The Cost Management Center Podcast
The Cost Management Center Podcast is dedicated to helping its listeners manage organizational costs to make their companies perform better, innovate more, and… of course… become more profitable.
In this podcast, we explore a wide range of methodologies and advice to reduce the company bloat and waste that creep into all organizations and stifles growth. Our focus ranges from broad strategic concepts, to specific industries, and even down to targeted spend and vendor categories. The common thread is that all topics center around reducing costs.
The podcast is hosted by Duane Deason, author of Operationally Svelte: Manage Costs to Increase Profit and Enhance Performance. Duane has dedicated his career to helping companies reduce waste and inefficiency as a catalyst for reaching their full potential.
The Cost Management Center Podcast
The Art and Science of Continuous Improvement with Keith Norris, CEO of KPI Fire
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Is continuous improvement an art, a science, or something else entirely? In this episode, I sit down with Keith Norris, CEO of KPI Fire, host of the KPI Fireside podcast, and author of Fire Starter: How to Ignite Improvement, to explore what separates organizations that talk about progress from those that actually deliver it.
Keith makes a compelling case that continuous improvement requires both disciplined systems and genuine cultural commitment. We discussed why so many improvement programs fail to deliver cost savings, how leaders unknowingly sabotage execution by tracking the wrong metrics, and what it takes to connect strategic goals to the daily work that drives real results.
For cost-focused leaders, this conversation offers practical insight into building an improvement culture that produces quantifiable financial benefits — not just activity, but progress. Listeners will walk away with a clearer understanding of how the right framework turns continuous improvement from a well-intentioned initiative into a sustained competitive advantage.
Connect with Keith:
LinkedIn: https://www.linkedin.com/in/keithnorris/
Find more from Duane:
Email: ddeason@efficacygroup.com
Website: https://efficacygroup.com/
LinkedIn: https://www.linkedin.com/in/duanedeason/
Buy the Operationally Svelte book: https://efficacygroup.com/company-efficiency-book/
My name is Dwayne Deeson, and I am the host of the Cost Management Center podcast. I am also the author of Operation Svelte: Manage Costs to Increase Profit and Enhance Performance. In this podcast, I interview experts and leaders in order to give my viewers and listeners the opportunity to learn about how to manage costs in their companies and organizations. Welcome to another episode of the Cost Management Center podcast. I am your host, Dwayne Deeson, and I have a great guest today. I have Keith Norris. He is the CEO of KPI Fire. He has an application, and his team has documented over $2 billion in savings. And so I obviously that gets me all teary-eyed. He is the host of KPI Fireside Podcast, and he is also an author of Firestarter, How to Ignite Improvement. Welcome, Keith. Hey, Dwayne, thanks so much for having me. It's a pleasure to be here. I'm so excited. Now, Keith, I always start my each podcast with letting the audience know a little bit about yourself. And I see your background. You have you started with your roots in some real estate, then you got into software development. And where did continuous improvement, which is a big theme of yours, where does that come from?
SPEAKER_00Why how did you catch on fire about that? I mean, if we go way back, I think continuous improvement is just a core value for me. And when you know you hear words like growth mindset and being an achiever, that that probably resonates with me. I mean, I've been an entrepreneur really my whole life. So started my first business um in high school, I think, like making stuff for lawn ornaments. So I've been kind of an entrepreneur all along. Got into software about 20-something years ago and just loved software. I loved the opportunity to work with so many different companies and people. Um one of our first major successes in the software business was working with the Franklin Kovey organization to take the time management methodology behind the the planner to an online edition known as Plan Plus, and you know, evolved into the business improvement and more enterprise software with KPI Fire. And that's really where my focus has been for the last, you know, seven, eight years is helping uh a lot of large companies, just just um not that we don't like to work with small ones also, but large ones is where you just can have a great impact on these business outcomes. And I find it to be um tremendously rewarding and and fun and engaging because I get to work with so many great people who are making like uh significant impact on the products that we all use every day. You know, we have a lot of emphasis in like the manufacturing arena, so it's fun to come across products in the grocery store when you know we've seen like the the improvement projects that help those things come to market.
SPEAKER_01That's fantastic. Yeah, I love the idea that it's what what can help a company actually can also help you as an individual. So if you have a mindset of continuous improvement, it's something that you can carry over into all aspects of your life. So I I I think that's a great, a great theme. So we're gonna get into your platform a little bit into the details here, but I always like to start at the top. And and one of the things that I I've read about and uh heard about from your different podcasts and writings that you you believe it starts at the top. Yeah, and and I think that leadership aspects and culture is is a huge part of every organization. And I want to kind of start there because it's a little bit of a pain point for me. Um many times I I think I go in and and leadership and and culture is always an issue, and and the leadership can be the hardest to change. So how do you usually uh tackle that? How do you usually approach it? Um, and it and do you as you find that that uh that I'm consistent is that they are uh oftentimes have to change their own mindset uh to improve a company.
SPEAKER_00Yeah, I uh culture is uh a topic that I uh have spent a lot of time thinking about and I I have some very particular thoughts about. Um I'll start with just a definition of culture, which I really like. It's really simple, is the way we do things around here. So in a company, the way we do things around here varies from company to company and from leader to leader, but that's probably the simplest definition that I've come across. Now, within that, I've been a student of a lot of different methodologies over the years. I mentioned, you know, the Franklin Covey, like the time management methodology, um, you know, from personal productivity, things like uh David Allen's getting things done as a productivity methodology. And then more recently, things like balance scorecard and OKRs or Lean, Six Sigma. So there's a lot of these methodologies. And I think that what those methodologies tend to do is put some labels on a way of thinking that helps a group of people have a bit of a shared vision around like the way we do things around here. So the culture of an organization, sometimes you'll see like um sometimes they'll just bite buy into like a particular particular thinking, like lean. Like this is a lean organization, and that's a a methodology that has a whole bunch of meaning behind it. But even if you've got something like uh a very common methodology like lean, there's still like every company is at a different place in their evolution. So that's one of the things I find most interesting about working with um companies. And I think that a lot of times people underestimate the the differences between organizations at where they're at in the path. Like I see a lot of people who maybe leave one company, go to another company, and because their old company did things a certain way, they assume that that's the way that it's done. And the truth is, is that there's thousands of little decisions that leaders need to make about how we're gonna do things around here that you know you need to spend time on. And that becomes part of the culture. And, you know, tying it back to the cost savings piece, like that is something that has to be part of the regular rituals that you build into the structure of the organization to avoid, you know, nothing makes me sadder than to hear these like thousands of layoffs at such and such company, you know, because it just feels like, oh man, somebody just didn't get ahead of that. Somebody didn't figure out how to make the improvements that they needed to at the at the right time.
SPEAKER_01And how do you impact leadership with that? So you go in there and this is how we get things done, and the and you talk to leadership about that. And during that process, you find that, you know, uh admittedly, they don't always do things well. I I've I go through various uh aspects of my book about um you have uh by crisis management type of management teams, you have you know uh management teams are very easily distracted, you have some that are just visionaries and don't know how to do be doers and how to get into it. How do you introduce that to them in an effective way that they actually not only hear you but are willing to make change? Because I I the hearing part is actually usually not the hardest part, but trying to get them to actually take um uh meaningful change that will ripple into the culture of the company. And I I have not always been successful in that.
SPEAKER_00You know, there there's a few frameworks or mental models that I I tend to turn to quite a bit. Um there's there's seven strategic goals that you know uh uh with our work with KPI Fire, we work with a lot of companies, we see a lot of strategic plans, and every strategic plan is unique and different in its own ways, but there's seven like very common themes that that we see in those. And you know, with within those seven themes, and I can get into that in just a minute, I mean, growth is definitely one. Almost everybody has has a objective of some kind to grow, either revenue or profit. And then the other one is what I would describe as like um cost management or improv improv IBITA. And then you've got things like you know, improving culture, everybody wants to have a great place to work. You've got um, you know, improving like customer outcomes, that of course is a good one. You've got um legal, regulatory compliance, that's always you know part of the portfolio. Sustainability is in in some companies a bigger priority than others, reducing risk, particularly, you know, if you're an insurance company, of course, most of what you do is about reducing risk, right? And then the last one, which sometimes gets blended into the other ones, is and this is where right now AI fits, right? Everybody has an AI initiative, but I would just call that innovation, like how do we make the business better? So another kind of model that I think of a lot in when it comes to strategic planning is every leader has basically two buckets to put things into when it comes time to create a new strategic plan. These are the things we're gonna maintain, and these are the things we're gonna try to improve. And depending on your role and where you sit in the organization, you know, maybe you're up to your eyeballs in just maintaining the current state, you know, you might be 95% focused on just the maintaining stuff, but some people in the organization need to be thinking about um how to how to improve. And um one of the things I like to say about leadership in general is number one, the number one job of a leader is to make things better. So at the top of the organization, that starts with somebody needs to set a target. Like what do what how are we going to make the business better this year? And again, a lot of times that falls into those seven areas, depending on the size of the organization. Um, you know, you've got a lot of different things that you can choose. The the most popular one, the easiest one to measure for any CEO is did you grow revenue, did you grow profit? Right? Like that's the easiest way to measure. Um, you know, everything else can can drive that. And that's probably one of the areas that I I sometimes wonder why companies don't do a better job of setting those targets, even if though, even if they don't know how they're going to get that three million dollars in bottom line improvement, put the number out there. You know, you can you can find benchmarks and industries, and depending on where you're at, is you know, what percent of total revenue should you be trying to improve. If you just set that number and put that number out there and share that number with the different departments and and places in the organization, that's probably one of the simplest things is just set the target, you know, come up with a number.
SPEAKER_01I I don't I love that. That the the number number one responsibility of a leadership is to improve the organization. I I I think that's that's very meaningful. And I think a lot of leadership they get so caught up in their tasks where uh you know you have a CFO that thinks that you know maybe financial reporting to the SEC is their number one, or or cranny budgets or those type of things, they don't and they don't think of it that way. And if you break it down, it kind of helps them to realize that they have to be part of the solution. I really like that. Uh that's basically.
SPEAKER_00Yeah, I love that um maintain versus improve because you know, without somebody pushing us, like, how are we going to get better? I think it's just human tendency to to to kind of like get lulled to sleep with like, this is my routine, you know, and this is probably more a challenge for certain personalities than than others. There's certain personality types that really like the routine and the rituals. You know, as we as we talk about some of the best practices that I see across organizations that, you know, we mentioned the billion dollars in savings that we've helped participate in, you know, this these companies that are generating the savings, we're not necessarily doing the work. We're just they're just using the software to help keep track of it. So they're doing the hard work. But there's definitely some success patterns that I see repeated. And one of them is that they start with a number. They have they have a number, sometimes it's a million, sometimes it's five million, sometimes it's fifty million in terms of business improvement savings. And then they typically will break that down at a what we would call just a department level. Sometimes that's a business unit, sometimes that's a cost center, depending on the organization. And then they go to those organizations and say, hey, this is a number we think we can get. And sometimes that's very well informed. Um, for example, a CFO in a company with five different plants that's that are all making the same thing. If you see one of your plants that has like maybe an electric electricity cost that's way outside of everything else, you can look at that and say, hey, why are we spending twice as much on electricity on this plant versus somewhere else? And you find out that, oh my gosh, we're using 30-year-old bulbs in in our plant, you know, to just like consume you tell me. So that's one thing that's really nice in bigger companies, particularly, is you can start to see these differences across um similar plants. So that's one of the simplest places to look for cost savings. And that's something that usually the finance department has some great visibility into, and they can go to that plant manager and say, hey, we think you could save $200,000 on electricity cost because we've got four other plants doing the same thing with similar productivity numbers, and they're spending a lot less. And so you can you can kind of give them some hints and some direction. Um, another one are are things like just cost to poor quality scrap and rework. These are some areas where you can, you know, quickly find some real improvements in cost uh as well.
SPEAKER_01Uh, you couple things there that just trigger thoughts and questions that I want to, I'm not sure which to prioritize, but I want to stay big and then I'll get to get down to a little bit how you calculate savings and hard savings versus soft. But but first I want to say uh a little little high level um because you did also mention about the size of a company. And uh is there some aspects that you see a lot in the whether it's different culture and their different ability to change in larger versus smaller, maybe I know you have some international presence as well, so you see different cultures of uh internationally that are that are more able to accept uh change and continuous improvement versus other organiz other places that are are not so much. What what what's your experience?
SPEAKER_00If you're in an organization that hasn't had much change and then all of a sudden you come in and you know you've got some new consulting organization or some leadership change that comes in and you know that that's a lot of times how it manifests, right? New the company was acquired or there's a new new CEO or new lead senior leader somewhere, and you know, everybody kind of gets on edge. So that that can be a time for a lot of disruptive change. What do they say? An ounce of prevention is worth a pound of cure. I think if even if you're in an organization that doesn't um really have a well-structured improvement program, I think that this is that lesson to every leader. I mean, if you're a leader, everybody I've ever talked to wants to get paid more money for what they're doing, right? And the only way, when you look at the dollars and cents of how that all works out, the only way to pay the people that work for you more money is to grow the pie, right? You've got to grow the size of the business, you've got to improve productivity, you've got to, you know, there's so many ways that you can improve the business. Even if you can't increase revenue, you can reduce cost. And so I think that's actually a responsibility that every leader can take some ownership on. I mean, of course, if you're in a very big company and the CFO says, hey, we need you to save X hundreds of thousands or X millions of dollars from this PL that you're responsible for, like you've got a target. But I think that's just a responsibility of a good leader is like, do the math. What do you cost the organization? And are you making the organization better every year because you're there? And you know, that I think that mindset is one that just it's good for job security, really. Particularly in a time where, you know, there's a lot of uncertainty about about jobs and whatnot. I think the people that are at least thinking about, hey, what's the value that I bring to the organization and how can I make sure that I'm bringing more value than I than I did before, is just a you know, it's a good mindset. Oh, I I very much agree with you.
SPEAKER_01Very helpful. And then what about um, so let's let's do that little dive down because you um but to that one point I made earlier, or question I had earlier about um hard savings versus soft savings and how you help a company measure that because sometimes you can uh one very identifiable and measurable savings can can ripple and and be three or four X when you consider the full impact of that. And so maybe explain that a little bit more to the audience.
SPEAKER_00First of all, is have a savings target. And then some things that you do to improve the business have um different categories, you know, different ways that you can measure the impact. So the way I I tend to think about things is there's like three layers of benefit that any business improvement project can have. And the first one is a financial impact. Like if you're gonna, if you can just reduce the cost of something, that's immediately drops to EBITDA. That's a brilliant improvement. You know, usually if you can increase the revenue without also increasing the cost more, that's usually a pretty good thing. So financial is always the simplest way to justify an ROI. Hey, this thing's gonna cost us $10 and it's gonna make us $100. Or this thing used to cost us $2,000, now it's gonna cost us $1,500. Those are the easiest things to say yes to. They're the easiest things to put on your resume to celebrate a win for. Then below that you have a layer that I I think of, I just call them key operating metrics. They're they're not necessarily the financial parts, but they're the things that drive the financial. It's the uh the lead time, productivity, it's the cycle time. It's just it's it's culture, it's customer satisfaction, it's all the things that really drive the revenue and the cost inside the business. And then the third layer of project benefits that I think of are just what I would call enabling projects, things that you just have to do so that you can do those other things. So I tend to think of things in those three buckets. A lot of the people that use KPI Fire and some of the best practices in the organization, when they make a business improvement, um, the thing that I would say is a standard that I see across lots of industries and lots of companies is this idea of a 12-month window. So if you're gonna make a process improvement, some of that benefit is gonna start accruing as soon as you make the improvement. And some of it's gonna take some time. Some of those benefits are gonna stack up. The best practice that I can share confidently with anybody who's saying, hey, how do we judge how do we value these improvements that we're making? If you look at a 12-month window on most of those improvements, that's the standard. That's what most companies will do with process improvements. Um, if you're saving $100 a month or $100,000 a month, value that for 12 months, call that the improvement. So with that's where I'm talking about with this idea of savings. Every sort of process improvement work that you do, um, there's a way to calculate the savings and put it into a dollar. And some of those savings are gonna be hard savings. And I would describe hard savings as something that really quickly shows up on your PL or your balance sheet. It improves working capital, it improves cost of goods, it, you know, it improves productivity. Maybe you need less variable labor hours to get those things done or you get that service delivered. And then the other thing is gonna be um soft savings. And you know, there's there's a lot of conversations. We have a very popular post on our website about hard versus soft savings that you know people can go look at because there's there's no shortage of discussion about what is hard and what is soft savings in different different industries. And I just I think that soft savings are just the amount of time that you give it before they show up in your financials. Because you could say um we have some customers that are in the mining industry, and some of their really important metrics have to do with um stakeholder relationships. For example, some of these mines are on um indigenous lands where you've got to maintain healthy relationships with the people that that own the lands or external stakeholders. You can get away with having some negative externalities in your business for a little while, but if you continue to do that for a long time, um, you know, absolutely the threat of shutting your company down is very real. That has an uh a big impact on your PL. So the difference between hard and soft savings is really just how short of a time frame you have between that where those costs start to come into your business. Um and I mean if it's if it's gonna affect your PL in the next year, that's a pretty good uh line that I would say for hard savings.
SPEAKER_01That's great insight. So let's let's talk a little bit about how you get started with a company and your app and your application and and uh how it benefits a company. Sure. Is there a standard methodology and client that uh process that you you go for every client, or do you have to kind of customize it? Um and so just talk a little bit about how you get started with a company and and uh and then where your application comes into play.
SPEAKER_00Yeah, sure. So so KPI Fire is uh we would describe it as strategy execution software with three main elements. You know, line strategy, drive execution, engage people. Um the the ones that are the best fit. I mean, every company needs to have a strategy, every company needs to have um business execution rituals, you know, monthly reviews, weekly reviews, that sort of thing. And hopefully every company is involved in finding improvements from people closest to the action, you know, sharing ideas, working projects through structured problem solving. The places where we are really focused right now and where we have like the fastest ability to implement and make a difference is um typically like larger manufacturing or mining companies that have multiple sites where they do have a specific number that they've set. We want to save 10 million, we want to save 25 million, we want to save 2 million, and they come in with a number, put that number in, assign that to the departments, and set up some some key operating metrics depending on the tar the department that they're in, so that they can you know keep an eye on various metrics. And then KPI Fire has um a feature we call the idea funnel. So the idea funnel is this place where anybody that you open it up to in the organization can can um hopefully be trained on what to look for in terms of cost savings opportunities or what to look for in terms of waste. You know, waste is always the the first place to look for where where can we save? You know, where are we spending money that we don't need to? You don't want to take money away from things that are. Driving value, but most often it's just the things that are the things that are wasteful. So for organizations that have um trained people to look for waste, which we find it goes really well with like uh a Lean Six Sigma methodology established where they are doing some training, you know, with like yellow belts and green belts, where they're teaching people in the organization what waste looks like, what inventory buildup, you know, what that means to the organization, why having huge piles of inventory waiting is not a good thing, why having long cycle times is not a good thing. Because a lot of times a lot of the business improvements can um can be focused on those areas and and make things better. So and again, I would say that in a typical implementation with KPI Fire, because we have this idea funnel, there's this opportunity to collect ideas and then turn those ideas into projects, run those projects through like a structured problem-solving approach, and then identifying the financial benefit. So not every idea that comes in is gonna turn into immediate um financial benefit. In fact, one really funny one that I saw in in an idea funnel was um change the bathroom fan. Like, okay, like that's probably not a cost savings advice. Maybe that's gonna improve productivity, but maybe that's just order productivity a little bit better, right? Like, you know, we probably would describe that as a just do it, like, yeah, that's more of a maintenance request, just do it. But when you start asking people for ideas, they'll they'll come up with all kinds of ideas, and some of them are brilliant and some of them are terrible. Um, one of the ideas that that we featured on our website was a simple idea that Walmart implemented around changing the height of a step stool. And you know, their their math on this thing was the the time savings, this was you know, probably soft savings, the amount of time where they were able to increase productivity was a $30 million impact over changing the number of steps that they had on a on a particular piece of equipment. Uh-huh. So it's like, you know, depend depending on the organization, big organizations, little changes can have you know a bigger change. But every little improvement counts. And when you teach people to look for waste as as part of the culture, and you make that, you make those questions part of the routine and the rituals that people go through, you give them opportunities to spot that waste and you build that culture. So hopefully you can avoid, you know, finding yourselves out on the plank, you know, where you've been not improving for so long. Now it's uh you know a major layoff or something is is required to get back on track.
SPEAKER_01You talked a little bit about uh kind of importance of setting some goals up front, and I think uh financial ones at that. Um and I and we also talked a little bit about uh the idea that almost human nature is at some point is just a kind of the status quo becomes some of the accepted norm instead of continuous improvement. So do you find that and once those goals, financial goals are set, that you have to have a carrot and a stick kind of approach where because some if if not, does that mundane and and uh routine type of thing? And and in all fairness, a lot of time employees are just damn busy. And so the idea of introducing another responsibility that they have to take to of this cost management project or this this in uh this initiative is overwhelming to them. So how do you how do you encourage, if you will, uh employees to really uh invest in this?
SPEAKER_00When I think about like my core beliefs, I believe that everybody who starts a new job today starts with the intention of being successful. There's very few examples of people that take a job knowing that, you know, I'm waiting for a better job and I take a job and then I get the other offer sure, like maybe that happens. But I think most people that take a job are optimistic that this is gonna be the best job ever. You know, nobody wants to take a job that's worse than the last one they have, very few people, you know, depending on where you're at. Um, you might take a job that pays less than one that you had in the past, depending on the situation. But everybody, everybody comes to the to that job that first day thinking, I'm gonna be great at this. This is a great fit for my skills. And then over time, sometimes that gets just worn out of people. I mean, there's you know, you look at the polls of like worker engagement, and that's that this is an area where I get pretty passionate and excited about the work because we we spend so much of our lives at work. It makes me sad to see people who are like disengaged or don't enjoy what they do because it just it just feels like such a waste of of human potential, really. So I think that it's really the leader has the responsibility to set the targets. And again, I I know that plenty of the businesses that we interact with are very serious and life and death is is you know a factor, but I think that it's a leader's job to help make the job uh, I would almost say like gamify, like make it fun. Like if if you know what success looks like, I I have not met very many people that I would like to work with on a regular basis who don't have this common pattern about their day. They like to come to work knowing uh roughly what's expected to them. You know, like they like to have a plan, a goal, like maybe it's a number. Hey, if I if I you know close these sales, if I ship these items, if I deliver this many hours or whatever, like I have some idea of what success looks like. I also have some autonomy in what the the way that I can do the work. I mean, not people don't love like you have to do it exactly this way and being told exactly what to do. That that kind of beats down the human spirit. And then they love to go home feeling a sense of accomplishment and having numbers, having metrics, having targets to hit is a key element of just having a good day. You know, like who doesn't love to go home at the end of the day feeling like you not only did you hit that target, but you beat it by just a little bit. You know, one of one of the questions that I ruminate on from a philosophy perspective is is it more important to uh be successful or feel successful? And and I think that that's you know, I mean, if you have one but not the other, you know, that's that's like, gosh, you're you know, you're really missing out. So hopefully you can find that that matters well. And I think that's where leadership has such an important job in setting targets. And the target could be um, you know, inputs, it could be outputs, um, it could be cost savings, you know, giving somebody a target to shoot for. Um you know, that that's why games are so fun, right? When you start the big difference between keeping score, playing, playing, you know, pick the game, right? Whether it's pickleball or pick up basketball or whatever, like having a score just helps us keep our attention a little bit more.
SPEAKER_01We're we're kind of we're competitive creatures. Uh interesting. Your application, it sounds like there's two core, and and I want you to expand on this if I if I'm understating it, two core aspects of it. One is is that you are tracking all opportunities for continuous improvement. And then you from that you evaluate which are your priorities, what it would take to invest in the company, resources. You you do all the planning once you once you uh capture these ideas and and track continue to track the progress within your application. And then the second one, it sounds like, is where you do KPIs, um, you know, the performance metrics, uh, all those other type aspects. Are those the two core principles within your application? Or is it more to it?
SPEAKER_00Yeah, KPI fire, there's there's I would say there's three main pillars there. One of them is what we call goals, and the goals are like, what do we want? So, and then those refer basically to those seven goal areas. So for a lot of companies, growth is like the overarching theme. And so we would say, okay, this company has a priority on growth. Then the second question we ask is how are we gonna measure it? Because growth is a great strategic alignment, but how are we gonna measure it? Are we gonna measure revenue? Are we gonna measure profit? Are we gonna measure number of customers? We're gonna measure number of employees, like you know, there's so many different things that you can measure. So you've got the goal, what do we want? The metric, how are we gonna measure it? And then KPI Fire has um projects and ideas. So an idea is just the early, the seed of a project. So the project is how are we gonna get there? So you've got a goal, you've got a metric with targets inside of it, and the project is the work that you're gonna do to close that gap. Because again, I I I asked this question the maintain versus the improve. Um, a lot of people, you know, if you do your budgeting based on, okay, we're gonna do the same that we did last year in this area, then I would say you're you're strong in the maintain side of things. Right. Right. Maybe you just need goals and metrics. These are the metrics we're trying to maintain. But when you have an improvement objective of some kind, and again, I have looked at enough of these strategic plans to um I the way I sometimes to describe it is like, you know, like you go to see the doctor and you're you're uh kind of nervous about this bump that you have on your back. You don't want to show anybody. The doctor's like, hey, I've seen it before, just you know, show me. So uh every company that we've seen has goals and metrics and targets, and so a lot of times they love to call them smart goals, but they fit into one of these seven buckets typically. And you know, the the best ones have metrics that they measure with with targets that are set incrementally, and then a set of um projects. And the project is where I I think the that by defining things as projects, the pattern that I see is that's where you get to unlock the human potential that exists inside organizations. And of all the forms of waste that there are, a lot of companies have high costs of poor quality and lots of scrap and lots of rework. But the number one form of waste that I see in every organization is the uh underutilized human potential. And having a structured problem-solving approach where people in your organization can can have a model to follow of what it looks like to identify something to make the business better, and then have like a structured plan to follow. We would call that a project plan, and then a framework for how to del how to communicate that in terms of business metrics that matter to the organization, then you can that's where this idea of culture comes in, where you create this culture of continuous improvement. You're recognizing people for their ideas, you're recognizing and rewarding them, whether it's financially or just in terms of um, you know, peer recognition that they're making an impact and making a difference. I mean, who doesn't love to make a a big impact uh in in the work that they do? You know, that's just that's just something that I think um even the people that don't have jobs where they feel like they're making an impact, I I believe they wish they did.
SPEAKER_01Now, in this, because we talked about you said most underutilized uh resource right now are are your people, and I I see that a lot as well. Um and now AI it almost every conversation and it uh has to include that now. Yeah. So where does AI come into play with uh in your mind in this, both from a standpoint of um having employees, um what how employees use it and how your application uses it, and is it is it something in this uh the sense that could be a catalyst to continuous improvement? What do you find AI's role in in all this is at this point? And where's it?
SPEAKER_00Yeah, AI is such a hot topic right now. I think um AI represents a huge shift in pretty much everything. So for folks that are involved in continuous improvement as a discipline or you know, project management, most of the big AI implementations are gonna come through some form of project management implementation. So I think that AI represents a lot of, I guess I'd say job security for people who are involved in you know business uh improvements. The other um thing that I think about with AI, um, you know, recently there was some news from a consulting organization that said 95% of AI pilots failed to deliver results. And you know, everybody loves to cite that evidence. And I'll tie this back to that kind of three layers of benefit for a project. The best place inside your organizations to look for AI to have an impact and to be able to say, hey, here is where AI made an impact is in that cost savings. There's you know, so many people that have great ideas inside of organizations, but oftentimes, more often than not, the best ideas might not get given the go-ahead because they're just not packaged in a way that the executives that can say yes to things or can, you know, can allocate a budget are they they just it sounds good, but they're just not, you know, it just hasn't been structured in a way that makes sense. And one of the examples that I love to share is, you know, let's say I'm a plant manager and and one of my you know staff comes in and says, Hey boss, I've got a great idea. Um, we could save $100 a month on our electrical bill by spending a hundred thousand dollars on this new air conditioning unit. $100 a month, $1,200 a year, and you want to spend $100,000? Yeah. Um, you know, get out of here, right? So that that's that's that's coming with the idea. Right. If you come with the problem, you know, let's go, let's why is this an idea? You know, this is what it might look if like they lead with the problem. Hey boss, we have a little bit of a problem today. The air conditioning unit went out, it's 120 degrees Fahrenheit inside of our shop, the fire marshal's here, and they've sent everybody home. We're completely offline until we get this air conditioning unit fixed. I found a new one, it's only a hundred thousand dollars and it'll get us back producing, you know, by tomorrow. Okay, go do it. You know, like so that's just a little um lesson of leading with the problem versus leading with the idea. You know, lead with the problem when you're trying to uh you know communicate the story to get the executive approval or the manager approval for this new idea that you have.
SPEAKER_01So you you have the application, you um if people use it, it will work. Um but I I find a lot of times that you that you almost have to hold their hand in order to make sure people use it, to make sure that it is uh being followed up on. Is is a lot of your practice about supporting the application once it's with the company or supporting the company to make sure that they follow up on these type of things, or is it really that um you you train just a few people within the organization to try to manage that um so that I guess they're teaching themselves how to fish, if you will?
SPEAKER_00Yeah, I I love the teacher teach them how to fish uh analogy because I I think that's a very um very useful one. Where we're at right now as a company, we do tend to focus on large organizations that have some form of an established business improvement function. Sometimes it's called Lean Six Sigma, sometimes it's called Project Management Office, um, you know, sometimes it's called business improvement professionals, but it's usually some centralized function responsible for implementing business improvement. Sometimes it's called performance management office. Um and the reason that we tend to focus with them is because you know we're we're still a relatively small company, but we like to work with folks that can that can add the the ritual part, the accountability part to the the monthly rituals. So for example, there's some behavior patterns that we strongly recommend we when we do an implementation with a company, we'll we'll look for certain things to be in place. You know, a lot of times um you if you're having some sort of a weekly business review meeting or a monthly financial review, those are good things where KPI fire can just be a few minutes on the agenda, you know, so it doesn't have to be like a separate meeting necessarily, maybe during implementation. But once you get rolling, it's just like, hey, we look at these metrics during during this weekly business review or this daily huddle, and we ask the question, what improvements can we make? And the model that I think of, all of these improvements fit into um you know, kind of three tiers. And the the top tier is the one that gets the most attention from cost savings. So the the the the lowest tier is anybody can say, hey, what can I do better? And and it and there's plenty of stuff that you as an individual probably could just do to improve your workspace, to just improve stuff that only needs you or maybe your team to get on board with doing. And and so those are the little things we'd call those just the just do it, right? Like just do it, just just make that thing better, just make that improvement. Then you've got things that are at this middle tier where it probably requires a little bit of coordination with people within your department, within your work cell, within your business unit, whatever, whatever level of responsibility you have. If you're the CEO, then everything probably fits into that bucket where, you know, but if you're a plant manager, a line manager, a work cell leader, a team leader, you know, you have certain discretion where you could you can make improvements, but you just got to get your team on board. And then you've got things that need to go up, where it either needs an approval or maybe it needs budget, you know, like you need to get somebody senior on on board. And so those are the ones that tend to have more dollars. And that kind of shows up in organizations with things like budget approvals, you know, like hey, if you're gonna spend more than X dollars, you need to, you know, get approvals from from multiple levels up.
SPEAKER_01Oh, that's very helpful. So I want to turn the kind of questions around because there's always times where I have lots of things that I could continue to talk about, but there's important things that you might want to know to say or or uh or things that are great points that I might not ask a question to trigger. So I always I want to turn it around a little bit and just say, are there certain things that are worth the discussing or uh um that that you think that we should cover on this uh when we talk about continuing this uh continuing improvement, anything from that range on to the your application, um, anything within the whole spectrum that you think that uh the audience might be interested in?
SPEAKER_00One set of target. I I can't tell you how many times I see like these vague targets like, hey, we want to cut costs by three percent. But nobody goes and turns that into a dollar amount. Like if I'm responsible for a work sell, don't make me do the math of what 3% is. Like tell me that you need me to save a million dollars. Like, you know, give me a number. That uh that's probably one of the things that that um I I either see no numbers shared, you know, that's really sad, or everything's just totally bottom bottom up where you see things. So but I like to see a target set, so uh X millions of dollars, you know, in in most companies, how much improvement do you want to see? Probably the other one is just asking people closest to the action what ideas do they have that can contribute to that number? I mean, even as I sit here and give this advice, I've been guilty so many times of assuming that the people that report to me might not have the ideas and I need to be the one with all the ideas right. And that just like I've I've been humbled so many times and learned that lesson so many times. That's probably one of those that just never ceases to teach is just when you think that your team isn't capable of coming up with those brilliant ideas to solve the problem, like show them the problem and ask them for their ideas. It just that's a lesson that just continues to teach all of the time.
SPEAKER_01Yeah, great, great thoughts. So I think you've given our the listeners and the audience here just a great insight into why continuous uh continuing uh improvement is is critical. And I really intrigued by your uh application on on uh how organizations can can utilize that. Um I I've uh been part of and listened to your podcast. I encourage uh listeners to go to that uh the uh KPI Um uh Fireside uh outstanding uh production. You had uh you've had some great guests. Anything else you want to promote or or mention uh before we sign off?
SPEAKER_00Yeah, well, if anybody's interested in seeing more about the software, you can check it out at uh KPIR.com. We've got a podcast on the subject as well, KPI Fireside. And Dwayne, for anybody that um you know might come from from this podcast, if you do um request a demo or if you think something like that could fit with KPI Fire, mention that you came from Dwayne's podcast, and I'll I'll send you out a copy of the uh the book here, the Firestarter book. This is basically the the handbook uh on how to build a continuous improvement program and system inside of your organization. So um it stands alone uh completely, or you can use it um as you're implementing the continuous improvement program inside your own company. I I love it, Keith. Thank you. It's a great discussion, and I appreciate all the insight. You bet. You bet. Thanks so much, Joanne. Thanks for having me.
SPEAKER_01Thank you for listening. I encourage you to check out other episodes of the Cost Management Center podcast. I believe we offer great advice to individuals that are looking to manage costs within their organizations or companies. If you would like to reach me with a question or comment, please do so on my website, theefficacygroup.com, and that's EFFIC A Cygroup.com. I would love to hear from you.