Aviation Safety Culture applied to Small Business

That's number one small business operations podcast. I'm joined here by my Crane Penwaren partner in crime, Peter S. Lohmann. How are you, Peter?

Doing good, John. We're live.

I love saying we're live. We're live. I love saying that. Yeah, do it live. F it, we'll do it live.

We'll do it live. I'm doing well. Uh, I'm doing well. I'm excited to talk about today's topic.

Yeah, let's do a quick pitch. By the way, one week, two weeks from today, Crane application window open. Is that right?

That's right. April 2nd, we have a big launch event called Access Granted, and we reopen applications for Crane. They will be open for about 10 days and then they will close for 6 months.

Awesome. And, uh, I know just from looking at the stats and stuff, Crane members, among many benefits, are hiring RTMs like crazy, uh, via our relationship. I love seeing those—

Absolutely.

—hires come through and putting those staffing markup jabronis out of business. So love to see it. What we were talking about today is aviation safety and culture. And I will preface this by saying you sent me an article a couple of weeks ago. I usually don't read the things you send me. I don't believe in reading correspondence. I'm just kidding. I read it. And once I digested it, I realized that I think it might be one of the most important articles that small business owners can read other than like Constraint-Based Thinking. And the whole concept that we're going to be talking about today, which is just culture. And I want to tee us off by telling why I think that is and why it's so worthwhile to listen to this conversation.

Let me drop the name of the article first, though, because it's one of the best titled pieces of writing ever. Other than Build Your Yacht.

Other than Build Your Yacht. You have to say other than Build Your Yacht, which you also sent me.

Also great. But the title of the article is Why You've Never Been in a Plane Crash. Yeah, which is always such a great title. By the way, it's hard to Google for that, so we're going to include a link in the show notes. Okay. Um, so yeah, that— okay, if you're not interested after hearing that title, yeah, wake up.

Okay, so if you read, uh, I forgot what his name is— Dan— not Dan Carlin, but something— he says the first level of a company, which is what more or less a crane break is about, is a self-managing company. And that most business owners at a small scale, their dream is to get to a point where it's a self-managing company. Taxes can be filed, tickets can be closed, new units can be leased, hires can be made, whatever. That is step 1, which is I can close my computer for 1 week, 2 weeks, 4 weeks, and my company—

I thought that was the end.

No, no, that's step 1. I got work to do.

If that's only step 1, that's step 1.

Step 2 is a self-growing company, which is not only can it run its current operations, it can grow on its own. So it doesn't just answer the mail, it generates inquiries, it converts those inquiries into customers and collects the revenue associated.

So can you come back from a 4-week crane break and be managing more doors than when you left? Correct.

And that is harder. Obviously, a predicate to that is a self-managing company.

And then second is a self-growing company predicate. Ding. I don't know if our new podcast editors are hip to our two little running jokes about when John uses a, what do they call it? A $5 word, $5 word. Uh, we get a little sound effect. And when I make an Alex Hormozy reference, which that doesn't count, then we also get a little ding.

Yeah. In California, it's a $5 word. Columbus, Ohio, it's a 4-cent word. That's right. Yeah.

Uh, you know, cost inflation adjusted. Uh, yeah, exactly. So.

So the second thing is a self-growing company. Broadly speaking, I can just tell you where I'm sitting right now. Sagan is the first two. Like, it both meets its obligations. Again, you know, generally speaking, right?

Well, you were never running it or growing it anyway. So that, I mean, that's hardly an accomplishment.

I don't know about that. Okay. But I actually think that there is a third level here, which is a self-learning company. Learning company, a company that can evolve and adapt without Peter saying, you know, I really think we should swap our pricing model because I'm not seeing customers, you know, cross-sell on that. And it's not Peter being the institutional learning point of focus. And what this article does to me is address— there's two parts of creating self-learning organization, in my opinion, which we can talk about. This one addresses what is the hardest part, which is the creating a culture of a self-learning organization. And so that's why I think this is so important because I think an organization that is self-learning, where it's learning from its mistakes, it's learning from its experiments, it's designing experiments, it's trying stuff without the owner saying, you know, I really think we should try cold email.

How is this not just hiring a great CEO?

I think hiring a great— I think that learning happens at— generally speaking, the best learning comes from the working level, not from the CEO. And a culture of learning and a culture of improvement. This is not Kasugi. What's the one that Tim— the Japanese one. Right. Uh, small improvement every—

kaizen. Isn't that the one where it's like you put back a piece— a plate that broke into 100 pieces, you put it back together and it's more beautiful than the original work?

You know, the reason I was thinking about is my buddy Kerry, who, uh, who is a SEAL, has got like a lot of scars. And he was— I saw him take his shirt off yesterday. I was like, dude, you look like Kasugi because he's got some—

there's a great Postal Service album by that name which we have on vinyl at home. But yes. Kaizen is, I think, what you're after.

Yes. Meaning a culture of improvement is not a top-down exercise, right? And I think this article and what we're going to be talking about, which is a just culture, is addressing the hardest part of that organizational learning, which is— and just because it's not a big deal, but I think there's two parts to creating a learning organization, a system of learning and a culture of learning. And this article talks about the culture of learning that's so important. So I want to just get that off my chest because when I read this, I was like, I've been aching for a way to talk about this. And this article helped me verbalize and formalize some of the things I knew, which is when somebody messes up, I don't just go, hey, Peter, check your emails, which is not right.

Well, let's, let's take us into the article. Do you want me to try and distill the article.

Yeah, because I think the discussion about it— I mean, you can summarize it in like a few paragraphs, and then I think breaking out all the concepts from that is where it's really fun.

Yeah. So, so why have you never been in a plane crash? Let me see if I can explain why you've never been in a plane crash. So just to set the stage here, and I know we, we talked a little bit about this on the tail end of the last episode, episode 100, which is a couple episodes ago, but at any— I was able to confirm this— at any given moment, there's over a million humans airborne day and night, 24/7, 100 million people in the air. So if you think about like, well, what's the odds of a plane crash? 1 in a million. Well, if that were the case, there'd be 24— like, if like one— if you think about like every hour, 1 in a million chance of a plane crash, well, that'd be 24 plane crashes a day, which we're clearly not at. So somehow aviation culture and aviation safety has evolved to the point where your odds of being in a plane crash are infinitesimal, and famously it's safer than driving and all this, right? How did that happen? Incredible. Because if you know anything about planes, commercial planes in particular, they are unbelievably complex. They have hundreds of miles of wiring in them. There's air, there's pneumatics, there's fuel. You've got gas turbine engines spinning a million RPM, like 6 inches from people's faces.

You've got nighttime, you've got weather, you've got exogenous factors. Exogenous— there's another one for you— you've got exogenous factors, right? You've got— it's incredible. It's truly stunning.

And compare that to driving, where there's hundreds of accidents, fatal accidents, every day across the country, and no one even blinks an eye, right? Yeah. And think about how much simpler a car is than a plane, and how much easier it is just to drive. Just driving as compared to flying, think about how much simpler that is. So the— it's, it's interesting question, right? Why haven't you ever been in a plane crash? Well, it turns out that there's a cultural reason behind this. It's not just because the people who design planes are really smart and pilots are really careful. That is not the answer to the question why you've never been in a plane crash.

They don't yell at the pilots before every flight and say, by the way, be really—

pay attention. All right, hey, be careful.

Yeah, 9 and 5.

All right, yeah, great. Yeah, 10 and 2. Yeah. Um, so it turns out it has to do with what happens when there is an accident. And early days in aviation, there were a lot of plane crashes, a lot of plane crashes, and there were far fewer planes and far fewer people flying back then, but there were way more plane crashes, uh, per week or per month. And what happened was this started to become an issue and the NTSB was formed and National Transportation Safety Board or Bureau, and they investigate these accidents. And there's a particular way that they handle the aftermath of an aviation accident that is distinct from almost anything else on planet Earth. And it has to do with the fact that they're not there to assign blame. It's not a judiciary body who's trying to figure out who's at fault. Quite the opposite. Their goal is to figure out what happened, what were the systems and cultures and interplays of complex, complex system dynamics that led up to this accident. And then once they find that, they issue a set of recommendations to the airline manufacturers and to the— or to the aircraft manufacturers and to the airlines and to the pilot organizations and everything else about, hey, here's what happened and here's what we think is gonna— is gonna prevent this type of an accident from happening in the future. And that gets all incorporated and then they move on. And they're not after blood, they're after not having another accident, which is quite different from how we handle things like car accidents, where if you get in a car accident, you may get sued, you may go to jail if you were drinking, right? And no one takes any time at all to think about, well, it seems to me that there's 25 fatal DUIs in Detroit every month in the summer. Yeah, maybe we should like stop passing laws about DUIs and start figuring out what is it about the system that's encouraging people to drink and drive, and what are the failures about the vehicles or the bars or the alcohol manufacturers, or something's happening. Like, if we took everyone who got a DUI in the last 10 years and we lined them up and shot them, there would still be another 10 DUIs the next month. So clearly there's an issue.

I want to add something that's also the beginning of what the solution is to this. That also makes it more of a miracle, which is the fallibility of humans. Meaning aviation error rate is as low as it is despite what is— pilots aren't perfect. Air traffic controllers aren't perfect. Mechanics aren't perfect. Uh, Eric, all, Despite human fallibility, which is omnipresent. And so the starting point of— they bake it in, correct? Which is everything is a system mistake, basically everything other than one or two examples that we're going to talk about. But despite human fragility, they still have that low of an error rate. Yeah. Right. And so when somebody is, let's say somebody has got a lot going on and they're an air traffic controller and they just miss a ticket, they don't say, hey, hey, we need to track every ticket, be better. They say, well, why did she have so many planes assigned? Was she at the end of a long shift or our shifts too long? Is our visualization software broken? Because it's not clear what's a taxiing aircraft versus it taking off. It's not, hey, hey, hey, pay more attention. Which is, which is when you look at how small businesses run, which is linking it to our topic here, somebody on your team makes a mistake. Hey Betty, it is so important that we have spellcheck-free writing when we communicate with owner investors moving forward. Please check your emails before you send that. And you know what she says? Awesome. I'll keep it. Absolutely.

I'll be more careful next time.

I'll double-check. And do you think that that is going to do shit? Right? It's not because you just went into 100 other plates. And so the single greatest impediment to error prevention is that we punish people for making mistakes. It's the single biggest impediment to error prevention, which is instead of saying, how do we build a system that doesn't let this happen again? We say, you know, I've looked at Betty's emails and she has a spell, you know, she, you know, we gotta, hey, new policy, new policy.

And what do you do? You give her something new to do. Yeah. Well, before you send an email, what I want you to do is blah, blah, blah, blah, blah. Right now you've just added. And by the way, aviation has a special term for this. Um, they, aviation culture is very interested in how busy pilots are because as you can imagine, you've seen a cockpit, there's a million lights and switches and displays and They've got a lot to think about. And so they've smartly identified that in some accidents, the pilot having too much to think about is a factor, right? Yep. Instead of just saying, yep, yeah, instead of just saying, well, we need to hire smarter pilots, or pilots need to just be smarter about how they just didn't flip that switch, situations, right? Just flip that switch. So instead, they, they, they sort of academically coined this phrase of pilot workload, and it is discussed extensively in aviation culture. And in— it's incredible. Yeah. And it encompasses, um, you're gonna love this other, uh, phrase that they— that's part of what goes into pilot workload. Um, occasionally you read these NTSB reports, which are really fun to read, by the way. They're very readable. You don't have to be and know anything about aviation to read an NTSB report. Yeah. Um, they'll occasionally talk about, oh, He was in task saturation. Task saturation. Just what did they say? Oh, he was too stupid to figure out what to do. No, no, he was in task saturation. Correct. Okay.

So your executive assistant drops the ball on something. Yeah. Yeah. She was in task saturation. I threw 87 things at her in a chain of disconnected Slack messages. She was in task saturation. It wasn't that she— you don't yell at her, hey, my schedule is really important. And she goes, okay, boss, you say, hey, task saturation.

Yeah. So brilliant.

We could just shut up right now and end the episode. It is so, it is so profound. Right?

My buddy Todd would be excited about all of the aviation, uh, learnings we're pulling into small business. He, he was a pilot, uh, before he ended up.

Yeah. Love it. Okay. So. Couple quick, quick little things to kind of tee some stuff up, which is the difference between a punitive culture and a learning culture. And then I want to talk about the kind of accountability balance here because I don't want people to tune out because they think we're— okay. Punitive culture, errors are treated as moral failings or crimes or whatever. What happens when you treat something like a crime? They stop telling you about it. Hey, if I am honest with what happened, I'm just gonna say, oh, the CRM, I swear I didn't see any And you never learn what actually happened because they know that if they tell the truth, you're gonna say, oh, we gotta fire you.

And in aviation, by the way, what happens? They stop reporting near misses. Yep. So aviation culture has this term called a near miss and they're reportable incidents where it's like, oh, we almost hit that plane or we almost took off when there was another plane coming, right? Anything having to do with where there could have been an accident. Yeah. That's part of how we learn. We don't necessarily need an, an actual accident to learn. We can learn from a near miss. But if you're punished for these, you're not going to report them.

And so what happens is the organization becomes blind to its own systematic faults. It becomes blind, right? Because it doesn't have people self-reporting near misses or whatever. Okay. The opposite is a learning culture or a just culture, which we're going to talk about. Errors are treated as free operational data. Transparency allows leadership to fix the system before catastrophic failure. Love it.

Oh, free operational data. It's like, you remember the free real estate guy? Free real estate. It's free operational data.

Only me and you. Okay. Now the one thing that I think is important to note here, which I really like, is defining a just culture. It's not a get out of jail free card, right? There is individual accountability, meaning—

Yeah. So pilots show up drunk. Correct. That's not— they get fired. They don't—

I was going, I was going really far down the rabbit hole, essentially. Um, there's 3 categories that they say here, a diagnostic matrix for leadership response. And essentially the 3 options are, uh, console, coach, and punish. And it has to do with the type of mistake. Okay. Console is a human error. Product of system design, unintentional. Action: console the employee, modify the system, right? Hey, look, you have 187 tickets. Um, you know, you're gonna make some mistakes in your types— type as you go. We're gonna install Grammarly on everybody's computer so that you don't have to triple your output, right? Okay. Console. Hey man, it happens. You fat fingered it. Okay. So that is a human error. The second is an at-risk behavior, a choice where risk is believed insignificant, i.e., a shortcut was taken. Right? The action: coach the employee and remove the incentives for a shortcut. Hey, I was really busy, so I didn't check the flue before I put the thing down the chimney, and I broke the flue. Sorry, I was in a rush. And so you say, hey, man, sorry, I know I've been overscheduling you, and you're really busy. But last but not least, as you said, which is reckless behavior, conscious disregard for substantial risk. And that's punish the employee, remedial action. That is, I showed up drunk. I mean, drunk's the easy one. I showed up drunk. That's not a systemic failure. That is a bad faith error, not a, I'm doing the best I can and I just dropped the ball because I have a task overlooked. So I do want to just insert that it's not just like a blameless culture. You have to look in essence at the spirit of the air.

Agreed. Great, great distillation there. Yeah. And there's actually some really—

I was looking at some charts in preparation of this pod. There's some beautifully elegant charts where it's like this, you know, did they know it was a bad behavior? Yes. No. If no, it's a training issue. If yes, did they anticipate the— no. Okay. Back to the decision tree. Yeah, it's this beautiful org chart, kind of flowchart around kind of categorizing these errors. Yeah. And that's a—

we should try and find that and put in the show notes because I think as I've grown as a lead, well, I should say as my businesses have grown and I've gotten more people reporting to me, I've— and we've talked about this on the show, I have trouble handling bad performance. Um, I, I fumble, I think, and I avoid the hard conversations around performance problems. And I, I think having a flowchart like that would help me understand how to approach the different types of mistakes and errors and problems that show up with people who work for me. So I, I like that.

This one was, I need to modify it because it was made, I think, very specific to aviation. Okay. But with a little bit of tweaks, it is so applicable to like employee challenges, right? The reason why this matters of course, is every business owner I talk to, it's like, oh, you know, she made a mistake, he made a mistake, huh? Right? Like this breathless, I just need better people. It's like, it's like this breathless lack of accountability and everybody is constantly falling short of their idea of perfection. And it's like, yeah, man, because you haven't built in the culture of a— you haven't built the right culture to get better, not kind of attach blame. Right. So the, the, the other thing that I think upfront, I really like here, and I pulled a couple of them. One of them is, oh yeah, these are so cool. You'll love these. One of them is, why is this hard? And I'll give a story because I was actually talking about this with Carrie, who was a SEAL yesterday too, which is one of the issues here is severity bias. I.e., outcome independence, which is the most difficult cognitive hurdle for leadership to overcome on this is the tendency to judge a behavior more harshly because the financial or physical outcome was bad. In a just culture, the level of intervention is based on the behavioral choice, not the outcome. A reckless act like driving a truck drunk is punished Ruthlessly, even if no harm occurred. Whereas a human error that caused $10,000 damage is met with system redesign and coaching, not firing. And that breaking outcome severity bias— I only pay attention to errors where it costs me money. Bad answer. Because what's that do? Hiding and no self-improvement loop versus This one cost me $20 grand. I don't know how good she is. She's fired. Cost me $20 grand. I have no context as to human error, task overload, system redesign. It cost me $20 grand. No excuses.

When you think about the worst bosses you've ever had, and I also, I feel like every boss from the 1950s and earlier was this way, right? Like, or that's how they're portrayed in literature and movies and stuff. Is like all that matters is the outcome, right? Yeah. That's your, your worst boss you've ever had is, is the one you were just describing there, John, of like doesn't matter the extenuating circumstances, doesn't matter if your mother died, if you're 10 minutes late you're fired, right? Or whatever. Yeah. Um, the worst type of person to work for. No understanding of the context in which work happens or life happens. Um, so Yeah, yeah.

So I thought that that was, uh, and but somebody drives drunk but they didn't get a ticket or get caught.

Oh, that's Gary, you know, right? Like, again, worst boss you've ever had. That's his response, right? Like, oh, you know, like, well, did anyone get hurt? No. Well, I guess we don't have a problem, right?

Did he, did he show up on time? Yeah. Like, so that I really like. Okay, um, a couple other things, um, Isn't that a great one? Right? That one of the challenges is severity bias. Yeah. Here was a little bit of a process flowchart that I pulled, which was, okay, incident occurs. Question 1: Was there conscious disregard of an unjustifiable risk? That is your first question. If the answer is yes, that's reckless. Punish. Right? No. If the answer is no, no, it wasn't conscious disregard for unjustifiable risk. Okay. Did the employee choose the action believing it was justified or safe?

So wait, John, let's run through the incident that happened in LaGuardia. Let's run it through this, right? So if you're not familiar, there was recently in the headlines, um, a plane landed at LaGuardia and a fire truck who was on its way to a different emergency, um, crossed the runway and the plane—

was that the story? I didn't know that. Yeah, it was on its way to a different emergency.

It was on its way to a different emergency. It was like smelled, smelled fuel in the cabin or something. And the plane crashed into the fire truck on rollout, which is the description for like when the plane lands, it's on the runway, but it was still going like 100 miles an hour, really fast. Yeah, it was slowing down. And the details are that the air traffic controller was in communication with this fire truck the fire truck described where it was on the runway and the air traffic controller cleared it to cross the runway. Yeah. Then the air traffic controller realized, oh shoot, there's a plane about to land, and told the fire truck, stop, stop, stop, stop, stop, stop. Um, but the fire truck either didn't hear it or it was too late, it was already out, or it stopped but it stopped in the middle of the runway or whatever, we don't know exactly. And then the plane hit the truck and the pilots were killed. The passengers so far I think have all survived, thank goodness. Um, but so that's, that's the situation. So let's run through—

let's— and let's use your article, right? Yeah, because your article gives an example. Imagine if that air traffic controller said, you know, everybody has the pitchforks out and it's like, this guy needs to be in jail, it's first-degree homicide.

Yeah, they arrest him right from the— right from the tower, right? Take him to jail.

And, and they're gonna say, you know, he killed two people, right? He made a mistake. 2 people, if it is his, let's pretend it is his mistake, right? He's going to stand up in the courtroom and say, your honor, my screen did not show that there was a fire truck at the, the technology, or my boss just whispered in my ear, clear the fire truck, or he's going to say something that does not actually address what happened. Because if he addresses what happened, He goes to jail. First-degree murder.

First. In other words, if he admitted task overload, correct, which could have been the real issue, correct, then that just sounds like, well, you weren't paying attention. Correct. Hey, you should have drank another cup of coffee.

You're an air traffic controller. You can't make mistakes like that. Yeah. Right. And then the next incident that happens, that same thing happens and they're gonna go, oh, my, my computer shorted out. And it didn't happen because they cannot Admit fault or else they go to jail. They get marched out of the air traffic control, right? Versus what we're about to talk about, which is, okay, incident occurs. Was there conscious disregard of an unjustifiable risk? Everybody gets drug tested. I actually think that's like an NTSB thing. Like the first thing they do is drug test everybody and breathalyze, you know, principal actors, whatever, right? I assume that's probably one of their best practices. Assume no, right? Okay. Did the employee choose the action believing it was justified or safe? Yeah. Problem is probably yes. The answer at that point would say at-risk coach, meaning the system can treat, you know, uh, I think I saw one, uh, uh, fire trucks don't have transponders on them. That's right. I bet you that they'll come out of this and they'll start putting transponders on fire trucks.

Correct.

I bet you that that's where this is all going to go. Yep. Right. Was it an inverted slip or less? Yeah. Human error console. Hey, how does the system, you know, do we need a different air traffic controller for emergency vehicles? Not give that to plane drivers because moving different categories of vehicles becomes cognitive overload.

Yeah. And there's been a lot of discussion about like, was the tower understaffed because of the ongoing negotiation with the budget and everything?

Yeah. Yeah. Which is fantastic. Again, I keep thinking about so many business owners that I talk to who are not interested in getting better. They're interested in being punitive. Hey, really? See, I don't—

I feel like I don't meet a lot of people like that. Maybe I'm just repulsed by them, so I don't even speak to them. But like, if I ran into somebody like that, you can't even believe how aggressively I would debate them.

Sorry, no, let me say this another way. Let me say this another way, because punitive is not the right word. The right word is, hey John, uh, hired Tammy from Argentina, uh, just making a ton of mistakes. Um, can you, can you get me a new executive assistant? Mm. That's punitive. Okay. It's not, I wanna throw her in jail and I curse her out. It's, yeah, you know, she's just kind of dropping a lot of balls and, you know, I don't know, maybe, maybe I just need somebody in the office. Or, yeah. Or maybe I need a chief of staff, not an executive assistant.

Or she just has a million questions for me. Right. She's always asking me questions.

Correct. Exactly. Or, you know, she's just dropped a few balls and, and at no point is it like, At no point is it like, how is the system contributing to this? Does she have a clear understanding of what her job is? Does she have a working-level point of contact? Right. It's more interested in just vibrating and spazzing and saying, all right, I guess we just need somebody new because— all right. And then they rip through 4 EAs and it's like, I don't rip through 4 EAs. If every—

if every EA you meet in a day is rude to you. Correct. Right.

How's that saying go? No, it's— it's— you fire one EA, you had a bad EA. You fire 4 EAs, you're a bad boss is probably what I would say. Right? Or whatever it is, operations managers or content creators. Right? And so that's where I would, you know, what system failures enabled this to happen? And so the reason why I'm so excited about this is because if I can get our company in this culture and system of sober-eyed, okay, we dropped the ball. Okay. Do we have too much on that person? Is our Airtable gotten too confusing? Have we not communicated expectations upfront? Not this culture of blame where John gets sent an angry email, I hit forward and say, yo, what the fuck? Do we need to fire this recruiter? Which I've been guilty of. I've been guilty of seeing a ball get dropped and go, how the heck could they do that? Did they not proofread it? Hit forward and say, you know, do we need to make a change in this seat? I've been guilty of that. And I am going to stop doing that.

It's the easy It's the easy button, right? It's easier to do that than to be introspective about your contribution to the issue, right? And you can imagine, like, in aviation, it would be easy to imagine all of the blame and finger-pointing that would happen between the aircraft manufacturer and the airline and the air traffic controller union and the president and the people who run the airport, right? If everyone just gets in this finger-pointy, blamey situation, then we're not going to produce a safer aviation culture. We're going to just produce a lot of whining and finger-pointing and lawsuits, and that's not actually going to make anything safer.

Crash planes. Yeah. Now, I will tie this into what I was saying with Carrie yesterday, and, uh, in, in my old organization, a high-performance one as well. And this is— you can read about this in books, this isn't private or anything— which is Basically, if you make a mistake, generally speaking, it's totally okay. Human beings make mistakes. But the one thing that is like zero tolerance in all of these environments is what is an integrity violation, which is, look, you make a mistake, fine. But if I then ask you, Peter, did you cut the run short because you were tired and you lie to me, you're gone the next day. You're gone the next day. Because I cannot, you know, I cannot ever question that you're going to tell me when I'm on a crash investigation that you're going to tell me the truth. Crashes happen. Cognitive overload happens. Task overload happens. But if I then say, what exactly happened? And you and I doubt you're telling me the truth, you're gone the next day because that's now essentially an ill will. Now, I want to tie this to why I think this is important for, say, a property management company or home services company or whatever. Right. Well, what—

and just interrupt you for a second. One cool thing about the article, if you read it, is they give a specific example of a pilot who made a mistake that killed like 20 people. Yeah, it was clearly the pilot's mistake. Yep, it led directly to the deaths of a bunch of people. And that pilot, like a few years later, was back flying again. And a few years after that was like even like promoted, or I forget what the details are, but because of how embedded that culture is into aviation.

What a beautiful thing though. Yeah, it's, it's beautiful because, you know, the congressman is calling saying, I want to see heads roll, and NTSB is like, uh, politely, Mr. Congressman, F off.

And like, NTSB reports aren't admissible in court for— like, it's very interesting.

Yeah, I mean, but what a You know, they're not subject to civil liability. Like, what a wonderful thing though. You know how hard it is to preserve a culture like that? Right? Because there's a hothead who writes a newspaper article and they say, my head's under enormous pressure to say, look, faultless investigations unless, you know, alcohol or whatever it is. Right? So the reason why this is important, one of the things that I think is really important, let's just do a couple obvious ones here. Many of these businesses are high turnover environments and you cannot afford to fire technicians for honest mistakes. You need them to learn and stay. Hey, you cost me $5,000 on that water heater replacement. You're done. You, okay, go find another skilled plumber. Right?

So like not, you know what's interesting about this too, John, is like as we transition to like AI agents and stuff, Like picture an AI agent makes a mistake. It's, you're fired. I'm bringing in a new AI agent.

Right. Switching to Claude.

Yeah. Switching to Claude. Like, like, well, no, you, you're gonna have to look at the system and the context that you're giving and the training and everything. Like, yeah, even more so.

Yeah, exactly. What system allowed the agent to make this mistake? Yeah. So the first is high turnover environments, which is you can't be, you know, having heads roll for, uh, honest mistakes. Second one, which I think is huge, definitely I identify with this one. which is a distributed workforce. You rely almost entirely on self-reporting to know what's actually happening. High integrity. Yeah. And so something like reducing callbacks, you have a business that 50% of your calls result in callbacks. Why? Because they get on site, they're missing a tool, they hack something together because they have 3 more jobs scheduled that day. And then the customer comes out and goes, Yo man, you hid the wire behind the— I can see it. And you call back and it costs you money because you're like, oh sorry, I had to go to another call versus, hey man, I didn't have enough time scheduled. I didn't have enough time scheduled. We need to figure out a way that on these complex jobs that I have some float time, because if I do find something where I need to move a wire, I'm able to. But if you don't have a just culture, they're not going to say shit. And then you're going to have 50% callback rates. You have to send a different tech to clean up the mistake that the first one did. Right? So I think it's very important there. And then last but not least, of course, in some industries, and I think property management is somewhat litigious, there are obviously others, but, you know, cover your ass. You know, when techs or whoever hide minor issues or minor damage or skipped, oh, I'm just not, I'm just not going to use the trust account this one time. I'm just going to move it over here. Right? Right. That exposes yourself to catastrophic liability, i.e., the equivalent of deaths, right? Where it's like, you could put us out of business because you just, you know, I put pressure on you to produce and you just threw it in the checking account and you said, oh, I'll catch up on next payroll and get it in the trust account.

Right.

Right. And so that's the other reason why building a just culture, not just from a performance improvement perspective, there are real tangible costs to having this Hey, I don't care, just get it done. Hey, yeah, you got to do 3 installs a day, bro, right? Or whatever it is. So I think this idea of a just culture, I just think it is— blows my hair back, just blows my hair back.

And I think this is, you know, you and I have somewhat— I don't want to give ourselves too much credit, but you and I have instinctively or intuitively grokked that this is a good way to run an organization. I think you and I have run our organizations this way for a while. But you're really excited about this article because it's giving us some language around verbiage.

Yeah. I wrote an— I wrote a newsletter a year ago that said the worst piece of feedback in the world is be more careful. Yeah. I didn't have this article to say, oh, this is called the just culture and it's from NTSB. I was just like, when somebody makes a mistake, you're, hey, hey, check your work. What? You thought they were just like winging it? Like, right. They had other things pulling their attention and they had other priorities and they, they had other systems and you just updated the Airtable. Like it's not treating human beings as their normal flawed selves. It's expecting a system that operates without the knowledge of human fragility, which is bullshit.

It's also not giving, it's not giving people the benefit of the doubt, or it's basically you're like assuming that they're kind of dumb and careless. In my experience, like, yeah, there's some people like that and you should get those people out of your organization. But most people are not that way. Most people, if they made it through your hiring process, yes, are kind of smart and mostly hardworking and want to do a good job. And so when you do find a mistake, your default instinct should be, oh, that's interesting. Let me look. Let me see. Like, what— wonder what was going on there. Like, not, not like, oh, this person's lazy or stupid.

In one sentence before we bring it home, the answer is from who to how. A punitive culture, who did this and how do we punish them? And a learning organization says, how did our system allow this to happen? And how do we redesign it so it never happens again?

Not to be confused with Who Not How, which is a good book.

Which I disagree with, but, or I don't like it as much. Okay. Last thing, and feel free to weigh in, which is, okay, how do you implement this? So you hear this and you say, Jon, this is great. You know, let's, let's bring it home. Let's land the plane. So to speak. Okay. Number 1 is leadership buy-in. Your leadership must commit to outcome independence. The highest standards you expect are the lowest you exhibit in yourself, meaning everybody on your team needs to say, we're going to look for how did this happen, not who did it. Right? I'm working on a cable right now. We talked about an episode, a cable called, you know, Sagan's Just Culture, and it's going to go to everybody and it's going to say, If we don't do this, call us out on this. If you see somebody who's doing it, let me— like leadership buy-in and proclamation. Read this article, right? So that's step 1. Comments on that? Nope. Okay. Step 2, foster safe reporting. Give people closest to the problems, field staff, whatever, a way to report hazards, near misses, near mistakes without fear of retaliation.

I would even take that a step further and it's mandatory. It's like, what are the mandatory, mandatory reporting? Like if you're a kid counselor or like, yeah, yeah. It's like there's certain roles where like you have to report when someone discloses something to you. Yeah, yeah, yeah, yeah.

So second is safe reporting, guys. I'm not, you know, you don't kill the messenger, even if it's my own mistake. Third, train the managers. You have to equip supervisors, mid-level managers, pod leads, whatever. So that they can respond to this kind of things with structure instead of emotion. Hey, what? Didn't we just talk about this last week? Okay, let's just walk through it. So walk me through why you did, you know, that kind of stuff. Okay. How many assigned maintenance tickets do you have? Whoa, you have 23? I thought we— oh no. Yeah, because Tammy quit, so you got her overflow. Okay. Like structure, not emotion. Right. And then last but not least, is fix the system. And that's a whole other topic, which is a system of learning, which is when the error is reported, close the loop. Right? So what does NTSB do? They train, they, you know, change the air traffic controller best practices manual that gets updated every quarter or pilot checklists in the cockpit or— They issue bulletins and stuff. Yeah. Bulletins or they, hey, put transponders on all fire trucks or, right? So you close the loop and now you've built a learning organization, which is the freaking nirvana right now, you guys, because you're going to go out and touch reality every day. And reality is going to create information. And if you can create a culture where that information is ingested without judgment and used to go touch reality in a better way, you're unstoppable. You're unstoppable.

I think your cable system is a great example of a system of learning. You're, you're, we, you know, see prior episode where we went deep on your new cable system that you set up at Sagan. Um, to summarize, basically when an important, when, when there's a decision on the record, that's a cable.

Why'd you say that?

Because I really like that expression, which came out of that conversation. Okay. When there, a cable is a decision on the record. And so those decisions are memorialized in a permanent way that's accessible to everyone at the company and, and even people who are hired after that decision was made. That contributes to a system of learning because you've, you've, something happened, you learned something, you memorialized it in a decision on the record in the form of a cable. That is a great example of a system of learning. Yeah.

I mean, if you look at Donahue Business System, they've never come out and promoted, but manufacturing roll-up, gazillion billion dollars, right? One of, I think the first or second day, all new employees learn the, I think it's called like the Donahue, I've written about this before, the Donahue Error something, and it's like 7 steps. It's like you ask why 5 times, then you talk about what the input was, then you talk about, and then the last step is essentially you memorialize it so that the, and it's like, it's one of the like 4 things that every DBS company learns, which is when we make mistakes, how do we fix our onboarding or fix our SOPs? Essentially, those are the only 2 end states. And it's a really, really clever way to do it. And that's another example of a system of learning that complements a culture of learning, which is basically what we spent the whole time talking about today.

Yeah. Good? Really good. And I think we now have a great answer to my question I posed at the beginning of the discussion, which is, why isn't this just hiring a great CEO? I think it's clear now that a CEO is not going to replace decades of blame-oriented culture, and they're not going to replace decades of not diagnosing mistakes when they happen and memorializing the fixes in a way that's, you know, referenceable by everyone at the company. Now they can work on those changes if you hire a great CEO, but it's going to take time. Of course.

So yeah, really great discussion. Awesome. Let's bring it home. Any— I've got one quick one while you scramble to find something, but any tips, tricks, tech? I'll start with mine. I wrote about this a little while back and I've got a better system. Which is I am perpetually getting recommended via Twitter, YouTube links, different content that I want to listen to. And then I'm always out and about on walks or whatever. So what I did was I used Claude Code and Obsidian. And what it does is it looks at a particular file that's called content for consumption, whether it's a YouTube video, a podcast, Twitter livestream, and it grabs the audio file and it publishes it to a private RSS feed. Which now lives in my Apple Music so that as I get all these random content things, I have a private RSS feed that just automatically populates with them. And so then when I have 30 minutes, when I'm doing stuck on a train somewhere, I have all of this backlog of content teed up and it's free. It's just some cloud code and a private RSS feed. So that's my, that's my tip for the day.

I'll get my, so mine is, uh, there's a billion AI newsletters. Yep. There's one that I actually like. It's called Evolving AI Insights. Okay. And we'll get a link. It's, I think it's just like a couple times a week. It's not every day. It might be once a week actually. And it's just, it's not that long. And it gives me a great summary of the news from the world of AI. And again, there's a frigging billion of these newsletters. Most of 'em are junk. They're actually AI generated themselves and they're just not good. But I happen to like this one, so I thought I'd share that if you're, like me, feeling behind every day on all the AI stuff.

In closing, Crane application open, uh, opens up in a couple weeks. Uh, Sam's doing great stuff. More to, more to follow on that. But, uh, thank, thank you for lending us your ears on this beautiful