Patrick Adams  00:00

Well, let’s, let’s dive in here. We we’re going to get you know, people are going to be joining throughout here, but we have, we have short amount of time and a really important topic to discuss. So for those of you that are joining us, please drop a comment below. Let us know where in the world you are, and if you have any questions for us on the topic that we’ll be covering today. So we’re going to be talking about hidden costs and how they’re killing your margins a lot of times. In businesses, we look at the financial statement, we look at the P and L, and we’re like, okay, yeah, where can we make improvements? But what we’re talking about today are things that do not show up on the financials. You don’t see them on the P and L, and they’re things that are just quietly, just just picking away at those margins. And that’s what we want to deal with today. We want to figure out, how can we start to identify those hidden, those hidden areas of the business that are pulling money out of the out of our margin, and start to take action on those and so I wanted to just kick us off today with a with a little story. I’ve shared this story many times, but I think it’s relevant for the topic of the day. Today, I was working at a company, and one day I walked out on the on the production floor with the supervisor, and we were just we were doing a little GEMBA and walking around, and I saw a temporary employee on the production line. And this temporary employee was, it was a bottle line, and he was picking up bottles and looking at the bottom of the bottle and putting it back on the line, pick up the next one, put it back on the line. And I went over to him, and I asked him, Hey, what are you looking at? What are you checking on these bottles? And he said, I’m looking for the date code. I got to make sure that the date code is on every single bottle. And so I said, Oh, okay, that makes sense. Like, how? So then I asked him, like, how, you know, how long have you been doing this? He’s like, I’ve been here for, you know, a month or two. Can’t remember exactly, but I said, Hey, in the time frame that you’ve been doing this, how many bottles have you found with no date code? And he’s like, honestly, I’ve never found a bottle without a date code. And I was like, Really, that’s interesting. So the supervisor and I to the walk up the production line, and you know, I was talking to him about the reason why they had a temporary employee there is because they the customer had received bottles without date codes on them, and then we got up to the front where the bottle maker was, and just after the exit to the machine was a a vision system that had apparently stopped working, and they had repaired it, but nobody Let the supervisor know that it was repelled. So for this month, two months, whatever it was, you know, the the the video or the verification was happening way up stream from this temporary employee who had just been left on the line for 30 days, just getting paid and never finding an error. And it just that story just makes me think about, you know, those hidden costs, right? Where you know, that’s one, where you would think like a manager or supervisor would know this, you know, right? Lot of times there are things that are happening that we don’t know about, and there’s no way that that maybe we we would know about it, unless we go see, you know, seek to understand, ask questions, figure it out. But I have lots of different examples and ideas, but I want to kind of open it up to you guys and just, you know, really ask you, what are the different areas that you have seen where you know, whether it’s rework or waiting, poor handoffs, excessive movement, you know, anything. But you know, if you’re not observing work, then you’re you’re missing the cost. So what are those different areas that you guys have seen? And I guess I’ll go to maybe Andy first. And Andy, what are some things that maybe you’ve seen, you know, out in industry where there’s just these hidden things, you know, money’s just kind of dropping out the back door there, and nobody knows about it.

Andy Olrich  04:05

Yeah. So a recent example I’ve been working with a client on is they’ve had a particular product line that they’ve run, and exactly what you said, everyone’s working really hard the margins just not. They’re not hitting their margin on the sales targets, etc. And the P and L is just, he said, This is really strange. I’m not sure what’s happening here. And especially at the moment where there’s some materials and inputs that have jumped up in price quite quickly, they’re trying to really focus in and find out where this money’s going. And what I generally find is it’s it’s it’s, it’s kind of, they’re being measured somewhere, in some cases, but they just don’t have it in that end to end of the actual thing that they’re making right, like they might start the clock, or the measurements from when it hits the floor, and then it’s got to be produced circumstance, the timing around interacting with the customer. Doing the design, the tendering, getting the purchase order, then doing the final engineering design. None of that was really captured. And book ended against that whole lead time. They’re basically saying, right? It’s a, x, y, z, delivery time. And they weren’t including, you know, once they got the purchase order, that time before it hits the floor. And then they can actually procure materials and do it.

Patrick Adams  05:22

So,

Shayne Daughenbaugh  05:22

right? And do it.

Andy Olrich  05:23

So when, when we lift it out, as we say, we go see but there’s a lot of walking around and talking to some of those broader business points that touch it, okay, how long what’s the general lead time for what you do before they get the signal to produce and it was, it was adding quite a lot to the duration. And then all these things started coming out around the the multiple handoffs, or the drawings, not right, and it’s got to go back, so the rework, or things like that. So that was a huge one. It was, it was almost a third of the what they should have been measuring was not being captured properly, especially with the thing, right? So that’s go with it all those little the lead up to, most people go in and go, you’re not making it fast enough. We’re not making any money. So, yeah, zoom out a little bit. So

Patrick Adams  06:15

yeah, and that’s the fact that they’re, you know, just those, those small little things that, you know, some people would say, oh, that’s no big deal, you know, it’s just, it’s, it’s just a, it’s a minor thing. It’s little, right? But all of those adding up, if you’re allowing that type of stuff to happen, you know, in all areas of the business, all those little tiny points of time add up to major issues on the financials, right? And then you’re like, what happened? So I think, I think that’s a really good call out, Shane, what about, you know, I was just thinking like, you know, we’re talking more in, you know, industrial application or manufacturing. What about in the office? What about,

Shayne Daughenbaugh  06:55

yeah, that’s what. And thanks for asking, Patrick, because that’s where my mind was going. And let’s talk about state government and and I’m not speaking to the state government that I worked for here in Nebraska, because we didn’t have this problem. But I’ve heard of other state governments that have issues. And here’s the underlying issue with or that one of the differences between what you’re talking about Patrick and Andy, where you look at the profits and losses. When you’re in state government, you just have a budget, right? And you just, you know you’re as long as you’re within budget, but you’re not paying attention to, like, how long does it take Catherine to do this task, and if it’s not done right, how many times does it have to go back to Catherine to redo like, we don’t what I found sometimes, in some places, is they’re not looking at that. They’re not like, it’s because it’s not dollars and cents and because these, this isn’t for profit, then it’s just like, oh, you know, it’s just, it’s just how it how it has to work. Sometimes we send it that way. We have to get it out. We got to give it to the next person. It’s got to come back. We got to make changes. And it’s just accepted that there is this, you know, inefficient rework loop. There are

Patrick Adams  08:10

multiple

Shayne Daughenbaugh  08:10

touches. Well, I’m going to put it out here and I’m going to get it back. I’m going to put it out here, I’m going to get it back. And they’re not thinking about flow. They’re not thinking, you know, about trying to save some of those costs, because what can happen is you’re trying your very best. And I have mad respect for those that are in, especially local government, you know, because their their their margins are so small, there’s they’re so tight trying to provide the services that they can provide. But if we’re not, you know, paying attention to those kind of things, the rework or, you know, the touch points, how many times we have to touch this and go back to it and and leave things open and back and just the break of flow, then what, what you’re doing is you are, I can’t think of a better way to say this. This might not be appropriate to say, but you’re short changing the taxpayers. You’re short changing the service that you’re trying to provide, and you’re undermining that service, because you can’t give as much as you’d like if you don’t pay attention to those kind of things, sure, the kind of the subtle things that it’s not about, you know, the overhead you know, or you know the materials you’re buying, this is the way you’re working. Is are things that I have seen that just allow hidden costs, just to trickle, just to trickle on through?

Patrick Adams  09:29

Yeah,

Patrick Adams  09:30

I think,

Andy Olrich  09:30

oh, go ahead, Andy, I was just gonna say Shane, one example is I’ve seen that pain or that the impact turn up in the staff turnover measure in a like a state owned or a services based organization. So the things are happening, the scorecard says, yeah, that, yeah, we’re going all right. Really, at the end of the day, we’re going all right. It’s fine. But then it’s like, we’ve never had this many people leave all of a sudden, well, I wonder what’s happening. And,

Shayne Daughenbaugh  09:55

oh man,

Andy Olrich  09:55

after a while it’s like, well, I just can’t work like this anymore.

Patrick Adams  09:59

Exactly.

Patrick Adams  10:00

Yeah, and Catherine, I want to, want to get to you in just a second, but real quick, if, if anyone missed this week’s episode of the lean solutions podcast, Shane and I talked about GEMBA walks and the importance of getting to the gemba and I started a story about a group of executives and mid managers that, you know, the directors thought that the process looked one way. The managers thought they it was another way. Well, we went out to the gemba to verify, and sure enough, the managers were right. There had been some an area that what they called the hospital, where they had created, they had a production line with pallets moving on a moving conveyor, that they actually had a hospital where if there was rework that needed to happen, it would be broken off onto this other line, and they had three or four employees that were running this hospital, and they were doing all this rework that was then coming back on the line, but none of that was captured anywhere, not in the standard work, not in The you know, they hadn’t got approval to add employees, like they were using temporary employees, like all of that was just these hidden costs that nobody even knew about that were, I mean, pretty, pretty massive when it came to the cost of that little hospital. But rework can add up. And the thing is, is people think, well, we just have to make it right for the customer. Well, yeah, of course you do. But you know, we got to fix this at the root so that it doesn’t keep happening. We can’t keep allowing these rework loops or these, you know, repeat wasteful actions to just keep happening. We got to do something about it to get it out of there. But Catherine, the question that I have for you is, what is, if you can’t see the problems, how do you deal with them? So what are some strategies that maybe you’ve experienced or been involved with in order to to bring these, these hidden costs, or these hidden problems, these, this hidden waste, to the surface where we can now start seeing them and making them visible so we can actually do something about them.

Catherine McDonald  11:57

Yeah, I think you’ve all made really good points so far. And makes me think that it’s not really that the cost is hidden, because the costs will actually show up. The costs will always show up. But what’s hidden is what’s causing the costs within your process. So that’s really what you guys have been talking about, understanding what’s happening and going to GEMBA and actually really seeing what’s happened to understand what’s shaping those costs. Now the thing is, you can go to GEMBA and you can see it for yourself as a business owner or a manager, but unless everybody can see it, then it just feels like a manager is seeing the cost, and they’re telling everybody else about it, and they’re telling everybody you have to do better. What’s better for everybody is when everybody can see the data. What? So whether that’s the KPIs, so what exactly is coming in, what’s going out at a higher level, but also the live data day to day. What are we doing in terms of meeting our targets? How are we doing every every day, every hour, if necessary, and unless we can all see that in live time, what happens is it just feels like managers are coming down on people, telling them to work harder, because people just can’t see where that opinion is coming from. They don’t have the data. So I think that’s why it’s really, really important that now, even though things, things are actually difficult right now in Ireland, I’m sure, as in many other countries, where people are being squeezed, and people are really starting to look at their costs now, so it’s a really good time to start thinking. I don’t want to put in place something that will just fix me up for now. But what can I put in place that will last throughout this and actually bring me back up again? You know, on my scales when it comes to when we come out of this financial, financial issues, and then that’s where bringing in the visual management and putting in a system around it can really help you when and it will drive you on when things are good, and it’ll help you get through when times are bad.

Patrick Adams  13:47

That’s so true that so many times we put in these short term fixes, which maybe are necessary at the time in order to get things back up and going. But a lot of times, you know, companies don’t go back and put permanent fixes, or really look at the systems that are necessary in order to keep that problem from happening again, or to eliminate the short term fix. So that’s a really good call out real quick. I want to pause, because I know we have a number of people that have joined us, and I just want to ask everybody, if you are with us right now, live, drop where you are in the world. Drop it in the comments so that we can see, I see we have Orlan from Bristol in the UK. We have Daniel Walker from Metro Detroit, right here in Michigan. And for those of you that are watching this on the replay, hashtag replay, throw that in the comments, just so that we can kind of track who was here live and who watched it on the replay. It’s always fun to see see both of those. But also, if you have any questions, drop them in the comments, because we are watching the comments. And if there’s anything that you have a question about, feel free to drop it in. Going back to what Catherine said she talked about leadership and Andy, I wanted to go to you on just. Leadership behavior and how leadership behavior really drives cost. You know, leadership can create waste and they can eliminate waste. And I’m specifically want to ask you about the side of allowing workarounds. You know, I mentioned the example of this hospital that had been built out there on a production line to do rework. Leaders clearly allowed that to happen, rather than stopping and fixing the problem and creating systems to make sure it doesn’t continue to happen. What do you think from a leadership perspective, what does it do when you allow workarounds to happen?

Andy Olrich  15:39

Definitely, what that I love, that saying, what interests my boss, fascinates the heck out of me. And if the leaders, I found a couple of scenarios. One is the leader has previously been in that role, and they will condition themselves that that’s, well, that’s just part of the job. And we just, we just factor that into the cost. And yeah, if it happens here and there, that’s all right, as this particular thing that pops out is exactly what I expect. The other one is, is they don’t know it’s unseen and the scores and the measures or the targets that they have on their back, but then they filter down to the workforce. It allows, it’s not something that they’re looking at. And when you talked about that episode, about going and seeing if they’ve never done that job before, or they’ve been brought in specifically independent, and they’re not looking for these things or talking to people about, you know, what’s kicking your butt today, or why are we having these customer complaints, really, not just, are the machine jammed up and Okay, reset it? So I’m finding that, yeah, definitely that culture there, if the leaders aren’t out there, not only challenging their own metrics when they receive a performance goals or things, but sitting down with their workers and saying, Look, I’m going to try and measure you a bit better than I want you to improve performance and participate in activities or do a good job some of those real lofty weasel word type metrics that people get put on them. It’s like, okay, well, come and show me what you do. What are some of the things you’re getting in the way? Okay, I want to specifically try and capture those things that are taking you away from what I think I’m paying you to do. Like, one example is when people are moving all over the factory, and the leader doesn’t even see that happening. And it’s the question is, are we paying them to work, or are we paying them to walk? What are they here to do? What’s the value? And I do find that if their role, like it, comes back to that leadership model, are they clear on what they’re there to do? Are they clear of what that really means outside of the job description that was kind of put in front of them, or they’ve created themselves in some cases, and then what does that mean for their worker, and can I what you’re measuring of the actual performance? Is that more than just costs and safety, is there a quality metric there? But also, if we’re not doing some sort of worker satisfaction or pulse check around how they’re being required to complete the task that they are being measured on, I find that that leader that’s disconnected, either intentionally, because the numbers look all right, I’m not going to stir anything up because I don’t know their job, or they’re not continuously testing what we’re measuring, because it’s the yeah and measuring more around the behaviors, not so much the results. You know, in all ways, I mean, that comes out, but it’s like, how, how do I know and how can I hold people to account, including myself, if we’re doing things right or we’re doing the right things

Patrick Adams  18:30

right? Absolutely.

Shayne Daughenbaugh  18:31

And I want to add, excuse me, add to that, because something that Catherine said earlier, I think, is really important. And so let me dovetail that in a leadership behavior of asking, like, if I’m going down the chain here. Andy, how are things going? Oh, they’re going really well, okay, but we don’t follow up that with, how do you know? Like, what is it? You know, look at our KPIs. Well, those we know that metrics sometimes don’t capture, well, you know. And so if we’re not challenging assumptions, because sometimes we just assume, well, I haven’t heard anything, so everything’s going well, so that’s what I’m going to report up, rather than going back down further and further to where things are actually happening. And here, hey, you know what? I don’t know what I’m doing here. I’ve been looking at this date stamp thing, like, how long did you want me to do this? Because I’ve been here for a month like it’s not trickling up or down, and I think a good leadership behavior to try to pay attention to those hidden costs that leak through is as you’re talking through. And this isn’t about demand or, you know, like calling to question someone’s character, it’s just asking for the data. Hey, how do we know that things are going well? Have you talked to the people down below? Have you or, you know, have you talked to the people that your direct reports? Have they talked to their direct reports? And continue to ask that question, rather than just assume, hey, everything is going well, because we’re looking at it from way up here, and we see that, you know, things are moving. But we don’t see again, those hidden things that are sliding through, I think are super important too. So I’m going to go with that, the ability to be comfortable challenging and asking for data,

Patrick Adams  20:13

right, right? Yeah, no, that’s good. Catherine, I’m going to go to you that. It looks like there was a question that dropped into the chat from LinkedIn user. So I don’t know who, who that is, but someone asked. They said, basically, like, if everyone in the organization agrees that hidden costs exist, but no one wants no one’s owning them. So he’s this person is asking, who should own the you know the problem in a high performing company, and how is that ownership enforced like in order to actually go do something about these hidden costs? What are your thoughts on that Catherine?

Catherine McDonald  20:51

They’re really good questions. Great. So I’ll give you an example of a company I’m working with at the moment, really high performing in terms of really high sales. It’s a service sector organization. They haven’t been using data for too long. So I kind of, I always get teased when I say data, because you guys say data. This is Shane always teases you.

Andy Olrich  21:11

Anyway, I was gonna say the official pronunciation is data. There you go.

Patrick Adams  21:17

Let’s, let’s, let’s poll the audience. Okay, so if you’re listening right now, if it’s number one, if it’s data, give us a number one in the chat. If it’s data, give us a number two in the chat. All right, go ahead, Catherine,

Catherine McDonald  21:32

that’s unfair. There’s more you anyway. So working with this organization, and we’ve been just they’ve started to collect a lot of information, because actually, everyone does agree. They’re all very willing. Everyone does agree we could do better. So they’re a lovely company to work with, but they just didn’t have a lot to go on. So what we’ve done just something very simple, which you can do if you’re maybe a small to medium company, or you can do maybe within your department, and start that way if you’re a bigger company. So what we’ve done is, every week, the each manager goes and has a quick five to seven minute, one to one with each of their team, they go and ask them, what’s going well? What’s not going so well? They pull out the data that they’re now collecting, and they say, okay, that links with what we can see here, or, Oh, I didn’t know that. Or maybe that’s what’s causing X issue. So they’re collecting information from their staff team as they are going week to week, the management team. Then get together and they share what has come back from the, let’s say, more qualitative side from the staff team about the processes or the systems. And then what happens is, I teach this one thing method, so each person in each one to one takes away one thing that they have control over or they’re going to do differently for the next week until their next one to one, and the leadership team also take one thing away from their meeting that they’re working on. And there’s this cycle that goes on where the leadership team then share every week. Here’s the one thing we’re working on to reduce this problem of this thing that’s come up. And then there, there. Each manager speaks to their team member, and the team member will say, well, here’s what I’m working on. And when you do that consistently over time, you will find that the hidden or not really so hidden costs and issues that come up, you will get to them as long as you’re consistent and you’re taking a one step at a time approach. So that’s what I found. Works really, really well. We get too overwhelmed by it all when we start asking questions, we have to break it right down into one thing. And

Shayne Daughenbaugh  23:20

I also love the idea of consistency, you know, I think that that’s powerful. Keep it simple, but keep it consistent, and that’s how you’ll catch it. Yeah,

Catherine McDonald  23:31

you

Shayne Daughenbaugh  23:31

can’t, you can’t swallow everything all at once, but if you continue to be committed to, hey, this is the system. And I think, Patrick, you mentioned that before, about having systems in place to be able to uncover, to be able to, as I have seen recently, inspect what you expect. Yeah, so, but consistency is key.

Catherine McDonald  23:52

Consistency very, very simple systems of gathering data make it easy to analyze and make it easy to see what’s the one thing we’re working on, unless, obviously, there’s something urgent that’s different. But a lot of these things you’ll find are not urgent. They’re more important than urgent. That’s why they’re hidden. You know, if they were urgent, people would get to them, we just don’t get to the other stuff. So if we do that, keep it simple and visualize the one thing and set up our feedback cycles, it will work.

Patrick Adams  24:17

Yeah, that’s such a such a good call out. How do you eat an elephant one bite at a time, right? I think that’s what you’re getting at.

Patrick Adams  24:22

Shane, well,

Shayne Daughenbaugh  24:23

I have a better one. Oh,

Patrick Adams  24:25

okay,

Shayne Daughenbaugh  24:25

there’s, there’s the 2026 model of that. It’s, How do you eat an elephant? It is one bite at a time. But Patrick, hand out spoons, so it’s not just you eating the elephant.

Patrick Adams  24:36

Oh, I like it. Okay,

Shayne Daughenbaugh  24:37

everybody. Well,

Patrick Adams  24:38

that that leads me to my point. So again, if you haven’t listened to this week’s episode of the lean solutions podcast, we Shane and I talked about GEMBA walks. This is another way, you know, from an ownership perspective, someone step up and develop a schedule of reoccurring, regular, consistent, GEMBA walks, where you can go out and find. These, these areas where these hidden costs are just slowly leaking out. Go observe, ask questions, seek to understand and then do something about it. You know, just make a make a goal to take just, you know, one hidden cost a week and take care of it. You know, find the root cause, plug the hole, and, you know, fix the problem, then the next week, go on to another one and just do it one, one at a time. Just keep driving out those costs. So really, really great, great question. Again, if you’re joining us right now, please drop a where you are in the world into the comments so that we can see that if you have any questions and there’s an active poll going right now of data versus data. If you say data, give us a number one. If you say data, it’s number two. It looks like Andy’s in the lead right now. Unfortunately, two

Shayne Daughenbaugh  25:52

times. Yeah,

Andy Olrich  25:55

hopefully, hopefully. I mean, it’s 5:27am, here. So once all these Aussies get out of bed in particular.

Patrick Adams  26:03

Then you’ll have a we’ll give it, we’ll give it like a couple days, and we’ll come back and check the comments to see, Hey, real quick, though, if you haven’t subscribed to the Lean solutions podcast, you can, you can do that on your favorite podcast platform. We’d love to have you subscribe. We release a new episode every week, same time, same day, every week, and we talk with leaders all over the world. So that’s the other thing. If you’re interested to share a story or you have something you want to share in the podcast, we’d love to have you as a guest as well. And we, again, we talk to people all over the world and or we just have conversations about topics that are hot and important. And speaking of hot topics, I want to go back to one, one other comment that I think is important. One of the things that I find that in organizations that is really drives up those hidden costs are hot jobs or drop in stuff that is like, we have this plan for the week. And then here comes a, you know, this hot thing that everybody has to jump to and and, you know, I just there is so much inefficiency in that that people don’t understand and realize that, I think is important to talk about. I was just at an organization recently where they they work, they work on these large tools. And every once in a while, they get a new tool that comes in. And they literally, and it becomes a hot, you know, it’s this hot job. They literally take everything that they have spread out on their workbench and in their work area, they pal, they put it on pallets, and they move it out of the work area, bring in the hot job, take it apart, do what they got to do. And then they bring all the pallets back in, unpackage everything. And it’s like if you were to add up, you know, over, you know, five days a week, 52 weeks a year. Add how much time that that takes to do something like that with a hot job coming in. I mean, that that’s a seriously high hidden cost. Do you guys? Have you guys experienced anything like that?

Andy Olrich  27:57

I’m just, if I can be so hold

Patrick Adams  28:00

on,

Andy Olrich  28:00

kind of right now, right? There’s a an organization that has several large business units, right? And they all kind of work together, right? But then they also chase their own work. But, yeah, one of the things a hidden cost, I think the timing This is really good, is one of the things that uncovering is supporting the other business units at short notice bringing in the hot let’s call them hot jobs. There’s some in the actual physical manufacturing space, but also in some office service based scenarios, they’re allowing, hey, go over. And that happened while I was sitting there doing a workshop with the team persons walked in said, Hey, we need this right now. Can you help out? Yeah, sure. And they organize people to do it. And we were talking about their EBIT, or their their revenue, their cost basis, and all that sort of stuff, and how that all comes together, what we’re talking about now. And I was, I was like, okay, so how long is that going to take up that area for? And they said, Oh, it’s going to be at least a week. And I said, and what about the jobs that they’re now working around

Patrick Adams  28:59

that

Andy Olrich  28:59

or have to go on hold? And they said, Yeah, we just cop that. And I said, so who’s who’s EBIT and or who’s who’s performance by the numbers, is going up, like, if they’re able to drop it on our doorstep and they get it fixed quickly and their customers happy and paying sooner, what about you? And it was, well, we don’t actually measure that. And it’s like, yeah, so if there’s some way to show yeah, we’re helping it, we’re being a team player. But you know what, when I sit down at the end of the week or the month, actually, my score is going down, and I’m working twice as hard to help another part of the business. But they were never, they hadn’t actually quantified or captured how much that hot? What did you call it hot jobs? I haven’t heard that term before. So I was like, we need to kind of, do you stop the clock on your timeline for your job and then start one on that one? They said, Oh, no, we just do that. I was

Patrick Adams  29:48

like, Yeah, right.

Andy Olrich  29:49

So that

Patrick Adams  29:50

happens most of the time. There’s a hot list that comes out, and then everybody’s working off of a hot list instead of what was planned for the week, you know? And the same thing happens in administrative environments too, yeah. Yeah, you know, something gets thrown on your desk, and it’s like, yeah, you know, so and so said, We got to get this done today. And you know, I’ll be the first one to say I’ve done it too. Our marketing team gets on me all the time because, you know, I’ll drop something into them, and they’re like, you know, be you gotta, you gotta be careful with that as a leader. Because, you know, of course, they want, everyone wants to do a good job, so they’re just like, Okay, let’s get this done, you know? And well, you know what’s going to what’s going to drop off their plate if they’re adding this into the week? Because, you know, for them, they’re just going to keep working and they’re going to get it done. Well, that’s not fair to them, right? And it’s, again, very inefficient.

Catherine McDonald  30:37

Yeah, that’s why I obviously don’t believe in micromanaging, but I still think leaders need to be in touch with people about their workloads. And I think that’s where you’re, you know, constant, regular chats about, how are you doing? But going a bit deeper, what’s your workload like? What are you finding? You know that you’re really enjoying and you’re getting time to do and brings, you know, a feeling of engagement to your work. But what? What doesn’t Where are you struggling? What are the things that you feel you can’t get done? What do you feel is on your workload that you just can’t get to or you’re not getting to? I think those conversations have to happen, because people do need support around it, not micromanagement, just support a sounding board. A manager can be a sounding board for people, just to help them get clarity on how to manage all of that, because a lot of the time the hidden costs are in people’s struggle to, you know, get their work done or not get their work done, and just a bit of support goes a long way,

Andy Olrich  31:31

taking it from the conversation to the thing that saved my bacon years ago was the latest standard work document that we were using, where there was a section For unplanned activities, where you would write down the hot basically, I’m thinking, it’s now the hot jobs this. This wasn’t in the plan for the week that I’d agreed to or had scheduled. These things came in and took this long, and you’ve only got to do that for about three or four weeks in a row, and you’ll see and even capturing things like meetings running over time, or people not turning up on time, when you put that in front of a leader that may be managing you hard, because all they see or hear from others is you’re not delivering what you said, putting that in front of them with a heap of reds on what your your agreed activities were like that. That link would keep going back to what we measure. But I was just like, look at the end of the day. This is half my week is being taken up by people walking into my office or grabbing me on the floor, and then I’m, I’m over here, or we’ve got this weekly meeting to talk about this stuff, and no one’s

Patrick Adams  32:30

turning up. Yeah, yeah. That’s, that’s, that’s the tough part about, about, you know, having allowing hot jobs or hot, you know, drop ins, or whatever it is to happen. You know, one thing I think about a company that I actually worked for years ago, and this was actually company continuous improvement in the in the book that I wrote, but we had a bunch of small jobs that would come in to the equipment, and they would they were really short, small jobs, but they had to be done. So they were scheduled on all the equipment. And anytime that someone had to do one of those, they do this big, long, extensive changeover to change over, run this little, short job, and then they’d be changing back over, you know, again. So, you know, what we did was we took all these small, they call them dogs, these dogs that they were getting, took all of them, and we moved them all to like, two pieces of equipment. And those two operators dealt with all the small dogs, and had to do all the changeovers and do deal with all those small little but it allowed us to put all those inefficiencies into two pieces of equipment and then allow the other, you know, 50 some pieces of equipment to just run very smoothly and have really good flow, good schedule. Never have these long changeovers. And I think the same concept applies for for any organization that’s allowing drop ins or hot jobs, of course they have to get done, but create a system for those you know, cross train your team members to deal with them, and then have a separate system that doesn’t interfere with your regular scheduled business activities. You know, to deal with those and get them out accordingly, just to just a recommendation. But go ahead, Shane,

Shayne Daughenbaugh  34:12

I was gonna say I add to I think it was Catherine that was talking about your one to ones. But, you know, understanding what your people’s capacity is, you know, on a regular basis, because if I understand that Catherine is at full capacity, but Andy has a little bit more, we could shift that. But if I’m just keeping it, you know, Hey, are you hitting your marks? Are you doing this? You’re doing that. But I’m not trying to understand a little bit deeper. I don’t have that a simple system of understanding where people are at that I could miss those opportunities, and then I’m overburdening the system. And we understand that when you over in the system, that’s a great way of leaking out cost, because you’re not operating efficiently like you should be. So yeah,

Patrick Adams  34:56

so

Shayne Daughenbaugh  34:56

true.

Catherine McDonald  34:57

I know one manager who did a recent. One to one with one of his teammates, and basically just ended up showing him how to use AI through the one to ones, because his team member was just scared of AI, just didn’t really know how to use it. He was struggling that the team member was struggling in in just the manual paperwork side, his manager spent the one to ones just showing him how to do it a little bit more efficiently, and that really, really really helps. So one to ones can be used for development, for a bit of training, for a bit of coaching. It’s whatever people need. And I just think that’s that consistent type of support is really, really important. And that’s, you know, we need to develop the people to be able to develop the processes. And that’s just so key.

Shayne Daughenbaugh  35:36

Versus using the one to one just to report on what’s going on

Catherine McDonald  35:40

exactly like

Shayne Daughenbaugh  35:41

I can. I can just read a memo and understand the report, but you know, the one to one is used better when I’m using it to develop, to understand and to go a little bit deeper. Yeah.

Patrick Adams  35:53

So real quick. Andy, before you say that if you’re just logging on, we want to know where in the world you’re from, so drop it in the comments and then smash the like button for us. Make sure you’re hitting the like button and share this out to your network. We’d love for everyone to hear some of this discussion. It’s a good one. Andy, I’m going to go to you, and then what I’d like to do, as we kind of start to wrap up here, is I want to go around the room and just give the listeners a one simple way that you can expose hidden costs, and maybe, maybe one simple way to expose and maybe just one recommendation on what to do with that, what action you can take. But yeah, Andy, what do you got?

Andy Olrich  36:35

I was just going to make a light point about Shane’s dog talking about going deep. It’s gone now, but it was on its back with its feet completely, completely.

Patrick Adams  36:45

I cut you off, Mandy, sorry about that.

Andy Olrich  36:47

That’s, that’s probably, probably, anyway, I shouldn’t have done that. Sorry everyone. But we are humans, till we we do human things. So, yeah, I was just gonna say about, if I give up my wrap up point, I suppose, around how it’s that go and see mentality, right? But you’ve got something there, the good old waist walk or stand in a circle type exercise that can be a really great exercise I do with with leaders in particular, to go out there. And we just obviously prepare the room, but we go out and and have a look around, and we look for these specific things, and that learning to see piece some people don’t recognize waste for what it is, and rolling right back to say, look, here’s how you have the seven or eight waste, whatever your flavor, here’s where these things are. And you know what all of those result to, in some way, shape or form, you spending more money than you need to so mine is, yeah, there’s some really tried and tested, very people centered approaches you can do that’d be one is to do that, that waste walk or activity, but go a step back and go, this is really what we’re looking for, not I’m just going to look at how many things are in the scrap bin. Now, this is a deeper layer to that. So that’d be my hot take, is to do a bit of thinking and training into that and go for a walk. I’ll never look

Shayne Daughenbaugh  38:06

awesome.

Patrick Adams  38:06

Perfect. Shane, what

Shayne Daughenbaugh  38:08

do you got? My favorite is, just going back to, you know, again, service industries and doing, doing mapping of the process. Mapping is,

Patrick Adams  38:19

you stole

Shayne Daughenbaugh  38:20

my hands down it, it, if I can get the right people in the room, you know, those that are doing it and their leaders afterwards. But to process map it out and to start making that map look really ugly by drawing the rework loops and, you know, all the pain points, and then go, okay, is this how you want it to be? Like, just visualizing it. It can be so mind blowing. Or, if it’s, you know, just computer work, I will ask the question, okay, how many times are you clicking? Like? Let’s everyone in the room. Let’s count the clicks. Patrick, do, do whatever you’re supposed to do, and we’re going to count the clicks. And like, is this the best way to do this? Is there another way that we can do this, or to maximize, you know, the the software that we’re using, or whatever. But, you know, making it, making it visual in some way,

Patrick Adams  39:08

I like it good. You did steal mine. Shane, yes,

Patrick Adams  39:12

alright, now I gotta give

Catherine McDonald  39:15

you time. Patrick, yeah, great points. I think I absolutely agree with both of them. Go and see process mapping. I would use all of those. I think they’re very, very useful, and they can be very quick. They don’t have to take a long time either. And maybe the only thing I’ll add is bring the KPIs to your people. So what I find is a lot of leaders will sit in a room and they will look at a KPI board, and they’re hold their heads. What are we going to do? I think, don’t sit in the room looking at them. Bring the KPIs to your people. Maybe use a visual board to actually, as we said earlier, show people the data in live time, and get people, I suppose, train people to think scientifically, day to day using data. Don’t hold on to the data, share it out. And I think that way. Way everybody will be able to take ownership for improvement, and you’ll see the hidden costs reduce that way.

Patrick Adams  40:06

Yeah, good, good one. All right, so the one that I came up with is, I would say, establish standards, standards in everything that you do. And I would say, in addition to that, create like, you know what good looks like, establish standards. But also like you know, whether it’s you know, from a 5s perspective, or just you know what, what amount of inventory is, right, or you know what amount of handoffs, or whatever it is, establish standards. And also what good is, what are the expectations for what good looks like, and then do regular we call them audits. I know audit can be referred kind of as a negative thing, but, you know, going out and just watching and comparing what’s happening to what good looks like, or comparing what’s happening to the work instructions, the SOPs, and then making observations and asking questions while you’re out there observing to to understand. You know what’s happening, you know why this is happening, and and then take action on that. So I would mine is establish standards and what good looks like, and then audit to that. So that is, yeah. Did you have something else? Shane,

Shayne Daughenbaugh  41:19

no, just love

Patrick Adams  41:20

it, love it, love it. Perfect. Well, thanks again for for joining us. It’s we’re at, we’re at about 40 minutes right now. We try to keep these short as we can. This is a we’re live right now. So if you are watching us live, be sure to let us know where in the world you you are at if you’re watching the replay, drop hashtag replay. So we can keep track of that too. But what we’d like to do is have you subscribe to The Lean solutions podcast. All four of us are not normally on the show. We release a new episode every Tuesday right now, and every Tuesday, maybe one or two of us are on either talking to each other about a specific topic, or we have a guest that comes and joins us and talks about something, you know, that’s hot in the world, or a tool or a technique, or maybe a case study of something that they’re doing. And so there’s lots of really, really great stories from people all over the world, all different industries, that you can listen to when you subscribe to The Lean solutions podcast. So otherwise, we will see you next week, Tuesday. Well, thanks everybody for being on. Appreciate it. Thanks. Andy, thanks. Catherine, we’ll see you later.

Andy Olrich  42:26

Thanks everyone