Simone Cicero:
Hi, everybody. Welcome back to the Boundaryless Conversations podcast. In this podcast we meet with pioneers, thinkers, doers, entrepreneurs. And we speak about the future of business models, organizations, markets and society in the rapidly changing world we live in. I am Simone Cicero and today I’m joined by my usual co-host, Stina Heikkila Chastina.

Stina Heikkila:
Hello, everyone.

Simone Cicero:
And today, we’re also joined by Joe Justice. Joe is say a legend of Agile. He has led Agile practices at companies such as Google, Amazon, Microsoft, Tesla, and many others, and also lectures about these topics in many universities around the world. I met Joe, more than 10 years ago, after watching this TED talk that was released shortly after he founded WikiSpeed, a not so usual micro car manufacturer that pioneered the adoption of open source and Agile practices in the context of manufacturing. With Joe, we are going to talk about his own experience with Agile, mainly from the perspective of using Agile to help businesses succeed, but also to transform the world we live in. And I’m sure we’re going to go beyond that. So, Joe, welcome and thank you for being here.

Joe Justice:
Good day. My pleasure to be with you again, Simone, and wonderful to be with you here today, Stina.

Simone Cicero:
First of all, Joe, I think it will be great, really, to spend some time recalling how we met 10 years ago. And maybe you can give a little bit of context of what Wikispeed is. And maybe you can also convey a bit of the enthusiasm and the great feelings that 10 years ago we had as we are brought to Wikispeed and you to Europe and to talk about eXtreme Manufacturing, and open source culture injected into the world of manufacturing.

Joe Justice:
Well, let’s all think back to about 2010, 2011, 2012, in that time period. That’s when we were just starting to see some of the first cryptocurrency forums. I remember being invited to the World Economic Forum to talk about new financial models and many of the other advocates there were talking about these new concepts of digital coins. Bitcoin was one but it was not at all at any kind of forefront. It was a new concept and people were wondering, well, what is it? The collaborative economy had existed in one form or another as long as there had been the concept of an economy, but there was interest in it at that time. Some of you might remember 2010, 2011, 2012 global conferences, forum summits on what is the idea of unlimited growth, or degrowth, or collaborative economy, or sharing economy, and how do these aid each other? And which direction do governments want to be making policies to support in this environment?

A group called WeShare about the collaborative economy, sharing information and maybe curious at times about this new idea of digital currency or cryptocurrency. They found my story. I had started an open source car company, which was already strange. Tesla later open sourced many of their patents in 2016. WikiSpeed was part of that same sense of global collaboration, even a few years earlier than Tesla decided to go open source on much of its core technologies. WikiSpeed was modeled, is modeled after Wikipedia where you have collaborative editors. Except instead of editing articles, like an encyclopedia, these editors were authors, create car parts, 3D drawings, bill of materials, supply chain plans, manufacturing steps, and nothing’s considered done until they actually make a physical part and test it.

Well, that was really interesting to the WeShare group, which Simone was also collaborating with at that time. They organized for me to do a series of lectures in Italy, in France, in Spain, and maybe even a few other stops, I’m thinking back. And I got to learn a tremendous amount from speaking with, conversing with, having a meal with, having a — I mean a cocktail with the members of this community, which have all gone on to do very interesting things in many different businesses. Some of them are enormously financially successful, which is maybe counterintuitive, as the idea is a sharing collaborative, open economy. And yet some of them have gone on to generate tremendous amounts of wealth and be able to choose how it’s allocated, which is one definition of power or capability or productivity. So, by traditional definitions, this movement has had some tremendous successes.

Meeting Simone in Rome, we went deep on how to run a company with 24-hour, seven day a week, 365 day a year innovation cycles; how to run a around the clock collaborative, innovative company that focused on pace of innovation. Now, interestingly, I consulted to Tesla as early as 2010, and set up some work in Tesla, some Agile trainings in 2016, and then joined Tesla in 2020. Tesla is now a phenomenal financial success, that as of the date of this recording, the stock price is actually quite low, it’s still worth two and a half times more than Toyota, all of Toyota. Its massive financial success even on a down day. And Elon Musk, CEO of Tesla, well, chairperson of Tesla says, pace of innovation is the only thing that matters in the long run. And interestingly, that was the topic, how to run a business where that’s your goal, even a few years before with Simone and the people who attended. We’ve stayed in touch, largely. We’ve kept communicating, as they’ve used those practices to help grow their businesses.

Simone Cicero:
Joe, thank you so much for the recap and for nicely connecting this to today, right? It’s really amazing now to look back into these 10 years. And I must say maybe some of the promises that the movement, the sharing economy movement, somehow the late or maybe the early open source movement, some of the promises that were into the conversation when we met 10 years ago, I think they really played out. As you said, some of these companies had massive success and you’ve been able to bring your work to Tesla, which is a massively impacting company.

So, maybe before we move into expanding, double-clicking into your work at Tesla, or in general with some of these leading companies, can you maybe share what’s your impression in terms of instead what kind of reality checks that that movement encountered maybe in the last 10 years? I think you are in a good position to do so because you have been able to bring some of these principles into some of the most impacting companies in the world. So, you may be able also to point out what were maybe the, and what are still maybe the naive elements of some of the open source sharing economy movement, that have encountered some kind of reality check in the last decade.

Joe Justice:
Wow, wow. We’re taking it to a very important, maybe serious tone right in the beginning, and I love it. Thank you, Simone. So, I ran and still run WikiSpeed, this collaborative, open source, modeled after Wikipedia manufacturing business, and I went to work for Tesla. So, an interesting thought experiment is, why did I go to work for Elon Musk instead of Elon Musk going to work for me? What about it made one financially massive? WikiSpeed set four World Records, actually made some money, more than a million dollars, which I reinvested back into R&D, more than 100%. I net net contributed to the company but it made money that we could reinvest. But Tesla is a mega success by all traditional metrics. Safest car on the road, a few months ago, best-selling vehicle in Germany, a competitor’s home ground, best-selling vehicle of any type, not even just electric. Safest car in Europe, safest car in the USA, fastest car in the world, etc., absolutely shocking achievements and profit margin nine times higher than Toyota. Just absolutely unreal, the success of this company.

So, why is it that Tesla has grown so large and my open source collaborative company, I went to go work for Elon? I think this is a useful lesson for all of us who are interested in new business models, especially collaborative and sharing, economy and models. Cash flow still matters. And if we use cash flow only to generate more cash flow, the company becomes slow to innovate, it becomes protectionist almost 100% of the time. And we see that in the laziness of all the traditional automotive manufacturers, settling in and a five to seven year product development cycle, very slow, many people near retirement age not very excited are able to keep up with this pace easily. It makes the company feel dead inside, unengaged. Excited people want to go work somewhere else, and this is normal in most companies. That seems to be what happens when the company is built around the idea of maximize shareholder value above any other goal. When that’s the number one goal, generate money, it makes an uninspiring and slow place to work. Which eventually self corrects, the company does eventually shrink or die.

On the other hand, you have maximized the pace of innovation at any cost, and that’s where a platform like Wikipedia thrives. Absolutely more edits than any other type of encyclopedia or knowledge sharing tool on planet Earth. Or soon beyond with Starlink taking internet towards the moon and to Mars and beyond. If you want radical innovation, you do want, it looks like, open, collaborative, very few rules, fast movers and high quality testing so you can create quality content and not just make junk quickly. Well, how do you then have your company grow like Tesla does or SpaceX or Neural Link or Open AI or The Boring Company; all of which are the most financially successful company in the world of their type? How do you repeatedly do that? It looks like you focus on innovation above all else, and one of your primary innovation areas is cash flow. So, if you’re passionate about innovation, you’re likely going to want to be passionate about innovation, sharing, collaboration, openness, transparency, respect, courage, than one and not your first value is maximize cash flow.

When I was working for Elon, what mattered is how many meaningful improvements to the customer experience we could make in an hour in production. I’ve never seen a hardware company that fast except for maybe WikiSpeed. However, some of those improvements also needed to increase the profit margin on the cars, well, reduce the cost to manufacture the cars by continually grinding down the cost to manufacture the products. Naturally, cash flow increased and increased and increased and increased until now it’s nine times Toyota. The company has so much cash reserves it’s now incredibly durable. And I think this is something many open source communities miss, where they run at a net loss, or they’re dependent on donations, which can work for a time. Wikipedia does it. But if you also have a funding model, that as you innovate, the funding model improves, I think that’s what makes us compatible with a traditional economy while we’re pioneering, prototyping, and playing in the new economy.

Simone Cicero:
I was basically trying to frame these cultural elements that seem to exist beyond your experience of implementing Agile at Tesla, which are a bit, if I understand well from your keynotes, it’s a bit different maybe from the experience you had in implementing Agile at other companies. Right? You know, first of all, I would like to suggest our listeners to go and watch some of your keynotes speaking about Agile at Tesla. I’m sure that you have a preferred one. We’re going to take this link and put it into the note, because it’s extremely interesting. You know, it gives you an overview of how such a crazy company implements some of the principles of Agile and across the spectrum.

One thing I wanted to basically double dive here is the seemingly deep elements that essentially bring the conversation around Agile that we used to have for a couple of decades, right? From what a way to optimize, let’s say, business performances into something that is much more, probably also much more in tune with the original ideas that kind of generated the Agile manifesto. Seems to be much more related to elements of innovation and culture, which are, I would say, much more systemic and related to, I would say the impacts that a company or an organization more generally can generate on society, right? For example, if we think about the Tesla handbook, right, which is the NTN book handbook that is seems to be, I would say a code, a culture code, right, for how Tesla looks into work. And for people that didn’t read the handbook, we’re going to put that in the notes again.

So, the handbook itself is kind of a testament of the role that culture has in a company like that. So, it’s not just a question of processes. But I would say, it’s also a matter of, as you said, mission, it’s a matter of culture of work, it’s a matter of autonomy, it’s a matter of how you perceive yourself as an individual inside a broad organization. So, since the handbook itself, it’s also very much contentious piece of work. It’s really, sometimes when you share with people, some people will react very positively, some people will react very negatively. So, it seems like it’s kind of a synthesis of some of the culture wars we also live in. And if I connect, lastly, and I will, I don’t want to go long, but I think contextualize it systemically, the work that you have been doing at Tesla, and in general, this topic is important.

If we look at these also from the perspective of topics such as, for example, these resurgence of importance in topics such as the American dynamism. So, this idea that, essentially, the culture of innovation that is present in an industry, in a business, especially manufacturing, any space or something like that, is also foundational to the role that a nation like the US, for example, can take on the world scale, right? So, I mean, SpaceX is collaborating with NASA right now. So, how do you connect the conversation around Agile as a practice to optimize a business to this holons of culture, society, geopolitics?

Joe Justice:
Wow. When we talk about the politics piece, I think there’s some very important policy that enables some of the US companies to do what they do in the US. And I think if we zoom out a little bit and look at the whole world at a moment, we can see why China is rising absolutely fast as it is on a track to overtake the US in terms of GDP very soon. And I think we can then identify policies that would let any group of policymakers be far more innovative than either of those two groups, or any group currently on planet Earth, or soon beyond.

And here’s what it is. In the USA, it looks like, currently, companies are allowed to run with very few rules when they have very few people and generate very little money. So, it’s extremely inexpensive to try something with five people, six people, seven people. Once you start to have some level of success and can fund 50 people, then more rules and regulations incrementally apply, which is probably the right thing. We want people to be protected, and we want society to be protected, and we want investors to be protected, and we definitely want employees to be protected. And those protections are added as the business grows by more than one, measure employee headcount, the number of people employed on the payroll, or even in some cases, the number of contractors, and total money flowing through the company, the actual financial effect of the company. That has enabled many people in the USA to try radical new ideas, and at very low level of effort to start it up.

With three, four or five people, a startup in the USA can truly be turned on in less than 10 minutes, legally. You can file the forms online. In some states, it’s free. In some states, you pay maybe $50, and you are a legal entity ready to go. You don’t even have to go to the bank first. Whereas in many countries you do and you need approvals, letters in certain formats, some cases, hundreds of pages of documentation, describing what you intend to do over the next several years of your business. None of that is required for small companies in the USA.

Then we look at countries like China, where, when I say country, I really just mean sets of policies, sets of regulations, sets of laws. That’s really all I mean here when I talk about country. So, the sets of policies, sets of laws, sets of regulations, in effect in China regarding innovation and ability to try something new, the government has chosen specific innovation pathways that are prioritized and made extremely few regulations for companies that will self-fund and self-experiment in those topics. For example, rocket launches. The People’s Republic of China launched almost as many rockets as SpaceX in this year, not quite as many. SpaceX is larger than any given country in terms of successful rocket launches to orbit. But China is number two.

And so how could anyone be competing nearly as fast as an Elon Musk company? Well, the massive government budget that then can augment the companies that put their own capital and mix it with the government capital, and extremely few regulations, and very fast approval. If you’re a rocket launch company in China, you shouldn’t have to wait more than an hour to know if you have permission to launch. It just absolutely prioritized government feedback, which is something Elon Musk doesn’t have. Elon Musk has to plan launches weeks in advance with the FAA, the American organization, the USA organization to dictate when it’s safe to fly a rocket and make room in the flight patterns.

That lets us zoom out further and say what are some policies that any group of people could try to make become more and more true over time, that would enable much more radical innovation. And it’s the idea of the government, this publicly funded entity whose job it is to give feedback in ideally, less than a second. So, what kind of feedback? What we want is a safe place to live, a safe place to educate ourselves, our kids, our neighbors, a safe place to experiment, a safe place to be productive, a safe place to enjoy ourselves, feel healthy, try to become more healthy, etc. We want those things. Life liberty, and the pursuit of happiness is one pretty good way to sum it up. Well, how do you do that while not slowing down innovation?

One of the good models here is if we think of DevOps, development operations. The idea of DevOps is you can try something new, and have an automated test return results, hopefully, instantly that says, was that a good idea? Did you make something better than what was there before? Is it safer than what was there before? Is it more interesting than what was there before; more profitable, more engaging to humans, better stimulates the human amygdala, the part of our brain that determines engagement and enjoyment. The government can fund itself as a test center. For example, I started a car company in 2006, WikiSpeed. At that time, it took about a year to submit a new car model, a radically innovative car model and be told, are you allowed to drive it on the road? Well, that creates a year-long iteration cycle or longer for any company that wants to make, for example, a car. That’s the downside of regulation. In exchange, you hopefully get safer products, right? Better products, more warrantable products, products that last longer, are advertised more accurately, hopefully you have protections.

Well, what’s the right answer? The right answer is to have those approvals come in seconds. And if you add up the total test time, not waiting for different government organizations, but the total test time, it’s less than an hour of total tests conducted on these vehicles to determine road legality, their emissions level, their advertised specifications such as range and acceleration, it’s less than an hour of testing. Meaning, an optimized testing organization could certify or not any newly submitted design in less than an hour. And that’s what the current way those tests are run. Now, Tesla has brought that certification cycle down even less than an hour and actually so did WikiSpeed eventually. We got it down to a shortest 27 minutes to certify, homologate, make road legal a new vehicle design.

If the government can view itself as DevOps, DevOps for innovation, we can have a radically different age of enlightenment than we ever had before. And I’d like to connect this to something personal. I had the pleasure and not too long ago of visiting my dear friend Paolo Sammicheli. Paolo Sammicheli is a world famous Agile coach and Agile trainer. Agile Sammicheli wrote the book Scrum for Hardware, and then has just recently published Scrum for AI, Artificial Intelligence. Paolo lives in Siena, Siena, Italy, arguably, the home garden, the birthplace of voting, voting with your feet democracy, the piazza, the central square, well, hexagon for Siena, is divided into sections, where long time ago, the residents, the votable voting class residents would stand in an area of the piazza to show which issue they were voting for, to take public attendance of voting issues. And some people argue that this is some of the original form of voting by majority. And it’s not two quadrants. It’s not two areas of the field or four quadrants. I think it’s five, maybe more. So, you could have a fairly nuanced view on sets of issues and have at a glance, majority rule.

Well, visiting Siena and seeing that beautiful piazza, the gorgeous buildings around it, I couldn’t help but notice how old everything was, how slow it felt. Honestly, it felt like an old dead company. It was really sad for me. The people who were out and about and bustling when I was in Siena, were people selling gelato or espresso, not people building a city like this. In fact, I would guess, few or none of them knew how to build a city like that. And that was hundreds of years old technology, much less, most of them knew how to build something new. And they were complaining about how the economy was slow. What a broken sense of entitlement. And I imagined Siena when most of what I was seeing was being built. And I imagined the type of people running around with tools and drawings, hopefully tools and drawings, making this, understanding it, innovating it, making some of the first build structures of those types, at least in that area, at least in that region. And I imagined how exciting it would be to talk to someone in a cafe when they were taking a break, or sitting on one of the beautiful street sides, when they’re having an espresso in between rushing back to excitingly build more of that city. That age of enlightenment must have been phenomenal. And it was gone. I felt like we were in the bones of something beautiful with some espresso and gelato, salespeople inhabiting the niches that great, fantastic, excited minds had made centuries ago.

And I think this is what happens when policy becomes so broken that people feel entitled and innovation is more frustrating than being slow. And this is how groups die, their engagement dies, their passion dies, their capability to innovate dies. And I think we have a real opportunity here. And this is where I’d like to ask Stina to join in and course correct or amplify this part of the conversation. As I understand it, Stina, you work with governments on various aspects, but including policy. And here I’ll focus it on, I hope, policy for innovation. And I’d be very interested to hear what countries, what groups of policies are doing in this regard, and what they’re not doing that maybe they could consider or move towards.

Stina Heikkila:
I had tons of questions coming up when you were talking, and I can really feel myself in your shoes, in this very vivid picture that you painted of Siena. And that sense of lost momentum and people getting demotivated and losing the sense of agency, let’s say, that would be needed to move things along. I think there’s a recognition of that in Europe, but we have, as you know, it’s a very different context from — compared to the US. So, we have tons of the things that you were talking about; protection of workers, and social protection and a lot of things that cushions, let’s say people, which is one element. I think especially in the European Union now they are working towards this mission-oriented innovation approach. So, really like the things that you were talking about. Like, how can governments be more — taking an active role in value creation, more than being just interfering or trying to intervene to correct things or to sort of instead developing that enabling role. And I think that’s difficult.

And that comes back to a little bit of that sort of paradox that I often find myself in what is for government to sort of try to control or try to, I don’t want to say correct, but to incentivize or to nudge, and what is for companies to do as part of their daily business. I can think about, for instance, this question of diversity and inclusion, right? And when I’ve seen a little bit of those debates going around very innovative, very fast growing companies, a certain culture, doesn’t that say, seem to accept a lot of weakness, if I can put it that way. Like, little bit, having a culture where you if you are not like, in, you’re out, and sort of you get a feeling that what happens to those who don’t fit that model? What do we do with people who need more time who might not have that mindset? I’m not sure if everyone would, and can, and are willing to develop it. And I think there are different roles that different types of people can play.

But I would be curious to, to hear from you like, in those organizations that you have worked in where there is, on the one hand, you could say that it’s quite — you’re reducing barriers, because I’ve heard you in other conversations as well talking about how you do not really think about who you are working with, because people are sharing a mindset. So, it doesn’t matter if you are a, say, man, woman or non binary or whatever, because what matters is what you do. Right? But then you have the other side of the spectrum is that if you’re not as able to do, what happens? Can you still be on board? Can you be onboarded? Can you have support and care? And is that the role of the company or is that more like a government role to provide? Because it would, of course, probably play a role in the speed that we are talking about. So, a lot of thoughts like back to you there. But essentially, I’m curious to hear what you think about that, like, what should companies, if anything, do, and what should government do and not do in that context, knowing that you already said that governments should facilitate innovation, right, be a kind of co-founder and enabler.

Joe Justice:
Brilliant, Stina. And I appreciate you sharing some current information on what governments are considering and are doing in regards to policies. And again, to say it clearly, by government, in this case, I simply mean groups of policies. I don’t necessarily imply anything about a culture or even a geography. I’m saying a group of policies. And interestingly, from that lens, a government and a company are very similar from that point of view, assembling a group of policies. Okay. To that point, and thank you for setting it up, the Musk companies take one stance that clearly is successful. Elon Musk is a serial success at a level we haven’t experienced as humans, possibly ever in human history. Maybe with the Yellow Emperor, what was that, maybe 4,000 years ago people believe the Yellow Emperor helped establish — That sounds a little too far back. I don’t have my history timeline right in front of me.

By the way, I use the Great Courses series Big History to help keep a timeline from when we believe the weak magnetic force emerged, various nucleic forces emerge, Big Bang style time of events, to the far off future when we have a likely heat death of the universe. The Great Courses series Big History provides a timeline of all of history from what we think was the Big Bang to what we think will be the eventual entropy end of the universe and everything in between. So, events like the French Revolution barely get a mention. They’re in there and it puts it in a very interesting perspective. Okay. Well, thinking about that, the Musk companies are clearly working, clearly functioning, clearly successful, they’re bizarrely successful repeatedly in different industries. And they take a specific approach that I think is worth understanding because it does work.

It’s not that different from a professional sports team. When you join a professional sports team, I’ve not played professional sports, I’ve played recreational sports. I’ve not been pro, I’ve not been professional. But just my understanding when you play a professional sport, you sign up for the team and you actually sign with your name. You actually sign your name and you agree to attend practices on the schedule. And you agree to attend games on the schedule and not be late and arrive refreshed, focused, ready to apply yourself as fully as you can in a healthy, sustainable way so that you last through the training, and last through the game. And maybe so you can even play next season, maybe even play even better next season. So, that’s part of your responsibility, and there’s coaches to help you do that.

Well, what happens for a pro sports team if you sign up and then don’t always show up, or you show up late, or you show up sick, or show up having not eaten in two days, or having eaten really bad food for the last three months, and you’re just playing at a very low level, in a pro sports team, you’re deprecated, you’re moved to the bench or released from the team. That’s a very similar model to what Elon does. Elon says, I’m not so concerned what your ethnicity is, what your gender or non gender is, what your political beliefs are, what your religious beliefs are, I’m not really concerned about that. What I’m really interested in is, at what level can you accomplish things. And a common saying in the Musk companies is you have no boss, data is your boss. And that can open up a lot of conversations. We can take that many useful directions, like how digital self-management is used instead of traditional human management, or how automated the design processes are.

But in this case, I mean it to be your results are measurable. If you’re playing football or soccer, there’s a score, and your ability to contribute to that score is very visible. And you can be scored as a player and scored as a team and the game is scored. Data is your boss. In a Musk company, it’s very similar. And if you’re not contributing to scoring, you are off the team. And it’s not to be mean, you’re off the team. Whereas in most companies around the world, the more handsome you are, the more well-spoken you are. In some cases, the taller you are, most of these are DNA, decisions is maybe their own word, the results of your DNA, not things that you have so much direct control over. That determines your height of your career progression in many companies, which is a much more broken model.

So, much of the world is bizarrely unfair, where your DNA and your connections which some of those have to do with where and how you were born, again, which you did not get to pick and the amount of money or not you were born into, how well-spoken and in what language, the neighborhood you were born into happen to be. That determines the height of your career in many companies all around the world. And that is one of the more unfair models in the current world. The Musk companies playing like a pro sport, you’re invisible. Where you were born is invisible. Your DNA is largely invisible. I mean, how that affects your mental performance, and in some cases, physical performance that is highly visible. But at least it’s tied to the mission and not something like beauty or how well spoken you are. And it doesn’t matter what language you speak, and it doesn’t matter how well you speak it. What matters is the data you produce, a lot like a pro sport. Okay, that model clearly works. It works — It seems to work in professional sports. It seems to work bizarrely well in business and of very different types of businesses all across the Musk companies.

But I’d like to propose, Stina, to your comment and question something even more fair that is still hyper innovative. Maybe it could be almost as successful as a Musk company, or maybe even more successful than a Musk company. And it might be more embracing of more types of people, which I believe is one way to measure fairness or at least equitable, equitableness, equanimity. And that would be have shorter shifts. We still want to reward performers for their performance, their relevant performance, not because they’re in this club or this culture or they speak this language well, but because of their performance towards the mission of that company, that group, that innovation goal. That is still important. Rewarding someone or protecting someone for anything else, as far as I can tell, is still inappropriate if what you want is an innovation.

In the Musk companies you are asked to work 12 hour shifts. Now to make it much more comfortable, when I was working in the mus companies in 2020, we had three days a week, we worked three 12 hour shifts a week, 36 hours cumulative, and then we had four days off. That is actually allowed in most European Union countries. If you did 12 hour days and worked five days a week, that would not be allowed in many EU countries. If you work 12 hour days and work three days a week and then have four days off, that is allowed. The benefits of working 12 hour days is product development never stops, your innovation never stops, you finish at 05:00 PM and another group of the same size comes in at 05:00 PM and they work till 05:00 AM, and you come in at 05:00 AM. And the product development never stops. It also prevents individual ownership, which the extreme programming and extreme manufacturing community have collected great data to show that individual ownership is slow and creates siloed thinking, hierarchical thinking, a lack of communication and collaboration which sub optimizes innovation and makes weaker results.

If you have shared ownership, you have faster collaboration, faster innovation, lower expense to the innovation and higher quality. So, how do you do that? You make sure no one owns something, no one’s ever waiting on one person. By having shift work that never stops you cannot own something. Someone else will always be working as much as you were, if not more, every day for 12 hours. Well, not everyone has DNA or a current dietary habit or workout regimen or level of health or sleep schedule that allows them to work 12 hour days at a high level. Not everyone does. The way the Musk companies are currently run it’s not for everybody.

So, what would be more equitable? What would allow more people to engage in a meaningful way, if they wanted to? Shorter shifts, having four six hour shifts, would give many of the same benefit as the two 12 hour shifts in the Musk companies. I’d love to experiment with a company who is interested in running that, truly still round the clock development for the product development inertia. Now I’d even be interested in running 12 two hour shifts. Yes, there are more handoffs, there’s more context switching, that will be a penalty. But I wonder if it could be similar in speed. Maybe since these people are fresh, two hours of, I hope, focused, intense, fun, exciting, productive, high quality work, two hours of that, maybe they’re very refreshed. Maybe even with the extra context switching, how refreshed people are, might counter it, and maybe it would be even faster. Maybe the net result would be even better.

That way, people of many different ages, who perhaps have 45 minutes or two hours or four hours of very clear thinking high performance capability in a day could participate. And those are people that currently would not be able to participate in a Musk company at that high level. Then there’s another tactic we could try. I did not play professional sports but I played amateur sports. I did rowing. We called it crew. We would be in shells or fast boats. And the boats I mostly rowed in were eight people. And the eight people each would row on one side. And so you had four rowers on each side with an oar sticking out on each side, and we’d row on rivers and lakes and race. We’d race against other crew teams. And one of the years I was doing this in my high school, we called it, I was maybe 16 years old. One of the years we did this, we won the national championship, the USA championship for high school aged rowers.

And to practice, we would even row against some colleges where these students are 20 years old, 18 years old, 19 years old, 22 years old; some people that physically have the opportunity to be more developed. They’re simply their DNA allows them on average, to be much stronger, have much higher endurance. And we were so good we won against many of the less successful college teams. So, I got to experience rowing at a relatively high level. And what the rowing team did related to equitability, equanimity, equitable action, is they had what they called an A boat, a B boat, a C boat, etc. And these were people grouped by data, not by how they looked, what their hair looked like, how well spoken they were, how good their handshake was, who they played golf with, or whatever. They were grouped by their rowing capability. And the A boat was the eighth, absolutely highest data rowers. And this approach worked.

That A boat won the national championship for their age group, for our age group, high school age in the USA that year. I was not on the A boat, I was on the B boat. I was pretty good. I was pretty good at rowing, but I was not on the A boat. I think for one day, I made it to the A boat, but my data wasn’t quite high enough in output. And thinking back on it, I think that was mostly related to my diet at the time. I simply had much too much caffeine every day, which in high school, maybe that wasn’t the best choice anyway. You have to really optimize things like your sleep schedule, your diet, your thought process, when you meditate, when you take notes, when you journal, if you want to be really high level in almost anything. That was definitely true when I was working at Tesla, and it seems to be true when I was rowing.

What companies may be able to do is have A teams of A players, and B team, C teams, D teams. And if many people are at a very similar level, maybe 100 A teams of around five people, that’s already maybe 500 people if you have 500 people at about that level, B teams, C teams. And as long as the exchange of players at these levels is dictated only by data and not personal preference, and never limited by something that’s only up to your DNA, but is always determined by something that you could choose, you could focus on, you could develop that skill, you could better increase your habits that protect that skill and take care of and nurture that skill. As long as the sorting is done only on data and that data is only about items that you can choose, you can choose to improve or change, then it could be considered fair. And as long as that sorting mechanism happens at a very frequent cadence so you’re not stuck on the B boat when your data suggests you should be on the C boat or A boat, or vice versa, then that feedback loop is fast enough for people to feel the reward when they’ve improved, or feel the need to improve when they’re not doing so great.

So, if that sorting mechanism is at least daily, and I would say hopefully, every hour or more frequent, and hopefully that sorting mechanism is automated. That’s where digital self-management comes back in, in the conversations we’ve had on that. I’ll recommend my YouTube video DSM, Digital Self-Management on my YouTube channel. I think that concept of grouping by output can allow anyone who wants to play the game to play the game. And I don’t mean sports is the perfect analogy. Sorry if I’m taking it too far. But maybe there’s some things we can learn from it. And I do think the idea of like World Cup level teams, soccer football teams, is pretty similar to how I felt working in Tesla and when I visited SpaceX, a very similar feeling, and I think it makes us understand it. I mean, some of us might think no one should be allowed to play professional sports. It’s just too intense.

I think some people do hold that point of view. But I believe many more people think if they want to play at that level of intensity I want to watch. That’s exciting and awesome. And I think that’s a lot like the level of dedication to your lifestyle that’s required if you want to play in a Musk company. So, what about having other leagues, other levels of different levels of intensity and capability so that everyone who wants to play these innovation games can? That might be a useful way to have an overall higher aggregate level of innovation that’s more approachable by a much larger group of people.

Simone Cicero:
This is a way to approach business that is very much very objectivized, very, I would say based on rules and heuristics and clear information flows and data. It’s like professional business, right? It seems like something like doing business at the best possible in terms of being at the height of the challenges that we also see coming up in terms of massive transformation purposes that some of these companies have to deal with. If we think about solar, or elictrification of travel or some kind of transformative niches that the Musk companies are engaging with.

There is one thing that I would like to talk to you before we get to our close. I feel like it’s a key concept of your work and also the experience you had with Agile at Tesla and beyond is this idea of modularization. Right? I’ve heard you speak about modularization in many contexts, in terms of, for example, how a product can be modular, how a factory can be modular. And I guess also how a team structure, an organization can be modular, and even a team can be modular. So, maybe can you spend just a few words on why together with some other heuristics that you shared during the podcast, modularity is another very important concept that organizations should be thinking about?

Joe Justice:
The idea of splitting a big problem into smaller problems is highly useful. The mathematics of calculus is entirely based on that, taking something as complex as nature and dividing it up into tiny little squares or cubes, or multi-dimensional objects, so that we can approximate, or do our best, really, I guess that’s what it is, do our best within each of those pixels, and then stack them back up and achieve a working model of that extremely complex natural phenomenon that’s not perfect, but it’s near. That idea is powerful for science, for philosophy, and for business. Modules are exactly that. And the way I will define modules is pieces of a goal, a product, a piece of software, a car, a service, pieces that can be built in any order without waiting on each other. That’s really important. We can divide a product or a set of services, or a piece of software many different ways.

There are a few ways we can divide these things where those pieces, those modules can be built in any order, or all at the same time without waiting on each other. Now that’s an art, and that’s the art of modular architecture. There are many very good books written on this. UML, the Universal Modeling Language, helps us understand which ways to divide a system of any type, can be executed at the same time, or in any order. Then the next step, I mean, that’s hard enough as it is. Agile architecture requires mental training and diagramming and careful thought, likely with groups of people working at a time, ensemble work or group work or mob work to identify different ways we could cut this thing into pieces smaller, more achievable, easier to think about, easier to understand pieces that aren’t going to wait on each other, that can be built in any order, or at the same time.

If you can do that, the next step is to try to cut those pieces again to be valuable. This is the goal, where each of those pieces can be tested so it meets your quality standard and has some value on its own just as that piece. You could potentially sell it, or it answers a question where it reduces a risk. That module if it’s done all by itself, even without waiting on the other modules is valuable. It increases cash flow, or it wins you allies, or it generates excitement, or it teaches a new skill. And this is one way to use agility. Agile architecture and object oriented modular architecture and microservices architecture, MSOA or services architecture, all of which are used by Elon Musk and the Musk companies. Musk just tweeted yesterday about services architecture, and why it’s such a useful solution. These allow you to develop in any order, whatever it is you’re building. And if those services, if those modules can also be valuable, you’ve now solved your cash flow problem, because you have a regular cadence of delivering value. And that’s the entire idea of Agile product ownership and the entire idea of Agile.

Now, there’s other aspects to Agile as well. There’s four values and 12 principles. Some of them are about this idea of a regular cadence of valuable releases and optimum architecture evolving over time from the people who are doing the work. The core idea of a module is to try to cut whatever it is we’re doing into multiple pieces that can be done at the same time without waiting on each other. And ideally, they’re testable and valuable. Well, if your overall product can be produced, tested and is valuable, in less than 30 days, for example, you might not need modularity. Modularity has a cost, it adds complexity, you do have to maintain the modules. One reason to create modules is so you can have results quicker. And you have a simplified area to think about, a simplified area in which to work. Like calculus gives us a piece of the overall system, and we try to approximate or solve for that piece, and then we stack them up. We add more.

Well, same for modularity. If your product or system is already well understood, people can think about it easily, they can talk about it easily, they can make updates or changes to it easily, they can test it, deploy it, build it easily, then we don’t need to introduce modules. That might just be adding complexity. But if it’s not, if it’s something like a car where people typically design these things over five to seven year cycles, in some cases, 14 year cycles to design one, that’s how complicated most people think these products truly are. Then modularity has enormous value. By splitting off the heat pump, just the heat pump and establishing a set connection around it, I’ll call that the interface, the connection points, by splitting that off so your heat pump team can work in any order. Yes, the heat pump’s going to connect to the battery pack cooling ribbon, yes, it’s going to connect to the radiator, and to the cabin vents and blower. It’s going to connect to all these systems.

But by having the interface, the connection point defined, in Tesla, that’s the Octovalve, this eight tube valve system that’s automated. By knowing what the Octovalve is, the heat pump team can deliver 10 different versions of the heat pump. And as long as they all still connect to the Octovalve, none of the other systems have to change. In fact, the heat pump team doesn’t even have to be aware of the other systems. They definitely don’t have to wait on them and none of those other systems are waiting on the heat pump. As long as there’s a heat pump version one that works, all the other teams can use that version already, and even sell cars with it. And if the heat pump version two comes out at any time, maybe it’s more efficient, maybe it’s quieter, maybe it’s easier to maintain, maybe it’s less expensive to make, maybe all of the above. Anytime that heat pump version two comes out, it can be connected to the same Octovalve and sold same day, as soon as it meets its testing and quality targets. It can be its definition of done, it can be sold. This creates a radically faster system of innovation. Modularity is completely core to that.

Now you can modularize a car, you can modularize software, you can also modularize governance. You can group policies, and attempt to re-split policies if you have permission to edit, delete, or create new policies. If you do, you can group policies in groups that can change without affecting the others where the others don’t have to be rewritten. Then you have a modular policy architecture. You could try that in your own household. At least in the USA, if you buy land, and anyone in the USA is allowed to buy land. It’s not like we have a class that’s allowed to buy land and other people who aren’t. Anyone in the USA is allowed to buy land. If you buy land, there’s a certain set of rules of policies that you get to choose for your land. It is like your mini country that allows you to experiment. You can set policies for your building, your house, your shed, your barn, your office building, you can set policies.

Companies are the same thing, they’re a container of policies. You can set those and try to evolve them rapidly over time to improve innovation. Setting policies that make it easier to test, validate and change your modular split, that’s essentially the speed of innovation of your system. If you can re-split your modules in less than 30 days, the structure of your product is on a 30-day innovation cycle. And that’s a pretty exciting place to be. Yes, in the Musk companies, it’s much faster than that it’s multiple times a day. But in most companies, it’s less than once a year. So, you’re dramatically ahead of most of your possible competition.

Simone Cicero:
I thought that this was too important to discuss, indeed, right, this concept of modularity. I’ve recognized it in your work across the board, so I wanted you to double-click on this. I mean, as I was listening to you, it’s amazing how many insights I think are very actionable for any business or organization that is listening to this podcast. But Joe, as we move into the closing, I would like to ask you maybe just one more thing that is your bread crumbs. So, do you want to share some bread crumbs to our listeners? So, what’s something very important that they should be looking into in a book or a movie or whatever you feel like is an important thing that conveys some breadcrumbs of knowledge or wisdom that they should be looking into?

Joe Justice:
Oh, you’re very kind to ask, Simone. I’ll share what’s worked for me, and people have very different experiences and things that interest them that are quite different. But maybe some people out there benefit from some of what I’ve benefited from. One is a book called Zapp! The Lightning of Empowerment. It’s a book that attempts to explain the value of complimenting people regularly and reducing frustrations, and more. And I find it very approachable, very easy to read, and excellent.

Another is, it’s a book on real options theory. It’s a phenomenal book on real options theory, I’ll need to try to add — I’m deeply familiar. I actually have more than 50 copies of that book, because when people come to work in team Wikispeed I ask them to read it. And the title is escaping me right now. I’ll attempt to add it in the notes later. But it’s a book on real options theory written in Europe, it’s written in English. And it’s a graphic novel, it’s a comic book, it’s a manga, basically, about choice and how evaluate very quickly, which choices open up the most options, versus which choices limit options, and the expense of keeping those options open, because maintaining — keeping options open isn’t free.

Then the Great Courses series Big History, which we got to talk about a little earlier in this session, I think is useful in keeping a balanced viewpoint as to what is existence, and that our life is truly a tiny piece. So, what do we want that to be? What do we want that to mean? And I find that actually very useful in my own search for meaning. I’m very grateful to the Big History course specifically for that.

Then more important than all of those, I think, is trying to get to a very high level of capability at any thing, more things, the better, but at least one. Whatever it is. Maybe someone super loves making pasta. Well, try to get to an incredibly high level of skill with pasta. So, you can look at different pasta dishes from different restaurants or different people made and guess how they made it and why and the decisions they made and why anything to a very high level of skill that will allow you to make an analogy between anything else that you’re curious about, or that is useful for you to do, and that thing in which you have a very high level of skill.

For me, it’s martial arts. I practiced martial arts three hours a day or more for more than a decade and became a master. That was the title given to me and the belt I was given had a red stripe on it, which in that system signified I was a master, an associate master is what they called it. And the level of depth I had to go into to achieve that level has been so useful for me to look at anything else, and making analogies, making comparisons. I’d recommend that to anybody. And that thing that you go to such a high level of detail in, or more than one, I hope it’s something you really like, then you’re probably in a good mood while you put in that time. In fact, it might be difficult for you to not put in that time because you like it so much. That would be my number one breadcrumb is go deep, as deep as you possibly can to extremely high level in at least one thing, and then use it for everything else you do in life.

Simone Cicero:
Terrific. Thank you so much, Joe. These are really wisdom breadcrumbs.

Stina Heikkila:
Yeah. And I think, like Simone was saying already, that we got a lot of very practical insights here. And I think in answer to my question that I had previously, I really liked this idea that you shared around, maybe reducing the shift hours as a way to test to do something else, that it’s really about sort of the quality that people can deliver, not necessarily the amount of time that you can spend in an office. You might have other responsibilities besides work, but that doesn’t mean that you wouldn’t be able to deliver a great value in maybe a shorter time. I think that was a very practical insight for thinking about those things. Really enjoyed the conversation. This hour went really fast, or this hour and a bit. So, thank you so much, Joe, for staying with us for all this time.

Joe Justice:
It’s my pleasure. I hope to collaborate with you again at some point. Please come join Wikispeed with me, maybe take some of my courses. I’m happy to collaborate with you on all of your projects too. Thank you very much. For anyone listening, you can reach me at ABI-Agile.com. That’s Agile Business Institute-Agile.com, ABI-Agile.com. And I’m Joe Justice on Twitter. Thank you, Simone. Thank you, Stina. I hope to see you again soon.

Simone Cicero:
Thank you so much.

Stina Heikkila:
For our listeners, if you didn’t have a pen and you were afraid to have missed all these references, of course, you can always go to our website and find the episode and the show notes. And we will make sure to put all the links that we have been talking about. We’ll make sure that you can find Joe. So, you need to go to boundaryless.io/resources/podcast and you’ll find Joe’s episode there with everything you need. So, it was a great conversation. And to our listeners, we’ll catch up soon. And in the meantime, remember to think boundaryless.