GA 606 | Fixing What Bugs You with Nick Klein

So last year, I forget how many we made, but we decided to start tracking hours. And last year we ended up saving a thousand hours of time spent just by looking at our processes and saying, how do we make them better? We had some really early wins that were. Some of them were pretty big.

Today I'm excited to welcome Nick Klein to the show. Now, Nick, as you'll hear, works in the banking industry, which is a really cool way to apply Lean. And so what we do on the show today is sort of talk about their journey with. With lean and continuous improvement. They're newer to the journey, and. And so I was very curious, like, on how they got started, you know, did. I asked him, you know, did. Did you find lean or did lean find you? That sort of thing? And then we just kind of just dive into, like, what they're doing and how they're applying continuous improvement in their industry. Talk a lot about the people side of things, like how their people are, Are they buying in? Is there any struggles on that end of it? And then. And then we even get into improvements that they've made. So it's a really fun episode. I think you're going to. To enjoy this one. I know I did. So show notes can be found over@gembapodcast.com this is episode 606 again, gembapodcast.com and look for episode 606. Okay, enough for me. Let's get to the show. Nick, welcome to the show. How's it going?

Hey, it's going great, Ron. Really excited to be here.

Yeah, excited to have you. Where are you calling in from?

So I am calling from a town in south central Pennsylvania that's pronounced Ephrata. Ephrata. And the running joke here is anybody that's not from here will call it Ephrata. So typically we correct people. It's Ephrata.

Oh, got it, got it. All right.

Yeah.

So Penn State, Pitt. Like, where's your alliance?

Yeah. So I'm a Penn State grad. We're about two hours southeast of Penn State and.

Okay.

Yeah.

Get to go to some games still.

I actually have not been to a game since I graduated.

Oh, wow. Okay.

I know. It's been too long.

Yeah. Well, you got a good team this year. I'm a Buckeye Vaddie. May night that.

Oh, are you really?

Oh, yeah. I grew up in Ohio, so, yeah, I've been.

I won't hold it against you.

Yeah, I know. My mom always says I live in Texas now. Have we been here for 20 some years? You Know, but my mom says you can take the boy out of Ohio, but you can't take Ohio out of.

The boy, you know? Yeah, I get it.

Yeah, yeah, yeah. So good stuff, man. All right. Well, hey, man, I'm excited to have you on the show. As you know, we like to get things going with our guest sharing a quote. So what do you got?

So my quote is a quote that would be no surprise to anybody practicing lean. A bad system will beat a good person every time.

By Deming, what's that mean to you?

So I just think about over time, the people that have, you know, either vented to me about, you know, not things, not working out at a job or even looking at my own team and saying, you know, are we setting people up to fail? And if, you know, if. If somebody left an organization and we replaced them with the best person that anyone's ever worked with, if they're not given the tools and the system to succeed, it doesn't matter, they're going to struggle.

Yeah, man, for sure. Well, Dr. Deming, he had some wisdom, didn't he? God.

Oh, man, he's. He's something.

Yeah. Yep. All right, well, hey, tell us a little bit about yourself, Nick. Tell us about your background and what you're up to these days and maybe how you first got involved in all this continuous improvement stuff.

So I'm a Penn State grad and started my role as a bank examiner for four years, cut my teeth into banking, and then had a chance to go to Lancaster, Pennsylvania, work for ENB Ephrata National Bank. And I've been here for 14 years. Started here in a quality control role in the loan area and was invited to be the chief risk officer here about five years ago now. And we've got a lot of good stuff going here. And we're $2.2 billion in assets. We have about 15 locations. We actually just purchased a small bank in Maryland, so that's been taking up a lot of our time. We're really excited about that. And I've been on this continuous improvement journey now for about probably two and a half, three years.

Well, how. I mean, curious. Like, in that industry, like, what. What brought you to continuous improvement? How'd you find it? Or did it find you or.

Yeah, I think it found me. So I'm a big podcaster and a guy I like to listen to. He had Paul Akers on his show, which, you know, he. Everybody knows Paul in the Lean World, and he was just really excited to talk about Lee Paul. Yeah. Right. So you Know, I actually remember this podcast extraordinarily well. I was in my living room working out as I'm listening to this guy talk. And, you know, he talked about this invention that he made where he travels so much and he likes to bring his guitar on trips, and he didn't like having a suitcase and a guitar, so he made a guitar case where he could actually pack a couple days worth of clothes. And I'm like, you know what? This guy's onto something. This is really cool. And he's so excited about it that I need to. I need to give this a shot. I need to start digging into this a little bit more.

Paul is excited about life.

Yes. Yeah. Yes.

Yeah. It's been a while since I've connected with Paul. I need to reach out to him and say hello. Yeah. We've actually got to visit FastCap a few times and. Okay, we shot several, we call them Gamba Academy Live episodes where we. We go in and. And, you know, see companies who are practicing Lean and whatnot. And. Yeah, Paul's. Paul's fantastic.

So. Oh, yeah. Oh, yeah.

So, all right, well, tell us a little bit about your journey there at your. Your, Your organization. And so you kind of, you know, drank the Kool Aid, for lack of a better phrase, and did. Were you the one that sort of got it going there or.

Yes.

How did it happen there?

Yeah, and I would say we're still very early in our lean journey here at enb, but, you know, I, I quickly picked up on it. You know, I read Paul Aaker's one book and then that led to a host of other books and just started to see and ask, you know, what can we do here to start that. That lean continuous improvement journey? And we've really been working on it within our enterprise risk management team now probably for a solid two years now. And it's continued to evolve, you know, obviously. But, you know, the. The thing that we started with was me just talking about the eight wastes and helping my team understand, you know, how do we go into every process with a mindset of, you know, why do we do what we do? How, how can we do it better? How can we do it differently? And, you know, at the end of the day, what are we doing it for? And, you know, one of the biggest challenges in the banking industry is it's so right, it's so regulatory heavy. There's so many rules, so many laws that a lot of the things we do, it's. It's hard to think and segregate what do we have to do? Because the regulators say we have to do it, and then what. How. How can we do it so that there's limited impact on the customer and we're still somehow adding value to that customer? That has been probably the biggest challenge with Lean here. Not the only one, but definitely a big one. But for our team, it's really just been looking at our processes and saying, you know, what can we cut? What? What. Why do we do the things that we do? How can we do them better? And really starting to understand the different steps that are involved. So we. We've been having some fun with it. What we started to do last year is we just started keeping a list of all of the improvements that we've made. So last year, I forget how many we made, but we decided to start tracking hours, and last year, we ended up saving a thousand hours of time spent just by looking at our processes and saying, you know, how do we make them better? Yeah, we had some really early wins that were. Some of them were pretty big. Can you get.

I know it's probably like, you tell me, but, you know, he didn't have to, you know.

Yeah, right.

Everything's super in your industry or whatever, but, like, an example maybe like, of an improvement or two that you.

Oh, sure.

You guys made.

Yeah. You know, the one that I was thinking about yesterday is we had an incident occur late. I think it was late last year, where something had just gotten dropped. Right. Somebody had left, and in the scramble just to keep things moving, something wasn't getting done. There was an issue, and somebody on my team went out and just started looking at the process. You know, what happened? Why did it happen? And as they looked at it, it wasn't just, let's put. Let's figure out what caused this and move on. It's, hey, why do you do this the way that you do it? And it was a very manual process. You got a lot of copying and pasting, a lot of emails to customers, and I don't remember how the question was asked, but they figured out that there's a report that you can pull that will literally save you an hour every single day.

Wow.

So that was a massive improvement just by sitting with a different department with a different mindset. And so that was one of the bigger wins. And then, you know, we had another one where, you know, we have to collect data for the government. And once upon a time, we were collecting data for loans that we didn't collect, need to collect data for, and somebody finally, you know, Figured out the process well enough to say, why do we collect this data if we're not actually submitting it or we don't need to submit it to the government? So that was another one where that was a really big win.

I'm curious, so you're newer on the journey, like, as far as, like getting all. How many team members are we talking about here as far as involved in your, in your initiative, your program?

Yeah. So our total organization is about 325.

Okay.

Our, erm team is about 15.

And so it's all 325 sort of on the continuous improvement.

So right now we're really focused on the ERM side. Okay. And what's, what's cool is that other departments are starting to notice and so we've had opportunities to share and that's, you know, one of the biggest things that's motivated me to keep, keep going and keep talking about it is I've got, I've gotten the chance to meet with quite a few teams.

Yeah.

And what's really cool is our team has such a reach with other departments. So, you know, audit compliance.

Yeah.

It all, it all impacts every different department at the bank. And so we can share our mindset and our concepts. And so people are like, hey, you know, there's actually something to this. We want to learn more. We want to start doing what you're doing.

Yeah, I, I remember, I can't remember what company it was, but I'm talking about sort of like a month in close, you know, of, of the books, you know, sort of. And, and how this company basically, they don't even do a close anymore. It's. Because it's basically done, you know, like, because they've, they've, they've streamlined all their processes and they've, they've gotten everything. So I mean, there's a little bit that they do, but it's not like it used to be where it would just like all hands on deck sort of thing. And, and just, you know, that's the beauty of lean and continuous improvement is it doesn't know a boundary. Right. The only boundary is us in our, in our minds and our limiting in beliefs. Right. And so, yeah, it's. Processes are processes and people are people. Right. And yeah, so that's, that's fantastic. Was everybody sort of bought in from the beginning? Did you have any sort of resistance or. I know it's a small team, so you don't want to talk. Oh, yes. Was terrible.

No, I, you know, it's interesting because you have quite a few guests on your podcast that will talk about that person or those couple people that really fight you. Right. I know Adam Lawrence was on your show and he talked about a guy who, he eventually came around, but it took some time. I, I did not have that experience here. It was more of, I think for me it was okay. Is this just one of those fads that Nick's going to talk about for three months and then something else is going to come around and then, yeah, we're not going to talk about lean anymore. But I think after about six to nine months, people started to realize, no, he's serious about this. This isn't going away. So I've had different levels of buy in, but I've never had anybody truly disengaged.

Yeah.

And so that's been exciting is you start to see the snowball effect. Right. You have a couple people starting to make improvements and then you start to hear the lingo and that's, that's when I started to really, you know, go home with my fist in the air saying, yeah, we're moving, we're doing good work here. So having people that are willing to engage our team, you know, I have four direct reports, 15 people total on my team. But to see those, those four start to take more ownership of it and make it their own and be able to communicate it just as well, if not better than I can. Mm.

Do you call it lean internally or continuous improvement? Do you have a name for it?

No, we call it lean.

Okay.

Yeah. And people know it. Like, I get so excited about it. People know me now as the lean guy at Ian. Okay. Like, I had a, I had an intern last summer in 2024, and I saw him last night and that was the first, first word he mentioned is how, how's lean going?

Oh, nice. Yeah, nice. That's fantastic. Well, so talk. I mean, I'm sure it hasn't been easy always and very surprised if it's been easy. What are some of the challenges that you guys are facing in particular, because, you know, the banking industry is, is a unique application of, of, of Lean.

That. So that is exactly the issue is I don't have a lot of history to go off of. You know, I've been reading so many, so many books, talking to people that spent their life in manufacturing. Right. A lot of industrial engineers have really perfected lean.

Right.

There's not a lot of resources in banking. It's healthcare, it's manufacturing, and to a lesser extent, it's technology. So I found one Book that was a little hard to obtain, that was written by a bank in Australia and a bank in New York that talked about how they did lean. The challenge though is those are much larger institutions. Whereas, you know, I have not met another banker in, in the community banking space. Smaller banks that have, that have done this. So it has been really okay. Manufacturing, healthcare, how do I apply their principles to banking? And so that's, I feel for me, that's why it's been taking me a while to just kind of slowly introduce this and let it build because it's, it's, it's different. Right? There's not a production line per se. There are certainly transactions that occur on a daily basis. There's a loan process, a deposit opening process, but it's not like we have an actual physical product that we provide to a customer.

Yeah, yeah, I was actually, I just did a quick search on Gemba Academy's website because I was curious, what do we have on banking? Yeah, a little bit we could do more, but yeah, there was. In fact I found A we in 2016, we visited the state of Connecticut and they're basically, it was a statewide sort of lean showcase. And one of the groups that we met with was this was their department of banking. And, and yeah, yeah, they, they, they talked about, you know, see what it says there, how lean thinking is helping to eliminate duplicate processes through their organization. So yeah, so I'll, I'll point you to that and you can check that out. But. And I actually did a podcast and uh, it was. Oh gosh, where was it? Yeah, just lost it, but with another, another banking.

Oh, I'll just go look through your.

Yeah, yeah, search it up banking on our website and you can find it there.

So yeah, you know, it's interesting because we, I did have two individuals on my team, I think last fall do a, a lean workshop in your county, just the next county over. And they told me that, you know, when they got there and they introduced themselves, they're like, what are you doing here? Yeah, we've never had anybody from the banking industry here before, but it was a good experience for them.

Yeah, that's great. That's great. Well, it's a book waiting to be written. You know, you can, you could write it.

Hey, if we keep, keep moving forward, that would be awesome. Would love.

Yeah, yeah, yeah. I know you talked a little bit about some of your improvements, but has been any other sort of like big breakthrough or a big sort of aha for you?

So I got really excited this year because we've been going through a pretty robust leadership training process with a consultant up in Massachusetts who's been coming over quite a bit, and the focus has been systems thinking. Didn't realize it quite at the beginning, but as time went on and we started meeting more and he starts throwing out words like Hoshin and Kaizen, I'm like, wait a second. This is all connected. Yeah. So, you know, I meet with him every couple weeks and he's been a huge resource to help me, you know, understand how, how lean and systems thinking is all really one, one big thing. And it's allowed me to have more conversations with our leadership team, you know, whether it's our CEO or COO to say, hey, you know, how do we, how do we tie everything in and really help our organization not just think in systems, but think lean.

What about just over the next, I don't know, year or two, do you have ocean kind of. Are you looking at some sort of like long term goals and things that you're trying to accomplish?

Yeah. So we actually did introduce Hoshin a couple of years ago. We call it something different and we struggled to get it off the ground, but we are starting to reintroduce it now that we've gotten more of the systems thinking ingrained in our team. So I just had a conversation with my team a couple days ago talking about that concept and how it all ties back to our overarching corporate strategy. So I'm excited to continue to work through that and really execute it on our team at a high level in hopes that everybody else is going to say, okay, this makes sense now. You know, Nick's team can communicate it in a way that's really effective and we see how, how good of a job they're doing. Let's follow suit.

Stealing from my buddy Mark Graben, what's been. Do you have like a favorite mistake that you've made or something that you've, you've done wrong, that you, that you really learn from and you're like, ah. And that stunk. That happened. But we're better off because of it.

Yeah, I think so. This, this might be a good example. So, you know, one of the issues we struggle with, with continuous improvement is, you know, we want to, we want to add value to the customer and we want to eliminate as much waste as possible. But we still have to remember that we have to follow the law. So, you know, so, you know, I'll completely own up to it. And hopefully no regulators are listening to this. Yeah. But, um, you Know, we, we had an, or, we had an individual, you know, self select out of the organization and we decided, you know, let's, let's just evaluate the whole system and everything that's going on. And we met with the team and they were doing something and we're asking, why are we doing this? Why are we doing this? Nobody can tell me why we're doing it. It doesn't appear that there's any regulatory reason for doing it. And then we hire a replacement a couple months later and they're like, why aren't you doing that? Well, because it wasn't, nobody was looking at it. It's not providing any value. Oh, well, you know, according to this reg, we are required to do it. So we had to put that one back. So pretty low stakes, you know, it wasn't anything that's going to, you know, we'd get fined for or.

Right, right.

You know, it would be a, hey, you know, don't do that again kind of thing. But it was a good reminder to say, you know what, in our quest for continuous improvement, we need to make sure we're going at a slow enough pace that we don't put ourselves in any regulatory hot water.

Right. Yeah. I mean, obviously within Lean, we talk about, you know, value added, non value added, but then sometimes you talk about essential non value added. Like it doesn't technically add value to the customer, but. But we got to do it. Right?

Right.

But I always, sometimes I'll even push back on, you know, even here if we're doing things that you feel like, gosh, why are we doing this? And, but the reality is, in your industry in particular, you know, you're dealing with a lot of money. Right.

And a lot of money.

These guidelines, these regulations, even though they might be a drag, there probably is a very good reason. Right. That you're doing it. Right. And so, so even if you're sort of grumbling about it, if you really step back and say, imagine you were in charge, you know, the whole thing, like, and would you, would you do away with this? And so I don't. It's tough when we look at these essential non value added tasks.

That I will say, though, Ron, one of the things that I've been challenging my team on is we have to do this regulatorily. We're required by law to do it, but that doesn't mean we have to do it the way that another bank is doing it. So let's understand what is the essence of the rule. What are they really trying to get At. And can we do it in a way that is compliant but is actually even better for the customer?

Right.

Than how other banks do it? You know, we, can, we, can we write something that's a little bit easier to read? Can we write something that is more clear, you know, something that we disclose to the customer that might be two pages? Does it have to be two pages?

Right.

Is it still compliant if it's a half a page, things like that.

Right, right. So maybe to wrap things up, let's say there's someone listening right now that's, that's in the banking or finance industry, something like that, and they're, they're curious about maybe getting started with, with lean, with continuous improvement, but they don't even know where to begin. Like, what advice do you have for that, for that person?

Biggest piece of advice is just start making improvements in your own role. You know, I'll go back to Paul, right. He says there's enough waste in your own life to last you 10 lifetimes.

Yeah.

So what you can do is just start looking at your own processes. You know, 5s, right. Look at your, look at your desk. Is it, is it a mess?

Start there, Shooter, you know.

Yeah. Oh, yeah. Like, you know, I look at these people that their desktops are filled with icons and it just, I just immediately have anxiety. Yeah. Clean that up, standardize and sort that and make it, you know, make it pretty, fix what bugs you and then go to the next thing.

Right.

And then as you look at, you know, I, I tell my team, even if it's something as simple as learning a keyboard shortcut, even if it's something is just, you know, refiling your, all of your folders. You're going to look at that and you're going to say, you know what? I don't click around so much anymore. This is great. Now all of a sudden I'm, I'm more relaxed. I've got more time to focus on the things that I want to focus on.

Yeah.

If you do that enough and you start talking about will pique people's interest.

Right, Right. Yeah. And error proofing. You know, I feel like especially everybody can benefit. Golly. In your, in your world, you know, like a mistake could be devastating. Right. That's true. So, yeah. Finding ways to just sort of poke. Okay. And just make it impossible to make a mistake. You know, those are, I would say, very beneficial things for folks.

Again, everybody. Well, that's right. I mean, we even talk about that, especially with our Frontline employees. Right. Our tellers Our branch staff is, you know, you have to make so many decisions every single day. Not only do you have to do customer transactions, but you have to catch the fraudsters that are showing up.

Yeah.

Trying to. Trying to rip us off and.

Right.

What are the things that we can put in place that'll prevent you from making a mistake?

Yeah.

And force, you know, allow you to use a little less brain power so that you can go home at night and not be exhausted.

Yeah, for sure. For sure. Fantastic.

Awesome.

Well, hey, man, this has been a lot of fun, Nick. I appreciate you coming. If folks wanted to connect with you, what's the best way.

LinkedIn is my social media of choice.

Okay.

So look me up at Nick Klein. I go by. I go by the title of Risk Nerd, Lean Nut. So there might be a couple of. Me just look for that one.

Okay. I like it. Well, we're gonna link it up on the show notes so everybody can go and connect with Nick and yeah, man, thanks for coming on and keep up the great work. And yeah, I'll be curious. Maybe have you back on in a year or something like that and we'll hear about all the improvements you made.

Happy to. Thank you, Ron.

All right. Okay, take care. Thanks for listening. Whether you've been on the continuous improvement journey for many years or perhaps you're just getting started, Gemba Academy is here to support you. And while we're best known for our more than 1500 lean and 6 Sigma teaching and virtual tour videos, we also have a team of experienced Lean and Six Sigma practitioners available for one on one coaching, as well as a variety of Lean and Six Sigma certification options. To learn more and to schedule a demo, head on over to gembaacademy.com.