When Fred Warmbier Wanted to Quit, Deming Brought Him Back

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week we try something a little different we have a special guest Fred warn beer owner of a metal finishing business he founded in Cincinnati in 1998 about 10 years ago warm beer was ready to walk away from that business it just never seemed like I could have the type of business that I wanted he says where things worked properly and our employees were happy and our customers were happy that changed when he discovered the Deming management method through a consultant Kelly Allen who helped him tame the chaos where does one start with Deming you start says Allen who is Chairman of the advisory Council of the W Edwards Deming Institute where the pain is as it happens and as we discuss in this conversation Fred warer has experienced more than his share of pain even in Good Times owning and running a business can be a lonely Pursuit our hope is that these weekly conversations will let owners know they are not alone in facing challenges same thing with our daily newsletter the 21 hats Morning Report which highlights the most important news of the day for business owners and which you can subscribe to at 21h hats.com where you can also find transcripts of our podcast episodes and lots of other articles and interviews the episode is titled when Fred War beer wanted to quit Deming brought him back welcome Fred and Kelly thank you so much for being here I really appreciate it Fred let's start with you why don't you tell us about finishing technology what does your business do sure I own a Metal Finishing Company finishing Technology Incorporated our main business would be anodizing of aluminum the industries we serve are what we do what what does that mean anodizing of aluminum yeah for uh for civilians like me sure for the Layman yes well Kelly's an expert on this tell us Kelly I'm just kidding so so aluminum anodizing it's actually a fascinating process it's a conversion coating where you take the molecular structure of a plain piece of aluminum which would we'll call it random shapes of Mo of molecules and when you put it through the anodizing process which would be you put the piece of the part that you want to anodize into a bath of an electrode light and you uh the part becomes the anode and the there's a cathode in you apply electrical current to it and it changes the structure of the metal actually so it converts it and the new structure would be more similar to a honeycomb look and it builds it up very strong it's a very it's very cool because you're not really it's not like paint where you're building it up and it can chip off it's actually the part of the actual structure so who uses this would be the the obvious ones that you'll understand the name of is NASA Aviation uh Transportation lot headlight lamps the back ends of those would be anodized lots of parts that you um that in cars Food Equipment uh popcorn machines um the the frames for the popcorn makers uh the pizza pans and Pizza Hut uh that would be your food equipment and then Firearms would be um military weapons AR15s what a range what is the purpose of the process it's to make a tough I like to say it's a tough durable coating and why do you need it in a popcorn maker well so that it doesn't get white rust on it so it maintains its appearance so it's cosmetic and it's functional um so and there's measurements of this and in the automotive world you may have or may not have heard of a process called salt spray testing and and that's where they'll take a body frame and they'll put it into a chamber that's um 95° 95% humidity and 5% salt and they'll run it in there and they'll scratch the paint and they'll see if it's if it rusts underneath it in the old days when cars rusted out they might last 50 hours so now today um they would they would range from 100 hours to a th000 hours depending on the application for the type of anodizing that we do we always get get 1 th000 hours it's easy so it's a very durable coding how did you get into this did you start the business I did so I started a metal finishing business in 1998 I was introduced to Industry through my dad who was a distributor of equipment to Industry and I did I I worked there for a while I didn't like it um but when I was out making calls uh people would ask me would you like to run parts for me you know would you like to clean these coils in our washers at the Ford Motor Company Plant and there and and in that case there were a hundred washers and they had 20 coils per washer and I got a hundred bucks per coil I realized there's money in this and so the evolution was I started doing that type of work which I would call grunt work low entry meaning anybody with a pickup truck and a pressure washer can do and then we escalated into other offerings over time we then started a gun bluing business which is black oxide and then that wasn't very big and the customers there said you know if you put in an anodizing line I'd bring you my work that was the extent of my market analysis I and because and then what I found out was these customers weren't big at all but I invested money and I put in an anodize line and it really triggered a lot of things let's bring uh Kelly Allen into this conversation how did you uh first connect with Kelly and and tell us where was your business at the time that you thought you might be able to use his services at that time I was ready to retire not I was I couldn't afford it financially but I it was and you were certainly too young oh yeah and it was such a mess that I just I was ready to give up why it was from we were crisis managing there was too much drama there was too much crisis and and it just never seemed like I could have the type of business that I wanted where things worked properly and our employees were happy and our customers were happy and and there's no I mean you're going to always have a little bit of drama but there would be less drama and and so I just I didn't feel like I was capable of creating that type of company so um you know I'm resourceful I I would have stopped doing that and went and found something else to do and and Kelly my wife signed up for a the course for presidents at Aeron and I really enjoyed that which Aeron is a really interesting organization that all three of us are familiar with in dayon Ohio that supports uh businesses uh in all kinds of ways I uh I took a course for presidents there and um and that was good and I learned a lot but it was a little bit higher level than I was ready to take on and um then I saw that they were offering a Deming management methods seminar there and I do work for Toyota I still do and I thought well I've always Associated Deming with Toyota so I signed up for the class Kelly taught it and and it completely resonated for me and and so uh it just made sense it w because I was I was basically in the weeds trying to run a manufacturing company with very little help or guidance none I would say there's no books for this trial and error yeah you're finding that out Lauren yes I we pepper Lauren because I'm asking the questions here uh Kelly let's uh give us a little background first of all you run a a management consulting business tell us a little bit about that yes I have a number of Associates and we work with uh companies large and small we met Fred in uh fall of 2013 is when we did the Demming seminar at Aeron and you never know who's going to be showing up at the the seminar what kind of leaders but Fred being Fred also came with I think four or five of his people uh some of them from the line because he's a lifelong learner and that's a good clue for any entrepreneur because you have to be a lifelong learner you have to enjoy being a lifelong learner so I wear that Consulting you know small Consulting from hat so it's you know management consulting also you know marketing related things uh some it uh spread across uh 24 Associates and then the other hat I wear is I'm chairman of the uh advisory Council for the W Edwards sing Institute and helped design the seminar that that Fred attended and I remember we had a speaker there who uh a a great guy who had been a turn around that we had worked with and uh he spoke very eloquently about the struggles of that and and Fred came up with the end and he said uh I talked to my guys and we'd like to work with you and you don't have to worry about getting paid but we need to start soon because I'm really tired of this business I'm really tired of what's going on we need to get this taken care of right absolutely yeah I I like that where we don't you're going to get paid and um and I think part of being in small business is being willing to reach out and ask for help and so for example um that you'll appreciate this Kelly I'm now at a place where I want to create a board of advisors so I've I've contacted Aeron and I'm working with them to create a board of advisors for the next uh phase of my business and and that's all part of this that's why we're here it's so important to let people know that you know I'm not going to have the answers I've got a successful company but there's certain things that I'm that I don't know and I'm going to take the advice from others all right so I I want to talk a little bit about what you found Kelly when you connected with Fred and started working with him but first yeah we're all familiar with the Deming name but give us a quick refresher who is Deming and what's his method sure de's Deming uh born 1900 died 1993 uh was asked by General MacArthur after the second world war to go to Japan to do a number of things unbeknownst to him a lot of Japanese uh uh engineers and professors had translated his work his research and writings uh about quality especially into Japanese so when they found he was coming uh there was a a big uh effort to get him to stay for a while and speak which he did and from that and and he told them I think in the late 40s early s that if they would follow what he was teaching that within oh 5 years they would be exporting quality products to the world and there would be screams for protection from the countries that were having Imports because the quality would be so high that's the only time I know when he was wrong it only took three years companies because they were really desperate I mean it was a war you know they're rebuilding after the war uh and so this uh approach offered hope so most people knew about Deming from a quality standpoint but that's really about oh 20% of his body of work so with with Fred for example we're also working on the 80% which is the management method around uh how you organize and operate uh an organization and it's really four big things and that's what Fred was hearing at the uh seminar the two and a half day Demming Institute seminar we we teach a few of the quality there are like 65 quality tools we teach a few of those in the seminar but it's really about how you see the system your organization as a system and how you uh run it for productivity profitability joy and work creativity and Innovation Etc and that's what Fred really is latching on to those are all very positive things that everybody would want could you give us a sense of how Deming gets you there and I know that's way too broad a question for one quick answer I think it's a fair question some of Fred's examples so for example one of the things that you're Fred talk about and one of the things he mentioned to me earli on was we have chaos we have chaos so we just started with some simple things because when Deming Works quality goes up and costs go down so that's pretty powerful right and Time After Time After Time Fred found that to be true whether it was about the intake take of Parts the process for cleaning Parts pre- anodizing the process for anodizing so there were uh flowcharts and fishbone charts and discussions with people that would about how to test a theory of how to fix a problem that's often called the Deming cycle the plan do study act cycle and Fred to just engage everybody and say hey we're getting spots on Parts where are they coming from what do we do about it are they coming in that or there something are coming in with that we're not catching to the other end after all this work is done how do you make sure the parts get shipped on time and don't get damaged before they get shipped after they've been cleaned and anodized and how do you do that efficiently and effectively without killing your people wearing out your people so they have joint work and so they're engaged in the process of improvement I think most small businesses they nail a couple things really well and the first thing is going to be sales and that's usually the that starts the company and then they're comfortable with everything that they do and they know how to bring home the business and and and over time what management encompasses is it's so much broader that you it's it's overwhelming and and what Deming did for me was they broke it down and they so so he's mentioned 62 things and I say no there's only four and and if and if you think about the four and and you don't have to do any of them it's just out there and that's what I really re related to and and the four things were you have to have a an appreciation of a system and again it's it's one thing to think that there is a system but then there's another thing to actually have a system that's functional that's somewhat scalable so the first thing is you you you appreciate that if I put together a robust system then my employees will not be able to run the company without it because with the lack of a system there's there's there's chaos everybody's going and doing everything and they're trying to do their best and and and but if there's not really a method and a system then you get chaos typically it's it's and that's just the way it is it was that way for me and it's that way for everyone so that was the first thing you have to have a system and you have to appreciate it and then you have to have a theory of knowledge and with that that was an interesting concept to me okay well you've got people around you you've got to impart uh information but it's not information it's knowledge it's information put to work and how do we do that so in the de so so I had to learn how a theory of knowledge how am I going to teach my employees to appreciate the system and work within it okay I have to have a theory of teaching a theory of knowledge that's second thing the third thing is um I have to understand variation and and what is variation it's simply put things don't run in a straight line they kind of do this and we have to understand where do we fit in with this are we here are we here and what can we do to manage our system to bring it in within acceptable limits that we want to run our system with so we have to understand that most people think you have to be perfect that's not going to that we aren't so so I had to learn about that and understand that then the last thing which I think was really one of the most important things to me was psychology and that was a huge component and because I had simply never ever considered what is the psychological component of running a business and it's huge what are the employees thinking when they walk in the door how do they feel when they're here are their needs being met you know what are their motiv think about it these are cool Concepts that that they don't have a lot to do with business but they and because guess what happens when you understand these Concepts and you're able to apply them to your business you create a great culture and you can't fake it I talk to business owners entrepreneurs all the time I've been doing this for 20 years and what you've just laid out there is a very different conversation than I typically have you know it's it's bordering on academic which is something that from my experience a lot of entrepreneurs and business owners run away from that's you know that's not their comfort zone uh Kelly I'm curious it strikes me that you need a special kind of person like Fred who is open to this how unusual is it for you to run into somebody who is willing to engage the way he obviously did two things I guess well one is what Fred described is deming's of profound knowledge and he named it that in part because he said if you understand these four elements you do not have to be expert in all four you understand the all four elements and how they interact you will have profound Insight you will gain profound knowledge and that's a competitive Advantage so we work with lots of organizations uh and sometimes we we uh when they come to us we don't start talking to them about the system of profound knowledge Fred was an exception in that regard but we have many others who uh what they want to do is to solve the kinds of issues that Fred describes so once you start to apply the the methods around those four areas of psychology variation theory of knowledge and appreciation for a system when you start to apply the methods around those to their problems they get hooked because they start to see the result results they start to see the magic could you give us an example I mean you've given us kind of the framework what happened when you guys decided to engage with each other and work together on this what's that process that process look like how did you get started Kelly did you go down to Cincinnati we did it all virtually in fact he's never been to my factory I've never been to his plan and all that's amazing you're not that far away he didn't need to go and and and so no again so let's back up because I think it is important when you say that the entrepreneurs you've worked with this would be we'll call it an esoteric approach I'll call it the hippie approach you don't want to do it you don't do it um but but but the reality is here's the problem when you don't have this concept and this understanding generally you get wore out in business there's not joy in work and and you do and you miss some much and and so CU I've I'm at the age now where a lot of my buddies are retiring and and and and it's sad because they're beat up they've made lots of money it has nothing to do with that but it's just reached a point where where they're tired of of of fighting the Bronco and that's not the way to run a business and and so I would challenge you that it may sound overwhelming to you but I didn't say so tell me about psychology Kelly it was basically um my God got a customer from New York we're burning their parts and they're trying to sue me and and so I mean let's be honest that's how you get here it's almost like you want to go to a psychiatrist you're not going to go there when you're rolling sevens and everything's great you're going to go there when you've got issues You're motivated to solve them and you're motivated to solve them but the reality is if you bring it back and you say you know what's my number one reason for being here it's really to have joy in work and and if you can hold on to that theme you can say well I'm here to make money well okay great here's the challenge with that you've been around and you've been an entrepreneur for a long enough time and you've been successful money's not on the table anymore all right you've made it so so then okay all right well that's not my reason for being here all right so so I I I I want to be productive I want to be fruitful I want to have but I want also want to enjoy what I'm doing and then I can look it for a greater purpose and that's to me the beauty of of being a successful entrepreneur is you you're able to look for a greater purpose and so today for me it would be a little different than it was when I met Kelly but but in the beginning it was all crisis management give me an example you what kind of problem did you first throw at him and how did you move toward solving it well I think would you it would have been the spots on the parts I mean okay so I have spots on the parts now keep in mind an anodizing operation has 15 stages in the tank and they're all chemically sensitive and and so and you can get and if you get spots at the after the parts are run it's a guessing game as to how where the spots are and so just by having someone back there to say well let's let's just evaluate your process and make sure how well how is each tank and can you confirm it and and with this calm approach that says no no no no we can't rush into this because we don't really know what it is and so we're pro and this is understanding variation he would ask me what's the variation I don't know well Fred is it special variation or is it common this is so good to know what's the difference between special and common variation talk Kelly on this because you're going to do a better job than me yes well if you have a common cause variation and most variation is common cause the way you uh fix the issue whether it's not enough sales or uh you've got accounting uh problems or your financial reporting is off you have to work on the overall system and process if you have a special cause variation that's a surprise to you uh like suddenly we have 10 times or 20 times the number of spots on parts that means something special probably happened because it's out of the ordinary it is special if you're driving to work and you're your commute and it usually takes you 15 20 minutes and one day there's a jack knife 18 wheeler on the highway that's special cause you wouldn't change your route because of that one day but you might want to say I could probably get to work in 12 minutes if I tried some other roots that could be a process Improvement so I can over time I analyze how I get it down from 20 minutes to 15 minutes right to know the difference between special cause and common cause is to know what type of action to take and spreadsheets don't tell you that spreadsheets just show you what the numbers are so when I was talking to Fred about the type of variation I was trying to get a handle on how much variation he was used to to having and how much rework was being done so there's rework in uh it development right there's rework in anodizing Parts there's rework in sales there's rework almost everywhere if I can reduce the rework that's profit and that's so key because what happens is we confuse it and we say oh wow so so my system if I have a dirty tank it's going to produce body parts that's common that's that's not special so so but if you treat it special you throw the bath water out it it just ends up being you start blaming people yeah yeah and and so you must identify the variation are they acting like they normally would act yes okay then that's their common behavior and and you either change your system to change it or that behavior is never going to stop and you say well if you titrate the tanks every four hours and make sure they always stay within this range you don't get that variation oh then that's the solution and you change the system costs go down quality goes absolutely yeah they do and and then you and the Beautiful Thing is then you can move on to the more important things refering to referring to sales uh growth um joy and work safety health so how long did it take you to go from chaos to finding joy and work okay um well I've always been a happy guy so I I never give up um but I'm pragmatic as well um I would say so it was probably 18 months we were working in that time period so and and some of the key things that I really appreciated was um we were doing two to 300 orders a week then orders for customers and and it seems like we have to get the parts in we have to log them in we have to process them we have to ship them there's many different components to that and early on we had these recipe sheets that we would put into to running the parts and no two were alike and it and it was oh my gosh and it was overwhelming to me because I I've got all these processes and we built a system and so we literally I had to take a deep breath and I had to work nights and I had to say oh my God there's no how how can I expect the employes to get it right when I can't even give them the right information and and so then that's frustrating and but and then so you take a deep breath and then and then thankfully we had somebody like Kelly around who would say no no no we want one good transaction we don't need to do all 200 of them let's just get one right and and then and even today I call it the perfect transaction and I think yeah I've heard that to from Kelly and so it took 18 months and then we were only able to begin to say um all right it's better than it was it's a lot better but you don't turn it over on overnight because guess what's happened you've missed tremendous opportunity from the years ago when you were running chaotically the people that had showed up that you really didn't gauge how much business they did and then over time we've gotten to meet some of those people and we realized they weren't spending 50,000 a year on anodizing they were spending two million that's a huge difference and now we're in a position that we can talk to those people and we can get their business and make them happy I wanted to just jump in for a second you'd ask Fred about how long it took to get joying work and I would agree it was about the 18 months but he started seeing results of the process within weeks really things started getting better the chaos started to go down uh as he started to get momentum in that and I think Fred you you talk about it very poignantly when you talk about one day you sort of woke up about 18 months and you said I realized that my employees now also had joy in work and that's why I'm here and and that is such a key point you know what's really tough as an entrepreneur when you're sweating the load and you think the weight of the world is on your shoulders and your employees have joy in work there's a problem there and that's what the average entrepreneur does the average guy that's going to work for you he wants to be happy and and he you know and he wants to have be secure and he wants to have a nice job and get paid fairly go home and and take his do his hobbies and raise his family and things like that so so I saw that happening around me and and yet and this is I think typical for entrepreneurs the weight of the world was on my shoulders because oh I've got to do all this and I've got to do all that and you'd say well isn't that the case today well yeah but it's I don't know maybe you just get comfortable with it and you realize that it no i' I have to have the same results as them as emplo did you see Financial results in 18 months as well yeah and one of the interesting things U that Kelly brought to my attention was when he when he got to know me in my business he said you're leaving a lot of money on the table and so I didn't know what that meant and um so uh I can say yeah back then we were doing maybe a million and a half in sales and then um now we might be at 7 million in sales and and we're in a we're in a pretty good space with this and we think we can double this and that's why I talked about the board of advisers we finally built an infrastructure that we're not intimidated by a lot of work and and we're making great incomes this is a very good business and um but I just feel like I can do more and I think I think it can be I've gotten to the point where in my life where if it's not fun then I don't want to do it and so um I think I can have fun um growing this business but also doing it in a way that doesn't punish people but that that that creates an infrastructure that when I do leave the company then I can have a um a legacy a legacy with the company that says hey this was better than when he left it and um not selling it I just met a guy today he had just sold his company oh I'm so glad to be away from that and it's like well if it was that bad then why didn't you leave 20 years ago seriously I said said what are you going to do he goes I want your life CU When you get management down well you don't work hard you don't work hard you you shouldn't work hard you should you should enjoy what you're doing you should be good at what you're doing you should tackle the difficult things and you should be able to oversee a fun operation you I want to jump in because there's a piece here I think that a lot of entrepreneurs would really appreciate hearing Fred talk about and that is how he changed the culture i think it was a bad culture to begin with right you know he's not beating up on people but he didn't have a culture yet at that point which was really all Hands-On deck to try to figure stuff out the organization was not a true system in terms of people understanding Upstream Downstream and their role in it how they're all in it together so I you know if you think it'd be useful maybe Fred would talk about okay but before we go there I'd like Lauren to tell me what culture is in a what do you think I just find it difficult to put a nail on I think it has a lot to do with um how you treat each other uh how you colleagues treat colleagues and um and your commitment to to serving uh your customers how far will you go to make sure that your customers get what they need I think that's those are the most important elements of culture in my mind what's your answer well I I don't um I kind of look at had it a little differently I I I I because I I did have to think about it and I think inputs equal outputs here so if you have the proper inputs then you create the culture that you want culture is what you feel when you walk into the plant it's that simple and so you can't talk about it you can't say we're going to change the culture and you know what we're all buddies now let's put our let's be like Dog the Bounty Hunter and put our arms around each other and say a prayer um so um but you can feel it did you try that um I would I mean yeah um I I I would so okay I had a friend come over today he wanted me to do a little project yesterday actually for for him and uh he was in business and he started talking about he said wow you guys you got a lot going on here I didn't realize you have this many machines and all this I said yeah yeah we're pretty active and then he said so you know I mean you've got safety issues how's your safety record and I said oh it's pretty good um you know I probably had a few safety incidents over the last decade but they would be very minor and not a whole lot okay oh so you do do you have safety meetings and tell them the way it's going to be and he's go and he's going back to to this command and control where you say if you don't wear your safety glasses you're fired and so so um if you don't do this you're fired and so that's where the fun begins when you're running a company now I only have 25 employees and you know somebody that's got 500 employees they'd say well I could never do this well Kelly could help him with that but I can only speak from my experience what I realized is well okay so we're going to treat a human being like because they don't understand the benefit of wearing their safety glasses that's my problem not theirs I haven't created an environment that they understand the need for safety glasses unless that they are in incapable of understanding and there's a certain element that are but they're rare so so again but I hear it all the time where it's like and you're going to do this and you're going to do that and it's like whoa no no we have to have an understanding here so in our plant you have to wear safety GL well first of all you're not allowed on the anodizing line unless you're an operator or somebody with authorization because it's a safety issue but if you're up there you always wear safety glasses because you there's chemistry out there and everybody does because it's just you and and well they have to because we would have to take action if they didn't that's kind of part of the culture is to get people to understand why you're doing things to take the time to invest in them and when you do that and then then then the culture starts evolving like oh I understand the reason that he cares so today so so we just hired a few new people and I hadn't done this in a while Kelly the pdsa and so I thought you know I got to get these people to know me I'm not I'm not around much I don't show up a lot so I said all right Alex grab the three new hires in here they've been here a few months and bring them in here so I did I did a pdsa on wait Kelly what's a pdsa plan due study act it's a continual Improvement cycle it's very simple but it's more than that so let's talk about the method of doing a pdsa you get a Blackboard I stand up there I'm the teacher I'm writing it down and I'm at and I'm in involving them in the pdsa meaning I'm engaging them in critical thinking skills it's time and I say time is love so when you get a guy who owns a company and he's sitting up there talking to these people and then um and I'm you know their 20 in their 20s and I'm an old guy um but I'm taking the time to teach them about anodizing and and that and and then I'm getting these great questions well how long does it have to stay in there well they've been working on that line for the last uh six months three months whatever but now I'm building their knowledge base for what they do and that's invaluable that's to me Kelly the heart of uh Deming is to say I'm gonna take the time to do this with you and guess what do you think that does for for for their they they see my commitment to teaching them and my commitment to the company and that that builds the culture that I want to have meaning I'm not afraid of them they're not afraid of me and and we can come in and we can have a basis for um discussion cuz CU you know we work from the bottom up we're a Manufacturing Company you know it's not from the top down you don't succeed that way you're so obviously uh thoroughly engaged in your business uh so far from when you were once thinking you know years ago that you might need to retire I hate to have to ask you this Fred but I but I feel I need to uh a lot of people listening to this I think will recognize your name and realize that you are of course the father of Otto who was imprisoned in North Korea and died so tragically and it was such an extreme and profound tragedy um I think most of us just cannot even imagine but business owners do go through tragedy and I think some people listening to this might benefit from hearing from you on this a little bit if if you're comfortable talking about it can you talk it all about how you managed to go from that to regain the joy of work that you're obviously demonstrating there's this picture back there actually sure first of all you don't have a choice but you don't have a choice when these things happen he was invited over there by the government of North Korea encouraged to go by a university Professor he was kidnapped it was we you know all the stuff that made it into the news um we we sued the government and we we won this big award and um and so in the when this happened I got my family together and I said this isn't a reason to fail and so are we going to be defined by North Korea or are we going to Define North Korea and are we gonna are we going to Define 's life based on the last week of his life are we going to Define 's life on the successful beautiful son that he fine son that he was so so we got to we got to ask those questions of ourselves and then thankfully I have great children who are really doing well one's probably going to be a doctor the other's going to be anything she wants and um and so we were able to kind of pull back and focus and say okay all right now and so that at least got us through the day-to- day and then over um over time what I've realized and this has just been in the last probably six months that um I was completely in shock and then um I don't even know how I functioned back then um but you you say my customers they like me but they can't get shitty Parts all right and I'm running a company so so I by All rights and I've been told this by presidents Prime Ministers and everything in between I wouldn't blame you if you locked yourself in a room and just drank all the time after what you've been through okay that's option a um option b is all right well that's not an option so so think about this for people that have been in this situation and and and adversity is is not unique we're all going to go through some sort of Hell through our lives it may not be on an international incident that's published all over the world that sort of thing which is you know Goofy and all that but but it's we're going to have it and then what I found is it's I have two other children and so what example am i setting for them if I lock myself in a room and drink all the time or what if I what if I mope around and I you know what if I let my business go to hell and and so I I found that it was liberating to you know develop some good habits I work out regularly um and just be be the person that I always was was you know I love Otto I miss Otto he's a wonderful Guy and um and there's issues that I have to work through for him um but then I also have to live my life and my message to anybody that's been through this is um you you have the decision to make and my thought is you know if you were a happy positive person that that before this happened um you might want to think about continuing to be that happy positive person you have a choice and I do and so um I you know my business grew a lot through that time and and simply because the industry did and you know that was good were you running the business through that period or did you step away how how did you handle that no no no I mean when when you're an entrepreneur okay this is the beauty of Professional Management you don't have to be there all the time you put into place systems and processes and you create a culture that you define the management and our case it's a horizontal type of management I don't want any guy any one guy that's that that everybody looks to for the answers that's that's hero worshipping I don't want that you can't run a company that way and be successful it's not sustaining so so in my case because I was working intensely on on Professional Management that's what the Deming management methods bring the aerons of the world there's others but but the we have professional management so no I mean I literally I've traveled all over the world I I'm going to DC Saturday as a matter of fact and I'm not going to be at work tomorrow so no I didn't work any harder I didn't work any less hard I I managed things the way I always did and uh and I engaged and it was interesting because I did have to have a uh I did have a pdsa when OT was taken there and said all right guys you know I I feel horrible and you know we just talked about it as a company and I said so again um we're going to we're going to do what we always do and we're going to focus and uh you know the rest of the stuff will take care of itself and thankfully the the media stuff kind of got died down but I mean we would get calls every day um at work you know does he want to speak on this show does he want to speak on this show that stuff's kind of died down but that's the beauty of the Deming management methods in this and and lifelong learning and so when you when you have that you say okay so so the business is a function of what we do okay but also we have Auto so what do we do with auto what is our goal with auto well you apply the same principles to that okay um does it make me happy if it makes me sad the efforts that I put in is there a payback that makes it worthwhile what am I looking for just like in business well what are you looking for so you say in business what are we looking for well I told you I'd like to grow the business another you know let's just say couple hundred% I'd like to build a bigger platform maybe have a wider variety of customers then you say okay well what's the uh you know you say the auto work what's the platform there and that's that would be personal but we we evaluate that the exact same way and we say okay is is are we motivated by hate and revenge all right that's not healthy we can't do that okay so if we're not then what spaces do we want to in that we can have joy in and still be effective so we have to be effective um we only have a little bit of time left um I'm wondering Fred what's running the company like for you today do are there still special cause problems that crop up and turn into uh crises or um is is it running fairly smoothly and you know do you get to focus on building the business all the above so the scary thing when you run a business is you're depending on one or two customers a small business so you want to have some diversification there so so we lack diversification so that's a that's a that's a fear and we worry about that so then now that the the opportunities for our business are we don't really have a sales platform we don't know I we we've always just waited till customer referrals we don't have salespeople you don't do marketing no none you none I mean I have a website there is no marketing wow zero so that's where I want to get a board of advisors in and I want to focus on the marketing aspect how can we sell professionally we're good salespeople but we don't have a method Kelly I'll ask a couple guys that are involved they could sell for us and then well what's the method you know what's the approach and and I laugh and they laugh and I said because we don't have one and and that's not good because if we can apply these same Concepts to the sales approach um then we can uh I I believe my prediction is that we'll have great benefit Kelly can you address that what would Deming have to say about this before uh the tragedy with auto happened that was the next thing we were starting to focus on to have some discussions about Fred was also balancing capacity capability at that time right you don't want to get too far ahead so it's no it's definitely time to uh uh look at that what what are the steps what are the assumptions what's the aim of a sales model right well it's to make sales but there's probably some subtle things about how you go about making sales it'll uh make a big change make a big difference in the success does the Demming method help you fig figure out just what channels you take I mean are we talking digital marketing are we talking advertising well yes and yes and no the Deming channels help you do fast experiments we say low cost low risk and fast uh through through plan do study act to to say where are we going to place more of our bets so let's just start to find out what works and what doesn't how much how much is the website helping us do we need a more robust website you start with a lot of good questions and then you say now let's take the Dem Deming methodology and find out how we can get answers for those questions low cost low risk and fast but then um it it's as simple as this um we want to increase sales and then I have three words that I like to use at the company by what method and that's when the banana peel hits the pavment and Kelly just I know we're running out of time but methods predictions I think those are so important can you just quickly elaborate on that sure so Deming always ask the question by what method so what we say is that management involves planning planning involves prediction right so if you're going to predict you have to have a theory right not some big academic Theory it's said if then if we do something with the website then would we expect to see this so that's kind of a prediction so by what method are we going to do that what's our thinking what are we going to try where are we going to place our bets do you see that how this works La it's easier than you think it strikes me that Fred is an exceptional example in in all kinds of ways I'm wondering how it looks to you from your practice how often does somebody stick with it and get the kind of results that Fred has gotten how often do people backslide and you know lose the thread and go off in a different direction I would say Fred's exceptional and in a variety of way but we have probably with our partners just in central Ohio some 200 companies on that Demming pathway some are going faster some are going slower that's variation right there's no company of any size left anywhere in the world that isn't doing some element of Deming they may not know that that's where it came from but you cannot compete unless you're doing some element of Deming so by what method with sales uh I will predict that that Fred will be following the Deming method let's not be setting quotas yeah yeah yeah no no yeah let's figure out how our method is going to uh make this work a lot of the Deming companies follow deming's approach which is you don't put salese on commission there are exceptions to that of course right it's not one size fits all but uh 95% of the time 96% of our time time uh the dming based companies uh do really well grow really fast have higher productivity higher uh sales and higher profits and their people are on salary and profit Shar and Kelly did bring up a great point we had capacity issues earlier so in the last year we've integrated quite a bit of new equipment so our capacity has went up pretty nicely so now we don't have those but we have uh expectation issues where we don't want to um promise a customer something and then disappoint them you've assumed that we have a Salesforce let me tell you what the issues are one of the issues for us is the phone rings and it's a new customer and so who talks to that customer it's and it's that's that's a potential sale it is who talks to that customer anybody who answers the phone that's a problem and so what is our method to to manage this thing and then do we have this person who's does quality and all these other things and and and they've been talking to these potential clients where they're probably not the best person to talk to them so that's the so I'm trying to get our team together and say hey let's develop a method that brings this stress down but that that allows us to to actually um leverage these calls because they're calling us and I know that we're missing a lot of business you may have to go ahead and hire some of those salespeople uh have you gained out what you think this is going to cost you in terms of an investment to to take the step no because it's not a money issue that's the problem with most business people they make it a money issue they don't have a method they don't have an idea well explain that because you do have to think about it at some point I mean if you needed to expand your factory that's money if you need to hire additional employees that's money what do you mean when you say it's not a money issue there's no Concept in place we don't have a method you got to do that first before you think about only you want to be successful yeah and and again the ready fire aim doesn't work when you're already established and so the idea is give me some things that I can focus on here and you say how much does it cost well that would be the last thing that I would want to it's not a money issue it doesn't matter what it costs because if you get the right method that's going to be so great and successful it I'll spend whatever won't I if I believe in it yeah but generally these things aren't they don't cost a lot thank you both for taking the time my thanks to Kelly Allen and Fred War beer this has been [Music] great wait wait don't leave yet if you have a question or a comment that you'd like the 21 hats owners to address send it to me by replying to your Morning Report or by email at Lauren 21h hats.com that's l r n 21h hats.com do it now before you forget and don't be afraid to tell Jay what you really think you can take it and if you got something out of this conversation help us reach more business owners tell a friend subscribe and review us wherever you get your podcasts follow us on Twitter subscribe to the morning report at 21h hats.com this episode was produced by Jess Theron founder of blank word Productions okay now you can leave thanks for listening everyone [Music]