Travis Klassen 0:00
Travis,

welcome to the value Creators Podcast, the exclusive Insider PodCast for the Klassen group. This is where we talk about how we create value, how we work lead and grow together and real stories from across the Klassen tree. I'm your host, Travis Klassen, whether you're in a machine at a desk or on the move, we're glad to have you on the Klassen crew.

In our last episode, we introduced the idea of value creation, why it matters and how it shows up at Klassen. But strategy alone doesn't build great companies. What really shapes a business is how people behave day in and day out. It's about how we treat each other, how we build trust, how we take ownership, grow through feedback, and show up for the team when it counts. This four part series is about the principles that guide those behaviors, the ones that hold us together when things are moving fast, and the ones that help us build something that lasts. Today, I'm sitting down with our CEO, John Mark Ferguson, as we take a deeper look into what we call the Klassen code. Okay, we continue the conversation on our values, the foundation of the business. It's, it's been an interesting one so far. We'll, we're probably we are in part three of this. This

Unknown Speaker 1:17
series still in the van down by the river, still

Travis Klassen 1:20
in the van down by the river. It's getting a little warm in here, but

John-Mark 1:26
I think I'm sweating yet, but I feel like I may sweat soon.

Travis Klassen 1:31
So good. I mean, we are going to start getting into the hard stuff, so maybe, maybe this gets gets there. Our third value is around continuous improvement. So I'll read it. We can discuss it. We improve. No thumb sucking, take action, do the hard thing and have the hard conversation. Show up in person, we gather data, analyze, design, implement, evaluate and repeat. We pursue growth, spot opportunities and take initiative. Progress doesn't happen by accident. It's a result of continuous learning and looping through the improvement process. So we improve no thumb sucking. Talk about what no thumb sucking means?

John-Mark 2:11
Yeah, so thumb no thumb sucking comes from a gentleman named Charlie Munger. Charlie Munger was Warren Buffett's partner at Berkshire Hathaway for many, many years, and he had this whole thing that thumb sucking is just what you do, or when you know there's a problem and you don't do anything about it. And human beings are notorious for this. We just we let things fester. It's like not pulling out a sliver when you know you need to pull out a sliver, and it just gets worse and worse, but you don't want to deal with a momentary pain to deal with long term gain, right? So yeah, that's, that's where that came from. It wasn't something we created. It was pulled from Charlie Munger, who we we really like. So

Travis Klassen 3:00
we're asking people, I guess that goes right with one of those, those descriptives is, do the hard thing. Do the hard thing. Yeah. So I guess, I guess digging into this one, then one of the ones I just noticed just jump out at me is show up in person, and I know we've talked about going to the problem. So can you talk a bit more about how we've done that, or how we encourage our people to do that.

John-Mark 3:26
I think people living or sometimes existing in carpet land, as my wife calls it, management at the hospital, interesting. They're not very good at going to the problem either at the hospital, but we, for example, in the hospital, they have a problem, and management just sends orders down from on, from the top floor, down to the emergency department, which is on the ground floor. But Kim, who's my wife, who's in charge of the emergency department, is like, they don't even know what the heck's happening down here. We've we're like, on the 600th patient in the last 24 hours, and it's completely insane. And there's people stacked up in the hallways. Yeah, where are you going to put the 50 people in the hallways? You just said, we can't have people. Yeah, please come down and look and work collaborative, collaboratively down here with us. But don't just send orders from from the top right, right? So especially, especially within the when there's a problem somewhere in the business, we can have a lot of opinions, and I would say sometimes they they potentially could be right, but we don't actually know until we go and see the problem ourselves. So Right? Go physically to the problem, meet the people, see how we can come up with a creative solution together. It's just, is always a better way to be. It takes more effort, and that's why we don't do it right. And you can't get to everything all the time, so you have to triage the problem. But that's kind of go to the problem physically and see it and engage with the people who are experiencing the

Travis Klassen 4:53
problem. Yeah. I mean, in our in our world, I think carpet land, as you call it, is the same that when. I first joined and started working sort of on an admin side 25 years ago. Grandpa said, Grandpa Neil, the founder of our business, said, Okay, you can work in the office with grandma, but you need to keep wearing your boots, just in case you got to get out there and help at the time, I thought, That's ridiculous, like I'm going to be working in the office. I got my dirty boots now so, but I now I understand what he was saying. Is there's this idea that now you're inside, or in your in Kim's case, that these people are up above, and we've structured the business, and even the design of our organizational structure puts the support team and the management team below, because we need to be to the problem. We've asked. We've said, like, okay, in the business, the customer is is up top, all of the people are up top, and then the problems flow down, and we're there to catch them, and that's our responsibility.

John-Mark 5:54
And we have to fight a new idea up through the organization. Yeah, we have to fight gravity, yeah, so we like that as well. But yeah, no, I get go to the go to the place where the people are having the real problem.

Travis Klassen 6:05
Yeah, that's absolutely right. Okay, improve. We improve, once again, continuous improvement. That is something that we talk about all the time. But you know, maybe not, isn't as familiar a term to everybody who works here. So maybe elaborate

John-Mark 6:24
on that a little bit. The idea of continuous improvement is simply, can we get better? What can I do today to make the business a little bit better? If I had this tool, if we did this, a brilliant example was a driver in the Okanagan corridor when we were delivering fines or hammered material from Oroville in Washington, DC, up to Armstrong to a Drax, which is a pelleting facility. He we've tried different things, tamping, but we were always under what our target was, and he, he came up with this idea of double tapping the brakes, and we get the maximum load, and we're achieving, get about three Bdts per trailer on that run. Every time this this happens, it's credible, like that's in continuous improvement. We were doing it for a long time not getting those three extra Bdts on that trailer, and that's a huge improvement that brought that hall. It was in the red into the black, with that improvement he suggested, and then the team implemented it. So just that, we want to have that sort of thinking, get the feedback and try things

Travis Klassen 7:37
right. So there needs to be. We've talked about, like, the loop, or a feedback loop, like I said in the previous episode, spending some time with the with the teams that's driving teams this last week. You know, gathering their thoughts, for feedback, for improvement, is one part of it, and the second part is we need to follow through and say, Yeah, based on all the things you have shared, we are going to commit to executing these two ideas today, these next ideas, we'll put into some development. There needs to be and there is a consistent feedback loop. And when we don't actually loop back to tell people what we've done, the perception is nothing actually changed. So how have you seen us use feedback loops in conjunction with continuous improvement? And how have you how would you say we need to or have the opportunity to improve that?

John-Mark 8:38
Last week, I was up in Penticton, and I sat down with Ken who and Henry, the previous owner of superior Pete who sold it to us, and and Ken's the manager there now. And for example, we he was looking for financial feedback and costing on his products, and we were looking for feedback, and we've gone through and iterated, and now we're able to get him costs and able to get him financials right, and we're getting better at this information flows and with what people want to see to actually what are the drivers of the business. He needs to see the cost. He needs to see the volumes. He needs to see the prices in the system. And, yeah, that was just somewhere top of mind.

Travis Klassen 9:27
Yeah, that's really good. One came to mind for me was with in is, once again, in transport, they, they've continued to try different things. You know, I know that there's been a push to to paint the inside of the trailers. Oh, yeah. Say, was a great idea, yeah, who came up with that one?

John-Mark 9:48
I believe this is, I believe this is another Chris. I believe the Okanagan double tamp was also Chris, okay. And this is another engineer on the team. Yeah, this is, and I. Yeah, we Yeah, the painting, the trailers, we believe we get more and we're just reducing the friction on the wall, putting painting wear along, and so we're making the surface smoother. And we think we can get more compression, just more units in every truck. So it doesn't, the friction doesn't, the shavings actually go deeper into the trailer, we can get more on in essence, yeah, so the proof will be in the pudding. We're still waiting for the analysis, but we've painted a trailer, and we're trying, trying something right, like an example that came to mind as we're talking here was when we first started the merit bagging facility. We had subcontracted some of the hauling, and we had the great idea that we're going to pay this gentleman by the trailer load. And what does one do if they're only paid by the trailer load? Is that they do have loads. Because they get paid, they can make more money. There's running back and forth. And when we finally, kind of were like, Hey, this isn't like, oh, you open the back and you're it's half filled. It doesn't work so well. And it took us some time, but then we slowly progressed, and now we have a way better way to optimize that whole thing and actually get a lot more on the trailers. And but it took us months, if not years, to improve these things. And you kind of every cycle, you measure it and get a little better. How can we do this better? And, and it's really cool. So yeah,

Travis Klassen 11:19
and not ideal. Not every idea does work. I mean, you've talked about tapping the brakes, you've talked about tamping, we've talked about now painting the inside. We're just trying stuff, and we're not afraid to laugh at the idea later and be like it didn't work next. It's

John-Mark 11:32
actually, I think it's really exciting to try an idea and it doesn't work out because then you tried it and it doesn't just loop around in your brain, right? So even this podcast, I would say, was looping around, and we're just doing it, and we're gonna see how it goes, and we're hoping that it goes and helps engage with a lot more people in the company and makes your day a little bit more exciting and interesting. Sure,

Travis Klassen 11:57
you actually mentioned this podcast is a result as a feedback loop. Also came from Ken in a safety audit. I asked him, What would be a better way to communicate? He said, well, most of the people are driving, you know, or working in ways that they could be

John-Mark 12:13
listening. We've sent them texts and emails, asked them to read. Yeah, they can't

Travis Klassen 12:17
read while we're driving, but almost everybody's listening to music or their own podcasts. And every once in a while, if you throw on this 15 minute one and learn something about Klassen, I mean, that's just another wonderful way to communicate, we hope. And again, I like to just acknowledge that somebody came up with an idea and it festered around, or it sort of mold here in the back of our heads, and here we go. So and that that comes right in this we improve, we talk about, we pursue growth, spot opportunities, and take initiative. And a lot of times, you take initiative and you just, you try it. I think somebody said it'd be better to fail at 100 things and succeed at one than to succeed at one or never try the thing. Right? You don't, you don't know?

John-Mark 13:01
Yeah, the biggest thing is never to try, right? That's it, like, we'll never know even, even Klassen matters was actually from Sean. Oh, really. Sean was like, hey, at lead core, we had this new newsletter and we shared information. I was like, yes, that's brilliant. Why don't share? And he's like, why don't we do that here? Yeah, thank you, Sean, for that wonderful suggestion. So thanks for the Thanks for the good feedback. This team

Travis Klassen 13:23
is pretty, pretty cool. Yeah, it's really cool. Lots of things coming up, coming at us here today. Yeah, that's it for this episode of the value Creators Podcast. If this is your first time tuning in, make sure to check out previous episodes. Each one offers a unique look at how we create value together, one conversation at a time. On behalf of the support team. I'm Travis Klassen, thanks for listening. We'll talk soon. You.