Ken Everett is an Australian who has lived in US, UK, Singapore and Italy. He is an Executive Fellow University of Essex Business School, and formerly worked for IBM and Wilson Learning. He is also a former school teacher. Ken is the Founder and Network Architect of TOYFNET (Think On Your Feet® Network), with 300 affiliates in 30 countries. He is also the author of Designing the Networked Organization. I recently met with Ken for an interview about the world of organizations.
Doug Kirkpatrick: Well, I’ve got a few questions here. And sometimes these interviews veer off a prepared list, and that’s perfectly okay.
Let me just start out and ask you: how did you manage your career up to the point where you decided you wanted to leave the corporate world of IBM and start your own business?
Ken Everett: [Laughter] Well, I couldn’t really call it managing at the time! My several careers started when I fell into the only way to go to university that my family could afford, and that was on a scholarship that turned me into a high school maths teacher.
So, I worked first for the government, who I regarded as a poor employer. In retrospect, I see they left us alone. So this was self-management by default, and I had a very enjoyable time.
At one point, to help my students investigate career options, we investigated the fledgling computer industry. It turned out I joined IBM, fully intending to go back to teaching one day. And after 17 years, I did, but this time it was teaching executives. And I’ve been at that now for 30 years.
Along the way, I did a Master’s Degree in Cognitive Science – the study of mind, the brain, and knowledge. When I ended up distributing a product called, “Think on your Feet®” it was a way of combining my experience in teaching, international marketing, and cognition.
Doug Kirkpatrick: And you’ve been doing that ever since?
Ken Everett: Well, yes, for the last 20 years. I started on my own, in Australia, with a license from the Canadian owners of Think on Your Feet® to distribute their product, and to recruit others to do so.
Then we moved to Singapore to tap the emerging Asian markets; and that was a wonderful experience. Over five years there we opened up in many other Asian countries.
Then I was asked if I’d like to take my company to Europe – which we did – and we lived in London for four years. We ended up with affiliates in 30-odd countries.
We are now focused back in Asia. My son runs the business on an operational basis; I support him.
Doug Kirkpatrick: Fantastic. So you mention in your book, Designing the Networked Organization, Ken, that Dee Hock of Visa fame is one of the pioneers and visionaries in the concept of a networked organization. So my question is: Do you know Dee Hock? And regardless of whether you know him or not, what are the key things that you’ve learned from him?
Ken Everett: No, I don’t know Dee Hock, but I’d love to. I imagine he’s alive. If you know him, Doug, please introduce me.
What was revolutionary was the way he set up Visa from the remains of BankAmericard. He introduced a new form of organization in which the banks who distributed the card also became the owners of Visa. This worked via local boards. So there’d be a board for Australia, made up of Australian banks.
The banks not only cooperated as owners, they also competed in the marketplace. And it was this yin and yang, this chaos and order, this chaordic organization as Dee Hock called it, that was the secret of Visa’s incredible success. And his book is a fabulous read. It’s called “One from Many”.
The point is – and I think this is what you’ve discovered at Morning Star if I understand it, and what I’ve discovered from my networked organization experience—that there is a huge opportunity for business advantage in the way we organize.
We often talk about business advantage through quality, or product innovation, or distribution, or whatever; but using organization as a source of business advantage is often overlooked. However, it offers options for organizational architects, most of whom default to the standard hierarchical model bequeathed to us by the military and the church. As Hock proved at Visa, there can be extraordinary advantage in a different approach.
To finish the story – Visa became so successful, that the regulators took notice. How can you have banks competing and collaborating? This sounds more like collusion. Is this an antitrust issue? This was first raised by the Reserve Bank of Australia, and then American regulators. As a result, Visa’s ownership structure was changed, and it was listed in 2008. Back then, it was the most valuable IPO of all time.
Today, Visa is a typical listed corporate entity, except in Europe where the old structure operates on a license basis. I think this is a natural laboratory with the two systems coexisting. Someday, someone might research the differences.
Doug Kirkpatrick: Exactly. Oh, thank you, Ken. For the benefit of people who have not read your book, how did you decide to organize TOYFNET the way you did?
Ken Everett: At the beginning, we didn’t have enough money to employ people, so we found colleagues who were willing to distribute our product.
Secondly, I was frightened – and it’s a strange thing to say – of emulating my IBM experience. I was taught in my IBM days that we were responsible for the continued well-being and careers of our employees. I was 50 when I started the network and I didn’t want to be responsible at 70-plus for putting rice in people’s rice bowls – as we say in Asia. So, you know, I wanted to avoid that sense of responsibility.
For want of a better word, we called this arrangement a network. Only later did we realize it was a different kind of animal: that it wasn’t just a default option for poor people who were afraid. It was, in fact, a very rich option. We discovered it was very resilient; we discovered it was very innovative; and we discovered it was leader-full.
I cannot understand why there is so much focus on the lack of leaders today. Our experience is exactly the opposite. There are plenty of leaders, and we’ve seen that in our network.
Doug Kirkpatrick: Great. So, Ken, what caused you to write your book and how did you know –
Ken Everett: I guess it was the teacher in me. I wanted to give back in some way. I imagined myself at a business school helping entrepreneurs experiment with organizational designs – which of course is what brings you and I together. And I thought the only way to do that was to get a PhD, to do a thesis, and qualify to teach.
So I started a PhD in Singapore. This led me to read about organizational forms, about networks, and about networking science – which is still very young – and all these things became interests of mine. As you know, having looked through the book, these themes pop up from time to time. I didn’t finish the PhD, but the result was the book.
Doug Kirkpatrick: Exactly. So the cover photo shows a chess piece.
Ken Everett: Yep.
Doug Kirkpatrick: What is the significance of your cover photo and how does it relate to your subject?
Ken Everett: Business Expert Press, who published the book, are innovative in their marketing. They sell collections of books to business school libraries. They have 50 or so books in each collection; strategic management titles, financial management titles, etc. My book is part of their strategy series, hence the chess piece.
Doug Kirkpatrick: Got it, thanks. So as the hub of TOYFNET, how hard was it for you to sort of let go and see yourself as a catalyst and coach and connector, rather than a boss?
Ken Everett: At first, it didn’t seem difficult because we associated ourselves with – recruited if you like – people who were similar to us. In fact, many in the beginning were my friends, ex-IBM. IBM was releasing people at that time, and many of those became consultants like us. It seemed kind of easy, but that was deceptive.
I still remember our second network meeting in Sydney. We’d spent the morning talking about delivery of the program. I had an agenda like a good corporate manager should and, after lunch, I announced, “Now, as per schedule, we’ll move to marketing.”
And one of my colleagues – our first affiliate, a lovely but a very straightforward man – said, “Ken, I want more time on delivery. I still have unanswered questions.” I can recall the uncomfortable feeling I felt. He was saying, “Ken, I heard you, but I haven’t finished yet.”
This was about control, or lack of it. I didn’t see it that way at the time. What I thought was, “What a bloody nuisance. What’s this guy think he’s doing?” And then I stopped, because that was my intuitive, animalistic reaction: the result of years of training about the manager’s role in running and controlling effective meetings.
But I realized I wasn’t his manager. Here was a man working in his own business. I paid him no salary. He owed me nothing, other than a simple contractual relationship. And it was his Saturday! He was there in his own time. I suddenly realized my reaction wasn’t justified.
After that, I became sensitive to these feelings, which were kind of chemical. I could feel my pulse racing when I was thrown off balance. It turned out to be difficult in some ways.
Then it turned productive. We started a search for more inclusive processes—processes that allowed us to share in the running of meetings, and the business. This began a transformation of the way we met and interacted.
Doug Kirkpatrick: Right; good answer. Well, the next question I have is, “How important is it for members of your network to be open and spontaneously adaptable to serendipity and ad hoc opportunities that come up?”
Ken Everett: Well, at one level, they are used to that, as small business owners. As a group, when we get together, they’re often meeting new people for the first time, so they have to be adaptable, as you say. Your word was adaptable, wasn’t it?
Doug Kirkpatrick: Yeah, spontaneous serendipity –
Ken Everett: Okay. Yeah, yeah. This is the stuff of everyday life. I mean sometimes we get a demand for a big job that one of them can’t handle on their own, and they now know other people who they can work with. Occasionally, we have the opposite. We have things like – well, you might recall, SARS. Do you remember the severe acute respiratory syndrome that started in China and spread around Asia in 2003?
Doug Kirkpatrick: Yeah.
Ken Everett: Well that decimated our business in Asia. We lost 50 percent of our business almost overnight, and for a period of six months. People had to make their own adjustments. That’s when we discovered one of the huge advantages of our networked organization. Individuals responded in their own ways.
I said to my son who was working in the business with me: “Our poor affiliates; what’s happening to them? How can we help them?” He said, “Well, why don’t you pick up the phone and talk to them.”
The first one I called was in Hong Kong, and I said to her, “Mary, this must be very difficult for you. How are you doing?” She said, “Ken –” and she’s a rather devout person – she said, “Ken, look. I think this is just part of God’s grand design and I’ve been so busy, that I haven’t really had time to focus on my reflections, on reading sacred texts, on prayer, and in meditation.” She said, “I think I’ve been given a God-given opportunity to right that wrong.”
I spoke next to someone in Singapore who was much more pragmatic. He said, “Ken, I’m so far behind. My website’s out of date. My marketing materials are rubbish and need to be updated. I’ve got plenty of work to keep me going.”
And then I spoke to an even more pragmatic Australian who said, “Oh, well, I suppose I’ll have to drink cheaper wine and fly economy class for a while.”
Each of these adapted in his or her way; and indeed, this is the opportunity they get from being independent. Overall, the system, our network, proved to be very resilient as a result.
Doug Kirkpatrick: Excellent. Well, let me ask you this. What are the key ways that members of your network turbo-charge the businesses of fellow members in the network?
Ken Everett: Well, thank you for reminding me. I use that word in my book. Doug, that’s very nice of you. [Laughter] Let me explain: We started off with me as a hub, forming connections with individual people. We were doing well.
Then we found that by introducing them to each other, a community evolved if we nurtured it well enough. As a result, we were getting better.
But then we discovered something which helped us even more: and that was what we call N2N, network-to-network-networking. And that was when we, as a hub, associated with other hubs distributing different products. We helped each other and our businesses improved dramatically. We were getting better at getting better.
For example, if there’s the Morning Star tomato processing company, maybe there’s an Evening Star apple processing company, and maybe a Midday Sun mandarin processing company. If you all have similar organizations and objectives then there are ways you can help each other.
These other hubs introduced us to our single most productive outlet as an individual, and our biggest market, which is China.
These introductions, these helping hands, from one network to another, have been enormously powerful. And in return, we now run N2N. At www.n2nhub.com you can find out more. We don’t make any money out of it, but it helps us and it helps others. We host N2N conferences for people from other networks.
Doug Kirkpatrick: Fantastic. Well, let me ask you the flipside of the last question, and that is, “How do network members regulate each other when tough conversations become necessary?” For example, when you have red mist erupting and then you have to deal with situations.
Ken Everett: Another very good question. Let’s talk about the red mist situation and what I mean by it. ‘Red mist’ we know from sport. It is when an athlete gets so charged they do something stupid, like become violent; that’s red mist syndrome.
In our network, it might be when somebody breaks the community ‘rules’. We once had one case where an affiliate directly targeted the clients of another. There’s nothing wrong with healthy competition; but this person actually chose to pick off other peoples’ clients simply by asking how much less she needed to quote to get the business. Well, that isn’t very productive and wasn’t looked on very well by the community.
At a network meeting people started talking about this. It was clearly the big issue. We dealt with it as a group, and one of our affiliates led the discussion. He was the leader on that occasion. Recall, I said we are leader-full.
Eventually, we invited the person who was being ‘difficult’ to leave, and she did. In fact, she handed over her accounts to other people; and we are on good terms with her now. But that’s how it happened, through the group deciding on what should happen.
Doug Kirkpatrick: Very good. In your book, you talk about the importance of having lots and lots of connections. And so to someone who may not be well versed in network theory, what makes the density of one’s connections or networks important?
Ken Everett: I need to preface this answer by saying, that although I’m a member of LinkedIn and Facebook, I’m not active on those. When I talk networking, I talk in a slightly different way. And one of the important ideas I’ve come across is the strength of weak ties.
The technical definition of a weak tie is of someone we don’t see often. A strong tie, in the sense it was defined by Mark Granovetter, is someone you see at least every two weeks.
Granovetter posed this question: “If you’re looking for a new job, would you seek help from your strong ties or your weak ties?” Nearly everybody says, “You ask your strong ties.” It turns out, the better answer is to consult your weak ties, the people you see less often.
And then the question arises, “Why?” Well, the answer is that the people who you see often have much the same information as you do. They don’t add much novelty to your database, whereas those you see less often may have fresh information.
In fact, Granovetter’s research shows you are likely to find a new job more quickly, and one that pays more money, via your weak ties. What’s the application of that for us? Whenever we open a new location, we tap all the people we think might have any information, including our weak network. We tell them what we’re doing via an all-points bulletin and see what we get back. We’ve had marvelous results this way. Does that make sense, Doug?
Doug Kirkpatrick: It does. Thank you very much. What did you learn from the dabbawalas of Mumbai?
Ken Everett: [Laughter] The dabbawalas, yeah. A dabba is a tin or a container for food in India. A wala is a person. This is a person who carries lunch tins. You are referring to the famous dabbawalas of Mumbai. They will deliver your home-cooked lunch to your office desk. Why would this happen?
Well, first of all, if you go to work on the Mumbai trains, they’re so crowded there’s no way you could possibly carry lunch tins. Secondly, there are dietary preferences. Third, there’s the delight of having freshly cooked home food for your lunch and, finally, it’s even cheaper than buying take-away food.
What happens is this; the dabbawalas collect your lunch from your home—and each will collect up to 40 tins—which they bring to a local railway station. Others from this area meet there, too. Then they board a train to downtown Mumbai, sorting tins by destination as they travel, and as more board.
In Mumbai, after final sorting, each dabbawala delivers tins to a separate area – a block, a site, or office tower. These are not the tins they picked up, but the tins for one location. They deliver with incredible accuracy within a few minutes of 12:30.
At 1:30, they collect the empty tins, and by 4:00 or thereabouts the tins are being returned home by the reverse process. The whole operation delivers about two hundred thousand lunches each day. Because many dabbawalas have little education, the tins are marked with simple codes, which they’ve memorized.
The quality exceeds Six Sigma. It’s a remarkably error-free operation. That’s the famous dabbawalas of Mumbai, an extraordinary group; and an extraordinary network—because they are organized along network lines.
Doug Kirkpatrick: And somehow they manage to accomplish that without having bosses telling them what to do.
Ken Everett: That’s true. It is true that at each major location, there’s a senior man who’s there to help convene conferences when there’s an issue to be sorted out between people; because they compete for clients, if you will, but they collaborate in the delivery. It’s this combination of competition and collaboration that characterized Visa which we spoke about earlier.
More than that, it characterizes the Internet. Few people reflect on the fact that the Internet doesn’t have a CEO.
Doug Kirkpatrick: Right. [Laughter]
Ken Everett: The Internet works because people collaborate by sharing the same protocols. Apart from that, they compete. The result is miraculous. In fact, we are talking on it right now from one side of the world to the other via Skype. And this service that you and I are using, in the sense of the internet, doesn’t have a ‘boss’.
Doug Kirkpatrick: Exactly right. Very good, very good. Well, I’ve got one more question for you, Ken, and as an observer of the business world, do you see any signs or any blooming flowers anywhere – any signs that traditional organizations are starting to catch on to some of these ideas of self-management and the networked organization?
Ken Everett: I do. There are a few I mention in the book. SEMCO has been around forever in Brazil; and their story is great. And Maverick, Ricardo Semler’s first book, was published, I think, in 1994. It’s still classic. I remember giving it away to my corporate friends at the time and they thought I was mad. But I think they now see him as being very perceptive.
Then some companies are inviting their customer networks into their business. An excellent example would be the SAP Community Network, which it has about two million members with 25,000 joining each month. This is a place where SAP users swap expertise. Many of these would be competing in the marketplace, but they see value in collaborating via SAP.
SAP, for hosting this, gets a big dividend. These clients suggest product improvements. What a source of innovation; all those people doing research for you.
Another interesting organization is the MONDRAGON Corporation Cooperative, or MCC, in the Basque area of Spain, also mentioned in my book. These are some that come to mind.
I think there’s also movement evident in things like the Management Innovation eXchange, the web discussion that Gary Hamel hosts. There you’ll see examples of more green shoots. And Morning Star, having been featured by Hamel in December’s HBR, is just such an example.
I cross my fingers our time has come, Doug.
Doug Kirkpatrick: I certainly hope you’re right. Those are great examples. Well, Ken, I’m out of questions. That was my final question; and you’ve been more than generous with your time, because we’re coming up on an hour already.
Ken Everett: Thank you. One way to sum up what we’ve been saying is that story of ‘O’ –if O is the modern organization—is very short, only a hundred or so years. We are now at some flex point. And indicators to the future come from several new kinds of ‘O’s:
One kind I call the SMO – the self-managed organization. Morning Star is good example.
Another is the RO – the results-only work environment. Best Buy is an example. Work when you want, where you want, how you want, as long as you get your results in.
There’s the NO, the networked organization that my book is about. And the CO, or community. The internet is a community.
These designs are all informed by what we’ve learned about peoples’ MOs – or motivations—from the work of [Daniel] Pink and others that points to the real satisfiers for people today: autonomy, mastery, and purpose.
Finally, I think we are moving from the leader as hero to the leader as a host, or HO. That’s my summary, in ‘O’s, as a way to remember what we’ve been talking about.
Doug Kirkpatrick: Well, I think you’re right, Ken. I couldn’t agree more. Thanks for your time, Ken. Take care.
PUBLISHED BY THE MORNING STAR SELF-MANAGEMENT INSTITUTE, MAY 1, 2012