Navigating the labyrinth of a male-dominated engineering world, Sara Hanks brings her narrative to the forefront, sharing the trials and triumphs from her journey that prove both her mettle and the pervasive gender dynamics in STEM. With a keen understanding of the complexities of business efficiency, Sara's tales of exceeding financial targets and mentoring veterans in the workplace underscore the power of communication and reveal the transformative role competition plays in professional growth. Her candid anecdotes, coupled with lessons learned from luminaries like Ron Howard, serve as a testament to the tenacity required to succeed and the wisdom that can only be gleaned through experience.
When innovation meets resilience, the result is a transformative business journey. Sara's transition from a software startup to a consulting powerhouse, Virtual Leverage, epitomizes the art of bouncing back from setbacks and harnessing the power of technology to revolutionize business operations. The chapter on business process improvement underscores the compelling narrative of a professional who pivoted from manufacturing to quality organization, and now thrives by merging technical know-how with strategic bottleneck analysis. It's a story of ambition, adaptation, and the ever-evolving quest for business optimization that any entrepreneur can aspire to emulate.
As we wrap up our time with Sara, we're left reflecting on the paradox of market share declines amidst sales growth, and the critical role of individual leadership transformation. Caterpillar dealers' conundrum serves as a backdrop to discuss the importance of technology in assessing and enhancing business performance. Through anecdotes of LinkedIn connections and empowering management conversations, Sara illustrates the profound effect of personal outreach and mentorship. Ending on a note of gratitude and a charge for action, we're reminded that the journey to success is incremental, and with every step, there's an opportunity to make a lasting impact, one person at a time. Mahalo for joining us and for the wisdom shared—here's to turning insights into action.
Visit us at LearningWithoutScars.org for more training solutions for Equipment Dealerships - Construction, Mining, Agriculture, Cranes, Trucks and Trailers.
We provide comprehensive online learning programs for employees starting with an individualized skills assessment to a personalized employee development program designed for their skill level.
Navigating the labyrinth of a male-dominated engineering world, Sara Hanks brings her narrative to the forefront, sharing the trials and triumphs from her journey that prove both her mettle and the pervasive gender dynamics in STEM. With a keen understanding of the complexities of business efficiency, Sara's tales of exceeding financial targets and mentoring veterans in the workplace underscore the power of communication and reveal the transformative role competition plays in professional growth. Her candid anecdotes, coupled with lessons learned from luminaries like Ron Howard, serve as a testament to the tenacity required to succeed and the wisdom that can only be gleaned through experience.
When innovation meets resilience, the result is a transformative business journey. Sara's transition from a software startup to a consulting powerhouse, Virtual Leverage, epitomizes the art of bouncing back from setbacks and harnessing the power of technology to revolutionize business operations. The chapter on business process improvement underscores the compelling narrative of a professional who pivoted from manufacturing to quality organization, and now thrives by merging technical know-how with strategic bottleneck analysis. It's a story of ambition, adaptation, and the ever-evolving quest for business optimization that any entrepreneur can aspire to emulate.
As we wrap up our time with Sara, we're left reflecting on the paradox of market share declines amidst sales growth, and the critical role of individual leadership transformation. Caterpillar dealers' conundrum serves as a backdrop to discuss the importance of technology in assessing and enhancing business performance. Through anecdotes of LinkedIn connections and empowering management conversations, Sara illustrates the profound effect of personal outreach and mentorship. Ending on a note of gratitude and a charge for action, we're reminded that the journey to success is incremental, and with every step, there's an opportunity to make a lasting impact, one person at a time. Mahalo for joining us and for the wisdom shared—here's to turning insights into action.
Visit us at LearningWithoutScars.org for more training solutions for Equipment Dealerships - Construction, Mining, Agriculture, Cranes, Trucks and Trailers.
We provide comprehensive online learning programs for employees starting with an individualized skills assessment to a personalized employee development program designed for their skill level.
Aloha and welcome to another podcast in the series of the Clouds Are Upside Down, which is looking at the world from a different perspective, and today we're very honored to have somebody who has been looking at the world in different ways since the beginning of her, I guess, her education, sarah Hanks, who and I'll let you let her tell her story but she does remarkable work. She's an engineer by profession, by education, which, as a female, is unusual. We were sharing, before we started, the fact that when I was at school taking an honors program in mathematics and physics, the smartest person in my class was a lady and she kind of annoyed all of us because she was obviously way the hell smarter than the rest of us. And, sarah, you've probably been confronted with that often over your work life. So why don't you start with school and how you got to where you are, what you did and all the rest of the things that turn you on, from a professional point of view, of course?
Speaker 2:Yeah, so I mean it all started with me really going back to grade school. I excelled in math and physics and I don't remember if I've told you this before, but I actually competed in mathematics in school and we would compete against other schools and I was able. I was in the top of that in our region. I went to the state competition.
Speaker 1:Wonderful.
Speaker 2:No, I didn't know that.
Speaker 1:Congratulations. It was hard.
Speaker 2:And you know how in sports you can earn a varsity letter, which I did get my varsity letter as a freshman in track and cross country, but I also got my letter in math.
Speaker 1:That's cool, that's cool.
Speaker 2:It's yeah, it's fun to tell that story.
Speaker 1:Have you any idea what it was that excited you about math and physics in grade school?
Speaker 2:Oh, I know exactly what it was. I liked the challenge of it, I liked the logic of it. With physics you could see it. You could take these concepts and kind of understand how they were. I remember my favorite moment in physics was we were given a setup of some track and marbles and there was a scale and a ruler and we had to predict where the marbles were going to land on the floor. Before we learned anything, we had to mentally figure out where we thought it would do. So all of us had to put a mark on the floor on where we thought the marble would land, and then we tested it and got to actually see it. So then, when we were learning the Newtonian or Newton's laws of gravity and all that it was Newton's laws we were easy. It was easy because we'd already seen it. So that was I loved physics. Oh my goodness, and math.
Speaker 1:How much of it do you think you knew intuitively versus had to learn?
Speaker 2:I think it came a great deal to me, intuitively I think. I mean, if early on math was very easy and I think I was really fortunate that way, I also think it put me at a bit of a disadvantage because I think it made me lazy. As a grade school student I could get things done quickly. I could pass tests really easily. Then when I got to college you had to put forth a little effort. I wasn't mature enough to put forth that effort. In the latter years of my education I actually traded off grades. My GPA slipped because I didn't have that discipline.
Speaker 1:I had the same dilemma. I was bored and my mother was a teacher. She was a vice principal. My grandmother was a teacher and they were on my case, like you wouldn't believe. So I go to university at 16 just because of my birthday, not because of my brains. I made deals. I would go to the lectures and see who was any good, but if the guy didn't give me any joy I didn't go back. The next time he saw me was at the exam. They were always surprised they had to check my ID because they'd never seen me.
Speaker 1:The only thing I got caught with was labs. Because you couldn't fix that, you had to go to the lab.
Speaker 2:I hate to admit it, but I got a D in the lab because I only did two out of five.
Speaker 1:Well, they excited me. Physics labs were kind of fun. But then I come forward and here's my grandson and he's 17, and he goes into the Navy. He had an exam in his senior year and he comes out and he says, oh, that was terrible, I didn't know any of it, I had to guess it, a whole bunch of it, and he got an A. He knew it intuitively and we were talking about it. Afterwards he says, yeah, it felt like it was right, so that's what I put down there. And then to talk about grades and discipline and laziness, that's what my blog was this week on a whole. A point, a point. You have to take personal responsibility. I was a D student because at the same time as I was taking my undergrad, I was across town teaching at another university.
Speaker 2:Wow.
Speaker 1:And I was in the middle of a lot of things from my junior year and I thought it was cool because it was in athletics, it was in water sports, which is what I did a lot of, and I thought it'd be cool to do because I'd see babes in bathing suits. You know, you can see where the priority was, and I was never serious about women, I was girls. My wife was the first girl that I actually felt any affinity to. So we have that challenge for you. It's too easy. You got lazy Grades, didn't turn your crank. You chose engineering, not staying with math, physics. Why did you go to engineering?
Speaker 2:So my father was an engineer and he encouraged me to pursue engineering strongly and in looking at the, I think job availability after was a priority for me and I knew that I could graduate college, have a really good chance of getting a good job that would pay well and that was my main rationale. And you mentioned being a woman. I graduated with a mechanical engineering degree. Our graduating class was only 9% women.
Speaker 1:Yeah, and that's probably pretty high for the day. What school was it? Sarah University at Buffalo. Okay, yeah, it's a really different world. There's a whole host of things that become kind of interesting Again relative to the clubs being upside down in 1900, here comes Henry Ford manufacturing cars, and we had 44 miles of road in America.
Speaker 1:At that time, business, government, labor, schools, all agreed that the skill level of the workers coming out of school had to be higher to be employable in this new world. So between 1900 and it's statistically true and measurable, between 1900 and 1970, america developed beyond any doubt the best education system on the planet. We had the most capable workforce and all the rest. Now, in the middle of that, or part of it, in the later stages, came the war and now traditional thinking, because part of why education was good is the smartest. Women were either in medicine, nurses, or in education, as teachers. And if you were a teacher, societally, believe it or not you were not allowed to get married. You had to develop yourself, to develop your children. So women were either teachers, nurses or homemakers, until World War II, when Rosie the Riveter came on and the men all disappeared. The women had to stand in. Women did a wonderful job. The men come back. It's 1946, the women have to revert. But wait a second.
Speaker 2:We've already got a taste.
Speaker 1:They were doing the other and they say wait a second. So the smarter nurses this became doctors, the smarter teachers went into business and more people left the homemaking role and went into work. So since 1970 to date, every year, since the education delivery system has failed, the grades in reading and mathematics have gone down. Every damn year the SAT score has been recalibrated three times. The high-router mark was 1963 and ever since then it's gone down. I mean, these are all statistical truths that you can check. So here we are now, and I'm going to go to 1988 roughly, when Time Magazine had a cover that was about the Japanese taking over North America. Because of Kaizen, because of total quality management, both of which started with Deming and Durand, who couldn't make it happen here. They went to Japan and they went to Japan and kind of that's looking right down the throat. So now you get a job, you go into business. Where did you start?
Speaker 2:I started on an engineering development program. So GE had a six-month training program where you could work in different disciplines and get a taste of what the different roles entailed, and there was leadership training on top of that and there was also coursework that would contribute towards a master's degree. By the end of my second rotation I realized that I don't want to be an engineer. I wasn't sure what I wanted to be, but to write requirements for buying a pump I found incredibly boring. I loved the. I did have a rotation where I was out at a customer site and we had issues with the ride quality on a locomotive and I got to do some hands-on testing and try to troubleshoot, figure out that. So I think I gravitated more towards that problem solving as opposed to creating. And my last rotation I took a black belt role so Lean Six Sigma black belt role and I was given a six-month trial and if I did well enough in that job I would be hired on for an additional year and I would be able to complete my black belt certification. I crushed that role. I loved it.
Speaker 2:I would go to work. This is before laptops. I would go to work, I would leave, I would run, I would eat dinner. I would go back to work because I loved it. I loved it because we had a ton of data that I could get my hands on. We could analyze the data. I had a lot of freedom and flexibility in that role. They didn't care what I did, as long as I saved money and I had the opportunity to travel the customer sites and teach people how to troubleshoot. Imagine being a 23-year-old woman teaching a craftsperson who's very seasoned how to do their job. I had to learn how to communicate very differently depending on who I was talking to. I loved it.
Speaker 1:I absolutely loved it. And the beautiful thing about that is and I had the same thing and I don't know how or why it happened, it just happened but I was listening to an interview with Ron Howard yesterday and Old Thief from the Andy Giffords show, right, it was a wonderful interview. It went about an hour and a half and if you get a chance it's on YouTube somewhere, and he was talking about being a director at 23. And all of the people, the stars that he had to direct John Wayne, you know. So the one he mentioned was Betty Davis and at that time she must have been in her 80s, if not her 90s, and they introduced and he was a little anxious and she didn't really give much to him. She called him Mr Howard all the time and you learn a lot about Ron Howard in the interviews a pretty special individual and he found out, he did a lot of research on her he does on everybody and he found out who her favorite director was.
Speaker 1:Okay, and that guy always wore a suit on set. So one day she's sitting in the makeup chair waiting to go onto a scene and behind the lights, here he comes walking in and she can't. She's. You know who is that? And he's wearing a suit and a tie and he's formally dressed. And they have a little discussion and a disagreement about a scene on how it's to be played. And he said do me a favor, let's just have one cut this way. And she said, okay, I'll humor you. And they did it and it was phenomenal. It went into the movie and she walked off the set, patented him on the ass and said that was pretty good, ron. And it's like how do you get this crusty guy who's been doing this job for 30, 40 years the same way? And here's this young whippersnapper lady who's showing him a different way to consider things. Look at the clouds upside down.
Speaker 2:Absolutely.
Speaker 1:And he did it. Yeah, and he had a aha moment saying, geez, why didn't I see that earlier? But that's not human nature. There's some people like you that get really excited about digging underneath the covers and finding out how things work and what the hell's wrong with this, because we can do it better this way. Either I can make more money or I'll save more money. I'll make a better product. I'll have more worthwhile. Whatever it is, we'll do it better and you were given freedom because you delivered.
Speaker 2:Yeah, yeah, I crushed it. I mean, they used to call me the sandbagger and I just I mean, if I think about it, you know, the business depended on these productivity projects to meet their financial obligations and we always far exceeded our goals, and it was me and my boss, and that's it.
Speaker 1:And how old was your boss?
Speaker 2:He was. I think he's five or six years older than me.
Speaker 1:Oh, so you were both pretty young, yeah yeah, it's typical of welts, though isn't it?
Speaker 2:Yeah, oh yeah, it was right in the. I mean, by then it had taken over, but you still had that Welch culture that you know the four E's, that that edge, and it was. It was a different environment, I think, you know there was more competitive and so, unfortunately, sometimes competition drives incorrect behavior. You know, behavior that may not be perfect, but it was exciting because everybody was striving for something.
Speaker 1:The competition is, a lot of people are afraid of it, and that's kind of why in our culture for the last 40 years, we've had these participation trophies. Oh gosh, you know, rather than let's celebrate whoever the best is and let's try and learn from that, and accept that everybody has the opportunity to get better, Everything you do, even if it's perfect you still do it better, yeah. But the other part of it is we're not all stars.
Speaker 2:No, we're not all stars, yeah.
Speaker 1:Yeah, that was probably the first lesson I was, given that you're not here to compete with anybody other than yourself. I was a swimmer, so if I finished last in a race that I beat my best time, I won. Yeah, and that was imbued and buried in me from a very, very young age. The second thing was I got fired five or six times by a guy who, if he was still alive and he called, said he needed help, but I just asked where he was and I'd be gone.
Speaker 1:I love this man and the lesson I learned from him was never, ever settle. If you can't give me your best, I don't want to see what you're gonna give me in its place. Yeah, and that's kind of intimidating. Both of them are intimidating and both of them they're kind of a cross to carry, aren't they? You're never gonna be good enough. You can always do better, and that's a drive that's different than oh, that's easy, so I don't need to study, I can get through this thing easily, but it's the other end of the coin, isn't it? It sure is, and I don't want to change anything in my life, but that's not a good place to be for somebody who's a competitive idiot like I am, you know, or doesn't want to sell.
Speaker 1:I used to have Marlene. My wife blessed her In our first number of years. I used to do a personal evaluation of my life December every year, and after a couple of years of this, she came to me and said Ronnie, I need you to go get in a hotel when you do this, because you're not very good to be around for that two week period of time. And I reflected and so I stopped doing it. I must have been terrible. But have you had performance reviews? Yes, have they helped you? No, okay, so how were they done? What do you think that performance review was trying to do to you?
Speaker 2:So in my experience with performance reviews between my leadership and me, I will say Yep, I have been in situations where we go down through the checklist of items and it's a scorecard and you're either red or green and you get beat up for your reds and your greens are considered goods, and no way in that evaluation are you doing anything to identify an improvement opportunity. You're just communicating a scorecard. That's useless. I've had reviews where I'm told I'm doing a really good job. Again, that is not helpful, and so for me, between me and my employees, I try to take that experience and change it, because it doesn't change like performance reviews are expected.
Speaker 2:We will do them. They are done annually and so it's kind of a condition of working for the company, right Is that? You follow these things? So I try to keep our conversations not about what you did. We talk about how you did it and where can there be improvement. We talk about where do you wanna go? What are the gaps between where you wanna go and what you have today? What kind of action plans can we put in place? And I spend time mentoring these conversations year round. We just set the stage. We just set the stage in the performance reviews and you've gotta treat them different based on the employee. Not every person's the same, and as people grow in their career, you've gotta adjust the conversation accordingly.
Speaker 1:Again. It's kind of an evolution in business, with the boss in the front of the room on a raised diast with a hat on visor, looking down on his stable of employees and criticizing poor performance rather than encouraging good performance. And then last year, when the Federal Reserve finally decided they were gonna start attacking inflation, the falsely journal head on the front page the fact that major corporations were gonna return to performance reviews on steroids because they were determined to find the people that weren't standing up to the job. And my whole deal with performance reviews is to have a discussion with the employee about what can I do to help you get better. And so it goes back to our assessments, our job function skills assessment, skills and knowledge assessments 96 questions, multiple choice.
Speaker 1:And it was a client that got me to do that. He said I wish I knew who I should be spending money on for training and who not. He said, because the only way I know is after they're completed one of your classes and they don't do very well. He said can't you give me something that'll evaluate? So that was the. Jenna said that was the seed that created these 18 job functions.
Speaker 2:Okay.
Speaker 1:And this man who was the executive vice president of a large organization in the distribution channel he did both sides the dealer and the manufacturer said after five years he had replaced 25 to 40% of his staff because he found that all they were doing was taking oxygen out of the room. Rather a startling statement, and I would bet you-.
Speaker 2:That's a lot of turnover. I'm just thinking all the costs of managing replacements and training them, and culture, and how do you create a team environment and-.
Speaker 1:Well, if you start with the place that my granddaughter calls it quiet, quitting, the younger generations are going to work. They're getting their money. They don't really. They do the least that they have to do when they go home. Sure, and neither of my grandkids are that way, and it's almost a disease in the family. And my daughter are the same thing. We're all maniacs for work. So my granddaughter is getting a masters of 22. Not bad, she's already teaching. It's crazy stuff. But our assessments Breakdown skills into discernible education levels. It's called developing, beginning, intermediate, advance. That's what the school world has as gradations. So for the job.
Speaker 2:The standardized testing. They rate them in a category.
Speaker 1:Yeah. So what we've done is we've taken eight classes for every one of those areas. You get a score less than 50 percent. That's called developing and here's eight classes you should take. And now we're building learning for classes that are accelerate the program and it's unbelievable the change. You still have the circumstance that the employee who cares does really well but you find out real quick who doesn't. So this gentleman who said that you know, call it, 25 percent of his workers are just taking oxygen. We talked back and forth and I said to him you need to hire more people because customer service has gone into the toilet. And this brings me back to Deming and Durand that we're in a rut. We view employees as tools in a toolbox. If things change, we change the tool. We don't try and do any development. Like when you went on boarded in the first 24 months of your arrival of General Electric, you were in training programs for 24 of those months.
Speaker 2:That's right.
Speaker 1:And your education, in my view, starts when you leave school, not ends, which most people figure yes. So how long were you at General Electric? Until we were divested in 2019, so 19 years and what did you think you were going to do when you were divested? That's a pretty major change in your life.
Speaker 2:Sure.
Speaker 1:Well, I was a really major. You've been through schooling, you found your way to get into a job. The job was good, you liked it, you were productive at it, and all of a sudden it's over. Ok, well, what that do to your head.
Speaker 2:It took a little bit of navigation through that period. I mean, after the Lean Six Sigma block belt role, I went into manufacturing as a quality engineer. That was another job I loved, for different reasons. I liked the physical aspect of problem solving and I managed three shifts of employees on the floor and we had a great output great like all the things. I do. Want to share a story from that time, though, and it goes back to perception of how you do your job versus what you're actually accomplishing in that job and performance reviews. My worst performance review of my life was while I had that job. My test area had a 25% reduction in overtime quarter over quarter and a 50% improvement in first pass yield across all product lines.
Speaker 1:That's pretty impressive.
Speaker 2:That's really impressive and I had the worst review ever because I wasn't signing documents when they wanted them signed.
Speaker 1:Welcome to my world. And these are documents.
Speaker 2:they needed them signed so they could check a box that was shipped. But they didn't even leave the plant for days, so it was not value add. About the rudder, sarah.
Speaker 1:Yes, a self-imposed rudder, an organizationally imposed rudder?
Speaker 2:Yeah, talking about the rudder, yeah, talk about what I just couldn't understand how a significant improvement in quality while reducing cost didn't amount to accolades, more responsibility, promotion, and so I left manufacturing and got into our quality organization, where I had the opportunity to completely transform a digital transformation into a journey in quality, and that was really fun too. That was not easy A lot of lessons.
Speaker 1:But it's really interesting listening to talented people of what you're one. Steve Clay, who is another colleague and contributor, graduated from the Air Force Academy. Any of the service academies are pretty tough duty. Then he went to the University of Chicago to get his MBA. One of his professors was Milton Friedman, who's kind of the father of economics before art laffer, and at 22, friedman had Steve at his house sitting on the balcony with two or three other professors peppering him, about a paper he had written that was about interest rates, the US dollar and employment, and he was so impressed with it that he got in charge, in touch with Paul Volcker, who was head of the Federal Reserve at that time, and the Federal Reserve had Steve sit with them in New York City. They paid for him to go from Chicago to New York and explain this paper, and they've been using that as a foundation of a lot of the work ever since.
Speaker 1:This guy is, amazingly, and he's a very, very humble, wonderful man. So he leaves academia, he leaves school and he goes to work for a consulting company called the WR Grace. And this is a long time ago and in those days consulting companies choked on data. They didn't have any information, so Steve got involved in creating computer programs and organizing it and transforming that data into information that could be used. And then after that period, he went to work for Avis, the car company, and he was in charge of all of the purchasing and market analysis of the world. And so that got him looking down the throat of how business performance could be measured.
Speaker 1:And then he was hired to come into a company that bought and sold businesses, so they'd go out and think of the data evaluation, the systems work, and taking data, data, transforming it into information, then developing the algorithms to look at how business could perform. Now I'm going to test this. I'm going to buy businesses, we're going to go in. We're going to do exactly what you do Find all of the holes, make the changes, implement them. Then we're going to sell it and do it again.
Speaker 2:Yeah.
Speaker 1:And you've got a very similar pattern. So what are you doing today? What is your business today?
Speaker 2:So I have two businesses today. Actually, One is virtual leverage. We're a smart solution industry for a 4.0 provider. Our approach is to take problems and then figure out how companies can implement solutions in a step function kind of way, so they don't have to take on the burden of buying a whole IT system at one given time. It also gives us the opportunity to integrate into existing systems. We can integrate into inspection equipment. My partner's one has a software background. He's been in software architect for 20 years. My other partner has a master's degree in mechanical engineering, but he found out in his career that he likes data science and coding. So we have the capability between myself who offers the opportunity to analyze your process, identify where it's problematic and understand what tech solutions you need to solve those problems. With this technology powerhouse team, we can make things happen, which is pretty cool, ok, so it's pretty extreme on there.
Speaker 1:Let me try and put that in there. Let me see if I understand what it is. You've got two guys that are primarily techies, system design and application, and one person who is looking for bottlenecks, and so, in effect, you review a business and give them kind of a roadmap of here's the good news, the bad news and the not so different ones. That's right. So the good, the bad, the ugly, and do you charge for that?
Speaker 2:For an initial consultation no.
Speaker 1:Once we understand what the business processes, how long is the initial consultation?
Speaker 2:One to two hours. We need to find enough about what the business is and where the problems are, and then we would come up with a proposal that that assessment, that detailed process mapping, would be included in the price of the proposal.
Speaker 1:OK, so from that one or two hour discussion that's kind of an exploratory discussion You're going to create a proposal, a quotation, a timeline and tell them what the deliverables are that you're going to do.
Speaker 2:That's right.
Speaker 1:And if you get the work, then you create a team and go in and get into details and put the documentation. Here's the executables, here's the process changes, blah, blah, blah. That's right, yes? And then I said back to about a year later. You come back in and do a post mortem and here's the good, the bad of what was done. Here's the openings that continue. It's kind of like repairing something. Right, I'm going to determine what's wrong, I'm going to give you a proposal, I'm going to correct it and then, a year later, I want to come back and make sure that everything that I told you was there.
Speaker 2:Well, yeah, I think a year is too long, but I think OK, so how long?
Speaker 1:So how long?
Speaker 2:No, I think three to six months, depending on what KPIs you're trying to measure and improve.
Speaker 1:OK, so there's the other missing element. Are you instituting new KPIs, are you using their KPIs or how are you doing that?
Speaker 2:No, what we're doing is it could go either way. It's really project specific in some areas where they don't know that they have a problem. For example, you have a process and you're not measuring your first pass yield, for example. They don't have a KPI on that because they've never measured it. They don't have any data to track it and even produce that. So we implement a software where they can track the start time, the stop time of these processes. They can understand what their rework loops are. Once you have a baseline, then you can expose that and then evaluate the reduction in the defect rate.
Speaker 1:OK, so that's one business. That's, that's hard core process improvement. I'm going to call it and it's dependent.
Speaker 2:It's all related to software, ai, analytics, anything in that space, iot, which I think is an enabler of process improvement. A lot of things can be solved by systems integration getting your data to not having to duplicate data from one system to another, giving you visibility to what's happening on the floor, putting together dashboards, like all of that stuff. I think process improvement is better when you have that capability.
Speaker 1:It technology today with everything that's going on. I'm going to put it into three camps. I have a business called the Capital Good Sages with the guy by the name of the Elzana that has 200 metrics for people on the Capital Goods distribution channels across third service sales, rentals and administration, and I've used that tool across almost all of the major manufacturers all around the world. So I've got standards by manufacturer, by geography. It's all interactive.
Speaker 1:We used to do this with meetings. Everybody would send in their financials and I'd put it into a model like what you're doing and come back We'd have a discussion and look at best in class and all the rest of that stuff, and the business owners were the guys, the leaders were the ones that were in the room and their competitive idiots whoever was last in one meeting didn't want to be last again in the next meeting. So over the course of time we took the net income of that group. There were 12 of them. Everybody used the term 20 groups. I thought 10 to 12 was better and we took the net income of these businesses up between three and a half and five percent as a group over five years.
Speaker 1:And yeah, it's pretty dramatic and it was too much work, it was too much travel. So I said, well, only, we're going to put it on the internet, which is what Taylor and I did, and people put their data in, they get a sport car. It's kind of like your GED thing, the red, green, yellow type of stuff. And then for every metric, I'm in the process this year of putting five tips that people can use and it's kind of like a DIY DIY. So here's the tips and we'll do those interactively. There's 25 bucks, 50 bucks, 100 bucks, 250, whatever. And if that doesn't work, then I got a bunch of retired guys I call ACES who will go in and do consulting work for you.
Speaker 1:If you don't know how to do it. Yeah, we've got people that can do that for you and it's amazing how all of this stuff people truly do want to make change, but now we've got a generation thing going on. I'm going to say 40 to 45 years old and down they'll change. 50 and 55 years old they're hanging on, they don't want to change anything. They've got more money than they've ever made in their lives and this is cool. Are you seeing that in this work that you do, where you have the one or two hour discussion?
Speaker 2:Yes, in space. Very much so, very much so. The owners are more skeptical and more worried about the cost upfront. And then when you get a chance to talk to the people that are executing the process and are leading the work, it's a completely different conversation. I don't like the way we're doing things. This is very manual. I think this is very wasteful. I spend three hours every day working on billing. I spend it's. The gap is very obvious.
Speaker 1:So how do this is what this is. The clouds are upside down thing. How do we accelerate this process? How do we get like? I always used to look for a champion, somebody who's going to carry the torch and make this damn thing happen, because it's you've got to be committed. If you aren't, when you run into an obstacle, you'll run, and there's no way for that. So in my early consulting years, you and I talked about this. I'd go in and do the same thing you're doing and I'd leave them a thing, a to do list sort of thing.
Speaker 1:And at the end of it I'd say, well, if you want, I'll come back and I'll implement it for you. And about half the time I ended up in the end and it's, it's, it's an interesting, it's an interesting evolution. So shift gears now. What's the other business that you're involved in? That's one of them.
Speaker 2:So the other business leverage for data is really a consulting slash training arm and it what it actually started as a software startup and I had several failed, failed stories I could share another time.
Speaker 1:You know it's it's, it's really it's. That's an important point. Let's stay there for a second. You learn nothing from success. You only learn from failure. True, and failures are actually a gift. You just can't let it destroy you. It has nothing to do with you, just happened to have made a mistake, that's okay. And if you're not making it what the hell, you're not learning, it hasn't?
Speaker 2:stopped me right. It's all been learning right. I wanted it to implement a soft. I had this dream that there could be a software platform that was inexpensive, that could connect the suppliers to the manufacturers, and that the suppliers, instead of having all of these different software systems that they would have to log into, they'd have one login and they would have access to all of their customers. And then I was thinking, oh well, we could take that data and put it into a blockchain. And now we have secure data about the supply chain. And now who would be interested in that? The Department of Defense Seem like a brilliant idea.
Speaker 1:It is, but you want to talk about a, an amorphous organization that's built like an army but it's a single cell. And how long do things take?
Speaker 2:Oh, it wasn't even at the point where I couldn't even get a customer to like buy into this idea. And then, when we built a point solution, we didn't have the conversation about funding up front and so they just thought that they were going to get the software for free forever and we cut ties with that customer and it was I don't know. I was ghosted several times. We were in development.
Speaker 1:So leverage for data is you and how many others?
Speaker 2:It's just so. It's just me right now. Okay, so I'm trying to. What I'm doing is rebranding it and read. What I'd like to do is provide more of a consulting and a training training program, and so I've got my newsletter. I'm trying to use that as the base to start educating people. That will help me create content to be a digital course, which then can hopefully turn into jobs for consulting.
Speaker 1:What is the other company called?
Speaker 2:Virtual leverage so virtual leverage Okay. Yep. Virtual leverage took the software component on. I have three partners. One of the other partners had a company called virtual IT solutions, so virtual leverage is the culmination of the two.
Speaker 1:So what else is coming down out of the fertile mind of Sarah Hanks? You've got the software business, the virtual solution, the virtual leverage. You've got the consulting slash, training leverage for data that's being, let me call it re-energized and more clearly defined. What else is there going to be?
Speaker 2:That's a good question. I mean, I still have other hats, but I have another idea, but I'm not ready to share it yet.
Speaker 1:Okay, no, that's cool. So one of the things that I've always believed, growing up in Canada by family originally were dairy farmers, and I was the first boy born and my uncle, henry, who ran the dairy farm, was ecstatic because now he had somebody he could pass his business to, and I was not at all interested. That's really hard work, and this is before the milking machines. So I grew up with the philosophy that everything in life was a three-legged stool.
Speaker 2:Okay.
Speaker 1:You needed to balance three things always people, money, purpose kind of thing. And if any one of them was suspect you'd fall on your keester. And I believed that until I spent a lot of time in Europe and found out the milking stool they used in Europe had only one leg and they put their forehead on the side of the cow while they're milking and they got the. I mean, it's much smarter, much more cost effective, it's a better approach to life. But that three-legged stool thing has stuck with me my whole damn life. So I had the teaching leg, I had the consulting leg and they had the financial evaluation leg. Inside Institute was the 20 groups, first learning center was the education. Rj Slade and Associates was the consulting. There we go. Now there's only one left and it's learning without scars. So there is a third leg there and let your mind put it out, and there's synergy between all three.
Speaker 1:So we look at the world, you and I and many others. We see opportunities, we see shortfalls, we see lack of efficiency. We see people's primary purpose in life is to make money and they're doing everything that they can to make more money in their company. General Electric, with Wells, did it in a red light, green light type of circumstance. For all his direct reports, elon Musk does the same thing, throwing $2 billion at SpaceX and none of them have made it into you know they explode, but the US government's funding that. Nobody really cares. And that's cool люди. They buy their Certainly USA and now they ask us whatEL, if I'm making money. What companies seem to have been doing is shedding people. The circumstance in America is we've got fewer people doing more work with less time.
Speaker 2:Recruiting is a problem and, yes, all of that All together.
Speaker 1:We've got Jay Lucas who purchased Dr Sutter, one of the largest recruiting businesses in the capital goods industries. John Dowling, who's running the construction equipment piece of that puzzle for Jay, trying to figure out. They're selling recruiting services on a monthly basis. Then we've got John Sessoms who does that for technicians. He does recruiting through advertising on social media etc. And charges his clients not for placing people. It's not the 25 percent of your wages I'm going to get if I place you. You're going to pay for my getting people for you Through all of that process. We've got systems, people. Here comes all of them SAP, jd Edwards, microsoft Dynamics, dic, anthos all these people. Not one of those key software providers in the industry knows anything about the damn business.
Speaker 2:I know it's stunning. I got in a fight with Oracle executives because they wanted to. Our CIO wanted us to use Oracle because we were a strategic business partner. Blah, blah blah.
Speaker 2:We were going to evaluate them for the quality system. They could not tell me how they were going to manage non-conforming material other than moving it out of inventory and making it unavailable to pick in a system. That is not okay, because those parts need decisions made on them. Those decisions need to be recorded and it's strict. You don't want to look at a part and have an engineer decide that it's okay to use. You need to know that. You need to know why.
Speaker 1:What the hell was the reason that it is not usable? That's right. That's why I make it better in the next case.
Speaker 2:Then you can learn to make it better in the first place. Yeah, it was amazing to me how much I had to fight. They wanted to continue their presentation and I would not. Until they could explain to me that they didn't, I said your software is not going to work.
Speaker 1:I'm sitting in a meeting in Chicago this is a long number of years ago with one of the major not Oracle, but one of that kind of stature. I have their European and Asian counterparts. That makes it a little harder for people to figure out who I'm talking about. I was the only one in the room in Chicago that didn't have a master's degree. I'm telling the international people that their product needed to be developed and presented in a different manner. They proceeded to lecture me on how data storage wasn't an issue. It's cheap. Memory is not an issue. It's cheap. It doesn't matter how big it is. My statement was of course it does, because the people using the software have to understand what the hell it does. The answer that came back to me was oh, no, no, no, that's where we make our money. We make our money from consulting. I said of course you do, because your product's no damn good.
Speaker 2:Yeah, no, this is why I have a software company. Yes, yes.
Speaker 1:And it's remarkable. So we have people who are selling system solutions to businesses that they don't understand. We have businesses in the capital goods industries that are being led by people who are beyond their expiration date and I mean that nicely, because I work with most of these guys and they all recognize the same thing it's time to get out. But they don't know how to escape and the transition to the next crowd has been delayed. People are not viewed as an asset, they're viewed as a tool. We're getting rid of people to make more money and we're slashing customer service and losing customers right, left and center. Here's a good example. I started in 1969 and in 1965, caterpillar. At that time I was with a Caterpillar dealer. They interviewed personally every customer. Everybody who owned a machine everywhere in the world had a sit-down interview. That's awesome, it was unbelievable. A friend of mine, ray Polhills his name, took over in 1966 and they did 20% a year instead of 100% every five years and Ray to this day defends it on the basis that it's much more cost effective to do it that way. I said your delay in response is what's going to kill you. So in 1970, first time I saw a report the market share for Caterpillar machinery. The dealer would get 83% 83. Something percent of the parts business went to the Caterpillar dealer for parts that went on the Caterpillar machine. That's pretty powerful. That's really good. I used to call it a printing press. They'd make money. It was easy. I'm putting a talk on.
Speaker 1:In Paluxy, mississippi, in the early 2000s I got 150 Caterpillar people in the room dealers and manufacturers and the guy who ran North America's in the room. I wandered the floor. I'm a teacher, I've got a lavalier on, but I wander around with a mic. Here's this guy I go up to and I stick the mic in his face and I said thanks for being here. I really appreciate it. Would you mind if I asked you a question? He said no, go ahead, because he saw the whole room was interactive. That's the way I teach.
Speaker 1:I said what's the market share for Caterpillar dealers on parts that go on the Caterpillar machines? Without too much of a delay he said 38.3%. I thanked him for being so honest. He said there's no point in being dishonest. That's not a good number. I said absolutely not. When I started it was 83%. In the last 50 years you've lost more than 50% of your market share. I'm looking at the room and I'm saying and every one of you suckers is making more money every year, correct? They said yes. I said you realize that you've got any idea why that's true. Is it because you're better? Oh, and that group of dealers that are competing in the marketplace over the last previous 20 years have gone down by 50%. No competition. If you're not selling more, what's the wrong with you? So it's kind of like the proverbial duck swimming in the water. Everything looks peaceful, but the feet underneath are going like maniacs. Sales are going up. We think everything's good.
Speaker 1:That's the market share is going down by 50% and I used to say congratulations, you got another 40%, you can lose. And they kind of look at me, what do you mean? Well, you've gone from 80 to 40. Now we go from 40 to 20 and you won't care. How do we fix this? I can't come up with a solution. Everybody I talk to, like you on this particular subject, recognizes where we are, what the situation looks like, but we don't have a solution. Have you got one?
Speaker 2:No, but where I've seen progress is people listen to what I say on LinkedIn. They don't like or comment, but when I run into people that I haven't seen in a while they talk about, I listen to what you say, I implement what you suggest I do. I have people come from out of the blue that look for advice on how to handle situations, how to manage, and I don't know how to scale it. But going back to the Ron Howard and changing your communication to get a result, I think on a one-on-one basis, learning that and then also finding the champions are a good way to make progress, but I don't know how to scale that.
Speaker 1:At the moment we can't. It's Jacques Cartier coming across from France to Canada in 1535. It's Christopher Columbus coming from Europe to the islands in 1492. It's the Vikings arriving in Newfoundland in the year 1000. It's the Russians coming across the land bridge in Alaska in 1000 BC. All of these things and we're at that place. And it's a good place to end this, because we're also at a place where, from data analytics with artificial intelligence, with where technology is now, it's kind of magic. You're going to have a nerve center. That's going to be the database People are going to own the data fields can't do anything with that data field without the approval of Sarah Hanks and that's not true today, but that's coming. Then we're going to have best in class SAS systems as a service IoT, internet of Things, all of these things. Sales force best in class today. Target best in class today.
Speaker 1:Just use small examples and they're not necessarily best in class, just use that as an example, you're going to have this octopus in the cloud, the nerve center, mission control, whatever you want to call it. That's the database. You're going to have all of these arms that are best in class. That are best in class. The software people, the consulting people, the business people are going to partner with the best in class, because that's transitory. You've got to work your ass off to stay best in class. We've seen that they're going to buy them, which is it's okay, but a short term spends a lot more money. However, they're going to produce it like we used to do. You're going to build it.
Speaker 1:I got the three P's You're going to partner, you're going to purchase or you're going to produce. We're not at that place yet. We've got a whole bunch of people talking about it, but thinking about it, but there's not enough resource. Who marry the technology thinking with the business operation thinking To the process.
Speaker 1:With the leadership thing, which is what Steve Clegg and I are trying to do. He's got a scorecard for business performance ABCD. I've got a scorecard for operating skills and knowledge management ABCD. Now we're looking at a couple of tools to evaluate the leadership quotient. We've got a guy by the name of David Jensen who has a tabletop exercise. He ran HR for Sarah Lee. That gives us a profile of who they are.
Speaker 2:Okay.
Speaker 1:Then we've got John Carlson, an executive function who. That's a tool that was used in university to determine the success of students 10 years into their work. I mean this is coming, but I ain't going to see it, sarah, I'm too old already, so you've got to carry the torch. Sounds good? No, I think you're right. We're making progress. It's one person at a time, and don't worry about scaling it. Just worry about making sure you've got enough on the table and you can look after your life properly.
Speaker 2:Yeah, yeah, but I think it's more important, or just as important, to have that impact. Oh, I agree, even if it is one person at a time. If you can teach one person to think differently, understand that they don't need to be a victim of the massive workload as a result of layoffs, that they can be empowered, they can learn how to assess what they're doing, and there's tools out there that you can easily adopt to make things easier. That's good, that's progress.
Speaker 1:And that's a good way to close this. I think we have looked at what you and I do the markets that we work in from a cloud they're upside down perspective from a different perspective, and I want to thank you for contributing to this discussion, and I want to thank everybody who's stuck with it and listened to this, and you know there's a lot to do and there's limited time. So get off your tush, folks, and get to work. So thank you very much, sarah, and thank everybody for listening. Mahalo, we will see you at another conversation, either on the clouds or upside down, or the candid conversation, in the near future. Mahalo.