The other day, we got the chance to sit down with Doug Hall – speaker, author, inventor, whiskey maker, and Owner of Eureka! Ranch. Doug also was a prominent influence on Tony Rogers, our president here at Creative Mechanisms.
Doug talks about using a systems approach to innovation in order to transform your company when adaptability matters most. Shall we say, during a worldwide pandemic? It’s through this approach that Doug believes that engineers are uniquely equipped to apply Systems Thinking to powerfully transform your business.
How Doug Hall Learned Innovation in Business
Doug Hall: I'm a chemical engineer by education, but I’ve been an entrepreneur since age 10. It started about 40 years ago.
I worked at Procter & Gamble for 10 years, and then 40 years ago started a thing called the Eureka! Ranch, where we help people provide systems to help employees think smarter, faster, and more innovatively.
We also do inventing. I had this invention that got out of control and next thing you know I was investing in it. And so now I have a pretty good-sized custom whiskey business where we make custom bourbon.
In all of this, I'm not interested in doing clones. I'm not interested in doing the lowest cost. I'm interested in doing the coolest stuff I can do, and then I've been blessed to be able to do that.
Taking a Systems Approach to Innovation
The new move that we're going towards creating a real change is system thinking. You're very familiar, obviously, with the approach Deming did in the late 70s-early 80s, applying system thinking to manufacturing.
It’s a collection of independent operations in a factory that work together to accomplish a shared aim. That aim of course is to delight the customer and the long-term sustainability of the company.
Deming said that systems thinking had only been applied to about 3% of the opportunities. The other 97% of the opportunity lay in strategy, innovation, and how we work together. So our approach is to use systems thinking to bring about change and ignite that innovation within each person.
A Manufacturing Case Study in Our Distillery During Covid 19
Take our distillery for example. I think it’s less about the calculations and questions you can answer with a computer and some tables. What’s needed is to look at the system of manufacturing itself.
As I’m sure you remember, hand sanitizer became a big deal. We thought it would be a nice thing to do if we put together some bottles and gave them away. Initially, we settled on producing 7,000 bottles to give away - well, they disappeared in 4 hours…
We heard horror stories of hospitals, police, officers, firefighters, all not having any hand sanitizer.
Even though I was supposed to go back to doing “regular work”, for several days, all I had been doing is working on hand sanitizer because now we've had requests for 1.2 million bottles of hand sanitizer people wanted.
So I went to my guys and I said, “Okay, 1.2 million. We'll go broke if we do that.” But these companies are desperate - big, big companies!
What’s more, when the deliveries went down, they weren't sitting on stock piles of Purell because they were used to getting it delivered every week. They don't have warehouses, they don't have space. It was a consequence of the system.
I went to my distiller and I said:
- I've got a brand new building, opening up 10,000 square foot with all setup for a distillery.
- What do you think if we take that building, which opens in a week, and we turn it into a mass production building to be able to produce over a million bottles of hand sanitizer in like three months?
He said "You do realize I can't buy automated equipment for that?”
I know there's the constraint, the boundaries, and yes, there's technical engineering and calculations and flows, but it's also the human systems. It’s how the human systems work, what the customer needs, and what we can do for the customers.
That's a different type of engineering than I learned in chemical engineering or engineering in general. Things get hung up because we tend to work on one part, one silo. We all know that systems are independent parts together to accomplish a common aim. The challenge companies have is that people are in silos and they're not working the whole.
Putting Engineer Thinking to Work on Human Systems
I’ve come to think that engineers need to take that monkey-in-the-middle job to be the facilitators of all of these things. Too many engineers think like a scientist and they get too narrow in their casting. To me, the reason I went into engineering as opposed to being a scientist was because I liked the interaction of those parts.
Creative Mechanisms: Engineers are uniquely equipped to understand human behavior because whether it’s systems or products, we deal in realistic results and efficient processes. If we can apply that thinking to teams, multi-faceted production processes or anything else - we have a particularly valuable opportunity to accomplish better results.