In this episode, we discuss the one important needle mover for organizations looking to build long term durability. It has to do with the power of a simple checklist.
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.
Book: The Checklist Manifesto by Dr. Atul Gawande
http://atulgawande.com/book/the-checklist-manifesto/
Ben Parker:
Hey everybody. In this episode, I'm going to share with you the one thing that we have found to be such an important needle mover for organizations looking at changing the way they manage the long-term value of their business and their assets.
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 longterm 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 organization's blast. We uncover what great leaders are doing from all types of capital intensive industries to make a decisions, build strong management teams, and prepare to meet the future in whatever form it comes. This is the Durability Podcast.
Hello and welcome back to the Durability Podcast. I am very excited to be here today. There has been a lot of things going on, but I really want to share the one thing that we have found that has had substantial impact on organization. When you get down to the nuts and bolts of is a simple thing.
I want to start the explanation of this simple thing by talking about a set of literature that has been discussed over and over again in a number of platforms, Harvard Business Review, and a number of other authors and speakers have really dived into it and highlighted the impact of this one thing. A number of industries have seen substantial results that have been documented and well founded in this particular thing. It has to do with our ability to manage complexity in the work that we have.
This particular thing has to do with checklists. If you go and read the book, The Checklist Manifesto by Dr. Atul Gawande and you will find a fascinating set of literature, references, and examples that really highlight the power of this very simple thing.
The statistics are very clear. When you look at surgeries for example, in the medical field. Dr. Gawande is a surgeon. If you look at the impact of a simple checklist on a variety of organizations and their performance and output, results are astounding and the process is intriguing. In his specific example, in the surgery field, there's several things that are interesting.
One, we're not going to dispute the brilliance of doctors. They are obviously trained. You don't become a surgeon just because you can use a scalpel. You have to have training and there is some intelligence involved in being able to qualify for that training and getting to that level. Also experience.
Regardless of training, experience, and intelligence, there are still gaps that happen. There's still mistakes that get made and part of this is human. We all have limitations. We all have things depending on the circumstances that we forget or don't weigh as much on our thought processes and our decision-makings as they possibly should.
The simple process of developing and using a checklist can have some amazing results in your organization. When you get down to the very specifics of it, it's very interesting how complexity is manageable when you have a process and you have systems in place. For example, in surgeries and some of the results indicated in this book where you basically we look at the total deaths that happen in the surgery side. This is specific to what the Checklist Manifesto brings out in some of their data that I'm quoting here is very specific in 47% of deaths were decreased when they implemented a checklist process.
Then you carry that same concept into the airline industry. When you have pilots go through a pre-flight checklist, where they have all of these points that they're looking at, they're testing, they're evaluating. I've never flown a plane, I'm not a pilot, but I get the general idea that there's a lot of factors that need to be considered. There's a lot of equipment that needs to operate well.
If you're going to perform at that high a level, that consistent over time, which the airline industry is one of the only industries that can tout a true six sigma quality rating. They have a number of checklists that they use and they go through. It has a very substantial impact on their output and their organizations. The airline industry is a good example.
Also, the construction industry. When you go through your safety checklists, your inspections during construction, and as you're building things. The power of those checklists has an amazing ability to one, ensure that things don't get left out, but two, to be able to manage complexity in a way that it takes a brain processing power away so we can rely on the checklist to make sure we get the critical things done that need to be done, or looked at, or evaluated. We don't have to go through and try to remember each time we do something, what those things are.
It's a way to free up bandwidth in our brain. It's also a way to standardize decisions across an organization. It's also important where for communication and coordination amongst teams to have those kinds of systems in place. How does that apply to building long-term durability into capital assets? How does that apply to capital improvement and asset management? It's very simple.
That's one of the reasons why we put together a simple tool called the Durable Capital Index. It is an assessment tool and it's basically a glorified checklist. It goes through eight different areas that are critical to making good long-term asset management and capital improvement decisions. It focuses organizations on their ability to check each of those boxes in a way that will help them understand where they're at and see where their gaps are.
It's the same purpose as any fundamental checklist that you find in critical situations that may have some complexity to them, but it simplifies it in a way and captures everything in a way that allows organizations to, without a lot of bandwidth or processing power, get to a very clear understanding of what their current status is.
That's been an amazing experience actually to go through and look at all the different factors that go into what derails the long-term improvement of capital assets. As well as the maintenance side, the team management side, and a variety of other things that have really gone into the Durable Capital Index. It really allows organizations to focus on the most critical things first.
If you've looked at all of the great organizations, the ones that can have the most impact for the longest amount of time, each of them has been able to implement their form of a checklist. This Durable Capital Index tool can help organizations close that gap without having to spend a lot of time and effort with consultants. With wasting a lot of time asking the wrong questions. It kind of packs everything into one simple tool that you can go through with your team and do in a couple of hours. That's just the one thing that we have found that can have a significant impact on organizations is simply know where they're at and have a simple tools for them to get there.
When we were looking at all of the different pieces and I've told some of this story previously in previous episodes, but when we formed the Durable Capital Group, the premise was that we had a lot of insight and expertise into how organizations could plan and prepare for the longterm. We wanted to come up with one simple thing that we could build and put together that would have the biggest impact on organizations.
When you peel back the onion, when you really look at it, organizations need to have critical information about where they're at in these key management areas. Once they really go through a baseline assessment, 90 plus percent of all of their answers are in front of them. It's within their capability of doing. A lot of times, it's just a matter of seeing it and prioritizing it. That's what the Durable Capital Index does.
It's been super rewarding to be able to see organizations benefit from that and be able to take a simple tool and really have significant impact into the value of their organization and their preparedness for the longterm.
One, in closing, don't forget, checklists are powerful, and it doesn't matter that you're really smart. It doesn't matter that you have a lot of experience and it doesn't matter how well you've been trained. If you're not using a checklist to close the complexity gap, you will have bigger problems. You will have more risk and you have more uncertainty.
It doesn't matter if you're in healthcare, if you're in construction, or if you're flying airplanes, or if you're building solar power plants. If you're managing waste treatment systems, running capital intensive fleets, or specialty chemical industries, or any other capital intensive industry, you can benefit from a checklist. The Durable Capital Index is a key checklist to see how well you're managing long-term assets. It is a great fantastic tool and relatively cheap. It's a great way to really see where you're at, keep you on track. That's all I have for today. Have fun and I will talk to you next time.
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 a longterm durability into their management practices.
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. It will give you a very detailed feedback report that you can take and share with your team.
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.