Book Chat with Eduardo Ergueta and B. Keith Simerson: The House Model
In conversation with Diane Knoepke
MSLOC community members are busy writing, publishing, and contributing to books adding greatly to our work as learning and organizational change scholars and practitioners. This chat with MSLOC alumnus Eduardo Ergueta and MSLOC faculty member BK Simerson, Ed.D. is the next in a series of Book Chat interviews we are sharing here. I talked to the authors in early September 2023 on Zoom, Eduardo joining from his office near Buenos Aires, and BK joining from his office near Chicago. We discussed their book, The House Model: A Simpler Way to Think About Organizations. The book and companion website provide a “visual way of thinking about an organization by highlighting the organizational relevance of specific areas, their interconnectedness, and the crucial points where attention should be directed.”
In the edited transcript of our conversation below, Eduardo and BK share how their collaboration started, where the House Model concept and framework came from, and how this tool both draws on, and sparks in leaders, insights for organizational strategy.
I know some of the story, having known and worked with you both for several years, but how did this collaboration between you get started? Or, using the terms of the book, what went on in “the Garage” to get the House Model and book started? [Note: In the House Model, the Garage represents “the organizational spirit that either helps start a new business or bolster an existing one.”]
EDUARDO: Everything goes back to the time I was in the MSLOC program. Specifically, in the spring of 2020, I was curious about doing an independent study. I was interested in it as an opportunity to start writing down a framework that had been useful for me in conversations with clients in my work as a consultant. The independent study, in partnership with BK as my faculty advisor, helped me to refine the model and add more insights, including some from my graduate work at MSLOC. After graduation, I asked BK what he thought about making the House Model into a book. Since then, our collaboration has never stopped, and the result is the House Model book.
BK: I had not been an advisor for an MSLOC Independent Study before Eduardo approached me. After a quick conversation, I quickly realized that he is an individual who is genuinely interested in organization theory. That is something that I’m very interested in and I’m very passionate about, so I was eager to serve as his advisor. It kind of started from there.
Who needs the House Model? Who are the audiences for it, and what does it help us understand?
EDUARDO: It’s for people from all walks of life who are interested in learning how an effective organization works. It’s aimed at business leaders taking over any organization—it doesn’t matter what kind of organization you’re talking about. It’s also useful for teachers, professors, consultants, graduate students, everyone who is interested in making an organization function more effectively.
I really appreciated the range of examples or organizations that you used, from your breadth and depth of experience. A local restaurant to a multinational.
EDUARDO: Every single organization, absolutely all, can be thought of, discussed, and analyzed using the same logic: the logic of a house. The House Model creates an analogy between an organization and a house and invites readers to think in that way regardless of whether their company is an NGO, a profit-based organization, a tech company, a flower kiosk, a chain restaurant, or a multinational corporation.
BK: Any individual simply interested in learning more: the book will benefit someone who is aspiring to become or who has recently been hired or appointed as a supervisor or manager. It is also an excellent read for the seasoned manager or executive wishing to step back and give some additional thought or consideration to the drivers and enablers of their organization’s success. This book takes complex principles and it simplifies them. It’s easy to read and understand, and its learnings are equally easy to apply.
EDUARDO: The House Model breaks down a house into five main areas: Foundation, Rooms, Garage, Roof, and Chimney, and invites you to think about your organization in these terms. It helps you walk through your organization and understand what happens in every single area of your organizational house. It mainly focuses on the relevance, meaning, and interconnectedness of what we call “organizational components.” Organizational components are specific elements and concepts that play a crucial role in an organizational life cycle. How these components interrelate and where you should focus your attention are key concepts for any organizational leader. Applying The House Model framework, you can ask yourself, for example, if your organizational roof is leaking and what makes a good roof resistant. It will help you review whether or not you have a solid foundation in your organization or how frequently team members are going to the garage provided that you have a functional garage. When working with business leaders and entrepreneurs, I realized they all know these concepts such as mission, vision, culture, and so on, but they have serious difficulty making sense of them in a tangible way, this is to make these concepts actionable and easy to understand for team members. The House Model is the house where organizational components live, and the framework will help you understand in which areas they are located and the relevance they have.
BK, you’ve written several previous books about strategy, strategic planning, organizational missions and visions, etc., some of which I’ve used myself. How has your thinking evolved or been enhanced by working with Eduardo on the House Model?
BK: I think Eduardo is the perfect person to write this book because he is very thoughtful and thorough in a lot of different ways and on a lot of different levels. He recognizes the complexity of organizations. When we think about organizations we frequently only think about structure, roles, and responsibilities. Eduardo recognizes the tangibles and intangibles that drive organization success. Important variables such as strategy, structure, systems and processes, technology, people capacity and capabilities, and culture are addressed in the book. Eduardo takes his understanding of organizational complexity and frames it in a way that’s easy for others to understand, regardless of where they are in their life and career or what sector they’re in. That’s what he brought to me in terms of the book.
BK: I have a new academic quarter beginning within days. In thinking about helping students grasp concepts and principles and giving them tools they can use to conduct organizational assessments and evaluations...the question is, “How could I not use the House Model?”
Eduardo, you also did your coaching training at Northwestern. How do you see the House Model being helpful to organizational and leadership coaches as well as consultants?
EDUARDO: Analogies are powerful tools to explain a situation using a familiar reality. As a coach, I can help business leaders think of their organization as a house and make them think about, for example, the value proposition they are creating in their company. In The House Model analogy, the value proposition relates to the Chimney area. The value proposition represents the value your company is cooking in your organizational house. All companies are “cooking” something inside their houses; they are using a unique recipe to create value made of effort, resources, technology, and activities. It’s useful to review what value proposition you have and ask yourself, what is the “aroma” people (potential clients) can perceive escaping from the chimney of your house? This kind of thinking helps a coachee walk back to the analogical bridge and reflect on how their organization is performing in real life.
EDUARDO: The book also uses “chunking,” a way of thinking our minds use. For example, if I say the word “tree,” you will automatically think of branches, leaves, bark, birds, nests, and everything that is related to a tree. That is something that your brain does instantly. The same happens with the House Model – when we talk about the core section, I immediately know there are three key concepts there. I think that analogies are one of the most powerful tools for teaching. Every section comes with powerful questions to reflect on and think about. For a coach trying to help a business leader, they can use analogies, visual thinking, chunking, and a lot of examples and tools from the book. Also on the website, you can download all the images and drawings the book contains.
BK: New coaches sometimes assume the advice they provide is the most important element of coaching, when it’s in essence the nature and quality of the questions they ask. A coach may ask really good questions but the questions may be too narrowly-focused. If you use the elements emphasized in the book as the basis of your questions, you’ll be asking very thoughtful questions that address the key drivers and enablers of organizational success.
You took time in the book to talk about a language shift you propose, from human resources to human talent. We have talked about this in the MSLOC community quite a bit – can you say a bit more about this language shift and what’s behind it for you?
EDUARDO: Nobody wants to be called “labor force” or “resource” or “workforce” or “employee.” People are not furniture that can be moved around the house. People have dreams, expectations, passions, fears, and feelings. You cannot remove all those elements from the equation of a human being.
EDUARDO: People are talented. Every person comes to this world with specific intelligences – this is based on the theory of multiple intelligences. If you can align the natural talents people have when they come into to this world with their position in the company, everyone will be happier performing their job. Everything is going to be easier for that person because their role is aligned with the talents they have.
EDUARDO: The only way you have to connect your mission in the market with your vision is thanks to your people. Your people are the ones implementing the strategy day after day after day. You can hire my skills and my time, but it’s up to me if I decide to bring joy, motivation, passion, and commitment to work. If I feel that I belong to the organization, that I’m committed to the mission and the way they treat people and understand people, I will be happier to work for that organization. Some people will say, “the organization is not your psychologist.” Yes, O.K. You don’t have to be a psychologist, but you do have to be aware of how team members feel about working in your organization. You must use empathy to understand how your teams are doing. You as a leader have the responsibility to lead the emotional and rational commitment of your people.
BK: I totally agree with Eduardo. Unfortunately, I’ve yet to come across an economist—the trusted advisors to Presidents and CEOs—who shares in the sentiment that Eduardo just expressed. Eduardo’s mindset in essence reflects the MSLOC philosophy, culture, and value proposition. Unfortunately, it’s not shared across the board. A lot of business, government, and industry leaders think of success as operational efficiency and effectiveness...they are very mechanistic in their viewpoints.
BK: One of the reasons I’m glad we used this particular term, “human talent,” is so our book can serve as either a spotlight or a floodlight to help sensitize leaders that it’s not the rational, tangible, mechanical “thing” that makes an organization successful. It’s that living, breathing, yes...irrational at times, person. You and your organization might have the best equipment, supplies, and facility in the world, but you’re not going to make progress or achieve success without people. Not everyone shares the viewpoint we in MSLOC share. In MSLOC, we truly recognize the importance of people.
You all have me fired up! People are not furniture, they’re the foundation. And we need to get leaders to walk up to the house so the floodlight turns on and they can really see what’s going on.
BK: There are world-class economists who say, “My first recommendation is for you to “right size” all of your people and replace them with automation. The only people you will then need are those who take care of the automation.” Others, like us in MSLOC, are sitting there thinking and (hopefully) saying, “You simply don’t get it.”
How did your work at Northwestern MSLOC inform the book? And how does the book inform each of your work as a faculty member?
EDUARDO: MSLOC informed the book in many ways. For example, the work we did in the MSLOC 440 Executing Strategic Change course, where we reviewed so many frameworks about how and what to change. Many of those frameworks helped me make a comparison with the rustic House Model framework I had in my mind at that moment. By doing this, I started to notice that most of the frameworks didn’t integrate clients in their models, for example. Of course, not every framework is for every situation. It was also insightful to all the material we read in MSLOC about organizational learning, for example, the work of Amy Edmondson. I took many insights into what makes a learning organization and how to become one. As a result, I placed learning as a key organizational component of the “mechanical room” section. And of course, working with BK helped me review everything that was written, give it a second thought, and go deeper, it was so helpful.
BK: I really enjoyed working with Eduardo on the Independent Study and then on this book. In [the course I teach] MSLOC 431 Leading with Strategic Thinking we emphasize that strategic thinkers are thoughtful and thorough, intentional, and self- and situationally-aware. Our book will give individuals information and insight they need to be thoughtful and thorough, to remain intentional, and to be self- and situationally-aware.
Besides reading your book, if you were to assign some homework to professionals looking to drive business success, what would you encourage us to do?
EDUARDO: In this time, we’re living in, everything is about technology and how artificial intelligence is going to solve all our problems and take all the positions in the company (laughs). I’m personally a believer, I follow Peter Diamandis from Singularity University, and I believe technology is going to save us from the problems it made for us. In this maelstrom of artificial intelligence, there is an opportunity to rescue the value of growing organizations to be humanly intelligent. The best technology we can apply to our organizations is our intelligence. We cannot remove people from the organizational, business equation. Strategic thinking is more relevant than ever. Creating time and space for effectively thinking in a strategic way, especially in scenarios of hyper-competition is crucial. Strategic thinking is not only something reserved for leaders; our challenge is to help our teams learn, think, and develop as much as we can. Using AI is okay, and it’s going to give us a lot of benefits, but we cannot remove human intelligence from the organizational equation. Our challenge is to develop organizations humanly intelligent.
BK: We begin the book saying that the House Model is a management and planning tool. In terms of an assignment: if you are in the planning phase, as you think about, as you envision, as you dream…be sure to test and verify. As you think about what you hope to become, mentally construct a house. Use that analogy to identify all the elements you need that will either drive progress or success. Don’t build the house alone...do it with your team.
BK: In terms of managing, if you’re “the 737 already cruising at 35,000 feet,” use the House Model as an assessment tool. Bring people together to assess where things currently stand. If a gap exists between where you need to be and where you currently are, take that insight and do something to strengthen “the current” (strategy, structure, systems and processes, technology, people capability and capacity, and culture) so you’re more likely to make more progress and ultimately achieve some higher level of success.
Final thoughts?
EDUARDO: The House Model is a framework that you can use with other frameworks. Use a different framework to understand what to change or how to change, and then complement it with the House Model. Use a business model framework to develop your strategy, then the House Model is going to be helpful to make you think harder, and think in a different way. Then you can use whatever material or tool to complement what the House Model is doing for you.
BK: We recognize there are different philosophical bases at play around the world. In terms of business, the world is becoming much more pragmatic on a daily basis. Pragmatism drives our adopting a rather narrow viewpoint and/or simplified “linear cause-and-effect” perspective. Organizations are complex. Organizational progress and meaningful success are the result of not one variable but several, and it’s the interconnectivity and interaction of those variables that drive short-term progress and long-term success. Because we are pragmatic, it is important for us to strive to be more thoughtful and thorough. The House Model will help us think more broadly and deeply.