldennismusic,
the handle for your...
[Pascal] Our band.
[James] [inaudible]
in terms of the URL for that workshop,
it is leansystems.org/grtd/index.
(40:12):
And then the last thing toobviously imagine to everyone,
is the websites that you can head over
and learn much more about whatPascal's been talking about today,
and that's digitalpathways.io.
[Pascal] And I should alsosay. Sorry to interrupt you.
Pascal Dennis h d d is my handle.
(40:36):
So if you put that in,
you'll get to our websites and blog posts,
and Amazon page and LinkedIn.
So Pascal Dennis h d d. Sorry to interrupt.
[James] No, that's fine. I wantto make sure everyone gets that.
So yeah, so thank you again, Pascal.
It's been an honour to talkto you and I think that
(40:59):
I share everyone's opinion in terms of,
thank you so much for joining us.
[Pascal] My pleasure. Thank you.
[James] Thank you very much, Pascal.
[James] Hello, and welcome to anotherepisode of the Strategy Hero Podcast.
The podcast that's all about divinginto the world of business strategy,
transformation, and operational excellence,
featuring insights and experience from someof the most successful leaders in the field.
Today, I have another fantasticguest that I cannot wait to talk to.
Pascal Dennis.
Pascal is something of a Lean legend,
(00:28):
an entrepreneur, engineer, and author.
Pascal is a four-time winner of the ShingoPrize Winner for Operational Excellence.
But he's also a co-founderof Digital Pathways,
which helps forward-lookingorganisations design, build,
and scale compelling digitalproducts and new business ventures,
which is something that I'msure today we'll get into.
(00:50):
And it doesn't end there.
He's a composer, musician,and also a student of Aikido.
But for us today, he is our strategy hero.
Pascal, lovely to see you.
[Pascal] Thank you, James.I appreciate the invitation.
[James] Lovely to have you on board today.
Although I know a lot of our listenerswill already be familiar with your story.
(01:13):
Having read the likes ofGetting the Right Things Done.
Could you just give, forthose who aren't so familiar,
just a really quickrun-through of your background
and how you got introducedto the world of Lean?
[Pascal] I'm a chemical engineer bytraining. I spent the 1990s at Toyota.
I was lucky enough to experience thewonderful mentors and great senseis.
(01:39):
I started Lean Pathways in the year 2000,
hoping that we could do for our partners whatour Japanese senseis did for people like me.
And about five years ago,I started Digital Pathways,
which reflected my growing interest indisruptive innovation using digital methods.
(02:02):
And here we are.
All these years later, I'm still having a lotof fun working with wonderful, marvellous
partners and lucky enoughto still be learning.
[James] I've personally enjoyed getting to knowyou over the last six or so months, Pascal,
and I think having readquite a few of your books,
myself and some of mycolleagues, one of which
(02:24):
is I'm fairly sure obsessedwith Atlas Industries.
I think it's an honour for us tobe able to have you on the podcast.
[Pascal] Thank you.
[James] It'll be greatto get your thoughts.
I mean, as we're going through kind ofwhat we could be talking about today.
One thing kept coming up, and I think
(02:45):
it's something that our audienceis going to love listening to.
So without further ado,
is Lean enough?
[Pascal] I don't think it is anymore.
I don't want to be misunderstood.
The methods of the Toyota productionsystem are as powerful as ever.
(03:05):
They're simply no longer sufficient.
So Lean Toyota production system
provides an excellent foundationfor protecting your core business.
But nowadays,
you also have to be ableto ignite new growth using
the digital methods pioneered inthe innovation hotspots of the world.
(03:29):
Places like Silicon Valley and Singapore,
where I've spent a lot of timethe last five or six years,
and it's been really transformativefor me. So the good news is that
Lean slash Toyota's productionsystem lays a wonderful foundation,
helps you protect the core business.
The challenge is we have to learnnew mindsets, new skill sets
(03:52):
to ignite new growth in a very differentworld than perhaps what we were used to.
[James] So one of the things thatI feel that we find a lot with
our audience over [inaudible]is that they have a very clear
mindset and culture coming fromsort of the Lean background.
(04:14):
And what comes with that isa very clear set of skills.
Is there a world that youcan go beyond that sort of,
this is how we've alwaysdone it, sort of mindset.
Is there a world beyond common lockers
and countermeasures and
really a way that people whohave grown up on this system
(04:37):
can take what theylearned perhaps and either
put it to the side orbuild upon it effectively?
[Pascal] Yeah, I think the keyis to understand something that
Aristotle, the great philosopher,
arguably the father of modern philosophy,
(04:57):
something Aristotle said many years ago,
he observed that thereare two worlds, in fact.
One world is that in whichthings cannot be otherwise.
In other words, the worldof science, physics,
I'm a chemical engineer of theToyota production system of Lean.
And in that world, thingscannot be otherwise.
(05:19):
If you define and implement agood value stream, a good process,
and you understand your bottlenecks,you elevate the bottlenecks,
you reduce waste, delay, etcetera,
throughput will improve.
Lead time will decrease.It'll happen every time.
That's the nature of thatworld. It's predictable.
(05:39):
But there is anotherworld Aristotle tells us,
and that is the world ofthings that can be otherwise.
And that's the world of taste,of public opinion, of psychology,
of politics, for example.
And in that world, things can be otherwise.
(06:01):
For example, a customercan say in a focus group,
oh, yes, I really like that.
I would definitely buy that.And then they don't buy it.
That's very, very common.
This other world, in fact,
is volatile.
It's uncertain, it'scomplex, and it's ambiguous.
And the skills that we learned in thefirst world do not necessarily apply.
(06:24):
As I suggested earlier, theydo lay a nice foundation,
they'll protect our core business. Butif you want to excel in the second world,
you have to develop differentskills and a different mindset.
And I call this becoming ambidextrous.
Much of my personal practice now isworking with boards and senior teams,
(06:44):
helping them understand ambidexterity,
it's no longer enough tobe good in the first world.
It's no longer enough to be good at Lean.
If, for example,
you are a supplier of a combustion engines
or parts for combustion engines,
you could have the best changeover,the best production lines,
(07:06):
the best supply chain in the world,and your future will still be bleak.
So it is what it is.
And, in a sense, we'revictims of our own success.
You know.
But, on the other hand,
it's a wonderful opportunity togrow and to learn something new.
(07:27):
[James] I think for people likemyself that come from probably
the former world that Aristotle spoke of,
talking to someone like yourself andlearning about the Toyota production system
and learning abouteverything to do with Lean,
it's challenging because you comefrom a very clear background,
(07:50):
that is probably more creative.
There are elements ofscience definitely involved.
And I guess for me, whatis very interesting is that
from our conversations, it soundslike you have found a way to almost
merge those two sort of worlds. Theyare quite similar. I mean, sorry,
they are quite dissimilar in many ways.
(08:13):
But also, there is a way thatyou can bridge that gap, I think.
In terms of skills.
What sort of challenges are youseeing, you know, in your engagements,
when you go into thesebig, big organisations,
what are people responding to in theC-suite? How are people responding? Sorry,
(08:34):
in the C-suite,
when you are asking themabout changing, you know,
well-formed habits and, and mindsets.
[Pascal] What I've experiencedis a sense of anxiety
because these are veryaccomplished people, good people,
(08:54):
that wanted to do the rightthing for their team members,
for their company, for the community,but they don't know what they don't know.
So, really there arefour blockers that I help
boards and c-suites withwhen it comes to creating,
developing this ambidexterity,
(09:15):
this dual capability if you will.
The first blocker is ignorance.
So people do not knowthe required skill set.
They do not know the basics, for example,
of design thinking oragile ways of working,
or Lean experimentation.
Let alone the transformative technologiesthat are changing every day and every week.
(09:39):
There's a new ChatGPT,
and gosh, what does that mean for us?
What does it mean forour marketing department?
What does it mean for our customers?What does it mean for da, da da?
So,
there's ignorance of the skill set.
Ignorance around the mindset.
So for example, maybe I am a chemical engineeror a superb auto plant factory manager
(10:04):
or executive.
But do those skills applyin this uncertain world,
volatile, uncertain,complex, ambiguous world?
So
That's a source of ignorance.
A third is what kind of a culture do Ineed to succeed in this second world?
(10:27):
The second blocker is fear.
As I said, there's a lot of anxietybecause these are good people
that want to do the right thing,
and they don't know if they can do it.
So a big part of mypractice is helping them
work through the ignorance andthereby start to assuage the fear and
start to feel,
okay, I think I get this,
(10:47):
and everything I've learnedup until now is not wasted.
It's a good foundation. butnow I need to learn new things.
Just an example of how what you've learned inthe first world applies in the second world.
So Lean experimentation is the meansby which you dispel the uncertainty,
the fog that you deal with whenyou're trying to create something new.
(11:10):
A new customer journey. A newoffering, our new business.
And the way you dispel that fog,the way you illuminate the darkness,
the unknowns, the known andunknowns, is through experiments.
But the experiments have to be much,
much quicker than we're used to,
say in a factory or in a supply chain.
Because you're in this volatile,uncertain, complex, ambiguous world.
(11:33):
It's not as predictable as thesupply chain or as the factory.
At any event.
So the first block isignorance. The second is fear.
The third is guesswork.So to ignite new growth,
you've gotta create new journeys,new offerings, and we have no data.
So how do you move forwardif you have no data?
(11:56):
The answer is you create your owndata through Lean experimentation
and related methods.
And that takes time and thattakes capability building.
But it can be done.
And the fourth blocker is one thatwe're familiar with in both worlds.
And that's scatter,
that's a diffusion of effortbecause we don't understand
(12:21):
where we are in this volatile world and we'repressing buttons hoping something works,
and that creates thisscatter and diffusion.
So yeah,
those are the four biggest blockers.
And as I say, I spend a lot of my time withboards and C-suites on those very things.
[James] What are some of theexamples? What are some of the tools
that you put to use when you are trying to,
(12:45):
I guess, ease some of that worry,
some of that anxiety overthe change that comes with?
This is unfamiliar, this is somethingthat I cannot apply this toolset to.
What are some of the examples andtools that you would normally put
to use in that sort of situation?
(13:07):
[Pascal] We have one methodor offering that we call
The Digital Executive Forum
wherein we connect a senior team with theircounterparts in the world of innovation.
So, for example, tech companies that
(13:28):
can demonstrate the best in class practice.
So, for example, if I'm abanking or insurance executive,
we can create a digital executive forum withtheir counterparts in the FinTech community.
And the Fintechs will show here isthe best practice in a given field,
in a given endeavour, in a given business.
(13:49):
And, you know, you talkwith them, you have coffee,
maybe we have dinner together, and thenmaybe we take a group of executives
to an innovation hotspot.
So we've done this inSingapore, for example,
where I've spent a lot of timein the last five or six years,
and let's visit some innovation labs andaccelerators in that vibrant ecosystem.
(14:11):
And then you start to see,okay, yeah, I think I get this,
I think I get this, this can bedone. And it's not that dissimilar.
I see a lot of experimentation,a lot of visual management.
We have a lot of playbacks, alot of stand-up meetings, and
yeah, that I understand.
So you start to desensitize the seniorleader and say, well, maybe I can do this.
(14:32):
That's just one example. Theother key countermeasure is,
just executive mentoring.
We've developed an "I offer 101",
which is protect your core business.
"201 Ignite New Growth."
And that's biweekly executive mentoring.
We have three-hour sessionswherein we learn by doing.
(14:54):
So this week's session ison Lean experimentation.
Here's a demonstration, here's anexample of a video or a case study.
So now let's go to the innovation lab,
and if we don't have aninnovation lab internally,
let's go to one of our partnersand see what that looks like.
Oh!
And then they see rapidideation, rapid experimentation,
(15:17):
the reflection, what have welearned, what does it mean? Okay,
what are the next experiments?And then they start to see,
whoa,
this is different than what I'mused to, but it's also similar.
I think we can do this, you know.
So two answers.
Digital executive forumand executive mentoring
is a good countermeasure I find.
[James] What do you find the typical lengthof time it takes for one of these executives
(15:46):
to go from,
this is the way that I do things to, okay,
now I've seen that itcan be done differently.
And then how long would it takesomeone typically to go from that,
Oh, I'm not quite sure,to now I have the tools,
I have the know-how, andI'm putting into practice.
Is there a standard or atime or does it really vary,
depend on industry andexperience, etcetera?
(16:10):
[Pascal] Probably on the order oftwo years, of course, you know,
plus or minus is based on experienceand the depth of commitment,
the culture of the company, etcetera.
One of my...
I had a session with one of myfavourite mentees if you will.
He's the president of awealth management company.
(16:32):
And he's, you know, a showcase for us.
We're very, very proudof Louie and his team.
And it took him about two years
to lay the foundation to protectthe core business and then
build, ignite new growth,you know, the second gear.
And they're just doing great.
And he's proselytising and he's saying,this is really great, you can do this.
(16:54):
So, we have other wealth managementexecutives that are, you know,
sort of tugging on my sleeve saying,
you know, can you help us do this?
How long will it take?
So, okay, well, sure.
[James] What sort of results do you see?
Do you think that it'simportant for Lean to be
(17:15):
at the foundation andthen to build this on top?
And if that's the case,
what's the results? Whatthe difference from,
okay, we're running, you know,
we're running our operational excellenceprograms and they're delivering X, Y, and Z
by layering these new skills on top.
(17:37):
What sort of material changedoes come about in terms of
whether it's revenue, whether it's savings,whether it's taking new products to market?
What is the, you know,
what are those sort of key numbersthat you can point toward and say,
this is clearly making a difference?
[Pascal] Yeah. We've gotquite a bit of data on that.
(17:57):
In terms of speed to market,
the improvements are 50%.
Terms of improvement and throughput.
The number of innovations youbring to market it's typical
to double the throughput a profitability,
increases 30% roughly.
Because,
there's so...
(18:18):
the method we use is,
you map the existing customer journeyand then map the value stream,
the internal processes that created it.
And by mapping pain points in the customerjourney to blockers in the value stream,
you unleash enormous amounts of value.
(18:39):
What we find interestingly enough is that
the most painful points inthe value stream coincide with
the biggest waste in the value stream.
What we're doing is bufferingweaknesses and it doesn't work
because we still have this awful pain.
So, in any event,
by mapping the two pain points in thecustomer journey with the internal blocker,
(19:02):
you unleash,
release an enormous amount of waste.So on top of the improved throughput,
new offerings and improvedcustomer experience,
you also tend to reduce costs as well.
In one particular, this wasa major bank in East Asia,
the pain point was the so-calledknow-your-customer process.
(19:22):
In other words,
how long does it take for me whenI apply for, you know, an account,
let's say I'm a business,
I want to get a commercial accountgoing in whatever Hong Kong or,
you know, Bangkok or something like that.
And the cycle time wassomething like two weeks.
And to provide that awful service,
it was something like 800full-time equivalents,
(19:46):
20 software systems internally,and a bunch of other buffers.
So that terrible customer experiencecoincided with this huge cost.
And that's a pattern that we see.
[James] That's incredible.
[Pascal] Yeah.
[James] That's a lot of wastage.
[Pascal] Yeah, often thereport out to the C-suite is,
(20:07):
did you know?
Did you know that to provide this awfulexperience to prospective new customers,
we are spending this amount ofmoney and hassle and software.
And usually it's:
What? What?
[James] Something that I'venoted as we've been talking
(20:28):
is it sounds like the, you know,
you're talking about value streamsand customer journey mapping,
ideation and Lean experimentation.
It sounds like there are,
there must be, correct me if I'm wrong,
there must be a lot of crossover here ofexisting tools that you might be using.
So that,
(20:49):
am I right here thinking that light bulbmoment is not just because people are
being shown how to do this? It'slike, okay, now I noticed that tool.
Well, that tool is a little bit similarto the other tool that I might use.
Is it fair to say that
one of the, perhaps, the accelerators inthis sort of journey that execs take is
(21:14):
familiarity with a toolset
and being able to transfer it?
[Pascal] Yeah, so as I said,
if you have, a good Lean slashoperational excellence system
that gives you a nice foundation to do thecustomer experience reform I just described,
to create new customer journeys
or new offerings because manyof the tools are transferable.
(21:39):
So, as I said,
the most basic level of innovation iscustomer experience reform, as I described.
We have an existing customerjourney. It really sucks.
We map it back to the internal value streamsand processes that are creating that.
And the most immediatebenefit is you can see
where you should focus yourvalue stream improvement.
(21:59):
So initially, you'll haverapid improvement events.
So typically, in our partners,
the first year or two might be somerapid improvement events at pain points
highlighted by theprocess I just described.
But then we have to take to the next level,
which is let's improvethe customer journey.
And that entails working externally,Lean experimentation, often,
(22:22):
digital methods to understandthe customer's journey.
I know, I like, I trust, I'lltry this product, I'll buy it,
I'm going to buy it again,
I'm going to tell everybody.
That's the customer funnel as we call it.
And that requires understandingthe conversion rate set every step,
and thereby understanding the bottleneck
and elevating the bottleneckthrough Lean experiments.
(22:47):
I hope that's not too technical,
but just give some idea of how this works.
[James] Okay. Definitely notfor this for this audience.
One thing I'd be interestedto know about is,
in my experience when Ihave learned, you know,
dipped my toe a bit more andmore into Lean and into Hoshin,
(23:12):
and PPM,
I've been able to borrow from the learningsand the experiences of my colleagues.
I've learned a lot of stuff fromtalking to yourself, Pascal,
and there's a lot morepeople like yourself that
I've had the chance, thefantastic chance, I should say,
to talk to and learn from.
Internally, then I just wanted to kind of,
(23:34):
to kind of look towards maybe someblockers to this, because in my mind,
this is, you know,
this is no different fromdeploying a strategy.
And what are the, you know,
when we talk about blockersto strategy, execution,
and successfully deployingthat and delivering results,
there are some very, veryusual suspects that pop up.
(23:57):
Am I right in thinkingthat those do pop up?
And, if so, what are they
and how do you normally overcomethose things like Silos and
communication issues when trying to spreadthis new approach throughout the organisation?
[Pascal] The most common blockers tooperational excellence, Lean, if you will,
(24:20):
remain as you said, Silos, misalignment,breakdown in communication,
lack of visibility, theabsence of prioritisation,
those all,
those all exist and we have to address themin the ways that successful companies have
for some years.
(24:42):
The additional blockers toigniting new growth are, as I,
or similar to what I talked about earlier.
There's ignorance of the skill sets
and the mindsets.
Some of them are similar.
So Lean experimentation isnot dissimilar to the kind of
(25:02):
controlled experiments we might run in aproblem-solving exercise in the supply chain.
But they're different in fundamental ways.
One is the speed.
So for example, we have to learn how torun experiments much, much more quickly
than we do in the factory.
We have to master social media tools.
(25:25):
One of the nice things about digital isthat you can accelerate a customer through
the customer funnel through short videosthat are engaging, that are funny,
that are based on thecustomer's jobs to be done.
So you can, as a smaller company challenge,
you know, a giganticcompany, very effectively,
(25:47):
there are many, many stories about that.
A cultural element isa very common blocker.
We're facing to a certaindegree, the innovator's dilemma,
and we have to get over that.
The innovator's dilemma,
famously described by one of my heroes,Dr. Clayton Christensen, is that
(26:10):
the return on investment of POVs, proofof values, innovations, if you will,
is very low initially.
So the quote-unquote rationalthing to do is to continue doing
what you've always done.
So a rational accountant, accountantwould look at your existing offerings,
(26:32):
and you get an ROI of 10%.
And then you look at an innovationportfolio whose ROI is zero,
and all the conventionalaccounting methods,
what's the revenue? Zero.
What's the market share? Zero.
What's the profit? Zero.
So the rational things to dowould be shut down the innovation.
(26:54):
So we've gotta get past theinnovator's dilemma, and that entails
learning new tools likeinnovation accounting
with an innovation portfolio forthe first part of it at least,
and often well into theearly stages of the launch,
we're using traction metrics and notgenerally accepted accounting principles.
(27:17):
At some point, you switch to revenue,return on investment, etcetera.
And that takes skill to knowwhen to change the scorecard.
So that's a common blocker. A thirdone, and this might be the biggest one,
is that innovations often
threaten the existing business.
(27:37):
So, for example, this is a case in banking.
It was a commercialdivision in a major bank.
And we were working on aninnovation which would allow
a commercial customer,let's say a small business
to make an application and receive theloan in 48 hours from their smartphone.
(28:04):
And the results were extremely promising,the customers loved it, etcetera.
But it met with resistance fromthe existing commercial leadership,
commercial banking leadership because,
and he was quite honest with me.
He said, look, you know, we've got2000 people in this group here.
(28:25):
If this proof of value goes tomarket, what happens to those people?
Or are they all out of business?
So that's an understandable tension,and you've gotta address that.
So you've gotta create strategic space,
physical space, financialspace, emotional space,
cultural space for innovation.
(28:46):
That might be one of the biggest blockers.
Because what will happen otherwiseis the innovation will be handed off,
quote-unquote,
to the business and quietly decommissionedand you never hear about of it again.
Which is why innovation is so hard in,
especially in larger organisationswith the best of intentions.
[James] Yeah, I know that experience.
(29:11):
I worked for a Teleco.
I was leading the product marketingside of developing a new product.
And it did require a significantchange to the business model.
One, which after a coupleof rounds of travelling
(29:32):
did suggest that thatshift would result in,
you know, those things that you mentionedthere in terms of there's an emotional impact,
there's potentially a humanimpact, with personnel.
It did get shelved. And I think, it'sgreat that there's something like this
that you are offering that couldhelp executives to navigate
(29:56):
those tough challenges thatcome along with innovation.
Out of interest, in thatsort of situation, therefore,
how would you coach, in my example,
that executive who was presented with a newproduct that would alter the business model,
but would not only generate mass savings,
(30:21):
but change the revenuetrajectory of the organisation.
How would you deal withthat positivity there,
but also that negativity of it wouldlead to some sort of structural changes?
[Pascal] Well, it's an impossiblediscussion to have at that moment.
(30:41):
You know, it's really too late.
What needs to happen is we have tohave that discussion two years earlier
with the board and with the C-suite.
And we have to educate them onthe nature of dual capability,
protect your core business, ignite newgrowth, and in the likely scenarios and
(31:04):
blockers that we're going to face,
and we have to commit asa board and as a C-suite
that we're going to see this through.
We're going to create the space,financial, physical, emotional,
cultural, strategic space forour innovation activities,
whether it's an innovation lab or anaccelerator or call it which you will.
(31:26):
And we're going to provideexecutive air cover
when the blockers inevitablyarise, whatever they might be.
And we're going to commit to ascale-up process that's fair.
That's just that offers peoplethat are affected by an innovation
(31:49):
retraining, for example.
Or if they don't want to be retrained,
coaching and how to start a new careeror how to retire, whatever it is,
you've got to plan all that out in advance.
That relates to one of the keyelements in our model, you know,
(32:11):
it's the pragmatic innovators network.
We have to create internalcapability to sustain innovation.
We have to be able to generateideas, screen ideas, monitor ideas,
and then launch the successful ones.
And that requires building businessin the so-called middle management.
So, that means,
(32:33):
you know, a program to build thecapability, to build the skill set,
to give them practice and the meansfor them to get involved in innovation.
And that could be as simpleas a Shark Tank-like process.
We've used that successfully.
So people pitch to, we callit an innovation council,
but it's an internalShark Tank if you will.
(32:58):
So these are the kind of discussionsyou have to have in advance.
In fact, our transformationmodel has three parts to it.
I can describe it if you'd like.
If that'd be helpful, butthere's three parts to it.
And the intent of the model is to answerthese questions in advance so that
we're not faced with the scenario youtalked about where an exec says, okay,
(33:19):
this puts, you know,2000 people out of work.
Well, that's too late.
We should have had this discussiontwo years earlier, you know,
so that we'd have a countermeasure.
So no, they're not going to be out of work.
They're going to be dot,dot, dot, dot do, right.
They'll be taken care of becausewe've made that commitment.
[James] So I think, I mean, that would'vebeen very useful in that situation.
(33:42):
It would've been very, very useful.
But I think,
for anyone listening that has gonethrough something like that in terms of,
new product introductions,
it's challenging and I think there'sa lot that we've heard from you today,
Pascal, that I think wecould probably, we have...
we have spent hours talking about.
(34:05):
If I were to challenge you for onesecond to offer one piece of advice
to leaders who want to adopt
a new mindset, a digital growth mindset,
what would that one piece of advice be?
[Pascal] I think it would be
(34:26):
create the space for innovationin the ways I described.
Strategic, cultural, financial, physical.
Understand the blockers are powerful,
work through the kind of scenariosthat I've described earlier.
It would be secondly,
to provide executive aircover for innovators,
(34:49):
understand the blockers.
Understand the blocker's point of viewand address it as well as you can,
build the needed capabilitythroughout the organisation.
So, our model fundamentally isexecutive development through mentoring.
The second element iscreating what we call,
a pragmatic innovator network internally.
(35:12):
It's a critical mass of peoplethat have the fundamental skills.
And then the third element ofthe model is innovation projects.
A balanced portfolio and thesethree support one another.
So, in summary, give people the skills,
create space for innovation,
(35:33):
and provide a culture that willsupport and sustain innovation.
There's another metaphorthat we use for that.
It's a tree metaphor.
The metaphor begins with the soil.
So you've gotta create arich culture skill sets.
The mindsets are there.
So the necessary nutrients.And then you create this trunk.
(35:56):
The trunk is a pragmatic innovator network.
People understand thefundamentals of of innovation,
not just the technology, theeight essential technologies,
but also the methodologies, the Leanexperimentation, design thinking,
and the rest.
And then you strategically decidewhat kind of fruit do we need?
So you want an innovationportfolio that's balanced,
(36:18):
so you've got both,
you know, customer experience reform,
fixing existing journeys, andyou've got more advanced innovation,
creating new journeys, andthen the most advanced,
creating completely newofferings and new businesses.
So those are the fruitsof the trunk and the soil.
So, you have to make this treecome to life and sustain it.
(36:42):
So I wish I had more time to describe it.
There's a lot to that.
So I've given some images,hopefully that's useful.
I wrote a book about it.
[James] I was about to say.
Just before we wrap up,
(37:03):
for those people listening todaythat perhaps are not in the C-suite,
that are maybe man on the shop floor,
maybe they're middle management andthey want to help affect change,
towards the senior leadershipteam, towards the C-suite,
is there a way in yourmind that they can do that
(37:26):
by raising awareness in whatwe've been talking about today?
[Pascal] Yeah, there is a,
I've been scratching my head aboutthat the last five or six years.
As I said, I've been focused on innovationand the hotspots around the world like
Silicon Valley and Singapore, and
I've realised in the last yearthat I really need to share
(37:48):
all the stuff that I've learnedand my team and I have learned.
So we've come up with aseries of workshops that
hopefully will share in auseful way what I've been able
to learn in these placesand with these experiences.
This one workshop that we'rejust launching now called
Getting the Right ThingsDone in a Digital World,
(38:10):
and it's the first of a series.
The next one will be whatwe call Smart Growth.
Then there's one on what we calla Transformation Lighthouse.
Building your TransformationLighthouse, Digital Strategy Compass,
the nuts and bolts of igniting new growth.
These are meant to be accessible and atranslation of everything that we've learned.
(38:33):
So I recommend that,
to build your own muscles,
understand the nature of ignitingnew growth and of dual capability.
And then I think you can influencea senior leadership in a good way.
[James] Yeah, absolutely. I think that leads toa very natural segue to wrap up this episode.
(38:59):
I think...
I wanted to say, first and foremost,
on behalf of myself and everyonein terms of production team
and our listeners,
it's been a pleasure talkingto you and hearing more about
how people can ignite digital growth.
In terms of next steps, you'veobviously mentioned the workshop.
(39:26):
I assume that in terms of peoplegetting in touch with you,
they can reach you on an email address.
Am I right thinking that'spascal.dennis@leansystems.org
[Pascal] Great.
[James] And in terms ofyour social handles,
that's Pascal, this is one word,
(39:47):
Pascaldennismusic,
the handle for your...
[Pascal] Our band.
[James] [inaudible]
in terms of the URL for that workshop,
it is leansystems.org/grtd/index.
(40:12):
And then the last thing toobviously imagine to everyone,
is the websites that you can head over
and learn much more about whatPascal's been talking about today,
and that's digitalpathways.io.
[Pascal] And I should alsosay. Sorry to interrupt you.
Pascal Dennis h d d is my handle.
(40:36):
So if you put that in,
you'll get to our websites and blog posts,
and Amazon page and LinkedIn.
So Pascal Dennis h d d. Sorry to interrupt.
[James] No, that's fine. I wantto make sure everyone gets that.
So yeah, so thank you again, Pascal.
It's been an honour to talkto you and I think that
(40:59):
I share everyone's opinion in terms of,
thank you so much for joining us.
[Pascal] My pleasure. Thank you.
[James] Thank you very much, Pascal.
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