The Goal Calabosession #6

SPEAKER_01 0:00

Just do this raw because I think anybody can go through and read a book, take notes, write a summary, and search on Google, get other people's influence, and talk about a book. But I'd rather just be like this affected me and my mindset so much that I realized I needed to learn more. And at that time, it's like 2015, in the Bay Area, California, at UC Berkeley, they would have these little, they weren't LCI events, they were UC Berkeley specific, and they were in a classroom on campus, and I just wandered in because I was like, this is cool, I'm interested in this. And I just one day just showed up out of curiosity, but then there was like, I don't know what you want to call it, ecosystem or conversation about this mindset in construction. So I just wandered in, and uh Jesse, the first time I was in that classroom, it was like choirs of angels. It's like that like the lights, I was super happy. I was there. I felt like these are my people, and I'm not super social, especially then. I was very rough around the edges and very construction armor. I was like, ah, this is academics, but I was super curious, and I'm glad that community of people who I still dearly respect and dearly cherish, they let me in. I had muddy boots and I took my vest off. I came from the job site. Everybody else in the room definitely had master's degrees, at least a master's degree. I barely graduated from college. So, like on an intellectual scale, I'm definitely not equal to them, but on a curious and trying to implement change. I didn't think about then, but at that moment when I walked into that room with these PhDs, that's how they think.

SPEAKER_00 1:59

Oh man, it's so good and so sad at the same time. This is the second to last conversation between Thomas LeMay and I on the goal, which has been an enormous amount of content. We've got some great feedback, and I appreciate all of y'all for like putting in the time because it's real time, like two hours, hour and 45 minutes, hour and 30 minutes. We got one more, and we're kind of thinking about doing a live stream. So let us know in the comments, chat, wherever you're finding us on the socials, if you're interested in participating in that live stream and maybe hash out some of the questions that you came up with along the way. This conversation was super cool because we're talking about like the drum and the rope. And I'm not gonna give it all away, but I will say this it reminded me that I need to keep my ego in check because we talked about a very similar situation in one of the earlier podcasts. And now here we are, fast forward into the future. And I found myself, like in real time, creating a situation that violated the principles that we're talking about. And so I guess that's kind of the thing, right? Like, if you can have a podcast or put your word, your thoughts, your ideas out there into the world, it's kind of a good way to keep yourself in check because it helped remind me, like, bro, you're a little bit off track. You need to get your stuff back together. And this is the first episode of a brand new year 2023. Gotta give a shout out to our patrons, Anson Green, Adam Hoots, Carol Raftery, and Davis Hambrick. Y'all have been super supportive all year long. Thank you for being there, standing by our side and contributing to the mission. Um, and for folks that are interested, go to the Learnins in Missteps website, find the become a member, click the thing. And if not, it's cool, man. Keep listening. We love it. We're getting we got a ton of downloads. We're averaging over a hundred downloads per episode now, which is pretty darn exciting. It's been a long road, and to be able to grow alongside with y'all has been super amazing. And based on the response we got from the last episode, we made a little switch, right? We moved the LM family member shout out to the intro of this conversation, where it used to be at the very, very, very end, which is kind of long sometimes. We're gonna keep doing it up here, loud and proud. So this shout-out goes to Miss Jennifer Munoz. And this one was special because I got like a personal text from her about it. She says, I forgot to tell you I love the book. I'm only halfway through, but it's nothing I expected to read. It's so great. I love the open and raw honesty in here. And so, Jennifer, thank you so much for taking the time to read the book and then going out of your way to let us know how you feel about it. That it's extremely helpful. And for newbies, if you don't know what book we're talking about, we're talking about Lean in Love 5S Love Letters, which is about enhancing your relationships at work, at home, everywhere, in the omniverse, even. So if you don't have a copy, get a copy. If you already have a copy, get yourself the Lean in Love Reflection Journal. We'll leave a link in the show notes to get you to the reflection guide, which is a little sample of a week's worth of reflection prompts and give it a test drive if you like it. Go ahead and head on over to the Amazon and get you a copy of the Reflection Journal. We'd really appreciate that. And that's enough selling. Here we go to Mr. Thomas LeMay on the goal.

SPEAKER_01 5:38

They could be running tech companies and be bajillionaires, but instead they're teaching the next generation that there's a better way. And I'm just like, I want to be part of that. So you know what we did? We became the experiment. Now, this is a really long story, but I'm trying to loop it back to the goal and like my experience. We made a connection and we had graduate students from UC Berkeley come and do time in motion study. Why? Looking for Herbie. We're looking for Herbies. And not only did we do time in motion study on the workers, but we also did one on ourselves in our information processes. Ooh. Yeah. So point in the mirror at yourself. Easy to turn the GoPro on trade workers, super easy. And it's exciting to do that. Um, but if you're gonna do that, and this is advice for anybody who's into doing production study of trades, if you're not also doing a process study of the way you flow information and how well you communicate, don't even do the time motion study. It's waste. Don't even do it. And what I mean by that is if you have processes that are not designed well for human beings, that means like if I need to go find the most recent, latest and greatest set of drawings, and it takes me longer than two seconds, that is a poorly designed system. Two worse, let's say I'm apprentice plumber and I have no access to the latest and greatest drawings, I can't even go ask somebody for access, it's just not allowed. That's a superly poorly designed process. Yes, that is even worse. So if you put people in poorly designed processes and then we blame people, that's bullshit. If we run people off of projects because we think they're not being productive, but we don't also look at our own processes in the mirror and take me like, hey, how are we flowing information to the field? How are we flowing it differently from the CEO of the company that we're building it to the first level apprentice uh on floor 26? There's definitely going to be some differences in the way you do the tactics of that, but if the access and information is different from CEO to apprentice plumber, that's a problem because now you're hiding information. And if you're hiding information from one party to the next, that's what we call not good. There's other worse things for that, it's all pre prejudice comes to mind. But yes, there is certain information that doesn't need to be made public because it's just company internal financial stuff, legal stuff, or safety information. But everything else, just share it, share it out. You got a schedule, put it out there. What do you think about that?

SPEAKER_00 8:28

That's a long story. The thing that stands out the most is it's fun, it feels good to be out there doing time in motion studies, improving the trade partners, helping them eliminate waste. But it makes me think of two-second lean, which I think is a great Paul Anchor, shout out. And what I've seen is a lot of organizations or teams, we'll just say teams, get excited about two-second lean, and that excitement lasts about 60 days because they're doing all these topical improvements, which is good. You can build momentum with that, however, there's no effort to make systemic improvements, and so the leader is expecting everybody to be two-second lean and upload videos and you know all the really awesome stuff, but they haven't done anything to minimize the variation and the stuff that kicks them in the face, the poorly designed systems.

SPEAKER_01 9:21

I'm we're gonna talk about chapter 26. This is the lead-in, serious, and if you actually read the book all the way through it, spoiler alert, there's a whole bunch of experiments and really easy improvements and optimizations that you can make, but you do that to lead towards a goal.

SPEAKER_00 9:38

And what people take away is the outcome of years and years and years of improvement that they made within the business. And we skip that. We skip the hard. Let's look at our systems, let's look at our inventory, let's look at our information sharing, let's look at all of these things, let's look at our throughput and say, Hey, y'all out there, frontline workers, you should be improving your own work. Okay, well, how about you improve your damn work to take the disruption out of my work? Like there's a foundation there, or maybe something that needs to be happening concurrently to your point. If you're gonna be over here trying to fix my business and your business ain't fixed, guess how long I'm going to pay attention to you. You come up and tell me the 5S and I look in the back of your truck and it's a mess, and your passenger seat in your truck is your trash can. I have no interest in 5S anymore. You can't ride with me then. But if all you're doing is saying y'all need to work and fix your stuff, like you blind, baby. You got a lot to fix too.

SPEAKER_01 10:45

When I reference this at DPR, it's uh if we can make improvements to our production in the field and we also make process improvement to the way we flow information, the way we deal with clients, the way we talk to engineers, talk to architects. That's one plus one equals a thousand. One plus one equals way more than two, like exponentially more than two. It's not even three, it's like two to the power of how many people are doing optimization.

SPEAKER_00 11:15

Yes. And so another way that I look at it is I get hammered as the foreman and superintendent about my PPC. And I'm like, okay, so Mr. Project Manager or Mrs. Project Manager, what is your throughput, your velocity, your PPC on freaking processing RFIs and submittals? Yeah, like you're worried about my output. What about your output? Oh, yes. Oh, yeah. Who's measuring that? Do you even know what the baseline is of how much should be produced in X period of time? But you're worried about my productivity. You don't give me that stuff, my productivity stops.

SPEAKER_01 12:32

Yeah, this is something you can apply. Anyone if you're a general contractor, you can apply this tomorrow. If you do the forced rank submetal log or the forced rank RFI log, where you take, say you have 10 open RFIs, and I'm gonna force rank them, but I'm gonna force rank them that suits me, the general contractor. And I give that, I don't give it to our architect who has to do the work, by the way. I don't show that until I show it to their the people that pay them. So I'll be like, hey, I'm not giving it to any wonderful designer. Instead of doing that, we give it to our owner and say, Hey, go tell your architect that we need these in this order. That's crap. That's crap. The best way is have almost a daily huddle. Almost if you could do it, it's hard, but try to at least a couple times a week, even if it's like a phone call, just be like, Hey, this is coming up, and I'm gonna give you a heads up in it. I've made some really deep relationships with designers, and I'm highly biased because I'm in a romantic relationship with one, but never work together, by the way. Really? But no, no, no, no, no. But all the people that I've worked with, and there's been some really good ones, we still get along to this day, we still talk, and that relationship was founded on trust because invest in the relationship. So, yes, yes. Should we talk about the goal now? Yeah, let's talk about it. Because all of that leads in, it all leads in. So we talked about drum buffer rope. Remember that? Yes, there's a lot of critics out there about drum buffer rope, not saying that this is a universal application that if you use drum buffer rope, that you can turn your uh company into the next Amazon. No, right, it will can make perhaps contribute to some success. There's a whole bunch of other things that apply, but definitely if you're not tying together your issues with your schedule with your variation, what I mean by variation is that in construction there's two types of variation. Number one is the change in design, just because of decisions. And here's a spoiler alert: any project you've ever you're ever gonna work on, any project you've ever worked on, and any project that's happening the second, there's gonna be some changes happening. So don't get upset when there's changes. Yes, it's upsetting, but it's not the end of the world. Take a breath, take a lap around the job site, you know, calm, calm down and understand that there's some fundamental things. And here's one thing that helps with that drum buffer rope. So who do you give the drum to? You give it to Herbie. Yes. So the drum is in like in a marching band, the drum is the pace of work. So if you have constraints, uh don't work faster than any of your constraints, it's waste. And it's hard. That's a hard one to do. But any work that is faster than Herbie will create inventory. And we already talked about when you have inventory, you have defects, and when you have defects, you have all kinds of problems. It just creates all kinds of chaos. So the drum is the constraint. So if you got a constraint log, that's your drum. But if you could do it, the constraint log should update your schedule, not the other way. Let's say you're just setting up the work for the day. The first thing we want to look at is your issues and constraints because that determines your decisions. It's not the opposite. It's not, hey, let's make the plan and then acknowledge that there's problems. It's the opposite. Because why? If you're not looking at constraints, you're gonna plan for way too much work in process. You're gonna make all kinds of overproduction. Buffer, that's time. I don't care who you are, it doesn't matter who you are. Elon Musk, the Pope, the President, Dalai Lama. It don't matter who you are, you can't buy time. It is ever fleeting. You can't even influence time. Nope. No one can. You can't buy time. So you have to constantly acknowledge that time is uh is an ever-receding thing. So if you think that you have extra time, you don't. You have no extra time. So what you want to do is that you want to set buffers in front of due dates. Why? Because of variation. You're gonna have variation. It is a rule of it's like gravity. So if you gotta get to the airport, you know the airport sometimes you can get through real quick, sometimes sometimes there's some variation. A whole bunch of other people want to go, the whole bunch of other people want to go through the airport at the same time. So we all gotta get through uh say, and they're they don't work at the same drum that you're on, right? They're on their their Herbie is much different. Oh, yeah. So that's buffer. So put a buffer in front of your due date. So that means if something's due, don't expect it to come in on time. And two, don't also expect it to come in early. Just expect it, expect things to have a little variation to it. So if we're trying to make a plan for something, give yourself some time, and that way it like deletes the mindset that we don't have extra time. We need to get this resolved because if there's problems later that we we don't even know about, then we can account for it. Then otherwise we're hosed. Yes. So that's the bumper, and then rope. So between Herbie and the front of your plan, you tie it. You don't let the fast person in the front that's ahead of Herbie that's already shot through the bottleneck, don't let them get away. Because all that does is it does the same thing, it's planning for perfection. The rope is a control. So the rope is a hard conversation. The rope is making a decision that's even that it's your A team, they need to crew down or they need to do maintenance or whatever it is. So the rope controls the release of new work. So, like in the project I was working on, we got spread out in this vertical building here. Let me pantomime. We had work on a lower floor, and we had work that was past the bottleneck, the enclosure, and it was starting to spread out, and all of a sudden we had all these empty floors with nothing happening. So all of a sudden, we have all this inventory in front of us, and we can't get to it because it would get damaged by weather because it's drywall and insulation, it's not waterproof. So we had to use some temporary measures to remove the iron skillet from Herbie the enclosure. So but what we probably should have done that would have been cost no money is put a control on the the structure. Yeah. So even though we were high five, and man, we topped out, we had man, we had a big old barbecue, we gave prizes, iPads, TVs, tools, and it was fun. I I definitely it was definitely good. I don't want to say that was like a bad thing. I definitely was good, but uh we we also celebrated a whole bunch of inventory, a whole bunch of waste. So so the rope is is a control. So you gotta put a control on your work that's through the bottleneck. So don't let them get away. Because if you if you if you don't have any control on the faster tasks, then we then we create we create variation. Yeah, so I hopefully that explained it. I'm I'm not an expert. That's why, and there's a lot of uh criticism to drum buffer rope, but that is the scheduling method that is the theory of constraints that I understand, how I understand it. I didn't even have to take notes, I just that was off my brain here. But uh what's your uh what's your theory of drum buffer rope, or what's your take on that?

SPEAKER_00 20:30

Well, uh so for me, I'm I don't know if I'm I'm using that thinking or trying working on applying that thinking to to my business. Oh damn, because I I just started my business, and so that lead thing would be what getting more clients, right? Getting more work, but I also have to execute the work, and I have Are you saying Kirby? I'm I'm also I'm so that's the fun part is like my ego is the front runner, and then my actual capacity to perform and deliver is Kirby, right? Like my ego says, Yes, I could do more, yes, I can do that, yes, more money, more revenue. I'm successful in my first year, like all that stuff, but I still have to do the work, yes.

SPEAKER_01 21:16

Okay, so you your your ego and you, your brain and your body are are both the frontline and Herbie. You got it. Awesome, yeah. Right joys of self-employment, yeah, yes, yes.

SPEAKER_00 21:32

So how do I what is the rope that tells my ego, hey dummy, chill out because you gotta sleep and you're training for a marathon and you have friends and you have a family and you have podcasts, and like you can't do everything. So I gotta have that thing, otherwise, my ego is gonna go sell a bunch of work and then I'm gonna disappoint a whole lot of clients, and then I'm gonna have a full-time job again, which I really don't want. And if I if I did, this is a promise. If I when if I have to go back into like full-time work, I'm gonna plumb. That is what I'm going to do. I'm gonna go be a plumber, and if I can get away with it, I'm gonna go be a plumber's helper and just just work and go home. That's it. I don't want to be dealing with all the drama, anyways. Back to the answer. So, what I've put in place is is some checkpoints that help me create that string, that rope, so that I don't go oversell, right? And so, what is that rope? Well, how it's a limit on the number of hours, committed hours in a month, and it's Soon as I hit a certain threshold, some things go into effect to slow down that ego, right? Like, like not necessarily the ego slowing down, but help the client say, Ooh, I don't want to pay that rate. But in two months, I'll be free so I can go back down to my base rate. Does that make sense? So it's a rate. Yeah, it's a control mechanism. It's a control mechanism. It is a rate increase once I hit a certain threshold of hours so that I can help if the client's prepared to pay that extra fee. Or they can say, No, when when it when can I get to the regular rate? Okay, well, let's do that in in uh in November. I don't have backlog yet. And if I get you on the board for now, then I will have I will maintain that rope. And the rope has some stretchiness in it based on rate, but it gives the client the opportunity to say yes or no. Ideally, they say no, because then I can focus, give my client that I've already got on the books the degree of attention that I want to give them. Yes. If I get too much work, I'm gonna start cutting corners and start underserving them. And that is not a good plan. So that's the that's my rope is I've got that little mechanism in place that says, uh oh, you need to like you are not. I, my ego, me, I do not have the self-control to just say, No, I shouldn't do that. I gotta put a mechanism in place that helps the requester say no.

SPEAKER_01 24:07

Yeah, okay. No, that that makes perfect sense. What's the buffer? What's your buffers? So the buffer is so I've got two two tiers. Your drum, your drum is your week or your hourly man hours per month, uh engagement time. Your the rope is the rate. What's the buffers?

SPEAKER_00 24:25

So my buffer is I have this is a new thing, I have designed in rest and recovery days in my month, which total 11 days. So I can absorb some work for a finite period of time, but when I'm absorbing it, it's cutting into my rest and recovery. Oh, okay. Right. So there's still a third of my month is available that I'm that I've dedicated to rest and recovery. But for whatever reason, if somebody just says yes, yes, yes, I'll pay it, I'll pay it, I'll pay it. I it's going to get into my rest and recovery, but also that is not sustainable. So I I've got to right. I've got to be able to say, okay, I hit my buffer, like I'm already in down to 10 days. That's a bad thing. Down to nine, that's a really bad thing. And I will feel it physically because that's a lot of travel, it's a lot of work, it's a lot of everything. Because that you know, and I didn't know this, Thomas, and I should have known, but I still didn't know. I didn't realize how much prep and follow-up time there is in serving a client. It there's a lot, way more than I anticipated, especially for third party. Yeah, yeah, yeah. Yeah, and so those are hours, like you said. I can't buy time, I can't text Michael Jackson and ask him to give me time because there ain't no more time to be had. I got one.

SPEAKER_01 25:47

If you have a time machine, that's the one exception.

SPEAKER_00 25:49

If you have the time machine for me, it was okay. What system can I design? Because I absolutely have the agency to design systems that will better serve me and help me also better serve people.

SPEAKER_01 26:02

That's awesome. That's awesome. That's a good listen. So if you have a constraint, that's your drum, remember, you can put a buffer in front of it, and that's a decision-making system. So you can say, Hey, I'd have 11 days, but this month, for whatever reason, for priority reasons, I'm gonna do 10. So I give a date back to uh to uh to the to the constraint or to the drum, and uh and and you can make that decision. If you had zero days, if you had it, you had it finished finished to start. Yes, if you had it that if you miss one day, or if you try to add one day, then you need a 32-day month.

SPEAKER_00 26:45

And those don't exist.

SPEAKER_01 26:46

You can't can't do it, you can't even buy it, even if you had Elon Musk money, yep. You can't buy time. That's so good. Thank you for sharing that. Yes, let's do chapter 26 because it leads into this, because this is uh this is the this is the challenge, and Alex Rogo, our hero, he goes back to headquarters and he goes and sees Bill Peach. So you have the agency in your own organization. I have some, I have I have some agency. I have some. I still have to have to do stuff for people because they say so, but I do have influence. But Alex has probably the similar that to me, that he has some agency within his own plant, but he definitely doesn't have almost any agency on a corporate level. So he's got to go report. So if you remember in the previous chapter, they're like, our own decision-making process is flawed because we have to give these metrics of efficiency to corporate, and the corporate, based on the efficiencies, figures out they make decisions based upon these metrics. And these metrics are inherently flawed because the the systems that are designed to create these metrics have all kinds of problems or all kinds of issues because all the decisions they made about prioritizing and whatever it is, they had the expeditors, they had all these like rules and regulations that's creating all this chaos, and all this chaos makes it almost impossible to have good efficiencies, and even then they can't change the chaos, they can't change the processes because they don't have the agency to do so because those that those processes are dictated from the metrics that they give to corporate. So, what does Alex do? He says F it and he makes the agreement with cool hand Lou. Yeah, he's like, whatever. We're if we have poor efficiencies, I don't care because now all of a sudden they're like our decision-making process is creating variation. Let's change the way we make the decisions. And Lou's like, if you change that decision, your efficiencies are gonna are gonna go down because all of a sudden you're going to have and the and the decision was if you have a non-bottleneck uh task, this is the if you have a non-bottleneck test, that means you if you have the the Boy Scout that's in the front of the uh line, if you don't put a rope on that Boy Scout, and I'm not I'm not saying put rope on children, but I'm just saying if we don't have a control mechanism to stop overproduction, then it then don't even do any uh efficiency. It's like if you do time and motion study on your plumbing crew, and you and I'll be like, well, Jesse, like we you put your gang box over here and your cut things over here, and your tools are over here, and I saw these two guys, they went took 20 minutes extra for their break. You need we need to have you do this uh remedial action and need a corrective action report from you by next week. Yeah, right? And then you and then Jesse's like, hey, the half the time I'm um in these super inefficient meetings, and the schedule that you give me is incorrect, Thomas. And I'll be like, well, that doesn't apply. That's that's that's that's just how it is, Jesse. Deal with it.

SPEAKER_02 30:10

Yeah, right.

SPEAKER_01 30:11

That's the bull crap. So so Alex is like, whatever, I'm gonna go take the hit from my people. So he walks in with his this is 1980, so it's probably a binder. It's not a right, it's not a file, it's probably a series of binders, and uh he has to go turn it in. And he sits down with with Peach. I'm just trying to I'm I'm going off memory here. I'll try to find it and Kindle. But uh he sits down with Peach and he's like, Bill Peach is like, sit down, man. Come here, come in the office, sit down. We gotta have a that that old the old chat. We gotta we have to have real talk, hashtag real talk. And Bill Peach is like, we're gonna close your plant. It's you're it's not making money. This is we got all kinds of problems. Yes, you've had some official like, yes, we've we've heard about some good things coming out, but you have years, years of losing money. You've made an improvement, yes, and we acknowledge that, and thank you for that. But you're we're gonna have to lay off some people and we're gonna have to close a plant, unless, unless he gives the old unless he says they need, I think it was 15. They need to see a 15 increase in I think it was uh improvement or something. So it's like a 15% improvement, let's just call it revenue, because that's probably what it was from a corporate guy.

SPEAKER_02 31:36

Right.

SPEAKER_01 31:36

They need to see, so that means they need to deliver and get paid for 15% more than they are projected to for the next month. He's like, if you hit that if you hit the 15% in one month, we'll keep the plant open. If you don't, we don't have a choice. Literally, the stakes are on. You ever had a conversation like that with yes, it's I did. Let me let me tell my story first. So the making do the temporary enclosure and jumping the drywall crew ahead of enclosure. I had to basically stick my neck out. I mean, me personally, if that was a poor decision, I was gonna get blamed for it. So I had to stick my neck out for it. And they're like, I would you bet your job on this idea? And I was like, Yes, yes, and that was convincing enough to make that decision. So that was that was my chapter 26 conversation with my operations manager, Dave. He's he's a good guy, Mr. Dave. He's no longer the operations manager, he's now a general manager, he's gotten approved. But uh, what was your uh hard? No, real talk, real talk.

SPEAKER_00 32:49

Yeah, so the real talk was it was uh I was responsible. I had just become responsible for all the manpower, all the staffing of all of our projects for the for the trade partner I was working with. And what I saw was we were there was a whole lot of dysfunction with temporary services, and we were paying like every two to three months the same person more money because they just kind of kept bouncing around. We'd release them, they'd come back, more money, more, but no more skills. And they were so that was a problem, and it was like recycling, rinse, repeat the same people. I'm like, man, like this is not sustainable. We need to start getting new people in. At the same time, I was serving on some advisory boards at local high schools with CTE programs, right? They were graduating high school students with an OSHA 10 certification, basic tool knowledge, basic systems knowledge, like like, and their complaint was they couldn't get those students a job. They were either, if they weren't going to college, they were getting jobs, but not like a career. They were they were working. So I'm like, this is stupid. Like, there's this pool of new people that are coming to us that have a skill set that this person that I'm paying more than I was last month doesn't have. They don't have their ocean, they they're just they don't have anything. Okay, so started working on a uh a trade-based internship program for high school students under the age of 18, which it was believed to be illegal or against OSHA, and that's not the case. It there's there's some very specific and strict parameters to stay within. Most of them are with regard to the insurance carrier. Once we broke that nut, we were out rewriting, rewriting the program, submitting it, rewrite, submit, rewrite, submit. It finally got to a point where they didn't ask for any more edits. And so I asked, is this okay? Like, so I'm good to go. I got approval. And like the words I got was oh no, we're not giving you approval, we're just saying you're not violating anything. So if you're gonna go with this, understand that this is yours, and I said, Okay, and they like, no, no, no, like if it blows up, it's on you. Like, I heard, and it's like, well, it could mean termination. And I said, Okay, I heard the first time, I got it. So we did it, and it ended up being a huge success, but it was absolutely like nothing can happen, these students cannot get hurt. They're like, this cannot be like any of that happens, you're gone. Okay, I understand. We did it, and and it's blown up, and they do it at every single business unit throughout the business, and it's a big thing now. But it I mean, it wasn't so much like meet this performance criteria or the job shutting down, but it was more like if you're gonna do it, it's on you, not a problem. Let's go, baby. Yeah, but that's where the the risk is where the reward is, right? Let's know when there's a young man, Josemo, who I interviewed him as a sophomore in high school, and he told me what he was going to do was start his own company, his own plumbing company, and he now has his journeyman license. Like, I played a role in that. I didn't do all of it, but I played a role in facilitating that.

SPEAKER_01 36:17

Hell yeah, Joseph. That's that's awesome. Yeah, getting after it right now, just doing it. Yeah, oh yeah, man. Man, I like some I like to see some just a plumbing crew just just putting stuff up. It is uh oh yeah, it's it's a it's really cool because like you'll come back, it'll be like there'll be a stack of pipe over here and a fit and a bunch of hardware and a bunch of stuff, and then you'll come back and it'll be all up, all and it's like way up on the ceiling. Yep, it's all the fittings and stuff, and it's like, damn, yeah, I was like, how'd they do that? The magic, yeah, magic, yeah. But uh, I know how they do that, they they work hard and uh because like yeah, because once you get the the fittings together, is it like uh you get in the flow state? It's like oh like this is just boom, fits this roll. That's awesome. That's awesome. I'm looking at page 297. It's a 15 increase in the bottom line. Oh, it's okay.

SPEAKER_00 37:14

So straight up, 15.

SPEAKER_01 37:15

So you need a 15 lift in profit. Woo, that's a heck of a write-up. Profit? Hell yeah. That's not a lift in revenue, like I said. It's a 15% in in profit. But think about think about what they're what they were what Alex was agreeing to, because he knew they were lowering inventory. And they were lowering so what what what is inventory? It's operating expense. If you can't if you have something that you've made that you haven't sold, it's inventory. So he's he knew he's like, shit, all right, I can a 50. You mean to tell me I need to cut my operating expenses by 15, but have the same throughput and sales? So yeah, was it a risk? But I I don't know. What do you think? Do you think he this is a little this is a little showmanship, I think.

SPEAKER_00 38:06

I think so. Yes, I think so. He said, damn it, all right. I'm gonna do my best. And he already knew 15. I got this.

SPEAKER_01 38:17

He does after they I'm looking at the the the book now. He's like, Man, we've been eating up backlog at a terrific rate, but he's starting to second guess himself. Yeah, I'm in really big trouble. Page 298. So he's second guessing himself, and uh, I made a comment in your live stream. Was that last week? Self-efficacy, yes. Remember that? Maybe maybe I thought it I thought it was solid gold because it's like an SAT word, efficacy. It's the uh it's your own, it's your own like view on how you are uh like productivity or like how you it's like it's efficacy, it's like a vaccination. So, how well does vaccination prevent viruses from right? So it's a performance thing. So your self-assessment of your own performance is often your worst critic.

SPEAKER_02 39:08

Yes.

SPEAKER_01 39:09

So your self-talk, the conversation in your head is often the most toxic conversation that you can possibly have. And this is this is some self-efficacy moment for Alex Rogo after he's like makes the deal with the Bill Peach of the world, and he's gotta walk back or drive back to the plant with that news, be like, good news, I got good news, I got bad news. Yeah, good news, we still all have jobs this month. I made a deal. We're not closing the plant. Bad news, you know, the thing that we've been doing for fun or as an experiment.

SPEAKER_02 39:45

It's real now.

SPEAKER_01 39:46

It just got real, it just got real. And uh I was at a oftentimes, oh who was who I forget who said this. It was man, I want to remember. Maybe next time I'll remember, but oftentimes the most improvement happens, and they they were it was at a conference, Lean Enterprise Institute conference, and they had this picture of an oil derrick on fire, and a lot of improvement happens when you're on an oil derrick that's on fire because you have no escape, you can't get off, right? You have to you have to make a whole bunch of you have to solve a lot of problems in a hurry, and you can't run away. So oftentimes you have to create some kind of crisis, and that crisis is the catalyst to to improvement, and I think that's part of the design. I think you have to have a sense of urgency to uh so if you're doing like process improvement or experimentation or innovation, whatever it is, that's cool. But when the when it's like, hey, we got to do this or we're done. And by the way, we can't go back and just work harder, we have to double down on our innovation. We have to double down on this crazy experiment that we've been running. That's a that takes, oh, that takes some serious, serious like like internal decision. But I think if you do that in a group, that's like the heroic moments that uh that movies are made of. What do you think about that? I'm gonna go to chapter 28, but what do you think about the oil derrick on fire? Because like there's movies about there's m movies with Mark Wahlberg about oil derricks on fire, yes, or like landing on an asteroid to put a uh explosive device on it. It's like but like her heroics, and we were talking about like male characteristics or or not male, masculine characteristics, uh, that takes courage and assertiveness and and and all of and strength. It's in those moments, those decisions, those conversations, when you make that decision that yes, we're gonna double down on this experimental process, and that we're not gonna waver at all, that's that's heroism, or that's courageous. What do you think?

SPEAKER_00 42:06

Yes, a hundred percent. I mean, so there's two things is when I don't when I'm on a Derek, my options are super, super limited, and there's very little place to hide. So that self-talk is much easier to ignore, right? Because the emergency, the urgency is this is how much time I have to make a decision and act on it because the loop is like I gotta go, baby. I don't have time to, well, you know, what are people gonna think? And hell no, am I gonna burn or not? And is my friend gonna burn or not? And so when when we have that urgent change in front of us, I think what it one of the things it helps us do is ignore all like just super super zone in and ignore all the other garbage, all the the that self-doubt, the questions around self-efficacy. Efficacy, we gotta do something. Now, I don't know if you've read the book Um Thinking and Bets. She talks about write it down, no thinking. Oh man, it's a it's a good one. So she talks about the difference between making good decisions and how that is disconnected from the outcomes. So think of Super Bowl, coach makes a call based on all the information they had in that period of time, they made the best decision they could given the information they had, and they don't cross the goal line and they lose the Super Bowl. Because of the outcome, people will say the decision was a bad decision. The outcome does not define the validity of the decision. The decision was a good decision, it was a sound decision. The outcome, because of the world and things happened, all the variation, turned out to be less than desirable. Had they made it across the goal line into the end zone, that coach would have been a genius and a hero for life. So the outcome has no bearing on the decision. Now, bringing it back into this situation of urgency and emergency, and like your life is on the line, like there's real, real stakes. The consequences are enormous. There's a couple of outcomes. There's one, shut down the plant. Two, keep the plant open. In order to keep the plant open, I got to make a damn decision, the best decision I can, given the information at hand. It seems courageous, but you really didn't have a choice. Like when you're in it, you don't, those are your child. You don't have 10 options. You got two.

SPEAKER_01 44:36

You're not thinking about being a hero or being courageous. It's just the Go.

SPEAKER_00 44:40

Let's go. That's it. We gotta go, baby.

SPEAKER_01 44:43

Come on. That's it. That's a famous quote about some serious heroic shit on 9-11. Let's go. Right? Yes. Yes. They didn't think about their own lives. They thought about the life the lives of other people. Who knows? White House. Who knows? Right? Yep. That's the that's a tragedy that happened in Shanksville. But yeah, that's that's great. Because that is when you do that OODA loop and you go from observe, orient, decide, action, action. Yep. Yep. That's and then you loop it back. But that's that's that's a really good point. That's a good point. Chapter 28. I I want to keep going. It's so good. It goes back to the plant. Alex, he's like, okay. The good news though, he's got support. And uh, you know, I think this is this is an important thing, and we talk about this a lot, and we talk about this with mental health, but uh and you talk about this a lot, and Jen Lacey talks about this a lot. You have to ask for help. Yes, have to ask for help. Uh no one is uh no one person. Remember the thing one plus one equals two to the power of how many people are on board. Yep, that that's that that happens also when you ask for help. So guess what? Jonah, Jonah shows back up. Jonah's on site. Woohoo! It's real now, baby. Guess what he does? This is this would be radical. I'm trying to go off memory. Jonah shows up and he's like, You got you got issues, bro. He doesn't say bro, he's from Israel. But uh he says, cut the batch sizes. So, like, if you think about they were they were doing the green tag red tag method, being like, okay, we know we know that this this bottleneck, it can do this much per hour, therefore we're just going to prioritize that. And he's like, that worked to a point. But if now if your goal is to have a 15% bottom line increase, you have to be even more militant about your inventory. This is like this is some Adam, this is an Adam Hoots moment right here. Yeah, so you have to make a decision and cutting your inventory that's taking your rope, tightening it up, shortening that, baby. I'm doing some pantomiming. Take that rope. Yes. If you actually read other gold rat, he says, cut cut the buffers in half, cut your inventory in half. So that's scary. Yeah, so that's a half. That would be like your fastest, your most productive crew, the probably the crew that's got the lean flag or the trophy. You say, All right, you slow down by half. That's scary, right? But uh he he starts. I'm trying to think, I'm I'm not even trying to read the book, I'm trying to read like a little what's on my iPhone, but it says small, but think about a smaller batch. If you went to a grocery store, and that's not a good example. Trying to think of a uh an anomaly about smaller batches, when you're trying to do a whole bunch of processing and it's got variation, so it's not like you're just doing the same thing over and over and over. So you have to change, you have to do all these kind of changes stuff. If you're only doing a handful of things at a time, things that are manageable, you don't need a whole lot of people. So if you take their batch sizes and shrink them down into manageable parts and pieces and sync it up with break times, all your variation, right? Sink it up with start times, shift changes, all this stuff. Start to synchronize it up, get bring in that, bring in that rope, tighten it up, bring in your inventory, keep the same throughput, but but shrink the batch size. And uh the thing about batch sizes, if they're smaller, they flow, they flow faster. Because if it's one batch but the batch is smaller, that batch flows through that bottleneck quicker because it's not it's if if it's a hundred units per hour and you only have a hundred units, that's one hour, boom, gone, go, boom. We can now change over to something else, and now all of a sudden, we don't have to take 10 hours to do this process. We'd shrink the batch size. And if we're doing mixed production, that means if we're doing different things, it's not exactly the same thing. And in construction, it's mixed. I don't care who you are, you can be building a high rise, it's 200 stories, it's mixed. Why? Because it's a difference between floor 100 and floor 200. It's it's the difference is it takes longer to raise things up, takes longer on the hoist, it takes longer to do it. It's all different. So uh if you shrink the batch size, now you can be way more agile. It's like being a cheetah. So if there's problems, if there's constraints, if there's uh issues, if the somebody calls in six, no sweat, because we're only gonna process these things in smaller batch sizes. And here's a new decision, and it's scary because like, hey, remember that rope that we designed? That rope is now half this half the length. Everybody now now closes in tighter. And but the idea is now that if we can process more easily and be more agile, why don't we speed up? Herbie Herbie's the same, but Herbie never stops now. Herbie doesn't need changeover or needs less time to do changeover. Yeah, and uh your three cost metrics remember inventory, throughput, and operating expense, they start to shrink. They go down. Throughput stays the same, but your inventory shrinks, operating and expense shrinks because it's it's related to inventory, and all of a sudden it's like, damn, we just found that 15%. What about what about small smaller batch sizes?

SPEAKER_00 50:28

So the value of smaller smaller batch sizes, what I and I don't think they talk about this in the book, but what I like about smaller batch sizes is because they're smaller, the problems are more appropriately sized. With a big batch, a problem seems minute. The frequency of the problem, the duration of the problem, the severity of the problem doesn't seem so big if I've got a process a thousand units and ten hours. But if I got a process and I'm measuring every hundred units every hour, that problem is proportionately visible. Like I could feel it and I'm compelled to solve that problem right now and not band-aid it because now that problem's gonna happen 10 times. The reality is it's been happening one time in a 10,000 or a 10-hour day. But when I start, when I tighten it all up and that whole cycle goes through, that problem's gonna happen 10 times a day. And all that's doing is adding burden to people and screwing up our throughput. So the smaller batch size helps me understand or maybe appreciate the problem appropriately. That's what I like about smaller batches because it's gonna happen again, and you have more opportunity to study it and like really kill the problem because the frequency of the occurrence is gonna happen in the next hour. So let's go, okay, boom, make oh, that didn't work. Experiment, experiment. Ah, okay, repeat, repeat. Okay, that's it. That's the new process problem's gone. 10 hours, yeah, you know, it kind of sucks, but hey, we're making our thousand units every now and then we got to work overtime. No, no, the frequency drives us to to solve that damn problem.

SPEAKER_01 52:20

Yeah, so if you got smaller batch sizes, and you can the frequency picks up, right? And your downtime on your bottlenecks is less, you can go faster. So, guess what? Alex does, and this is genius, and this is uh this is this is legit. You know what he does? This is this is cool. He goes back to HQ, goes back to HQ, but he doesn't talk to Bill. He stops on the floor below because you know, marketing and CEO, they're all connected. And I I love me some marketing people, all the marketing people, they do good work and they help me out. But uh, let's let's engineer a sale. So there's a book by Goldrad, it's called It's Not Luck. Yeah, and it talks a lot about how theory of constraint works in retail and sales, but you can engineer a sale. So he goes to the the lead salesperson, and it's uh I'm looking at the guy's name Johnny Johns, the typical sales sales name, just it's so slick, right? Johnny Johns, Johnny Johns, sales guy, 80s sales guy. He got all kinds of stuff in his hair and stripes on a suit, definitely stripes.

SPEAKER_00 53:30

I'm thinking Miami Vice, right?

SPEAKER_01 53:32

The big oh yeah, got the pop, the pop collar.

SPEAKER_00 53:36

Yeah, Johnny John, baby.

SPEAKER_01 53:38

Johnny Johns. So Johnny Johns, he's like, Alex, Rogo, you got the uh got the plant that's that's that's not performing. He's like, we've figured some stuff out. We're we want to increase, we need to increase our bottom line by 15. Therefore, I need some I need some customers. I gotta, I gotta, I can, I can, I can I now have some capacity through a bunch of optimization that that now I have capacity. I have now created capacity and uh if you have any capacity, let's in a sale, therefore, let's guarantee four-week deliveries. And this is before this, they were blowing deliveries by months, so plural. So they're blowing they're blowing their lead times by 16 weeks. I was like this morning, we were in a meeting uh we're looking at lead times, and like it was like 52 weeks, damn! I hope it's not 53 on a on a piece of equipment, but uh that plays so but if you can say I'm gonna guarantee Johnny Johns, you're gonna go out to customers and say this product that we manufacture, you can guarantee four weeks, yeah. And go out, and he's like, if you can guarantee four weeks, and guess what he does? He bets him. Not only has a bet with his boss with his job, yeah, he bets he bets uh Johnny Johns with some Gucci loafers, Gucci, some Italian loafers. Those of you who weren't around in the 80s, the loafers, the Miami Vice was a thing. I was a child, but I still remember Miami Vice being on TV. They wore these suits with with loafers with no socks in Miami. Like, can you imagine the smell, by the way? Like, I never thought of that until then good thing they're they had to convert. That's why you keep the top down on the convertible. Ah, yeah, now it all makes sense. Gucci loafers with no socks, but it's like so probably I don't know. I don't know what Gucci loafers are these days, but it's yeah, so Italian. So he's like, and especially sales guy, they love the flashy stuff. So he's like, okay, if I deliver anything more than four weeks, you sir, have Gucci loafers go out there and go execute a sale. And uh Johnny John's is like, you got it. Let's let so they literally ener a sale. Yeah, so here's here's the thing. So not only can you be profitable, the kind of the lesson here is not only can you be profitable by lower lowering your inventory and doing optimization and have having be even more productive, there's also a sales impact that now we have capacity, we can do more. So we can grow our company, we can grow revenue, we can grow whatever profit, we can grow all this stuff with the same amount of people, but we're not burdening the people with more work. In fact, we're we're lowering the burden on our people. Now they have capacity at this new rate that we don't have to increase their work, but we can we can have more in sales. So the engineer of sales, that damn. And uh he does it in a way that that would entice a salesperson to dangle some flashy, and I'm not saying all salespeople are flashy, but most of them are. But he says, four-week delivery, guarantee it, let's go. And that that would increase, and you imagine if if uh you went out and said, Hey, we can guarantee four-week delivery, and these are customers who are used to getting blown off by 12 weeks plus later than the due date. Yep, people are gonna be like, There's gonna be some demand there, right? Yeah, so that's 28. That's chapter 28, and uh that's kind of profound. I think that's I was saying that in a sales meeting the other day. I was like, let's engineer a sales, and uh even I got some pushback on that one, but engineering a sale is is uh taking what you know, your capacity, like if if if you know a capacity, and it gives you a competitive advantage. That means you have an advantage that no other company has, and uh this it becomes a choice, like the choice becomes made. It it takes away experience and money and schedule performance, and now it's like we just want to use them all the time. So that's that's that's like uh unheard of in construction, but uh uh DPR we we definitely are trying to be competitively advantaged in many fields and through a whole bunch of efficiencies in our self-perform work and all kinds of data and VDC. That's what we're trying to do. But it's kind of the chapter 28 kind of mindset is you can enter a sale. It's really cool. That's why I really like working at DPR because they're they're trying to do that. So, but that's chapter 28. What what do you think about that? Engineering again.

SPEAKER_00 58:32

The the there's a lot of there's courage in that, right? Like he was in a crisis, go no go situation that right, like this was real, people's lives, his livelihood, careers, the whole thing, and going and promising four weeks reliability dice out, yeah. Yeah, when the market is exceeding 16 weeks on a good day, like that's a that is courageous, not just because now you got to deliver, but last week I sucked, yeah, and now I'm guaranteeing that I'm not gonna suck anymore. Like, that's guts. That that's you know, we talk about I've been accused of being a sandbagger once or twice, Thomas. And now the reason I did it is for different reasons, right? I would sandbag because if you knew, because this was the the dynamic, if you knew I could deliver in four days, the next time it was four and a half days, I was gonna get my butt chewed. So I'm always gonna tell you six days because now I got a buffer, because you're gonna overreact if things don't work out perfectly. I could do it in four days with the ideal conditions. I our agreement on this piece of paper says five. Right, right, right, and while you're sandbagging, like I'm not sandbagging, there's a buffer in there. I would I would guarantee you four days, provided I knew you weren't gonna email the world because I went over by three hours. You follow me?

SPEAKER_01 1:00:00

So yes, I've had this conversation. Yes, continue.

SPEAKER_00 1:00:03

Yes, yes, so doing that, knowing that I can deliver, and I've done the shit. We did it when we were first deploying Tremble, like the very, very first time we did it on a job in San Antonio. Yeah, I was the guinea pig. Robotic machine, yeah, yeah, robotic setting our point.

SPEAKER_01 1:00:21

So all our sleeves pantomiming holding a holding a uh device, yes.

SPEAKER_00 1:00:25

Yes, all our sleeves and all our embeds. It was a hotel, and man, I want to say we had something like 300 sleeves and I don't know, eight, eight hundred embeds. And I was like, we were tracking it. We didn't really trust the the technology because we'd never used it, and so the first round that first pour, we were like we were laying out with the trend with the device, and we were going back and doing it old school checking, cross-checking with string lines and tape measures and you know the whole thing. And it's like, damn it, everything's on. It took our operation from about six people to do that work 12 hours a day for four days. It took our operator. I'm like, shit, all we need is three people, and we can do it in two days. Oh, with the machine, with the machine, it's more efficient, yeah. Yeah, right, it's more accurate, like pull just like straight up, just pulling walking across rebar, kneeling down on a rebar cage beam, holding the measuring tape up against the form, takes a lot of time, right? And asking somebody to move a pile of rebar or a crate of this or a crate of that, that's what was making us take long. But with the with this device, the technology, we didn't, it didn't matter. We could just go and lay out if there was crap in the way. We just kept laying out over here. And when they moved that crap, we went and laid out over there. It was like, I mean, smooth. Now it became a thing. Like, I want to keep that tremble on site, I want to keep that device on site. So I need to go and talk to the GC about tightening up that lead time to pour so we can start forming, so I can so I had to go and say, hey man, we can install all this stuff in three days. On a really great day, we'll in a great great week, we can do it in two. But I don't, we don't need the like if you can shorten this up, I can continue to deliver it this time. And it was, you know, potentially exponentially we picked up time, but I had to say, yes, we can do it in two and a half days. And they're like, okay, so we're pulling provided these conditions are met. Yes, yeah, I need control points, I need this, I need that, and I can give it to you. I will commit to two and a half days. If I gotta work overtime the second day, I'm gonna work it, I ain't gonna complain. But I need like we need to pull the pores up, and you know, pulling a pour up and then delaying it, that's not a good thing. It's hard, yeah, yeah, yeah. And and so, like, I it was on the line, and my team was like, son of a guy, like Jesse, why did you go and tell him? I was like, I know, I know, but look, your bad says, yeah, yes, yes, here was here's what's happening. If like we're not gonna have access because we only had one device, we're gonna go somewhere else, some other project, it's gonna be a two-week delay. It's like if we don't have that, this is what it's gonna do to our labor, and we need the you know, blah, blah, blah, blah, blah. Oh, you need the machine. I need the machine. The only way to really like I'm going to lose access to it in two weeks. So we need to like we need to make this commitment, or we're gonna be crawling around, you know, doing it, and it's summertime. Like, oh, you're okay. Well, like, yeah, I'm not gonna complain about overtime. Let's do it. And we did it, but man, I had to say uh pinky promise we get it done in two and a half days, but I need them pores, that pore schedule to be tightened up, the frequency to be accelerated.

SPEAKER_01 1:03:46

Yeah, man, you're pulling on my heart strings here with being productive with excellent layout, yeah. But it's very true, yeah. Oh man, and the the the I'll link it back to the the chapter 28. You you cut your batch size in half, you eliminated the manual step with the string line and tape measure, yep, and mental calculation, and you relied upon the BIM model, or at least it might have been CAD, but at least you relied on the points and you relied upon a the reference that was provided by somebody else. Yes. So you had there was some trust. Absolutely. You had to trust that the the the general contractor gave you a a very accurate control point for which you can do your you can extend your layout from and that that so that's so you had to number one, you had to get on the oil, Derek, two, you had to cut your batch size in half, and three, you had to you had to abandon a manual step. Yes, because uh so you had to embrace it's like man, you're like Alex Rogo right right here. That was a great story. You had to abandon the safety factor, and maybe not safety factor, you didn't abandon safety, but you abandoned a traditional method that's tried and true. And listen, tape measure, string line, and you gave me the story about the the plumb bob, like it works, it works. Hell yeah, it does. Only when they're freaking that's you know, it's funny because if they were like your if your reference is often, trust me, you're talking to a director of quality for a very large operation. We sometimes make mistakes in our layout and we catch it, but we if we're totally reliant on the machine to do that, and we don't catch that mistake, it's it's a problem, it's a big problem because if your reference is wrong, everything else is will be everything else is wrong. Yeah, I can go, I can do a whole episode about Julia. I'll save it, yeah. But uh uh I'm highly biased there, but yeah, you definitely hit the hit the heart strings on many points, but uh cutting batch sizes takes courage, yes, take it takes courage because you have to abandon some safety factors, and it's usually mental or it's a mismanagement thing, right? Like you have to call it you have to abandon it. Like you like, we're not gonna we're not gonna use that like fall back on it, no, like that, like on the burning oil, Derek. Like throw that over the edge, like get that off. You've got to push that thing off the edge, get it out of the way so we can get attack this fire and push into the if we call it a comfort factor, it's more a comfort factor.

SPEAKER_00 1:06:40

Than a safety factor.

SPEAKER_01 1:06:41

There you go.

SPEAKER_00 1:06:42

Thank you. Yeah. Right. Like it it I feel better having that because I'm not adding risk. I'm just letting go of that comfort, that cushion that that I could always rely on.

SPEAKER_01 1:06:54

That's right. And that when you do that and you reduce your batch size, it creates opportunities. Yes. And then and then you can design in, go back to Johnny John's and some Gucci sandals or Gucci leather loafers that just cup your feet. Oh, you're driving your Ferrari. Yes. I have I have none of those things. But but uh throughput, inventory, operating expense, throughput. If you can increase your throughput and lower your inventory and operating expense, profit. Boom. It's it's if you think about it in that sense. Yep. That 15% lift in your in your bottom line, not so scary anymore. You just gotta take some risk. So chapter 29, reality strikes.

SPEAKER_00 1:07:37

Yep.

SPEAKER_01 1:07:38

And uh spoiler alert. Well, it's not a spoiler alert because I hopefully everybody that's listened this far has read the book because you're only 10 chapters away. But chapter 29, cutting batch sizes really works. And uh if you don't believe me, head on over to the Lean Builder podcast, Hoots on the Ground, or Jason Schroeder, Elevate Construction, both of them will prove it to you and with much greater tenacity and accuracy and real-world examples that if you take your batch sizes and shorten them down, it creates it creates opportunities. And if you if you seize those opportunities, your work, your efficiencies, everything, everything can as long as you design, as long as you anticipate that increase. So if you if you be like, uh, we'll just go on vacation for three months. I suppose you could do that, but if you take advantage of that, be like, hey, this is now how we work. This is new rule. We're gonna lower bat uh batch sizes and work uh in sync with our uh constraints, and the constraints dictate the schedule versus the opposite now. All of a sudden you can design systems that uh move faster than before in ways you didn't even expect. So, but you gotta go find some business. Yes. So talking to Johnny Johns, oh, it made a felt great, it's got he's gotta go make some sales, and sales is a very subjective thing. Uh-huh. So it's not just taking orders any. So before sales would come in with pretty typical orders, and they were doing electrical components, so these components would probably go into radios and vehicles, and who knows? This is the 1980s, so and maybe uh TVs or something, right? Like they're components, so they ship off to Sony, Panasonic, General Electric. So, but uh the sales is also those same customers, so so they have to negotiate with General Electric, Sony, Panasonic, and uh they have to adjust, it's it's based upon market demand. So if nobody's buying Sony TVs, they so they have to create these business deals, but all of a sudden, if I was this is very hypothetical, but if I was uh Sony electronics in Japan and we're making TVs, and this this component comes from Unico that's critical to our operation, and if we can get it inside of 12 weeks down to four weeks, it's like that would be nice. Yeah, so now it so it there's a ripples of impact, right? Oh yeah, hashtag so all of a sudden it ripples out. So not only are you are you doing optimization in your own factory, you have customers that uh can now be affected. And I think that's kind of key. So when you when you when you change your change your methods and there's improvement that happens, and you change your sales effort, your customers now have to change the way they buy stuff. And that's uh you can't dismiss that. I think that's very important, and especially for this instance, because they're not they're not delivering to Jesse, Jesse, here's your new Unico 2000 device. They deliver to another manufacturer that has to manufacture something and then sell it. So they're not they're in the middle of a supply chain, so they can't just create all kinds of opportunities, so they have to go find some. And uh Rogo, Alex Rogo's got to do some negotiation, so they'll come back and they'll be like, ooh, get me some business, and now he's gonna literally make a decision about actually hitting a four-week metric. And uh to secure new business, you actually have to make those decisions and then start to deliver on that. So you have to uh you have to take some new risk. There's unknown, there's unknown things that happen when you uh do optimization. I think that's that's very, very important to say that uh once you make optimization, you can't stop there. You can't stop there. You now have to you have to engineer sales, and now you have to influence your customers. And that's hard, that's even harder than before if you're in in into a leadership position. Before the hard work was down on the shop floor that we just gotta crank this stuff out, right? Like, hey, we need more workers, man. Nobody nobody wants to work anymore, you know. Like, oh, what's this union problem? Instead, the hard work now goes to it's a leadership issue. What do you think? What do you think about that? I think that's very true. Once you do optimization, you can no longer continue to optimize on the shop floor or on the job site. You now have to change the way you're you become a leader, and the way you communicate and the way you do your marketing campaigns, the way you approach work, the way we have schedules, the way all everything that is not the physical act of construction has to change. So everything's on the table now. Everything's on the table.

SPEAKER_00 1:13:01

Yes, yes. You know, it reminds me of a softball team I was on. First team, we had about three people that never played ball before. Never. And we won the league. And there were several competitive players on the team that were complaining. We may we came back from full times being down by 10, 15, 20 runs. And I swear it's just because some of the people on the team didn't know you're not really supposed to come back when you're down 15 runs in a softball game. We won the league, so we got bumped up. Some of the more competitive players on the team said, we need better players. We need to get rid of those scrubs that never played before. And I said, Man, I I think we should just get this is a fun, it's a company team, blah, blah, blah. No, no, no, no, no. We want we need to be more we need better players. Okay. And as we improved, the two people that were most adamant about needing better players ended up on the bench because they were not improving themselves. They were wanted everything, all the conditions around them improved, and they did nothing to improve themselves. So they got left behind, right? And in this case, if all you do is improve the field, improve the people doing, executing the task, and you're not improving yourself, good people leave because there are other opportunities. So you've got to improve yourself, right? And when I'm talking, not like let's zoom back out, we're talking about the whole business. Like, okay, you did good there. So what? Go go do good everywhere else. And and like, I mean, to hear you say it is it's motivating. But my experience as a trade partner is it's always about improving the trades and optimizing and eliminating the eight waste and and what we're doing in our work. Okay, but what about the rest of the stuff? Because I'm gonna finish and then what? And you're gonna and I've like it was easy for me. It's like, oh, okay, so we're gonna do this, and you want me to be faster and more efficient. Okay, we're gonna do that, and I'm gonna be done on Wednesday, and I'm gonna have no work and I'm gonna send people off the job. That's all I had to say for them is like, okay, like you want, like you think I need to go faster, and I agree, but I'm not the only thing that needs to be corrected here. Like, we I really, really need how about we get the steel here because I'm gonna get this rough and done. We're gonna pour concrete and we're gonna have a dance floor for two months. There ain't no point in me working overtime if there ain't gonna be no structure to keep the work flowing. You have a problem and you're focused on me. Like, come on, man.

SPEAKER_01 1:15:39

Yeah, yeah, that's uh that goes back a few chapters, but uh, once you make improvements to Herbie, the spotlight goes off of Herbie and goes to further upstream, yeah. Others, yeah, because we're now looking for the new Herbie. I'm holding a mag light here, yes, but yeah, and it's incredibly important. So I want to tell a quick story. So we uh we did we work with UC Berkeley, we work with uh Iris Tomlin, Dr. Tomlin, and she sent us some graduate students and they did two things. They did time in motion study. We did time in motion study of the way two things. So we did uh, and it was based on Herbie, the current Herbie, which was uh the exterior curtain wall system, and we had unitized curtain wall, and unitized curtain wall is prefabricated windows, so it's got the frame, it's got all the gaskets, it's unitized. It's it's you don't have to do any fabrication on site, it's just set it and forget it. But it there's a there's a process to that, and it's very it's very uh fussy, and you have to be very methodical, but it it is very repetitive. So the nice thing about repetitive work is you can look for opportunities because it's like we're gonna do this over and over for 28 stories. We're gonna do 28 floors of the same work, basically the same work. Let's look for opportunities. So we did. So we got out GoPros and we studied their work, and we we did, we definitely found some that were there were the way they set up their tools, the way they positioned their bodies, the way they uncreated these units, and there was some optimization, and they definitely with some optimization, they were more productive and vastly more productive. So that was really cool. And I was and I'm very thankful for that that group of of graduate students that came out and and did it, and they gave us a really good report, and we like we did it side by side with them. It was really cool. And then also the the glazers and iron workers of of that crew, Prima Stelisa, they were super receptive to it. Like they were open to it, and we were open about it. We're like, hey, we're just curious about your work, we're not trying to like fire you or anything, and so they were super cool about it, and I'm super appreciated of that, the the workers that did that as well, yeah, because we filmed them, yeah, and we can see their faces, right? Like we can see the way they work, and like we made improvements, but like the way we approached it was it wasn't about we're trying to find your weakest link, we're we're really trying to figure out like the how you moved your body and how you moved your tools and how they set up their like physical logistics. And uh, once we got over the that, it was like no factor. It was like, yeah, this is awesome. Thank you for this help. This is this is super helpful. And uh the way we did it was hey, like, hey, professional football players record themselves at practice. They don't just, I mean, obviously, they do game film study of games, but they also game film themselves at practice. And I'm like, Do you not consider yourself a professional? And they're like, damn, like when you say it like that, Thomas. And I was like, Yeah, like you guys are professional, you're not professional athletes, you're professional ironworkers and glazers. So let's act like the NFL players. And uh at that time, the 49ers in San Francisco, they were like really good. So we had a lot of uh discussions about that, and uh, so we did. We were like, let's watch game film. So that's what we called it. We called it game film. I like that, yeah. They thought it was cool, and I think that's very important that you show the players the film, you don't just show them the report, you show them the film, and we did, and I think they appreciated that because it was kind of cool, and I was like, it was cool, and they thought it was also cool that uh that UC Berkeley was there a study of them, so they felt like they were like on the Discovery Channel or something. I think that would be cool. I if I was a uh crafts person and a university was sending graduate students to to study me uh as an experiment, I think that would be I would be interested in that. So and then that crew definitely did. So the shout out to the to the local iron workers and Glazers Union in San Francisco. They're those guys are awesome. Yeah, some of them are my friends still, till to this day. And then but the second part that they did, they also looked at our processes, the general contractors' processes, the way we moved information. Yes, yes, I don't know. And uh which which do you think was more efficient? The work in the field? I'm talking without optimization. Oh, the work in the field in the field or the the paperwork, you know, moving information around. The work in the field, work in the field, 100% like by by like not even close. Yeah, yeah. I'm talking about hours, hours. So yes, so personnel hours. So if if you had an iron worker glazer crew that's set well panels, I don't know. I'm trying to think back, I think it was about 12, maybe 16 people, yeah, right. Our our general correcting staff was 13 people, so almost equal, almost equal in terms of head count, so almost equal in terms of uh work hours per week. They measured the output of what we did to move information was was so much less efficient than the work output of physical work in a field by like not even it wasn't even close. It wasn't even close. We were so much because of all of the the waiting, the downtime, the it's just all waiting. It's all waiting. You you move you move something from bucket A to bucket B, bucket B is somebody else, somebody else is busy, they don't have time to look into their bucket until sometimes a week, a week will go by. And if if it's a week, it's remember, this is a system, and if we're in a system, it's the entire I don't want to be we definitely got paid for that week of work, but uh we weren't completely efficient, and uh it wasn't even close. So if you took the our salary, all of our cumulative salaries times the work that we did, it was like the iron workers crushed us, like in terms of like the what they build for that week of work versus what we build for that week of work and the output, all things being equal. We were we were less than half of the value produced, it was less than half, and they they showed us this figure, and we were like, holy shit! Like, definitely don't show that to uh anybody, we want to hide this one, but instead of that, this is the oil derrick moment. Instead of doing that, we were like, this was a moment that looking in the mirror and be like, you know what, we need to change the way we move information, the way we have meetings, the way we notify people, the way we all the way you move information, and we made some changes based upon that time and motion study, and time and motion study in a non in a knowledge setting is you don't need GoPros, you just need to see when things do a cycle, and so the the the the advice I'm giving to everybody is like definitely do time and motion study with GoPros, but definitely also do time and motion study of your information flow. Yes, because if you do that, it's one plus one times everybody, your it's exponential, yes. Yeah, I thought that was really cool. I will definitely want to share that. And thank you to the to the group. The those those graduate students definitely got their master's degree, and they they definitely took a pound of flesh working with a bunch of us. They came over the bridge, they we had a good time, and they took them up in the high-rise, like all of them. They've never been on a construction site, and so we uh we we had a good time, and uh I'm I'm really appreciative for for those. They probably work for tech companies now, right? Right, or or they're like professional civil engineers, but uh I'm really appreciated that. And the lesson there is don't just do the time and motion study in the field, do it in the office, and uh if you do improvement on both, it's like yes.

SPEAKER_00 1:24:13

Well, I want to add some clarity because I'd like I said the field without hesitation, and it's not just you know it is, yes, right, but it's not just because I'm biased that like for me was an easy yes because the field they have a scoreboard, they know how many welds, how many inches of weld, how many diameter inches, how like their whole budget, everything is they have an understanding of what the scoreboard of output is, or maybe the more accurate way to say it is they are much closer to having a scoreboard in processing the stuff that they're responsible for processing than the information flow. I don't know, I have never heard anybody be like, even not like look at me like I had six heads. Nobody has ever been able to tell or set a target for the number or the duration, the target duration to process a piece of information. They couldn't say what the target was, and they couldn't say what their current performance is ever. So if you're not measuring it, of course your performance is horrible because you ain't measuring it. And the people in the field, they're measured every single day.

SPEAKER_01 1:25:27

Yeah. So if you have a change order process, make a process map and measure what's the time one piece, one piece from notification of change all the way through authorization. And I bet you'll measure it, I bet you can measure that in weeks. Plural a hundred percent. Weeks. How do I know? Because I know uh and it's and it's not just the way general contractors move information, it's the same with a trade contractor, right? It's it's like the way what like you from what when tell me about like how to order materials if you were on like a foreman on site, like what's that a very high-level summary of yeah, from the time it takes from ordering a series of pipes and hardware and fittings to the time it shows up, yeah.

SPEAKER_00 1:26:12

What's weeks? Oh, yeah, I'll say a complete order for a system, it could take two, two to three weeks, and so I've got to get the drawings, I've got to scale out, do a takeoff. I mean, I don't have to. There's more, there's technology you can use for that, but I gotta scale it out, I gotta get my quantities, I gotta, I gotta translate it onto an order form or type it into an order form, send that to the vendor. The vendor's got to process that, send me an invoice or a quote. I gotta get a PO, gotta give them the PO, and then the material, then they gotta acquire the material because I'm telling them, do not send me that material if there's any back ordered items. I'm ordering this ahead of time, so it's about two weeks to get that material. And that's without variation.

SPEAKER_01 1:27:03

Yes, always like, hey, Jesse. Sorry, bro. Uh we uh we we need to move it. They're they're adding a new uh exhaust duct. Oh god, yes, so you gotta change a bunch of fittings, yeah. So that's yeah, so yeah, so you have lead time variation, dependent events, variation. What are you talking about here? Is this uh is this the thing? That's chapter uh, but the the kind of the the summary to 29 is like if you're gonna make a commitment, make it and then go double down on your processes. Let's do it, baby. Yeah, don't play the 30. Oh this is the chopper, the helicopter.

SPEAKER_02 1:27:45

Oh yes, oh this is glamour glamour time.

SPEAKER_01 1:27:49

So this is this is kind of advice. So when you start to be super productive and super profitable, people start taking notice. And you do if you become super profitable and you become a best practice, people want to go and see. Uh-huh. So my project, the CEO showed up, Mr. Davron. Yes, we uh we started doing really great things. We started doing really great things, and people started to take notice. Yeah, and we weren't we were definitely not perfect. We were not perfect, but uh I'm trying to be humble, but also talk about a story where the CEO of the largest construction company in the world showed up on on our job site and we had to give them a we had to tell 'em, show 'em, show them, show them around. Like what's the what's your tactics? what's what is this crazy method Thomas that you're doing Thomas and the team but at in chapter 30 the helicopter shows up outside of Unico and uh it's Bucky Burnside the the the the what's his name he's a very he's probably a bajillionaire and he's like what is this thing of what is this heresy what is this sorcery four week lead times guaranteed yeah you crazy boy what is this so uh yeah so a helicopter drops in on Unico and uh now it now it's like it's go time it's go time and uh be prepared for this I think this is a good thing so when you're and you have to stay humble I guess the the the advice in advance is is don't let that go to your head people want people will want to know and uh you have to definitely share out because you can now have a huge ripple of influence on other people because now if you're if you become the best practice you have to teach yeah so not only do you have to be this crazy you got to inner sales and you got to do all this stuff and do all this optimization you gotta you gotta you gotta bring in the rope right you gotta do all this stuff now you have to become a teacher because all of a sudden they're like hey if you're super profitable what is it what is it that you're doing and now can you please teach this to other plant managers so all of a sudden Unico is like bringing in all kinds of just everybody with the with the title and letters in front of them VP CEO CIO CFO blah blah blah blah blah yeah they're like they just their bottom line metrics and and and they go ahead and drop their monthly report and they hit it by 17% they didn't just hit 15 blew past it blew past 15% bottom line so they did a lift and I don't know what the lift was I don't have the sheets in front of me but uh right you imagine if if you had a 15% increase in profit from from month over month people are people are gonna know like there's there there will be analysts from Morgan Stanley asking questions right yeah so like people want to know and now it's like what is this what is this magic so yeah so for me the the CEO of of the of the company came in CEO of Turner construction CEO Peter Davron shows up and he's like hey I'm in San Francisco I want to I want to check it out and we were like well we got to do this special tour and we we got to clean up the job site and we definitely did clean up I'm not gonna say we did not yeah we definitely cleaned like we cleaned more than we normally do. So I I kind of regret that in a way because we were pretty like we kept things pretty tight. It wasn't perfect but uh what we did not do we did not change anything we did not shut work down we did not uh we didn't do anything differently than than and we didn't clean up like the building we cleaned up like around like the around the perimeter like we got rid of the graffiti and the like the pop bottles that are blown against the construction fence and that kind of stuff but we definitely cleaned that so we definitely switched out the dumpster so it was empty like it looked good. The job site looked pretty good it needed it anyways so I guess it was a good excuse. So thank you Mr. Davrin for showing up we did we needed a little love but uh other than that it was as any other day and we gave uh peter a tour of the job site and we we just showed him around and we didn't shut down work we didn't we didn't hide ladders we didn't do any of the the normal shenanigans that that that would that we would normally do we showed it as it was and one thing that Peter mentioned to me later was like he appreciated that because if you think about it he probably gets a red carpet rolled out wherever he goes all the time maybe and maybe not I don't know I'm not there all the time but uh right there definitely was pressure to do that and we definitely cleaned up but uh other than that we wanted to show the the the true story and uh the what happens at Unico back to the book is they're like we think you're lying and yes always and please meet not only am I bringing I'm bringing my CFO and the corporate controller and we're gonna go through the books and then I have uh the corporate operations executive that's gonna go through the factory yeah and it's like so we think you're cooking the books here uh the Alex and uh they're like this is this is uh this is if you use our accounting methods you didn't have a 17 I think it was less let me find it but I it it was less than that and it wasn't an insignificant amount let's see 12.8 percent yeah so that's under 15 oh shit yeah damn it so the reported lift in profit was 17 that they reported to corporate and we did that on our project with Peter Davern CEO same thing we gave them a report says hey we made this much profit so but one thing Peter didn't do is accuse us of lying then in the uh Unico example in the book they did they're like hey our corporate accountant says you didn't hit your 15 in fact you were under that you're on and this is uh Hilton Smythe the the little snake yep he goes hey and this isn't Bucky Burnside's has his corporate helicopter but the the Hilton Smythe shows up with all these corporate accountants and says you didn't make it you're this is a naysayer I think that's important I think that's important because you will find because because when you start to um stick your neck out and then so you'll be an outsider and so you'll look differently and that takes courage and then you'll have if you're successful from being uh sticking your neck out even more people will try to take you down yes because uh now not only are your metrics super good now the people who play by other rules they want to take you down and and uh yeah because the game has changed and they might have to play harder you changed the game and not only so our the way we changed the game was we didn't make the workers work harder we made us the leadership work harder yeah and through that method through that method plus a bunch of time and ocey plus a bunch of like managing our constraints and understanding inventory and operating the specs and and managing our bottlenecks and looking at constraints syncing stuff up shrinking the rope I'm doing a very summary but we did we made all of these decisions that are are were not risky in terms of like human life but risky in terms of like we could get fired about this right people who don't make those kind of moves they don't like that it's like oh you change the game you change the rules on on me Thomas and uh Hilton Smythe don't like that so he brings his own accountant in and they do their own estimate and accuses Alex of cooking the books man what do you think about that I think it's a real thing.

SPEAKER_00 1:36:14

I mean think about I was listening to Jordan B. Peterson and he was talking about herds right like animals traveled in herds because there's safety in the pack. So if you separate yourself from the pack you're subject to being eaten by the lion. Now how does that relate to people is what you're just talking about. It there is safety or comfort in the status quo. And the funky thing about like a zebra is is not going to say ah let me kick you in the face and keep you out of the herd but people humans will if I decide to stray from the herd oh yeah right and and say I'm not gonna go to the status we've got to do something different is what I'm gonna do people in the herd not the entire group but there are members of the group that are going to continue to kick you out and point out how different you are to feed you to the lion they're sacrificing hoping because the status quo is there is that's the comfort zone right now. The outlier sometimes is a nutcase like me sometimes the outlier is going to like you said change the game elevate the standard and the the herd over here is going to have to assimilate right they're gonna have to adapt to it and it's easier to go and throw that guy to the lion than it is to change.

SPEAKER_01 1:37:39

Yeah because remember corporate's like your best practice go teach everybody else everybody else was like I'm good I'm good over here my my plans we're not being accused of right right cooking the books or we're not on we're we're not risking our jobs we're good why should we change hey we're profitable we're kicking out seven and a half percent alex plan over there was not even making it profitable right now all of a sudden he's making 17 and a half percent is that right is that right I'm gonna instead of being like hey Alex tell me like how are you doing this instead of that their immediate reaction was they're lying yep yes bullshit yes that's bullshit so uh that's chapter third in a nutshell so they get so at this so it's it's this weird time where you get all this fanfare the your your most prized client is flying in in a helicopter like checking you out being like how are you doing four week deliveries like that your client is coming to you and congratulating you and at the same time the people at your own company are shooting daggers in your back being like you're lying and not only that you changed the rules but if you follow the old rules you didn't even meet the metrics you're out of here bro right so it's this weird time now it's like but what what I what I think that is and this is a Malcolm Gladwell. So you said Jordan Peterson who's who who I like but Malcolm Gladwell is is one of my favorite authors a malcolm's California guy he's from USC but he has a book called Tipping Point. Chapter 30 is a tipping point this is the tipping point where you're at the time where if they go with Hilton Smythe, like if they roll with Hilton Smythe and be like Alex you didn't hit 17% you hit 12.5% and our metric and our agreement was you had to be above 15 therefore you're gone and everything that they did up until that point and everything they could have taught that company on the other plants would be lost at that that's the tipping point. Yes so Malcolm Bladwell's uh he goes through a series of case studies where this happens all the time this happens all the time freaking blockbuster could have bought Netflix for like an insignificant amount right I don't know if that's the one of the case studies I can't remember now but but the tipping point is this decision. Are we gonna get rid of Alex's Unico plant because they didn't make the decision but kind of the like but like Bucky Burnside's over here being like this is awesome like eh like it's this is the decision and if we they make the wrong decision it could be detrimental to the whole company yes it happens in society that's a different book by Malcolm Gladrill and some Jared Diamond stuff but but uh that tipping point that what I what I'm trying to say is like there are moments very important moments that make or break companies and at the moment you don't understand the consequences yeah yeah and the time over time that book is like time over time over time over time over time governments like major corporations small companies just just time over time over time that if you don't make that decision in the right way there's dire consequences and oftentimes it was the company that that retreated back to it to the comfort zone to a traditional approach failed failed to the point where they were no longer in business years later and there's lots of I don't want to pick on any company there if you go pick up that book but go pick up that book tipping point it's such a good one but that's that's chapter 30 such a good one yes and uh that's the they're they're at that moment and chapter 31 Alex gotta go back to corporate and plead his case yeah that that three percent he's like ooh what is this so he has this blistering report and I'm sure the uh accountants has all kinds of metrics and they did and the reason why they said that they didn't hit the 175% because they they looked at it through that their efficiency metrics the old way of measuring production was hey they had idle resources and not idle resources on bottlenecks they had idle resources on non-bottlenecks because they pulled in the rope they pulled that rope in and then said we're gonna put in a control mechanism to limit inventory cut our batch sizes and all of those decisions made old Hollywood metrics they made those Hollywood metrics they didn't look good anymore. So that now their Hollywood metrics if they were once at 80% they're now in the 20s and 30s because they were they were letting the non-bottlenecks sit idle. So if you did that calculation the the previous the old calculation you didn't you if you had if you had you had downtime on a non-bottleneck they calculated that as that's a waste of of money therefore your operational expense you underreported. Yeah so all of a sudden you're somehow I don't know how you did it Alex but you somehow hid money and which in in fact wasn't true they lowered their operational expense by eliminating a whole bunch of inventory by smaller batch sizes and synchronizing their production with their with their constraints yeah and being super efficient with the resources at hand versus letting non-bottleneck work just keep producing and keep increasing for the sake of for the sake of of these Hollywood metrics. Yes. So I don't want to spend too much time on chapter 31 but it's uh the tipping point was Alex goes into Bill Peach and and basically convinces them that we have to change the rules we changed the game or we changed our our game we gotta go to the commissioner's office and change the rules the tuck rule yes right we gotta we have to go change the rules the way that we're measured as a plant because we've now found a way through this series of focusing steps that the the accounting metrics that's traditional that we're comfortable with that people who have degrees from Brown and Harvard and I'm not saying that if you have a degree from Brown and Harvard that's bad but I'm just saying that if there's a traditional approach we can't always rely on the traditional metrics don't always apply if you do optimization. So your traditional measurements are wrong. So now all of a sudden not only do we have to change what we do on the job site we have to change what we do in the forward operating base or the you know the trailer if so to speak we have to change that. Yep we have to change our marketing campaign now we have to change the way we do business yes the entire system the whole system needs to change and it's just like chapter like nine or 10 if you have local optimization right like hey we figured out we found Herbie it's in CX10 or we found Herbie we did the heat treat we send a third of it off to a third party that's great. That's great and it's great and it helped but what really helped was the difference in the way we did priority and the scheduling work. And that was great and that made optimization and then all of a sudden we had capacity so now we had to change the way we did sales and that helped because now all of a sudden we're locking in these sales because we're we're being more productive with our throughput but now we have to look at like a bigger part of our business and the way we do accounting and the way we manage resources and and and this is big money like this is now this could have effect on capital planning. That means like building new factories and I'm personally invested in building factories I was on two last week and I was on one today a factory so that these capital expenses so investment we have to change the way we look at investment so we have to change the way we look at the future based upon optimization. That's Shepherd 31 and very I'm I'm very glossing it over but uh now all of a sudden you have to make a decision and the tipping point was Alex Rogo's method this is great and now it's proven and now it's uh several months worth and now he goes and convinces Bill Peach the CEO that this method is better but the naysayer Hilton Smythe is being like no he's lying to you he's got to choose somebody's right who's right right right that's the decision which one are we the tipping point because if we get rid of Alex and his plant because he didn't make 15% Hilton Smythe's the the operate directly linked to all he's the operations manager so he's linked to he's the line boss for all of the plans at Unican yeah so now if if uh Alex goes away the only dissenter is gone yes and things will continue as normal yes and now so it's a very very I don't want to spoil it that's chapter 31 it hangs it right there it's like Alex Alex's promotion because it would this is the decision are we gonna go with Hilton Spice or are we gonna go with Alex Rogo? Yeah we have to make a decision and it's very internally focused we would just let it hang there. Yes I think so till next time but and these decisions happen all the time yeah that uh we we have a traditional approach and we have this innovative approach that looks promising but it's only it's it's very remote like it's very thing but like to to to do Alex's theory of constraints it's only limited by decisions and policies that are done by corporate. Yep. So to to continue to grow this method of of managing with drum buffer rope and theory of constraints and all this stuff you have to continuously expand this program because it's a system it's it's it's only it's limited by the system. So if you want to continue to grow the company and become get 175% at all your plants you got to make some changes everything now all of a sudden everything is on the table including top brass including top management including top and it's not people's jobs it's just their the policies and procedures um that's the theory of constraints once if you keep elevating if you can't remove a constraint you keep elevating you keep elevating keep elevating eventually you'll hit a policy or a key decision or whatever it is if you can't elevate beyond that because you can't because hey we have to change policy if if if we're unwilling to put that policy on the table that's where that constraint will will will will die. And if you remember from last session one of the cardinal sins cardinal sins of theory of constraints is letting a constraint be idle. Leaving it alone yep because it all it's it's like it's like illness certainly it maybe the symptoms go away for a while but if you have a major illness it's you have to deal with it and the sooner the better it's the same thing it's the same thing with mental health if you have symptoms of of depression or or whatever deal with those now deal with those now if you can't deal with those now go seek help 811 seek seek the help seek the help and go get it and be brave and it's hard to be brave when you're stuck in your own mind but and if you're unable to seek help and you see somebody that needs help and you don't react that's on you that's on you. And I carry I carry a lot of that on me because I I fail to react to a whole bunch of problems with people suffering. So uh and it's the same with constraints. If you get a constraint and you're in a leadership position and you fail to act, that's uh that's that's that's that's no longer a constraint, that's a leadership problem. Yes. So I'll I I will I'll leave it on that too, because I I'm I'm a huge proponent of that. I'm definitely d I'm definitely not perfect in the uh letting constraints be idle. I'm definitely let some sit around. But now it's it's a very conscious thing for me now that I try to uh do action on constraints.

SPEAKER_00 1:51:18

What do you think? So I mean that's the thing, right? That's I think that's the important thing is in continuous improvement. When you start getting there, start doing it, you're gonna discover new things to improve. So don't kick yourself in the face for what you did. And we I think I can't remember which conversation it was. We were talking about when you learn to see, you can't unsee.

SPEAKER_01 1:51:38

It's like a butt butt crack.

SPEAKER_00 1:51:40

Yes, yes, the butt crack. I was working with I was coaching the finance manager for for company, and all of a sudden he could see, right? Like we're we're I was doing some A3 coaching with him.

SPEAKER_01 1:51:53

He had a big choirs of angels.

SPEAKER_00 1:51:56

Well, at first, he's uh for me, I'm like, oh my god, you can see. And the his next response was it was two things like he's like, Jess, we got so much waste, like there's so many things that we need to fix. Like, yeah, like and I was like, but calm down, like the business isn't gonna go under. It's always been there, you just couldn't see it before. And he's like, Oh, that's horrible. I said, I agree. So now we have some urgency to go and fix things. Yes, okay, good. The other thing he his bigger takeaway was, oh my God, the way I have been trained, training and developing my people, all I've been doing is ruining careers, limiting their capability. Because I never gave them space to be autonomous. I gave them answers, I gave them direction. I didn't help develop their thinking and their problem-solving capabilities. And like that really got again, you're on this path. Use those experiences, those missed opportunities to fuel the improvement going forward. So if you're if you have a tendency of seeing a constraint and not acting on it, that's done. It's behind you. You know what the outcome of leaving that constraint was. Let that be fuel to go and take action on every other constraint you have in the future. Because we can absolutely, and for me, it's always gonna be this we absolutely can improve the quality of life for the men and women out there in this business through continuous improvement. Yes, we can have profit, yes, we can have all those other fancy things.

SPEAKER_01 1:53:34

You can do that at the same time, yeah. You can do it at the same time. You can you can what is Joe say leadership capital? You can increase your leadership capital and increase your uh profitability at the same time, at the same time, you know.

SPEAKER_00 1:53:50

I had a session with the client today, and we were working on conditions of satisfaction, and so you know what were they wanted to get out of this path that they've just embarked on, and what does winning look like? And Thomas, there were like three stickies on the wall. The definition of winning was higher quality of life for us, higher quality of life for our people, higher quality of life for everybody that's on our job sites. And I was like, Oh my god, I I I hit a gold mine over here. These people they want to make things better for other human beings. That's how they're defining success of their continuous improvement efforts. I I I was hearing angels sing today, my man. I'm excited.

SPEAKER_01 1:54:33

That's awesome! That's awesome, and it there's a ripple effect. So uh the reason why Bucky Burnside flew in on his helicopter is because there's a reinforcing effect. People, it's a it's like mag, it's like a magnet. Yeah, and uh if you if you uh keep reinforcing, it's exponential, yes. And uh the reason why you see companies become incredibly successful is because of that. It's like, whoa, they have an advantage in this one thing. And if your advantage is people are just fatically crazy about working there, oh baby, oh baby, yeah, I'm doing the uh this is your stock price, yeah. Because uh if if people are are and this is being very, I don't know, like uh and I and I and I am excited to work for the company I work for for that reason because I'm empowered, and if I have an issue that I can't solve myself, I'll elevate it and the the people will take action. They will take action. And let instead of being like bouncing back off, bounce and boom hits me back in the face with like you need to go try this, Thomas. Like, no, like we'll try a different angle on the the the issue at hand. And uh I guess what happens, I'm in power, like I'm now excited even more to go try some new stuff, and that's awesome that the people you're working with have that same mindset. And I think if everybody did, imagine if that was just the way, dude. Yeah, we'd be having helicopters everywhere, just choppers, just everywhere, but uh but but but I I think uh I really like the the chapters 29 and 30 because uh you will win and you will have naysayers at the same time. It's just it's this weird moment, and I felt that because the CEO of the company was showing up and being very like like very interested in the company. This is my own personal story, and this is yep, this is a true true story, if you care to believe it. And uh at the same time, I didn't we don't have naysayers, but you have people your peers, and it's a competitive environment because there's only so many slots for for the promotion thing, so then that definitely plays as well. That that narrative starts to trickle in. And my downfall was listening to that. Yeah. And it wasn't, I wouldn't say downfall, like I didn't down, like I wasn't I didn't downfall, but like it it slowed my progress because I would I would now have to also combat that. And my my advice to everyone is like when you when those whisperings start turning into words and those words start turning into statements at meetings that you're actually involved in. Yeah, whatever, whatever. This is here's the here's the 17.5% right there. Boom. Yeah, just point it. Yes, oh, you're gonna spend a bunch of your time trying to uh figure it out. I don't care. I'm on this optimization track. Next week's gonna be or next month's gonna be 21%. Right, right? Yes, yes. Just chart my progress. I wish I would have done that instead of getting torn down. So my advice is uh keep going, be different, be different, keep going. And it's okay to uh when you're courageous and you've done something courageous, now double down. And it's hard, it's super hard and super risky on an emotional level, but you gotta do it. And Alex in the fictional book does it. And for me, I definitely did it. I took a risk that when I decided to leave operations and teach my method, and we'll leave that for next time.

SPEAKER_00 1:58:20

I'll let it hang there too. I like it. Double hang. Oh my goodness, you're either driving down the road or just so enthralled with the with this whole podcast that you went all the way down to the very, very, very, very end of it. And we appreciate you. And just we're going to take this as an indication of your dedication. So we got a little special request of you a call to action, because everybody tells us that like you need to have a call to action. So here's the call to action be kind to yourself, go out there and share a smile with someone.