Latest / Lean Blog Interviews: Real-World Lean Leadership Conversations in Healthcare and Beyond / Gerard Ibarra on ”Good Decisions, Better Outcomes”

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Gerard Ibarra on ”Good Decisions, Better Outcomes” · Lean Blog Interviews: Real-World Lean Leadership Conversations in Healthcare and Beyond

0:01
Welcome to the Lane blog podcast,
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visit our website at www dot lean blog dot org.
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Now,
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here's your host,
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Mark Graven.
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Hi,
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it's Mark raven.
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Welcome to the podcast.
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It's episode 4 33 for december 8th 2021.
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Our guest today is Gerard I Bara.
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He's the author of a new book,
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Good decisions,
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Better outcomes,
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a simple five step process to help you make important and difficult decisions with confidence and clarity.
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So you'll learn more about Gerard in uh in a minute.
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But if you want to learn more about him and his book and more,
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you can go to lean blog dot org slash 433 or look in the show notes,
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whatever podcast app you're listening to as always.
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Thanks for listening and now on with the show.
0:49
Well,
0:52
hi welcome to the podcast again.
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Our guest Today is Gerard Ibarra.
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He is an author,
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a business consultant,
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a speaker and an entrepreneur and I'm not back there in the Dallas Fort Worth area all the time.
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But we're both,
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Gerard is also based out of the Dallas fort Worth area.
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So before I tell you more about him,
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let me say welcome to the podcast.
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How are you very well,
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thank you for having me on here,
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Mark.
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So Gerard and I are both part of a linkedin group.
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It's not super active these days.
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A Lien DFW group.
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Looking forward to being able to do more in person with with that group again.
1:34
But we're gonna be talking today.
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Gerard is author of the recently released book titled good decisions,
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better outcomes.
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I'm gonna hold it up here for those watching on youtube good decisions,
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better outcomes.
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A simple five step process to help you make important and difficult decisions with confidence and clarity.
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So those are uh important topic and those are important goals.
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Gerard has a PhD from Southern Methodist University's Lyle School of Engineering with the emphasis in logistic systems engineering and operations research.
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He has taught graduate courses and logistic systems engineering at S.
2:12
M.
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U.
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As well as logistics supply chain management and the business courses at the University of Dallas Graduate School of Management.
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Gerard has had executive roles in logistics companies.
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He's had his own consulting firm and was president and ceo of a company from 2000 and 8,
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2010.
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And he was also the ceo of jaguar logistics,
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the largest medical on demand transport company in texas until it was acquired in 2018.
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So maybe we can also and we're going to talk about the book but maybe since supply chain has been in the news so much recently,
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maybe we can we can talk about that at some point to drugs.
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Absolutely.
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Alright jot that down and we'll come back to that topic.
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So before we talk about the book and decision making,
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you know uh you know here on the podcast always like to get the origin story if you will from guests about,
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you know,
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what was the context,
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what kind of company or environment was it where you first got introduced to continuous improvement practices.
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So that's a good question.
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And I my undergraduates in the electrical engineering and when I graduate it back in the days I had the option of working at a engineering firm or go work at ups.
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And because I'm a newly graduate,
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you know the ups paid about 33% more.
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So what do you think I did,
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what kind of decision you think I made the one thing to help pay off school?
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There you go.
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So so I went to I went to work for a united parcel service and they put me in the industrial engineering department because of my math background and that's where I began to learn all these things about lean processes improvements and our entire my most of my career there,
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about 60% of it was in the engineering department.
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And when we first went there or when we first started off as supervisors after about six months to a year that we would have a training class and they would review pretty much all the things that we've been doing hands on,
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but yet a little bit more into the details.
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So by and large,
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what we do is we try to improve efficiencies through looking at how the job is up,
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rearranging it,
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going through some analytics and then trying to figure out what's the best way to set up these projects or these processes in the warehouse or even at a customer's location and ever since then,
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I've just been really intrigued by that about the process improvement and just never left it since then.
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So that's why I've been in logistics and supply changed since then.
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Yeah.
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Is it somewhat urban legend?
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Uh The idea of ups and the driver's supposedly never making left turns or it's a matter of minimizing left.
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That's a good question.
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I that was mapped out by what we call the time study scheme and the most effective and the most uh I guess the best safest turns,
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the news take a right as opposed to laugh.
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And when you map out things,
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you know,
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you're gonna map them out as much as you can,
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but if you have to take a left turn,
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you'll have to take a left turn.
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But yes,
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that's uh,
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you know,
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and I guess today,
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I don't know how they do it.
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I think they have software now,
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but back in the days when I started and I'm aging myself and you had a team of individuals would take all these stops and they would just start mapping out on a map.
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What's the best way to do this path route?
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Yeah.
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And it's an interesting point you bring up,
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it's not just about the time spent waiting to make the left turn,
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but yeah,
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that safety element,
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there's so many more things that can go wrong.
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Making a left hand absolutely good to hear that.
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There's a safety argument behind that.
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So um,
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so Gerard,
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I'm curious to hear,
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you know,
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I do like asking authors,
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you know the story behind the book and again the title is good decisions,
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better outcomes.
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Like what what was the spark of inspiration to take that on as a project?
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So what happened is I was working on my masters and a professor who will say who was in charge of the locking Uh joint strike fires.
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He had about 5000 engineers working for him.
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He went through this process on how to make decisions.
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And when he went through that in class,
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I just said this is everybody and their mom should be doing this.
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And I was really,
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really amazed with it because there's a lot of decisions.
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I had to make it ups and in my personal life fist as well.
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But this process helped that.
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So I used it to at work,
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I used in my consulting practices but I really didn't use it personally until about 2000,
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or two around that time I guess 2002 and I ended up making the decision,
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trying to use that process there.
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And to make a long story short,
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I did make a very effective decision.
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So I didn't use all that analytics and things that I talked about it and I ended up making the decision and years later I come to think of that well it's time to write that book because I've been wanting to write this since the mid nineties.
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And then I did research for it.
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And when I did the research,
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I started learning more about how much of our emotions come into play.
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So when I did that,
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I said,
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okay then this is why I made the,
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but I make this because I let my emotions take over.
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So in the book,
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I actually put in there a section about emotions so that when you make a decision,
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your emotions as part of the whole process and ever since I made those changes,
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at least personally,
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that's worked out.
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But the framework itself is useful for companies who have to make a decision.
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And we're talking about efficiency.
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It's also a very efficient tool to get them from Point A to point B from the,
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from the time they meet together to the time they make a decision.
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And what was that decision that you mentioned there was that the story that used at the beginning of the book about buying a car is that,
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is that the decision?
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Yes,
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that is.
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So I bought the car based on three things.
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It's the price,
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the look and the stereo system.
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Forget all of the other stuff,
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you know,
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and I just went and bought it.
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And uh,
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a few months later I realized what I got into when I had fires say,
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well,
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why did you replace themselves fast?
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Because the car got,
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had to sports tires and so they're very low,
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very low rubber and they wear out as opposed to,
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they say about 30,000 miles,
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but they were wearing out about 2022,
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23 and I had to do a lot of driving.
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So within the first three months I had to replace my tires and then to make things worse When I went to the place that replaced them,
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they were saying,
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well,
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you're gonna have to get performance tires which were about,
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I don't know 50% more.
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I said,
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well,
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I can't do that.
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Well.
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The only way we can get you the regular tires is if you change your rims and by the regular times mike.
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Okay,
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great.
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So I ended up buying those performance tires again.
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So,
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but had I and what it came down to in the end,
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it was more of my emotions drove me to that decision.
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But yes,
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that's,
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that's exactly what happened.
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Right.
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And so the target audience for the book is it mainly business leaders?
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Even though there are applications of a decision making framework for decisions we make at home in our personal life.
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Yes.
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So that the book and that's a good question.
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The book is geared towards the decision makers even,
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uh,
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as well as those who are personal decisions that you have to make.
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Do I take this job,
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do I purchase this house?
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So I purchased this vehicle.
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So it's,
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it's geared to the decision maker,
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whether it's in business or in personal life.
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Okay.
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And it sounds like the focus,
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when you talk about good decisions,
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there's there's an element of efficiency.
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Let's not drag out the decision making process or agonize over things but then also aiming to be effective in making the right decision.
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Can can you share more about those two pieces effectiveness and efficiency?
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That's various student which you just pointed out.
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So I I lectured last night at S.
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M.
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U.
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And I talked about that process right there and it's about being efficient.
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So this process here this framework will help you get from your from your start up the position of what you need to do to the end much quicker because it gives you a framework and it's go step by step,
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this is what you need to do.
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So you're very efficient that you don't you're not all over the place and as far as being effect of making a better decision at least through this framework,
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you'll see comparatively here's alternative for a.
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B and C.
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And when you go through the framework in the end you'll have a total score.
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And the alternative with the highest score based on all your requirements is the best decision for you or for the company.
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So it's sufficient in the in the in the respect that it gets you from Point A to point B.
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And it's the fact that in the sense that you have three alternatives,
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you're choosing the best one for the company.
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So I want to explore,
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um you know what you brought up George about emotion getting involved.
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I mean none of us are Spock or from star trek or or Vulcan,
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um decision making.
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You know,
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it's never strictly rational whether it's buying a car or hiring,
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which person do we hire?
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Do we hire another person?
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Um I mean what are your thoughts on,
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you know,
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how much emotions influence?
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Do we need to um just understand that?
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Do we try to eliminate the emotion or just realize that that's part of the equation?
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So just a couple of points.
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First of all,
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uh spoke uh my wife makes spot looks like a crying two year old when it comes to logic.
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So that's how logical she is.
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But in terms of emotions,
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the only way you make a decision without any emotion involved.
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If you're autistic,
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everything that we do from all the books,
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I've read all the research year,
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you're I guess you're keen,
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your people who are gigantic and decision making and economy and raffia.
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Uh Hammond.
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All these individuals talk about emotions being part of the decision making process.
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And if you read some of the sales books,
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they also talk about emotions,
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Jeffrey get more out of Dallas uh who said the gentleman,
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you can teach a kid to ride a bicycle,
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the Sandler process.
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They talk about emotions.
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So what I did in my framework is to allow you to put your emotions in there and just to keep them in check.
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So you can get rid of them,
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but at least it helps you put them in check and that's what the process does for you.
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So yeah,
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you got to have emotions otherwise you're just not a human or autistic I guess.
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Um so so the methodology.
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Um so if you could share,
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you know,
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there'll be a lot more depth and detail in the book of course.
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But what if you could kind of walk us through the overview of this methodology and this is the P two mode or the P two mod methodology or is that?
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So P two mode is inaccurate.
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And uh and it starts at it it stands for parts processes,
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maintenance costs,
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operational costs,
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disposal and the friend.
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So this uh this acronym that put together comes from years of consulting and education and application.
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And what I do is use that acronym which is a cookie cutter to help you think in totality.
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So when you need to make a decision about whether you're gonna start the service,
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you're gonna move the organization,
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you're gonna hire someone.
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If you go through those acronyms,
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you're gonna be able to make a better decision for the totality or for the benefit of the company.
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And one of the things that I think that I'm speaking?
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I someone successful.
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What's the one thing you want us to take away?
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You know,
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what,
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what is that one little nugget.
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And I always talk about your exit strategy,
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which is your disposal when you're A alternative,
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no matter what it is,
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you got to think about what happens at the end,
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what happens at the end of it's no longer viable or I'm gonna move on to something else.
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And that's very important because most of the times we think about today and tomorrow,
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but we don't think 5,
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10,
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15,
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20 years down the road.
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So the P two mode is a cookie cutter to help you with the what I call the three tier philosophy,
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which is think critically think big picture and think of an exit strategy.
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So the P two mode.
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Again,
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it's just that cookie cutter that help you think in those terms.
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So this this framework in this decision making process could be used to answer,
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it seems like a range of questions of should I buy,
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let me come back to cars,
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Should I buy a new vehicle,
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like comparing what I have versus what I might need or might want,
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then there's maybe a level of,
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you know,
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which vehicle should I buy and let's see if someone is grappling with the idea of,
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you know,
15:23
should I buy an electric vehicle?
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Any of those questions could be handled through Yeah,
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yeah.
15:30
So the framework,
15:31
what's good about it.
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You know,
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again,
15:33
it goes back to efficiency,
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you can go down a rabbit hole and just do analysis,
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paralysis and you'll never come up with a decision and it's going to be six months later,
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you're still trying to decide what car to buy and,
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you know,
15:45
some new models come out and there you go through the whole process again.
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Oh,
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this one just came out.
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So this framework is a quantitative process that allows you to put in alternative,
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a electric alternative be used alternative,
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see brand new truck,
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alternative d maybe a brand new four passenger.
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And when you go through the process,
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you'll have what I call a base for this is your minimum acceptable requirement.
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And then you have scores for everything else,
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if the scores for all the alternatives are less than your base,
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that means keep with what you have,
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don't put it in more time into it.
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Maybe do it again next year.
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Um,
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because I mean,
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I think of last time we've got a new vehicle was just a little over two years ago.
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And,
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you know,
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there's questions,
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uh,
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there's so many questions and decisions to make,
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buy versus lease,
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um,
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you know,
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which which brand or make or model or even then within narrowing that down,
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you know,
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unless you're ordering something specific from the factory,
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you may have,
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let's say,
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you know,
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five choices in inventory,
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none of which are exactly what you wanted,
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but you kind of,
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yeah,
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I've built my wife and I,
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you know,
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she's an engineer also,
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we we've built a spreadsheet at least you know,
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laying out options and you know,
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short of doing some sort of operations research,
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optimization function.
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You know,
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we're trying to weigh pros and cons but I can't say that was a formal decision making process that was sort of winging it with data.
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So you know,
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that's a very good point when we talk about getting lost in all the data and really not being efficient.
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The thing that I have in the framework is that you take everything that's important to you and to your wife And then you try to just come up in terms of a totality.
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What's the most important thing if you list out 25,
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let's say 50 items If you had to rank those items into a 100%,
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how does that come out?
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And then from that you take the ones that are your top ones,
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you 80%,
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that Peredo analysis,
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you know,
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what's the top 80% and those are the ones that you focus on.
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The other 20% is what I call white noise and that's just again,
18:08
that's that's doing analysis from paralysis,
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it might have not much of an effect on your own decision.
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So that's where this framework starts as understanding in totality and understanding the decision you're gonna make,
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how important is every part or aspect of that decision,
18:25
electric costs,
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um,
18:27
you know,
18:28
how often you're gonna use it.
18:29
What do you do at the end of it or you know sell it to your resell back,
18:33
give it to your kids or whatever the case may be.
18:39
So one other um decision that a lot of people might be going through these days is related to vaccination.
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And for me the decision point here is um I I got the J and J vaccine back in March.
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I'll admit I didn't go through a rigorous decision making model to decide which vaccine.
19:04
You know,
19:04
I think I did the J and J vaccine because it was just one and done.
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Not that I couldn't have gotten myself back for a second dose.
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But you know at the time they were saying they're you know they're all good.
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So I I made this decision of what I thought was the shorter time to uh antibodies.
19:23
But now I've got this decision of I mean I have decided to get the booster shot that's being recommended.
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But now there's this these alternatives opened up of like you could get the J and J again or I could get the moderna it's just a different booster or the fighter as a different booster.
19:41
I mean how would you use this P two mod model on a decision like that when you look at the parts of the acronym and and and how that thought process is.
19:52
Okay so that's a two part answer.
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So first when you were talking about the vaccines I have something that I call an inefficient decision.
20:04
And what that means is either don't have all the data available or you have conflicting data but you have to make a decision based on what you have available and it's no fault of yours.
20:15
The decision you make,
20:16
it's only because of what's available to you.
20:18
Life happens.
20:19
And I talked about last night you used this model and framework.
20:23
He said well I should have gone with A instead of C.
20:25
Or D.
20:26
Or B.
20:26
Well no,
20:28
the reason you went with A.
20:29
S.
20:29
Because of everything that was in front of you.
20:31
But you had no idea what's happening on the world economy and these things just happen.
20:37
So in terms of the P two mode,
20:39
what you would do is and again the pt mode is for those difficult decisions.
20:46
It's not for you know what beer and I'm gonna have or might set with pepperoni or not but it's for those difficult decisions.
20:53
So that p at first piece of parts.
20:55
Okay.
20:56
What kind of parts are gonna go into this shot?
20:58
You know,
20:58
you might do a little research and it has this type of uh antibiotics in there,
21:03
this type of medication,
21:04
this type of whatever it might be and you have to kind of look at that seat.
21:07
Are you allergic to any of those that would be parts The process would be okay if I do the one shot,
21:14
like you said,
21:15
that was part of my decision making process to,
21:17
you know,
21:18
do I go once or twice,
21:20
But then my wife did a little bit more research and she pointed out some things that maybe you go with the two shots,
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but the process is,
21:27
how much time are you going to take for the decision you're making?
21:30
How much does it affect you in your life,
21:33
in your processes?
21:35
It's just a part of the thought process then,
21:38
is which day to get the shot?
21:41
You know,
21:42
after I had the J and J shot,
21:44
I had a fever for about four hours the next day,
21:47
my wife got the moderna and I'm leaning,
21:50
I've got the moderna schedule,
21:51
but I'd still like to go through the rest of the um decision making framework with you.
21:56
But um,
21:57
you know,
21:57
I could have a store arm that probably wouldn't get in the way of anything.
22:00
If I were feeling a little under the weather next day,
22:04
like I've scheduled it on a day or the next day would be a little more forgiving to having a day's worth of side effects as sometimes happens there.
22:13
Yeah,
22:14
that's exactly,
22:14
that's the process.
22:15
How much exactly.
22:17
Right on point.
22:20
The remaining four is maintenance costs.
22:24
So in this case I believe they're all free so you don't have to worry about any maintenance costs except,
22:32
you know,
22:32
in terms of the process,
22:34
if you're gonna be out for four or six hours,
22:36
you're incurring some costs one way or the other whether it's time being lost or whatever.
22:43
You know,
22:43
having to go to the restroom often or taking other pills and operational costs as well.
22:49
How much does it cost me to do this?
22:51
And the reason I separate maintenance and operations costs in some organizations,
22:56
they're very much well aligned.
22:58
But the reason I put maintenance and operation costs for us,
23:02
the individuals is to make sure we think about everything that goes into terms of a cost.
23:07
If all I said was maintenance costs then you may not be jolted with operational cost and vice versa.
23:14
So that's the M.
23:15
And the O.
23:15
And the P.
23:16
Two mode and then the last two which is disposal you know,
23:21
what happens after I take this vaccine?
23:24
What happens 45 months later,
23:27
even a year later,
23:28
you got to think about that.
23:29
And again it goes back to how much information you have that's available to you.
23:33
But the point there is,
23:35
you should always be thinking about your exit strategy.
23:37
If something goes wrong,
23:40
you know,
23:40
God forbid something goes wrong.
23:42
Am I ready for that?
23:43
The next step?
23:45
And the last one's emotions uh you know,
23:47
emotions plays a lot into it.
23:49
Some individual might want to do fight or someone might want to do something else only because of what the company who is providing these injections stands for.
23:58
That's your emotions playing into place or you prefer uh CVS or Walgreens and one of them happens to have both of them.
24:06
The other one does not.
24:08
And going back to the process.
24:09
I forgot this one.
24:10
This was another thing that when it's my decision making process,
24:13
The one shot for me was about 20 miles away.
24:18
The two shots was a mile away.
24:21
So in terms of process.
24:23
So and that's that's how you would use the P two mode.
24:26
But again,
24:27
for those difficult decisions purchasing the vehicle,
24:31
taking a new job,
24:32
hiring an employee.
24:34
Once you get very acclimated with this,
24:36
you can use the P two mode for other decisions just running through your head and say,
24:40
okay,
24:41
always got to be thinking about my exit strategy.
24:44
Mhm.
24:45
And one thing I think is interesting about having a decision making framework is that it's not always going to lead to the same answer for each person because of these different variables.
24:56
For example,
24:57
how long is somebody willing to drive?
24:59
How much do they value one and done versus going back again weeks later.
25:06
And then,
25:07
you know,
25:07
there could be emotions,
25:08
there's you know,
25:09
fear uncertainty and doubt where some people this was not really part of the thought process for me.
25:15
But I would understand if some people said it would say,
25:19
well,
25:19
you know,
25:19
the J and J vaccine is more traditional if you will vaccine technology,
25:24
the M.
25:25
R.
25:25
N.
25:26
A.
25:26
Vaccines from Pfizer and moderna to some people might be new or less certain or less proven.
25:34
Um and and and so there you know I think it goes to show there are different decisions that are right given the circumstances and what needs and wants are what when people value and just kind of looking at.
25:48
Yeah I think it's interesting to think of decision making as a process different people have different inputs which might lead to a different output of that decision making.
25:56
Absolutely.
25:57
You know it's a very good point again that you bring out in the in the book I talk about this decision is for you and for your company it's not for anybody else.
26:10
So when someone says well you should have gotten this vehicle or you should have moved over there.
26:14
Oh yeah that's fine for you but not for me.
26:17
I went through my analysis and what's best for me and for my company.
26:21
Is X not why was he?
26:23
So?
26:24
Yes it's it's very personal.
26:26
Yeah.
26:26
I mean I think back to the vehicle decision um for for getting an suv and and somebody might say oh mark you should you should have gotten the one with the third row seating.
26:38
I'm like I cannot think of a situation where my wife and I would need that third row.
26:42
So for us that decision and those needs and wants are are different than Somebody else who would use that 3rd bro.
26:51
Absolutely.
26:52
Absolutely.
26:52
Yes.
26:53
Very very good point.
26:55
So maybe you know if you can let's explore that a little bit more.
26:59
I know in the book you kind of layout,
27:01
decision making criteria needs versus wants.
27:05
How does that influence your decision making?
27:07
Gerard so needs wants and emotions.
27:12
That's what I call the trifecta influencers and it has a very big part in your decision making process.
27:18
So you have to first recognize a need versus a want.
27:23
A need is something that's a requirement.
27:26
The need is something that is they must have.
27:28
And the very simplest thing for me to associate and meet with is you need water to live uh you need that to sustain yourself.
27:37
I want under their hand is something you desire.
27:41
And one could be I want another polo shirt,
27:45
you have 43 of them are the same color.
27:48
The one that you're looking at is the same color but it has a different stitch somewhere else and you don't even need it,
27:55
that's more of a want and a desire.
27:58
But within those two I have what I call an inefficient need.
28:03
He said what do you mean?
28:04
Not an efficient and inefficient one.
28:07
What do you mean by that?
28:07
Well let's go back to the water example,
28:10
you're thirsty and you have you have to have water but you have to have the water from that bottle with that nice pretty picture on it.
28:21
Nothing else will do well Yeah,
28:23
you need water and you can convince yourself.
28:25
Yeah,
28:25
I need water.
28:25
So I'm gonna drink this.
28:27
But that's very inefficient.
28:28
The most efficient thing to do is if you lift the house with an apartment just get water from the faucet cheap.
28:35
It's there recycling and that's what you do.
28:38
So that's those are the difference I guess between a inefficient want versus just a pure one.
28:44
And the last thing is the emotions,
28:46
your emotions is what creates your wants.
28:49
If you didn't have emotions,
28:51
you really wouldn't have any once.
28:52
But it's your emotions that tell you,
28:55
you know Gerard,
28:56
I really want to be able to dunk the ball from halfway through the course.
28:59
I'm gonna go buy those sneakers with the check marks on there.
29:03
Because I know once I have those on there I'm gonna feel I could fly through the air.
29:07
So those are my emotions talking to me.
29:09
And that's where critical thinking by the way.
29:12
Which is the why from my book is where you have to really zone in and say why am I things and in marketing and I don't want to get off the market here.
29:22
But it works very well if you know how to do it when you look at the commercial for those sneakers.
29:28
They're creating a story for you.
29:30
They're not selling sneakers there selling an adventure.
29:33
They're selling you.
29:34
The fact that you could dump the ball halfway through the corn.
29:37
So that's where your wants,
29:39
your emotions come into play the stronger your emotions are,
29:42
the more you're ones are gonna be less efficient you to be in making decisions.
29:46
So you have to be able to recognize whether it's a want or a need and how much your emotions are playing into your wants.
29:53
Yeah.
29:54
For someone like me,
29:55
there's no shoe in the world that would help me dunk a basketball on a 10 ft rim.
30:00
And but um,
30:04
but yeah,
30:04
I didn't think through wants and needs,
30:06
um,
30:07
you know,
30:07
in pandemic times,
30:08
especially I'm guilty to a fault of focusing on to me a want of comfortable shoes.
30:17
Like I really like these shoes from a company.
30:20
All birds.
30:21
They're kind of like a sock with a soul on,
30:24
you know,
30:25
there very comfortable.
30:27
But then again,
30:28
if it's raining and you need a waterproof shoe,
30:33
that is not the shoe to wear,
30:35
right?
30:35
So it's it's a good weather shoe.
30:37
And then there's,
30:38
you know,
30:39
my my wife's uh sort of want or a need.
30:42
She she doesn't think those are really the most attractive shoes.
30:45
So there's her need and want to keep in mind like house her husband look,
30:52
she doesn't care about the comfort for me as much maybe.
30:56
Well,
30:56
you know,
30:57
it's funny you say that.
30:58
So my decision making with my wife is whatever she wants that's just trying to follow it on,
31:06
try to follow it up.
31:07
But I pushed back on the shoes because they're because they're trendy,
31:11
they're Silicon valley trendy,
31:13
they're not,
31:14
you know,
31:14
high fashion trendy but it's one of your emotions,
31:18
it's your wants and that's okay.
31:20
So it's okay that we're humans,
31:23
if you don't satisfy yourself emotionally,
31:26
you're not going to be hidden in all your cylinders.
31:28
So if wearing those shoes or wearing a white shirt with a tie that makes you feel great,
31:35
makes you perform better than by all means.
31:38
So I'm not taking,
31:39
I'm not saying it's all bad.
31:40
I'm just saying you've got to recognize how much of an impact it has on your decision making process.
31:46
So um you know,
31:47
there are some decisions that would be strictly individual.
31:51
There are some decisions that you're making together with your spouse or that's buying a car or what choose to where you think maybe that's a trivial decision,
32:01
but there are joint decisions and then in workplaces there maybe organizational decisions or team decisions.
32:07
How does a framework like this facilitate group decision making?
32:12
So another great question.
32:15
So the in terms of a business organization,
32:21
the book is the out like the reason I say the book is good for a decision maker,
32:24
like the ceo of the business owner or yourself or you can purchase a house or vehicles because you pretty much have the total authority.
32:32
But if you're in an organization,
32:34
you have finance,
32:35
you have HR operations,
32:37
logistics,
32:37
marketing,
32:38
sales,
32:39
uh legal,
32:40
all everybody has some kind of input.
32:44
So in this process and what I showed last night was you have to take everybody's input and kind of put it all together.
32:53
Let them go and try to identify what's the most important thing for them.
32:57
Then come back again together and then take everybody's list and rank them from the top to the bottom,
33:03
get rid of the top of the bottom 20% and then just stay with the top 12 things it does for you.
33:09
One is you get better insight into a decision for the company because you have HR involved logistics operations,
33:16
they put their two cents in there but on the flip side or more.
33:20
So should I say everybody feels like they were part of the decision making process and that goes a long way when someone says we should have made this decision and they were not involved,
33:31
they're going to be your biggest uh people who are going to criticize you.
33:35
But when everybody is involved it's like okay well I was part of the process and I can't really say much So that's how it works with an organization and there's a different steps for that.
33:44
It's a little bit different but it's uh that's where the efficiency really comes in.
33:50
So it's I believe it was uh the consultant firm McKinsey,
33:54
they did a survey,
33:55
2000 employees nationwide.
33:58
Mid managers,
33:59
not nations worldwide.
34:01
And what they've concluded is that The organisation of a average Fortune 500 company loses $250 million Does't matter if they make the right decision or just talking about the whole process,
34:18
opportunity costs.
34:20
So if they had a framework like this,
34:22
it would make things a lot more efficient.
34:25
And one of the things I talked about just yesterday was,
34:29
here's an organization,
34:31
you have the requirements.
34:33
You say,
34:34
here's the goal.
34:36
Only so much amount is sent out to business to the department's,
34:40
someone does the analysis,
34:42
they come back,
34:43
it's the wrong analysis.
34:44
You meet again,
34:45
you start all over and you just have this cycle that keeps on going and after three or four or five months you just don't do it anymore and you go on to another decision that has to be made.
34:54
Mhm.
34:55
So we're talking about decisions that have to be made and in your role as a consultant or a coach.
35:01
I'm curious in your work,
35:02
how often you get brought in to do training to teach frameworks versus being brought in to help consult on a particular Big decision.
35:12
So,
35:13
so I've done a couple of big decisions here.
35:16
The most recent one whisper,
35:18
an investor who was putting $4 million dollars up to start a new,
35:22
a new company and the four millions was for the brick and mortar.
35:27
And what we did is he put a team together and I helped him through just the decision making process in terms of where to where to locate the organization.
35:38
But the problem that we incurred and I had to tell him this afterwards.
35:42
It's something that's called an anchoring trap.
35:45
And the anchoring trap into the business world is where someone kind of puts together the question in such a way that their emotions or their criterias in there.
35:56
So he said,
35:58
let's go ahead and look at the four major cities in texas,
36:01
austin san Antonio,
36:02
Houston and Dallas Dallas Fort Worth.
36:05
And I'm really,
36:06
I like Houston because of A B.
36:08
C.
36:08
And D.
36:09
But you guys go out there and you just tell me what's best for me.
36:11
Well guess what everybody was thinking at that point.
36:15
Exactly.
36:16
So so yes,
36:18
that's one example or in that case there it was even maybe framed or anchored in one of the four major cities.
36:26
When if you opened it up,
36:28
even within texas,
36:30
maybe for some different reasons,
36:33
uh you know,
36:36
smaller town west texas,
36:39
why why not lubbock,
36:40
maybe lubbock would be the right choice.
36:42
But if you framed it around those four cities now maybe there were wants or needs of let's say if it's a business decision where an executive says,
36:50
you know,
36:50
I'm only going to locate the business and one of the big cities because that's where I want to be.
36:55
Well that's that's fine,
36:57
that's a want and that criteria could be known.
37:00
But I guess it does create the risk if what you're saying is if you're anchoring it too strongly you may end up making a sub optimal decision.
37:13
Yeah.
37:14
It's very common in the business world.
37:18
It's uh someone frames it a certain way and then that's what you end up trying to do.
37:22
So yeah.
37:23
Uh the other one is it's more for the institution.
37:27
And the biggest thing there is the executive VP had a $300 million dollar budget.
37:35
And He was saying that I've got these three VPs and I need to disperse those $300 million.
37:43
And he says they're very nice people but there will cut your throat in a second.
37:46
Just they get my position and take all the money.
37:49
So what I did in this case was I went through the process in terms of thinking totality.
37:54
What's best for the institution,
37:56
not what's best for department A B or C.
37:58
And within the afternoon about three or four hours we had all the money dispersed and everybody,
38:06
no matter how much they he did,
38:10
they all knew in the air and that this was the best decision for the institution.
38:13
So so I do I do some of the decision making them right now.
38:17
Most of us in training where I go in there and I do a two day workshop and I do a couple of day follow ups in three months in a six months.
38:27
So one other question I wanted to ask you about decisions kind of connects to one of my other podcast series called My favorite mistake.
38:36
And and maybe we could do a separate episode and have a different discussion framed around that where guests,
38:42
Oh,
38:43
go ahead.
38:43
No,
38:44
I was going to have so many mistakes.
38:46
We can tear it into a complete show.
38:49
That's what I do ask people to think of at least a favorite mistake,
38:52
even if it's not the okay,
38:55
I can do that.
38:56
But you know,
38:58
I think,
38:58
um you know,
38:59
because the part of the mindset around the podcast is realizing that we all make mistakes.
39:05
We're doing the best we can,
39:06
we're making the best decisions we can at the time.
39:10
So the podcast isn't about proverbially beating people up or chastising them from making mistakes right now,
39:17
a decision.
39:19
I've had some guests recently,
39:20
let's say for example,
39:21
talk about the decision to leave a job or the decision to not leave a job.
39:26
They're making a decision at a point in time or maybe even continually based on the information they have at the time.
39:34
And then at some point it could be days or weeks or months or years later.
39:41
That decision that seemed like a good decision somehow reveals itself as a mistake.
39:47
So I'm curious like what your reflections are on decisions that turn out to be mistakes.
39:53
And I think you alluded a little bit earlier.
39:55
How much of that is due to maybe a bad decision making process and how much of it is just,
40:00
well,
40:01
we we didn't have the right information,
40:04
didn't have enough information or had information that was maybe just false.
40:09
Right?
40:09
Yeah,
40:10
that's uh yeah,
40:11
that goes to the inefficient decisions.
40:13
You made a decision based on all the data you had or data you didn't have and conflicting data that you had.
40:19
So yes,
40:21
those are hard.
40:22
Yeah.
40:23
I mean,
40:23
what what are your thoughts?
40:24
I mean you think back to at least one example,
40:29
maybe we can talk about a different one in an episode of my favorite mistake.
40:32
A mistake you've made gerard,
40:35
How do you reflect on that and think of what you would do given the chance to make so different.
40:42
So for me,
40:43
so I'm gonna go back to my vehicle example I think had I really understood my emotions and how much they played into the whole process,
40:51
I would have probably been a little bit more cautious in the vehicle I chose.
40:55
You know,
40:55
that's all part of the process.
40:57
And then if I really look a little bit deeper into this,
41:02
that mistake is also tied to the organization that I used to work for and I should have left the organization in january and if I had done that then I don't believe I would have been in the predictive and I would have been in with the vehicle.
41:18
So it gets a little bit deeper there.
41:20
So if I had to go back,
41:21
I just wish I would have left the organization in january as opposed to june and I wouldn't have all these problems with the vehicle.
41:29
Even if I purchased the vehicle,
41:31
I wouldn't be putting that many miles on it.
41:32
I wouldn't have to have that much maintenance on it because of all the driving I was doing,
41:37
I had my headlight cracked and I'm like,
41:40
are you serious?
41:41
This is how much it cost to get this replace.
41:43
This was back in 2003 and it was something like $3,
41:48
So yeah,
41:49
if I reflect back on that,
41:50
I should have left sooner than later and that would have really prevented a lot of these things as far as my vehicle and heart acres as well.
42:00
Yeah.
42:02
So it comes down to again,
42:03
both the rational and the emotional like you can add up the dollars in a rational way and then there's the emotion of,
42:12
you know,
42:12
I think of like decisions I've made in the past,
42:16
I'm on my third Macbook Pro in congratulations now while it's,
42:21
it's not really so much and congratulations because the first with the first one I got because the old one was dying,
42:30
the board would have cost too much to repair the board or replace the board.
42:34
The laptop was basically totaled to use car language.
42:39
So I got a new laptop and there were a lot of things I didn't like about it but I needed one that worked and then that laptop started giving me a lot of problems after six months and it was partly rational like I'm wasting time because this laptop reboots itself when it's supposed to be just waking up from sleep mode and there were all these different problems.
43:01
I was putting a lot of time in the troubleshooting which is maybe more of like the rational,
43:06
the maintenance,
43:07
I don't know if that's operational or maintenance costs but there was cost and then there was a motion where I was like it was an emotional reaction to say well I just want to throw this laptop out the window.
43:18
Like clearly I wasn't going to do that.
43:20
I'm not that rash but um,
43:24
but now you know the Mac Apple announced their new laptops and uh you know they've brought back to HQ I'm sorry I'm getting into a rat hole mines but for example they brought back the H.
43:35
D.
43:35
M.
43:35
I.
43:36
Ports.
43:36
So I think when I start going back on the road again and I don't want to have all these adapters,
43:41
I just want to plug into the H.
43:42
D.
43:42
M.
43:42
I.
43:43
Ports.
43:43
So hopefully this laptop will last me for years instead of months even with generous trade ends but you know I I can see where even a decision like that.
43:54
If should I upgrade the Macbook,
43:56
should I upgrade it now there's there are both rational and emotional elements,
44:01
there are wants and there are needs involved.
44:04
So I miss it.
44:06
I miss heard what you said.
44:07
I thought you were on your third math book.
44:09
No,
44:09
no magazine.
44:10
I got it now.
44:12
I which is why I said congratulations.
44:15
So I had to kind of go back say yeah,
44:18
so you know,
44:20
uh the only thing I would say at this point is think about your exit strategy and you've made some very good point is how much more time I'm going to spend on this,
44:29
how much more time.
44:30
So I'm gonna have to reboot or whatever the case may be and I'm going through the same process myself.
44:35
Uh,
44:35
the laptop that I have,
44:38
when you start up in the morning,
44:39
it has this really,
44:41
really gnarly sound,
44:42
you can hear the motor and it's going good.
44:47
They're never good,
44:48
but it's still here and it's been going on for four months and I'm now at that point.
44:52
So yes,
44:54
it's sometimes it's hard.
44:57
But so yeah,
44:58
I didn't have your framework at hand.
45:00
But I thought thinking back to the decision I made four or five months ago,
45:05
two because Apple wouldn't replace the laptop.
45:08
I had to trade it in for a new one.
45:10
So there was a bit of a financial hit,
45:11
but I weighed that against the hit I was taking in time and frustration,
45:16
but to your point I had an exit strategy because I knew the rumors that Apple was going to be announcing new laptops and probably four or five months and I could have waited but I decided not to wait.
45:28
But part of the disposal or the exit strategy was again,
45:32
knowing like the resale value Of Apple Mac Books is really high.
45:37
So I'm gonna start doing the math of like,
45:38
well it's not a $1,500 purchase decision.
45:41
I'm basically leasing it for $100 a month until I can replace it with this one that meets some of the needs better.
45:50
So,
45:52
so that's a very good process table that you went through there.
45:55
Yeah,
45:55
that's good.
45:56
The most recent one that I did personally for myself for my wife was foundation work,
46:03
we have foundation work done is it was like 12-$15,000.
46:07
So yeah,
46:08
I went through the process and in the end and this is what I learned from the process.
46:14
I guess there are things,
46:16
you know,
46:17
things you know that you don't know and things you know that you don't know or things you don't know that you don't know.
46:22
And when I went through this process,
46:23
what I learned was when the companies came out and gave bids,
46:27
I had three and they all gave me different bids because they had different beams or put in.
46:33
Well what I learned was that whoever we went with is gonna have to hire a structural engineer based by city ordinance and whatever the structural engineer says has to be done.
46:44
That's what they have to do had I and they would still get charged for that by the way,
46:48
had I known that I would have just gotten an engineer come out here and then said,
46:52
here's what I need done.
46:53
Give me a bit company A,
46:54
B and C.
46:55
So,
46:58
so that was a helpful,
46:59
it was helpful to have a framework.
47:02
It was helpful to have a framework and uh,
47:04
there are things that you learned through the process in the end that you didn't know.
47:08
And that's,
47:08
that's,
47:09
that's really hard.
47:10
I guess sometimes you make a decision and there are things you just don't know and you don't even know who to go to to ask.
47:16
Is this something that I should look at?
47:17
So yeah,
47:19
those,
47:19
those are difficult things to do sometimes.
47:23
Well,
47:23
maybe a final question for you here Gerard and again,
47:27
our guest is Gerard Ibarra.
47:30
His book is good decisions,
47:32
better outcomes.
47:33
It's available now and uh,
47:36
I hope you'll take a look at it and buy it and read it.
47:40
So this might be some sort of the graduate level capstone question for the episode,
47:46
but you've got a PhD so I know you're,
47:49
you're up for it and you have a lot of experience in um,
47:52
the realm of logistics.
47:53
This will be a very intentionally open ended questions.
47:59
So I know you'll have,
48:00
you can choose to say whatever you think would be helpful in response to it,
48:03
but you know,
48:04
there's so much in the news about supply chain problems with global supply chain um factories in china having to shut down because of electricity shortages or environmental factors,
48:17
problems getting ships into the ports,
48:19
lack of containers,
48:20
lack of drivers,
48:22
lack of trucks.
48:23
Like there are so many different problems throughout the supply chain.
48:27
I'm just curious like what what what your take on the situation and what types of decisions could executives or should they be making with with a framework?
48:38
Like the one that's so that's very very huge because the supply chain is just not here in the U.
48:46
S.
48:46
We're talking global country,
48:48
we're talking global here and the first part of this whole mess or I guess situation is everybody has to agree that there is a problem and that they all have to work together and that's that's where the difficulty might come in and here in the US if we wanted to look at this and unfortunately we may have to get some help maybe from Yeah the Ceos themselves,
49:14
maybe some regulations,
49:15
something that help us push through and get over what we're doing through here.
49:19
You know,
49:19
they're so the shortest of drivers.
49:21
But why is there a shortage of drivers,
49:23
you know,
49:23
is that the fuel prices is that is that a government trying to reduce things slow down things.
49:30
Is that uh there's just a whole slew of things,
49:33
Is it just the process itself that's lacking.
49:35
You know,
49:36
you talked about the out of the in china or I guess overseas you have electricity shortages.
49:42
Well once they come back on,
49:44
you know,
49:45
you don't have to catch up so you don't have to use more people and now you're gonna flood the U.
49:49
S.
49:49
You don't have enough people so you can bring more people and so it's just a,
49:53
it's just a very huge problem and it requires,
49:56
it requires a systematic or systems approach to even begin to look at the solution.
50:02
Yeah,
50:03
yeah.
50:03
It seems like there's no particular single bullet because there are decisions that were made in some cases two decades ago about offshoring and sourcing to china things that used to be manufactured here.
50:17
Yeah,
50:18
that goes back to the exit strategy and again it goes back to critical thinking,
50:24
which is again,
50:25
the wife for me is if anything that anybody learns from this podcast,
50:30
this recording is just to think a little bit more critical and it seems like there's a need and I'm curious how this fits into the frame works and what you write about in the book there,
50:43
there are known factors that we can make decisions off of and then there are the unknowns and in risks and how much does a framework for risk analysis enter into good decision making.
50:56
So the framework itself is pretty straightforward,
51:00
but in a five steps in within the framework and within the mathematical part,
51:06
the step two and three,
51:07
that's where you would do your that's where you do some of your analysis.
51:11
Monte Carlo,
51:12
risk analysis.
51:13
Bayesian,
51:14
Markov chains and that's where you would do it to try assess what's going on.
51:19
But as far as the unknowns,
51:21
the best thing you can do to combat that is if you're looking at,
51:25
say,
51:25
logistics and supply chain and you're in marketing and you're trying to create a messaging,
51:31
it might be good to talk to the people and operations so that you don't create a message that cannot be delivered and they may know things that are taking place that you don't know of.
51:40
So that collaboration is very important.
51:43
Otherwise you might miss the mark.
51:46
Well it seems like uh your book doesn't miss the mark.
51:50
You have been able to read a little bit of it and I jumped through to some of the framework and I'm looking forward to going back in and filling the rest of the pieces again,
51:58
the book is good decisions,
51:59
better outcomes.
52:00
A simple five step process to help you make important and difficult decisions with confidence and clarity.
52:07
So,
52:07
the author again,
52:08
is our guest here today,
52:09
Gerard,
52:10
Ibarra Gerard,
52:11
thank you so much for being a guest.
52:13
Thank you so much for having me on here.
52:14
Thank you and congratulations again on the release.
52:18
Thank you.
52:19
Thanks for listening.
52:20
This has been the lien blog podcast for lean news and commentary,
52:25
updated daily visit www.
52:27
Dot lean blog dot org.
52:30
If you have any questions or comments about this podcast,
52:33
email mark at lean podcast at gmail dot com.