In this episode, John Downes talks with Damien Lacey, founder of OE Partners; an expert in operational excellence.

Damien shares key insights from his experience with companies like Toyota and Bosch, outlining the critical steps for high value business transformation.

From setting a clear vision to aligning leadership and achieving small, quick wins, this episode provides actionable strategies to help businesses improve productivity and drive results.

Tune in to learn how to make lasting changes that can set your company apart from the competition!

Click here to see more information including the downloads

Highlights:

00:00 Introduction to Damien Lacey and Lean Manufacturing

02:43 Understanding Organization Transformation

03:01 Types of Business Transformation

06:47 Key Factors for Successful Transformation

08:10 Importance of Vision and Leadership

14:44 Engaging the Right People and Solving the Right Problems

17:33 Building Trust Through Small Wins

20:19 Learning from Success Stories

22:51 Customer-Centric Transformation

27:17 Final Thoughts and #CriticalFewActions™

I'd like to welcome Damien Lacey to Meet the Expert.

2

Damien's been working in the lean

manufacturing space and formerly with

3

Toyota for many years now and he's my go

to guy when it comes to all things around

4

organization, performance improvement.

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Damien, welcome.

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G'day John.

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Thank you again for the

opportunity to talk to you.

8

JD: I wanted to talk a bit about

organization transformation.

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What are the tools that we can use?

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Perhaps you can just introduce

yourself a little bit and then

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we can jump into, so what is this

organization transformation thing?

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I'm the owner of and

founder of Bowie Partners.

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Always sense of operational excellence.

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And so my experience with transformation

and organizational improvement

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probably started in 2002, 2003,

working with Robert Bosch, joined the

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Bosch product assistant team, which

was a team put together to really

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shift the way the business operated.

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Lean transformation program.

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So really good experience to see

a big shift in performance that

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came through a structured approach

with these lean tools and methods

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kind of been hooked ever since.

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And.

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A lot of the thinking and the tools

and the methods came from Toyota.

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And so I was keen to learn from

the source and spent a number of

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years working with Toyota here in

Australia lived and worked in Toyota

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head office for about three years.

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So yeah, really good experience

just to really be not just from a

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technical aspect, but also from,

seeing a living culture, living and

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breathing culture around how do we.

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Better performance out of

everything we do every day.

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No, that, that was really good.

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So yeah we've grown to a team of

of a client facing really helping

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client mainly Australian businesses

improve their productivity.

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Fantastic.

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JD: So Damien, what is organization

transformation or business transformation?

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Yeah good question.

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Cause the word transformation gets

thrown around in a lot of things.

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different contexts.

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And all right, it's all correct.

40

But it's good to understand what

we're actually talking about here.

41

So Harvard Business Review produced a

neat summary little while back, and it's

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actually three distinct definitions.

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The first one is an

operational transformation.

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It means you're doing what you're

doing now, but you're doing it

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significantly faster, better, cheaper.

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And companies like Toyota,

Procter and Gamble's, they

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really are the masters of this.

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They are significantly more profitable

than their competitors because they

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are able to transform their operations

on a regular basis and stay ahead and

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really challenge the organization to

work in different ways, in better ways.

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I mean, they're still making laundry

powder in the case of Procter and

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Gamble and, Turd is still making cars.

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And you know what?

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The cars that they make are probably

not the most exciting and the laundry

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powder is not the best exciting thing,

but they just do it really well.

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And that's the way they compete.

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The second type of transformation

is a transformation of your business

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model or your operational model.

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So you're delivering the same service.

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But you're doing it in a

fundamentally different way.

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So for example, Netflix, they started

by posting DVDs in the mail, in physical

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mail, people get a DVD in the post.

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Obviously, they do it much differently.

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Now they provided by on demand

streaming services through the Internet.

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And an Uber.

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Look, it is essentially a taxi service.

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But their delivery model was a lot

more efficient than having to stand

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at a curb on a Friday night in the

city trying to hail down a taxi

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and be grateful when you get there.

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You've gotten, you got in there, so

same service, but they've just done

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it in a completely different way.

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So that's the second

type of transformation.

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And the final trans type of

transformation is really a whole

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scale strategic transformation.

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Okay.

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So really changing everything about

the business in some respects.

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So Amazon began life as a book

retailer, an online book retailer.

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A lot more than that.

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Their reach has has changed in scale.

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The type of products that they

handle is a bit different and

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their value offering is different.

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They're in all sorts of

things like cloud computing.

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So they're very much a

technology driven company.

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Now Google started providing

search services online.

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They're now developing self driving cars.

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So they're completely different in

terms of who they are, what they do,

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which customer segments they serve.

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Now for most of our customers

anyway the first type of

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transformation is going to be.

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The most common and the most in

line with what they need to achieve.

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We don't all have the risk appetite

or the budget to pull off a

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complete strategic transformation.

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So it's most likely going to be.

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An operational transformation, doing

what you're doing now, but just doing

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it really better, faster, cheaper.

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JD: I think you're dead right.

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Most organizations can't handle full

strategic until they've actually got

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some really good runs on the board.

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They've earned the right to

grow, as I like to call it.

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And I've also got some good

financial backing to be able to

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take some big strategic risks.

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Doesn't mean throwing the

entire business model out.

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It's actually about incrementally

changing that business.

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But it may well be they're

starting a new business.

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Yeah, that's right.

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JD: As part of how they, they

see themselves reinventing

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the business in the future.

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In fact, I've, I can think of one client

now who for the last five years saw the

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demise of the industry that he's in, and

he's been actually building new products

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and services to completely reinvent his

business over a decade, which will see

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him be a market leader in Australia.

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Yeah, fantastic.

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So where do we go from here?

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We could step through some, what

we think are five key factors.

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So for success with regards to

transforming your business there are

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more and you could argue which ones are

the most and all that sort of stuff.

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But these are good five solid factors

to get right to ensure that the business

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does a good job with transforming it.

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Yeah.

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So I thought I'd talk

through a couple of these.

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JD: Let's do that.

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Okay, great.

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So look, yeah, let's just go through them.

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The first one is, having a clear vision

and a significant vision because it's not

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improvement, it's transformation, but then

starting small and learning as you go.

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Number two is getting, having a clear

mandate amongst the leadership team

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and making sure everyone is on the

same page and then the actions flow

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from that as a leadership group.

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Including, obviously the owner, the

CEO, but then the direct leadership

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team around them getting the right

people working on the right problem

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developing a trust cadence of frequent

small achievements, so steps towards

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the goal to get everyone on the same

page and proving that it's happening.

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And then we talk about lessons learned

and stories and why that's important.

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That's why that's important

as part of the journey.

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It's

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JD: interesting.

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Every one of these is all about the

people in the organization, isn't it?

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It all pretty much hinges on

people at the end of the day.

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So the first one is really around vision.

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And again, vision is one of those

words that can feel really fuzzy, but

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it's Getting clear on what is it that

the organization is shooting for?

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And why is that important?

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So you and the other thing to say is,

look, if this is your first goal as an

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organization you You're going to have a

big goal to aim for, but you can't expect

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for the next 6, 12, 18 months or whatever

the time frame is, to plan out your change

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program and have neat little steps and

firm milestones all nicely laid out.

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The businesses that achieve a step

change are usually willing to accept

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a bit of uncertainty up front, but

then rapidly start taking small

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steps towards that overall goal.

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So yeah, it starts with that clear vision.

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What does the business want to achieve?

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And why is that important?

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And we'll go through a couple

of examples a bit later on.

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And then the business, yeah,

kicks off small projects.

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You deliver quickly, learns from that,

modifies the approach as they needed.

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Now, I mean, one, one initiative that

sort of fits this bill and sort of

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rings in my mind is the time that I

was sitting in in Toyota City in Japan

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in and the GFC hit, but the GFC hit,

and that was really quite cataclysmic.

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I'm talking to people in Australia

wasn't quite as dramatic an event,

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but really people were laid off.

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Factories were shut.

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There was, it was really,

it was quite cataclysmic.

163

And in that organization, they'd

never, ever not delivered a

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profit for the last 70 years.

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That, that really is quite significant.

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Every single year rain, how old

the company posted a profit.

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Yeah, safe as houses.

168

And now this is for the first

time was going to post a big loss.

169

And that was quite quite

quite dramatic for them.

170

And so quickly the goal was set.

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We need to cut operating costs something

in the order of a billion dollars.

172

And in terms of why that was needed.

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That was pretty clear.

174

Lots of people gonna lose their job.

175

Changes, what do they do?

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Changes happen really quickly.

177

New investments were cancelled.

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New I remember suspension projects I

was involved in, they were cancelled.

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Factory output was dropped and everyone

was given a cost cutting target.

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Every region, every division,

every department was giving a

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clear cost reduction target.

182

You need to get, is it 10 or a hundred

dollars out of your part of the pie.

183

And the first step was for

everyone now to start coming up

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with ideas on how to achieve that.

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So changes to production

processes, changes to part

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design, consolidation of supply.

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No one knew how long it was going to take.

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And on where exactly the savings would

come from, but that didn't stop activity

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from getting started straight away.

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And the modifier, the approach

was modified as we went along.

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And yeah, it took a while,

but the result was achieved.

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So yeah getting clear on what it is

you're trying to achieve, why that's

193

important, but then just getting

cracking with it really in small steps.

194

Good.

195

So now the next thing

is around leadership.

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And as you can imagine

that's pretty important.

197

And probably the most common reason

that these change initiatives to get

198

kicked off don't necessarily get the

traction that they originally wanted.

199

It's really clear correlation.

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I'm an engineer and I always like to

look at things in numbers and graphs.

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It's really clear correlation,

the higher the level of support

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and alignment with the leadership

team and the higher the results.

203

So it's pretty, pretty linear.

204

Now that doesn't mean that the CEO or

the business owner has to be out the

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front leading all of the initiatives

and commanding and controlling

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and It's in fact, it's probably

better that they don't do that.

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What they do need to do though, is

provide the support that's necessary.

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Okay.

209

But what does that mean?

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If you're kicking off some sort

of transformation program, you

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still got business as usual.

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You've still got your customers

that you need to talk to, orders

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need to be filled, fulfilled sales.

214

Still needs to be made.

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All that stuff needs to happen, right?

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And so your transformation program,

it's going to compete for attention, for

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money, for time, all that kind of thing.

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And so, resources are going

to have to be allocated.

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Hang on.

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Stop that.

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Do this.

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Is it the team's going to spend a day

week on it or however many or maybe you're

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actually going to take a few people out

of the organization in the day to day

224

backfill their roles with someone else.

225

Resources need to be allocated.

226

Some people might be a little

bit initially resistant to it.

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Oh, hang on.

228

This is a bit different.

229

I'm not used to really having

to redesign the way we work.

230

And I need some help To be encouraged.

231

So reminding them of why it's important.

232

And of course, some of those

people won't change at all.

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That's right.

234

You will encounter people who

are just not going to change.

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And

236

JD: that clear commitment from

leadership is absolutely vital.

237

Yeah, that's it.

238

To not let those people

set the agenda, yeah.

239

Hang on back.

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The whole organization.

241

Yeah, that's right.

242

Hang on.

243

I don't think this is a good idea.

244

I don't wanna do it.

245

Tell me why we need to do it.

246

. Yeah.

247

Flipping that conversation,

saying no, sorry.

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This is something that the

organization is going to do.

249

We are doing, this is why we're doing

it, and this is what we're doing.

250

And here's your want to

be a part of it or not.

251

Figure out how you can help.

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JD: That's it.

253

Or maybe you may need

to work with somebody

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else.

255

That's right.

256

And that doesn't, does happen.

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And, uh, not a bad thing.

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On other occasions, the grumpy

person who's got lots of things

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to say sometimes it's useful.

260

They're highlighting.

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Hurdles that might happen with the

change that do need to be factored in.

262

That's not a bad thing, but yeah.

263

JD: And sometimes the most change

resistant, if you can swing

264

them around, they can actually

be the strongest advocate.

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Yeah.

266

They've got actually lots of ideas.

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It's just.

268

Sometimes the way they frame those

ideas comes across as a little bit

269

critical and negative, but in actual

fact, no they've got good ideas, but

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maybe soften the delivery a little bit.

271

So absolutely, you need leadership

support and participation.

272

That's, it's not a lone

superstar that, that does this.

273

It's a team effort and

leadership is part of that team.

274

JD: So if it's a lone

superstar, it'll probably fail.

275

That's right.

276

Pretty shortly afterwards.

277

Yeah.

278

So yeah, just leading on from your point

there around around people, it, it really

279

does hinge on the success really does

hinge on the involvement of people.

280

Now to begin with, I would suggest that

whilst you may be aware of some resistors

281

situated in certain parts of this, let's

maybe put them to one side to begin with.

282

And work with the

coalition of the willing.

283

So these are your most capable

people the people who naturally are

284

interested in change and have got

ideas around how to make things better.

285

So they're the people you probably

want to gravitate to first.

286

You can't put the resistors

to the, in the corner forever.

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You will have to engage with them at some

point, but at least in the beginning.

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You want to work with coalition to

willing and also the other thing

289

as well is that to be successful,

you want to be solving the right

290

problem and something specifically

that attacks a known issue within

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the organization, and it's tangible.

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It's important for everyone.

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For example, saying that.

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We want to be more efficient.

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We need to be more productive.

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That's not going to cut it.

297

All right.

298

That's too vague.

299

You can't really grab a hold

of that and measure it and hold

300

yourself to account that easily.

301

So to give you an example from a client

that we're working with right now

302

they're in the construction industry.

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They deliver a piece of the construction

build that's at the end of it.

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It's so they are always under time

pressures because construction projects

305

quite often, I want this, I'm sure this

won't be a shock to people, run late.

306

But the handover time is trying

to always try to be maintained.

307

And so they're always under pressure.

308

Now, the transformation program we're

working on with them has a really clear

309

goal to reduce their delivery lead time.

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It's currently sitting about 29 days

to turn a customer specification

311

into a fabricated solution, delivered

and installed on site about 29 days.

312

And the goal now is to get

that down to seven days.

313

That's significant, right?

314

That's four times faster.

315

And when that happens, that

will absolutely blow their

316

competition out of the water.

317

Yeah, it really is.

318

And they've got a great solution that

has got global potential behind it.

319

So when we frame the goal of the

program around that target, everyone

320

in the business gets it, if we talk

to sales and say, Hey, we need your

321

participation ideas around this.

322

Absolutely.

323

What do we need to do?

324

Because they know that if we can

get a project turned around in

325

seven days, they've got a lot

easier job to sell it, right?

326

Yeah.

327

Yeah.

328

And the finance team you've suddenly,

improved cashflow because you're

329

turning projects around in with,

seven days as opposed to 30 or

330

thereabouts, they're happy about it.

331

Manufacturing know that they need

to, get faster and more efficient.

332

They've got authority.

333

To be able to make changes there behind.

334

So everyone gets behind it

because it's really tangible.

335

Yes, that's definitely

important factor as well.

336

Yeah, very good.

337

Now.

338

The other thing is, yeah.

339

The old elephant, right?

340

Um, it's that analogy.

341

You've got to start small.

342

You've got to create a frequency of

delivery that builds trust, built

343

momentum in the organization, another

common reason why programs stall will

344

start to lose support because they

don't deliver benefits fast enough.

345

Or they're not large enough, so we can

plan, we can strategize, we can analyze.

346

Okay, but you also need to start

delivering doesn't need to be perfect.

347

Just get going.

348

That's what's going to You

can provide the momentum.

349

It's if you were doing a weight watchers

program, not that I'm suggesting anything,

350

John, but let's say I signed up to weight

watchers three months, I did everything.

351

I was told to add everything

as per the instruction.

352

I still didn't lose any weight.

353

Maybe I need to start

looking at other options.

354

This isn't working.

355

And it's the same with your transformation

program, like investing time, effort

356

and energy, but you need to deliver.

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A little example of that is.

358

Working with the client, they had

an initiative to get visibility and

359

performance metrics in the operations

and get the team knowing where they're

360

going and work in the right direction.

361

Now it started by, the initial plan was

let's get an electronic dashboard to put

362

it up in, in 10 different locations in the

facility, let's have that link to sensors.

363

We want sensors connect real

time data and pull that in.

364

We want cool data visualization

software so that anyone can get in

365

and drill down into a lot of detail.

366

We want that valuable on the intranet

so that anyone in the organization can

367

see what's going on at any one time.

368

Great.

369

Okay.

370

Awesome.

371

All that sounds fantastic, but

it also meant that it would be

372

months before the thing was up and

running if we took all of that on.

373

So instead we started, that's a

good goal to aim for, but let's

374

get, what we did was actually get a

whiteboard and start with some printed

375

graphs out into the operations and

got to the heart of it, which was.

376

Getting the guys clear on how they're

performing, understanding the gap

377

and problem solving to fix it.

378

That's ultimately the benefit

that we want to enjoy.

379

So how do we get there

as quick as possible?

380

So we were able to do that,

demonstrate good progress.

381

So then when we did need budget

and resource and time to digitalize

382

it, okay, yeah, this is working,

we want to do more of it.

383

So a cadence of trust based on

delivery is really important.

384

Early and often.

385

Early and often.

386

Yeah.

387

That's it.

388

So one bite at a time.

389

Yeah.

390

Don't order yourself and

don't order yourself.

391

Another elephant while you're

in the middle of eating the

392

current elephant , yeah.

393

JD: Which is also about focus, isn't it?

394

Yeah.

395

That's it.

396

Then the last factor is lessons

learned, scaling lessons learned.

397

This is something that's not

often really talked about, but the

398

lessons learned from within the

organization are really powerful

399

motivators for delivering more change.

400

And I think people by and large, they

learn best from other people's stories.

401

And those, the best stories around

transformation will come from within.

402

Because I could go through, I've gone

through a couple of examples today.

403

And I could go through another

bunch and that's great.

404

But the I would wager that the stories

and the anecdotes and the examples

405

that will have the most weight will

come from within the organization.

406

People really sit up and take notice

from hearing from their colleagues

407

within the business that they know

of what worked, what didn't work,

408

what would they do differently?

409

They carry a lot of weight.

410

And so you want to harness that effect

as much as possible and actively think

411

about how to facilitate that cross

pollination of ideas and examples.

412

Could be, we report on this in

our management meeting, right?

413

Best change initiatives has happened

in the last month or start documenting

414

these lessons learned creating cross

functional teams to share these ideas.

415

Create some infrastructure

to actually get it happening.

416

And there's a few reasons

why you want to do that.

417

It reminds everyone that

change is happening.

418

It creates inspiration within the

organization and also helps develop

419

a sense of teams as, okay, there's

a number of people on this and

420

we're all making some steps forward.

421

Yeah, this is something

to keep going with.

422

Develops that becomes so much more

423

JD: relatable for them to, Oh yeah.

424

So Lucy's actually been working on this

and what a great result that team's

425

been doing as opposed to, Oh yes.

426

And in Toyota, they did

this we're not Toyota,

427

we're

428

JD: not General Electric, so being

able to relate to it in their own

429

environment is absolutely vital.

430

That's right.

431

It could be about creating

some information boards

432

within the organization.

433

This is where the latest

best change happens, right?

434

JD: Yeah.

435

Or just the leadership team highlighting

when someone puts in that effort, these

436

little initiatives to, to start the

recognition around change will help.

437

Yeah, they're top five, John.

438

What do we need to do

to really drive this?

439

Where could we get started?

440

What would be some first steps to

make, I shouldn't say this, but it is

441

surprising how often, when we start

working with clients around change

442

and improvement, a lot of the focus

is internal, we need to do this.

443

We need to do that.

444

I think this, I think that, and it's

not automatically the case that we

445

start talking to our customers when we

think about change and transformation, I

446

would recommend start with the customer.

447

So really knowing what your

customer wants most and.

448

Your customer wants everything, right?

449

They want it to be cheaper.

450

They want more features.

451

They want to deliver it instantly.

452

They want perfect

quality, all those things.

453

And I get all that.

454

If you can zoom in on specifically

what is most important.

455

What do they really care about?

456

And so for instance, that example I

was talking about the client in the

457

construction industry for them, they

want everything, but really wanted

458

to live it on time, fast, reliably

that, pretty much is the main thing.

459

And price becomes less of an issue.

460

That if you could get it to me on time

as, and then I can finish the bill

461

and hand it over, everyone's winning.

462

So for them, it was that, so yeah,

if you can get clear on what it is.

463

That your customer really cares

about and differentiate to that

464

you're on a, you're on a good start.

465

That can be done.

466

So how do you do that?

467

It can be done through conversations.

468

It could be done, but I would

recommend something a little bit

469

more structured and analytical.

470

You're going to need to motivate

yourself, going to clear some

471

resistance, going to justify resources.

472

So if you've got some good analysis,

that's good data behind it, you're

473

going to be more comfortable.

474

Maybe conducting some

surveys, we do workshops.

475

We do, um, customer journey

workshops for customer discovery

476

workshops for our clients.

477

So get a group, get a small group

of your customers together, give

478

them some lunch, work, workshop.

479

What's most important really understand

from the directly as opposed to

480

just assuming some instances that's

not always possible and in some

481

instances, we've conducted surveys.

482

So sending out some survey and getting a

large amount of data back and then really

483

distilling it distilling it out into

some clear things that they care about.

484

Another example is that was for a

software company that we, we worked with.

485

So they're an Australian business,

international presence, selling

486

products all over the world.

487

They've got design and customer

service centers scattered

488

across different time zones.

489

And just thousands, tens

of thousands of customs.

490

So obviously we can't get them

in a workshop over lunch, right?

491

There's too many of them.

492

So we went down the survey path and we

sent out the survey results and got the

493

data really interesting thing was that for

them, it came back clearly that It wasn't

494

so much about new products, new features.

495

It was, they liked the current products.

496

It just wanted them to work

well and bugs and defects.

497

And those kinds of interruptions

were just came back overwhelmingly

498

clear from the data.

499

And that really shifted the business

as folks to say, hang on, maybe we

500

don't, we would currently spending 90

percent of the design belt resources

501

on new features, new products.

502

And maybe 5 to 10 percent

on fixing the current ones.

503

And they really shifted that balance

and saw a huge intake up increase in the

504

retaining, in the retainment of customers.

505

They knew they had quality problems.

506

This wasn't new for them.

507

But because the data showed so

clearly that this is what the

508

customer really cared about.

509

That really convinced them that,

oh, we need to shift and reallocate.

510

And that got them the

change that they wanted.

511

Yeah.

512

Without the data, without really

understanding the customer,

513

they wouldn't have had the

motivation internally to shift.

514

JD: Yeah.

515

Look, it's very easy, I think, for

organizations to say, yeah, I know

516

what the customer wants and this

is gonna be great for the customer.

517

But at the end of the day.

518

It really does need to be customer led.

519

If you're going to say that you're

a customer centric organization,

520

if everything's about the customer,

if you haven't spoken to them,

521

then it's not about the customer.

522

It's about you.

523

Yeah, that's right.

524

Just getting out and talking to

them, workshopping with them, having

525

lunch, surveying them getting some

customer insights, absolutely vital

526

to get the most, those most in.

527

Important things.

528

One of those critical few things

that if I did nothing else would

529

actually satisfy the customer.

530

So speaking of which, what do you

reckon I should be doing tomorrow?

531

If I want to start my transformation

journey, if I did nothing

532

else, what one thing could I do

533

tomorrow?

534

It would be exactly that.

535

Just start, let's talk with,

understand and quantify.

536

What it is your customer wants

and let that be the first step.

537

Shift from, I think this and that

we've got some internal opinions,

538

however confident those opinions

might be to something that's a

539

little bit more structured that's

got some numbers behind it.

540

That if we took the personality out of

the person making the suggestion, would

541

that would that analysis really stack up,

getting some numbers and some structure

542

around it so that's what I would do.

543

Survey your customers, go do it, do

a focus workshop and really have some

544

analysis and numbers to back your

understanding of what they really want

545

is that should be then to start of what

it is you're looking to transform to.

546

JD: Yeah.

547

And perhaps even go out and actually

see the customers and see how they're

548

using your product and service.

549

Wonderful workplace.

550

Yeah, absolutely.

551

Thanks so much for your time.

552

Great talking to you, John.

553

Thank you.