Success Secrets and Stories
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Success Secrets and Stories
How Leaders Create Solutions When Money Is Tight
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Your department is drowning in needs, your budget is flat, and leadership still expects results. That’s where ownership shows up. John Wandolowski and Greg Powell break down how leaders create solutions under real constraints by learning the budget first, doing the homework on actual performance, and asking the hard question: Are we meeting customer requirements at the lowest responsible expense?
We dig into why some budgets are predictable while others, like maintenance budgets, can swing wildly with catastrophic failures and deferred maintenance. John shares a simple rule of thumb for parts and labor, plus what happens when payroll is covered but materials are not: preventive maintenance disappears, everything becomes an emergency, and costs climb fast. From there we get practical about timing, why mid-year budget changes are so hard, and how a five-year plan or department master plan helps you spell out risk, phase large projects, and give executives clear transparency.
You’ll also hear how to connect spending to profitability with straightforward profit-margin math, including what it really takes in sales to fund a $100 expense or a seven-figure facility repair. Finally, we talk people: engaging staff to find smarter options, recognizing the real owners of solutions, and using SBAR (Situational Background Assessment and Recommendation) to present clear, actionable recommendations that can get resolved in one meeting.
If you want to become the person who brings solutions instead of just problems, listen now, then subscribe, share this with a new supervisor, and leave a review so more leaders can find the tools.
Presented by John Wandolowski and Greg Powell
Welcome And The Leadership Focus
SPEAKER_01Well, hello, and welcome to our podcast, Success, Secrets, and Stories. I'm your host, John Wondolowski, and I'm here with my co-host and friend, Greg Powell. Greg? Hey everybody. And when we put together this podcast, we wanted to put out a helping hand and help that next generation and help answer the question of what does it mean to be a leader? Today we want to talk about a subject that I think supports that concept. So in this podcast, we wanted to talk about creating a solution and in essence, developing ownership. And when I think about developing ownership, one of the easiest lessons that I remember is a parent can teach a child what it is in terms of handling a budget. And as a kid, it becomes apparent to you that your wants and your needs are going to exceed that allowance that your parents are going to give you. In a business environment, especially as a new supervisor, the concept of working within a budget can be challenging because the demands that are placed in a department don't always match the dollars available. As a new supervisor, you have to do your homework. That means looking at the department's actual performance and results as you assess the department's overall needs and what their budget really is. The real challenge is asking the departments that you support: are we meeting your customer requirements? And how can we reduce the cost of doing that service to improve the bottom line of profitability? It's standing back, making an assessment, and understanding
Ownership Starts With Budget Basics
SPEAKER_01the full picture before you start coming up with a creative solution.
SPEAKER_00So creating a solution. In most organizations, when you become a new supervisor, you are introduced to the accounting system. And unless you are moving into a position in accounting, you may not have the background to understand the nuances of that system or even answer the simple question, what is my budget? That is a core requirement to understand your budget is responsibility of department leadership NHR to give new supervisors and managers a clearer picture of the environment in which they are going to conduct business. The budget should be a straightforward conversation that makes sense, much like explaining how a checkbook works. The complexity comes in when positions do not have a constant volume-related expense. Hey John, maybe you can explain the erratic cost structure of a maintenance department. Yeah.
SPEAKER_01I mean, if you're making a widget and you're going to make 100 widgets, you kind of have a consistency of cost. But when we're talking about a budget challenge, you get into those creative solutions because there aren't really guidelines or guardrails that are associated with a budget in maintenance. It's a great example of extraordinary cost of catastrophic failures that you can't always predict. But there's a very simple rule to determine whether the budget is sufficient in terms of how it can operate. In a maintenance context, the amount of money you spend on parts should be equal to the amount of money you pay your staff to do that work. Often budgets cover payroll, but they don't have enough funding for the materials necessary to do good repairs. That kind of environment magnifies the failures associated with keeping equipment running. Everything then becomes an emergency. And there's no real true preventative maintenance. The team becomes reactive and they'll end up fighting significant failures instead of managing the normal and doing more of an ongoing maintenance kind of approach.
SPEAKER_00So from the concept of creating a solution, how do you handle an environment where your budget does not meet the core responsibilities of your assignment?
SPEAKER_01Well, first you have to understand a very important term in the world of budgeting. Timing. You're not going to get a budget change easily that has to be approved every fiscal year. That's just not going to happen. Regardless of how needs are being perceived, changing an approved budget is really difficult. What you should be doing is developing the background information and the communication needed to address these significant issues in the following budget cycle, if possible. And at the same time, the issues are ongoing problems that have been ignored for years.
Why Maintenance Budgets Feel Impossible
SPEAKER_01Trying to get everything addressed at once is never going to happen when you have budget constraints. That's why people talk about developing a five-year plan. A five-year plan gives you the ability to spell out the risk while also creating the way to increase your budget proportionally. It gives the organization a chance to absorb the actual cost of doing business and trying to take a portion of the repairs at a time.
SPEAKER_00You know, John, in my experience in human resources, I've worked with members of management who really did not understand what budgeting means. They either didn't understand fundamental budgeting principles, or they were so caught up in the increased sales celebrations, they thought the budget rules had changed. It can become a very contentious conversation if they have not taken the time to learn the dynamics of budgeting. Whenever we look at working with a limited budget, that is the challenge. And finding a creative solution begins with addressing the problem with foresight. In different organizations, the skill set associated with foresight is developing an operational or department's master plan. A master plan approach is both good practice and at times an emergency technique used when an organization is in trouble. You do not want to be in a position where executive management starts asking, hey, how do we get into this situation? Creating a department master plan helps define the goals of the team and how those goals support the organizational goals at the same time.
SPEAKER_01And it also talks about sharing the risk and identifying the risk before it actually happens. I found it as a very helpful tool when I had developed five-year plans in healthcare. And healthcare is actually a great organization that really understands how to fund deficits. They are involved in major structural renovations, and they have expensive equipment needs, which all puts pressure on anybody's budget. Organizations within healthcare almost always develop a five-year plan. And that's not by accident. It's actually by design. Those plans give the ability to talk about risk. They rely on feasibility studies and talk about strategic case examples to support how to expand or redirect funds. The important part of this concept is that plans give donors and executive management transparency to your department. They help people understand the organization's mission and your department's approach to meeting that mission.
SPEAKER_00The same can be said for manufacturing organizations, which are always focused on the bottom line. Understanding the current cost of doing business and the current profitability of the products being produced is one of the key elements an organization should communicate. Everyone on the team should understand the impact they have on the organization. You know, I remember one meeting where the marketing manager explained the simple impact of a $100 expense to the manufacturing manager. The profit margin on the product was somewhere around 20%. So the product sold for $15. The company earned about $3 in profit. That means marketing would have to increase sales by almost $500 just to cover the additional $100 cost. I remember in retail, they used to ask the question how many pairs of shoes do I have to sell to cover the cost of your extravagant shoe department display layout?
SPEAKER_01Okay, that's awesome. And
Timing And The Five Year Plan
SPEAKER_01that kind of falls into another example that comes to mind when you're in a maintenance kind of environment. Imagine being in a room discussing the replacement of the roofing system over the entire manufacturing site that's going to cost $1.3 million. Think about the impact of sales to cover that kind of expense. You have to ask your sales team and your marketing team to sell roughly $6.5 million worth of product from that previous example to cover the roof. And that's assuming that there's a 20% profit margin that's not really going to any other expense other than a roof. The room usually goes silent, and you can hear that kind of expense is unusual. And if there is a creative solution, it's finding a way to make that expense digestible. And what I mean by that is dividing the project into four parts so that the organization can absorb the cost within a normal sales routine without trying to do something extraordinary.
SPEAKER_00So that is why a five-year plan is one of the most effective ways to handle those kinds of budget exposures. Creating a solution means more than using a budget process or a financial trick to spread out the impact of a significant cost. A five-year plan takes the time to show the true exposure of operating costs going forward. So maybe it's time to look for another site that does not have as many deferred maintenance issues as has been identified in the five-year plan. Maybe it's time to accelerate the cost reduction ideas of producing the product to compensate for the expenses that are anticipated. Clearly, when unexpected expenses arise, the responsibility of creating a solution falls on leadership. Leaders are expected to bring forward solutions, not simply identify problems.
SPEAKER_01And another key element of creating a solution is engaging the organization to pull the cost down by engaging your staff. This is where you're starting to use your skills in terms of emotional intelligence and team building. And that's when it really becomes critical. Involving your staff is really the secret to examine the cost and identify options from their perspective, not just yours. One of the most interesting conversations I had is with a warehouse manager who talked about inefficiency in the warehouse. He had done some reading and had found some semi-automated processes that were inexpensive, but could be a real impact in terms of the cost of doing business. Because this individual was into software programming as his assignment, the opportunity to create that software actually was relevant to reduce the cost to the organization. And that's the person who actually presented this to executive management. I had him talk about how that could actually affect the bottom line. That did two things. It developed my staff, and it gave management an understanding that we have experts in the field that could help the organization. And that's where we could show the strength of leadership.
SPEAKER_00That is exactly what we mean when we talk about being creative and developing a solution. The issues you are dealing with right now are universal, whether you are marketing a product, supporting a product, or delivering a service. These questions are always going to come up. Executive leadership is looking for people who get involved in creating solutions and bring forward problem identification approaches that show foresight within their own ranks. I think this is really critical to talk about how important it is to develop your staff and promote from within. That's what they mean. People who understand the process and the expenses are going to be leaps and bounds ahead of someone who comes on board and needs six
The Math Behind Big Expenses
SPEAKER_00to nine months to understand the nuances that people in the department have seen for a decade. The key is helping people make the transition from being voices of the department to becoming leaders. That means teaching them how to lead and how to communicate. And if you are the supervisor or you're the manager, you know when people within your department are giving responses that show signs of leadership. But the question is, what are you doing to develop that talent?
SPEAKER_01And there are some of the concepts that we've always talked about in terms of MBR that help reframe how leadership challenges itself to take responsibility to become the cause of the solution. And I'm using that word intentionally. That simple shift is the focus of what the most important part of the idea that we're trying to discuss in this podcast. Engage your people around the problems, around you. Encourage them to look beyond just the obvious. You're asking people to take ownership of the problem and become part of the solution. And I should add, recognizing these people will help develop not only a solution, but you can see that their voices matter and they are part of the end result.
SPEAKER_00So, next is the idea that being a solution is sometimes defined by the difference between conformance and achievement. By coaching individuals away from simply defining their conformance or meeting the bare requirements of the job, you help them step into an environment of achievement. That means taking initiative and developing the kinds of results we're talking about.
SPEAKER_01And probably the most effective approach that I have found is something that we have talked about in other podcasts. If people are going to try to formulate a solution, they need to understand the problem. And there's a wonderful framework that's called Situational Background Assessment and Recommendation, or SBAR for short. This is a formal identification process that makes clear recommendations and it is an excellent communication tool. Problems are often identified and solved within one meeting. I think SBAR reports in advance of an executive meeting also help resolve issues. I wanted to give executive management an understanding of who participated in the meeting and who was truly the owner of the solution. I wanted to make it clear that I was not the person who generated the response that made the situation better or found the solution, that it was my staff. And by using this simple approach, I was able to show and give the recognition to the talent within my department.
SPEAKER_00So there's another real benefit to what you've been talking about, John. It is the ability to rise to action and actually cause a shift in mindset.
Engage Staff To Lower Costs
SPEAKER_00So picture a newly appointed division director who halts the blame game during a heated status meeting. Instead of accepting excuses, the leader states the intent and declares the specific result the team needs to deliver. And this is a leader engaged in the process who will also hold one-on-one discussions with managers to shift their focus back to their own sphere of control. They are encouraged to drop defense explanations and begin drafting actionable, value-added steps. That helps them become productive and learn from an environment that could have exploded right in front of them. So being the vehicle to create a solution can be straightforward, but it is not easy. You need to understand the impacts and the environment surrounding the issue that need to be solved.
SPEAKER_01So let's pull this all together. The first step in being a change agent is finding the solution and understanding the environment that you're in. What does that mean? Understanding what is in your budget and how the budget works in the first place. And before you start making recommendations without understanding the impact to the budget, you are not going to make a suggestion that's going to carry any weight. You also need to understand that you need to make the solution digestible. Techniques like the five-year plan can avoid those emergency funding moments where they blow out an annual budget, especially when the request is a significant impact to the entire organization.
SPEAKER_00So, from an MBR perspective, it is also important to understand the nuances of how leaders can become bottlenecks. Using techniques such as shifting from effect to cause, understanding the difference between conformance and achievement, and developing structured solutions is critical to building the right perspective. You know, the one thing that holds true is this if you are in a leadership position, you're going to be put in situations where you must develop solutions. These are the tools that can help you move that process forward effectively.
SPEAKER_01So that sums up our podcast on creating a solution. And I hope that the outline is giving you a different perspective on how to become a change agent for your organization. The person who does more in terms of identifying
Tools Resources And How To Reach Us
SPEAKER_01the problem will understand and find those creative solutions. So if you like what you've heard, I've written a book called Building Your Leadership Toolbox, and we talk about tools like this. And it's available on Amazon and Barnes and Nouble and other sites. The podcast is what you've been listening to. Thank you so much. It's also available on Apple, Google, and Spotify. A lot of what we talk about is from Dr. Durst in his MBR program. If you'd like to know more about Dr. Durst, you can find out on SuccessGrowthAcademy.com. And if you'd like to contact us, please send me a line. That's Wanto75 periodjw at gmail.com. And the music has been brought to you by my grandson. So we want to hear from you. Drop me a line. Tell me what's going on, what you like, and what you would like to hear about. It has always helped us to create content. Thanks, Greg. This was fun. Thanks, John. As always. Next time.
SPEAKER_00Yeah.