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 and putting it in dashboard form that's easy to consume and relevant to the person consuming it. What's so nice about that is it's an automated way to engage everybody around the highest priority, the highest value creation initiatives and get everyone in a shared mission. Welcome to the manufacturing executive podcast, where we explore the strategies and experiences that are driving mid size manufacturers forward. Here you'll discover new insights from 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 apply actionable business development strategies inside your business. Let's get into the show. Welcome to another episode of the Manufacturing Executive podcast. This shows being brought to you by our sponsor, CONDINA's part solutions. I'm Joe Sullivan, your host and a cofounder of the Industrial Marketing Agency guerrilla. Seventy six so I entered the workforce in two thousand and five, after graduating from UNDERGRAD and I don't know that I could have stepped into the marketing world at a better time. I was interested in digital media, web design, online marketing, digital advertising, etc. And then in November of that exact same year, two thousand and five, a new Google product was released, its name Google analytics. It blows my mind looking back and thinking, wow, this is a tool that just about every company relies on to harness data about their audience, how their audience finds them and interacts with their website. And it didn't even exist until fifteen years ago. Before then, a marketers ability to measure the impact of their efforts was just so primitive. The advancements in harnessing marketing data that have unfolded 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. That will be a great topic, but one for another episode. Instead, I want to call attention to how quickly the world has changed in terms of our ability 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 the emergence of the Smart Factory and Iot Technologies, dprinting, advanced robotics, autonous vehicles and and all of these things have just made data so much more essential than ever before, and it's a good lead into my guests today, who I'm really excited to introduce. John Thompson is a cofounder and senior partner at Blue Margin Inc, a company of thirty eight consultants and engineers in Colorado who helped mid market companies, with an emphasis on industrials, use their data to create growth by getting everyone to play for the same playbook. An author and speaker, John Sheds light and how you can create the dashboard effect, which is the title of his book, as well, a revolution in business that helps 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 a little bit more about yourself and your journey that's led you to where you are today? Sure. Yeah, my brother and I are the founders of this company. We started out in the DOTCOM age and two thousand we built a business that was venture backed, where we took data from enterprise companies around their telecom expense back when cell phones did not have unlimited plans, and so on and telecom was a major line item and we took their their bills that would 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 find savings and really we're able to do a lot with that. We actually grew to a five hundred person company that was pe back by one equity partners called vercuity. became the name of the company...

...and when we we went on various adventures from there and real estate and of the things. But when we got back into starting a business, we decided we wanted to do things that enable companies through essentially the cloud, and started out in in cloud productivity, Google and then Microsoft Office. Three hundred and sixty five were now Microsoft gold partners and focus solely on data and business intelligence, which is a strange phrase. That means 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, profitability and employee satisfaction and so on, and that's that's what we wrote the book about the DASHBOAR effect. It's great. Why is data such a big buzz word in business right now, and particularly in manufacturing? Would you say, yeah, it really is. There's a few factors that have lent to that big shift. You hear everyone talking about and throwing around, like you say, buzz words big data, artificial intelligence and so on. One of the reasons is that everything we do produces data. So all the machines and manufacturing that we use, all of our accounting, all of our sales, all of our HR, every bit of operations, produces data because we're using transactional systems, ie. Software, and that leaves an artifact that shows you how 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, various managements, philosophies and techniques and so on, they're looking for that next frontier and data appears to be that opportunity to really leverage an asset that you already have. So companies are turning more and more to that and all the gurus, it seems, in business, are really pushing for data as as the big 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 look across Peter Drucker and anyone else, you can get your hands on their speaking to data. Another reason that it's really become a big buzz word is that the tools to harness and mobilize your data, like power Bi in the case of Microsoft, or Tableau or click or any number of a hundred different platforms that are out there and that seemed to be appearing daily, are making it much more accessible, financially and technically to be able to connect to your data sources, get it wrangled in and produce something that gives you instrumentation and insight so that you're you're able to operate more intentionally less reactively. I would also say that that business culture, in the mindset of employees, has shifted a lot with the information age. You have employees moving on from one job to the 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 and owner should tip of their work, and data really provides a great way to do that, rather than the sort of old model of we will do all of our insights and strategy in the board room and then push those through an organization twenty layers deep. Companies are finding that if they put that instrumentation in front of everyone, right down to the line worker, you get much better engagement, you get much more employee satisfaction and it begins to turn the tide on some of those shifts in culture so that companies can take advantage of them rather 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, which was co authored with your brother and business...

...partner, and can you kind of tell 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 around using data and business. Typically, when companies think about data, they're thinking about the executives. We need better reporting that's more consistent. We need to be able to answer questions at our fingertips instead of requesting spreadsheets and ad hoc meetings and all the overhead that goes with that, and that is a good place to start. The most influential people in an organization typically, typically are the executives. But what we found is that democratizing data, democratizing dashboards and insight and instrumentation, as we call it, throughout an organized zation has some phenomenal impacts 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 for their role that the executives have, so that they can think strategically, make the 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 of a lack of clarity. When you're not sure how someone's doing, you stay on top of them. When you're not sure how you're doing and how the Organization perceives your performance, you fall to politics a lot. When you make that empirical and it's in numbers and people can see here's the goal, here's how they're trending towards it or not. Here's why. It allows for much more direct discussion, much more agency on the part of the employee. So that'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 into that. There are a number of times in the book you drew on concepts from Charles Conrad's book the game of work, which essentially likened running a business to playing a game. In sports, the simplest numbers on the score guard service the motivation behind why players play and show up and ultimately why we watch them do it. And by the way, you had me in the first line of the book where you recalled Odell Beckham Junior's famous one handed catch against the cowboys back in two thousand and fourteen. It's as a huge NFL fan that's when I won't forget. But can you unpack this idea of numbers as a motivator? Yeah, you bet, and I put in the book that that was one of the greatest catches in NFL history. I really think it was by a long stretch. You know, double double, meaning they're the greatest catch in in NFL history. It's really amazing and as we point out in the book, you know, you can look at the highlights of any any weekend and see heroics or any game really and see how how do people do that? And what coon Rad says is if you want to improve the quality 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's sort 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, which is tough for executives in line employees alike. When you give someone a very concrete goal, a singular concrete goal, that gives them a sense of stability and firm footing and really drives focus and prioritization. If you were to play golf, it's a beautiful place to be, groomed environment and it's lovely and fun to swing the club and when you occasionally hit it at the center of the face and it makes that click it's...

...seems all worth it, but without a hole at the end it loses all of its meaning. And for some reason we tend to leave that aspect of human nature at the office door and assume that instead of score keeping and having a definite, measurable goal to go after, what we need is good job descriptions, good compensation packages, an annual review, things like that, and that those worked for a long time in the very sort of top heavy, top down, authoritative business environment of the industrial revolution, but less so in business culture today. And so if you can give folks the same motivators that will drive those heroics that you saw with o'dell and again any game and any professional sport or any sport, it changes that dynamic for them and really leverages human nature and our desire to achieve and to have that achievement be concrete and recognized and measured and clear. So that's the idea behind keeping score will drive motivation improve performance. We're going to take a thirty second breather here for a word from our sponsor, cadinus part solutions. 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 architects need models of your products to test fit in their designs. That's where cadinis comes in. They help you create a dynamic, shareable cad catalog you put on your website. Designers can preview the product from any angle and download it in the format they prefer. They get the data they need for their design and you get a fresh lead to add to your marketing pipeline. To get one of your products turned into an online d model for free, use the code executive at part Solutionscom slash executive. How do you how have you seen the business world change over the last pack,...

...the last decade or so in terms of use of data inside of operations? Yeah, a lot. It's funny because we don't run into many companies that have their data really as a managed asset. It's more like a tide that's coming at them that they're trying to harness, and you know you can't. You can't fight the tide when you don't have a good, controlled way of managing it. entropy kicks in and you get data chaos before you know it, and so companies will again call all together large and complex spreadsheets with all sorts of versions of the truth depending on where in the business you're looking at data, and that can be very 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 and business and is a phenomenal tool. But with the recent last ten years, fifteen years, development of these platforms that go much beyond excel, that are connected directly to your systems that produce data, so they automatically update your data mart and they and that automatically updates your reports, companies are realizing that clear visibility rather than reactivity and relying on instinct and experience, which are all good. You have to have those skills, but if you can, if you can fourfy that with clear visibility into what's happening empirically and not get trapped in sort of the bias effect where you're looking for things that confirm your decisions and you're hiding from things that are that seem too difficult to deal with, data eliminates 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 where employees want more agency, where there are more transient between jobs and if they're not engage, if you're not engaging the full person, if you're treating them 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 and and harness their fuller potential. So we're seeing that that change in culture driving this 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 for those margins that give them an advantage and data's one of the ways to really zero in on those things where they can, they can increase efficiency, whether it's inventory management or or on time delivery or you name it. So on that 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 are some of the biggest challenges that manufactures specifically are facing in terms of, you know, getting control of and making use of their data? Yeah, well, manufacturing is a complex operation. You have a lot of pieces that runs sort of separately but have to coordinate really well. So understanding your sales projections first of all, sales people understanding their buyer trends and knowing who is falling off or not taking advantage of a broader swath of their products or have us as a satisfaction show or has run into on time delivery problems, those sorts of 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 is important for the purchasing folks to be able to know what to have on the shelves to be able to deliver quickly. That then translates to the inventory folks who are trying to keep free up as much cash as possible and minimize slow moving inventory, have the right things on the shelf, have strategies to get rid of stuff that is becoming more obsolete,...

...and then that has to do with the supply chain and on time delivery and invoicing and order to cash and so on. So all those things need to coordinate and it's very, very difficult and those are some of the areas that we've really focused on with our manufacturing clients. We've also focused heavily on machine employee utilization. We have a client that they're quasi manufacture. They do install and maintenance on a commercial and industrial level. They have five hundred texts and with better insight on tech utilization being able to coordinate that body of employees, they increase their their employe utilization from sixty to eighty percent. With five hundred texts, that comes to about five million dollars on their bottom line. And I have actually a couple other quotes from some of our clients that I think are useful. This is from a 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 like we invented fire. That's a common response for an organization that has been relying on 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 we have clear visibility into critical areas such as order to cash and are another one fastener manufacturing company. After viewing our DASHBOARDS, I realized this might be the most important 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 and we're companies really struggle is in getting started there. Their data seems like a massive hair ball that can never be untangled, and we help them to and regardless of working with blue margin or whomever, a company should start with a small area that is lightlift and high impact. Where can we get the most impact for the for the least effort and begin to see that that visibility through dashboards 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 a data driven organization and dealing with things like inventory and on time delivery and so on. So those are those are some of the areas that we've seen manufacturers really take advantage. Are there any tangible examples? You know, a success story 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 their bottom line. Yeah, so we have a manufacture of aerospace parts and they are really focused on on time delivery across various plants. What they did was to set up a calendar that's color coded, that shows either month to date or can show the entire month, and it shows by day how they're doing on their own time delivery and they created an internal benchmark so that from one plant 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 the game of work and numbers being a motivator. Then we're able to improve their on time 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 speaking specifically 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 what we have internally, this is our benchmark for on time delivery, really help them to shore that up on that calendar. When you see a lot of reds for one plant and you see a lot of Greens for another. That one month the red. They want to fix it quickly. It follows that Charles Schwab story that you've probably heard, everyone's heard, but where he was running a steel fact tree and walked in the morning and said how many heats did we generate today and they said six,...

...so we took a piece of chalk and wrote a big six on the floor and left and the next crew came in and said what's at six? Oh, that's what the last crew produced, and by the end of the day that was scratched out and there was a seven. It's it's just that ability to get that feedback loop that really drives people to think about how can I be more efficient, as opposed to 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 something tangible or a visual that you can just makes it more concrete can be such a powerful thing. Yeah, yeah, you know, it seems like they are accountless platforms and services out there that promote big data and artificial a talent intelligence, machine learning and or yet of things, excter. How can manufacturers make sense of all this and what are practical ways it can get started making use of their data? Yeah, that's a great question. So company so often come to us and say, Hey, we want to do this, this machine learning, this artificial intelligence thing, and what they mean by that is we want to take the hordes of data that we have and find insights that that a human being or a spreadsheet can't do. where the correlations between weather 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 a customer satisfaction issue, and those are great. It does require those sort of more advanced extended analytics, that machine learning, those heavy algorithms that are looking for correlations and patterns. It requires a lot of data and it requires a high tolerance for trial and error. You've got to have a test set of data, you've got to have a training set of data and you've got to be able to apply that and see where these these correlations. That is good stuff, but it's not the lowhanging fruit. So many factors when they're thinking about data, rather than going into that stratosphere of you know, sort of science fiction, you know brushing up against the border of science fiction type artificial intelligence. We find that the vast...

...majority, I would say ninety plus percent, really don't have a good grip on just what's happening as of today and how does that relate to where we're headed and what our goals are in our 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 marketing spend? Is it something to do with our supply chain, or whatever the case is? And so what we encourage companies to do is, let's take care of this really easy, lowhanging fruit. Let's give you good instrumentation so that you can, from a command center, from a single screen, see what's happening 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 the same playbook and has that shared mission. Then, once you've got that tightened up, then it's good to look at the the more speculative, advanced analytics and there's some opportunity there, but I think that's that's one way that companies can make sense of it is leave some of that really science fiction stuff on the table for now and get back to the blocking and tackling of getting a feedback on performance on a daily basis. There was a two thousand and Nineteen Harvard Harvard Business Review New vantage article that surveyed a wide variety of executives in enterprise organizations about their adoption of data, and I'm a read a couple key stats from that survey. One of them was that fifty two percent admit they're not competing on data and analytics, and then sixty nine percent report that they have not created a data driven organization. And one of the conclusions, I think, from the survey seemed to be that companies are spending money on and prioritizing data, but their adoption has been lackluster. Why do you think more companies aren't taking advantage of becoming data driven...

...and what they can they do to overcome it? Yeah, that's a great question. There it's the number one issue that we see. It's what you're seeing more of business articles about data referring to how do we get this organizational change? How do we get this adoption and it's it's become our singular focus. Rather than technical experts, which we are and have to have, but rather than hired guns where someone says here's the reports we need, make us a day to warehouse. We want to 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 at is how do we begin to shift our organization towards being data driven? What's difficult about that as habit and convention and prioritizing the urgent and the short term over the important and the long term. There's also this sort of specter of the 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 really big players and complicated and risky. There's also this idea of sort of the waterfall approach, which is a term and development that means we're going to build the whole thing and then deploy it, as opposed to the agile approach where you go after smaller targets and over time build a bigger mechanism to drive that data and it's that lack of understanding of how to convert to a data driven culture that I think holds companies back. So what we focus on is helping companies again to identify that first area. First of all, look at the whole thing. What are the areas of operation that are critical to us to meet our goals in the next one, three and five years? And then let's focus on where the biggest, the most acute pain is. That has the 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 million dollar data warehouse. It's going to require thirty or forty thousand dollar engagement to whether 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 shelf space and getting rid of slow moving inventory and freeing up cash. Where can we get the biggest bang for the buck and seed this thing and have it be if that's the last thing we ever do with business intelligence, it will continue to have value long term. It's not. It's not intertwined with a with a big, bigger mechanism that it won't work on its own. So needs have standalone value and so many companies miss that first step. Just get a 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 you have to go in wide eyed when you're saying, Hey, we need to take better advantage of our data. Be careful of the pitfalls. That's something we help with, but something our book speaks to and a lot of industry wonks 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 this conversation 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 large as is, thirty eight people. Now your typical mid market manufacture as far as scale, but we've seen it here and then we've seen it with so many companies we work with. When you start to put into people's hands those tools that give them visibility, it is like breathing oxygen again. It's like you've been you've had a governor on your on your ability to really move through some 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 easy to consume and relevant to the person consuming...

...it. What's so nice about that is it's an automated way to engage everybody around the highest priority, the highest value creation initiatives and get everyone in a shared mission. It's much more difficult to motivate to have company wide meetings to say, remember, here's our priority and this is what we need to focus on and and then, throughout the organization, having every manager get on that same company line and be able to preach that so that people just get it into their heads through repetition. You don't have to go through that heavy heavy lift and on and going burden if you'll just put in front of each person what they need to see to know how they can succeed at their work and contribute to the bigger success of the company. When you do that, great things start to happen as far as culture and as far as employee satisfaction and as far as pulling out people's greatest potential. So I encourage companies to take a small step, a very small step, not to start a huge new initiative, but let's nail one small area and see what that does. And that's where you get that sort of eyebrows raised, light bulb goes on and and companies tend to freak out and say, oh my gosh, it's like we invented fire. What have we been you know, we should have done this a while ago, and I know that sounds a little self serving and then certainly on my opic, because this is what we do, but we've seen it over and over and it's pretty phenomenal. Great Way to wrap it up, John, great conversation today. Really appreciate you coming on the show. Thank you, Joe. Can you tell 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 get a inquiry from someone, we start out just in the consulting mode and will do a discovery around. What is it you're trying to achieve? What have you tried so far? What's worked,...

...what hasn't? Where's your biggest opportunity to get impact for the lowest investment up front, and if it looks like there's a place to help, then we'll put together a proposed scope of work and they can consider that for their own internal deployment or using someone like us if they want to. But very light touch, consultative approach because we find that works best. So if they go to the site, they can see me on there. It has my contact info or they can fill in one of 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're happy to help great well. I encourage our listeners to take John up on that offer. Visit Blue Margincom well. I'd like to say thank you once again to our sponsor, codenist part solutions, for helping make this episode possible and John Thanks to ton for taking the time to come on the show today. Yeah, thank you, Joe. Take care. As for the rest of you, I hope to catch you on the next episode of the Manufacturing Executive. You've been listening to the manufacturing executive podcast. To ensure that you never 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 find an ever expanding collection of articles, videos, guides and tools specifically for be tob manufacturers at gorilla seventy sixcom learn thank you so much for listening. Until next time.

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