Today you’re in for a treat. We have Peter Asch and Joel Marquardt from Twincraft Manufacturing talking with us about a school of thought called Appreciative Inquiry.
Too often we focus on what’s not working in our business. Today, we’re going to flip this around and focus on the things that do work.
Here’s the theory. If you focus on what you do well, there’s a good chance that you’ll get better much more quickly. The question I like to ask is wouldn’t you rather become world class at what you do instead of making it all of the way up to mediocre. If your answer is yes, then you’ll want to listen to this episode of The Sustainable Business.
Here are some of the things you’ll learn in today’s podcast episode:
- What appreciative inquiry is.
- Why appreciative inquiry gets better results than focusing on things that aren’t going well.
- Why you make more money when you focus on the strengths in a business.
- When you focus on strengths you’ll be willing to experiment more.
- Learn the magic word re-imagine and how it can be applied to your business.
Narrator: Welcome to The Sustainable Business Radio Show podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. In The Sustainable Business, we focus on what it’s going to take for you to take your successful business and make it economically and personally successful.
Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he’s learned through his 40 years of owning, running, planning and thinking about what it takes to make a successful business sustainable.
Josh: Hey, how are you today? This is Josh Patrick. You’re at The Sustainable Business.
Today, you’re in for a treat. Instead of one guest, I have two guests with me. We have Joel Marquardt who is Chief Operating Officer at Twincraft Skincare. and we have Peter Asch who is the President and CEO of Twincraft Skincare. Peter and I had a podcast, boy, a couple of years ago – very early on, about him buying his business back.
Today, we’re going to talk about something a little bit different. Today, we’re going to talk about the topic of appreciative inquiry. So I’m going to bring Peter and Joel in. Joel, can we start off with what a description of appreciative inquiry is in the first place?
Joel: Well, I’m not sure what the academic description would be. But from a practical standpoint, what we embody, increasingly, at Twincraft is to help people increase their capacities and to enrich all aspects of the business by understanding what the life-giving energy is, what the potential is that’s trying to emerge, and being able to remove those barriers for more progress that’s wanting to happen as opposed to trying to find every little problem with something that’s not completely perfect and put all of our resources into really things that don’t improve substantially or don’t move the needle much.
Peter: Good morning, Josh.
Josh: Good morning, Peter.
Peter: Let me give an example of what Joel meant. Traditionally, if one was looking at your on-time shipments and your on-time shipments might be 95%, let’s say. And we use this example at Twincraft quite a lot. The teachings would suggest that you should look at the 5% that you’re not shipping on time, do a root cause analysis, try to figure out where the problem is, go after the people who are causing the problem et cetera and really focus on the problem. And what generally actually happens is the problem gets larger because you’re focusing on it.
What appreciative inquiry is all about is looking at what is working. So, in this particular example, you take the 95% on-time shipments and you focus on, “Why are we doing it on time? How are we doing it on time? What is causing us to do it on time?” And by focusing on the positive, that being in this case on-time shipments, you actually crowd out the 5%. So more you focus on the 95, the more the 95 becomes 96, 97, 98. And that’s essentially an example of appreciative inquiry. You appreciate what is working. And by appreciating what’s working, what works actually appreciates or gets larger.
Josh: So what you’re saying is that when you focus on what’s right versus what’s wrong, the opportunities are often better?
I make this analogy and I’ve asked this question a zillion times in seminars we’ve done. And the question I ask is, “Would you rather focus on your strengths or focus on your weaknesses?” What do you think people answer most of the time, owners versus employees?
Peter: Well, I think, what people do is they focus on weaknesses. I don’t know what they would answer but I know what they do. We believe that focusing on strength simply works better. If it’s pure capitalism, you actually make more money focusing on strengths. I think you also have a substantially deeper and better culture because you’re looking at the positives, not in a superficial way, but really in a deep, meaningful manner to create greater positives and crowd out the weaknesses in this case.
Josh: So let me ask you a question about mistakes because this is an interesting thing. We all make mistakes. And I’ve actually come to the conclusion there’s two types of mistakes. There’s mistakes we don’t want to make and there’s mistakes we do want to make. And in my experience, if we focus on the mistakes we do want to make where we actually pay attention to them, instead of ignoring those mistakes, we actually come out way better than if we do it the other way. Do you have any thoughts about that?
Peter: Well I don’t know if this is exactly what you have in mind but one is pursuing abundance and one is living in scarcity. So we have the mistakes we don’t want to make. We don’t want to diminish the scarce situation that we have. We want to make sure it sustains or make it a little bit better.
And the mistakes we do want to make are about experimentation, exploring potential, understanding, discovering ways that abundance perspectives to- rather than making something 2% better, re-imagining in a very practical real way and in an experimental way, ways instead of taking 50 up to 52, taking 50 up to 300 because we’re completely open to and exploring all of the potential.
Josh: That makes sense. Can you give us an example of how that might work?
Peter: On a minor scale, within manufacturing, the planning and scheduling group is really a central hub to the business – for all of the customers, for all of the incoming materials, for everything that’s going on in the plant. And we have a very intelligent– probably the most capable and intelligent person I’ve experienced in 26 years in manufacturing that had countless tools to do what she was doing four or five years ago. And in that, the focus was always on, “How do we make the tools slightly better?”
And what we did is, as we looked at the processes and the people involved, we started re-imagining, “Okay, how could this operate?” And in doing that, we’ve dramatically taken the output of the plant– that’s one component of many things that are necessary, but we dramatically took up the productivity of the plant year over year which never could’ve happened by slightly making those tools a bit better.
Josh: So you just said a word which I love which is re-imagine. I just love that word because that’s the thing. The other thing that just crossed my mind is where the budgeting process fails. And with appreciated inquiry, when you’re saying, “There’s a possibility of a 300% improvement,” we’re never budgeting for that. Or we’re never setting a goal for that, if we actually have written goals.
No one’s going to come in with a goal of “I’m going to improve productivity by 300%.” They’re going to come in with a goal, “I’m going to improve productivity by 5%.” So how do you guys handle goals? Because I know that you use goals in your business or have you gotten rid of them?
Peter: Well, we have a very fluid budget. And by that, what I mean is we are ever vigilant to ensure that the budget does not get in the way of sound decisions being made.
Josh: Talk more about that, how a budget can get in the way.
Peter: So I don’t have a crystal ball. And I, so far, have not seen anybody who does have one. Hence, when you’re budgeting, you are necessarily needing to make assumptions. And because none of us have a crystal ball, our assumptions, some will be accurate and some will be inaccurate. And then you have life that happens. And maybe there’s a recession next year, maybe orders come in far exceeding the orders that we assumed et cetera but everything’s constantly changing. So if everything’s changing and you have a static budget, the budget will actually get in the way of progress as decisions need to be made.
So, we have a fluid budget. I mean, it’s a real budget. It’s serious and it’s real. However, we don’t let that budget get in the way of a decision that needs to be made.
So a decision that would need to be made is, we need another piece of equipment because we just got in a $2-million order which we didn’t budget. And we don’t have the capital expenditure budgeted for that order because we didn’t anticipate the order coming in over budget.
So we won’t let that get in the way of buying that piece of equipment because buying the piece of equipment is the right decision. And the budget is frankly immaterial which doesn’t mean it’s of no value, it just means that it’s something that helps keep us generally on a certain track and we won’t put that in the way of the sound decision. In this case, buying the piece of equipment.
Josh: So I’ve had a guy named Tim Berry on my podcast a couple of times and Tim Berry is the founder of Palo Alto Software which is the originator of Online Business Planning. An interesting guy. And one of the things he recommended– he used to be, you do a budget, you live with a budget and that’s the end of the story.
Now, with you, Peter, you’re saying a fluid budget needs to be reviewed on a monthly basis. Is that something you guys do? Do you adjust your budget as the year goes on?
Peter: Yes. I mean, if you think about Apple, there’s no possible way the iPhone would’ve been invented had Steve Jobs and his executive team been mandated to adhere to the budget. They went way over budget on R&D, on innovation, and they produced this extraordinary device that’s created a company that has the largest market cap on this planet.
So perhaps if we were a stayed business, there was no innovation in our business, we got 7.4% a year growth, year-in and year-out, perhaps we should adhere to a budget. But quite frankly, I think the 50s are over, the 1950s and the 60s. Everything is far, far more fluid today than it’s ever been. And you need to keep up with the times.
Josh: It makes sense to me.
So several years ago, you guys weren’t doing appreciative inquiry, you were doing the usual management stuff – focus on what’s wrong and try to improve it, get your baseline up. What got you to go from traditional management towards working with appreciative inquiry? And how long did it take you to get– I know you’re still working on it, but how long did it take before it took hold?
Peter: That’s a great question. You’re never there.
In a learning organization as we believe we are, we’re always learning and you’re proverbially climbing up the mountain. And as you continue your ascent, you’re learning, you realize that there are better ways of doing things. At some point, we believe, there was a far better way of operating a business. I don’t think that it was a light switch that was just turned on. It happened, I think, over years. And we started hiring people who fundamentally believed that an appreciative inquiry culture was a far better way of operating.
We also read a lot of books. I mean, this is what Google does. This is what all the great companies do. So, to some degree, we’re not inventing anything. We’re just following and learning from the masters and doing the best that we can, day in and day out.
Josh: Yeah, I love to steal from the best. I come up with very little– few things are original. I think it’s like one or two in my life. And the rest I just borrow or just right out steal from others.
Well, Pete, I want to go back to my question again, is that you had to make a decision to move from where you were to using appreciative inquiry, so was it you just read about appreciative inquiry and you said, “Gee, that’s a good idea. We want to try it” or was there more thought process in there?
Peter: You know, again, I have to speak to a particular point in time that we decided to do this. It evolved over time. I think it evolved because I have a strong belief system. Joel has a strong belief system. Our belief systems are aligned. And it’s just way more fun being appreciative than it is beating everybody up over the 5% everyday.
Josh: So I know you have strong values in the company, how do the values fit in, Joel, with using appreciative inquiry in the company?
Joel: Well, I think a lot of the organizational development models can be misunderstood or misapplied. And as sort of being theoretical and we’re very practical in our values, very reality based and that fits well with the appreciative inquiry as of not bringing in some model, or language, or philosophy from some other organization but really focusing on how we are.
We’re far more of an artisanal business than sort of the widget-type manufacturing businesses so it’s extremely important for us to continue to see ourselves in reality accurately and then continuing to build on that as opposed to having the answers, throwing what we’re currently doing – those types of things. And so, for us, the values of, we believe in a very humanistic orientation. And that doesn’t mean people aren’t accountable. All roads need to increase the top and bottom line but in a humanistic way as we’re pursuing that.
And so, I think, focusing on abundance and generating new realities instead of beating the heck out of something that isn’t quite perfect. Those are all the types of values that we need a live on a daily basis.
Josh: Yeah, it’s really interesting. The cost of closing from 95% shipping to 99% shipping, if you’re to focus on that, would be absolutely incredible and probably would add no value to the company. But by focusing on the 95%, you might get to 99% as a side effect.
Josh: So it sort of fits in with people always say, “Well, the purpose of my company is profit.” Any time somebody says that to me, I say, “No, it’s not the purpose of your company.” Profit is a result, it’s never a purpose. It’s something that happens afterwards. So when you talk about purpose, you’re doing this until–
You also mentioned something which I find really interesting because you have to make all these stuff operationally doable. You folks have a blue collar business. I think, with making this operationally doable, it’s about telling the truth to yourself. Do you have any thoughts around that?
Peter: I actually love the blue collar environment. I’ve been very involved with nonprofit and community development at a deep level and national level as well as the academic world. I’m sure I’m biased because I’ve spent a lifetime in manufacturing but I find the blue collar and manufacturing world, it holds your feet to the fire type of thing.
You have to deal with reality. The machine either works or it doesn’t work. The materials are either running well or not. People are either being safe, making reasonable quality and getting product out the door efficiently or we’re not.
You’re held accountable to reality. Because if you start living in your head and in meeting rooms and in theory, and all the tendencies that make us feel good, it’s very easy to start to forget reality and start to live in an abstract sense. So I think it forces us to, especially in our business, because much of what we run every week has never been run before by us. And it hasn’t had all the R&D, the prototypes, the alpha testing, the beta testing, the countless studies before we go into production, so we have to be extremely capable and flexible and dynamic and that forces us to be reality-based which is core to appreciative inquiry.
Joel: So here’s a good example of that, what we found is that, in our industry, if you’re shipping at 70% on time, you’re in the A class. You’re top seed. So we’ve completely dropped this whole notion of “Let’s go from 95% to 99%” because living in reality, we have come to fundamentally realize and appreciate that our customers could care less. They want to be satisfied and they want to be happy.
And often, they might ship in components late or artwork might be needed to be re-done. And they’re quite happy to have their shipment two weeks after they initially wanted it. Now, previously, we would’ve said, “Oh my gosh, it’s two weeks late” and focus on that. That’s living in our head.
Now, we’re saying to our customer, “Are you okay having it two weeks late or a month late and it will be done the way you want it?” And they’re absolutely fine with that. So we’ve simply dropped the metric and really looked at what’s more important which is customer satisfaction.
We have very happy customers. And we don’t have a tremendous amount of time being spent by management focusing on a metric which is, quite frankly, irrelevant. The real relevant metric is satisfied customers who want to do that all over again with us.
Josh: So we’re almost out of time. I have one more thing I want to talk with you guys about which is, okay, I like this idea of appreciative inquiry and if someone who’s listening and they want to put it in their company, what would you recommend they do first?
Peter: I would recommend they google appreciative inquiry, read some books and David Cooperrider. If they’re local, get in touch with Champlain College who has a whole school on appreciative inquiry. And–
Josh: By the way, local is Burlington, Vermont.
Peter: Yes. Local is Burlington, Vermont.
And study up on it. It may not be for you or it may be. There’s plenty of information on it. And I think people need to appreciate appreciative inquiry before they judge and make a decision as to whether to do it.
Josh: Okay. So I’ve done some research. I appreciate it. What’s my first step?
Peter: Start living it. If you’re the CEO, start living it because you have to live it if you want your people to also live it. And so, you have to lead and be appreciative and people will, I think, really find that it’s appreciated by them and they will start to do it as well so I would say live it is the first step.
Josh: That’s great advice.
And I just want to add one thing to that which is it takes time, folks. If you decide to start going down the road of appreciative inquiry, you likely won’t get any results for maybe a year or two. It’s not something that’s fast but it does happen. And you’ll see little pieces quickly but not the big stuff.
Peter: We didn’t roll anything out as a program and we were very careful to make sure people didn’t dismiss it or understand it as what we’re only going to be positive and nice to each other, only talk about the good things in the business while there are issues. We started to just use the techniques and philosophies to dig into the issues but not from a scarcity standpoint, from an abundance standpoint, from a humanistic standpoint.
So, okay, we do need to remain a viable business and do the right things in the business. However, as we go about them, we’re going to really shift to an opposite orientation as opposed to, “It doesn’t mean that we ignore the issues in the business or opportunities in the business.”
Unfortunately, we are out of time. So you’re a really interesting company, how would people find you?
Joel: Twincraft.com. We’re on the web, on the internet. In Winooski, Vermont, we have two facilities. We make bar soap in one facility and we make liquids in another facility – liquids being lotions and all sorts of things.
Josh: So if you want more information about Twincraft, go to www.twincraft.com. You can find out lots of information about the company, about Peter or about Joel. And I think there are some videos up there about some of their belief systems. So, that would be a great place to go.
And I also have an offer for you. I have a one-hour free audio CD that I put together which is an audio course on how to take a successful business and make it personally and economically sustainable. There are five things you get to learn about focusing on.
To get it, it’s really easy. Take out your smartphone. If you’re driving, do not do this while you’re driving. But take out your smartphone and text the word SUSTAINABLE to 44222. You’re going to get a link. You click on the link, you’ll give me your name and your address and we mail out the thing. And if, by any chance, you have a new car that doesn’t have a CD player just let me know and we’ll send you the audio file.
This is Josh Patrick. You’ve been at The Sustainable Business. Thanks a lot of stopping by. I hope to see you back here really soon.
Narrator: You’ve been listening to The Sustainable Business podcast where we ask the question, “What would it take for your business to still be around 100 years from now?” If you like what you’ve heard and want more information, please contact Josh Patrick at 802‑846‑1264 ext 2, or visit us on our website at www.askjoshpatrick.com, or you can send Josh an e-mail at firstname.lastname@example.org.
Thanks for listening. We hope to see you at The Sustainable Business in the near future.