Ron and Ed welcome their first five-time Guest to the show, VeraSage Fellow and Professor at Xavier University in Cincinnati, Dr. Reginald Lee. The conversation surrounds his new book, Project Profitability: Ensuring Improvement Projects Achieve Maximum Cash ROI. (Full disclosure: Ed wrote the Foreword.) In Project Profitability, Reginald explains why opportunities are not realized and offers a framework that will guarantee your teams identify projects that align with your strategy, calculate cash savings appropriately, and realize these cash savings upon implementation. Before we get to the show notes…

A Bit More About Dr. Reginald Lee
Reginald Tomas Lee, PhD, is an executive advisor, professor, author, international speaker, and corporate trainer in the areas of cash profit/ROI, capacity management, project profitability, supply chain/operations, and effective metrics. He is the author of five books, including Project Profitability, Strategic Cost Transformation, and Lies, Damned Lies, and Cost Accounting. He has written over 40 articles and white papers, and was a feature writer for the Journal of Corporate Accounting and Finance. Reginald has advised many major companies, including as Bristol Myers Squibb, Dell, Disney, DuPont, Home Depot, and Toyota. Professionally, Reginald has worked for GM, IBM, EY, has been a professor of both engineering and business. He is currently a business analytics professor at Xavier University, advisor at Business Dynamics & Research, and is a senior fellow at the VeraSage Institute. Reginald has a PhD in mechanical engineering from the University of Dayton.

Below are the show notes. Use them to follow along while listening to the podcast:

As a consultant, Dr. Lee saw a big gap between where companies are and what they should be doing. As a business leader, you should be able to see yourself in the stories of the book. And that’s the motivation behind why it was written. https://www.amazon.com/Project-Profitability-Ensuring-Improvement-Projects/dp/1637421699
Dr. Lee sees benefit inflation in some cases. You’ve heard it before: “You have 1,500 employees making over $100k per year and if you do X then we will save you Y times 1,500 employees making our software pay for itself.”
The new book, Project Profitability, focuses on the EXECUTION of what business tools can enable. You should identify what the appropriate metrics are to determine if a business change makes sense. That sounds like common sense but is often overlooked.
Part of Project Profitability is intended to help explain what’s truly going on so that we as consultants don’t deceive (unknowingly) and customers don’t get deceived (unknowingly). We need to get to real value from a cash and operations perspective to have a valuable business conversation.
Profitability is a loaded word. Accounting profit and cash profit are two different things. Have you ever heard, “But in the long run, accounting profit and cash profit are equal”? Dr. Lee addresses this in segment two of the show today.
Let’s talk “measure vs metric” — Measurements can be compared to a standard (like gold and currency). Inch, degree, temperature are all known standards. Metrics need to be calculated and there are assumptions, along with subjectivity and error. Costs are a metric.
Give Dr. Lee one example in which the cash cost is lower when you produce more units. It’s a challenge no one has ever successfully met. Ready? Go.
This book was described as “awesome” by Dr. Lee today. That’s the sound of it being added to our listener’s book lists. “Profit Beyond Measure” by H. Thomas Johnson https://www.amazon.com/Profit-Beyond-Measure-Thomas-Johnson/dp/1439124620
“Usually the team is focused on project completion rather than value realization.” Does this resonate with you? It’s straight from Project Profitability https://www.amazon.com/Project-Profitability-Ensuring-Improvement-Projects/dp/1637421699
Dr. Lee focuses on 3 project types in Project Profitability: informational, instructional, and implementation https://www.amazon.com/Project-Profitability-Ensuring-Improvement-Projects/dp/1637421699
What’s the profitability of iTunes? “We have no idea” was Tim Cook’s answer - UNDER OATH - during the Epic trial.
“If we are managing our business on this abstract idea it’s going to sub-optimize the decisions we make as leaders.” —Dr. Reginald Lee
A big THANK YOU to Dr. Reginald Lee for joining us today. Pick up his new book, Project Profitability, and change the way you think. https://www.amazon.com/Project-Profitability-Ensuring-Improvement-Projects/dp/1637421699

Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

This week was bonus episode 380 - “Free-riding with Reginald” — Here are some of the links discussed: