Video Transcription:

Jim:

Hello, I'm Jim Fleming, and I'll be your host for the next 30 minutes. We're going to have a discussion around strategies for successful businesses. My background, I have over 35 years of global enterprise, ranging from Fortune 100 companies to small sector of businesses. What I'd like to do as we start today's journey is share a few statistics around what is going on inside of our world. A couple of things, today, business is dealing with some harsh realities. First of all, it's a very large market that we're dealing with and have an opportunity to be part of. Statistics are showing that our global commerce, available markets that we can participate in, dealing at about $88 trillion annually. This is all companies across all of the world that are going for the customer base, and the customer base continues to expand as the world population expands. There are over 200 million corporations worldwide, and this continues to expand as we go forward.

Jim:

Twenty, 30 years ago, this number was substantially less. What we have seen is through the evolution of business, e-commerce, and technology, countries that were once not able to compete, have gotten into the market and are creating businesses. One of the things we have to be aware of as we go forward is there is competition. The thing that starts to stand out with folks is, what is the difference between companies that are successful and companies that aren't. Statistics out of Standard and Poor 500 market index show that the lifespan of a corporation has gone down substantially. In 1960, the average life of a large-scale corporation on the Standard and Poor was about 60 plus years. Fast forward to today, by the year 2025, that same lifespan is going to be down at approximately 17 years. Now, who's in this market? These are the big players.

Jim:

These are the Amazons, the Apples, the corporations that are having a significant impact. If they have these kinds of challenges, let's think about some of the challenges that we might have, whether we are a large corporation, midsize, or small. Statistics are showing that when companies start up and they become part of these 200 million corporations worldwide, about 51% of them in the manufacturing sector will fail within a 10 year period. Let's think about this. What is it that drives the difference between those that are successful and those are not?

Jim:

We'll talk today about strategies where corporations of all sizes get clear around their purpose and their business strategies and how they're able to further articulate them for success. I'm joined today by Shane Barber. He's the co-founder of the Business Excellence Group and is the developer of the Straight Six Optimization model. Shane, welcome. I was wondering if you could spend a little bit of time telling us about your particular module, and how does it relate to organizations being successful with challenges like we just discussed.

Shane Barber:

Yeah, appreciate it. I appreciate your time today. I appreciate everybody's time that took it out of their work schedule or life schedule, should I say, in this day and age, to be here. In terms of these business facts, I've spent 30 years in manufacturing as I've been in various roles. I've been a certified welder. When I came out of high school, I got a production operations degree and supervised managed, designed, laid out, and then led production floors for large corporations. I've also led small production shops, job shops. This model that I'll introduce today, it's very agnostic. It's anywhere people and processes are involved to drive a business result. That's agnostic.

Shane Barber:

I've used it in a three-person retail outlet of a UPS Store to get results, I've used it in dentist offices, law practices, and I've used it fairly intensive in manufacturing companies, small, medium, and large, defined by companies that are a founder and up to 19 employees, midsize, anywhere up to about 400 and larger than that. With this model comes an analogy. Jim, I'm going to share the analogy first. I'll introduce the module, and I'll come right back to how it relates and how I've seen it, and using this for the last 20 years and developing it formerly in the last 10.

Jim:

Great, sounds good, Shane.

Shane Barber:

Okay. To do that, I want everybody to really think about this analogy as your organization, as a vehicle. It doesn't matter what size your company is. It could be a small, two-door coupe that has two business owners that have an affinity for pets. You started a cut and sew operation for dog chew toys, and it's only you and your partner. It could be this midsize van here, that you have three to 4, 12, 15 employees, and you started to scale up that business, and it could be a large-scale business where it's multiple shifts, departments, locations.

Shane Barber:

This analogy of the vehicle, it's purposely built to reach its destination, the size of it, the performance of it, and the payload it can carry. The driver in this analogy is the leader. What does the leader need to do? The leader needs to set, in the old days, set the compass, set the map, set the destination through the strategy. Where is this vehicle going over the next 18, 36 months, maybe even five years for some of you that like to plan that far? The managers, if you have them, or supervisors, they're the mechanics. They're keeping the wheels on the bus. They go round and round, and it stays on the path.

Shane Barber:

In the analogy, the passengers are the employees. They're literally, are the team members. They're building the products and services of which the vehicle is hauling, its payload, whether it be raw or components, but they're building the product as fast as you can get to your destination. The vehicle needs all size of companies, all size of vehicles. It needs an engine that powers it down and gets it to its end destination. That engine must work together with the components in the vehicle, to get to its path. To optimize that you got to tune the engine, you got to synchronize the engine together.

Shane Barber:

If you follow this analogy, hopefully, it's practical, you don't have to be a master mechanic to understand it, but the engine, this is the model, what I call the Straight Six model that the Business Excellence Group uses. I've been utilizing it for 20 years now. It really is six critical principles that you got to the time, and they all got to fire together. Starting with the lead cylinder fires first, is strategy, this is where it's not vision and mission. That can be involved in your strategy, but this is a strategy from where the organization is headed, where it needs to be, strategic objectives, goals, metrics, must be tangible.

Shane Barber:

Most companies fail at setting lofty strategies, visionary-based. I'm not saying it's a bad thing, but they fail on drilling it down into these strategic objectives that are tangible, that others in the organization, the passengers, the teammates, the mechanics, can understand where the vehicle is going, and they can spend their time and talent getting the vehicle there. That's strategy. The next core principle here or design attribute is structure. Structure is where leadership and hierarchy lies. This is critical from accountability to common metrics, common strategic objectives and goals, and decision-making, and single-point accountability of your departments, your divisions, more importantly of your leadership to all have a common goal, versus what happens is siloization, and everybody's got their own goal, going in a different direction.

Shane Barber:

The next cylinder is people. People live in the structure. This is role clarity of what their role is, expectations, what their metrics are, and what they do to enable the organization to deliver upon its strategy. It is very important for people to know where the company is going, or the vehicle, so they can apply their talent to get the vehicle to its end destination. Methods and tools, this is the fourth cylinder. This is where processes and systems are given to people to do their jobs. They got to understand them. They got to do them consistently. This is where most organizations have a high level of variants because they don't have standard practices and principles here.

Shane Barber:

Lateral process is a fancy word for communication and collaboration. This is the drawbridge that connects the silos in an organization to where, sales, engineering or design, production, and operations pick on the manufacturing sector, the three common silos. This is the drawbridge that has those organizations work together towards common goals. The last similar tie to the output shaft is metrics and rewards. These are common metrics that started company down to your departments, into your work teams, into your individuals. Like all engines, all motors, these cylinders, you cannot just target one cylinder to optimize your organization.

Shane Barber:

Jim, you asked a question, where do you see failures that add to this ten-year failure rate. Most companies, most organizations put all of their, or a lot of their eggs in the methods and tools cylinder. They spend money in time buying systems, software, build processes to be able to build their services and products that they build. They sub-optimize the whole because if this was a manufacturing client, they optimize the production floor. They sub-optimize. Instead, they need to holistically look across. Once you start turning a cylinder, you got to see the effects it's having on other cylinders. If we change methods and tools, we buy software and methods, we've got to train people.

Shane Barber:

The fact of the matter is we spend more money on methods and tools than we do developing people to be process-capable. Every time you touch a cylinder, you got to look, just like a motor, how it is affecting the other cylinders. You've got to get this thing into alignment and timing. If you can get it into alignment and timing, you can optimize it, just like a car motor. The other question you ask is, where do organizations fail. Well, start at the lead cylinder. They set a strategy. Most companies, the last time they really holistically looked at their company was when they set up their articles of corporation, whether it be an LLC, doing business as, to a large corporation. Large corporations, they have processes, people, and systematic products, but they still fail at it.

Shane Barber:

You got to continue to monitor where the vehicle is going, adjust for the roadblocks that are in the road the vehicles going down, and you got to set and reset that direction. Then you got to align the rest of the cylinders to it. This is an ongoing process that companies should do. They should look at this quarterly, and then they should look at it annually to be able to go do that, but that's just one part, one-sixth of the equation. I'll pause there, Jim. What questions do you have on this model? Because at about this point, when people are like, "Okay, I kind of see the connections, but how does this relate to today?"

Jim:

Yeah. Shane, you bring up some interesting points. One of the things that stands out when we're talking about leadership and strategy, new corporations are coming up with great ideas. They go forward, they generate some kind of cash flow to get started. They enter into this, knowing that the first few years they're probably going to be losing money. They're going to have to kind of keep an eye on cash. Now, a lot of corporations actually fail, because they do run out of cash. They're unable to turn that initial product line from a loss into a profit. One of the things that stands out is in that two or three-year window of struggle, how many companies do you see that do a really good job of re-looking at strategy, rethinking and making sure that they are optimized, or do they just say, "It's the same strategy. Let's just brute force our way through and hit that third year, and oh, by the way, at that third year, maybe we'll be profitable"?

Shane Barber:

Yeah. In that stark reality, we're all just talking about dollars and cents in that strategy, but what I've seen is it shouldn't just be a strategy on the startup of that technology. It should be a startup through the four phases of a product, four phases of that. You have R and D. Some companies will call that greenfield. You're starting up a new process or you're starting up a new site, whatever it is that you're doing. That's one phase of that strategy. The next phase is, you're ramping to that capacity because you've built a product. Have you looked at the full maturity of this product, what are the phases you got to go through in training, development, equipment, processing systems, all of these things, so what's that next phase on how you design that startup.

Shane Barber:

Then you're ramping to test that capacity, and you get to sustainment mode, and you're planning in that phase of sustainment. Then of course, then you have product sunset. That product's going to plateau. We've all heard it, cash cow, but product life cycle, you see it, how it's a bell curve, but you need to plan out all four phases. What comes to mind to me is a good example. I was involved with a five-person leadership team for a new hospital in Albuquerque, New Mexico. We did this. I happened to be fortunate as a consultant. I met the CEO at a discussion I was doing on this model, and he said, "Hey, this is a practical model. I want to go plan the phases of this hospital. I have my senior team hired, and that's it." We planned all those phases.

Shane Barber:

We put milestones and metrics for each phase. We knew when the trigger would be pulled. For instance, doors open, was now we're out of R and D, we're out of development, and now we're into startup. Then we had consensus beds. When we get to X percent of beds filled and our processes in place, now we're going to move over to ramp to capacity. Then we had at capacity, and then we planned many years out in their model because it was a new hospital. It was that 10 year, what are they going to do? They had other phases with other products and services as a hospital.

Shane Barber:

As we did that, we knew it took a different work style for the leader and leaders and leadership doing hands-on in the R and D, then training your people into getting into that startup mode, then bringing on their team members. We planned each phase of that, instead of, let's just plan, we're going to lose money for three years. We're going to measure this, and we hope, and hope's not a strategy (...)

Jim:

Right.

Shane Barber:

Right? That's a quick example of planning it by the phases against a product life cycle, how leadership needs to change and how it does its work along with the plan as it scales into its product lifecycle.

Jim:

Shane, you bring up an interesting point. As you articulated, your initial story was around manufacturing companies. The story you just told is using the same model in a different industry, that's our healthcare. Do you see that this model works for all of the industries that we're exposed to today, and especially with the service sector becoming a significant portion of the way people do work, in the way corporations move forward?

Shane Barber:

Yeah. It's often the battle with when I meet a leader and ask them the proverbial, "What's your pain? What keeps you up at night?" We've all had that conversation. Some of us have held it, but I have found, because of my background being heavy in manufacturing, they go, "Well, we're not a manufacturing site." Over the last 10 years of being an external consultant, I have convinced small, medium and large manufacturers that aren't in that sector that, just go with me for a minute, you have products and services that you either sell, you either package, you either ship or services. You're a production. I had to do this with an accounting practice that did tax accounting. I said, "You have raw materials that come in the door." "Really? I do?" "Yeah. Shoe boxes of receipts. You take those receipts. You understand in the initial assessment of the taxes, and you route it to one of your production lines."

Shane Barber:

"I have production lines?" Yeah, you do. You have a production line, which is single family filing of taxes. That's one production. Then you have specialists, you have technicians that work on that tax portfolio. Then you have this other production line that says, I'm doing personal taxes plus business, and get experts, and you have people that can do that. These two production lines, these two technicians, maybe you have to resource that tax return. Then you have another production line that is type of business. Is it an LLC, is it an S Corp, is it a conglomerate, what is it, so getting people past the conceptual block, that this is a mechanical model against a engine, or it is a model that can be used in healthcare or manufacturing. You have methods and tools, you have people. You have to put good methods and tools to reduce variance, corrections in your taxes that you do.

Shane Barber:

You have to train people against that. You have to communicate and collaborate. You have to have a structure with decision-making of when you replace the expert because it's an escort versus a doing business as. This model works. I've used it in a UPS retail outlet, healthcare we mentioned. I've used this at a dairy in the middle of Eastern Colorado. If you can get people past the conceptual block of, the experience comes from manufacturing, but it's been used in any industry, then they start getting excited like my tax accountant. I do run a production facility. I have raw materials, I have production lines, and I'm going to go skill up my people, so make sure we produce the best products and services. We measure every step of the way, and we have quality checks along that way. A lot to be learned from manufacturing here, a lot to be taught to folks that aren't in it. Hopefully this model, you can see yourself in it as you're watching.

Jim:

Shane, you bring up a point around people. Today, there's this term that we're reading about in the news all the time, and it's the war for talent. Workforces are struggling, getting the best talent possible to be successful. When you think about this particular model, what are some of the things that would be directly in alignment to help you not only acquire the best talent, but keep the best talent?

Shane Barber:

Yeah, let's go right into that people cylinder right now. It's people systems, and I'd love to be challenged on this, but I've been tracking this for years. Eight to 10 years ago, we had 750,000 skilled labor jobs we couldn't fill in the US, because the school system stopped putting welders out at high school level like me. We've gotten back to it because we've recognized it. I'm sure that is triple right now, but now it's not just skilled labor. Everybody's got a skill. First off, let's parallel this with the housing market. It is not a seller's market. It's not an employer's market. It's an employee market. What I mean by this is, people now, because there's so many jobs to be offered, they want certain things in their work. They want flexibility. They want to be heard, valued, and involved.

Shane Barber:

They want to know where the vehicle is going, where they're going to put their time and talent. They want to be seen as an asset to the company. They want to contribute to that. Now, employers, it's not hire at the lowest dollar amount when Walmart's hiring at $18.50, when fast food's starting at $13.50 in some regions, where Hobby Lobby is hiring at the same that I was working with an aircraft manufacturer of heat exchangers. They were paying a dollar less than Hobby Lobby. I told a welder, and I am a welder, I said, "Hey, why don't you go work there?" He goes, "The great thing is I wouldn't have to work Sundays." I said, "So why don't you?" He said, "I'm a skilled person. I'm a craftsman." To this challenge, we're going to have to do a greater level of what our culture and our company is.

Shane Barber:

By the way, when all cylinders are firing, its culture and behavior is the output, so who are you, why are you in business, what is your strategy, what can you offer the employee to engage, to get on the bus, to get in this vehicle. They want to use their skills and talent. They don't show up just to get a paycheck. Look at Gallup data. Gallup data suggest when people have asked, that they could work, they could double their productivity if they wanted to, keyword wanted to. If you can tap into that untapped talent base, by sharing the strategy, telling them where they play, telling them that their skills are valuable and they can help the company achieve and share in those results, share in the profits, share in this achieving those goals with amazing technologies, we're going to have to really do a good job as companies today, whether you're a UPS retail outlet, a restaurant, a manufacturer, dairy, a hospital, whatever it is, we're going to have to sell people on, why would you join my, our company, what are we going to do for you.

Shane Barber:

Some owners, they don't like that answer. They're just saying, "It's a workforce problem. I can't produce that, and this is all I can give you as a customer." I don't think that answer is going to go, that it's going to brood well for your customer base. We're going to have to really leverage good people systems to attract, obtain, bring them into your company, train them and retain that talent long-term. You're going to have to invest in younger people and get over the millennial effect. These are young people that are talented, that are teaching me how to work faster and smarter than ever before. We're going to have to embrace four different generations in the workplace and appeal to all of them.

Jim:

Yeah. You bring up a good point. What I've seen is, of all of those different age groups, they have a tendency to ... I mean, 99.9% of the people that come to work want to do a good job. This has been my experience for years and years, but they get frustrated. They come to work, and they don't see the difference or the work that they are doing, making a difference to the company. They can't connect those dots. When you kind of peel the onion back and you look and say, "Well, don't you have metrics?" and they'll say, "Well, I have metrics inside of my siloed unit."

Jim:

You mentioned earlier, engineering, manufacturing. You might have your sales organizations. Each of them is siloed. Each of them has clear goals, but at the end of the day, those goals really don't show what difference am I making in the larger enterprise. I am thinking about the three cylinders of people, lateral processes, and metrics. How do I talk through or create capability internally to help people see, I come to work, I make a difference, I can go home with a degree of pride?

Shane Barber:

Yeah. First off, in order of things, what plagues every company, 94% of my first consulting practice was clarifying people's expectations, metrics, and their goals. Any industry I worked in, I could tell people, I can guarantee you, I can walk in any organization, I'll make that challenge to anybody in the line today, I can walk in any organization, and I can guarantee you they're misaligned to your expectations as a leader. As much as we feel we communicate clearly, we don't. Job descriptions are meant to advertise for hire. They're not meant to manage and grow performance. You got to clarify people's roles by accountabilities, which are a large grouping of like activities. You got to put the percent of time against those accountability areas, of where they should spend their time in a given week, then work activities, what are the work activities, what, why, how, and when do they do them.

Shane Barber:

Lastly, behaviors and those metrics. Once you can clarify what their role is and align it to strategy, I don't care if you're a jeweler, and you're making jewelry in custom jewelry or a repetitive jewelry business, people want to know what industry are we serving, and where does my craftsmanship go, whether you're an accountant or a jewelry maker. Next, explicit on the metrics. Not only individual, their peers, their boss, their manager, the whole organization from the company down to the division they work in, their work team and them as an individual. Now we swing to the lateral process one. Everybody is searching for an app to replace face-to-face communication. We're on one now. We're only on one by necessity. There are good apps out there and good systems, but when people are working in teams, working on common metrics that we've aligned for them, we got to communicate.

Shane Barber:

I'll ask people, "How often do you communicate the priorities of your business, where you are at in achieving your objectives, aka sub-goals of your strategy, how successful or not you are, and what you need from them?" They're like, "Yeah, we meet, we communicate quite a bit. We meet, we do a once a week. We do a once a month." I'm like, "Oh, that's great. How often does your information change in your business, and is it on parallel with how often you communicate with your people," and they're like, "Oh, our information chain daily, it changes hourly." I'm like, "Well, and you meet every two weeks or once a month. Shouldn't you meet and communicate and collaborate, coordinate the work efforts of your team at a cadence when it's changing?"

Shane Barber:

I'm not saying you're meeting every millisecond. I'm saying, do you meet when people come in in the morning to see who's here, what work they're going to be doing, have them set their goals, and then swing back around and see where they're at, what help they need. Then give them feedback that you did a great job. Tomorrow there's an opportunity to do a better job, but we're looking for an app to do that for us. You got to be present to win as a leader, a manager, a supervisor, or a lead, and you got to be setting those priorities and those metrics, showing them they're winning. Most organizations, when I walk around or you walk around, Jim, in the work you do, people think the company is not successful. They don't know they're winning. They don't know that, and then that's why they leave. They're like, "I'm going to step off this vehicle, get onto one that's successful," when they've tripled their revenue.

Shane Barber:

They think they're losing, because the quality's poor because they've grown too fast. The systems and processes they use, the drawings are bad. The service requirements are wrong. The estimation did not count into effect of what needed to happen when they show up at the customer's doorstep. You've got to constantly be clarifying the goals and expectations of people, setting metrics so everybody knows the vehicle is not running hot, it's not running out of gas, it's doing its job. Then lastly, communicating, communicating, communicating, and not everybody's good at it. We promote people into supervisor's jobs that should stand in the middle of that storm when they don't want to be and they're not good at it. Find people that are good at doing their work and coordinating others' work, and they can communicate where the company's at, where it needs to be, and then inspire them to come in tomorrow, to do it all over again. Make sense?

Jim:

Yeah, it does. As a leader, companies, at times, you can step back and look at a number of different success stories and say, "What was the trait of their leader?" We have individuals that have really good ideas. They start up a company, and then all of a sudden they realize they are the leader. What are some things you can do to kind of help that leader move forward, be aware of all of these factors, and give them a sense of confidence that we, it's starting with myself as a leader, we're going to win?

Shane Barber:

Yeah. First I'd say, pull out their business card, scratch through their C-suite label, and put servant leader on it, two words. All that really means, somebody on the line of there's a book on it, there's articles, go research it, go look at it. At the end of the day, it's taking your hierarchy, turning it upside down. You work for the people that stand on those concrete floors, that drive those service vans, that do those taxes, like the tax accountant. How do we put servant leadership in place? We put a weekly huddle in place, because when taxes are due, they're working around the clock. They're not eating well. The Lord knows they're not exercising. They're not seeing the light of day.

Shane Barber:

Doing somebody else's taxes of work, they don't know of somebody they've never met, and so I was like, "You got to be present to win. Ask them what they need to do their job, what barriers, what resources they need, but you got to be present to win. You got to be willing to serve, and you got to drop your title." Those leaders that people want to follow through the burning door are the ones that go through the burning door first. They're the ones who are willing to stand on the concrete with them when the truck's not loaded on time. It's a hard job. They got to set the strategy, the destination for the van. They got to make sure that all the equipment's in place to do it. They got to make sure the pit stops are roaring in. They're switching out the components based off the conditions on the track. Then they got to make sure people understand their roles, they know they're doing a good job.

Shane Barber:

Then they got to help identify when they're winning, no matter how small it is. If you came out a nanosecond, out of the pits, in the Indy 500, that sport knows and celebrates it. They view the tapes every day. Do you do that same thing? At the end of the day, be humble, serve others. You might've gotten that company, it might've been your idea. You might've put that device to put 10,000 songs in their pocket, but are you a technical leader? Are you a leader of the enterprise that can inspire performance and people to work harder for you than anybody else? If not, maybe you just lead technically and do a different role.

Jim:

Great. Well, Shane, we're nearing the end of our time. What I'd like to say is, you hear this term in an elevator speech, give me the 30-second elevator speech around this particular model. What can I walk away with having a very clear understanding of how I can be successful using a concept or a model like this?

Shane Barber:

Okay, 30 seconds or less. I would say, one, don't optimize one cylinder. It's going to break the other cylinders. You got to look holistically at these six design attributes, assess which one is running lean, hot, not running, and timing with the others. Get them all timed. It doesn't even matter if it's the wrong direction that you point the bus in, at least you know it's running. Then get people on board, over-communicate on the strategy, engage their time and talent, make them feel valued, involved, use good metrics so people are reading the gas gauge before you run out of gas. Then make sure you have good methods to reduce variance and really good communication and collaboration structures, so everybody knows where they're at, where they need to be, and where the vehicle is at its next pit stop, down the road.

Jim:

Great. Shane, I'd like to say thank you. You've really helped bring a degree of clarity within myself and hopefully within our audience. Of the statistics we talked about earlier, what I can see is through simple and straightforward focus in these different areas within the optimization model, I can be one of those companies that is successful. I can see the opportunity to become part of that global ecosystem of staying and providing products and services that customers want. I can see a winning success model going forward. Shane, I'd just like to say, thank you. It's been great. Folks, I welcome you to reach out to BXG and talk to them more about this particular model. They have very solid individuals. They have a very solid team and a very solid infrastructure in business systems. Thank you.

Shane Barber:

Appreciate the time today, and you can go to our website. We do free assessments to help you diagnose your company, no matter if it's manufacturing or it's out of that sector. Take us up on it, go see our webpage. We'll be glad to help. Again, Jim, thanks for your time, and we'll see you next time.

Jim:

Thank you, Shane.