In this episode, I share how my passion for chemistry has led me deep into the principles of managing capital assets.
We are excited to discover, with you, the key commonalities and best practices that allow both public and private organizations from capital intensive industries to become stronger at managing their assets over time.
Learn more at: www.durablecapitalindex.com.
Hello, everyone. Today, I'm going to share with you how chemistry and my passion for the fundamental workings of things has led me to think deeply about managing capital assets and how important it is for organizations to really get these dots connected.
Welcome to The Durability Podcast. This is for those that are passionate about helping their organizations plan and prepare for the inevitable future. My name is Ben Parker, management consultant, chemist, creator, entrepreneur, co-founder, and member of the Durable Capital Group. I'm excited for you to join me as we discover what successful organizations do to build long-term durability.
We explore the tactics and strategies that allow great organizations to combine the financial wisdom of asset management, the practical street smarts of the maintenance subculture, with the real-world paranoia of managing risks to ensure their organizations last. We uncover what great leaders are doing from all types of capital intensive industries to make the decisions, build strong management teams, and prepare to meet the future in whatever form it comes. This is The Durability Podcast.
Welcome back to the second episode of The Durability Podcast, and today I'm going to share with you as something that has been a blessing and a curse in my life, which has been the insatiable curiosity for the fundamental workings of things. And when I was a kid, I remember this was a problem on some levels, specifically one time my mom or dad, I can't remember, had got me this really cool set of a radio walkie-talkies for my birthday. And they lasted about a day, maybe two, before I had all the screws out and pieces strung out in the garage.
And I was trying to figure out how all this electronic stuff actually worked, which was really frustrating for my parents, of course, but I was just fascinated by what was inside and how things actually worked. I think I actually managed to get those back together as well, which wasn't always the case with some of my explorations.
But one of the things that led me to is in my career selection, I had a really awesome, crazy chemistry professor in high school that really piqued my interest in terms of the basic fundamental building blocks of everything around us and how once a fundamental understanding of something could be learned, there's a tremendous amount of options that are available.
And so looking at my options and trying to plan and select my career, I found that chemistry was super intriguing to me, not just from my curiosity side, but also from my forward-looking planning side of, I didn't want to be in a career where I couldn't find an option. And at the time, I had some really great advice to really focus on the fundamentals and get through the math and get through the engineering and get through the physics and the chemistry.
And I was so blessed to be able to land myself in a degree that pushed me both physically, mentally, but also in an area that allowed me to focus on these really cool technologies right upfront. When I was even in undergraduate school, I was able to work on some really cool projects that totally fascinated me. Most of them had to deal with getting two things to play together nicely that did not want to play together at all, like oil and water.
I was intrigued by this whole fascination and this whole world of interfacial chemistry, where you're trying to get to things that are not similar at all to play nicely together and to really do some cool things. And one of the things that I discovered in that whole process is that there's a lot of parallels to that both in terms of people, where you have different cultures, different backgrounds, different ideas and thoughts that do not play nicely. What are the things and circumstances and environments that allow them to play nicely?
And the same with the chemistry side, where you have different things that allow for whole new worlds to open up and whole new functionalities because you now can get two dissimilar things to play together and interact together in novel ways. And I think as I graduated from chemistry, as I was able to really kick off an awesome career in the special chemical industry, I did a lot of product development. We focused a lot on a new product creation, optimization. A lot of it was customized stuff for very specific customers.
And I really began to get a fundamental sense of the basic principles of business through that lens. But I also realized through that whole process that there's a lot of limitations on the business and operations, the financing side, that didn't allow me to get everything out into the world that we could do in the lab and on the bench. One of the things that I shifted from was focusing less on the new product creation stuff and more on the implementation of new products and processes in to the operation side of the business and even on the sales side.
I was blessed to work for a regional specialty chemical company. They were big enough to have multiple locations and do a variety of different things, so I was able to see a whole range of things. But also they were small enough and growing where we couldn't just have all the resources we need. There was not an unlimited amount of resources, which we all find ourselves in various organizations at different times.
I was fascinated by this process of taking something that was a need, whether it was a customer poll product, a customer had a need they needed filled and we were trying to provide them another product or service to fill that need, or it was a market need where there's definitely a variety of customers in a market that needed something and we could create something to fill that need. And once we had it in the lab, that process was to scale that product or process. It was fascinating for me to see how many different dynamics played into those decisions.
From my research and development side, I really wanted to see these products get out to market. I really wanted to see them do well, but I recognized that there were some significant business constraints that inhibit us from getting there. One of those was how we justified spending capital across an organization, and the other one was the level of certainty and confidence in a marketplace that we could get the products that we needed and get the customers that we wanted all at the right time and in the right window.
That's really where the light bulb moment came on for me, where I was so focused on the building blocks of the chemistry side died. And then I had this aha moment where I was like, "Wow! It's actually the same thing. I have a model for this in my head about how organizations can take two dissimilar things like finance and operations and create environments, structures, systems, processes, where they work well together, they compliment each other, and they can do some amazing things."
My focus really shifted from just creating products on the lab bench to more creating capital investment proposals, being able to put together the business development plan, the marketing plan, the process plan, and the scale-up to really help bring something new to a market and justify the value creation piece to investors, to owners and help get all the pieces together to help everyone understand the needs from the different areas, whether that was the sales side, the operation side, the maintenance side, the manufacturing, as well as from the finance side, the constraints of the business on the capital that's required to do certain things, as well as the return on investment.
You start looking at all the different pieces that go into to that. And if you take a one sided approach, which many organizations end up doing depending on the dynamic of their group and their communication styles and practices, then you definitely can see how organizations do not optimize the right pieces at the right times. What I've found is that it actually creates a lot of waste, and there's nothing more frustrating than unnecessary waste in an organization.
I don't know if you are like me, but one of the things, so that just drives me crazy is the $200 part that we couldn't get, but we should have got that is now costing us $100,000 a day or whatever the price range is for your organization. There are many things that we can do to help alleviate some of these pain points, not just in terms of how we align our teams and manage our processes, but in terms of how we help our organizations shift the mindset from a false belief that oil and water does not mix to a more realistic and functionally a helpful belief that says, under the right conditions and under these circumstances, these things mix very well.
To close out that analogy, oil and water is very interesting from a chemistry perspective. There are very specific types of naturally occurring molecules and synthetic molecules that allow them to interact both with water and oil-based substances, carbon-based substances. They are called surfactants. Surface active agents is the kind of abbreviation for that term. You add surfactants into an oil-water system. You can make a variety of different structures. You can do you a variety of different things, and they're functionally used in the body.
Your cells have very similar things that actually hold them together and a tremendous amount of other things. In our organizations, in parallel to that analogy, we see that under the right conditions that people do work well together, that we can plan well for the future, and we can inhibit a large amount of waste in what we do, what we spend our money on, how we invest, what risk we actually take on, and how we organize our teams to reach a very specific objective. Some key takeaways from today. Number one, people are like molecules.
Some people are like oil. Some people are like water. That doesn't mean their bad. That means that we have to create the right conditions to allow them to be the most efficient and effective in what we're trying to accomplish. The second thing is that we need to shift how our organizations focus on the right things at the right time with our capital investments and looking at how we manage our teams and gain that alignment to really help focus on building a long-term durability into our organizations.
I want to thank you so much for listening to this episode, and I will talk to you soon. Have a fantastic day. Hey, everybody. I just wanted to share with you something that has been super effective at helping organizations to really kickstart the conversation around how they're going to build long-term durability into their management practices. And if you stop what you're doing right now and go to www.durablecapitalindex.com, that's durablecapitalindex.com, you can sign up to take a very special assessment.
This is the Durable Capital Index Assessment. It's a baseline assessment, and it'll show you exactly where you're at currently with fundamental best practices for building durability. And it will give you a very detailed feedback report that you can take and share with your team. So if you go to www.durablecapitalindex.com, sign up, take the assessment and share with your team, and really start that conversation around building long-term durability into your organization.