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My guest for Episode #496 of the Lean Blog Interviews Podcast is Randy Carr, the CEO of South Florida-based World Emblem – one of the largest embroidery companies in the world with plants in the U.S. and Mexico.
Since 1993, the family-owned business has been the “go to” for emblems and patches for sports headwear, footwear, sports garments, and other apparel, with an output of more than 100 million products a year.
In this episode, we delve deeper into World Emblem's systemic view of their business operations within the scope of the SQDCM (Safety, Quality, Delivery, Cost, and Morale) model. Learn how this approach steered them toward not just honing a product's price-point, but also delivering a superior experience that justifies that price.
Discover how lean principles became an integral part of their response to various business challenges, ranging from pre-COVID operational inefficiencies to the financial impact of pandemic-induced difficulties. As World Emblem continues to foster a culture of continuous improvement and uphold their focus on safety, quality, and customer service, this lean journey illustrates the effectiveness of lean in maintaining robust competitiveness within a dynamic global market.
Questions, Notes, and Highlights:
- We'll somewhat structure this interview like an A3
- Let's start by telling us about the background of World Emblem — what was the need for change?
- Their “management system” wasn't right?
- How did you learn about Lean?
- A 7-figure leap of faith to hire consultants
- Baby steps… vs. trying to learn and do it yourself?
- Countermeasure — Why Nearshoring?
- Hoshin Planning process – how has that worked? Benefits?
- Allocating your time as a CEO — 30% with customers?
- Using Lean outside of production?
- Being honest about problems — a key part of the DNA
- What's next on the action plan? How will continue you evaluating your progress?
- The UK “True Lean” methodology
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Episode Summary & Article
Embracing Lean for Operational Excellence: The Transformation of World Emblem
Introduction to World Emblem
World Emblem, a South Florida-based embroidery giant, stands as one of the leading companies in its industry. With facilities in both the US and Mexico, the company boasts an impressive output, generating over 100 million products annually. As a family-owned business rooted in the apparel sector since 1993, World Emblem has been a trusted provider of emblems, patches, headwear, and various sports and footwear garments. Their unparalleled service includes fulfilling high-volume orders with an exceptional delivery track record. In this deep dive, we explore World Emblem's journey toward operational excellence, focusing on cost control, delivery consistency, and the critical role that lean principles have played in their continuous improvement.
Pre-COVID Challenges and the Need for Change
Before the world was hit by the COVID-19 pandemic, World Emblem faced significant operational challenges. At the core of these issues was the lack of effective cost control–leading to inconsistent delivery schedules and competitive struggles. Despite on-time deliveries reaching 100% on some days, they could plummet to 50% the next, depicting an unpredictable operational flow. This volatility put a strain on their ability to maintain the high standards that had ensured their success over the years.
These inconsistencies highlighted the absence of a robust management system that was necessary to harmonize operations across all locations and facilities. Key performance indicators (KPIs) were in place, yet they were insufficient for driving the kind of systemic improvement required for long-term success. The company's leadership realized that while they had systems to manage parts of the organization, the overall DNA of the company needed to evolve for sustained growth and operational health.
The Lean Solution and Its Implementation
The onset of COVID-19 exacerbated existing issues and introduced new challenges, such as staffing shortages and wage inflation. It was clear that incremental price increases would not suffice to cover the escalating costs. This pivotal moment led World Emblem to consider a lean approach–a methodology they had yet to fully embrace. As an answer to the growing demands for efficiency and cost-effectiveness, the company decided to hire a firm specializing in lean implementations. This decision would prove transformative.
The results of implementing lean principles were immediate and impactful, offering solutions to long-standing problems. The lean initiative not only addressed issues that existed before the pandemic but also prepared the company for future challenges. Through this experience, World Emblem recognized the potential of lean methods earlier in their journey, realizing that they could have reaped the benefits of such an approach had they adopted it sooner.
Advancing Through Lean Principles: A CEO's Personal Commitment
The introduction of lean into World Emblem's operations wasn't just a system change; it required a cultural shift that started at the top. Randy Carr, CEO of World Emblem, acknowledged the need for this comprehensive transformation as essential to the company's advancement. By integrating lean into the fabric of the organization, they aimed to fundamentally alter how their staff worked and thought about their roles and responsibilities. The goal was to create a problem-solving machine where every one of the thousand employees operated with shared beliefs and principles.
The consultancy firm provided what Carr describes as “shock treatment” to the organization, eliciting the desired margin improvements and immediate results. However, this abrupt change did not alter the company's DNA permanently–when consultants began their exit, old habits resurfaced. This observation led to the development of the ‘World ML Management System,' a rebranding of their lean journey, emphasizing the need for an enduring approach to change.
The Economic Reality: Inflation, Cost Increases, and Lean-Thinking
World Emblem's strategy to improve margins involved more than just lean practices. They also needed to manage pricing in response to market demands while addressing rising costs due to inflation. The company undertook a balanced approach, recognizing that while some inflationary costs can be passed on to customers, they also needed to discover efficiencies within the business to counteract wage increases and other expenses. This approach reflects modern lean thinking, emphasizing continuous improvement and waste reduction to navigate economic pressures without simply resorting to across-the-board price increases.
The firm's lean journey became an integral part of maintaining margins in the face of considerable labor cost increases. Randy Carr explained that when budgeting for merit increases, they also sought to identify an equivalent percent of savings within operational efficiencies. This has been an integral part of their lean evolution, ensuring that resources are used effectively, and the customer receives exceptional value–a hallmark of lean philosophy.
The Bigger Lean Picture: SQDC and Evolving a Culture
Initially, World Emblem's focus gravitated heavily toward delivery and costs, sometimes overlooking the importance of quality and safety. With the introduction of lean, these elements became interconnected, allowing the company to understand how each one impacts the other. Hiring an HR director who was attuned to lean principles helped highlight areas for improvement, with safety becoming a crucial metric.
It was the recognition that safety, quality, and morale all contribute to a better working environment, reduced turnover, and ultimately, a more productive business, that propelled World Emblem further into their lean journey. Embracing lean was not just about KPIs but about changing the heart of the company's culture, turning the entire workforce into active participants in the pursuit of excellence.
The Continuous Journey of Lean Thinking: Beyond Cost and Price
A central tenet that emerged throughout World Emblem's lean transformation was the systemic view of their business operations. This involved understanding the full spectrum of the SQDCM (Safety, Quality, Delivery, Cost, and Morale) model. Their journey showcases the importance of not only honing a product's price-point but also delivering a superior experience that justifies that price.
Even before fully integrating lean, the company's management was thinking systemically about how different variables affected the entire operation. The emphasis on system-wide performance is visible in Carr's acknowledgment that continuous improvement is crucial for keeping prices fair and competitive while also maintaining–or even increasing–margins. The forward-thinking approach to managing operational issues through lean signifies a commitment to excellence that defines World Emblem's core ethos.
Final Thoughts on World Emblem's Lean Journey
Embarking on the path of lean manufacturing has been a transformative experience for World Emblem. With a staunch belief in lean principles, Randy Carr and his team continue to embed these practices in the DNA of the company. From addressing pre-COVID operational inefficiencies to minimizing the financial impact of pandemic-induced challenges, the adoption of lean strategies signals World Emblem's dedication to remaining a leader in the embroidery industry. As they build a culture of continuous improvement and emphasize safety, quality, and customer service, the journey toward operational excellence demonstrates the potent role lean plays in not just surviving, but thriving, in an ever-competitive global market.
Transformative Approaches to Business Challenges: Lean Principles in Action
The success of World Emblem's integration of lean principles is not solely confined to operational processes but extends to evoke systemic changes across the organizational culture. Their proactive decision to engage TBM consultancy brought about a vital shift in the company's trajectory. With a commitment to a holistic lean transformation, World Emblem delved into establishing a robust lean culture and management system.
As outlined by Randy Carr, their CEO, the return on investment (ROI) was more than just financial–it was strategic. In the wake of COVID-19, World Emblem faced a crucial need to adapt swiftly to the changes in the market. The consultancy's analysis resonated with Carr's deep industry experience, confirming that the projected benefits were attainable and drawing a clear course for action.
The Lean Principles: Catalyzing Excellence in Sales and Marketing
Interestingly, the journey demonstrating that the lean approach is not solely applicable to production and operational efficiencies, World Emblem identified new territories for their lean strategies. The embodiments of lean methods in the sales and marketing departments opened new avenues. The introduction of value stream mapping to these areas signified an expansion of a mindset where every facet of the business could reap the benefits of lean thinking.
World Emblem's story illustrates a dynamic application of lean principles that extend beyond the confines of traditional manufacturing processes. The company's willingness to invest in training and problem-solving capabilities meant adapting lean methodologies to suit the evolving requirements of their sales and marketing strategies–a testament to the versatility of the lean approach.
Shifting Paradigms: Embracing Lean Philosophy Across the Business Spectrum
World Emblem's experience underscores a critical aspect of lean transformation: the need for a company-wide adoption, where the decision to lean into lean principles cannot be half-hearted or compartmentalized to a single department. This broad-scope integration signifies a resolve that is echoed by the company's leadership–who recognize the transformative nature of lean methodologies not only for solving immediate operational issues but also for fostering resilience and proactive growth company-wide.
The incorporation of lean into sales and marketing, alongside operational activities, advocates for an inclusive approach where every segment of the business, every employee becomes a potential vector for impactful change, growth, and improvement. This encapsulates a paradigm shift from viewing lean as an operational toolbox to a philosophical cornerstone of business strategy.
The Evolutionary Lean Journey: A Continuum of Improvement and Adaptation
At the heart of World Emblem's story, there is a consistent ethos that views the lean journey as a never-ending progression. While the shock treatment provided by consultancy services was necessary, it became clear that true transformation lies in the daily commitment to lean practices by every member of the organization. Maintaining this momentum is an ongoing challenge–one that requires complete immersion and steadfast direction from leadership.
This evolutionary process spotlights the distinction between adopting lean tools and cultivating lean thinking; it's a continuous journey where every challenge serves as an opportunity. World Emblem is embarking on a deep transformation not only in operations but in how its workforce perceives problem-solving and goal attainment–a journey that's only just begun.
Nurturing a Lean-Centric Organizational Mindset for Sustainable Growth
World Emblem's journey unfolds a tapestry of lean-centric strategies woven into the fabric of their organizational culture. The voices of leadership reflect a deep understanding of how empowering teams and decentralizing the problem-solving process can dramatically enhance operational effectiveness. Developing robust feedback loops and communication channels, where every employee, from front-line staff to upper management, is encouraged to voice concerns and contribute solutions, is at the core of a sustainable lean approach.
The company's leadership reinforces this by allocating substantial portions of their time interacting with customers and teams, which is essential for nurturing a customer-focused mindset throughout the company. Randy Carr's allocation of 30% of his time to clients underscores the importance that World Emblem places on customer experiences. Moreover, this close interaction with the marketplace provides valuable insights that feed continuous improvement and innovation.
Cross-Functional Alignment and Goal Setting
Embedding lean principles across various business functions requires a cross-functional alignment, where goals and initiatives are cohesive throughout the organization. World Emblem's lean journey involves setting actionable objectives with measurable milestones reviewed regularly–monthly, in this case. Such structure allows for a responsive strategy that can adapt when needed while upholding the granular focus on delivering customer value.
This alignment is crucial when establishing priorities and setting stretch goals that challenge the team but remain within the realm of achievability. By encouraging teams to develop the objectives themselves, World Emblem fosters a sense of ownership and accountability that is pivotal for achieving these goals.
Elevating Team Ownership and Innovation
While the journey has been hallmarked by consultant engagement for the inaugural lean shock therapy, it is clear that sustained change will hinge on the internalization of lean principles by World Emblem's staff. The company has recognized the immense potential of its workforce and is moving towards a distribution of problem-solving responsibilities.
By facilitating an environment where team members not only own their plans but are also expected to dedicate significant time to breakthrough activities, World Emblem is transforming its operations. This shift is fundamental to progressing from reactive firefighting to proactive, innovative improvements that drive business growth.
Lean Thinking: From the Front Line to Leadership
The culture of continuous improvement that World Emblem aspires to establish pivots on the principle that everyone should be equipped and motivated to identify and solve problems. This inclusive approach is not limited to a select few but extends from the front line to the executive suite. The questioning of “What problem are you working on today?” by leaders signifies a strategic pivot towards engaging every employee in the company's lean transformation.
This engagement is deepened by fostering an atmosphere where highlighting problems is not only accepted but expected. Recognizing and addressing issues without fear of reprisal or blame enables a transparency that is essential for lean thinking to permeate an organization's DNA.
Forward Momentum: Lean Tools and Technologies
Finally, World Emblem's lean journey is not just philosophical but also technological. Investment into new technologies, such as ERP systems and technical solutions, complement lean tools to streamline processes and remove waste in the customer journey. Such fusion of lean principles with technologically backed innovation is paving the way for the company to meet its ambitious goals and deliver patented products to the market.
The roadmap for World Emblem seems clear: continuous training, applying True Lean methodology, and maintaining the momentum of improvement while navigating and adjusting for market realities. This process is dynamic and iterative, indicative not only of a strong lean management system but also of a culture that views challenges as opportunities to learn and grow.
Core Values and Vision Clarity
At the heart of World Emblem's lean transformation is the crystallization of core values and the sharpening of organizational vision. Clarity in these areas is paramount, as it guides behavior and decision-making across every level of the organization. Randy Carr's commitment to this clarity means embedding continuous improvement into the company's ethos.
The dissemination of these core values ensures that every individual in the company is aligned with the fundamental principles that drive World Emblem. It is about creating a unified understanding of the mission and cultivating a shared narrative that everyone, irrespective of their role, can latch on to for guidance and motivation.
Role Clarity and Structured Interactions
To propel the lean-centric culture forward, role clarity is essential. Each employee, from leadership to the front-line workers, must have a defined set of responsibilities. Understanding how one's role interacts with the lean processes and the business as a whole empowers individuals to contribute more effectively and eliminates unnecessary redundancy in workflows.
By formalizing roles and responsibilities, World Emblem creates a structured interaction within the company, limiting the necessity for upper management to frequently intervene in lower-level operational issues. This allows for more autonomy and encourages immediate engagement with the principles of lean thinking at every tier of the organization.
Commitment to Continuous Training and Coaching
Continuous improvement is a journey with no finish line, and training is the fuel for that journey. World Emblem understands that instilling a new mindset and altering the company's DNA requires an ongoing commitment to learning. The implementation of training sessions and learning opportunities, such as Kaizen events or ‘shock treatment' exercises, equips teams with the skills and methodology needed to drive lean principles home.
Training underpins the transition from old habits to new, fostering a lean-ready skill set that extends beyond the knowledge of tools to imbue a philosophy of continuous growth. Such a robust training program ensures that every individual contributes to and feels a part of the lean culture World Emblem is championing.
Consistent Reinforcement Through One Voice Leadership
Effective leadership in a lean-centric organization does not merely command; it echoes the core values consistently and persuasively. One Voice Leadership at World Emblem means that the messages cascading from the top are aligned with the lean ethos, reinforcing the commitment to continuous improvement at every opportunity.
Leadership remains a potent influencer in the culture of an organization. By maintaining a consistent message, leaders at World Emblem reinforce the behaviors and thinking patterns that will cement a lean mindset throughout the company. Such unity in message and purpose sets a clear direction for the organization and nurtures the cultural shift necessary for sustainable lean adoption.
Embracing Technological Aids in the Lean Journey
No lean journey is complete without integrating the optimality of modern technology. World Emblem continues to invest in systems and tools that foster efficiency, such as Enterprise Resource Planning (ERP) systems, which provide a coherent framework for streamlining processes across the company's vast operational spectrum.
Harnessing technology is not merely about simplifying workflows; it's also about enriching the data-driven decision-making process that is central to lean methodology. By marrying technologically-advanced solutions with a robust lean philosophy, World Emblem lays down a comprehensive strategy for sustainable growth and competitive advantage in its market sectors.
Automated Transcript (Not Guaranteed to be Defect Free)
Mark Graban:
Hi, everybody. Welcome back to the podcast. I'm Mark Graban. Our guest today is Randy Carr. He's the CEO of a South Florida based company, World Emblem.
Mark Graban:
They're one of the largest embroidery companies in the world, with plants in the US and Mexico. Since 1993, this family-owned business has been the go-to for emblems and patches for sports headwear, footwear, sports garments, and other apparel, with an output of more than 100 million products a year. So, Randy, welcome to the podcast. How are you doing?
Randy Carr:
I'm doing well. Thank you for having me.
Mark Graban:
Well, I think it's such a great opportunity here today to explore your lean journey personally as a CEO and as a company, to talk about nearshoring, talk about a lot of important issues here. And we had agreed, at least roughly speaking, we're going to try to structure the conversation a little bit like an, you know, Randy, let's start on the upper left corner. Kind of tell us some of the background of world emblem. What was some of the situation and some of the need for change a couple of years ago?
Randy Carr:
Well, I think there were really grounded in kind of two parts. The first one was really coming out of COVID but even before then. So I'll just go like before COVID we really didn't have good cost control. That was the number one thing. We weren't really improving the business as well as we needed to in order to be competitive.
Randy Carr:
We were having delivery issues. Things were super inconsistent. So we'd be 100% on time one day and the next day we'd be 50%. So there was a lot of ebbs and flows in the business that we just weren't able to keep up with. Lean wasn't the answer at that time.
Randy Carr:
I mean, it probably would have answered the question had I asked the right question and kind of gone down that path, but it was really not having the right management system in the business. And I don't mean like ERP, I mean the management system to like lean to operate the business across all of our locations and all the facilities. And then the second part of your question, or the second part, the second answer to it was just coming out of COVID I think we sort of knew, and it was fairly obvious coming out of COVID that there was going to be the need to staff, the need to get more people, and we were going to need to pay more. And we knew that price increases weren't going to be enough in order for us to chase the requirements to pay our staff more, the inflationary requirements that were going on all over the place, which wasn't just labor, but labor was the biggest factor for us. So we needed to get more out of what we had.
Randy Carr:
I had a good friend in my YPO forum, and he has been on me and my COO has been on me about using Lean as sort of his secret weapon, he calls it. So he introduced me to a turnaround firm that does lean implementations for private equity, and we ended up hiring them and it was like the best thing we ever did. We found immediate answers to a lot of the problems that even before COVID and now it's sort of grounding us for what's to come.
Mark Graban:
So going back to pre Covid, it sounds like if I hear you right, Lean wasn't part of consideration of what the answers, what the countermeasures could have been. But if you had learned about it earlier, you could have tapped into lean earlier, it seems.
Randy Carr:
I'd like to think on that sort of enlightened. Sometimes you need a kick in the face. I mean, Covid was more than just a kick in the face, but I think it was just the obvious response to needing to get more out of less, and that was it. But no, going into Covid, I would say we had a lot more operational issues and service-related issues, and what we weren't looking at was the management system for the business. We were looking at stuff like technical debt on the IT department was a big topic around here, or a better salesforce was like the topic and those were the topics.
Randy Carr:
But the reality is what we had to do was chase. We had to look internally at what we were doing as a management team to resolve the issues.
Mark Graban:
And it's always tempting to go looking for solutions, even if we're sort of jumping to solutions instead of kind of looking back at the current state or even what you described as a management system. And would you say before the introduction of lean, was there a consistent system per se, or was there just a lot of management happening?
Randy Carr:
We had KPIs and ways to measure things, but we didn't have a system that was top to bottom, like leans cliche, like what we call the World Emblem management system now, but we've renamed our lean journey the World Emblem management system. So I'll use that term interchangeably today. But no, we didn't have a system that really changed the DNA of our staff. We had measuring KPIs, paying for the measurement on the KPIs, but we really weren't changing the culture of the business or just the DNA of the company. Just to give you a parallel.
Randy Carr:
When we called our consultants in, they gave shock treatment to the business. So they came in and shocked everyone in the organization. And we got the margin we wanted. We got the results of the spend, and when they started to pull out, it just started to backslide. So we never changed the DNA.
Randy Carr:
We were kind of going back to where we were prior to Covid. So again, we had to change course. So the answer is, we had systems and we had management systems and we had operating systems, but we never changed the actual business or the DNA of the company. So we weren't getting the long term health results we needed to get. We were going to the gym, but we weren't eating right, so we weren't creating the right habits in order to make a well-rounded problem-solving machine.
Mark Graban:
So then your friend from the YPO forum, do you remember how that friend kind of initially pitched you to say, hey, Randy, here's some stuff you need to learn about. Did he have to be a little persistent with you?
Randy Carr:
No, he didn't have to be ultimately persistent, but I did have to be prepared to spend the money on consultants, and it was a seven-figure to have. It was a leap of faith to know that we're going to drop a million or $2 million and we're going to get that money back. But the short answer is, we did a forum retreat. He's in my forum. We did a foreign retreat.
Randy Carr:
Am I okay to say his name here or no?
Mark Graban:
Yeah, it's up to you.
Randy Carr:
So it's Andrew Koenig. This company, City Furniture, is a billion-dollar furniture manufacturer in South Florida. He's awesome. Like, he's the boss. So anyways, we did a forum retreat in Mexico, and I was all hyped up and proud.
Randy Carr:
And he went down there and he was complimentary of our facility and everything else, but he then says to me, you got to look at this. I had heard of it before, and I had read Paul Aker's book on the 2 second lean, or I think that's the name of it.
Mark Graban:
But two second lean.
Randy Carr:
Two second lean. Yeah. But I had read his book, and I toured Nissan and some of these factories, so I had been familiar, but he sort of hit me with it, and I was like, yeah, but we're doing this, so we're just as smart. Whatever we're doing is really good. Then I toured his factory, then I toured his facilities, and I was embarrassed.
Mark Graban:
Then, Covid, why is that time? What did you see as the differences or the opportunity for you?
Randy Carr:
What I saw was alignment number one. I saw like he had his war room set up and all the visual tools were there. And then I went around and I saw the sort of visual tools all throughout the organization and all of them rolled up to what he was doing in the war room. And that kind of hit me and I'd say that was probably a year before COVID and the retreat was probably two years before COVID At that it was just layering and at some point, like I said, the real impetus was Covid where we just had to do something.
Mark Graban:
Yeah. New reality of challenges finding workers.
Randy Carr:
Yeah, it was challenge finding workers and it was also like we had to give big increases and how are we going to keep our margin consistent with giving big increases? I mean, obviously price increases were there but they're not 20%. So that spread, we had to make the spread out and we knew there were inefficiencies of the business. The question was just how do you even start? It is daunting with 1000 people.
Mark Graban:
So I come back to the getting started, but maybe exploring. There's that possible countermeasure, if you will. And companies, I think as customers we're all subject to this. We get the email, we get the letter that says something like due to wages, due to gas prices, due to whatever, they'll say what we're forced, we have no choice but to raise prices. And I always read those, I kind of think, well, bs, there are options, there's a choice.
Mark Graban:
Going back to Toyota, lean literature, they would always emphasize that you're not entitled to raise your prices. If costs are coming up in this one area, you've got to figure out how to reduce them in another area. It seems like you really were pursuing that more Toyota type thinking. We've got to take other costs out, right?
Randy Carr:
I think it was a combination of both. To be fair, inflation is a reality. But when we do now give merit increases or comp increases, we need to find those increases in the business. So we're just arbitrarily saying let's give a 3% raise across the board to everybody. When we budget for that, we forecast for that.
Randy Carr:
We're also going back and saying we need to find 3% in the business. But again, we're on year three of this kind of lifelong journey of being running a lean type organization like Toyota or like know, we certainly are probably like a three year old child in our thinking about this entire process, except there's a thousand of us. I think the power of this thing is getting everybody thinking like that. All 1100 people in the business and all operating under the same beliefs. But to answer your question, yes, we did approach it both ways.
Mark Graban:
Yeah, you price to what the market will bear. And I think, look, the market may be accepting of price increases to a point, but I think that's different than viewing it. Like, sometimes you get a sense of entitlement of like, well, we're going to raise our prices and of course people will pay it, which might be true, until they find alternatives.
Randy Carr:
Until they don't. Right. Or another product comes out or something else. I think in our mindset, at least as far as pricing is concerned, and this has been true with our lead journey. So it's not like, but the better we service our customers, the more they're willing to pay also.
Mark Graban:
Sure.
Randy Carr:
So regardless of the price, I mean, what we do is pretty unique. There are days, it's not every day that we'll do 800,000 or 900,000 pieces in one day. We'll ship half the order same day, and we have one piece minimums. So what we do is it's a low-price product with a low margin. It's very fast and it's complicated.
Randy Carr:
So for us to get the margin, it takes a lot of combination of people and technical work and everything else. And the degree of accuracy that people expect is pretty high. So for us to be, what I would say, elite customers are willing to pay 2% more if we're 3% more than the nearest competitor, if they know our stuff's going to show up the next day and they don't have to worry about it not showing up. Then, you dovetail that with very high quality and sort of an elite customer experience via e-commerce API. And that's kind of our recipes for success.
Mark Graban:
And it seems like even before lean, Randy, you're thinking about your business a little bit more systemically than just looking at cost in price. You're looking at, and you may have been taught the same letters here of SQDC, safety, quality, delivery, cost. Of all of these things going hand in hand, it seemed like you were already maybe thinking about those interconnections.
Randy Carr:
I was, but I would like in full transparency, it was always delivering cost, and quality was an afterthought, kind of. Not really, but kind of safety was an afterthought, not really, but kind of only would have translated to workers comp. And it never really sort of the umbrella of kind of all of it. And looking at it again, getting a new HR director in here the last couple of years, she hit me pretty hard on that one and said, getting the turnover down is going to having those kind of. It's not like we were having injuries because that wasn't the issue.
Randy Carr:
We're not construction, but just calling that number out on all levels and even something as simple as a dirty kitchen. But just calling those things out makes a better work environment, reduces turnover, makes a better, healthier staff. It's just stuff we don't have to think about. And to be fair, I'm an owner operator. I started with three people.
Randy Carr:
So my mentality is, something's busted, go to the machine, try to fix it yourself. We went through very gritty times and I'm sort of used to that. So for me it's get on the machine, get the order out. That's kind of all I'm thinking about. But yeah, on the SQDC version, just looking at it now and looking at it every day, it's just much more aware of it than I was at the time.
Randy Carr:
Yeah.
Mark Graban:
And then there's the m for morale that often gets tacked on, because as I learned it almost 30 years ago, SQDC, it was in that order. Morale may have been a little bit more unstated directly. And then I think people are like, well, morale is important too, and it's put at the end, not because it's the least important thing. I mean, it's probably one of these things that helps drive quality delivery and cost. Maybe it should be SMQDC.
Randy Carr:
Yeah, for sure. It goes back to the culture.
Mark Graban:
You're talking about a thousand people thinking this way. I do want to come back to that a little bit later, but as you were exploring, it seems like kind of the current state and your performance gaps, what are we going to do about it? There was this decision point, as you described it, seven-figure leap of faith to hire consultants. That's a big leap. I mean, it's a lot of money.
Mark Graban:
I'm curious if you don't mind sharing a little bit of the thought process around starting with baby steps, reading Paul Akers' book. Let's just start doing a lot of two-second lean, or a lot of times, companies say, well, we're going to try to do it ourselves. I'm just curious if you don't mind.
Randy Carr:
It's not going to be anything that's going to be too brilliant. The reality is I read Paul Akers' book ten years ago because I saw him at a Verne Harnish talk in Orlando and I was like, this guy's awesome. I read his book, put the book down and forgot about it because I picked the next book up and the next book. So it's like one of those things. It's nothing more than what I said before.
Randy Carr:
The reality is we knew coming out of COVID the pie was going to be bigger and we were going to get busy and we had to do something different. And if we did the same stuff we always did, we got the same results, which would have been 60% on time performance and an increase of cost of ten points and we just wouldn't make any money. And maybe at this point in time, you and I wouldn't even be talking. It's just we knew we had to do something and this is the track we took. The ROI was pretty straightforward.
Randy Carr:
When the consultants came in and looked at stuff and put on paper, hey, this is what we think we can get you. And the one firm we ended up hiring, which was TBM, their analysis was pretty clear. And I'd been around the business forever, so it was like, yeah, that's probably just about right. So the ROI was there. It wasn't much more than what I paid.
Randy Carr:
But on year two, that's crazy.
Mark Graban:
Right now you are sustaining and continuing to improve.
Randy Carr:
Look, it's nothing linear. So again, it was like the paddles and shocked the business and it was shock and it was one kind after another. And that's kind of all we knew at the time. But there was no problem-solving or none of that. Then we went to the UK route, which was University of Kentucky called True Lean, and they hit us from the top was what?
Randy Carr:
That's where the sustainment starts. Like, go into the DNA, go into the culture one boys, leadership, roles and responsibilities, problem solving from the bottom up. Yeah, Kaizens are awesome too, but I think it all kind of works together. And that was kind of the second breakpoint where it was doing the Kaizens, getting the money out, taking that money and reinvesting it in the training from the top down and go deep into the DNA of the business and really start changing the way everybody operates and thinks about everything and imagine how powerful it is to have 1000 people solving a problem a day. The power behind that is unbelievable.
Randy Carr:
Now, we're not close to that. We probably have eight people solving problems every day.
Mark Graban:
Okay, so there's still a gap to work on.
Randy Carr:
The gap is huge, which is awesome because all that's opportunity and margin and opportunity for our customers to benefit and opportunity for our staff to benefit and growth for the. I'm. Thank God we have those.
Mark Graban:
You know, it sounds like maybe there's a parallel between reading a book about fitness, of which Paul has written a book called Lean Health. Reading a book versus having a trainer who can kind of help kick in the butt. Make sure you're taking action, give you feedback. There's value in that, right?
Randy Carr:
I use the trainer parallel to my staff and I said, our lean journey has been the equivalent of hiring a trainer. And then you fire the trainer and you stop going to the gym. That was my example. It's exactly the same example I used to my staff. And I was like, we hired a trainer.
Randy Carr:
We did 90 days of workouts. He leaves and we go back to skipping a day or skipping two days and eating bad. A healthy lifestyle is just that. There's a balance of all these things. And this is the same, it's exactly the same thing.
Randy Carr:
Reading the book is like the kindling, the 1%. I mean, look, the book was great and I saw him speak and he was great and everything he said was right. But to try to do it yourself, to me was just, there's just no way you could do some things yourself. Clean your desk up, which is obvious. But to implement SQDC boards and tier one boards and tier two boards and to run an elite business at the pace we're trying to run and serving the kind of clients where we have to serve, there just wasn't a 20 year room for 20 years of failure.
Randy Carr:
We had to get things straight and we had to do it quick. And again, you came out of COVID and everybody came out like a cannon. It was only till this year things started to drop off and people had to do a reset. And the reset was more on sales and marketing. And we had the same issue.
Randy Carr:
We came into 23 thinking we're going to be like gangbusters. And all of a sudden things started to drop off. I think what everybody else is in February and March, and we just said, all right, let's take these lean principles and let's start moving them into sales and marketing. And we did that. So I brought TBM back in.
Randy Carr:
I brought them into my sales and marketing department. We started doing value stream mapping. So it's not just production, it's every single piece of the business can be.
Mark Graban:
I mean, I appreciate how Randy, you are framing all of this. Not in terms of, well, here are the tools that I want to go and implement because there's a lot of workplaces people get started with lean, cleaning up the desk, using lean tools and maybe kind of a superficial or trivial way where I appreciate your motivation was around we've got these business challenges and opportunities to solve. Focusing on that seems so much more powerful than saying, well, we trained 1000 people in tools and we had them all go use the tool. Aiming for that alignment is so much better.
Randy Carr:
Don't get me wrong, I did that too. I didn't do that. Not with this, but not with this. Not with this. Right?
Randy Carr:
In this one, we went all in and I've had people ask me on referral calls, we're just going to do one department and we're going to see how it goes. And I was like, for me it was like 48 laws of power in Cortez and the whole deal is burn the ships. And for me it was like, not that I'm burning the ships, but I'm going to spend enough that we're going to get it right. And I knew it was going to work. So there was never a question of whether the money was there, meaning the margin.
Randy Carr:
I knew the gross was there just from being around the business forever. So I wasn't concerned. I knew what the ROI was. So it was like, we're either going to do it or we're not, but we're not going to do it 20% and see how it goes. And I didn't know the whole DNA thing either.
Randy Carr:
None of that hit me. I've read the Toyota Way and the Toyota production system. I feel like it's changing the world, but I have the book name wrong. But Taiichi Ono, I've read a lot of these books at this point. I've read some of them more than once.
Randy Carr:
But I was never under the belief that, again, the DNA thing didn't hit me until UK. And even when I went to UK, the DNA thing still didn't hit me until I hired him as a coach. And I sat through Leli and I sent people to leadership conferences. And it's really just a question. It's not a question of spending the money, it's just a question of going to the gym every day and dieting.
Randy Carr:
Right, every day and meditating for ten minutes every day. And it's one thing to discipline yourself, it's another thing to discipline 1000 people in the same methodology.
Mark Graban:
Yeah, I think these different approaches fit together where some of these approaches might be helpful but not fully sufficient training. Lots of people in some tools doing a lot of these, these different strategies can fit together. And it sounds like the UK. Is it fair to say working with UK, did that help create a more coherent future state vision of a management system and a company culture that doing a bunch of events, maybe couldn't deliver.
Randy Carr:
It did exactly that. Again, it did that. And I happen to have a very good COO and I have a good CI guy. And we collectively said, this is the way we're doing business. So the other thing is we were real clear.
Randy Carr:
Not whatever they say goes, but whatever they say goes. This is what's happening. This is happening. And you're either on board or maybe there's a better place, another place to work for you. And I didn't quite have to speak it like that because I didn't have to.
Randy Carr:
But we didn't lose anybody and everybody's on board. And there are some people that are further behind than others in their development for whatever reason. But again, got to change 1000 people's mindsets, got to change their dna, and we expect it to take time. And there's a lot of learning and we're still learning, like so much.
Mark Graban:
Yeah, because I was going to ask you when you talked about the shock of getting started, sometimes that shock leads to people saying, well, I'm going to get off this bus. And you're saying, no, you didn't lose anybody who've been like, no, this is not for me, I'm leaving.
Randy Carr:
Look, I didn't lose anybody on my leadership team. Some people might have left or sort of find new jobs and maybe it was because of COVID or whatever, I don't know. But I can tell you that we hit the shock super hard. It wasn't enlightened. We hit it as hard as we could and as fast as we could, and we did it in three locations at once.
Randy Carr:
And again, it was coming out of COVID So we knew we had to do stuff right away. And we did put the pressure of. There was the pressure of, and I don't want to say like the fear of this, this and this, but there was the immediate pressure that we knew we had to get a lot quick because we knew there was going to be a surge in advantage. And obviously, looking backward, there was.
Mark Graban:
So I think part of the story that we're not done talking lean, of course, and some of this is interconnected, but I'd like to talk more about what your current state had been and what your thoughts were around manufacturing locations overseas versus local or nearshored. Can you talk about kind of that aspect of your business and how you started thinking through that?
Randy Carr:
Again, it's nothing that's going to be earth shattering, but just to give you some historical context for 30 seconds, my brother and I grew up around my dad's business, and he had an embroidery business in New Jersey, and it was relatively successful. And in 1988 it went under and he moved the business to Medley, Florida, and the three of us restarted the company. In 1990, the company had grown to a couple of million dollars, and in 2000 he passed away. And then a couple of years later, we ended up picking up a sizable contract. And at the time we had moved to North Miami.
Randy Carr:
We were running three shifts, and we ended up having some problems with the city because across the street from us was a residential zone. NAFTA had been passed and I had went to the city and asked for some help with rezoning, and they told me no. So I knew a guy that knew a guy, and I met my managing director in Mexico City in 2005. It was like one of the things that changed my life. There's people that in your life?
Randy Carr:
This guy changed my life. He's still with me. And I'd give him a suitcase of $100 million and I'd get back $100 million. He's that guy. It's not just financial trust I'm giving my kids and I get my kid.
Randy Carr:
I would trust him with anything. So thank God he came into my life. Anyways, it was after. And after his passed, the plan was to arbitrage design work. It wasn't anything more than that.
Randy Carr:
We weren't really trying to build an offshore manufacturing facility to make emblems or compete with China or any of that. It wasn't just know looking at the world like that. It wasn't in my worldview at the time, but it was in his. And I listened to what he said, and we gradually moved certain production lines overseas, and at this point, we have a half million square feet there and close to half million in the states. And the operation of Aquiladora in Mexico is really a standalone business that runs independently and supports the US businesses.
Randy Carr:
So the answer there was a long-winded answer, but the answer to the question that we see at this point is we use nearshore labor where it makes sense, but our whole business is grounded on turning stuff very fast. So the things that we do in our facility in Mexico are the things we can do that aren't required to be done in 12 hours. So everything we do in the States is a result of that thinking. So there are some other things, like people send us headwear or garments and they want us to brand them with our products, in which case we don't send those to Mexico, we'll do them in the states and we have some software and systems to do that as well. But apart from that, the thinking is straight.
Randy Carr:
What I told you, which is everything that has to be done same day is done in the States, everything else goes down in Mexico. And I would tell you there are other things we do in that facility also, like tech development. We have a marketing team, a service team, a sales team, a finance group. Because of that, the business has grown together.
Mark Graban:
I guess it's a matter of looking at kind of balancing cost, quality, delivery, of doing something local. It's faster, it's going to cost more. But for that application, it's okay.
Randy Carr:
In our worldview, yes. In our worldview, yes. I would say there's no difference in quality of person between the states and what I've seen in any country. But in particular, my experience has been in Mexico. But for us, everything's about speed.
Randy Carr:
Our whole business is built on doing custom stuff. Same or next day.
Mark Graban:
Yeah. And you're saying the quality of the product also is comparable.
Randy Carr:
It all comes down to process. Obviously, the people have a huge input of that, but it's about training the right person on the right process to get the right output. If they fit our core values and they run our process, they'll get the quality. The output will be the same every time, regardless of whether it's in Mexico or anywhere else in the world.
Mark Graban:
Okay, so let's talk more about some of the different elements of lean management system. And I know for you that includes in part, a Hoshin planning process. Can you tell us more about how that works for you and what some of the benefits have been?
Randy Carr:
Yeah, we have been doing consultant led planning for the last 18 years. I want to say our first, we did a host and plan last year, but I would say this was our first one and it was UK led. We had them come in and help us with it. It was completely different than anything else we've done. I think the first thing was all the prep work that went into it.
Randy Carr:
We typically would do the prep work, but wouldn't do it seriously. So we went into the room, we would spend a day fighting over what the priority was, and then we would leave in silos. And that was 15 years worth of annual planning this year. And again, I only have a year, so I don't have that much experience under my belt with it, but I can give you my take on it. What I found unique was the prep work, and then the three annual priorities that we left with were very cross functional, and they made everybody nervous, so everybody left uncomfortable.
Randy Carr:
And then that was a month ago. Next week everyone's flying back in to Fort Lauderdale, where we're based, or Hollywood, Florida, where we're based. And they have what's called a rodeo. And the rodeo is really getting locked in and aligned on everybody's twelve-month plan to go back to the three-year goals we had, we said we were doing something like this, but we really weren't. This is the first time I can remember where we had three cross-functional goals that made everybody nervous.
Randy Carr:
That I'm happy with that I haven't been involved with what's called Nemawashi or the back and forth between everybody. I haven't been involved with it the whole time now. I've injected my opinion in areas on things that I think need to be rounded or clarified. But my team really did the work independently of me. And I'm comfortable saying that we'll leave next week with a very good plan with measurable milestones that we'll be able to do check ins on every month.
Randy Carr:
And I'm super excited and really motivated for next year because of it.
Mark Graban:
Yeah. And when you say those priorities were making everybody nervous, is that because were there stretch goals that people are nervous about reaching?
Randy Carr:
Yeah. So it was a three-year priority, and we're working on the one-year plan to get us a three-year priority. And they're all doable, which is the nice. They're not like insane, they're just a little bit far out, a little outside of where everyone's comfortable. And it came from the group, so it wasn't anything.
Randy Carr:
No one just. I didn't come walk in there and say, we're doing this, which is what would happen three years ago. They would say, this is the sales goal. And I would say, no way, dude. You need another 20% on top of that.
Randy Carr:
And then we'd miss the goal. All the goals from this came from the team. So there's a lot of ownership from the team and even from the Nemo washing and the rodeo. And when we're done with the plan, they own those plans, which is different. Typically, I would be inserting my opinion on everything.
Randy Carr:
In this case, I really didn't have to do that. All I had to do was, again, like I said, polishing edges or sanding boards.
Mark Graban:
It sounds like you're expecting better alignment. Is it fair to say not just in terms of goals that might cascade across the company, but then also the question of what are we choosing to work on in terms of Kaizen events or improvements that may be more aligned, more focused, like better prioritization, as opposed to a lot of organizations. People are trying to do everything and therefore nothing. Really.
Randy Carr:
That's me. That's my 20-year history.
Mark Graban:
It's not just you.
Randy Carr:
My to do list is like, ridiculous. So, yeah, the answer is we have the three priorities that are cross functional. This is stuff we're going to work on now. There's other things that are going to happen. There's other work.
Randy Carr:
But the question we keep saying that I heard, I hear during the conversation, isn't that your day job, isn't that the reason you have a job? Your hostion work is not why your day job, they're two different things. And the hostion work, it's for breakthroughs. And at this level, that's pretty much 80% of their time should be working on breakthrough. There were some moments during the meetings where that was like, people were like, whoa, you're telling me 80% of my time has to work on the breakthrough?
Randy Carr:
Well, how's the business going to grow then?
Mark Graban:
Well, it's a difference between firefighting and breakthrough activities, right?
Randy Carr:
Yeah, I think you got to finish the firefighting stuff. Which was, again, like, going back to what we said like 20 minutes ago, was the shock therapy. Sustainment of the culture, sustainment of the DNA, then go into ocean. I mean, I remember 20 years ago, we had a consultant come in and do annual planning for us. He goes, plan for you guys.
Randy Carr:
Can't plan for an hour, let alone plan for a day or a year. We're yelling and screaming at each other across the room. So we've come a long way.
Mark Graban:
Yeah. You talk about allocating time. One thing we had talked about, one thing you mentioned when we talked previously, Randy, was allocating your time. As a CEO, I'm just curious if you can share perspective of how much time are you working on the management system, the DNA, working with customers. How do you decide the best use of your time?
Randy Carr:
So the first thing that I would tell you is the majority of my time should be spent with clients, customers. That's just my personal opinion. And I think the second part of my time means accessible to my team. It doesn't mean managing my team. It just means being accessible.
Randy Carr:
So 30% of my time is with clients. That's my number one rule. So I'll travel with my reps, which is mostly where that comes from if I have to. Like last week, I had to go to a football. I was in a football game in Alabama and I had one of my reps meet me in New Orleans and I drove around with him for a couple of days through Mississippi and ended up in Tuscaloosa to see my son.
Randy Carr:
So I'll kind of dovetail trips. Spend 30% of my time with my clients, I spend 30% of my time with my team, and I spend 30% of my time on my leadership work. And then 10% for whatever I want. 10% usually gets consumed with stuff that I don't want, frankly. Like my calendar gets filled up and it's not always like that, but somewhere in between.
Randy Carr:
But I can tell you that the time in front of customers is the thing that matters most, because I can connect through everything that happens in the business. And every conversation I have or every conversation that I'm hearing going on in the company, I can connect back to the customer's experience. And that's really the only reason we're all here. The only thing that matters.
Mark Graban:
And that customer focus is probably being reinforced by the uk folks. And they're former Toyota, is that they're all Former Toyota. They all are. Right? So it's not just process focus, but customer focus, customer obsession even.
Mark Graban:
They're probably re-emphasizing the connections.
Randy Carr:
Yeah, I mean, I'm not saying that every customer is always right because that's kind of not real either. But there is the focus on the customer experience and what is the customer receiving from the business, and how are we interacting with the customer? Engaging from the sales side of the service side, the territory manager side, and the package side and the business side. And how does the invoice look? How does it hit the website?
Randy Carr:
Like, what is the standard work for the customer when they sit down in the front of their computer and start placing orders. We even go as far as looking at how does the customer interact from when they get the order feeds from their ERP? How does that connect to our ERP? Because there's a lot of waste there. So it's just like seeing all that and putting the investment to go deeper into the customers world in order to shorten our lead times is going to have the biggest return on our investments.
Randy Carr:
And it's real easy when I see it to get behind the initiatives here, other than just looking at the ROI on and to be fair, there's a lot of stuff we don't do. That's right. So I was in California three weeks ago taking pictures of their computer and the product they received and sending it to my COO and saying, this is not right. What are we doing here? Sure enough, he does problem solving.
Randy Carr:
He figures it out we make an adjustment. Some of the things don't get fixed right away. Some of the things are on the list to get fixed. In a year from now, we'll tell the customer, look, this is a known issue in the business and we don't really have a solution for it. We're going to do our best, but at least we're honest about the problems and we're sort of creating lists of problems that we're deciding what to work on.
Randy Carr:
But I said something a while ago and I said, imagine if we had 1000 people all solving the problems rather than eight of us. And that's the power of this whole thing that I see.
Mark Graban:
Well, I think the way you stated that people being able to be honest about problems, that's a key part of Lean DNA, right?
Randy Carr:
Yeah, without question.
Mark Graban:
Yeah. And you already touched on something I was about to ask of. We talk about wanting everybody to share this DNA, to be thinking this way. That means extending lean beyond operations and manufacturing and supply chain. You're bringing it into business functions.
Mark Graban:
And part of that view of everything is a process.
Randy Carr:
Yes, I can give you a couple of examples. The one was what I said earlier, but I have loads of others. But I'll just start with the one that was so obvious. 2022 was great for most businesses, but great revenue wise, not great operationally. I think people struggled a lot with a lot of things, whether it's staffing or infrastructure or whatever, chips.
Randy Carr:
I mean, we didn't have the chips issue, but staffing was a big challenge for us and those kinds of things. We kind of figured it out. We have good year and then 2033 comes out and looking back on it, fairly ignorant, but we should, thinking about it now, we never should have thought 23 was going to be like 22. We should have kind of known that there would be a drop off, but whatever, either way we forecasted and planned like things were just going to be. It was just going to keep cruising and it just didn't, obviously, and we didn't have the sales processes in place to make up the slack, so we had to re forecast twice backwards.
Randy Carr:
And that's no fun. And we brought in the lean consultants, the original ones, to look at our sales marketing processes from end to end. And we sat in a room for almost a month straight and did one dsm after another. And we're still in the middle of implementing a lot of the work they did, either technically through software solutions or manually, where software didn't solve those problems. But we are using the measurement tools we left with and we use them every day now.
Randy Carr:
Again, sales and customer journeys and the customer incubation time is longer for new customers, for new products. So we expect it to roll into next year and sort of again, we haven't reforecast twice, but that's okay.
Mark Graban:
Yeah. Do you expect with a Hoshin planning process as you're going into 24, are there more frequent touch points where you might say, someone might raise the flag and say, hey, wait a minute, the year is not starting off the way we expected. Do we reforecast? Can you adjust sooner?
Randy Carr:
We changed our budgeting process quite a bit. So I know your question isn't about budgeting, it's more about is somebody able to raise the flagster anywhere in the business? So there's two answers. One, we did change our budgeting process to adjust for what happened last year. Something else will probably happen, but that same issue won't.
Randy Carr:
I like to think so, but I would say too soon to tell with the DNA. So obviously there's some people that will raise a flag and others that won't. The idea is to get them all to raise the flag. The real idea is to get them all to solve the problems independently without having to raise the flag at all. Right.
Randy Carr:
That is like the utopia of this whole thing.
Mark Graban:
Yeah, well, it seems like that balance to be found of people to the front line and not too far above becoming better problem solvers, feeling more empowered and doing things. Not everything can raise up to your level or the Coo's level, but at the same time learning when do we escalate something? When do we need to ask for help? And not being afraid to do that is really key. Even if there's not a physical and encord for someone to literally pull, it's more that question of saying, hey, I need help.
Mark Graban:
Someone coming in to say, okay, no, I think you can fix that on your own. Versus, yeah, let me help.
Randy Carr:
Yeah, for the the coach from UK told me when you're talking to your managers, what you need to ask them is what problem are you working on to solve today? Forget any other conversation, he says, the only thing you need to ask him is that obviously there's other things again. But I know what he meant. It wasn't literal, but it's like I get on the phone with one of my leaders, it's what problem are you solving today?
Mark Graban:
And I've heard toy to people, there's a variation of that question. I've heard it posed sometimes as what are your top three problems that you're working on but either way, it's just kind of try to get a sense of how are you prioritizing? And you can't say, well, what are your top three problems? All of them? Well, no.
Randy Carr:
Well, yeah, then nothing ever gets done. But he's been hammering me for that. Yes. Painful, but it's supposed to be.
Mark Graban:
Yeah. Well, we can think back to going to the gym. Like, sometimes working out causes some pain, but to benefit.
Randy Carr:
Yeah. What is it? Growth comes from discomfort. And I'm like, what is a. Yeah.
Mark Graban:
Tear those muscle fibers a little bit to spur some growth, but start to wrap up here. Randy, you've shared with us, we didn't follow this strictly as an a three, but that's fine. But you gave us a good comparison of no need to apologize. And I kind of drifted away from that a little bit, too. But just to recap, I think we have touched on, even if it wasn't completely linear, your current condition, the business challenges, the current state action plan, and you've shared a lot of that with us.
Mark Graban:
So I was going to ask what's on the current action plan for the next couple of years, and how would you evaluate your progress as you continue being a couple of years into this lean journey that still keeps going?
Randy Carr:
All right, so I need to wait till tomorrow, until next week's naval washing session to answer that. But that is what's on the action plan. So, again, we do have our three priorities. I think I'd rather not just verbalize them, but there is a combination of growth margin and technical wins for the customer. And in the growth, there's a lot of cultural, there's a lot of cultural changes.
Randy Carr:
A lot of it comes down to how do we onboard customers and employees, how do we make sure we reduce things like that? And those are a lot of what's in the plan. Next week's rodeo will give me the physical action items that I need to work with. And I think my role here is to make sure that I clear out obstacles so that the team is able to work on those and they don't get distracted by other concepts or ideas or fruit that gets placed in front of them.
Mark Graban:
Yeah. Okay, well, I didn't mean to.
Randy Carr:
You're good.
Mark Graban:
Shortcut that process that you're going through.
Randy Carr:
No, the question is legit. We intend on growing. We have a lot of new products. We're a technical manufacturer. What we do is simple, but technically we're very strong at it.
Randy Carr:
We invest 9% of our revenue into technology every year and year over year, every year. And I venture to say that not a lot of people in my space do that. We have a couple of patents that we're going to be launching next year, that we're excited about patented products. But I think a lot of that, the only way any of that stuff scales is by having a management system in the business that allows it to scale. So regardless of whether it's one of those three priorities or not, it all kind of rolls back to it.
Mark Graban:
All right. One other thing I wanted to come back to a little bit was you talk about the goal of 1000 people thinking this way and working on problems versus is it 1000 yet? It's not. Is it eight? Is it something higher than that?
Mark Graban:
What do you think are some of the next steps in getting that number from eight to 80 to 480 just to pick numbers off the top of.
Randy Carr:
My head, I'd say the first thing is to continue to train on what UK calls the “True Lean” methodology. So it's to continually invest in my leadership team in this methodology. Then from my standpoint, it would be getting the values right, making sure I'm clearly communicating the core values, and there's an assemblage of one that has continuous improvement in it. Getting the vision clear and really clarifying roles and responsibilities throughout the organization so that everybody knows how they interact with the business. Before this exercise or before this management system, I would drop four levels below my job 95% of the time.
Randy Carr:
I now check myself half the time. Not always because that's new habits, but I think that's the thing. So it's to continue to train, continue to do the Kaizens, like, continue to do the shock treatment of the business, but the reality is it comes through training and working on the DNA, and that's only going to come through changing the culture, and that comes through training and then consistent reinforcement of one voice leadership. What are the values of the business? What are the roles and responsibilities?
Mark Graban:
Well, I think that's a great note to leave things on here today. So again, we've been joined. It's been a real pleasure. Randy Carr, CEO of World Emblem. Real treat, Randy, to hear from your business challenges and your leadership and your focus around lean.
Mark Graban:
Thank you for giving us a glimpse into what you've been doing, how you're thinking about this, and a little bit about what's to come.
Randy Carr:
It's my pleasure. Thank you for having me.
Mark Graban:
And you're very welcome. And maybe at some point down the road, it'd be good to check back in on you. You're not accountable to me. In any way. But even if it's a shorter conversation, to get an update would be great.
Randy Carr:
It's all good. I'm always here. You're always welcome to reach out.
Mark Graban:
And if I'm down in your part of Florida, maybe I can come anytime.
Randy Carr:
Firsthand here, Australia, Mexico, Houston, Atlanta. Anywhere we have a facility or anywhere in general, actually, just feel free to reach out.
Mark Graban:
All right. Thanks a lot, Randy.
Randy Carr:
Really appreciate it, Mark. Thanks, buddy.
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