The Manufacturing Executive
The Manufacturing Executive

Episode · 1 year ago

Create a Dashboard Effect: Drive Your Work With Data w/ Jon Thompson

ABOUT THIS EPISODE

Twenty years ago, we barely had enough info to measure our impact. Today, manufacturing marketers are overwhelmed with data, and everyone wants to sell us software to find, store, clean, surface, and use that data.

Why is data such a big buzzword in business, especially manufacturing?

On this episode of the podcast, I invited Jon Thompson, co-founder and senior partner at Blue Margin Inc, a company of 38 consultants and engineers who help mid-market companies with an emphasis on industrials use their data to create growth.

Jon and I talked about:

  1. Why data needs to go from the c-suite all the way to the frontline worker
  2. The idea of numbers as a motivator
  3. The biggest challenges manufacturers face when controlling and using their data

Check out this resource we mentioned during the podcast:

The Dashboard Effect

To ensure that you never miss an episode of The Manufacturing Show, subscribe on Apple Podcasts, or Spotify, or here.

The beauty of harnessing your data andputting it in dashboard form that's easy to consume and relevant to the person consumingit. What's so nice about that is it's an automated way to engage everybodyaround the highest priority, the highest value creation initiatives and get everyone in ashared mission. Welcome to the manufacturing executive podcast, where we explore the strategiesand experiences that are driving mid size manufacturers forward. Here you'll discover new insightsfrom passionate manufacturing leaders who have compelling stories to share about their successes and struggles, and you'll learn from B tob sales and marketing experts about how to applyactionable business development strategies inside your business. Let's get into the show. Welcometo another episode of the Manufacturing Executive podcast. This shows being brought to you byour sponsor, CONDINA's part solutions. I'm Joe Sullivan, your host anda cofounder of the Industrial Marketing Agency guerrilla. Seventy six so I entered the workforcein two thousand and five, after graduating from UNDERGRAD and I don't knowthat I could have stepped into the marketing world at a better time. Iwas interested in digital media, web design, online marketing, digital advertising, etc. And then in November of that exact same year, two thousand andfive, a new Google product was released, its name Google analytics. It blowsmy mind looking back and thinking, wow, this is a tool thatjust about every company relies on to harness data about their audience, how theiraudience finds them and interacts with their website. And it didn't even exist until fifteenyears ago. Before then, a marketers ability to measure the impact oftheir efforts was just so primitive. The advancements in harnessing marketing data that haveunfolded since center are really pretty unbelievable if you stop and think about it.And I use this example not because we're...

...talking about marketing analytics today. Thatwill be a great topic, but one for another episode. Instead, Iwant to call attention to how quickly the world has changed in terms of ourability to access, interpret and use data to make decisions all throughout our businesses, and what an interesting time in particular it is in manufacturing, with theemergence of the Smart Factory and Iot Technologies, dprinting, advanced robotics, autonous vehiclesand and all of these things have just made data so much more essentialthan ever before, and it's a good lead into my guests today, whoI'm really excited to introduce. John Thompson is a cofounder and senior partner atBlue Margin Inc, a company of thirty eight consultants and engineers in Colorado whohelped mid market companies, with an emphasis on industrials, use their data tocreate growth by getting everyone to play for the same playbook. An author andspeaker, John Sheds light and how you can create the dashboard effect, whichis the title of his book, as well, a revolution in business thathelps companies thrive through data. John, welcome to the show. Thank you, Joe. Glad to be here. Appreciate it. Well. John,before we dive into this topic of data, can you tell our listeners just alittle bit more about yourself and your journey that's led you to where youare today? Sure. Yeah, my brother and I are the founders ofthis company. We started out in the DOTCOM age and two thousand we builta business that was venture backed, where we took data from enterprise companies aroundtheir telecom expense back when cell phones did not have unlimited plans, and soon and telecom was a major line item and we took their their bills thatwould come literally in a box of stack of paper and we would scan it, we'd Parse the data and we would identify areas for them to to findsavings and really we're able to do a lot with that. We actually grewto a five hundred person company that was pe back by one equity partners calledvercuity. became the name of the company...

...and when we we went on variousadventures from there and real estate and of the things. But when we gotback into starting a business, we decided we wanted to do things that enablecompanies through essentially the cloud, and started out in in cloud productivity, Googleand then Microsoft Office. Three hundred and sixty five were now Microsoft gold partnersand focus solely on data and business intelligence, which is a strange phrase. Thatmeans dashboards essentially. I like to think of it as data intelligence,and we dove in their full, full force, working with mid market,again, emphasis on industrials, and that have been helping them ever since.Our focus is is around changing company culture, which affects operations, productivity, profitabilityand employee satisfaction and so on, and that's that's what we wrote thebook about the DASHBOAR effect. It's great. Why is data such a big buzzword in business right now, and particularly in manufacturing? Would you say, yeah, it really is. There's a few factors that have lent tothat big shift. You hear everyone talking about and throwing around, like yousay, buzz words big data, artificial intelligence and so on. One ofthe reasons is that everything we do produces data. So all the machines andmanufacturing that we use, all of our accounting, all of our sales,all of our HR, every bit of operations, produces data because we're usingtransactional systems, ie. Software, and that leaves an artifact that shows youhow you've performed and where you're trending. And so there's a real opportunity there. As companies have really streamlined how they operate with, you know, variousmanagements, philosophies and techniques and so on, they're looking for that next frontier anddata appears to be that opportunity to really leverage an asset that you alreadyhave. So companies are turning more and more to that and all the gurus, it seems, in business, are really pushing for data as as thebig changer for an organization. There was...

...an HBR article, Harvard Business Review, where the the author said, if you want to motivate your employees,stop following your instincts and take a data driven approach. And if you lookacross Peter Drucker and anyone else, you can get your hands on their speakingto data. Another reason that it's really become a big buzz word is thatthe tools to harness and mobilize your data, like power Bi in the case ofMicrosoft, or Tableau or click or any number of a hundred different platformsthat are out there and that seemed to be appearing daily, are making itmuch more accessible, financially and technically to be able to connect to your datasources, get it wrangled in and produce something that gives you instrumentation and insightso that you're you're able to operate more intentionally less reactively. I would alsosay that that business culture, in the mindset of employees, has shifted alot with the information age. You have employees moving on from one job tothe next every two point five years, and part of that is that,more than salary or retirement plan, employees are looking for agency and involvement andowner should tip of their work, and data really provides a great way todo that, rather than the sort of old model of we will do allof our insights and strategy in the board room and then push those through anorganization twenty layers deep. Companies are finding that if they put that instrumentation infront of everyone, right down to the line worker, you get much betterengagement, you get much more employee satisfaction and it begins to turn the tideon some of those shifts in culture so that companies can take advantage of themrather than watch employees go in and out through a revolving door. That's great. In two thousand and Nineteen you publish your book the Dashboard Effect, whichwas co authored with your brother and business...

...partner, and can you kind oftell us a little bit about what the dashboard effect is all about? Yeah, yeah, so the dashboard effect takes a particular angle on this trend aroundusing data and business. Typically, when companies think about data, they're thinkingabout the executives. We need better reporting that's more consistent. We need tobe able to answer questions at our fingertips instead of requesting spreadsheets and ad hocmeetings and all the overhead that goes with that, and that is a goodplace to start. The most influential people in an organization typically, typically arethe executives. But what we found is that democratizing data, democratizing dashboards andinsight and instrumentation, as we call it, throughout an organized zation has some phenomenalimpacts where you get everyone with a shared vision, with shared accountability,where they own their area of the business, where they have the same tools,essentially flinging open the boardroom doors and giving everyone the same tools appropriate fortheir role that the executives have, so that they can think strategically, makethe right decisions focus on the highest priority. That that's what the dashboard effect is. It's a whole organization having clear visibility and the impact that it has. It also reduces things like micromanagement and politics, which are driven out ofa lack of clarity. When you're not sure how someone's doing, you stayon top of them. When you're not sure how you're doing and how theOrganization perceives your performance, you fall to politics a lot. When you makethat empirical and it's in numbers and people can see here's the goal, here'show they're trending towards it or not. Here's why. It allows for muchmore direct discussion, much more agency on the part of the employee. Sothat's that's the idea of the dashboard effect. In the book we outline here.Here's why organizations do that and the...

...benefits and how you can get intothat. There are a number of times in the book you drew on conceptsfrom Charles Conrad's book the game of work, which essentially likened running a business toplaying a game. In sports, the simplest numbers on the score guardservice the motivation behind why players play and show up and ultimately why we watchthem do it. And by the way, you had me in the first lineof the book where you recalled Odell Beckham Junior's famous one handed catch againstthe cowboys back in two thousand and fourteen. It's as a huge NFL fan that'swhen I won't forget. But can you unpack this idea of numbers asa motivator? Yeah, you bet, and I put in the book thatthat was one of the greatest catches in NFL history. I really think itwas by a long stretch. You know, double double, meaning they're the greatestcatch in in NFL history. It's really amazing and as we point outin the book, you know, you can look at the highlights of anyany weekend and see heroics or any game really and see how how do peopledo that? And what coon Rad says is if you want to improve thequality performance in any area, improve or increase the frequency of the feedback.That's the simple principle that so many business gurus hold to, and then it'ssort of measure what matters type of thing. If you want to manage it,measure it. So numbers really give you a fixed Bogie that you're after. Without them you get this vague and constant pressure to do better, whichis tough for executives in line employees alike. When you give someone a very concretegoal, a singular concrete goal, that gives them a sense of stabilityand firm footing and really drives focus and prioritization. If you were to playgolf, it's a beautiful place to be, groomed environment and it's lovely and funto swing the club and when you occasionally hit it at the center ofthe face and it makes that click it's...

...seems all worth it, but withouta hole at the end it loses all of its meaning. And for somereason we tend to leave that aspect of human nature at the office door andassume that instead of score keeping and having a definite, measurable goal to goafter, what we need is good job descriptions, good compensation packages, anannual review, things like that, and that those worked for a long timein the very sort of top heavy, top down, authoritative business environment ofthe industrial revolution, but less so in business culture today. And so ifyou can give folks the same motivators that will drive those heroics that you sawwith o'dell and again any game and any professional sport or any sport, itchanges that dynamic for them and really leverages human nature and our desire to achieveand to have that achievement be concrete and recognized and measured and clear. Sothat's the idea behind keeping score will drive motivation improve performance. We're going totake a thirty second breather here for a word from our sponsor, cadinus partsolutions. Let's talk real quick about getting specified. Are you a component manufacturer? Maybe you sell architectural products to parks or large facilities. Engineers and architectsneed models of your products to test fit in their designs. That's where cadiniscomes in. They help you create a dynamic, shareable cad catalog you puton your website. Designers can preview the product from any angle and download itin the format they prefer. They get the data they need for their designand you get a fresh lead to add to your marketing pipeline. To getone of your products turned into an online d model for free, use thecode executive at part Solutionscom slash executive. How do you how have you seenthe business world change over the last pack,...

...the last decade or so in termsof use of data inside of operations? Yeah, a lot. It's funnybecause we don't run into many companies that have their data really as amanaged asset. It's more like a tide that's coming at them that they're tryingto harness, and you know you can't. You can't fight the tide when youdon't have a good, controlled way of managing it. entropy kicks inand you get data chaos before you know it, and so companies will againcall all together large and complex spreadsheets with all sorts of versions of the truthdepending on where in the business you're looking at data, and that can bevery challenging. But companies are are using data much more despite that that difficulty. Excel has more than a billion instances deployed on the earth. It is, you know, sort of the one of the primary go to tools andbusiness and is a phenomenal tool. But with the recent last ten years,fifteen years, development of these platforms that go much beyond excel, that areconnected directly to your systems that produce data, so they automatically update your data martand they and that automatically updates your reports, companies are realizing that clearvisibility rather than reactivity and relying on instinct and experience, which are all good. You have to have those skills, but if you can, if youcan fourfy that with clear visibility into what's happening empirically and not get trapped insort of the bias effect where you're looking for things that confirm your decisions andyou're hiding from things that are that seem too difficult to deal with, dataeliminates a lot of that and so we're seeing a big change and again,part of that, as I mentioned before, is this cultural change in business whereemployees want more agency, where there are more transient between jobs and ifthey're not engage, if you're not engaging the full person, if you're treatingthem like a cog in the machine and...

...saying here's your function, do this, do it well and you'll be pressured and if you don't do it well, you're fired, and if you do do it well, that's expected.So whatever you seem much more wanting to get people involved at every level andand harness their fuller potential. So we're seeing that that change in culture drivingthis desire for greater visibility into data in manufacturing. You see that like crazy, because manufacturing is globalized and become more commoditized and manufacturers need to look forthose margins that give them an advantage and data's one of the ways to reallyzero in on those things where they can, they can increase efficiency, whether it'sinventory management or or on time delivery or you name it. So onthat topic of, you know, applying these concepts to the manufacturing sector specifically, because I know you've worked with a number of manufacturing organizations at blue margin, it's seems to be one of your specialties. Right. So what aresome of the biggest challenges that manufactures specifically are facing in terms of, youknow, getting control of and making use of their data? Yeah, well, manufacturing is a complex operation. You have a lot of pieces that runssort of separately but have to coordinate really well. So understanding your sales projectionsfirst of all, sales people understanding their buyer trends and knowing who is fallingoff or not taking advantage of a broader swath of their products or have usas a satisfaction show or has run into on time delivery problems, those sortsof things. They need to know that to know who to pay attention to. And as they begin to fill the funnel and have projections, that isimportant for the purchasing folks to be able to know what to have on theshelves to be able to deliver quickly. That then translates to the inventory folkswho are trying to keep free up as much cash as possible and minimize slowmoving inventory, have the right things on the shelf, have strategies to getrid of stuff that is becoming more obsolete,...

...and then that has to do withthe supply chain and on time delivery and invoicing and order to cash andso on. So all those things need to coordinate and it's very, verydifficult and those are some of the areas that we've really focused on with ourmanufacturing clients. We've also focused heavily on machine employee utilization. We have aclient that they're quasi manufacture. They do install and maintenance on a commercial andindustrial level. They have five hundred texts and with better insight on tech utilizationbeing able to coordinate that body of employees, they increase their their employe utilization fromsixty to eighty percent. With five hundred texts, that comes to aboutfive million dollars on their bottom line. And I have actually a couple otherquotes from some of our clients that I think are useful. This is froma client that does specialized handicap wheelchairs in the like, and he said,you know, it's amazing how much these dashboards are being used. It's likewe invented fire. That's a common response for an organization that has been relyingon manually produce spreadsheets and so on. Another one I won't mention the company, but the general managers at our data is very complex, but now wehave clear visibility into critical areas such as order to cash and are another onefastener manufacturing company. After viewing our DASHBOARDS, I realized this might be the mostimportant thing I've been involved with in the last five years in this company. And I mentioned those because we see that light bulb moment so often andwe're companies really struggle is in getting started there. Their data seems like amassive hair ball that can never be untangled, and we help them to and regardlessof working with blue margin or whomever, a company should start with a smallarea that is lightlift and high impact. Where can we get the most impactfor the for the least effort and begin to see that that visibility throughdashboards and have those light bulb moments?...

As soon as they get that,then they're often running. It really is a catalyst for moving towards becoming adata driven organization and dealing with things like inventory and on time delivery and soon. So those are those are some of the areas that we've seen manufacturersreally take advantage. Are there any tangible examples? You know, a successstory or even just an application that need to make this tangible for someone?How how company has successfully use their data on and what it's meant for theirbottom line. Yeah, so we have a manufacture of aerospace parts and theyare really focused on on time delivery across various plants. What they did wasto set up a calendar that's color coded, that shows either month to date orcan show the entire month, and it shows by day how they're doingon their own time delivery and they created an internal benchmark so that from oneplant to the other, they could see, here's how the five plants are doing, compare those and create that competitive spirit we've talked about, with thegame of work and numbers being a motivator. Then we're able to improve their ontime delivery significantly. I don't have a bottom line number for that,but the VP at that company set are our power by reports have taken hold, enabling us to monitor and improve our efficiency. In that case he's speakingspecifically to their own time delivery so that that ability to create that competitive edge, without creating a wall of shame, but just saying look, here's whatwe have internally, this is our benchmark for on time delivery, really helpthem to shore that up on that calendar. When you see a lot of redsfor one plant and you see a lot of Greens for another. Thatone month the red. They want to fix it quickly. It follows thatCharles Schwab story that you've probably heard, everyone's heard, but where he wasrunning a steel fact tree and walked in the morning and said how many heatsdid we generate today and they said six,...

...so we took a piece of chalkand wrote a big six on the floor and left and the next crewcame in and said what's at six? Oh, that's what the last crewproduced, and by the end of the day that was scratched out and therewas a seven. It's it's just that ability to get that feedback loop thatreally drives people to think about how can I be more efficient, as opposedto this vague sense of we're doing stuff but we're not sure what it means. So those are this the types of applications that we see. Having somethingtangible or a visual that you can just makes it more concrete can be sucha powerful thing. Yeah, yeah, you know, it seems like theyare accountless platforms and services out there that promote big data and artificial a talentintelligence, machine learning and or yet of things, excter. How can manufacturersmake sense of all this and what are practical ways it can get started makinguse of their data? Yeah, that's a great question. So company sooften come to us and say, Hey, we want to do this, thismachine learning, this artificial intelligence thing, and what they mean by that iswe want to take the hordes of data that we have and find insightsthat that a human being or a spreadsheet can't do. where the correlations betweenweather patterns and how people buy certain products, or if they've bought one product,how likely are they to buy another? or where's their likely to be acustomer satisfaction issue, and those are great. It does require those sortof more advanced extended analytics, that machine learning, those heavy algorithms that arelooking for correlations and patterns. It requires a lot of data and it requiresa high tolerance for trial and error. You've got to have a test setof data, you've got to have a training set of data and you've gotto be able to apply that and see where these these correlations. That isgood stuff, but it's not the lowhanging fruit. So many factors when they'rethinking about data, rather than going into that stratosphere of you know, sortof science fiction, you know brushing up against the border of science fiction typeartificial intelligence. We find that the vast...

...majority, I would say ninety pluspercent, really don't have a good grip on just what's happening as of todayand how does that relate to where we're headed and what our goals are inour mission for our company? And are we on track and if not,what are the factors that are getting us off track? Is it our marketingspend? Is it something to do with our supply chain, or whatever thecase is? And so what we encourage companies to do is, let's takecare of this really easy, lowhanging fruit. Let's give you good instrumentation so thatyou can, from a command center, from a single screen, see what'shappening across all the aspects of your operations and be able to see that, coordinate and identify by exception. Here's where I need to focus my effort. Get your operations tight and then democratize that so everyone is playing from thesame playbook and has that shared mission. Then, once you've got that tightenedup, then it's good to look at the the more speculative, advanced analyticsand there's some opportunity there, but I think that's that's one way that companiescan make sense of it is leave some of that really science fiction stuff onthe table for now and get back to the blocking and tackling of getting afeedback on performance on a daily basis. There was a two thousand and NineteenHarvard Harvard Business Review New vantage article that surveyed a wide variety of executives inenterprise organizations about their adoption of data, and I'm a read a couple keystats from that survey. One of them was that fifty two percent admit they'renot competing on data and analytics, and then sixty nine percent report that theyhave not created a data driven organization. And one of the conclusions, Ithink, from the survey seemed to be that companies are spending money on andprioritizing data, but their adoption has been lackluster. Why do you think morecompanies aren't taking advantage of becoming data driven...

...and what they can they do toovercome it? Yeah, that's a great question. There it's the number oneissue that we see. It's what you're seeing more of business articles about datareferring to how do we get this organizational change? How do we get thisadoption and it's it's become our singular focus. Rather than technical experts, which weare and have to have, but rather than hired guns where someone sayshere's the reports we need, make us a day to warehouse. We wantto be data driven. If we take that order and just start building stuff, it tends to have marginal value. So what you have to look atis how do we begin to shift our organization towards being data driven? What'sdifficult about that as habit and convention and prioritizing the urgent and the short termover the important and the long term. There's also this sort of specter ofthe legacy of the data warehouse that enterprises have deployed over the past decades.That cost seven figures and sounds like a you know, only for the reallybig players and complicated and risky. There's also this idea of sort of thewaterfall approach, which is a term and development that means we're going to buildthe whole thing and then deploy it, as opposed to the agile approach whereyou go after smaller targets and over time build a bigger mechanism to drive thatdata and it's that lack of understanding of how to convert to a data drivenculture that I think holds companies back. So what we focus on is helpingcompanies again to identify that first area. First of all, look at thewhole thing. What are the areas of operation that are critical to us tomeet our goals in the next one, three and five years? And thenlet's focus on where the biggest, the most acute pain is. That hasthe biggest opportunity to introduce performance feedback in...

...the form of DASHBOARDS and data analytics. That is not a heavy lift. It's not going to require a milliondollar data warehouse. It's going to require thirty or forty thousand dollar engagement towhether you're doing internally or hiring someone, to get ahold of the data.First Certain area, let's say inventory, and you're looking at freeing up shelfspace and getting rid of slow moving inventory and freeing up cash. Where canwe get the biggest bang for the buck and seed this thing and have itbe if that's the last thing we ever do with business intelligence, it willcontinue to have value long term. It's not. It's not intertwined with awith a big, bigger mechanism that it won't work on its own. Soneeds have standalone value and so many companies miss that first step. Just geta win, get wins early and often, make them simple, make them small, make them good, and then you can be off and running.And so I think those are some of the challenges the companies face that youhave to go in wide eyed when you're saying, Hey, we need totake better advantage of our data. Be careful of the pitfalls. That's somethingwe help with, but something our book speaks to and a lot of industrywonks out there will teach you about as you begin to look into data right. Well, John, is there anything else you'd like to add to thisconversation to kind of put a bow on it that maybe we haven't touched on? Yeah, I would just say this that for our organization, as largeas is, thirty eight people. Now your typical mid market manufacture as faras scale, but we've seen it here and then we've seen it with somany companies we work with. When you start to put into people's hands thosetools that give them visibility, it is like breathing oxygen again. It's likeyou've been you've had a governor on your on your ability to really move throughsome of the key initiatives and key goals that you want to get to,and the beauty of harnessing your data and putting it in dashboard form that's easyto consume and relevant to the person consuming...

...it. What's so nice about thatis it's an automated way to engage everybody around the highest priority, the highestvalue creation initiatives and get everyone in a shared mission. It's much more difficultto motivate to have company wide meetings to say, remember, here's our priorityand this is what we need to focus on and and then, throughout theorganization, having every manager get on that same company line and be able topreach that so that people just get it into their heads through repetition. Youdon't have to go through that heavy heavy lift and on and going burden ifyou'll just put in front of each person what they need to see to knowhow they can succeed at their work and contribute to the bigger success of thecompany. When you do that, great things start to happen as far asculture and as far as employee satisfaction and as far as pulling out people's greatestpotential. So I encourage companies to take a small step, a very smallstep, not to start a huge new initiative, but let's nail one smallarea and see what that does. And that's where you get that sort ofeyebrows raised, light bulb goes on and and companies tend to freak out andsay, oh my gosh, it's like we invented fire. What have webeen you know, we should have done this a while ago, and Iknow that sounds a little self serving and then certainly on my opic, becausethis is what we do, but we've seen it over and over and it'spretty phenomenal. Great Way to wrap it up, John, great conversation today. Really appreciate you coming on the show. Thank you, Joe. Can youtell listeners where they can connect with you online and learn more about we, what you and your company, Blue Margin, are doing? Yeah,you bet so. They can just go to blue margincom. When we geta inquiry from someone, we start out just in the consulting mode and willdo a discovery around. What is it you're trying to achieve? What haveyou tried so far? What's worked,...

...what hasn't? Where's your biggest opportunityto get impact for the lowest investment up front, and if it looks likethere's a place to help, then we'll put together a proposed scope of workand they can consider that for their own internal deployment or using someone like usif they want to. But very light touch, consultative approach because we findthat works best. So if they go to the site, they can seeme on there. It has my contact info or they can fill in oneof our forms. We'd love to chat with them and offer any help,answer any questions that it doesn't have to be a customer oriented thing. We'rehappy to help great well. I encourage our listeners to take John up onthat offer. Visit Blue Margincom well. I'd like to say thank you onceagain to our sponsor, codenist part solutions, for helping make this episode possible andJohn Thanks to ton for taking the time to come on the show today. Yeah, thank you, Joe. Take care. As for the restof you, I hope to catch you on the next episode of the ManufacturingExecutive. You've been listening to the manufacturing executive podcast. To ensure that younever miss an episode, subscribe to the show in your favorite podcast player.If you'd like to learn more about industrial marketing and sales strategy, you'll findan ever expanding collection of articles, videos, guides and tools specifically for be tobmanufacturers at gorilla seventy sixcom learn thank you so much for listening. Untilnext time.

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