Entrepreneur Addiction #21 — ‘Dump Trucks on Fire’ with Author Kevin Duggan

10+ min read • Jan 23, 2012 • Dan Bischoff

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Kevin Duggan, author of the new book, “Design for Operational Excellence,” and founder of the Institute for Operational Excellence and Duggan Associates, talks to us from Florida about how companies need to change their focus from running a business to growing a business.

His new book outlines how business owners can design a specific process to make growing a business a perpetual process among every department. His strategies go beyond initiatives like Lean and Six Sigma to achieve true “Operational Excellence.”

Enjoy the conversation.

In this episode of the Entrepreneur Addiction Podcast, we discuss:

  • Garbage trucks on fire
  • Design for operational excellence
  • Growing a business vs. Running a business
  • The problem with meetings
  • Reaching a destination instead of a vision
  • Throwing Patrick off a plane
  • Why managers don’t lead people to the right destination
  • You don’t need managers and you don’t need meetings
  • The formal process to grow a business
  • Work on offense, defense and maintenance
  • Be a solutions supplier
  • The Toyota Way
  • Beyond lean principles
  • Don’t cut and paste
  • How to develop and understand ‘Flow’
  • Self-healing value streams
  • Flourishing companies in this economy
  • Plasma-cutting torches
  • War games
  • Build the bridge before you send cars across the river

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If you can’t listen, here’s the transcription by Shad Atkinson:

Voice: Fueling your business success, this is the entrepreneur addiction podcast, breaking the small business loan news you need if you obsess about your company. Heard exclusively on Lendio.com. And now here are our your hosts: Brock Blake, Dan Bischoff and Patrick Wiscombe.

Patrick: This podcast is sponsored by Lendio.com, the online source you need to find the right business financing to grow your company. So check them out: Lendio.com, to get your business growing right now. It’s the entrepreneur addiction podcast episode number twenty-one. My name is Patrick Wiscombe. Thank you, as always, for tuning us in and taking us along wherever and however you’re accessing the podcast. And based on the last numbers, Dan, there’s a lot of people listening to this podcast.

Dan: Yeah.

Patrick: And we have another terrific guest in studio. By the way, that’s Dan Bischoff the director of communications at Lendio. It’s always good to see you.

Dan: Good to see you again.

Patrick: You know, it’s not very often you see a dumpster fire on the way to work, a rolling dumpster fire.

Dan: (laughter) Yeah, that was good and bad, maybe.

Patrick: It was a garbage truck that was on fire, and so it dumped it’s load out onto the freeway.

Dan: Right on the freeway, covering lanes.

Patrick: (laughter) Yeah.

Dan: Fiery trash.

Patrick: So you wouldn’t…

Dan: Smoking up the freeway.

Patrick: Joining us from Florida, normally from Rhode Island, but he’s joining us from… where was it Kevin?

Kevin: Stewart, Florida.

Patrick: Stewart, Florida. Ah, I wish I were in Florida. Kevin Duggan, who’s the author of “Design for Operational Excellence, a breakthrough strategy for business growth”. This is a contrast between last weeks podcast, which was with Jeffery Hayzlett. Jeffery was saying, “Hey, let’s make everyone uncomfortable.” This is a direct contrast to what jeffery Hayzlett was saying, and it’s good to have you here.

Kevin: Oh, thanks for having me, guys, and I’m glad you survived the trash truck on the highway.

Patrick: (laughter) The dumpster fire. Hey, let’s dive into the book immediately.

Kevin: Sure.

Patrick: Tell us why you wrote the book.

Kevin: You know, previously I had two other works. One was more on the technical side, teaching truck companies how to design their factories. It was “Creating Mixed Model Value Streams”, which was a book about, “Here’s how you technically design for flow in a factory.” Then I did one for the office: “Here’s how you design for flow in the office.” And I was doing some things with engineers, and I was working with companies, teaching them how to make their factories more efficient. And in working with one company, I got my eyes opened. I mean, they would just say, like, “You know, Kevin. All this stuff you’re teaching on the factory is great. You know, how to put lean concepts in. How to do advanced lean concepts like mixed model. This is all working great.” But the CEO’s telling me, “Here I’m talking to my sales people, and I’m saying, ‘you guys need to go build a brand and really get us market share and product recognition.’ And then I go to the operational side of the people, and I have to say, ‘you guys got to cut cost and get better quality and better on time delivery.” It just doesn’t seem right. I should be telling them the same thing.” And I’m like, “You know what? You’re exactly right. I’ve only been teaching you half the story.” And so the real epiphany came when I realized that—and this was about six or seven years ago, they had a program called commercial excellence and operational excellence—and that the only success we could have is if we married these two concepts together because one couldn’t go forward without the other. No matter how great your sales and marketing and branding is, if you can’t deliver the product on time, that’s not going to get you anything. And if you’ve got the best product and it’s at the lowest cost and you’ve got a hundred percent on-time delivery, a really lean factory, and the customer says, “Geez, that’s really nice. We just don’t need that product anymore. We’ve got something else.” That doesn’t help you either. So what happened with these companies is we worked with them to marry these two programs together and came up with the concept of operational excellence, as the operations that supplies the growth for commercial excellence, and the company did very well. And this was a very large company. They were in the book. They have, I think, forty companies beneath them. And throughout all these companies, they went and applied the concept of operational excellence and performed very well. And after that, I kind of said to my team, “What did we do right?” Because this was amazing. I mean, we’ve been helping companies for years, but we do with this company and how we worked together was unique. And therefore I got my eyes opened and said, “You know, I think we need to change from just teach lean and teaching the continuous improvement tools to teaching operational excellence that teaches business growth.”

Patrick: Now, can we ask you what the company was?

Kevin: Yeah. Idex Corporation.

Patrick: Okay.

Kevin: You’ll read about them in the back of the book as one of the case studies.

Patrick: Now, give us a little bit of background on Idex.

Kevin: They were a company that was championed by a very smart CEO. Like I said, he was saying, “How do I move… we have forty different companies under our umbrella… how do we move them all up to a level of performance.” He was really good. He was like, “I’m really not a big believe of consultants. I think our people should be able to do this on their own, but we’ll hire you,” me “you’re company, because you teach us.” And that’s what we did. We ran formal training. Formal classes. It was like taking their executives and their management, and even their people online, and putting them through like a little college. Putting them through a series of courses. And that’s what we did with them. Then we helped drive them to apply the concepts they learned in the classroom into their operation. And the results were staggering. When you talk about businesses that are growing in a down economy right here in the US, they’re a good case for that.

Dan: Yeah, speaking of those businesses that are struggling right now, what’s the main pain-point that your book’s trying to solve? With this operational standpoint, what is the main problem that companies are facing right now in how they operate?

Kevin: Yeah, it’s really amazing. Company’s really see… they try to grow their businesses every way they can, trying to get market share, trying to do the right thing and get what the customer wants. But what we don’t do… even if we get orders, we have to go and figure out how we’re going to produce the product and give it to the customer, or service. It doesn’t have to be in order. But the real key is, if we just sit back and say, “Look, we’re going to design our operation in order to leverage business growth instead of ‘just get the orders and we’ll let manufacturing handle it or we’ll let the office handle it or we’ll let our service coordinate it or handle it of customer service reps.’” You know, if you really think about it… just walk into any small business or any medium business… go into there company and ask one question to all of the people in their office or in their shop core. And the question is this, “How does everyone in this office know what to work on next?”

Patrick: That’s a great point.

Kevin: Yeah, and the answer you get is, “Whatever my boss tells me. Whatever email just came across. Whatever meeting I just got out of.” Most likely its, “Whatever I feel like.”

Patrick: (laughter) “Whatever I feel like.”

Kevin: There are five of six different way that people can decide on what to work on next. In reality there should only be one answer to that question, and that is, “Whatever the next process needs.” What that one question shows is that we all work independently in office where there’s no flow. There’s no understanding of linkages of information flows to the customer. There’s no formal points where we capture knowledge. There’s not even an understanding… if we don’t have an understanding of the flow, we don’t know if that flow is on time. We don’t know if the flowing is going right or if it’s going wrong. It hasn’t been engineered. Then when we have problems, you know how we fix that, right? We have a meeting because meetings… the reason we have meetings in a company is simply to fix when flow is broken. In other words, if we had good flow in our offices, we wouldn’t have to have meetings to fix it.

Patrick: So is this a CEO driven issue then?

Kevin: CEO driven? It’s prevalent throughout the company. It’s more like, is there an education at all levels where people understand this dynamic happening, from the CEO all the way down to the shop floor. You know, it’s kind of the cultural way that we do business. Let me make a point that will maybe resonate really good. Imagine when you get on an airplane, and you’re sitting in a seat and you get up 30,000 feet. Everything’s going well when all of sudden the captain comes out. He hits the autopilot and he comes out. His first officer comes out, and he calls all the attendants to the front of the plane, and says to them, “Look, everything’s go okay with the flight and everything, but corporate called and our costs are high, and we have to find a way to reduce operational costs and become more efficient.”

Dan: Throw Patrick off the plane.

Patrick: Yeah. He’s sucking up too much gas. He weighs too much. (laughter)

Kevin: (laughter) And so the captain turns to the first officer, and the first officer says, “I’ll try adjusting the fuel flow and see if we can save some fuel.” And the captain says, “Yeah, see if you can find a better route.” And the attendants say, “We’re not going to hand out as much food, and we can try to do this.” And they start writing down all their ideas on the flip-chart, and then they start assigning tasks. Then they say, “When are you going to get this done by?” That’s all management does in order to solve problems. In order to lower costs. Now if you saw that sitting on a plane, I don’t think you’d want to fly that airline again. You know, watching this happen. But in reality, that’s what happens to our businesses everyday. You know, we’re in flight. We’re trying to get orders to customers. We’re trying to move things, and what are we doing? We’re up there playing around, calling the attendants up, calling the pilots out of their seats, and saying, “What do you think? What do you think?” Now, in real life, what does a pilot do to make sure that plane is flying as optimized as it can be flying. They go through a checklist. And the checklist tells them is this plane flying as efficiently as possible as it was designed to do? And of course, in our operations, we don’t have any of those checklists that say, “Is our operations performing in the way it should be.” Why? “Because we don’t have a design, so there can’t be a checklist.” All we’ve done is had a bunch of managers to direct people based on their experiences and based on their knowledge which, you know, can be good. But it’s all on influence and leadership. Just look at how many books are written on leadership. It’s because that’s all we know, but if we sat down and said, “Whoa, whoa, whoa, time out here. All we have to do is design our operations so that everybody knows what to work on next.” Because what does a manager do? They tell people what to do, when to do it, how to do it. Well, a visual signal, or an open square in the floor, an open folder in the office, can tell the next person what to work on next because that’s what the next process needs. You can put signals in to tell them if they’re on time. How to do it is simply standard work. And again, when to do it is just those signals. Why do I need a manager? I don’t. The end result of this…

Dan: I think a lot of people probably like that one. I don’t need a manager. That’s probably why they’re entrepreneurs too, right?

Kevin: It’s interesting, and you don’t need meetings that just tell people what to do and set priorities and expedite. So what happens? Well, with all that, the managers are not running the business anymore. They’re growing the business, and growing the business is not just a catch line. “Oh, we ought to go grow our business.” There’s a formal process to do that as well. So it not just me saying, “Oh, they should go grow the business.” No, there’s a process. It’s what you do when you free up these guys’ time.

Patrick: So you’re focusing on the future basically, at this point. Once you get the design down, then you can really get growing the business, if I’m understanding you right?

Kevin: Yeah, we call it “Working on offense.” Offense is all the activities that that someone does on the company that is on business growth. And defense, of course, are the ones where you have a bad quality to the product, you have to go defend the company and maintenance of the stuff you have to do just to run the company everyday. This is one of the most simplest things I’ve taught companies, and they love it. We make a pie chart and put it on the conference room walls. And it says every time someone’s in this room, you have to put the pointer on why these people are in these rooms. Green is offense. They’re growing the business. Grey is maintenance. We’re telling people how to maintain our company. And red is defense. So I just look and then track. Every time someone’s in the room, they get a red dot or a gray dot or a green dot. And at the end of a month, look at how many dots you have on your conference room wall. How many times have people come together just to do defense? How many times have people come together just to do maintenance? And then how much time do the get together to do offense? And this everybody, not just the sales people. This is everybody in the operation as it works. And that just brings a huge awareness to people of, “Oh, my God, look at how much time we’re spending on this. No wonder our business isn’t growing. We spend more time managing people and processes than we do finding out what our customers needs are.” It’s just a real powerful way to make sure that design is actually running, the checklists, as it should be.

Patrick: So it’s kind of a metaphor for this morning. People spend more time putting out the dumpster fire than they do growing their business.

Kevin: Yeah, kind of like that.

Patrick: In a way.

Kevin: We kind of get them to understand that… you know, people are going to do what they’re comfortable doing, and usually with operational people, we’re really comfortable running an operation. So the commonality I had with last week’s speaker is that we’re going to make some people uncomfortable by saying, “Yeah, you have all this knowledge about all the machinery in your factory and all of its processes and the technical capabilities of what your factories can do and what your sister companies can do. Now you’re going to go with a salesman and listen to what the customer is saying, and then after that you’re going to go talk to your salesman and say, “You know, this company over here, we make this and this, and this company over here makes this and this. And I can go meet with these client managers and we can come up with a prototype for you in like three weeks.”” Bingo. And that’s just what a company like Idex does. They go out and they leverage all their operations to provide customer solutions, not customer parts anymore. That’s why I say, how you really get the offense thing going is when you start changing from a parts supplier to a solution provider to customers. That’s where we talk about capturing market share because there’s only so much market out there. It’s the question of who’s going to get it. And it’s the ones who are really listening to what the customers needs are and what the future needs are and then designing solutions for those needs rather than providing a blueprint and a drawing and then quoting on a part, where most of us are stuck nowadays.

Patrick: We’re talking with Kevin Duggan the author of Design for Operational Excellence: a breakthrough strategy for business growth. Where can people pick up the book?

Kevin: Well, it’s at the Amazon, Barnes & Noble outlets as well as Kindles. So it’s out by McGraw-Hill, so they have a pretty wide distribution on it. They can also get it at the Institute for Operational Excellence, which is a company that I have that teaches companies about operational excellence as well.

Patrick: Now, I also noticed that Jeff Liker, who is the author of the Toyota Way. Are you guys friends?

Kevin: Yeah. Jeff and I go way back. You know, I did some teaching at the University of Michigan, some guest speaking with Jeff when I wrote my first book on mixed model value streams. So Jeff is an expert on Toyota. Kind of back in the day him and I did some co-teaching, and he actually wrote the forward to my first book as well on mixed model value streams. So I contacted Jeff and I said, “Listen. I’ve got a new… my learning and my education has increased since the last time we spoke. Take a look at this manuscript.” And he said, “Sure, I’ll write the forward to it.” And so it worked out well.

Patrick: Now, what was the Toyota Way, for people who haven’t read his book, and I realize that we’re talking about your book, but explain what the Toyota Way was.

Kevin: The Toyota Way went to teach companies what’s behind the magic of Toyota, what’s under the covers. How does Toyota process and really work culturally as well as mechanically, and Jeff is an expert on it. He broke it down to principles, how they believe, how they think, and how it all works. Of course, Toyota was the most profitable car company in the world, and they had some unique beliefs about manufacturing that really changed a lot, the whole automotive industry. They went and helped Porsche recover. They did some fundamental game changing things early in the day where, you know, if they had a production problem, they actually did stop the line. You didn’t pull the car off the line and try to fix it someplace else. Jeff went and really studied what made that work and how they became the powerhouse that they are, which is good. I like to tell companies, “Look, lean principles that came from Toyota…” actually they started with Henry Ford, but mostly recognized through Toyota, but when I teach companies, I say, “But understand, they applied them in a way that works for them.” Most companies are not a car company. You know, small entrepreneurs, small business shops or even medium sized business owners, they’re not car companies. And so, we have to look at it differently, and one of the biggest things I find with companies is they do this cut and paste, like we’re Microsoft Office. They go and they see something in a Toyota factory and they want to copy it and paste it into their factories. It doesn’t work. You know, let’s just take the wing off this airplane and put it on this airplane and see how it flies. (laughter) What we really have to do is get them to understand that look, there’s some really underlying principles and then there’s some really detailed design stuff we have to do to make it work in your company as well. That’s the part I really like to emphasize with companies. You know, Toyota did a lot with a company called Kaizen, which is rapid improvement events. Get a bunch of people in a room and solve a problem in a week. Feed them pizza and soda and don’t let them out of the room until they solve the problem’s solved, so to speak. I’m joking a little bit, but basically it’s a rapid improvement event. We’ve adopted it as Americans. “Oh, we should do Kaizen.” And companies are measuring Kaizens and everything else. You know, that gave us incremental improvements. Companies got better. Five and ten percent. Save some costs. Save some money. That’s not what I’m talking about. I’m talking about making that plane fly at 30,000 feet and do 500 knots. What I mean is, instead of just trying to get better everyday, in operational excellence we say, “No.” We design the company, the operational side of the company, to perform at this level, this much mix in volume, and we want every employee to be able to understand how the flow of product is working towards the customer. If that flow is on time or not. And then what to do about it if the flow is right. And what to do about it if the flow is wrong. That’s actually the definition of operational excellence is when each and every employee can see the flow of value to the customer, and fix that flow before it breaks down.

Patrick: Hmm…

Kevin: That one simple sentence. How do you define operational excellence? There it is. CEO’s get it. Workers get it. The whole company gets it. This all about whether or not I can see the flow of the product to the customer and understand if that flow is normal or abnormal. Yeah, that’s what it’s about. “And I should know when things are going right? Yeah, I should know that. And I also need to know what to do when things go wrong in the flow, like parts start to backup. Or the next operation breaks down?” Yeah, you should know what to do then. Because if I can do that, and teach all my operators to do all that, then we create what’s called self-healing value streams. You know, value streams just flow value to the customer. The self-healing side just means, just like if you cut yourself a little bit, you’ll heal on your own, without the need of a doctor or nurse. In this case on the operation side the doctors or nurses are the managers and supervisors. So what we’re really trying to promote in these companies is, if we design it to work this way, the product will flow to the customer this way. It will self-heal this way. What’s the rest of the management team going to be doing? You’re going to be working in innovation funnels. You’re going to be working on product development and research. You’re going to be with salesman. Companies that do this… I can’t brag enough about the good things I’ve seen. In our economy… if you don’t mind me switching subjects a little bit. Our economy seems to be talking about all the negative things that are happening, and yet there are some companies whose businesses are really growing.

Patrick: Okay, let’s talk about those then.

Kevin: Yeah, I’ve got a fantastic one for you. Probably my most favorite reference is a company up in New Hampshire. They employ about a thousand associates, so they’re not small. But they started small. They started forty years ago with just two guys. Now they’re a thousand associates. They make plasma cutting torches. And this company is so unique…

Dan: I didn’t know there was such a thing.

Kevin: Yeah.

Patrick: I didn’t either.

Kevin: Well, when a ship comes in and needs to get cut apart and fixed and stuff like that, they blow threw an inch, inch and a half of steal with these plasma cutting torches. They cut them right up.

Dan: I was thinking plasma like the blood, like what’s in the blood.

Kevin: No. The plasma that is high arch energy. It’s hotter than the sun. Some of they produce are hotter than the sun.

Dan: That’s amazing.

Patrick: You know, I know who they’re next customer is going to be. Somehow I seem them going to Italy to cut up that ship that’s on it’s side.

Kevin: Yes. Yes.

Patrick: The captain that abandoned ship.

Kevin: (laughter) They’re probably using those torches right now. Anyway, so this company, it’s amazing. So first of all it’s a heavy mechanical electrical device. It’s about… some of their bigger ones could be as big as a cube by three feet by four feet by four feet by four feet. They’re big heavy devices, electrical-mechanical. They do… ninety-six percent of their supply chain is within two hundred and fifty miles of New Hampshire. So they don’t buy components from low cost countries. They don’t buy major components from Asia. They buy everything in the United States and they synchronize with their supply chain. So everything is purchased here in the United States. However, thirty-percent of the products that they produce, end products, are sold in China or in Asia, competing with the lost cost producers in their backyard, made here in the United States. Thirty percent of their products competing with low cost Asian producers right in their own backyard. They sell another thirty percent in Europe, competing with European producers in their backyard, right here in the United States.

Dan: That’s surprising.

Kevin: How often do you hear that story?

Dan: No, you don’t hear that story.

Patrick: No, you don’t hear that story.

Kevin: They do not have a big management staff running their operation. They have six hundred plus associates building their products everyday. They don’t have a lot of management. Their people… the orders go right to the people building the product. They do not have production control departments. They do not have the layers of management. In their operations meetings, they don’t talk about operations. They maybe spend five minutes because all their meetings are about future product development, how do we stay technically ahead of the competition…

Patrick: So they’re innovating?

Kevin: They’re innovating with new solutions to customers. They’re getting into new markets. They’re constantly… they have these games where they figure they’re going to get knocked off everyday with their products over there, so they actually do war games where they spend their time trying to figure out what their competition is trying to do with them, so they can stay ahead of them. And this is the operations people by the way, and their culture is, bar none, one of the best ones I’ve seen. They always get voted the best place to work in New Hampshire, and I think they got the top twenty, within the top twenty places to work in the whole United States. They have a fantastic culture. They’ve never had a lay off since they’ve started over forty years ago, even in this down-turned economy. You know, when the economy turned down, they had extra associates that weren’t needed to build a product. So what they did is they took things like the snow removal, the landscaping, the carpentry work, the maintenance of the building, janitorial services… all that stuff that they had contracted out, they asked their own associates if they wanted to quote on doing those jobs. And they did. So they kept all their employees employed. Then the work came back, and now they’re hiring again. They believed that if they let go of an associate or a reason that they had trained, they’ll never get them back again. “So why would I do that?” It’s a completely opposite thinking of most America companies to try to shed their labor and lower costs.

Patrick: I think you absolutely nailed it there. So does it show weakness if a company lays off people because they haven’t adapted or because they don’t have the flat organizational design? Does it show that they haven’t been forward thinking?

Kevin: Ah, I can’t really be that judgmental.

Patrick: I know that’s the easy solution. I guess, all I’m saying is that companies have to adjust.

Kevin: Well, it’s more or less that maybe they haven’t been educated in that there’s different ways to think about the operation and how to do business. The stuff I teach isn’t a one slice, one piece of the pie. It’s everything. The company has to really understand, and understand the concepts, and say, “Yeah, that will work for us.” In other words, they have to understand the concept of, “I really want to spend my time out in front of the customer or doing product innovation.” And that’s a formal process. I’m really not going through that with you. There’s things call innovation funnels, you know, five stages through the innovation funnel, where operation fits in, and all that stuff. Basically it’s, “This is where I want to spend my time, and I know if I do this I’m going to capture the market-share because I can see what’s coming down that funnel. Therefore, why would I go to my operations people and try to cut course or beat up on my suppliers or try to find low source solutions, when I know my innovation funnel is already getting full out here in the front end. You can’t do one without the other. You can’t just say, “We have no orders. How can we hang on to our people?” Well, the whole thing is ‘the chicken or the egg’. We have to realize that if we streamline our operations and really educate the managers into a different type of job, which means you’re now going to use your knowledge to develop, with r & d and customer solutions, to make product capables and make product launches to be a hundred percent on time, right the first time. And not go through six months of debug when we launch into a product. That’s quite a strategic advantage, but it also takes a deep understanding of how the whole system will work, like how that whole flight is going to operate: from loading the passengers to taking off; to flying the plane; to landing. You just can’t understand what the pilot does or what the attendants do. You have to understand the whole concept end to end how the business will run and how operations will fit into that to get this way of thinking to take hold.

Patrick: So you can literally become an architect of your business to maximize… well, to use your words: to have operational excellence.

Kevin: Yeah. The right words I like to use is you can design you operation, which is from the time the customer gives an order until the time we deliver that service to the customer. That’s the operational side of the business. So you can design your operations to leverage business growth, to support it and enhance it.

Patrick: Hence the title of you book: Design for Operational Excellence.

Kevin: Right. It’s not done by good leadership. It’s not done by muscle management. It’s great that we see all these books, but it’s still the same old thing where people just come in say, “This how you lead people. This is how you do that.” Well, gosh, if you need to build a bridge, we’d probably want to get an engineer to design that bridge before we put a bunch of buses and cars to go across it.

Patrick: Just a minor detail.

Kevin: Yeah. Good motivation isn’t really going to tell us how thick the metal has to be and what the span should be. It’s really knowledge, deep knowledge. And the deep knowledge comes into design that there are eight principles of flow through your operations. There’s another nine principles that you have to use in your office. And these are things like establishing tech capability. Creating things like work-flow cycles. Putting in first in first out, so each process is connected to the next process. Setting up physical pathways or electronic pathways between people. Putting up standard work of when processes send to when they receive. You know, there’s a whole education here that is really just missing. And what do we do? Instead of education we have managers and meetings, and we let the managers decide. What I’m talking about is specifically this: it’s the dynamic side of the business. What do we do when the customer gives us an order? What’s the design for that? And we find out that there isn’t one. It’s just left up to whoever is left to figure out how the order is going to get entry. Then the order is going to go here. Then the order goes here. Then it gets this. But all the little steps in between of when does it go there? How often does it go there? It’s none of that. People just, like I said, work on whatever they want usually in the office. (laughter) They really need to figure out “how do I go make that bridge? What thickness of steel do I need? What span should I need?” They need to get the laws of physics of operations under their belt before they just go out there and start thinking about how big that bridge should be. So I would encourage them to do those three things. Just become aware of, if they think differently about their operations, they can become very competitive in this market, in the market place, even with the economy as it is today.

Patrick: We’ve been talking with Kevin Duggan, the author of design for operational excellence. Be sure to go out and pick up his book. In sixty seconds, tell us a little bit about your business. Do you consult people on how to be operational excellent?

Kevin: Yes, we do that on a global basis. We help fortune five hundred companies all the way down to any small to mid size business. We actually go out, and will say, everything we teach companies we do in our own office. Which leads me to be able to speak to you today from Florida on a podcast because we have no management in my company, and everything works. When people say where can I see a company that runs like this, I say, “Come see mine.” And next time you go hire someone to help you with your business, you probably want to ask them that question before you let them in the door: “Do you do this in your own business, or are you just telling us how to do it?”

Patrick: Do as I say, not as I do.

Kevin: Yeah, so we actually do it. People come to Rhode Island to see how we run our office. They see how we run a company without management, and how we have a global reach, how we coordinate the efforts of people all over the world, going out and helping other companies. So, yes, we go out and help them do that. There’s a couple websites. If you google me, you’ll probably find a couple of websites where you can reach us on how to do that.

Patrick: Kevin J. Duggan, author of Creating Mixed Value Model Streams, and the lead author of The Office that Grows your Business: achieving operational excellence in your business process. And today we’ve been talking about Design for Operational Excellence: a breakthrough strategy for business growth. Be sure to go out and pick up his book. Kevin, thank you so much for you time. I hope you’re enjoying Florida, and I hope you enjoy Europe next week.

Kevin: Thanks. I will do it, and I appreciate you guys as well.

Patrick: Oh, I forgot to ask you: When did the book come out?

Kevin: Oh, it just came out actually. It came out September 2011 from McGraw Hill and just got released in Europe, I think in November.

Patrick: For Kevin Duggan, Dan Bischoff, director of communications at Lendio, the guy responsible for getting the podcast on the air for the last four months. It’s always good to see you.

Dan: Good to see you.

Patrick: My name is Patrick Wiscombe. Be sure to pick up the podcast on Lendio.com/blog. Plus you can read all of the other great material that Dan throws together on the Lendio website. So Lendio.com/blog. You can also pick up the podcast on my website: PatrickWiscombe.com. So for Kevin, Dan, I’m Patrick. Thanks for listening. We’ll talk to you next week. See ya.

Voice: Making business loans simple, this has been the entrepreneur addiction podcast, helping you secure the capital you need, with your host Brock Blake, Dan Bischoff, and Patrick Wiscombe. Heard exclusively at Lendio.com.


Dan Bischoff