S2:E08 Organizational Management + Optimization

S2:E08 Organizational Management + Optimization 

Liberty Leadership Institute Workshop Podcast hosted by Jeffrey Ganthner.

This month Jeff discusses the types of things leaders will manage, including corporate culture, management systems, operational systems, resources, products and services, and markets. We’ll also look at how to optimize our performance with Six Sigma, ways to minimize waste using the LEAN approach, and combining those ideas for continuous improvement with Lean Six Sigma.

Jeffrey W. Ganthner, DSL, AIA has 30 years of professional experience launching and leading organizations filled with architects, engineers, construction, and technology professionals. In addition to his architectural and engineering degrees and professional licenses, he has a doctorate from Regent University in Strategic Leadership and currently serves as a professor at Regent University teaching classes in leadership, organizational design, development, and optimization.

Transcript

SPEAKER_00 0:03

Hello and welcome to the Liberty Leadership Institute Podcast, a marketplace ministry of Liberty Live Church. My name is Jeff Gantner, and I serve as the director of this relevant and timely ministry as we look for ways that we can serve God in the marketplace. In this podcast, we will be discussing organizational management and optimization. As always, please follow us and give us an awesome review on your preferred podcast platform. This helps us to get the word out. Let's begin with prayer. Lord, I pray that you will use this podcast for your glory and that we develop a closer walk with you as we strive to thrive and leave a legacy with our businesses, family, church, and community. Thank you, Lord Jesus. Amen. Well, let's begin. Well, this month we're going to be talking about organizational management and optimization. And if you're new to this podcast, each month we discuss a different topic related to business and related to the Bible. So we believe that the Bible and business are intertwined. And part of the reason is because business is God ordained. If you think about the Bible for a second, you think about it throughout the entire Bible, it talks about Jesus. It also talks about leadership, but it also talks about money and business relations. So when we look at leaving a legacy, something for our heirs, something for our other businesses to leave behind, we think about the word legacy itself. Well, that's that's an L. It starts with lead, then engage the E, then G, give generously. The A is accountable, the B is competent, is the Y is to say yes. And that's what we think about when we think about legacy. It all begins at the beginning with legacy. And how do you leave a legacy? Maybe leaving a personal legacy. Maybe you're leaving a legacy with your time, your efforts, your stewardship in different areas that you serve in the community. About your spiritual legacy or your professional legacy. We all think about legacy differently. We kind of look at legacy as being all those dimensions: personal, professional, social, material, yes, and spiritual legacy. This all begins a little bit with leadership as well. Are you a leader that's at the top of an organization? You're the functional leader of an organization. Are you a leader in the middle, or maybe a leader at the bottom? You can be a leader wherever you are. And God has asked you to be a leader wherever you are as well. So if you think about leadership, you don't have to wait. You can be a leader today. Winston Churchill says success is going from failure to failure without a loss of enthusiasm. And all those things are relevant. That's what we talk about in this podcast. So let's begin. Let's dive in, okay? So in this podcast in organizational management, um, we often look at how do you build a team. And there's a book by Patrick Lyncini that I referred to before, um, that I've done it before in previous podcasts, but I just need to go over like it for like 30 seconds just to remind everybody and set the tone for today's session. So in this book, he talks about building trust, learning to trust others in your organization. He talks about conflict, how to master it. And you want to engage in conflict around ideas, not people. Talks about making a commitment. Once decisions are made, you're rallying around them as a team. Holding each other accountable is another big one. And then finally you can get results, and those are focused on achieving collective results. Those are not individual results, but collective results. Also, I want to visualize, we've done this before in the previous month, about this canoe where maybe your business might be a canoe or your organization might be a canoe. You have a few people roaming in the direction you want to go. Those are called your actively engaged. And Patrick Lilanciona says it's teamwork that remains the ultimately compet ultimate competitive advantage, both because it is so powerful and so rare. So those three people are rolling hard. But maybe you have two people in the boat that are kind of rolling against you a little bit. They're actively disengaged. They're doing things that undermine you, undermine your leadership, undermine your business. And you have maybe the 500 people in the middle that are just kind of the disengaged. They're they're smart enough to be in the boat, but they're not really doing what they're supposed to do. They get kind of by by the minimal, minimal part of their day, doing the minimal thing every day, not just not just doing it with anything with excellence, just being minimalist throughout their day. Your job as a leader is to focus on those three people that are doing a great job, reward them, encourage them, surround them with all your resources to get those two people out of the canoe, and to get those five people to make a decision, either start rowing or leave. You as a leader, do not try to minister or seek those actively disengage. Get them out, maybe you invite them to church, but you get them out of your organization. We've also talked a little bit about different types of team cultures. Maybe you're a collaborative or a clan type structure where everything is great as long as you do things together. Or maybe it's a do things first culture, or maybe it's creative culture where we're going to be successful by doing things first. Or maybe it's a marketplace-based culture, we're going to do things fast so the marketplace has to catch up to us as opposed to us catching up to the marketplace. Or maybe it's quality, high quality control, doing things right. Maybe your control type culture. Know the type of culture that you are and figure out how to best serve that. So when you think about organizations and building and optimizations, you look at the what questions, the who questions, the how questions, and the why questions. What are we going to do? What markets are we going to be in? What competencies must we have? What financial resources do we need? What kind of leaders do we need? What is our team culture like? Who are we going to serve? Who are we going to recruit and retain? The how questions. How are we going to be organized? How are we going to operate? How are we going to get better? And then the why questions. Why do we want to do this? And why do we need to do this? And then this is a recap, final recap of verse. Proverbs 22 29 says, Do you see someone skilled in their work? They will serve before kings. They will not serve before officials of low rank. And hopefully, you as a leader, as a business owner, as someone who's looking to maybe launch a business or an organization, you want to serve kings. You want to serve the great people that are doing things out there in the community. Um, one thing also is to um think about as we look at organizational management and optimization is this whole idea of being smart and being healthy. A smart company focuses on strategy, marketing, finance, technology, solutions, education. Those are all things that we think about when we look at developing a business plan. A healthy company also thinks about keeping politics to a minimum. This is office politics, uh, people striving to get better than somebody else. Keep that to a minimum. Have minimal confusion, make sure you have clear messaging. High morale, high productivity, low turnover. Turnover hurts. It's expensive to have people leave your organization and then to recruit people to backfill those positions. And then also developing great healthy leadership opportunities. Those are all things that healthy organizations do. Patrick Lincione says at its core, organizational health is about integrity. It is healthy when it is whole, consistent, and complete. That is when its management operations, strategy, and culture fit together. As a leader, what kind of organization are you building? How's your organizational health? Are you just smart, strategy, finance related, or are you smart and healthy? High morale, high productivity, low turnover. What are you building as an organization? Hopefully you're building an organization that looks to optimize both. So one of some of the tools for optimization, you've heard of Six Sigma, and Sigma is basically how many defects per million or something. So for example, a Sigma level one has 690,000 defects per million. So only 30.85% are successful. Only 30.85%, basically three to four out of ten are successful. If that was a batting average in baseball, you'd be a major league baseball player. But if you're an Amazon um competing company, you would fail miserably. A Sigma level two is three hundred and eight thousand defects per million, so sixty nine percent are okay. Sigma level three is sixty six thousand eight hundred or ninety-three percent's good. A Sigma level four is six thousand two hundred and ten or ninety-nine point three eight percent, and then five is two hundred and thirty defects per million or ninety nine point nine seven seven, and then finally sigma level six is three point four defects per million, or ninety nine point nine nine nine six six percent good. Amazon strives to achieve that sigma level six. It's not there yet, but it's trying to, it's striving to. Okay, so as you look at defects in an organization, where are you as a company? How good are you? How what's your yield like? Are you a sigma level two? Well, we'll look to be three. There is a uh diminishing returns as you go higher in the sigma levels. The difference between a sigma level two is 69% to 93%. That's pretty good, right? Well, 93% being successful as an opera as a doctor, that's only 93% successful. That means seven out of a hundred um operations or diagnoses have failed. Well, maybe you can be a sigma level four as a doctor where you're 99.38% successful. Less than one out of a hundred are unsuccessful. Maybe that's what maybe that's a realistic goal for you. But that's 6,210 defects still per million. Sounds like a lot, but it's very, very little. So where are you as an organization? Where are you as you where are you as an individual as you try to achieve um perfection? Again, we can't achieve full perfection at Sigma level seven, but we can try to move up to sigma level as an organization. Maybe you can set a goal from 30% to 69% to 99% at some point. When you look at why things go failing, um, you look at sigma levels, you want to look at a couple different things. And the first thing we're gonna look at is a tool called the five whys. And the five whys is very simple. It's it basically says, hey, if you can ask five why questions, you get to the heart of an issue. So, for example, you might ask your first question is why did that problem occur? Why did the stated problem occur? Well, why did the why occur? Why did the why why again occur? And why did the y a why again occur? Now it's very difficult to say through a microphone without showing you a graphic, but let me kind of explain it a little bit. Let's say that you were a manufacturing company and you delivered floor mats to companies, and you sent the wrong floor mat for a truck. You sent a Mazda MX6 as opposed to a model, a RAM 1500 um floor mat. Okay, that was the that's what was sent. Well, you you might say, well, how'd that happen? That's your first one. Why did we send that one? Well, it was mislabeled. Well, why was it mislabeled? Well, an operator picked up the wrong label. Well, why did the operator pick up the wrong label? Because there were several labels on the packup table and we put the wrong one on the wrong on the wrong mat. And the barcode scanner scanned the wrong one and thought it was the right one. And why did it do that? Well, we were batch ordering all the labels or printing them all at once to save time. Well, why were we trying to batch order them? You guys you get the idea to save time, to save money. Well, let's not do that. Those those kind of get to the heart of the problem. Well, what are we gonna do about this? So that's that's all about, okay, why did it happen? What are we gonna do to contain the problem? Well, if you're if you're concerned about quality and things, you might say, okay, what we're gonna do is we sent the wrong, wrong floor mat. We're gonna call the customer up and we're gonna overnight the correct correct one to them. So we overnight the correct floor mat to them. Um we give a return package for the um the one that they had we had sent wrong, um, or give it away as a gift. And then when we decide, okay, we're gonna employ processes and employ our industrial engineers to figure out a better process so that we can prevent this from happening again. So it's about containment and prevention. The five whys will usually get you to the answer. Another way to look at this, a little simpler, is to a thing called the root cause analysis. If you look at a tree, you see symptoms or problems. Maybe it's brown leaves, you might think it's a drought, or it might be disease. You don't really know. You gotta look into the roots to figure out what's really going on. If the roots are in soil that's all dry, you can probably figure out that, well, guess what? It needs more water. We need to put more water in our roots. Or if there's insects all around eating everything, well, you can probably look at it and say, well, we have an insect problem. So what are the symptoms? What are the leaves telling us? But that's not really the root cause. Get down into those root causes, maybe through the five Y's or through some other tool. When you look at problems, you look at organizational management, subconsciously there's five different steps you want to try to take a look at. And you want to move back and forth between these. Stage one, number one is define the problem. Stage two is generate solutions. Stage three is evaluate those solutions. Stage four, pick a solution and five. Stage five is make a plan. Again, you start with defining the problem, moving through generating solutions, evaluating, pick a solution and make a plan. Sounds simple, but people want to go right to stage five first. No, do the homework and the time it takes to actually define the problem and generate those solutions. When those solutions are generated, they don't have to be pretty. They can be minimal. They can be something that you know that will try to work a little bit. You don't have to be making a finished product. Make what's called a minimal viable product. Something that, if I can just mock it up real quick, I think this will work. Yeah, this will work. I know this will work based off what I'm mocking up. That's what you need to do to figure out a solution. You don't have to develop a final product to be able to set a course to your organization. Develop a product or a service or something enough so that you could actually tap into tap into your overall skills as an organization later to bring it to the marketplace. But you'd at least know the direction that you're going. That's called a minimal viable product. So when you Sigma is really learning about learning, lean six sigma is basically eliminating um defects. Lean is basically making things by reducing waste. When you put those two together, it's called lean six sigma. So lean is about focusing on reducing the following waste. Defects. Okay, that makes sense. It's kind of like Sigma. Errors requiring rework, overproduction, producing more than what's needed. It looks to eliminate waiting, idle time between process steps. Why is something waiting? Why is somebody in a process having to wait? Can we eliminate that time? Non-utilized talent under using employee skills. We all have people in our team that can be doing a lot more if we actually deployed them correctly. Transportation, unnecessary movement of materials. Um architects, when they design, let's say, um, kitchens, commercial kitchens, or even residential kitchens, they look at the distance between the sink, the refrigerator, and the oven or the stove. And they look at minimizing that walking distance around. Because it become if you can minimize it and make it efficient, um then your team members will have to be moving around a lot less. Saves energy, saves time. Removing the unnecessary movement is a very good thing. Inventory, maybe you have excess product that you have to store, maybe condition that product. Motion. Again, it's similar to transportation, but a little bit different. This is unnecessary movement of people. So maybe you're moving people from one area to another area as a whole. And there's extra processing. Maybe there's some forms or some procedures. They're just redundant. You don't need them anymore. You can remove those completely. When you look at setting lean goals, um, you want to think about the word SMART. Um, it's an acronym. S stands for specific. Make things specific about what you want to try to achieve. Ask yourself questions about your goals. Kind of like the five whys. You can also ask who questions, the what questions, where questions, how questions. Make it measurable, the M. Make sure that you can measure your success. You'll be able to track your progress by answering questions like how will you know when your goal is complete? The A, achievable, ensure your goal is realistic and achievable. Don't set yourself a goal that's too easy or too difficult to complete. Definitely don't make it too easy, but also definitely don't make it too complete. You know, too difficult to compete. Because it what happens then is that you're not being realistic. You're not you're not challenging your team enough, and sometimes you might be overchallenging your team. Make sure that it's done correctly. Look at your current situation and make sure you have what you need for success. The R in SMART is make it relevant. Set yourself a goal that is relevant to you. Not some goals for some other organizations. What are your goals? What are those things that are needed? And the T is make it time bound. Okay, make it time bound. That's SMART. There's one more tool I'll look at when you look at optimizing an organization from Sigma to Lean to the five Y's to cause symptoms to SMART. There's another tool called the five S's. The five S's are pretty simple, pretty simple if you think about it. You want to start with sorting, eliminate what is not needed. That's the S, the first S is sort. Eliminate what is not needed. The second S is set in order. Straighten. Organize what remains after sorting. Okay? So what do we have to what do we have to remain? Let's organize that. The next one is called shine. Keep the workplace clean. It's an essential part of maintaining the most effective workspace possible. Don't clutter it up, right? Keep only the items that you've sorted and that you've straightened. Don't have any other items in that area. Standardize. Develop assistant procedures to maintain and monitor the first three S's. Keep it simple, not overly complex. Don't have a form to fill out forms. Forms, if you fill them out, make sure they're relevant and make sure they're actually useful and it's not make work. And then sustain it. Sustain the process is viable as taking a week or month or more to properly get everything in order, only to have it all fall apart six months later is going to accomplish nothing in the long term. Make sure you can sustain the process. Again, sort, straighten, shine, standardize, and sustain. Those are those things that are the five S's. So again, what is lean six sigma? It's basically putting lean and six sigma together. Lean improves business productivity. Sigma improves business productivity by reducing variation. So you put those two together. You have lean six sigma, which is improves business productivity through reduction of waste and variation in the process. Focused on quality improvement by increasing flow and solving problems. It uses both observation techniques of lean and statistical analysis of Six Sigma. It uses them both. Okay. You can look it up. There's a lot of great YouTube videos out there on it. But it's basically a process that's similar but a little bit different. It all starts with involving your employees. So you involve your employees first to identify a problem that they analyze, that then solutions are developed, then you implement a solution, then you analyze the result of that. If it's successful, you standardize it. If not, guess what? You involve the employees again, you identify the problem again, redefine it, analyze, develop, implement, analyze, standardize. Do that process over and over and over again. It's a great way to learn. It's great for your team to learn, and a great way for your team to bond as well as you're going through a process. So what is so when you look at the Kaizen approaches, what is the general strategy? What's our problem statement? What are we going to provide for background? What goals are we going to have? What's our current state of the process? Where are we strong and where are we failing? Can we develop a plan for improving the issue at hand? Can we actually implement this plan? Can we review and work and improve what is not working? And can we report our findings? An acronym for this is PDCA. Plan. Makes sense. Establish a plan and the expected results. D is do, take action. C is check it. And the A is act. Plan, do, check, act. Again, it's a process, similar in order. Plan, do, check, act is a simpler way of looking at things. Those are all great methodologies when you look at optimizing a business. There's a concept, the final concept I want to leave you with today, this idea of strategic foresight. And when you look at strategic foresight, it looks at things that are out there that you can't control and makes a plan for them. For example, in the 2024 election, um, I did not know who was going to run for who was going to be um running for president, even, much less who's going to win the presidency. So I kind of had some jot down some notes for our business at the time about how we would act differently. We served with the federal government in several capacities. If one person won the presidency, what things we would change or do. If the other person ran won the presidency, what we would change or do keep on doing. They were subtle, but there were some differences, and we identified those. That way, after the election was decided, we knew exactly how to operate our federal business, regardless of who won. We had a plan for both. Well, that involved us looking at the political landscape, the elections, right? Knowing that we can't control it, but we're going to be we're going to be impacted by it. What are some economic factors that might be impacting you? Maybe the financial markets, maybe your business is susceptible to interest rates. What about social, uh, the morals, the values, um, the demographics in your area? What about technology? Well, if a new technology comes about, you know, seven, eight years ago, we we knew what AI kind of was. Now it's it's it's on a whole other level. What's it going to be like in seven or eight more years from now? What's it really gonna do for us? What about the legal? Are there court cases or rulings or regulatory rulings that are out there that impact your business? And then environmental, again, similar to legal, but maybe there's some advocacy or some other things that are happening from an environmental perspective that up that um impact your business. Well, you can't control any of those. Many, few of us can control any of those things. But you can look at what it is. So you're looking around the court, that's strategic foresight. You're kind of making decisions based off of what you're seeing out there, you're making a forecast, then you can develop a vision, a plan, and then finally act, right? That that plan and doing, right? That plan and doing. But you've got to be able to figure out what that is going in at. So one example you might want to do with your organization is pick a topic that might that might change in the future. So I'll pick a topic for this podcast. AI is gonna dominate in the year 2030 or our pretty much every part of our business world. Okay, well, that might be realistic, right? It's only four years away and we're seeing the impacts of AI right now. So if AI really does impact us, okay, what's a first order consequence? What's the first thing that's gonna make that's gonna happen? Well, if AI dominates this business, then this will probably happen. Okay, well that's a first order. And if a first order thing happens, a second order is what happens then? And then a third order is what happens if it happens, right? So basically you can keep on mapping this thing out, maybe two or three orders, maybe as deep as you need to go. But how do how do you uh how do you identify the trend? How do you understand a trend and how are you able to predict and then adapt to it? Because you can't control AI, but what you can do is figure out how AI can impact your business and make a plan for that. And you can use strategic foresight to help you, okay? And you dominate you dominate then your thinking with we're gonna be making a plan regardless of the situation, even if we can't control that situation. Okay? Identify the change, use your first order consequences to direct action, the second order consequences to in fact influence you and third order if you like, analyze them, and then find new actions. So it's a cycle. That's how you better manage your organization and optimize your business. So we talked a lot about a lot of different subjects here today. This is kind of this wetch your appetite. Um I will I encourage you to look at it deeper. Um, organizational management optimization is is a large topic, but these are some things that maybe you've heard before, maybe some things you haven't heard before, but I encourage you to dig deeper into these areas as well. We all need tools to help us run our business. Hopefully, today I've showed you some tools for you to dig deeper into. The five lies, the root cause, five stages of problem with solving, the lean six sigma, minimal value product smart. Um, looking at Kaizan as well. Thank you very much for your time. Until next time, God bless.