Thomas Green here with Ethical Marketing Service. On the podcast today, we have Dan Edds. Dan, welcome.
Thank you. It’s great to be with you.
It’s my pleasure. Would you like to take a moment and tell the audience a little bit about yourself and what you do?
Sure, so I’ve been a management consultant for over 25 years and that has had various bends in the journey. I started out doing what was called activity based costing at the time, which is basically looking at systems and processes that morphed into looking at revenues and costs of services and along the way that’s morphed into doing process improvement, now really focusing on organisational design and culture enhancement which really came out of working with literally hundreds of organisations and seeing the good the bad and the ugly of leadership and finally started to ask myself the question how to high performing organisations approach the practice of leadership and the result of all of that is now a book.
So I have now published my second book. Well done for doing that. Thank you. I like to look at the good quotes everywhere. You know when I’m digging around on guest content and if I start with a quote, maybe you can tell me what it means to you. Sure quote is the greatest waste is failure to use the abilities of people, the contributions that they are eager to make, yep, yep, is that Deming? Yes, yeah, I love it. Yes, so what that means to me and actually that idea wasn’t that quote, but it was that idea that got me really looking at the question, which is how do high performing organisations approach the practice of leadership? And I’ll give you one example. I was doing a project for a large government agency. This organisation licensed annually 450,000 health care providers and, by any measure, they were a mess.
Just as an example, they were dropping well over 1000 calls a day because their telephone system technically couldn’t handle the number of incoming calls. And on a good day, he had six or seven people, meaning or you know, handling the telephones. They were supposed to have 10, but it was so stressful that there people took any and every opportunity they could not to go to work. I had finished up the project. It was going to take about 18 months to implement and I was having my last meeting with the deputy director, finished up the conversation. I’ve got my coat on, I’ve got my, my computer case in my hand, I’ve got my hand on the door, ready to walk out the door and in almost a confessional tones, she said, you know, I don’t even tell my friends where I worked anymore and I turned around and I said why?
She said it’s just too embarrassing and that conversation along with several of the others really propelled me into looking at the question of how do high impact, high performing organisations approach the practice of leadership and one of those ingredients because that they recognise the humanity of their workforce and it’s not a moral, it’s not a moral argument, although they would probably say, yeah, we do it, you know, because we value, you know, the human, the human species, but it’s really an issue of human beings when they walk in the door. There is an unimaginable amount of creativity, innovation, problem solving capacity that walks in the door with them and it walks in with him at no additional charge. And high-impact organisations recognise that in their people and they develop people and this is a kind of a humorous distinction.
But yes, they train people to do the technical parts of their jobs, but they develop people in terms of becoming more self-confident, more self-empowered, engaging people with the mission of the organisation ways that’s intentional and oh, by the way along the process that create better human beings as well, what would you say? The best way is to cultivate that potential? Yeah, yeah, really starts with the intention of what is the experience of the workforce when someone comes to work for you or for me or for someone who owns the business. What is the experience of the workforce that is intended to be delivered? That sounds a little bit academic, but it’s really very practical. So in my research I found organisations that you know when I when I asked them, how do you approach the practice of leadership?
They didn’t give me 10, 10 leadership skills or attributes. He said things like we want to cultivate a value of respect in this organisation. One of my early interviews was with a young man who is a millennial. He had been with one of the world’s largest engineering firms for 10 years. And you know, sort of out of the blue, they said here you got a new job, and he went from being a project manager to leading multiple teams across multiple disciplines, geographically dispersed you know spanning various market segments. And he recognised that this job was different and so and of course you know they gave him no training and no experience, no mentoring and leadership, it’s a sink or swim mentality, which is what most organisations do, but Brian’s an engineer. So he thought about it very logically and concluded that leadership is a relational enterprise.
So he went about figuring out how does he have to produce relationships within between himself and his team. And then that grew to within the team and then that grew to a whole series of activities redesigning the office, pulled out all of the office cubicles set up an open office concept because he recognised that everybody got the best work done if there were relationships, real relationships with people within his teams, but that was an intentional design and I saw the exact same thing every time I found a high impact organisation that was producing quality results for a long period of time, not a year or two, but or 58, 10, 20 years. They said what is the, what is the experience that we want for our employees and they built their leadership around that interesting. You mentioned millennial in your answer and I picked up somewhere – I think it was on your site – that 75% of employees are millennials.
Have you got anything to know on that particular topic? Yeah. Right now the millennials I think comprised like 50% of the workforce, but it’s soon to be 75%,, But by 20, or something and yes, millennials look at leadership very differently according to Gallup organisation, they don’t want to be lead, they don’t want bosses. The idea of leadership is different for them and frankly I welcome that, I think they’re incredibly smart. I have a great affinity for the generation of millennials. they, like I said, they’re not interested in bosses but they are in love with the idea of development and so they want coaches and mentors don’t generationally tell them what to do, show them what to do. And I think millennials I don’t think I know that millennials will be recreating the world of work, the workplace and how we work, how we engage with one another, how we engage with customers and I find their worldview very healthy frankly. Well I was going to ask you about your approach or what you teach in your book not leadership based on the individual but based on the system.
I’m talking about that for a minute. I love talking about that and how much how many days do we have to talk about it? I spent four years researching and writing about it. So it’s a bit of an obsession but yeah it just it’s when I asked began asking the question how to high-impact organisations. You might even see elite level organisations. How do they approach the practice of leadership? They do not approach it as a style of the individual. They approach it very systemically. The analogy that I use in the book is they essentially create their own organisational DNA. And they do that with intention. So just as an example, one of my interviews was with a retired Four-star General of the United States Army and when I asked him I said how does the army approached the practice of leadership?
He said we practice servant leadership, and that idea comes with it a whole set of values, a whole set of well-defined behaviours. When I asked him, how does the army teach, train and support and implement the practice of servant leadership. He didn’t give me, you know, half a dozen attributes of the servant leader. He gave me three attributes of the way the army reinforces servant leadership and I’ll give you one when a company or when a group of platoon is getting on a helicopter to go out on a mission, who is the last person to get on that helicopter happens to be the highest ranking officer because that in effect says my job is to protect my soldiers. I’m going to get on this helicopter last and who is who gets off of that helicopter first.
It’s the highest drinking officer symbolically saying I’m going to put myself in harm’s way first because my one of my number one jobs as a servant leader is to protect my soldiers. And that might say well it’s largely symbolic and yeah, I don’t think there’s anybody that would disagree with that. But it’s one very simple way that the army teaches its officers, your primary job is to protect and serve your soldiers. And he gave me just one other real simple example and that’s in the cafeteria when everybody is getting their blood, which who goes last, who goes through the cafeteria line last. Well, it happens to be the highest ranking officer again representing the idea that as an officer, your primary duty is to protect and defend and take care of your of your soldiers.
Well how do you think? What in your opinion the best way to go about translating that into a well for lack of a better corporate insurance? Sure. Well as it turns out, the United States Army isn’t the only organisation that practices leadership. There’s a few others like coca cola, google Starbucks. intentionally practice servant leadership and basically they say as a leader in this organisation, your job is to really look out for and take care of the needs of your of your employees, of your staff. So one of the, one of the, one of the healthcare organisations I looked at was an organisation down in Mississippi way in the south of the US. And they intentionally designed a system of leadership around the principles of servant leadership. And so one of the, one of the routines that they set up was every leader was to round to their employees or their team every day.
Now. Rounding is the term that comes out of health care. It’s the idea that when hospitals or excuse me, when physicians, they go and visit their patients in the hospital, they round to their patients. So rounding is just an idea that comes out of the health care industry that says when if you’re a leader you go to your employees and you basically visit with them. It’s management by walking around in the in the lean world, the Toyota production system world, we might call that a gimbal. It’s the same, it’s exact same concept. But this healthcare organisation in Mississippi, the CEO said to all of his leaders, your number one priority is to round to your team every day and that is the number one priority of your schedule. Everything else in your calendar and your schedule is secondary to that activity And you want to visit with him. In fact, the joke about him and he was renting four different hospitals, 30 some clinics, 7000 employees.
The joke about him was if you needed to see him, don’t bother going to his office because he’s never there. You know, he’s always out with his people. And he even had a practice of, he would, he would never eat lunch by himself. He always ate lunch and one of the cafeterias with everybody else. Because he, as he said to me, he said, I could learn, I can learn more about what was going on in the in the various hospitals and clinics and a half hours sitting was sitting with the rank and file eating lunch than I ever could in a staff meeting. And uh, but you know, he made, he made rounding the priority and required every one of his leaders to do the same. And is it any would anybody be surprised that the engagement levels of his of his employees? Which is a basically a measure of how emotionally and psychologically they are engaged with the organisation was in the 96%ile. And it wasn’t that there for a month or two there for three years prior to probably five years prior to him leaving.
That is a massive accomplishment And the patient satisfaction scores or in the 90th%ile nationally, which again is a massive, massive accomplishment. So, you know, he set up the system of servant leadership. And it wasn’t anything that was difficult and hard. It was basically centred around things like you visit with your team. I had one of my early conversations was with the chief medical officer of a large trauma centre. He would never admit this, but he’d be classified as one of the top trauma specialist in the States. And I was talking about leadership and how I’m looking at leadership as a system. And he said, well let me tell you a story. He said our hospital had a few years ago as CEO who operated out of the 12th floor of the hospital. He said, you know, I’m one of us for senior leaders.
He said, I never saw her, he said I would see her in official meetings. Most of the communication was through email and the joke and the trauma centre was, you know, the 12th floor wants to see you or the 12th floor is asking us to do this, That or the other thing, it was never about a person is always just the 12th floor. And you know, he said I’m one of his, his you know her, I was one of her senior leaders and you know, outside of official meetings, never had a conversation with her. He said then we get a new CEO. And he moves his office from the 12th floor to the first floor, right in back of the admitting office of the hospital, just so he can see what was going on with the people coming in being admitted. Get a sense of the pulse and the rhythm of the hospital and Steve the chief medical officer said the strange thing was, is when he showed up in my office one day and he just walked into the end of the trauma centre and just wanted to see what was going on.
He said, that was shocking enough. Then he came back and since he’s been here, which has been two or three years, he said, he comes around every two or three times a week just to see how things are going on and you know, as he puts it, he says, you know, names turn into faces, relationships that get established and he said, the strange thing is where before there was no basis for trust of senior leadership because nobody knew who they were. All of a sudden there’s, there’s enormous trust being built for our senior leadership. The engagement of my staff is going through the roof just because the CEO decides to show up and say, see how things are going along. Well. The, it makes me think of the typical, I’m not sure if you’ve heard the term or not, but uh, lock yourself away in the ivory tower type thing because you, would you say it’s one of the main mistakes of leadership? Oh, massively. So, um, I’ll give you another story.
One of one, actually, one of the, it’s one of the nation’s safest hospitals. It’s been credited with one of the nation’s, that’s one of the nation’s safest hospitals. Like, the last nine years, and actually someone from the UK took a tour and proclaimed it to be the safest hospital in the world. Which doesn’t sound like any real big deal until you realise that, avoidable deaths and hospitals, is one of the leading causes of death in America. I think the last number was 161,000 people died a year because of avoidable accidents in hospitals. So, a safe hospital is a big deal. And um, this is a hospital. I know where it’s at, it sits on a hill. There could be probably, I know there is from many of the floor is a beautiful expansive view of the city of a harbour, snow-capped mountains.
It’s a gorgeous, gorgeous city and their offices for the executive leadership team is in the basement and that’s by intention. They want to leave because this hospital is driven off of a single core value of respect, respect for the patient, respect for the work, respect for the worker. So if you’re designing a hospital based on a culture, a core value of respect, where do you put the executive offices? Do you put them up on the top floor where they have a big expansive views of the city or do you leave those views for the patients because you’re driven off of a value of respecting the patient? No, you put them in the basement because they also recognise that the best work that leaders do is when they’re not sitting in their offices like an incentive.
You have to get some time. Yeah. Well yeah, I get it would be fun to use some stronger language but you know, get your, get your rear out of the seat of your executive office chair and go hang out with your team once in a while. Good point. Well, the I do have a typical question that I’m sure you get asked all the time but I kind of feel like it has been covered by what you’ve already said. And so the question of how to engage employees. if there is something which we haven’t covered and would you like to share it? Sure. Sure. Well, you know, again I the first, the first step is to, you know, determine what do you want that experience to be? And again I found designed intentionally crafted experiences around respect relationship. one of the more interesting ones was with an elementary school principal and this was a school, this woman took a school that was failing on multiple fronts.
It was the lowest performing School in the district with 18 different elementary schools. Five years later it’s the highest performing elementary school out of 18. And when I asked her, I said how do you approach the practice of leadership? She said, well this won’t be very popular but love and grace, I thought, okay, that’s interesting. And then she said it’s really about approaching my team in an atmosphere or a spirit of Love and Grace, but I won’t write what I really want my team to experience this collaboration. And so we talked about that and how the idea of collaboration wasn’t just a saying, it was a real deal and she had a whole system designed to promote collaboration with her within her team. But in the middle of that conversation, she started talking about the way she developed her team and I also this is something else I found throughout my research and really gets to the point of your original question when Aaron started talking to me about how she approached the idea of you know, employee development, it was pretty clear that she was talking about whole person development.
She wasn’t just interested in developing better teachers and better teacher skills and better administrators and counsellors, et cetera. She wanted to see her people really grow as human beings and so I in the middle of the conversation I stopped and I said so Erin it sounds to me like your approach to developing your people is really around developing the whole person and I’m not I’m not kidding. When she said, she looked at me like I was from outer space and she said, well of course why would I want half a teacher walking in my door? And that’s really what we do with our employees. We say, okay well you’re going to come working work for us for eight or nine hours a day. And what we really want is your technical skills. The other stuff you could leave at the door, we don’t want that, we want your technical skills. If you’re a software developer, we want you to write code. if you’re a nurse we want you to put shots and needles arms, which they’re doing a lot of these days. if you’re a physician we want you to be a better cardiologist, you better urologist, better general practitioner or whatever, if you’re a lawyer we want you to be a better lawyer if you’re if you’re a carpenter, we want you to be a better carpenter.
But the really good parts of the worker, their ability to problem solve to create to innovate. Well, that’s nice, but we’re not going to, you know, leave it at the door. But universally, what I found was that high-impact organisations have this understanding that when people walk in the door you’re a whole person and they intentionally want to engage their people around personal growth and development as much as it’s about professional growth and development. So if there was a second thing along with the idea of engagement, it’s you really have to engage the whole person. And then the other thing I would add is you have to reward them as well and it’s not has nothing to do with compensation, compensation, you know, a good salary, good benefit package gets somebody in the door, doesn’t keep them there. In spite of all of the research that points that out, very, very few organisations really want to bother with it. But high impact organisations recognise that engagement really revolves around the relationship with their manager Gallup says that there’s other studies that show collaboration, psychological engagement, all of which really focus it focuses on that relationship with the manager.
And if that if the manager isn’t doing a good job of building relationships of creating the right culture the right atmosphere, you’re never going to get engagement with the employees. Have you got some, because I was interested in, you got some examples of he said developing the whole person rather than just their skills and what some practical examples people can use and implement them if they Sure, sure. So I was taking a tour of this, one of the hospitals, I just, I just referenced the safe one and I was, when I, when I saw what they were doing to intentionally developed their employees, I was really blown away. I was certifiably stunned and so much so that actually asked for a conversation with a woman that teaches leadership at Harvard University who had been kind of a mentor me in the project and I told her what I was saying and she says, I know exactly what you’re saying and then here’s a whole series of books you need to read.
One of which actually became the basis for, I think the second section of the book, my book, but you know, develop that idea of developing the whole person is for them is really simple. It’s not hard. You know what is the scariest thing that human beings face? The one thing, you know, outside of maybe snakes, you know, the one thing that that we all sort of fear the most happens to be public speaking more than death, right? Yeah, more than death. Some people feel like it is death, they would rather die than speak publicly. So this hospital provides lots of opportunity intentionally for people to speak publicly. That might be something as simple as you know, the team leader does not manage all of the team meetings. They actually get rank and file people to manage their meetings, they train people how to manage and run a meeting. and yeah, it helps out their professional skills a little bit, but it’s really all about developing a more self-confident, self-empowered workforce.
Uh the thing that I that I really saw that got my attention was every Friday afternoon from 12:00. This hospital has what’s called report outs. They’re, this hospital was the first hospital in the world to adopt the Toyota production system and say they do lots and lots of process improvement and they have lots of process improvement teams. And so every Friday afternoon these various teams will come into an auditorium that will seat probably 125 people. And people can, it’s livestreamed as well so people can watch it on their, on their, on their work, state their computer and every report out every report on one of their process improvement initiatives last exactly five minutes, not five minutes and two seconds. It’s five minutes and it all starts out with, there’s always two presenters and by rule it’s not the leader of the team that is one of the presenters.
It’s one of the, one of the rank and file people just participating and they do that intentionally because they want their people to have that experience of presenting their work publicly. And so there’s always two presenters. And the first words out of the mouth of the first one is I want to thank my colleague who is standing here with me today as well as the rest of my team members for you know, going through this project. And then the first presenter would present what they did on the project. The second presenter always starts out with I want to thank my colleague standing here next to me and the rest of my teammates for this project and this is what we learned. This is what we did here was the outcomes. The last words of every presenter is. Again, I want to thank my colleague for presenting with me today. And at the end of the hour when I was sitting there, the chief medical officer who was in attendance that day stood up and basically conducted a real simple debrief. We had six report outs.
You had a real brief conversation with the attendees about what they saw what they learned, how they were going to implement what they learned that anybody any new ideas. But before he started that he said this and he pointed to a woman who was sitting in the back of the auditorium and he pointed to her and he referenced her by name and said, I want to think so. And so this was her first opportunity for participating in one of his report outs. And he looked at her, referenced her by name and said, I want to thank you for the courage of being with us today at the end of the hour. And of his debrief, he again looked at the woman sitting in the back of the room and he said again, I just want to acknowledge, you know, you by name, thank you for your courage of participating with us today. So what they did, they not only said if you’re going to be involved in this in this organisation, we’re going to give you lots of opportunities to speak publicly, but we’re also going to going to give you a safety net, You’re not going to be critiqued on your speech.
We’re going to we’re going to design your speech very well. This is what you’re going to say. This is what you’re not going to say, it’s all scripted. And then when they’re done, you’re going to be complimented and for your courage, not whether or not you gave a good talk, five minute talk, but you’re going to be complimented for being present and they do that with great intentionality and it’s all because they want their people to be self-continent. one of the other things that they do with regard to leadership as they train their leaders to not become problem solvers. So if I’m if I’m working for you and I’m gonna one of their clinics and you’re the clinic manager and I come to you with a problem, you are trained not to solve my problem for me, You’re trained to help me think through the breadth of the problem. How deep the problem is, Who are the other people that maybe, you know, interacting with the solution to that problem? But you are not to solve the problem for me because when you do that you disrespect my basic intelligence and passion for the industry because you’re also supposed to respect the industry and the work and so you are trained to not solve my problem.
And what that does is gives me the self-confidence that I can solve the problem. Solving my problem may work may make you feel good, but ultimately it is devaluing and disrespectful to me and they do that. And with intention, it’s one of the things that they’re teaching and coaching. If you get a coach or a mentor and you ask them, you know directly about a question that you want an answer to, they won’t give you the answer, they’ll help you answer for yourself because obviously if you answer, if they answer it for you, you will always need a coach correct. Exactly done it for yourself. You can then solve future problems for yourself. Yeah, exactly. You know, I think I referenced this four-star general. Amazing, amazing conversation with him and I asked him about the car sort of the same idea. How do you In fact the reason why I was talking to him, because I had heard him speak at a lunch engagement and you know, he’s a keynote speaker for the lunch meeting and he talked about decentralising leadership and pushing decision making down further into the organisation?
That is the strangest thing I’ve ever heard a four-star general talking about decentralising leadership that four-star generals gave commands and everybody else was expected to salute and you know and move quickly. And when I asked him about this, when I was interviewing him, he said no, he said we have a rule that the highest ranking officer on the ground on the mission Is the is the one who has the best perspective. And so you know, whatever they say they need, in theory, it always happens this way, but in theory they get, But he said to, you know, a commanding officer, you know, 50 miles away in a bunker some place, they’re trained that the person on the ground who is getting shot at as a better perspective of what is required than they do. In fact, he said, I have, he said, he said, he said I’ve been in the in the white house situation room many times watching a military mission go down through the magic of satellite TV and communications.
He said we had virtually as much information of what was going on that mission as our soldiers on the ground. And we could very well have easily told them what to do. But he said if you really want to screw up the culture of the army and screw around with the culture of command and chain of command and decision making. Actually his language got very, very colourful here. He said take that power away from the officer on the ground. And he said take that power away. And he said he just screwed up the entire culture of the United States Army. I can imagine it. Great answer, by the way. Yeah, you can’t tell, I loved my conversation with the general. It was hands down probably the most impact for a one hour conversation of my life. Well, I’ve kind of got another open-ended question for you about another, a similar topic if you like. Which is company culture.
There are lots of people talking about company culture. What does it mean to you? And how do you create a quote unquote good company culture. Yeah, great question. I love that. And actually when I started out doing the research for the book, I wasn’t looking for culture. I was just looking for, you know, how do high-impact elite organisations approach the practice of leadership and I was not looking for culture, I wasn’t looking for anything like servant leadership, I wasn’t looking for anything other than just how do they do it? And there was there was sort of a second question which was you know, I was looking for evidence of something that might appear to be systemic or systematic. but what I found was culture and it’s really evolves around the idea of behaviours. If you think about it, culture is essentially how we behave with one another, how we how we interact with one another, it’s that human dynamic. so one of my discoveries was that elite organisations put as much focus and attention on behaviours of their leaders as they do their core values.
In fact, I would even go so far as to say they put more emphasis on the behaviours of their leaders as they do their core values. See, I think it was Peter Drucker who said culture eats strategy for lunch. I heard someone say the other day and I think it’s totally appropriate that behaviours eat culture for dinner, something like that. So you know one of my mentioned this elementary school principal, one of the first things she did when she came into the school and it was a mess there was open in fighting with the staff, the prior principal had been run out by the teachers’ union and it was an implicit was her first, try being the principle of a school. And one of the first things that she did was to develop a charter, which basically said, here are the rules of how we’re going to, we’re going to relate and treat each other and was all behaviour.
It was things like we will treat and speak with each other, you know, with respect, we will try to be positive in our communication and I was all behavioural. And she put this into a charter and one of the side benefits of that is that when someone wasn’t behaving according to the charter because it was the team, You know, 75 teachers, even janitors and custodians were involved in developing this charter because the team had developed the charter, She didn’t have to go around and say, well, you’re not behaving like I want you to, you know, I’m going to, I’m going to, you know, move you on. She said, no, we designed this charter as a team. You’re choosing not to behave this way, therefore you are taking yourself off of our team. And um, I had a conversation or maybe a month ago with a gentleman who uh, founded a company, um, called Mesa, um, construction and they do, uh, they do the technology that keeps large pipes from corroding oil pipes, oil pipeline pipes, big, you know, big construction projects And there’s about 200 and depending upon that in the end, the state of the industry at the moment, anywhere from 245 to 280 – 280 employees.
And when I asked him about behaviours, he said, oh yeah, he said, he said, we actually, he said, I believe very intimately, very, I strongly believe that behaviours are the critical compulsion component to our culture. I said, so how do you design that and how do you handle all that? He said, Well, he said, I started out, he said, I wrote a 13 page document that outlined how everybody was going to treat each other as well as our customers. And then he said, I realised No one was reading it. And so I whittled it down to three pages, he said, I realised people were looking at it, they still weren’t reading it. So and actually following through, he said, so I finally got it down to four sentences and you know, it with real simple things like we treat each other respect was the way the way we would like to be treated. And so when I asked him, he said, yeah, he said, if someone, someone decides they don’t want to treat their fellow employees or their customers with respect, he said they effectively take themselves off the teams are not to fire anybody, they take themselves off the team because you know, they review these four sentences if you will in the on boarding process, they review them routinely in company meetings and staff meetings.
In fact, he said at the end of each one of our staff meetings, we take a couple of minutes and we just look at these four sentences and some of our core values just remind ourselves this is what we’re about and that’s, you know, that’s the kind of thing that creates culture and ultimately I believe it’s the culture that keeps people around. Yeah, they may come to work because they like the industry or they’re going to get a good paycheck or they need a paycheck. But ultimately what keeps people around and engage just the culture of the organisation. It’s the experience that they have every day going to work. They like being there, they feel comfortable being there. They like to be there going back to your first quote because they have an opportunity to contribute. One of the things that I found universally is that high-impact organisations not only want their people to contribute, they expect them to contribute, They invite their contribution and they reward them for contributing.
Just one real quick example and I’ll be quiet. I looked at a manufacturing company and in this company of about a little over 200 employees. The employees generate 1250 Tyson’s or process improvement initiatives every year. Not, not the senior leaders, it’s the employees, they are all engaged in, in finding and eliminating waste in their design and manufacturing processes. And by the way, they want that, they want kaizen or how they do these process improvement initiatives to be so embedded so ingrained into their employees that they reward them if the kaizen is for the company or a personal kaizen. So, uh, you know, uh, I heard, I heard, you know, a couple of funny stories, one was some guy at a sailboat and he wanted to reorganise the interior of a sailboat.
And so he did a kaizen on reorganising his sailboat and he got his paid time off. It didn’t for them. It doesn’t matter if it’s personal or professional because they want the process to be so ingrained into the people. And actually the guy I was talking to you with one of their senior leaders. He’s a millennial. He’s probably mid-thirties, I would guess. And he said, I learned an important lesson. He said, uh, my, my wife was quite pregnant and with our first child, I think he said, and I decided that she would really appreciate it if I reorganised the kitchen pantry and he said, I got my, my personal time off. But he said, unfortunately my wife didn’t kill me, but she wasn’t really happy that I reorganised her kitchen for her. Um, but you know, against the idea that they, you know, this company wants how to do the process of how to do, you know, process improvement wants it to be so ingrained that they will reward people not only if they figure out a better way of, you know, cutting fabric or cutting wood for their furniture, which is what they do.
They design a manufacturer, manufacturer, high end, commercial custom, commercial furniture. But they not only reward people for, with paid time off if it’s for a professional companywide improvement, but also personal improvement as well because they want that, they want that training, the, just second nature just to touch on something you mentioned. Um, kaizen for people don’t know. if I’m not mistaken, it’s everyone doing everything in the same way, the same thing in the same way, is that correct? No kaizen. And here in the States, outside of the States, you’re probably familiar with the term lean. Lean is the Americanised version of kaizen and that actually is not totally accurate either. But kaizen basically means readiness for change. And you know, do you see something that needs to be changed? And so a personal kaizen would be something that I see what I’m doing. And I see an opportunity to do something different than I’m doing so in this manufacturing company in my tour.
They introduced us to a woman who told about her kaizen. One of the kaizen is that she did so and she was cutting out big, you know, big pieces of foam core material that would, she would cut into smaller pieces that would then become part of the furniture. And she was getting four parts out of this big piece of foam core material. And, and, and she had been in the company very long, but she, she realised that if they just had a slightly different configuration of the, of the original material That she can get the five parts out of the same amount of material rather than four, which is, you know, that’s a, that’s a take big savings right there. And so she went to her, I’ll use the term supervisor for the moment. She went to a supervisor and said, you know, I think I see this opportunity. And so the supervisor because the supervisor was trained that their job was to enhance and reward and promote and train people how to do kaizen, how to, how to engage with the company, how to contribute to the company, coached her through the process.
And pretty soon they’re getting five parts out of the, out of this film corn material where they have been getting four parts. And what was interesting to me was when she was telling us this story, there is this quiet little short lady standing right next to her who didn’t say a word. And finally, but I noticed that every time she used the word mentor, the lady who was talking who was making the cuts of the film core material. Every time she used this word mentor, she would slightly turn to this woman standing next to her. And so finally I, I had to ask the dumb question. I said, so wait a minute this woman standing next to you, is she your supervisor? And um, no exaggeration. She looked at me like what kind of an idiot are you? And she said, well I guess so, but we just call them mentors. And that was again intentionally designed because they wanted to promote the idea that you’re a leader in this organisation. You’re a mentor and a coach to your staff, you’re not their boss, you’re not there to tell them what to do, you’re a coach and your mentor.
And so they changed the name mentor because again, it fits the relationship that they want their leaders to have with the rank and file and all of that feeds into the culture of the organisation. One of the crazy things I noticed when I was waiting to go in and take a tour. You know, I’ve, I’ve walked into lots and lots of different organisations, you know, sort of sight unseen. Hi, I’m Dan. And this particular one was interesting because I’m sitting in my car drinking my morning, you know, Latte waiting to go in. And I noticed every time I see someone walking in their door, they’re smiling, they’re going to work and they’re smiling when two or three would walk in there together. They’re laughing and smiling together. And it was so unusual. I thought to myself, this is very strange. People are smiling when they’re going to work and then when I got in I saw it’s a manufacturing company, so there’s a certain amount of noise, but it’s a quiet noise.
It’s almost more like a hum. And people are sitting around in workstations and they’re talking, I mean it sounds really strange, almost. I mean we’re talking but you could, you could watch them and you see them and they were interacting with one another and there and, and then you also notice that there’s these colour coded cups everywhere. So on every workstation, there’s a cup on top of it and if it’s a red cup, it means I’m in trouble. I’m stressed. I’ve got too much. I’m behind my schedule for the day. Um, and I need help. Well, that is a visual cue for their mentor to get out of their own share and go visit that work team member and say, what’s going on? How can I help you today? What do you, what do you need? And if it’s an orange cup, it means I might be getting to the point where I am behind schedule for the day and maybe my mentor coach ought to be coming to see me. But if it’s a green cup, it says I’m on target, I’m doing good.
I don’t need any help, right? It’s fun. And when you see it, when you actually see it, it is breath-taking. There were many, many green cups presumably in that particular? Yeah, yeah, yeah. Most of you see we’re green and they have virtually every job every day you know, down to the schedule out to the number of minutes every day, Every function that they’re going to be doing every part of their job was scheduled down to, you know, virtually minutes to today, but they’re so good at continually improving their processes, improving the steps, improving their work at such a, you know, the level of the workforce. Not again, the mentors, the coaches, the CEO, CFO it’s the rank and file that they’ve engaged to find and eliminate waste. They are extracting so much waste every year. In fact, I calculated to be about four or 5 of gross sales is being extracted out in terms of waste every year.
That’s they have enormous flexibility and what to do with that. They could, if they wanna, you know grow their market share, They can keep prices lower or they can keep prices the same And take that additional value that they’ve created and put it back into the company. They could put it back into employee retirement accounts. They could put it back into bonuses. So it’s just a it’s a building thing that every year they get better and they get better and they get better and they get more and more efficient and more and more productive. They create fewer and fewer and fewer mistakes and errors which means that the value that they’re giving to their customers grows each and every year. And in fact they deliver so much value to their customers. They actually have a waiting list of people who want to do business with them. And it’s and like I said when you see it in action, it’s breath-taking.
They actually have a 10 point scale that they measure every one of their customers against. And it seems like do their values, they match our own values. Is their compatibility that way. Do they pay their bills on time? Can we increase their prices occasionally? And I don’t live with Eleanor but there’s 10 point that’s a 10 point scale. And so if you want to do business with them, the first thing you do is well I’m not you know you gotta get in line and then and then when you do get in line they actually Interview You, they rate you on these on this against this 10 point scale. And if you don’t come up you’re not going to do business with them. Well, I wanted to ask you about the book, but that’s okay. Yeah, I’d love talking about the book. Well, one of the things that I always ask near the end of the podcast is what your goals, so what your goals for the book? Well, um, the goal for the book is not to sell a million copies, although I suppose that would be nice. ready for the book itself, I just really wanted to to become to become part of the conversation around leadership here in the States.
The sort of the average estimate of what we spend in leadership development is around $50 billion dollars a year Worldwide. There’s some estimates that we spend something in the area $350 billion dollars a year on leadership development. And virtually every penny of that is focused on personal attributes of the leader, you know, making you a better leader, making me a better leader. What do I need to do to be a better leader? What do I need to do to become a leader that other people will want to follow? What if you think about? It sounds okay. But the problem is that and there’s actually research that shows that we go to leadership training programs and exercises and classes and workshops. We read books, but then we come back to our organisation and find we can’t implement what we learned and there’s all kinds of reasons for that. One of the most important reasons is we walked back into an organisation where there’s already a system set up maybe not intentionally most of the time.
Not intentionally. But there’s a system there of how to lead and it might be, it’s okay to lead with disrespect might be perfectly fine. And so how do you how do you install or how do you behave in a leadership capacity with respect when everybody else is leading with disrespect. so I want the book to become part of that conversation beyond that though. what I’m really looking for is organisations that will say dan I want to implement this in my organisation and can you come help me? And so you know, so then the book becomes a framework for what does the design leadership system look like? How does it, how do how do we want our leadership system to look like? How do we want, how we want to design our culture? if you think about it, culture is the ultimate competitive advantage because it’s our culture, it’s not their culture or their culture, your culture, it’s our culture and it becomes the ultimate competitive advantage because no one else can compete with that when you see cultures where people are engaged with the mission of the organisation, where they have the opportunity to contribute, It really is a saying of beauty and again going back to your first coat by Deming, it gives giving people the opportunity to contribute fully, to fully engage with who they are as human beings.
Not only do we create better products, better services at a cheaper cost of greater value, but oh, by the way, we also create better human beings and we make and we make humanity, we make the experience of being a human being in the workforce better, more alive. We actually end up creating better human beings. And if you can think of anything better than that, let me know. Um, so that, that ultimately is where I want the book to go, but where I want my mother, the rest of my career to go as well. Well, the next question was going to be, um, is there anything that a principal or something that we haven’t spoken about today that you think is worth mentioning, but based on your last answer, I think that’s a pretty good one to end on, isn’t it? Yeah, I don’t know if I could do anything do any better than that, but, you know, that the side the side comment would be, we talk a lot about, you know, humanity in the workplace, creating a more humane workplace, and frankly, we’ve been talking about that for a long time.
It’s nothing new. Um, but it’s almost always, you know, uh, in a framework of morality, it’s moral to treat people respectfully. It’s moral to try to capture their psychological engagement with the work. it’s moral to pay people a fair and liveable wage, all, which is true, but what high impact elite organisations have realised. And I don’t know that they’ve intentionally realised this. But when you treat people with respect with decency, when you treat people in such a way that they are invited to contribute, they are expected to contribute. They are rewarded to contribute. When people walk into that kind of a culture, it drives performance. So if it’s a commercial organisation, it actually will drive the experience of the employee. It will drive employee or excuse me of the customer.
It will drive the value provided to the customer. It’s a social service organisation of its, let’s say it’s a school, it will drive academic performance. There’s a government agency. It will actually drive the way that agency performs and meets the needs of its constituency. So yeah, there’s a moral dimension, but there’s also a commercial revenue stakeholder dimension in there as well. Dan Edds, where is the best place to find you? Well, two places. Actually the best places, my website danieleds.com. D-A-N-I-E-L-E-D-D-S.com. You can actually get the book there if you’re in the States. If you’re outside the States, you can get the Kindle version of the book there and you can also go to amazon and get both the Kindle and the actual book from amazon as well. And bookstores too. It’s available in just about any bookstore around the world right now.
And you know, I would love if someone in your in your audience just wants to call and say I heard your podcast, I want to talk to you further about that. You know, my email is dan@danieledds.com. I say I will give you anybody in our free of charge just the chance to talk about it.
So well, thank you so much for the value you provided today. It’s been absolutely great.
Well, thanks for the opportunity. I really do appreciate it and I feel very honoured to have the chance of being with you. Okay, well, you know, I really mean that so that the value has been great. Thank you very much. Good, thank you.