This week I’m speaking with Dawn Holly Johnson, the CEO of 3D value group and the author of the soon to be released book What CEOs Don’t Know.
During this episode, Dawn and I chat about Operational Excellence and how leaders can improve their overall organizational performance by adopting simple strategies and lean concepts.
What You’ll Learn This Episode:
- What compelled Dawn to write her book
- The top 3 areas that are lacking in traditional organizations when it comes to Operational Excellence
- Why top organizations need to adopt Lean and Operational Excellence
- What you can apply today to improve organizational performance
About the Guest:
As an Organizational Engineer with transformational experience in every major industry and in every size company, Dawn has been the catalyst for businesses to realize over $6B in cash flow improvements. She is the CEO of 3D value group and the author of the soon to be released book What CEOs Don’t Know.
Important Links:
https://www.dawnhollyjohnson.com/
https://www.linkedin.com/in/dawnhollyjohnson
https://www.wildlysuccessfulenterprises.com/
Full Episode Transcripts:
Patrick Adams
Hello, everybody. Our guest today is Dawn Holly Johnson as an organizational engineer with transformational experience in every major industry. And in every size company, Don has been the catalyst for businesses to realize over $6 billion in cash flow improvements. She is the CEO of 3d value group and the author of the soon to be released book. What CEOs don’t know. Welcome to the show, Don. Thank you, Patrick. Thanks for having me. Absolutely. You know, I’m excited to have you on the show. And I’m excited to hear about the book. So exciting to be right at the verge of releasing that book. I can’t imagine what you’re feeling right now.
Dawn Holly Johnson
It’s been five long years. Absolutely excited.
Patrick Adams
what actually compelled you to write this book?
Dawn Holly Johnson
oh, to be honest, sheer frustration. You know, I grew up learning operational excellence, total quality management in college. And when I first started working in aerospace, I was lucky enough to start out in one of the premier aerospace companies that was launching, total quality management, Six Sigma, ISO 9000, they were for running. And we had an excellent environment for continuous improvement inside of it was very much encouraged. There were structures inside of all of us, of course, I became a green belt, and then a black belt, then a master black belt, and all of that. But what I realized from the very beginning, was that I had a natural inclination to create improvement. I am an engineer by degree, I like to design I’m a big picture person, and I’m an extrovert, I love people. And so I just automatically took to being able to see the entire organization is what really turned me on because I could see the whole forest and I wanted to improve the health of it. And the main reason that drove me was to have people be happy in their work environment, right. And you know, I got spoiled in aerospace, I got spoiled in that company. And then I moved into health care after my father suffered a massive stroke due to medical error. I thought, you know, they don’t need me in aerospace. Planes aren’t falling out of the sky. I’m going into health care. And I’ve never met so much resistance in my life. And I’ve been in every major industry since then. But, you know, I began to question why, after presenting a viable, better solution, to improve the health of an organization, why there was so much resistance. And inside healthcare, which my experience has been as very passive aggressive in culture, I would get taken out by a leader that was threatened by my identifying significant opportunity. And so this continued to happen throughout my career, and I still managed to bring 6 billion in value for organizations, but there was a lot more left on the table. And you know, after another layoff, then I decided to sit down and start writing this book and figure out what’s missing? What is it that’s not understood that these best practices are not being embraced? I mean, operational excellence type practices mean, how long ago did Deming start 80 years ago. I mean, it’s been around a long time. I should be mastering by now. Why isn’t it? That’s what I began to question. And that’s what the book is about. It’s about recognizing that all of us are born inside the traditional paradigm, it’s part of society, the way we all work is ingrained in us. We’re taught to work this way, whether you’ve been to the University of hard knocks, or Harvard University, you’re taught this is how you design a business. This is how you manage a business. This is how you account for the business. This is how you do all these things.
And it’s not optimal at all. In fact, it creates a lot of the problems inside organizations. So I began to from my experience, you know, being a systems thinker, obviously, being a process engineer, but also a change management expert. I mean, yeah, I began to look at, you know, what’s the resistance? Why is it there? What is it that we commonly just don’t even recognize? Now? I was 20 years into my career when I began to write the book. Okay. I recognized that I also had been, of course, raised in the paradigm so it took me 20 years to knock myself out of it. And recognize that, really, people are blind to the true opportunity. They just can’t see it. And so we talked about business transformation, but I don’t know I mean, you can even Google it. There’s not a lot of definition around what that means. I don’t know if people truly understand it. But transformation means that prior to that moment, you could not see another opportunity, you couldn’t see it. And in a moment, you see now that you have choice, you can go a better way, you can stay the way you were. And you have a choice. Seeing if you keep to your old ways or not. Now, I’m going to say that all traditional business practices are not effective. And they cause all the common problems in organizations, but they’re assumed to be effective. Sure, a status quo. And so you’ve really got to let go of status quo thinking and take on new and proven methods, which we all are, you know, as operational excellence experts, huge proponents of, but I want our profession to be successful at this, my experience for the most most of my profession was like put pushing a rope up the hill, you know, very arduous, more change management than actually getting things done to try to bring people along. So I appeal to leaders to be open to new ways to work, because that’s what’s going to make the change. So the book is written for the world, it’s, it’s for three audiences, number one, for leaders, until you’re able to see the detriment of what you’ve been taught to do, it’s not your fault, and can undo that thinking and take on new practices and see the advantages of it, you will always struggle to create a high performing organization, for operational excellence leaders, I think it’s paramount. And it’s the first group we put through our wildly successful enterprises program are the operational excellence train people, because they need to be the first to shift their own paradigm, the reason our profession has not been as successful as you would think they would be, because oh my gosh, I mean, if if someone partners with one of us, their business will improve. But that’s not commonly accepted out there. Right. So it’s an opportunity for operational excellence leaders to actually see what the blind spots are with the company that they so desire to help create more success. And so it’s, it’s a big wake up call when it is in the book. And but of course, the recommendations are practices, a lot of them are operational excellence practices that we all know and love, and, and other practices that I don’t see operational excellence bringing into organizations that should be brought in. But nonetheless, the third audience is just for the common worker. Everyone’s in this paradigm. And so when we take companies who are wildly successful enterprises, everyone goes through it. And you know, from being a lean practitioner, everyone needs to be involved. Absolutely, everyone needs to understand, everyone needs to feel empowered. And so it’s really for the world, because my ultimate goal is that if every organization was delivering on its purpose, and providing value to the world, and operating effectively, and efficiently, no human being on the planet would go without their basic needs met.
Patrick Adams
Absolutely. That’s why I wrote. And I appreciate that. I appreciate that you’re putting this out there to the world and I also appreciate the fact that you identified the problem right up front, and that that problem is the traditional paradigm, right? And that’s what, that’s what you talked about. And so I’m interested to hear a little bit more about that. What would you say are the top three areas that are lacking in traditional organizations that should really be looked at and addressed? What would you say those would be?
Dawn Holly Johnson
I address three areas in my book, because I wanted to kind of, again, I’m a big picture thinker, let’s just give you three things to look at here. The first is focused. So the traditional focus, so if we look at a CEOs focus, traditionally, it is to create equity in their organization. That’s the number one prime objective. And I want to even create more equity in the company, but having that primary, and it’s usually the majority of the focus of the CEO, is on that equity. What’s begin to happen is the CEO and the CFO conspire a lot to manipulate the numbers to make that balance sheet look better to bring up that equity, right? How can I raise my assets and then what’s in their control? What’s in their control is to increase sales. Right, bring in new revenue, or cut operational costs, which we see the detriment of every day. Look at the number of layoffs that occur. downsizing, budget cutting, it’s a consistent thing and I can tell you in the fortune 100 It’s a bi monthly occurrence. They’re reorganized downside, this budget got cut over here. And so the focus is all about that balance sheet. Now, why was the organization formed in the first place, it was not manipulated balance sheets, that was not the purpose of the organization, the purpose of the organization is to deliver value. If you focus on actually delivering value, streamline your organization to focus on delivering value, the money comes, it’s not a problem. And so the first area that gets missed is focus. Okay? The second is structure. Organizations are not designed to deliver value, they are designed to manage and control people in departments. That’s because every org chart looks exactly like that. So that’s the focus, again, you’re not focused on delivering value, which is why the company exists. Instead, you’re worrying about managing people. What this creates, is it lacks diversity of thought, because you have all the marketing people conspiring together on what they think they’re going to do all the operations, people conspiring on what they think they need to do. All the sales, people conspiring all that, you know, and you get this group thing. And, of course, as operational excellence leaders, we purposely create cross functional teams for that very reason. But we’re already fighting an uphill battle, because the environment, the very structure of the organization will undo all the good work. And I see it over and over again. Now, things can stick. But it’s very difficult to have them stick because the way organizations are structured, are not compatible with delivering value. They’re compatible for miscommunication, creating rework, problems in product and service, and, you know, is simply not a customer focused design. But it’s an automatic, natural human tendency to be higher, it’s got to be willing to let it go.
Patrick Adams
Yes. And unfortunately, sometimes that also creates silos within organizations, which even further separates things, right? And that’s, that’s one of the things that I see, you know, not only the hierarchal issues, but also the silo issues that are caused, you know, as organizations get more and more complex, and so I can see where that would definitely help.
Dawn Holly Johnson
So I propose a new organizational model that very quickly, you know, with a change in focus, which is we’re going to deliver value. And now let’s design the organization to actually do that effectively and efficiently. And all other areas of the business are accountable to those value streams, to make them healthy. That’s the number one goal of the organization, it’s not to make my department look good to hit my department numbers. It’s not, right, it’s we’re going to deliver value, that what’s critical in a constantly changing world is that you’re also listening to the pulse of the marketplace. What do people need? What do people want to keep up with innovation? Well, the model I propose creates a natural, innovative environment creating a naturally collaborative environment, naturally efficient and effective environment. And so companies can be far more adaptable. And you know, since COVID-19, right, we saw companies that weren’t able to turn on a dime, seriously suffered. So you’re going to have to be adaptable. And all of this is critical to digital transformation, ever being successful. It’s, in my opinion, a train wreck right now, because there is not a focus on process and delivering value. It’s all about well, the next technology will make my company better. Sure, that is a false assumption. So structure is critical. And then the third is mindset. Now, this is really where the operational excellence piece comes in the mindset of continuous improvement. The difficulty is, and the reason I mentioned mindset last is without the right focus, and without the right structure, it’s very difficult to hold the mindset and have people be naturally accountable, naturally interested and engaged in continuous improvement. But another thing that I really recognized reflecting on why all the resistance, you know, back when I said, you know what made me first start writing this book with all the resistance. I had a question: Why? Well, people are resisting because they don’t understand there’s a better way also, there is a false assumption in society about human beings. That assumes that because I’m an expert in an area of business, that I’ve actually set the business up to win, which is that they’re not mutually exclusive. Just because I’m an expert in marketing doesn’t mean I set up the best marketing processes or engagements across the organization and that I’m connected with the rest of the organization that created a viable pipeline of information. It doesn’t mean any of them Right means I’m bad at marketing. Okay, so so there’s a disconnect, that the experts and leaders in the organization that typically rise because they are good at a function, so then they rise up through the organization are actually good at designing the business to be effective. So what I’ve come to realize is these experts, I mean, I’ve been in companies where sometimes people grew up in the company, like health insurance as an example. They’ve been with the company, 20 years, they’re a VP. And I come in, and I find opportunity, and they’re like, Who are you, you don’t even know our business, don’t need to enhance what you know, right? I make it better, right? I take what you know, and make it better. But the assumption is what we’re always continuously improving, because they’re constantly changing the process. They’re constantly changing what they do. And that is thought of as continuous improvement. So using that term is a little dangerous, because people already think they’re doing that, and they think they’re the experts to do it. And that’s the biggest barrier for operational excellence.
Patrick Adams
And would you say, as, as people are listening as, as listeners are thinking through what you’re saying, in these, these three areas that are that are lacking, it sounds like they they should be starting with the first one going to the second one before they look at adopting lean or operational excellence, to help with some of those issues. But do you feel like the ultimate goal is to adopt lean and operational excellence to help with those issues? Is there another approach? What are your thoughts on that?
Dawn Holly Johnson
So I, you know, I’ve been trained in multiple methodologies now. And you know, I prefer some over others in the book, I actually don’t go into any of them specifically. Okay. And for good reason. I think that yes, I am saying that, first, you need to change the focus, and then the structure and then bring in the mindset. But operational excellence is a huge piece of that mindset. What I’ve always done is a huge tool belt, I have a very large tool belt, I learned a lot, I’m a learner, I absorb a lot. I use what’s appropriate for that culture in that situation at the time. So I’m not locked into any particular methodology. Sure, I will say, My favorite is lean, because it empowers all people. And that’s the way it should be six sigma was never that way. We were like Superman and Superwoman, coming in, solving things, very complex, and then leaving and hoping, you know, yes, we would put in process control. But would it stick in For how long? That’s not empowering people? I mean, it is my favorite methodology. I just want to give it an environment to actually catch on. Sure. I think sometimes we get a little too rigid in the methodologies, and don’t back up to look at the big picture. And what we’re really all out to do. And so I would just challenge anyone trained in a particular methodology to just be open to adapting to how a team or how an organization needs to move forward versus being rigid. I know we must use this tool to do this. Well, yeah. Can you come up with it another way? So just being flexible, I think, is critical. But yeah, operational excellence is in the cornerstone of the mindset piece. Absolutely.
Patrick Adams
And I completely agree with you in exactly what you said about the tool belt, you know, for me, you know, I run into a lot of people that say, well, because this company did it this way, or this company had this tool, then we have to apply it. My response is very similar to what you said. And if you think about it, man, if I’m trying to put a screw in a board, am I going to use a hammer? Or am I going to use a drill, right? And, you know, for organizations that are applying tools, a certain tool may not work for that team or that industry for that time. So they may need to be adjustable even on the tool on how to change or be flexible with how that tool works, or what it looks like. So you know, I completely agree with you in what you’re saying and being flexible as leaders to ensure that we’re using the right tool for the right job. And that we’re open to learning new ways or listening to our people as when they say this isn’t going to work. Can we try it this way? Right and being open to experimentation. So thank you for that.
Dawn Holly Johnson
Absolutely. Absolutely. I also want to appeal to leaders of organizations, yes. If you do have operational excellence, people in your organization, they need to be reporting directly to the CEO. They need to help design the business to work.
Patrick Adams
Tell me more about that. I’d love to hear a little bit more about your experiences and why and you know what your thoughts are on that topic?
Dawn Holly Johnson
Well, so the average operational excellence practitioner has been trained on a particular methodology, yeah, trained on process improvement. And so what typically happens is an operation which I’ve been right operational excellence later gets brought in at the director level, sometimes the VP level, usually reporting to the CEO. It’s usually very operational. operationally focused initially. But it’s all about oh, we’re having a, you know, our lead time is too long and hiring people. So let’s send a belt over there. Let’s send the lean expert over there. And let’s work that process well. So we’re working at these little peace processes inside the organization, we haven’t addressed the focus, we haven’t addressed the structure, we haven’t laid out, even identified our value streams. So ultimately, I mean, we’ll get some quick wins out of it. But ultimately, it’s not going to transform the organization to even come close to reaching its maximum potential sure got to change your focus in your minds that, well, a good operational excellence Later, we’ll know how to design dot organization, every organization I come into, even if I’m not brought in, just you know, in the past wasn’t brought into structure in my mind, within a month, I already had a complete new structure for that organization. In my mind, I would even sit and play with it and draw it out, you know, here’s their core processes, they should be lined up this way. As an example, I came into, you know, one of the top healthcare organizations about six years ago, and billions in waste in three months that I could see, it was clear to me that the way they were structured and organized was driving so much waste, and there was an opportunity to just and they were reordering all the time anyway, what I propose in the book is you reorganize one time, and you’ll never have to do it again. Never.
Patrick Adams
Yeah, yeah. And I appreciate that you said that. And I would love to hear even some more examples about, you know, specific examples of maybe projects or within companies that you’ve worked in, but in applying what you recommend, if you could share a little bit of that with us?
Dawn Holly Johnson
Absolutely, absolutely. Working with a company of about 4500 employees, about 20% of the business came from the state, you know, it was a state account. And, but that had to go up for bid. You know, it’s the government accounts, every five years. And so, we were bidding. And so I heard, you know, I was in the operational excellence group, I was actually working really hard to bring lean into the organization at that time. And I had developed my own type of program to do that to fit this type of environment. And that was quite successful. But I heard rumors that you know, the word on the street was, there was no way by looking at the budget for that business unit that they were going to be able to bid competitively. And so what leadership did is what leadership typically does in a traditional organization, they started pouring through budgets, before through budgets, they poured the financials, they had to cut 2.4 million annually out of that business units budget to be competitive, they came up with point 7 million with cutting, cutting, cutting. Now, when you’re looking only at a budget, and you’re cutting things you don’t know whether you’re cutting value, or cutting waste. So it’s dangerous to budget cut, just from a spreadsheet perspective, which is the first thing I talked about in my book, so they still weren’t going to win the bid. And out for three attempts. pleading with them. I mean, I was already working with them. That’s not going to cost you anything. Let me value this at a high level across the whole business unit. And I’ll find it, I had complete confidence, I would find it close to. And so I spent three weeks doing that. I had to train up kind of for people so as I would find an opportunity, I’d send them off to go drill down into it. And I continue to walk that entire business unit. From a customer perspective. I didn’t worry about auxiliary processes. It was like what’s the main process here that you know we do, right, we deliver x and let’s go through this. And after three weeks, I identified 2.5 million. So then I proposed the change. We managed to put all that in in three weeks, and we won that bid, we won that bid. And you wouldn’t believe how ecstatic the people were in customer service, you know, in operations that we had been struggling to try to serve customers. And that have, we’ll get back to you in 30 days. That was their promise in the call center. Because it took that long to try to solve an issue. We were doing same day real time issue. And so within a week, the call center volume decreased by 10%. Because we had solved problems. So while we had reorganized the work, I was also capturing new data. And we were able to trend that there were several problems in operational platforms that we then corrected with it. And we reduce the problems. So when call center volumes went down, people were able to react quickly. We didn’t lay a single person off. We let attrition ride over six months, which call centers high attrition anyway right, which started to decrease. Actually people wanted to stay but we want attrition right but what we avoided was a 20% layoff. That’s amazing, we also got rid of an IT system that was just completely useless that had been brought in by another department. without talking to the other departments, we just got rid of it. So we saved 2.5 billion. Now, we won that bid . Besides saving 20% in the 900 people’s jobs, it generated a billion in revenue annually for that company for the next five years. And they almost didn’t take me up on it.
Patrick Adams
That’s amazing.
Dawn Holly Johnson
Oh, replicated what I did in the other 80% of the company, and brought cost savings to the customers, right, to improve their competitiveness, those leaders chose not to do that. Because that wasn’t their problem. Yeah. But yeah, I mean, the money is there. And if you’re willing to take on the mindset of delivering value.
Patrick Adams
right, I love that. So we have many listeners right now that are listening in and I’m sure they’re, they’re wondering, what could they take even from your, from your the story that you just told us? Or your book or other things that we’ve talked about, you know, what could they take away? What could they walk away with today and begin applying right away, I don’t know, if there’s one or two things that you could pull out that you could say, you know, what, these are the two things that that I would recommend you do right now, or what they could do to help improve that organization performance. Any suggestions for the listeners?
Dawn Holly Johnson
Absolutely, the first place to start is defining your organization’s value proposition. Now, this is marketing 101. And typically, marketing works to come up with what that is, so that they can market the organization. Typically, then in a vacuum with marketing, most marketing professionals will say I have statistics around this, I don’t have them in front of me, but that they’re concerned about the value proposition they’ve developed. Because the rest of the organization was involved in coming up with it, there hasn’t been sufficient research done on the marketplace, or what potential customers want, you don’t want to talk to your current customers, they’ve already used to your status quo delivery, you need to talk to potential customers around that. But you need to find your value proposition. And then every single person in your organization needs to know it and agree with it and appreciate it. And that begins to create stronger alignment, because at least you’re all aiming people will make better decisions, customers will be better serviced, right? I mean, the whole thing changes, it starts with changing that focus. And there is an assumption in organizations that everybody working in the organization knows what the purpose and the value it delivers, and of the organization and they don’t make false assumptions. And most people are kept in their silos right in sometimes kept in very small silos. They don’t even know what the whole company does, they have no idea. The first thing I do in every organization is define those high level processes. And everyone in the organization is presented with that training at a very high level, look at this is how our organization actually works. Most people have no purview to that. So you’ve got to start with defining value and making sure everyone in your organization is crystal clear about what that looks like. And then you’ll begin to gain alignment. And once you’ve defined that value, then you can start designing the organization to actually deliver it, that’d be the first priority. So that’s the first step.
Patrick Adams What would you say within the same question? Maybe for someone that doesn’t have, you know, the ability to make organizational decisions for you know, maybe they’re in mid management, maybe they’re a supervisor somewhere in an organization where they don’t necessarily have the decision making authority to, to change things at the top? What would you suggest to someone like that, that, you know, something that they could walk away with an apply right now?
Dawn Holly Johnson
Well, I would highly recommend that they get this book in front of their leadership. You know, I’ve had several people pre read the book, including CEOs. Were really curious to know what they didn’t know. Sure. He wanted to read the book. You know, so I think it’s easy I’ll call it an easy sell, to talk to leadership and begin to, hey, you just got to continue to spend this stem this awareness. But what you can, you know, help promote in your own area of the organization is, it really begins to bring up these conversations with people. It’s like, what is the value of knowing when, especially if there’s a meeting, and everybody’s brainstorming about solving the latest problem? And it’s like, well, what’s the value we’re trying to create here? I mean, just starting with that will create a new attitude throughout the organization, it will catch on, it will make people think, you know, what’s the customer value here as an example, a few years ago, working with with a customer service rep and she says, well, we’re we’re going to reduce the number of call transfers because It’s expensive, and nice. And my first thought is, why are they having to call in in the first place? What are your top reasons that people call in, you’re more worried about your budget in the call center than you are about serving your customers? Sure. because ideally, there is not a call center. Except for, I don’t know how to put my widget together, can you help me? I don’t understand, you know, you should be able to understand the instructions you should be able to, but how many things I have bought lately that I can’t even understand the instructions. run and operate it. So you know, we’re not customer focused. And then we think a call center is going to handle that later, is too late. So just continue to bring the voice of the customers we used to call in six sigma, right, that said, you know, what, put yourself in place with the customer, would you want that. But you want that, and that will begin to bring a you know, customer centric, customer journey, centric thinking into the environment.
Patrick Adams
That’s great. Good advice. from Dawn Holly, I appreciate that so much. If anybody is interested to get a hold of you with questions, or they want to get a copy of your book, which is to be released here pretty soon, where would they go? How would they get a hold of you? What’s your contact info? And we’ll make sure that we drop this in the show notes as well.
Dawn Holly Johnson
Sure, absolutely. So Dawn Holly Johnson com is my author page. As soon as you land on that, you can click a button and order a pre-release in the book, and then be wildly successful. enterprises.com is another great place to visit, we have operational excellence pages, as well as pages for CEOs perfect. We’re in conversation. And you can also take a short assessment of your organization that takes about three minutes, that gives you a sense of how close your organization is to reaching its maximum potential. So that’s wildly successful. enterprises.com
Patrick Adams
perfect. And we will definitely throw that in the show notes. So if you’re interested to get a hold of Dawn Holly and maybe even look into that assessment, you can click on either of those links in the show notes. Well, it’s been great to have you on the show. And I hope this isn’t the last time. Maybe once your book is released, we can pick a chapter or a topic out of the book and maybe do a deep dive into it within the next year. Thanks so much for tuning in to this episode of the Lean Solutions podcast. If you haven’t done so already, please be sure to subscribe. This way you’ll get updates as new episodes become available. If you feel so inclined. Please give us a review. Thank you so much.
Transcribed by https://otter.ai
Hello, everybody. Our guest today is Dawn Holly Johnson as an organizational engineer with transformational experience in every major industry. And in every size company, Don has been the catalyst for businesses to realize over $6 billion in cash flow improvements. She is the CEO of 3d value group and the author of the soon to be released book. What CEOs don’t know. Welcome to the show, Don. Thank you, Patrick. Thanks for having me. Absolutely. You know, I’m excited to have you on the show. And I’m excited to hear about the book. So exciting to be right at the verge of releasing that book. I can’t imagine what you’re feeling right now.
Dawn Holly Johnson
It’s been five long years. Absolutely excited.
Patrick Adams
what actually compelled you to write this book?
Dawn Holly Johnson
oh, to be honest, sheer frustration. You know, I grew up learning operational excellence, total quality management in college. And when I first started working in aerospace, I was lucky enough to start out in one of the premier aerospace companies that was launching, total quality management, Six Sigma, ISO 9000, they were for running. And we had an excellent environment for continuous improvement inside of it was very much encouraged. There were structures inside of all of us, of course, I became a green belt, and then a black belt, then a master black belt, and all of that. But what I realized from the very beginning, was that I had a natural inclination to create improvement. I am an engineer by degree, I like to design I’m a big picture person, and I’m an extrovert, I love people. And so I just automatically took to being able to see the entire organization is what really turned me on because I could see the whole forest and I wanted to improve the health of it. And the main reason that drove me was to have people be happy in their work environment, right. And you know, I got spoiled in aerospace, I got spoiled in that company. And then I moved into health care after my father suffered a massive stroke due to medical error. I thought, you know, they don’t need me in aerospace. Planes aren’t falling out of the sky. I’m going into health care. And I’ve never met so much resistance in my life. And I’ve been in every major industry since then. But, you know, I began to question why, after presenting a viable, better solution, to improve the health of an organization, why there was so much resistance. And inside healthcare, which my experience has been as very passive aggressive in culture, I would get taken out by a leader that was threatened by my identifying significant opportunity. And so this continued to happen throughout my career, and I still managed to bring 6 billion in value for organizations, but there was a lot more left on the table. And you know, after another layoff, then I decided to sit down and start writing this book and figure out what’s missing? What is it that’s not understood that these best practices are not being embraced? I mean, operational excellence type practices mean, how long ago did Deming start 80 years ago. I mean, it’s been around a long time. I should be mastering by now. Why isn’t it? That’s what I began to question. And that’s what the book is about. It’s about recognizing that all of us are born inside the traditional paradigm, it’s part of society, the way we all work is ingrained in us. We’re taught to work this way, whether you’ve been to the University of hard knocks, or Harvard University, you’re taught this is how you design a business. This is how you manage a business. This is how you account for the business. This is how you do all these things.
And it’s not optimal at all. In fact, it creates a lot of the problems inside organizations. So I began to from my experience, you know, being a systems thinker, obviously, being a process engineer, but also a change management expert. I mean, yeah, I began to look at, you know, what’s the resistance? Why is it there? What is it that we commonly just don’t even recognize? Now? I was 20 years into my career when I began to write the book. Okay. I recognized that I also had been, of course, raised in the paradigm so it took me 20 years to knock myself out of it. And recognize that, really, people are blind to the true opportunity. They just can’t see it. And so we talked about business transformation, but I don’t know I mean, you can even Google it. There’s not a lot of definition around what that means. I don’t know if people truly understand it. But transformation means that prior to that moment, you could not see another opportunity, you couldn’t see it. And in a moment, you see now that you have choice, you can go a better way, you can stay the way you were. And you have a choice. Seeing if you keep to your old ways or not. Now, I’m going to say that all traditional business practices are not effective. And they cause all the common problems in organizations, but they’re assumed to be effective. Sure, a status quo. And so you’ve really got to let go of status quo thinking and take on new and proven methods, which we all are, you know, as operational excellence experts, huge proponents of, but I want our profession to be successful at this, my experience for the most most of my profession was like put pushing a rope up the hill, you know, very arduous, more change management than actually getting things done to try to bring people along. So I appeal to leaders to be open to new ways to work, because that’s what’s going to make the change. So the book is written for the world, it’s, it’s for three audiences, number one, for leaders, until you’re able to see the detriment of what you’ve been taught to do, it’s not your fault, and can undo that thinking and take on new practices and see the advantages of it, you will always struggle to create a high performing organization, for operational excellence leaders, I think it’s paramount. And it’s the first group we put through our wildly successful enterprises program are the operational excellence train people, because they need to be the first to shift their own paradigm, the reason our profession has not been as successful as you would think they would be, because oh my gosh, I mean, if if someone partners with one of us, their business will improve. But that’s not commonly accepted out there. Right. So it’s an opportunity for operational excellence leaders to actually see what the blind spots are with the company that they so desire to help create more success. And so it’s, it’s a big wake up call when it is in the book. And but of course, the recommendations are practices, a lot of them are operational excellence practices that we all know and love, and, and other practices that I don’t see operational excellence bringing into organizations that should be brought in. But nonetheless, the third audience is just for the common worker. Everyone’s in this paradigm. And so when we take companies who are wildly successful enterprises, everyone goes through it. And you know, from being a lean practitioner, everyone needs to be involved. Absolutely, everyone needs to understand, everyone needs to feel empowered. And so it’s really for the world, because my ultimate goal is that if every organization was delivering on its purpose, and providing value to the world, and operating effectively, and efficiently, no human being on the planet would go without their basic needs met.
Patrick Adams
Absolutely. That’s why I wrote. And I appreciate that. I appreciate that you’re putting this out there to the world and I also appreciate the fact that you identified the problem right up front, and that that problem is the traditional paradigm, right? And that’s what, that’s what you talked about. And so I’m interested to hear a little bit more about that. What would you say are the top three areas that are lacking in traditional organizations that should really be looked at and addressed? What would you say those would be?
Dawn Holly Johnson
I address three areas in my book, because I wanted to kind of, again, I’m a big picture thinker, let’s just give you three things to look at here. The first is focused. So the traditional focus, so if we look at a CEOs focus, traditionally, it is to create equity in their organization. That’s the number one prime objective. And I want to even create more equity in the company, but having that primary, and it’s usually the majority of the focus of the CEO, is on that equity. What’s begin to happen is the CEO and the CFO conspire a lot to manipulate the numbers to make that balance sheet look better to bring up that equity, right? How can I raise my assets and then what’s in their control? What’s in their control is to increase sales. Right, bring in new revenue, or cut operational costs, which we see the detriment of every day. Look at the number of layoffs that occur. downsizing, budget cutting, it’s a consistent thing and I can tell you in the fortune 100 It’s a bi monthly occurrence. They’re reorganized downside, this budget got cut over here. And so the focus is all about that balance sheet. Now, why was the organization formed in the first place, it was not manipulated balance sheets, that was not the purpose of the organization, the purpose of the organization is to deliver value. If you focus on actually delivering value, streamline your organization to focus on delivering value, the money comes, it’s not a problem. And so the first area that gets missed is focus. Okay? The second is structure. Organizations are not designed to deliver value, they are designed to manage and control people in departments. That’s because every org chart looks exactly like that. So that’s the focus, again, you’re not focused on delivering value, which is why the company exists. Instead, you’re worrying about managing people. What this creates, is it lacks diversity of thought, because you have all the marketing people conspiring together on what they think they’re going to do all the operations, people conspiring on what they think they need to do. All the sales, people conspiring all that, you know, and you get this group thing. And, of course, as operational excellence leaders, we purposely create cross functional teams for that very reason. But we’re already fighting an uphill battle, because the environment, the very structure of the organization will undo all the good work. And I see it over and over again. Now, things can stick. But it’s very difficult to have them stick because the way organizations are structured, are not compatible with delivering value. They’re compatible for miscommunication, creating rework, problems in product and service, and, you know, is simply not a customer focused design. But it’s an automatic, natural human tendency to be higher, it’s got to be willing to let it go.
Patrick Adams
Yes. And unfortunately, sometimes that also creates silos within organizations, which even further separates things, right? And that’s, that’s one of the things that I see, you know, not only the hierarchal issues, but also the silo issues that are caused, you know, as organizations get more and more complex, and so I can see where that would definitely help.
Dawn Holly Johnson
So I propose a new organizational model that very quickly, you know, with a change in focus, which is we’re going to deliver value. And now let’s design the organization to actually do that effectively and efficiently. And all other areas of the business are accountable to those value streams, to make them healthy. That’s the number one goal of the organization, it’s not to make my department look good to hit my department numbers. It’s not, right, it’s we’re going to deliver value, that what’s critical in a constantly changing world is that you’re also listening to the pulse of the marketplace. What do people need? What do people want to keep up with innovation? Well, the model I propose creates a natural, innovative environment creating a naturally collaborative environment, naturally efficient and effective environment. And so companies can be far more adaptable. And you know, since COVID-19, right, we saw companies that weren’t able to turn on a dime, seriously suffered. So you’re going to have to be adaptable. And all of this is critical to digital transformation, ever being successful. It’s, in my opinion, a train wreck right now, because there is not a focus on process and delivering value. It’s all about well, the next technology will make my company better. Sure, that is a false assumption. So structure is critical. And then the third is mindset. Now, this is really where the operational excellence piece comes in the mindset of continuous improvement. The difficulty is, and the reason I mentioned mindset last is without the right focus, and without the right structure, it’s very difficult to hold the mindset and have people be naturally accountable, naturally interested and engaged in continuous improvement. But another thing that I really recognized reflecting on why all the resistance, you know, back when I said, you know what made me first start writing this book with all the resistance. I had a question: Why? Well, people are resisting because they don’t understand there’s a better way also, there is a false assumption in society about human beings. That assumes that because I’m an expert in an area of business, that I’ve actually set the business up to win, which is that they’re not mutually exclusive. Just because I’m an expert in marketing doesn’t mean I set up the best marketing processes or engagements across the organization and that I’m connected with the rest of the organization that created a viable pipeline of information. It doesn’t mean any of them Right means I’m bad at marketing. Okay, so so there’s a disconnect, that the experts and leaders in the organization that typically rise because they are good at a function, so then they rise up through the organization are actually good at designing the business to be effective. So what I’ve come to realize is these experts, I mean, I’ve been in companies where sometimes people grew up in the company, like health insurance as an example. They’ve been with the company, 20 years, they’re a VP. And I come in, and I find opportunity, and they’re like, Who are you, you don’t even know our business, don’t need to enhance what you know, right? I make it better, right? I take what you know, and make it better. But the assumption is what we’re always continuously improving, because they’re constantly changing the process. They’re constantly changing what they do. And that is thought of as continuous improvement. So using that term is a little dangerous, because people already think they’re doing that, and they think they’re the experts to do it. And that’s the biggest barrier for operational excellence.
Patrick Adams
And would you say, as, as people are listening as, as listeners are thinking through what you’re saying, in these, these three areas that are that are lacking, it sounds like they they should be starting with the first one going to the second one before they look at adopting lean or operational excellence, to help with some of those issues. But do you feel like the ultimate goal is to adopt lean and operational excellence to help with those issues? Is there another approach? What are your thoughts on that?
Dawn Holly Johnson
So I, you know, I’ve been trained in multiple methodologies now. And you know, I prefer some over others in the book, I actually don’t go into any of them specifically. Okay. And for good reason. I think that yes, I am saying that, first, you need to change the focus, and then the structure and then bring in the mindset. But operational excellence is a huge piece of that mindset. What I’ve always done is a huge tool belt, I have a very large tool belt, I learned a lot, I’m a learner, I absorb a lot. I use what’s appropriate for that culture in that situation at the time. So I’m not locked into any particular methodology. Sure, I will say, My favorite is lean, because it empowers all people. And that’s the way it should be six sigma was never that way. We were like Superman and Superwoman, coming in, solving things, very complex, and then leaving and hoping, you know, yes, we would put in process control. But would it stick in For how long? That’s not empowering people? I mean, it is my favorite methodology. I just want to give it an environment to actually catch on. Sure. I think sometimes we get a little too rigid in the methodologies, and don’t back up to look at the big picture. And what we’re really all out to do. And so I would just challenge anyone trained in a particular methodology to just be open to adapting to how a team or how an organization needs to move forward versus being rigid. I know we must use this tool to do this. Well, yeah. Can you come up with it another way? So just being flexible, I think, is critical. But yeah, operational excellence is in the cornerstone of the mindset piece. Absolutely.
Patrick Adams
And I completely agree with you in exactly what you said about the tool belt, you know, for me, you know, I run into a lot of people that say, well, because this company did it this way, or this company had this tool, then we have to apply it. My response is very similar to what you said. And if you think about it, man, if I’m trying to put a screw in a board, am I going to use a hammer? Or am I going to use a drill, right? And, you know, for organizations that are applying tools, a certain tool may not work for that team or that industry for that time. So they may need to be adjustable even on the tool on how to change or be flexible with how that tool works, or what it looks like. So you know, I completely agree with you in what you’re saying and being flexible as leaders to ensure that we’re using the right tool for the right job. And that we’re open to learning new ways or listening to our people as when they say this isn’t going to work. Can we try it this way? Right and being open to experimentation. So thank you for that.
Dawn Holly Johnson
Absolutely. Absolutely. I also want to appeal to leaders of organizations, yes. If you do have operational excellence, people in your organization, they need to be reporting directly to the CEO. They need to help design the business to work.
Patrick Adams
Tell me more about that. I’d love to hear a little bit more about your experiences and why and you know what your thoughts are on that topic?
Dawn Holly Johnson
Well, so the average operational excellence practitioner has been trained on a particular methodology, yeah, trained on process improvement. And so what typically happens is an operation which I’ve been right operational excellence later gets brought in at the director level, sometimes the VP level, usually reporting to the CEO. It’s usually very operational. operationally focused initially. But it’s all about oh, we’re having a, you know, our lead time is too long and hiring people. So let’s send a belt over there. Let’s send the lean expert over there. And let’s work that process well. So we’re working at these little peace processes inside the organization, we haven’t addressed the focus, we haven’t addressed the structure, we haven’t laid out, even identified our value streams. So ultimately, I mean, we’ll get some quick wins out of it. But ultimately, it’s not going to transform the organization to even come close to reaching its maximum potential sure got to change your focus in your minds that, well, a good operational excellence Later, we’ll know how to design dot organization, every organization I come into, even if I’m not brought in, just you know, in the past wasn’t brought into structure in my mind, within a month, I already had a complete new structure for that organization. In my mind, I would even sit and play with it and draw it out, you know, here’s their core processes, they should be lined up this way. As an example, I came into, you know, one of the top healthcare organizations about six years ago, and billions in waste in three months that I could see, it was clear to me that the way they were structured and organized was driving so much waste, and there was an opportunity to just and they were reordering all the time anyway, what I propose in the book is you reorganize one time, and you’ll never have to do it again. Never.
Patrick Adams
Yeah, yeah. And I appreciate that you said that. And I would love to hear even some more examples about, you know, specific examples of maybe projects or within companies that you’ve worked in, but in applying what you recommend, if you could share a little bit of that with us?
Dawn Holly Johnson
Absolutely, absolutely. Working with a company of about 4500 employees, about 20% of the business came from the state, you know, it was a state account. And, but that had to go up for bid. You know, it’s the government accounts, every five years. And so, we were bidding. And so I heard, you know, I was in the operational excellence group, I was actually working really hard to bring lean into the organization at that time. And I had developed my own type of program to do that to fit this type of environment. And that was quite successful. But I heard rumors that you know, the word on the street was, there was no way by looking at the budget for that business unit that they were going to be able to bid competitively. And so what leadership did is what leadership typically does in a traditional organization, they started pouring through budgets, before through budgets, they poured the financials, they had to cut 2.4 million annually out of that business units budget to be competitive, they came up with point 7 million with cutting, cutting, cutting. Now, when you’re looking only at a budget, and you’re cutting things you don’t know whether you’re cutting value, or cutting waste. So it’s dangerous to budget cut, just from a spreadsheet perspective, which is the first thing I talked about in my book, so they still weren’t going to win the bid. And out for three attempts. pleading with them. I mean, I was already working with them. That’s not going to cost you anything. Let me value this at a high level across the whole business unit. And I’ll find it, I had complete confidence, I would find it close to. And so I spent three weeks doing that. I had to train up kind of for people so as I would find an opportunity, I’d send them off to go drill down into it. And I continue to walk that entire business unit. From a customer perspective. I didn’t worry about auxiliary processes. It was like what’s the main process here that you know we do, right, we deliver x and let’s go through this. And after three weeks, I identified 2.5 million. So then I proposed the change. We managed to put all that in in three weeks, and we won that bid, we won that bid. And you wouldn’t believe how ecstatic the people were in customer service, you know, in operations that we had been struggling to try to serve customers. And that have, we’ll get back to you in 30 days. That was their promise in the call center. Because it took that long to try to solve an issue. We were doing same day real time issue. And so within a week, the call center volume decreased by 10%. Because we had solved problems. So while we had reorganized the work, I was also capturing new data. And we were able to trend that there were several problems in operational platforms that we then corrected with it. And we reduce the problems. So when call center volumes went down, people were able to react quickly. We didn’t lay a single person off. We let attrition ride over six months, which call centers high attrition anyway right, which started to decrease. Actually people wanted to stay but we want attrition right but what we avoided was a 20% layoff. That’s amazing, we also got rid of an IT system that was just completely useless that had been brought in by another department. without talking to the other departments, we just got rid of it. So we saved 2.5 billion. Now, we won that bid . Besides saving 20% in the 900 people’s jobs, it generated a billion in revenue annually for that company for the next five years. And they almost didn’t take me up on it.
Patrick Adams
That’s amazing.
Dawn Holly Johnson
Oh, replicated what I did in the other 80% of the company, and brought cost savings to the customers, right, to improve their competitiveness, those leaders chose not to do that. Because that wasn’t their problem. Yeah. But yeah, I mean, the money is there. And if you’re willing to take on the mindset of delivering value.
Patrick Adams
right, I love that. So we have many listeners right now that are listening in and I’m sure they’re, they’re wondering, what could they take even from your, from your the story that you just told us? Or your book or other things that we’ve talked about, you know, what could they take away? What could they walk away with today and begin applying right away, I don’t know, if there’s one or two things that you could pull out that you could say, you know, what, these are the two things that that I would recommend you do right now, or what they could do to help improve that organization performance. Any suggestions for the listeners?
Dawn Holly Johnson
Absolutely, the first place to start is defining your organization’s value proposition. Now, this is marketing 101. And typically, marketing works to come up with what that is, so that they can market the organization. Typically, then in a vacuum with marketing, most marketing professionals will say I have statistics around this, I don’t have them in front of me, but that they’re concerned about the value proposition they’ve developed. Because the rest of the organization was involved in coming up with it, there hasn’t been sufficient research done on the marketplace, or what potential customers want, you don’t want to talk to your current customers, they’ve already used to your status quo delivery, you need to talk to potential customers around that. But you need to find your value proposition. And then every single person in your organization needs to know it and agree with it and appreciate it. And that begins to create stronger alignment, because at least you’re all aiming people will make better decisions, customers will be better serviced, right? I mean, the whole thing changes, it starts with changing that focus. And there is an assumption in organizations that everybody working in the organization knows what the purpose and the value it delivers, and of the organization and they don’t make false assumptions. And most people are kept in their silos right in sometimes kept in very small silos. They don’t even know what the whole company does, they have no idea. The first thing I do in every organization is define those high level processes. And everyone in the organization is presented with that training at a very high level, look at this is how our organization actually works. Most people have no purview to that. So you’ve got to start with defining value and making sure everyone in your organization is crystal clear about what that looks like. And then you’ll begin to gain alignment. And once you’ve defined that value, then you can start designing the organization to actually deliver it, that’d be the first priority. So that’s the first step.
Patrick Adams What would you say within the same question? Maybe for someone that doesn’t have, you know, the ability to make organizational decisions for you know, maybe they’re in mid management, maybe they’re a supervisor somewhere in an organization where they don’t necessarily have the decision making authority to, to change things at the top? What would you suggest to someone like that, that, you know, something that they could walk away with an apply right now?
Dawn Holly Johnson
Well, I would highly recommend that they get this book in front of their leadership. You know, I’ve had several people pre read the book, including CEOs. Were really curious to know what they didn’t know. Sure. He wanted to read the book. You know, so I think it’s easy I’ll call it an easy sell, to talk to leadership and begin to, hey, you just got to continue to spend this stem this awareness. But what you can, you know, help promote in your own area of the organization is, it really begins to bring up these conversations with people. It’s like, what is the value of knowing when, especially if there’s a meeting, and everybody’s brainstorming about solving the latest problem? And it’s like, well, what’s the value we’re trying to create here? I mean, just starting with that will create a new attitude throughout the organization, it will catch on, it will make people think, you know, what’s the customer value here as an example, a few years ago, working with with a customer service rep and she says, well, we’re we’re going to reduce the number of call transfers because It’s expensive, and nice. And my first thought is, why are they having to call in in the first place? What are your top reasons that people call in, you’re more worried about your budget in the call center than you are about serving your customers? Sure. because ideally, there is not a call center. Except for, I don’t know how to put my widget together, can you help me? I don’t understand, you know, you should be able to understand the instructions you should be able to, but how many things I have bought lately that I can’t even understand the instructions. run and operate it. So you know, we’re not customer focused. And then we think a call center is going to handle that later, is too late. So just continue to bring the voice of the customers we used to call in six sigma, right, that said, you know, what, put yourself in place with the customer, would you want that. But you want that, and that will begin to bring a you know, customer centric, customer journey, centric thinking into the environment.
Patrick Adams
That’s great. Good advice. from Dawn Holly, I appreciate that so much. If anybody is interested to get a hold of you with questions, or they want to get a copy of your book, which is to be released here pretty soon, where would they go? How would they get a hold of you? What’s your contact info? And we’ll make sure that we drop this in the show notes as well.
Dawn Holly Johnson
Sure, absolutely. So Dawn Holly Johnson com is my author page. As soon as you land on that, you can click a button and order a pre-release in the book, and then be wildly successful. enterprises.com is another great place to visit, we have operational excellence pages, as well as pages for CEOs perfect. We’re in conversation. And you can also take a short assessment of your organization that takes about three minutes, that gives you a sense of how close your organization is to reaching its maximum potential. So that’s wildly successful. enterprises.com
Patrick Adams
perfect. And we will definitely throw that in the show notes. So if you’re interested to get a hold of Dawn Holly and maybe even look into that assessment, you can click on either of those links in the show notes. Well, it’s been great to have you on the show. And I hope this isn’t the last time. Maybe once your book is released, we can pick a chapter or a topic out of the book and maybe do a deep dive into it within the next year. Thanks so much for tuning in to this episode of the Lean Solutions podcast. If you haven’t done so already, please be sure to subscribe. This way you’ll get updates as new episodes become available. If you feel so inclined. Please give us a review. Thank you so much.
Transcribed by https://otter.ai
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