April 28, 2025
Transforming Businesses without Sacrificing Employee Satisfaction: Interview with Service Physics Co-Founders, Brian Reece and Steve Crowley
Episode 137: What if the key to transforming your business lies not in adding more resources, but in simply understanding how your employees move through their workspace? In this eye-opening conversation with Service Physics co-founders Brian Reece and Steve Crowley, we uncover the hidden costs of inefficient processes that might be quietly draining your profits and customer satisfaction.
Website: www.servicephysics.com
Service Physics app download: Apple Store
Service Physics app download: Android
Brian Reece: LinkedIn
Steve Crowley: LinkedIn
Brian and Steve's journey began at Starbucks during the financial crisis, where they witnessed firsthand how applying lean principles transformed a struggling company into a global powerhouse. After further refining their approach at Anheuser-Busch, they founded Service Physics with a mission to make these powerful techniques accessible to businesses of all sizes. Their unique consulting approach—which they playfully describe as "doing consulting wrong"—focuses on being physically present in the workspace, collecting real data, and experimenting with improvements rather than simply delivering recommendations.
One of their most powerful revelations? The true cost of motion. Through simple techniques like "spaghetti diagrams" that track worker movements, they demonstrate how activities that look like work but add no value (like walking) can represent 10% of labor costs—translating to millions in opportunity costs for mid-sized companies. Even more striking is their finding that most service businesses already have sufficient equipment capacity; they're simply not using it efficiently.
What sets Service Physics apart is their focus on driving top-line growth rather than merely cutting costs. By helping businesses understand leading indicators (like customer queue length or transaction time) rather than just lagging metrics (like sales), they enable proactive improvements that capture previously unmet customer demand. Their entrepreneurial journey offers valuable lessons in bootstrapping a business, building systems that don't rely solely on founders, and creating clarity through effective communication—including innovative approaches like using AI to transform quarterly updates into podcasts.
Ready to discover how much hidden capacity your business already has? Download the Service Physics app, visit servicephysics.com, or catch them at upcoming industry events to learn how making work more joyful for employees creates better customer experiences and stronger financial results.
Please connect with me on:
1. Instagram: stephen.mclain
2. Twitter: smclainiii
3. Facebook: stephenmclainconsultant
4. LinkedIn: stephenjmclainiii
For more resources, please visit Finance Leader Academy: financeleaderacademy.com.
Chapters
00:00 - Introduction to Service Physics
11:40 - Origins at Starbucks and Anheuser-Busch
15:35 - Consulting Done Differently
23:30 - Applying Lean Principles in Service
29:50 - Startup Journey and Leadership Focus
37:10 - Working with Finance Teams
43:00 - Key Takeaways and Future Plans
Transcript
WEBVTT
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This week, I am sharing an interview with the co founders of service physics, Brian Reese and Steve Crowley.
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Service physics is dedicated to helping corporate leaders and business owners in transforming their companies without sacrificing employee satisfaction, they show you, not only with data, but visible evidence that your processes may be costing you. Brian and Steve also share valuable startup business advice in how they utilize their finance teams to make better decisions for their own business. Please enjoy the episode. Welcome to the finance leader podcast where leadership is bigger than the numbers. I am your host. Stephen McLain, this is the podcast for developing leaders in finance and accounting. Please consider following me on Twitter, Facebook, Instagram and LinkedIn. My usernames and the links are in this episode's show notes. Thank you. This is episode number 137, now let's get right to the discussion with Brian and Steve. Please enjoy both Brian and Steve had previously led teams at Starbucks and in Heiser bush with a focus of applying lean principles to foster transformation with the end goal of better customer experiences.
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Brian and Steve, thank you for joining me today. We want to hear more about you, so please tell us about yourself. Brian, you can start. Yeah,
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thanks a lot.
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Stephen, great to be on the podcast today. Thanks for having us. Yeah, as you said, co founder and principal consultant with service physics here, along with Steve, we've been doing this together as service physics for about six years. But actually, you know, our relationship goes back over 10 years ago to Starbucks. As you mentioned, I'm based in upstate New York. I've got two daughters, six and four. Just love being in the outdoors and consulting with service businesses.
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Awesome. Steve,
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yeah. Stephen, thanks for having us on the podcast. Really great to be here. Steve Crowley, based in Des Moines, Iowa, though I've lived all over the country over the course of this journey.
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Other co founder service physics principal consultant, aka Brian, better half and chief Storyteller here in the company.
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I also am here with my family. I have two boys to counter.
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Brian's two girls. They're 10 and three, and they keep me busy. All
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right, awesome.
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We definitely want to hear more about service physics, and please highlight the service that you provide and then how it benefits your customers.
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Yeah, I might start by telling a little bit of a story about how we ended up here. And so Brian and I met working at Starbucks, Coffee Company, around the time of the great financial crisis, when Starbucks was in a bit of hot water that, you know, the stock price was in a position where, had there been any liquidity in the market, it certainly would have been acquired, and during that time, had been experimenting with lean manufacturing principles in the roasting plants at the company.
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And when the economy started to shift and operations started to feel the pressure, the sort of like chief strategist of the company moved that function and all those learnings from the roasting facility into operations, and that's where Brian and I were exposed to it for the first time, really taking a good hard look at the way that people were doing the work to brew the coffee, to serve the customers, identifying where waste was, and then designing better ways, which we eventually cobbled together into a full service delivery system that helped transform that company out of a time of great peril into a time of great fortune. And so at that point in Starbucks history, they were in the single digit 1000s, and today, Star sand at about 40,000 locations across the globe. So that would have been possible without that transformation having been exposed to that, Brian and I found ourselves working together again, building a hospitality business from the ground up. So over five years, we built a business with Anheuser Busch in Bev of about 550 bars and restaurants across the globe, and really got our first experience in a more of a consulting role. And during that time, had come on to this idea that Lean thinking and the principles and techniques associated with it were pretty broad and prevented a lot of organizations from applying them fully and transforming and we came up with this concept of a minimum effective dose of Lean thinking that you could give to a restaurant operator and in a very short period of time watch them start to solve real problems and drive that business forward. It was during that time together, Brian and I were on the road with a training that we had developed called service physics, which was about a 90 minute workshop training that we would conduct in like kitchens or back offices of restaurants that. Culminated with running experiments in the restaurant during peak periods, where to bring that team through, collecting some data, forming some hypothesis about how we can make things better, taking a few loops through the Plan, Do, Check, Act cycle, and then sort of watching their blinders come off. And during one of these experiences, actually, on the side of a mountain in a national park in Patagonia, Argentina, came to the conclusion that this was too good to be reserved for the biggest beer company in the galaxy and the biggest Coffee Company in the galaxy when 90 plus percent of the industry is small and medium sized business.
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Mom and pops are really suffering and having challenges making that equation between low margins, low wages and poor customer experiences look differently. And so we decided to flip the script on that by going back to New York, starting a company that was six years ago, and now we are supporting a lot of companies who people interact with every day, some fortune 500 players in both healthcare and hospitality.
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We've got a team of about 20 folks working in some capacity around the country and some other parts of the world, and we're starting to see the seeds of transformation for the industry take hold. Oh,
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very nice. So I'm very curious, that 90 minute workshop, when you were with an Heiser bullish, is that correct?
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That's correct. So going from that 90 minute workshop you did, what do you do in service physics? How did you expand that? What are you offering?
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Now, we don't like to use the C word consulting, because working in those big companies, we had exposure to a lot of consulting firms that we're just not joyful to work with. We like to often say that we do consulting wrong. Okay, we are not dropping PowerPoint decks and walking away and wishing you luck with the recommendations that we've put into place, but we put a great emphasis on going to sea and so we grew up in, you know, sort of the early days of COVID. Our we don't have a corporate office that people go to work to every day. Our corporate office is our clients, what we call gembas, or the place where the actual work happens. We put a lot of emphasis on going there to collect data and talk to people, to identify the real problems, and then to experiment our way into better ways standardize that work and then help the team think through how they might package the solutions to the problems that they have, and then scale them across, you know, hundreds, if not, 1000s of locations. Oh,
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very nice. Tell me a little bit more about that experimentation. What actually are you doing?
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We're out in those restaurants, collecting data, trying to figure out ways to create a better customer experience, maybe moving faster through the line, having a higher quality product or a better personal interaction with with one of the team members, really thinking through how that customer experience can be improved, and then working our way backward into the operation, to think about the work the employees have to do to create that experience right, making that work as easy, as joyful, as friction free as possible. So we've got employees doing easy, joyful work, creating great customer experiences, right? And you put those two things together, happy people, happy customers, and that always flows down through the to the bottom line of the business. Very nice.
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You had mentioned restaurants. Is that your typical customer, or are you also doing other type of hospitality businesses?
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What we've come to understand is that these techniques, which we, you know, sort of borrowed from manufacturing, apply to almost any industry that has customers, and even those that don't. At the end of the day, everybody just doing something in service of somebody else. And when you think about the way that work happens using people's hands, heads and hearts, and you apply some of these principles, it's not always a one to one translation, but the principles still hold. I think when we when we started out, we saw ourselves as you know, squarely in the restaurant industry, it wasn't long, maybe about a year or year and a few months into this journey, when we were contacted by a fortune 500 healthcare company. I didn't take the call seriously at all. In fact, I think I took it from the stoop of my apartment in Queens and a hooded sweatshirt with a cup of coffee in my hand, and when asked if we could help, I said, Well, we don't do healthcare, but I'm happy to talk to you.
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We've now been working with that company for, you know, little over four years. Oh, nice helping, helping them lead. What I what I think just won't be a transformation of that health care company, but will be a transformation of health care more holistically, with some of the things that we're learning and working to publish in operations journals.
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Nice, very nice.
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Do you particularly work with the operations side, or are you also working with the CFOs on the finance side?
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The CFOs always want to know what we're going to do for them, right? You know, I talked about making the work more joyful. People creating better customer experiences. And then, you know, you talked a little bit about what kind of experimenting we do. And so we know, you know, in order for any of these solutions to see the light of day, there has to be a an ROI associated with the work.
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So a lot of what we do, and a lot of the data that we collect is to demonstrate not just the improved customer experience, not just the improved workflows, but also how that's going to trickle down to the bottom line for the business. And actually, often we're focused on top line improvement, which I think is pretty unique for consultants. A lot of consultants go after cost cutting and are really focused on, you know, things like reducing labor costs or cost of goods, we actually have found a niche for ourselves and really thinking through tactical ways that the operation can drive top line. And so it's not about marketing necessarily. It's about taking advantage of the customer demand that you have already. And so when we've interacted with CFOs, we usually get kind of this reaction of, oh, you're not going to show me how I'm going to cut labor or cut cost of goods. You're actually going to show me how I can make more money. And that has has really been a game changer for all very good, especially when talking to CFOs.
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Oh, absolutely.
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You guys talked about particularly on your offerings, you want to go and use those Lean principles. Now, how do you use those Lean principles to help organizations achieve that transformation?
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The one thing it always comes back to is problem solving, okay, and time and time again, and once you become aware of it, becomes infuriating how often we start solutioning without understanding what problem we were trying to solve in the first place. It's so critical, in fact, that we've now developed training that we do with our partners to help them hone the problem solving skills of their teams. Because without that, the transformation can't take hold. I think one example, and sort of like at the base of that set of Lean principles that we that we bring to bear, there are also a lot of techniques, and all of them really center around the work that people are doing that provides the value to the customer. And we have some mantras that come up time and time again related to that. For example, motion is not equal to work. Okay, motion looks a lot like work, but it actually provides no value to the customer, guest, patient, whoever that is. And so one of the very early things we do, and I this is one of my favorite techniques, because the barrier to entry is a pen and a piece of paper, something called the spaghetti diagram, where you very quickly draw some circles and squares and rectangles on a piece of paper to depict the area that people are working in.
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And then you put pen to paper, you trace the worker as they walk around. If you do this with an operator, invariably, within 30 seconds, they're asking questions like, Why is she going over there? Why did he go over there. And we always stop them and say, Don't worry about that.
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Yet they went over there to get something the right question is, why is that thing over there?
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And so what we can then do is say, let's look at the work space and the way that things are organized to reduce that motion. And it may seem trivial, but if you think about, you know, an entry level restaurant worker making $20 an hour. If 10% of everything they do is walking, that's $2 an hour we're attributing to walking.
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Absolutely save that across 80,000 employees, 350 days a year. What is right up to right?
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And let's say for a mid sized company, that's, you know, a $5 million opportunity cost of walking for people in this one station. How many restaurants would you have to open to drop$5 million to the bottom line?
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Well, let's say 10 or 12 restaurants. That's 10 or 12 sites that I have to scout, build a location into, filled with equipment, inventory, a team of 25 people train them, a district manager, all the overhead to support so suddenly think about, you know, it's just a little bit of walking, but walking isn't work
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absolutely. So when you when you mentioned the issue about motion, I think you both know that I served in the Army, that reminded me of a commander that I had when I was a lieutenant. He was an engineer. So we always talked about work equals force times distance. So the opposite of that was that if you apply a lot of force and don't move, you haven't done any work. Give me a great memory there of you talking about motion when you start to do the big calculation and add up all the it probably really amazes those leaders, actually, how much money is costing when you start to look at those motion studies, what are those follow on conversations that you guys have when you start to show those big numbers?
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There's often disbelief to start and what this fortune 500 healthcare company I was referring to earlier, there was a senior leader when we proposed, sort of the problem, the opportunity size and the solution, or the way we might go after. And said, Whoa, wait. I think what you're saying is you can turn water into wine. And the thing is, about these Lean principles is they are simple, but not easy, right? And so if there's often a little bit of like disbelief, they're often counter to human instinct, a human instinct, because we're hunters and gatherers and we're fit for survival, we're trying to surround ourselves with inventory, surround ourselves with labor. Give ourselves more space. Like Nope, we should need less inventory, less labor, less space. Right, right fit for survival, instead of surrounding ourselves by all the excess Absolutely,
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when you're doing this analysis and you're helping your customer, you must also be relying on some particular metrics, you know, in particular, either some leading or lagging indicators. Can you?
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Can you take us through that a little bit? I love the
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the conversation about leading and lagging indicators, and particularly the industries we work in, they're highly focused on lagging indicators. I mean, obviously sales is a key metric for most, you know, service based organizations, but you know, you don't know what your sales were until after they've happened, right? And so, to your point, what? What are some of the things that contribute to those sales? That's the kind of data that we actually go after and help organizations to see and be able to measure. So most organizations that we work with are stuck in the lagging indicator space through some of the techniques Steve was describing, looking at labor utilization, looking at motion, looking at how long is the line at peak. You know that's that's not something that a lot of restaurants actually know that, but that's your leading indicator for whether or not you have unmet demand that you can actually go and and capture. So that's kind of how we're thinking about we can help you drive sales by improving the time it takes for the customer to work work through the ordering and payment process at the register. So if we can reduce the time that the customer spending at the register, still make it a great experience, but just make it quick, we can actually get more customers through that register and capture more of that unmet demand. But most organizations we work with don't understand, don't see those leading indicators of what's the time that the customer is spending at the register. How many customers are? Are there in line? They're just looking at those lagging, lagging indicators, like the sales that they were able to ring through yesterday. If I can build on that a little bit, quick plug for our app in the we have it for Android and Apple, you can just go to the app store and download it, but that app is designed to help us answer three really important questions before where to start doing the work. The first question is, really, what is the current production capacity of this restaurant, of this healthcare clinic, of whatever? So here we do a lot of process timing, and we capture something called line off rate, like, what is the pace at which something can come off the line or out of the kitchen or out of the window. The next question is, how much equipment capacity exists across the system and with machine utilization and every restaurant operation that we work with is always talking about like, more fryers, bigger ovens, more grill space. They want bigger, bigger, bigger. And we've not found the need to introduce any larger or more equipment in a restaurant, and with now have this data from over, you know, 1000s and 1000s of restaurants, and probably, like, 10s, if not hundreds of 1000s of hours. And we always capture this data at peak. The third question is, how much human capacity exists across the system, right? So when you put the humans in the machines together, that those are the constraints of the total system capacity, which was the first question. And with this app, you do some studies, and you don't need to do much to get something. I mean, you're not going to have statistically significant data, but you're going to get a pretty good finger in the wind about what your current bottleneck is. You can start to like, go unlock them, and you put them all together. It's all about creating more capacity to do whatever you capacity is amazing, because you can either take it to the bank, if that's your need, you can invest it in training, you can invest it in customer experience. We've worked with some restaurant and healthcare companies that have improved their quality metrics by over 100% organization actually improved by 800% by just reading all capacity and more time to do work in the right way. Wow, that's amazing.
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What I'm picking up on, though, a little bit, was that once you start to dig into that data, I'm very curious about the leadership that you're working with, they tend to operate more from the gut, especially when you're talking about adding more fryers and more equipment, and then then they're really surprised by that data once you show it to them,
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I'd say always there's a new product on the market that we've become a big fan of, which is the Ray Ban meta glasses that have a camera installed in them will now put.
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Am on workers doing the work?
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Oh, wow. And then as we're sharing, because oftentimes we're when you're talking to senior leaders, you're not doing it in the setting of the restaurant. You're not in the gemba where the work happens. So people have all kinds of myths that they tell themselves about the way things go down. But if we can show them a three minute video of somebody working on a grill, or somebody working on a make line, and they see how disorganized that is. Humans don't naturally understand how to sequence their activity with a machine so that it's like a ballet. We tend let's get that machine busy and then go on to the next thing. And now the machine is done, and it's either burning the thing or it has some kind of auto eject. And now it's just sitting there, but that's idle. But what can we do to just keep the machines busy? I mentioned most motion is not equal to work as one mantra, another mantra is keep the machines busy.
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Wow, right?
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That's amazing. Yeah, yeah. I really like what you're talking about. Your that the application of data, and then you show the the leadership exactly what's happening. And then there's so there's this epiphany, and then you can start to really start to do some transformation. Is that what you're finding That's right, yeah, amazing. You sound so proud and happy of the founding of service physics. And I want to delve into a little bit about startup leadership, because I always like to talk to founders. How do you get what you what you want to do, off the ground? Again, startups seem very chaotic, so how do you what are the very first things you're doing, other than like, seed funding? What are you doing to like, align your team with that same vision, the direction, what tasks are you working on? What are you doing first, and how you staying focused?
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I love talking startups before starting service physics. Actually, Steve and I had the opportunity at Anheuser Busch InBev to part to participate in, like a they called it an accelerator, but really it was a business incubator. And so we learned a lot of those kind of techniques that you would learn reading Lean Startup, or something like that. And actually, we took a lot of that to heart when we started the business. I think Steve mentioned it a little bit, but after we decided to, you know, there was a big industry opportunity, we had this gut feeling. We knew that there was a better equation for the people working in the industry, for the for the employees and for the owners, but we didn't know for sure, because we didn't have any data. So we went back to New York, and we actually kind of did some trial runs. We started offering our services for free to really understand, you know, what was the market out there, what was the product we were trying to sell, and what, what was, what would the market bear in terms of paying for it? And so we, you know, I highly recommend doing, you know, whatever you can to get those, those signals for the market and what the what the market wants, and what it's willing to pay. So we talk about the DVF framework, desirability, viability and feasibility. So we want to think through desirability is, do we have something the customer actually wants? Is there a problem we can solve or a value we can create? Viability, your audience will love. Can this thing make money? Can we charge enough money for this thing to actually be profitable and then feasibility? Can we build a team? Can we design a system?
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Can we write some code to actually deliver on the desirability and the viability of the business? And so I think we spent probably the first year and a half, two, three years, maybe even still today, stumbling around, trying to, trying to create the balance between the d, v and f for this business. But I'm, I'm super proud to say, to your point, you know, we're really proud of what we've built. We have not had to take on funding, because we started from day one, really thinking through the business model and making sure that we had something that would turn the economic engine that being said, Steve was it three years of doing this before we paid ourselves. So I think to some extent, we self funded, we bootstrapped, but it is possible, especially in a service business like ours, to get off the ground without a whole lot of money, as long as you're willing to, you know, sacrifice a little bit for the vision. You know, absolutely,
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if I can add a little bit to the sacrifice story, because I think this is a something that entrepreneurs need to hear during the early days. So 2019, and, you know, totally different. It was a pre COVID world, Brian and I held on to our w2 day jobs, and so what operations looked like for us was setting up video cameras in restaurants around Manhattan in the morning, going to work from 830 to noon, meeting up for lunch, going back to the restaurant, switching out the SD cards and batteries And the cameras, letting them run through lunch and into the afternoon, and then going to pick them up on our way home, getting home, doing dinner, putting the kids to bed, and then crunching data from the videos, right, and then rinse and repeat, and then doing like, all the whatever powerpointing or experiment designs or whatever on the weekends. And this was like, I. That was months and months and months of that grind until COVID hit, and then suddenly we had, like, a new problem to solve. We went dark like we had clients who were like, We don't know if we're going to be able to pay you, let alone let you into our restaurant. We're like, totally get it. But then it was a matter of maybe four or five weeks before everybody realized that their five year digital strategy needed to be a five week digital strategy, right? And still trying to manage, you know, the family, the the day job and so forth. But it wasn't long before it became clear that there was a there, there, and we're able to, sort of, like, break free from that, but again, a few years of really, you know, pinching pennies on the on the home front, in order to make sure that we could fund a team in order to meet the demand that we knew was there. Yeah, that's
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awesome. Now you don't have to deal with any kind of venture capitalist, so that's really good. So as the firm's leaders, what are you focused on each day?
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I think the game, at least as I understand it, is building the machine. So, you know, we're, we're operations consultants, we understand systems and how that, you know, the full system needs to function in order to deliver the result. And so steadily, you know, over the last six years, we've been building the different components of the system that that is the business. And so when we started out, Steve and I were literally wearing every single hat that there was to wear, the finance hat, as well as the operations hat, as well as the marketing hat and the sales hat and the, you know, on and on. And as we've grown, you know, a lot of our time is spent figuring out how to divest ourselves of the various hats we still aware. So I would say, you know, over the last couple years, we've really focused on building an amazing team that can deliver for our clients in the way that we would, you know, want the brand to show up. Built a great and amazing delivery team. And then recently, we've actually been able to put together a very small finance team. So we have a head of finance, we have a bookkeeper, we have a CPA. They keep us out of trouble, keep us on the straight and narrow, and prevent a lot of fire drills. To be really honest. There were a lot of times when, you know, I can remember one June and I was looking at, oh, crap, like, all these invoices just came in, but we haven't gotten paid yet. And so it was a mad dash to, you know, ring up our clients and try to get the money to come in.
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We haven't had a fire drill like that in a couple years, because we've got folks that are on top of that stuff for us and built systems and processes for us to stay on top of those things. And so I think, you know, just to get back to your question, a lot of what we're doing is figuring out, how do we, how do we build the systems that will enable this company to run as a as a machine, and not require Brian or Steve to be in every meeting, in every decision, in every process and making it go?
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That's the key, right there? Absolutely. If I can
00:27:56.319 --> 00:29:33.019
add a little bit to that, there's really two things that I wake up thinking about every morning. One of them is sort of a recent learning based on coaching that Brian and I have been receiving from our external coach, our external lean coach, which is, you can always be more clear, and most things break down as a result of not being clear enough. It's easy to just wake up, go to work and start talking about, talking about, but that's confusing. Can be misinterpreted. And I think about how many times we go to a task on the Kanban board and have to click into it and try to remember what the heck it was that we said that we were going to do, and who has the context on this? And like, that's just a failure moment. It creates a lot of waste, and it's it's bad enough for us, but the cascading effect as the company grows is really tremendous. The other thing, and this is a little bit related to what Brian said about building the systems, it's important to remember that people are a part of that system. Our product is our people, and this year, our mantra has been to build the people that will build the company that will transform the industry. And so it doubled down on investing in our people and our practice, because our practice is evolving. We're learning all the time about better ways to translate these concepts, apply these concepts, and so everybody's got to stay fresh all the time. We put a lot of emphasis on collaboration as a team. We do a lot of continuous improvement hours every week, on looking at our own work and the way that we do things, and then also looking at the client work and better ways to refine these like chaotic and complex problems, very good. And so, yeah, I just double down on that people and people and clarity. That's awesome.
00:29:33.200 --> 00:29:55.240
Brian, you had talked gave us a little bit of an introduction to how you work with your finance and accounting team. Help us understand how you use finance and accounting in your business, and what's your relationship with them. And how do you beyond like financial statements, what do you how do you use finance to leverage your decision making? I
00:29:55.240 --> 00:30:19.079
think you know sort of the answer I might start with here is, I. We're a little bit like the the cobbler with no shoes. We're, we're experts, and we've built a team of experts in, you know, helping folks operationalize their business process, improvement and building systems, tools and training for those things.
00:30:14.640 --> 00:30:39.980
We've, we've been slower to do that for ourselves. I think this is an area where bringing in a head of finance has really helped to systematize a lot of the things that we had been doing or had, you know, some some really basic processes around and really turn them into sustainable processes for us.
00:30:35.720 --> 00:30:52.779
And I think the that when I say the Emperor with no clothes, or the cobbler with no shoes. The only metrics we have today are our finance metrics, and we're making much better and more informed decisions by looking at a key set of metrics every week.
00:30:49.779 --> 00:32:23.359
But our head of finance is really like every week, literally improving the dashboarding, literally improving the availability of those numbers in in real time, so that we're crystallizing our vision and our ability to understand the business. So it's kind of this effort of continuous improvement that we're going through. And so while you know, a lot of our business is focused on helping other organizations find those leading indicators, we're still very much appreciative of our ability to look at our financial metrics, and a key thing for us is our forecast. And so we spend a lot of time thinking about our forecast and the way that we generate the forecast, and then, you know, not just sort of using statistics to arrive at a forecast, but actually almost doing like a bottoms up forecast. Let's look at all the clients that we have in the funnel. Let's think about how much we might be able to charge those clients. Think about which months we're going to issue those invoices and actually build a forecast from the bottoms up. And so we've actually integrated our finance our head of finance sits in our sales meetings and is taking that real time input into the forecast to help us really have a better bead on on our business. Similarly, our finance lead also sits in our weekly people planning so he's intimately aware with our hiring plans, our plans to use, you know, part time contractors, and building all of that into our forecast in real time to allow us to then on on Monday mornings, really look at the state of the business and be armed, you know, with whatever actions we need to take. Oh, very
00:32:23.359 --> 00:32:28.099
nice. I like that. So what type of conversations do you have with your head of finance?
00:32:28.220 --> 00:32:58.359
I might add, maybe just a little bit of like structural context. And I think that'll will help answer that question. Okay, we operate as scrums. So each project team functions as a scrum, but then we treat our finance function also as its own Scrum. Nice scrums come together weekly for a roadmap session and daily for what we call incidents and high rollers and the scrum of scrums.
00:32:53.859 --> 00:33:26.599
Teiciona said, you know, data, of course, is important, but I prefer facts, the data in isolation, without the context of everything else that's happening in the business is not good for decision making. So the fact that we have operations, people, finance, Brian and I at the table, surfacing and explaining, you know, why things are happening, or why the forecasts look like this, or what will be the consequence? I think a lot of the I try to answer your question more specifically. Now, a lot of the conversations are scenario planning. A lot of what happens?
00:33:26.599 --> 00:33:36.920
What if that happens? And then Brian and I, as as you know, sort of like lean coaches for the scrum of Scrum teams is trying to help the team articulate things as problems.
00:33:36.920 --> 00:33:48.220
And back to that original comment about problem statements and problem solving being very important, what's the gap? So if this is our forecast, what's the gap in May, what's the gap in June, what's the gap in July?
00:33:45.819 --> 00:33:53.140
And then we can talk about how we're going to close that, and now we've got people and operations also at the table to think about how we'll do that.
00:33:53.740 --> 00:33:54.220
Excellent.
00:33:54.220 --> 00:34:04.619
I like that so that. So that leads me to another question, any plans, and this may be a no any plans to maybe use AI in the future with that what if scenario planning?
00:34:05.339 --> 00:34:05.759
It's funny.
00:34:05.759 --> 00:34:12.900
We've been talking a lot about AI this week in particular, although I'd say it's not not a constant topic.
00:34:12.900 --> 00:34:59.920
For sure, we haven't yet integrated AI or even much advanced statistics or modeling into our finance specific analysis, we get a lot of leverage from AI in the actual performance of of the consulting work. And so I'm a big fan of perplexity. I think Steve's a chat GPT user. But what I love is being able to take that, you know, structured and unstructured data, throwing it into the tool. And so when I say unstructured, I mean transcripts from calls, scholarly articles, previous presentations we've delivered, we'll put those, those documents and all of that context into a workspace. You.
00:35:00.000 --> 00:35:11.099
Perplexity, and now I use it as a thinking tool to help really untangle, you know, because a lot of the the problems we're working on are quite complex.
00:35:07.559 --> 00:35:35.420
And so we find AI to be a really great thinking tool to help us simplify, take a very complex sort of problem space and turn it into some key components that we can then, you know, better describe to our clients, you know, how, how we would propose to help. And so I think we get a lot of benefit out of AI as a thinking partner, more so than a any kind of, like, analytical or predictive modeling kind of capability. Okay,
00:35:35.420 --> 00:35:37.280
I like that.
00:35:35.420 --> 00:35:39.559
That's excellent. That's a great move forward. I like that.
00:35:37.280 --> 00:35:39.559
That's great to hear. I
00:35:39.559 --> 00:36:58.539
can think of one specific example where we are leveraging AI with finance, and it might not be Brian somewhere where our brains would go immediately, but we have a good habit around what we call a quarterly pulse, where we bring the team together to go over where we are financially, where we are operationally, and sort of paint a quick look back and then paint a picture of a look forward early on, that meeting would look a lot like a 90 minute session where Brian Steven, some other folks were talking to the team, and then, if we were lucky, we'd have five or 10 minutes at the end to do like an open forum and answer questions. But what we learned was the most value actually came out of the Q, a component. And so pivoted to now, and it's still, I think we're about to go through our third like iteration on this actually tomorrow morning, is we go through and we build the PowerPoint deck for that, that readout, as if we were going to present it to the team, and then we feed it into notebook, LM, and have it generate a podcast. Oh, nice. We send the podcast to the team as a pre listen, and put the PowerPoint slide in a digital whiteboard and have them like pre listen to the 15 minute podcast and then take any notes with post its on any parts of the presentation that they want to talk about. And now tomorrow, we'll spend 990 minutes just answering questions instead of having them digest that information. That
00:36:58.539 --> 00:37:03.958
is amazing. I love hearing that. That's a great tip. I really like that.
00:37:00.539 --> 00:37:07.438
That's now that sounds very like it's very effective. Has that proven to be so super
00:37:07.440 --> 00:37:09.119
effective? Of course, is always a better way.
00:37:09.119 --> 00:37:11.280
So we go to school on that tomorrow. Yeah.
00:37:11.340 --> 00:37:20.599
Awesome. I love that. Tell us about a hobby or a that you really love to do on your off time, or a book that you're reading or something fun that you like to do.
00:37:21.079 --> 00:37:34.759
Well, I'm, I'm a big process nerd, and so my hobby, of course, is all about process. And my process of choice is smoking meat. So I'm a big fan of Texas style barbecue.
00:37:34.818 --> 00:38:17.518
Oh, nice. Uh, which, for fans of barbecue, will know there are many variables and many hours spent in the making of good barbecue. And so from for me, it's, you know, on Wednesday night, unwrapping that brisket, trimming off the fat, salting it, getting it in the in the fridge, letting it sit, do its thing for, you know, a few days, night before the smoke, getting it out, rubbing it down with with a nice rub, and getting it all ready, waking up super early at like, you know, three in the morning to get that smoker going, building that fire just right to last for 12 hours, and then getting that thing on there and kicking back and watching it go. But it's, you know, you can imagine, with all those steps in that process, there's a lot of lot of fun tweaking that you have to the recipe.
00:38:17.760 --> 00:38:20.719
So do you use a wood, a particular type of wood.
00:38:21.199 --> 00:38:29.300
I'm a big fan of mesquite charcoal. Okay, gotcha, yep. So it's, it's, it's charcoal. It's not pellets.
00:38:29.300 --> 00:38:37.820
It's, you know, proper lump charcoal. But it's, it's old school, you know, really got to babysit that thing to keep the the temperature in range. Yeah.
00:38:37.938 --> 00:38:40.219
Now, how many hours do you smoke? Smoke it?
00:38:40.398 --> 00:38:41.739
We're old school in
00:38:41.739 --> 00:39:06.958
some ways, and advanced in others. I have an AI thermometer that I use. So I heard this analogy one time. A lot of recipes are written as if you were giving somebody directions that said, get on the road, put your accelerator halfway down, and go for three hours. Okay, that's the very typical recipes are written, right? Instead of that, you know, I like to be data driven.
00:39:03.838 --> 00:39:10.139
So I'm bringing that brisket up to two, three degrees, however.
00:39:06.958 --> 00:39:19.739
Long that takes eight hours, 10 hours, 12 hours. Get it ready, two or three, and then we rest it until it it comes back down to about 95 and she's ready to go. Oh, wow,
00:39:19.739 --> 00:39:21.679
that sounds good. Now I want some brisket.
00:39:21.679 --> 00:39:28.039
Steve, what kind of hobby or something? Tell us a bit more about yourself. Something you like to do.
00:39:28.880 --> 00:39:59.920
I used to like to do a lot of things, and had a lot of hobbies, and then I had kids, and so that takes most of my time now, but I'd say a passion of mine has always been teaching, and so having children gives me an opportunity to, like, teach them cool things like how to how to bait a hook and how to untangle fishing line in your in your reel. Over the last few years, Brian and I have had the opportunity to go up to the Nolan School of Business at Cornell, which is like the premier restaurant school in the country, if not the world, and.
00:40:00.000 --> 00:40:15.179
And I really find a lot of joy in getting these ideas to people who are super early in their career, when they can go do a lot of like, quote, unquote damage to help help with the transformation. Very good. Yeah, I get to scratch that itch.
00:40:15.539 --> 00:40:21.980
Maybe if I, if I were to retire, someday, I'll go teach in a school, somewhere college or high school or something
00:40:22.280 --> 00:40:25.280
nice, very nice.
00:40:22.280 --> 00:40:27.260
Hey, so please tell us about what's next for service physics.
00:40:27.920 --> 00:41:17.219
Well, Steve, Steve likes to say that his his biggest worry in life always comes down to a cycle time and demand rate problem. And so our mission at service physics is to make service work better for people. That mission really is about the people doing the work as well as the people receiving the service as well as the owners. And so if we can think about what that could look like on a on a massive scale, right, how could all of the service businesses be serving their customers better? Be creating better jobs, be creating better business equations for for the business, that's a big mission, and so Steve's big fear is that we just don't have enough time in our lives to to achieve that mission. But that's, that's what we're we're after is a full industry transformation, and we're not going to stop until we get there or die, I guess.
00:41:18.360 --> 00:41:23.300
Awesome. No, please tell us where we can find service physics. What's the website? Pretty
00:41:23.300 --> 00:41:31.400
simple. Www, dot service physics.com. We are, I guess, another exciting thing on the horizon for service physics.
00:41:31.400 --> 00:42:19.800
We are overhauling that website now for grand release in May, which will coincide with our attendance of the National Restaurant Association's big show in Chicago. We'll have a booth there and hoping to connect with a lot of industry folks. We're also going to be in attendance in our sponsorship of the PROSPER forum 2025 I'm excited for that, as well as the PROSPER accelerator, which is focused on, again, the sort of people who are just coming into the industry and have a lot of potential. Always connect with us on LinkedIn. We're trying to get better about keeping our socials up to date. But you know, as a as you mentioned, startups are chaotic, and sometimes we we lose focus when we get busy, but we're trying to be better there as well.
00:42:20.280 --> 00:42:24.559
Awesome. Very good. And you also mentioned an app earlier.
00:42:25.159 --> 00:42:48.998
Yeah, please download our app if you'd like to answer these questions about capacity, throughput, machine and labor utilization, they can be the great equalizer. You know, the restaurant industry in particular is known for every field operator thinking they don't have enough labor, and every owner or senior leader thinking we're over allocating labor, and it's the great equalizer in that conversation.
00:42:49.179 --> 00:42:55.898
And the fact of the matter is, is that everybody is everybody is wrong, and the data will point us in the right direction.
00:42:55.958 --> 00:42:56.679
Absolutely,
00:42:56.679 --> 00:43:11.280
I completely agree with that. Brian, Steve, thank you so much for joining us on the finance leader podcast. I appreciate it. I wish you guys both the best of luck going forward and what you guys are offering with service physics and the best to your team. I appreciate it. Thank you so much. Thanks,
00:43:11.280 --> 00:43:12.360
Stephen. Thank you. Stephen.
00:43:12.360 --> 00:43:15.000
It was great.
00:43:12.360 --> 00:43:15.000
Really appreciate it. Now.
00:43:15.000 --> 00:43:22.340
I really enjoyed my time with Brian and Steve. I learned a lot from both of them.
00:43:18.300 --> 00:43:27.019
Now, here are a few highlights I want to share before I close.
00:43:22.340 --> 00:44:23.599
Number one, do your task processes make sense? Your processes may be hurting your business. A badly developed process, or a process not being followed properly, may be costing you productivity, which then costs you top line revenue and that leads to a lower bottom line. Pay attention to your processes number two, leading and lagging indicators. Many businesses, of course, use sales as a key lagging indicator. But let's start analyzing the key leading indicators before the sales occur, so you can understand why your sales are not where you want them to be, which can give you the opportunity to take action earlier in the cycle. Number three, invite your finance leaders into your key business activities. Ensure your finance team is involved directly in key meetings so they can help you with better forecasting and people planning, for example.
00:44:24.619 --> 00:45:30.139
And finally, number four, utilize financial results to drive the business. Brian and Steve discovered that there was better understanding in their own business at the quarterly financial update, when everyone was given information up front in the form of a podcast plus a presentation, and then they use the actual meeting as a high quality Q and A session, which has proven to be very effective overall, with more understanding for the entire team. Now please visit service physics.com for more information. Also download their app. The links will be. In the show notes, thank you again to Brian and Steve for joining me on the podcast. Good luck to you both, and to service physics. I hope you enjoyed the finance leader podcast. You can find this episode wherever you listen to podcast. If this episode helped you today, please share with a colleague until next time, you can check out more resources at financeleader academy.com and sign up for my weekly updates so you don't miss an episode of the podcast, and now go lead your team and I'll see you next time. Thank you.
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You.
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