Michael Riches - Leading People & Leveraging Technology
A podcast with the Head of Beverages Operations at Bega
Intro
It's been such a pleasure to have Michael Riches on the podcast.
Mike is passionate people leader, with an impressive logical, analytical mind. Throughout the episode, it's clear that he always puts people first, and that would be a larger part of his success. He explains the challenges and long-term benefits of implementing new technology, sharing some success stories and mistakes and previous sites he's led. He mentions practices like asset care software and autonomous maintenance. Mike stresses the need for preparation and sticking to long-term goals, even when immediate results aren't visible.
They also discuss how crucial employee engagement is for success. Michael shares how focusing on engagement led to improvements in safety, quality, efficiency, and financial performance. The conversation wraps up with insights on leadership, making better daily decisions, and dealing with imposter syndrome.
Podcast Links
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Some of our Favourite Parts
Mike shares so many gems in this podcast, some of our favourite parts where;
The role of the site leader, the challenges, and creating accountability. Timestamp : 7-12 min
The 30 second person. Timestamp: 20 min
The retired engineer parable. Timestamp: 22min
The challenges site leaders have when considering technology. Timestamp: 24min
Full Episode Transcript
Disclaimer: This transcript has been edited for clarity. Timestamps may not perfectly align with the content, and guest dialogue may have been refined for accuracy.
00:00:04
JP Picard (Factory AI)
Michael Richards. Welcome to the show. Good to have you.
00:00:09
Michael Riches (Bega)
Thanks, JP. Good to be here.
00:00:12
JP Picard (Factory AI)
Awesome. We've known each other for a while, which is fantastic. As you mentioned before we started recording, some people might not know you. Could you give us a snapshot of your journey over the last decade?
00:00:38
Michael Riches (Bega)
Sure. I've been working for Lion and then Bega at their manufacturing sites for the last decade. Before that, I ran my own engineering consultancy for a couple of years. At Lion, I was an engineering leader, then a site leader. Currently, I'm with Bega as the Head of Beverage Operations.
00:01:32
JP Picard (Factory AI)
Fantastic. You also had a stint with Made by Cow. Could you share what interested you in that company and why you decided to spend some time there?
00:01:55
Michael Riches (Bega)
Made by Cow was a subsidiary of Lion. I was offered a secondment to head up the operations team there. It was a small facility without much process or leadership presence. I implemented structures and processes, greatly improving their operational efficiency, staff engagement, turnover, safety, and product quality.
00:02:35JP Picard (Factory AI)
Interesting. You started your career in well-known companies in the oil refinery space, Schlumberger. How was it working for such a massive company, and what lessons did you learn there?
00:03:02
Michael Riches (Bega)
I started with Schlumberger right out of university. They provide specialized services on oil and gas rigs. I flew in and out of various locations, measuring properties of the formation while drilling. It was interesting but not conducive to the lifestyle I wanted. After a few years, I moved back to Sydney to find a different vocation.
00:04:17
JP Picard (Factory AI)
And that's where you landed in the food and beverages industry. Was that by choice or just a nice opportunity?
00:04:40
Michael Riches (Bega)
It was just a nice opportunity. I knew someone who had some work available, and when I came back to Sydney, that's what landed in my lap. I've built from there.
00:04:55
JP Picard (Factory AI)
With hindsight, after nearly 10 years in food and beverages, are you happy with your choice? Do other manufacturing industries interest you?
00:05:12
Michael Riches (Bega)
I'm happy where I am and with the difference I've been able to make. Sure, it would be nice to change the world more, but I'm not complaining. I'm happy.
00:05:31
JP Picard (Factory AI)
Our local food and beverage manufacturers have a significant impact on our daily lives. I'm a big fan of your company, especially your peanut butter, which is made in Queensland, correct?
00:05:55
Michael Riches (Bega)
We get the peanuts from Queensland and bring them down to Melbourne, where they are processed into peanut butter.
00:06:06
JP Picard (Factory AI)
You have a significant impact as a food producer. Speaking of impact, you've had an impressive track record of progression. You started in engineering and quickly progressed to a site leader. What do you think site leaders today struggle with, and what advice do you have for them?
00:07:17
Michael Riches (Bega)
As a site leader, the main responsibility is getting your team to successfully complete priority tasks. It's challenging because you can't control or know everything 200 people are doing. Micromanagement isn't feasible. We hire capable people but then try to tell them exactly what to do, which can disengage them. It's better to trust them and let them take ownership.
00:09:06
Michael Riches (Bega)
When I was the engineering manager, I was responsible for all R&M and capital budgets. Initially, I controlled every change, but I realized I was a roadblock. I allocated a budget to each department leader for them to spend on whatever they wanted. This approach reduced our overall spending and empowered our team.
00:09:46
Michael Riches (Bega):
At the beginning of my time as a leader, if you wanted something changed in the site, you had to come to me and get my buy-in and agreement to actually change it. If I liked it more than I liked any of the other ideas I had myself, I'd hand it over to my team and they would start to scope and price and then implement that change.
00:10:10
Michael Riches (Bega):
At first, I thought I was doing the right thing, ensuring that every design and everything that was implemented on our site was perfect. But in time, I realized that I was actually just the roadblock to progress for our site and the RMM budget. I had around 300 grand a month to play with, and so what I did is carve out 10 grand for every other department leader and said every month you've got 10 grand to spend on whatever you want.
00:10:39
Michael Riches (Bega):
My team were in hysterics. How will we ever control the budget if you're letting other people use our money? But I showed them that we were doing this work anyway. We were just in control of it before, and it was taking up our time and effort. If we do it this way, they're in control of it, still taking up our money, but not our time and effort anymore.
00:11:06
Michael Riches (Bega):
And sure enough, even though we were meant to be spending 50 grand more, we ended up spending 50 grand less each month because people were able to spend the time themselves on exactly what they wanted.
00:11:20
Michael Riches (Bega):
It got to the point where we were starting to talk about decisions for a better tomorrow all the time.
00:11:30
Michael Riches (Bega):
It was slow at first, convincing trades that you're allowed to shut down a machine to make a change today, even though it's going to impact production. It's a mentality change they had to go through, but eventually we were able to share the power that comes with owning a budget.
00:11:51
Michael Riches (Bega):
When I say you're getting people to work on the right things, you're empowering them to actually do what they think is right.
00:12:05
JP Picard (Factory AI):
That's a very interesting story. There are a lot of lessons to untangle in there. One that I think you may have told us before, but I find it very interesting that if you give people ownership of how they choose to spend the precious capital you have in a site to improve things, you might be surprised that the spending will actually be less than if there's a small pool of optimizers really going out for it. That's surprising.
00:12:40
Michael Riches (Bega):
Yeah, it's about effective utilization of resources. How do you go about effectively utilizing that resource? It can be contrary to what I would call standard logic. We've got the saying that you need a plan if you want to do anything. It's an expectation that you need to get through a level of detail that's probably higher than what's really needed for the situation.
00:13:22
Michael Riches (Bega):
So I changed my approach. Instead of saying you need a plan, I would say you need a plan so we can change it. It simply makes it not a concrete thing that we have to get perfect. I don't need tomorrow or today to be perfect. I just need us to be better than we were the day before. I'm making achievable goals rather than outlandish positions.
00:13:51
JP Picard (Factory AI):
Yeah, that's great. I'd be curious to get your perspective on this. There would, in my mind, appear to be the fear from other site leaders that if more ownership was given to some of the staff, some of the initiatives they might decide to tackle may all be very important because there's so much important stuff that you can improve at a site. But it may not be the top three problems that you're really struggling with that might really turn the dial.
You mentioned that you need to have a plan. I suspect that's part of aligning it to something that's really a problem. Are there any other advice that you would share to other site leaders who wish to give their staff that level of ownership in terms of getting them to spend their money on things that are really problematic?
00:14:58
Michael Riches (Bega):
I can guarantee for you that 99% of the staff you have working in your factory are people. Like all people, they'll have hopes and dreams and feelings, and they'll make mistakes. No one comes to work wanting to do a bad job. You don't need to work to try and make people do a good job. You get that for free just by them turning up.
00:15:31
Michael Riches (Bega):
However, based on their engagement and their motivation, you will get a differing level of discretionary effort. The focus for leaders needs to be on how do I maximize that discretionary effort that I get from people? The simple answer is you treat people with respect. You listen to their opinions, you value them, and you trust them. You show that through recognition.
00:16:08
Michael Riches (Bega):
Every six months, we would hold a team day, where we would stop the factory for the whole day, bring everyone together to celebrate and thank them and do some training, and to influence them a little bit. After the first two team days that we had, there were a couple of people who didn't turn up to either of them. Either they called in sick or they said they couldn't make arrangements with their kids. Keep in mind, we're bringing people from all three shifts. Someone who's working night shift, who normally picks up their kid at 8 a.m. or drops them off at 8 a.m. for school, can't do that if they're having to come in on a day shift. So there's some understandable positions.
00:16:49
Michael Riches (Bega):
I pull out the HR handbook. It says, if you've got a problem with one of your staff not turning up to their rostered shift, and this is a rostered shift, we had it planned in, you need to start an investigation. You have to arrange a support person for them to attend the meeting with, and eventually you might get to a warning.
00:17:13
Michael Riches (Bega):
And if you got dragged through an investigation process like that and got handed a warning, what's gonna happen to your discretionary effort?
00:17:25
JP Picard (Factory AI):
Yes, it's not good. I don't think...
00:17:29
Michael Riches (Bega):
So, instead, what I did was I brought him off the shift, off the line, brought him into the office. I told him I'd noticed you hadn't been at the last two team days.
00:17:47
Michael Riches (Bega):
I listened to their response. It was usually quite a reasonable response as to why they didn't interpret. Some people would say, "I just didn't think it was important. So I called in sick." I sympathized with their position and recognized them for what they had done for us. I told them how important they were, not just in the business but to me, and how we missed them on the team day.
00:18:29
Michael Riches (Bega):
I asked if there was anything I could do to make it easier for them to attend next time—change the start time, arrange a taxi, call a friend. I brainstormed ideas around what I could do rather than tell them what they could have done differently.
00:18:48
Michael Riches (Bega):
No warning, no new expectation. We left the meeting with me just saying it would mean a lot to see them at the next one.
00:19:05
JP Picard (Factory AI):
You have to tell us now.
00:19:07
Michael Riches (Bega):
They all turned up to the next one.
00:19:10JP Picard (Factory AI):
No surprise.
00:19:14Michael Riches (Bega):
We also need to acknowledge that mistakes happen. We are people. We will have lapses of judgement. We can't say that we will prevent all mistakes. It's not an achievable goal, but we can make tasks simpler, find an easier way to get it right the first time, or find a way that when we get it wrong, it doesn't cause a catastrophe.
00:19:48JP Picard (Factory AI):
And I suppose maybe an interesting question here is, with people like this that fall into this category, do you find that when they interact and engage with such moments, do they get as much value as you'd expect from others? Or might you be pleasantly surprised, and maybe they get even more than you expected? What's been your experience there?
00:20:21
Michael Riches (Bega):
One of my sayings is, "You're a 30-second person." It's meant to remind you that although you were yourself the entire day, each person you see you might only see them for 30 seconds. If you're scattered in your thought patterns throughout the day, maybe you're balanced, and you talk about safety as much as you do quality and productivity. When you see that person for 30 seconds, if they catch you in your cost-saving mindset, then according to them, all you care about is saving cost. You don't care about their well-being, their safety, or the quality of the product. So they've now got the image that we are a cost-saving business.
00:21:20
Michael Riches (Bega):
You have to be the same 30-second person to everybody. You have to be that person that talks about their safety, well-being, and recognition if you're going to make that difference to everybody.
00:21:43
JP Picard (Factory AI):
I love that one. That's a very powerful one. I might steal that one from you—the 30-second person.
00:21:50
Michael Riches (Bega):
Have you heard about the retired engineer?
00:21:56
JP Picard (Factory AI):
No. Surely that's not you. You barely look 30. But no, tell me, who's this retired engineer?
00:22:06
Michael Riches (Bega):
It's a joke or a parable. This engineer retires from his job, and a week later, the big machine in the factory breaks down, and they can't fix it. The manager calls up the engineer and says, "We need you back as a consultant to fix this thing." So the engineer comes in that afternoon, takes a look around the machine, pulls out a sledgehammer, and whacks the machine once. The machine starts up again.
00:22:42
Michael Riches (Bega):
The next day, the engineer submits his invoice as a consultant for $5000. The manager is outraged. "You were here for all of 20 minutes. That can't be a fair price." The engineer says, "It's a fair price, I assure you." The manager says, "All right, if it's a fair price, give me an itemized bill." The engineer submits an itemized bill that says, "Hammer, $5. Knowing where to hit with the hammer, $4995."
00:23:13
JP Picard (Factory AI):
Go ahead. Sorry, finish.
00:23:19
Michael Riches (Bega):
What do you wanna say? Because it goes on for a while.
00:23:22
JP Picard (Factory AI):
No, sorry. I was just gonna say that I had a feeling this is what the invoice was going to look like.
00:23:31
Michael Riches (Bega):
This parable puts into words the value of strategic thinking, the value of spending the time to think before acting. What I see today in business as well as in behavior, especially with the latest generation coming through our business, is that we do a lot more strategic thinking. We have more analysts, more advisors, and we are spending millions and months figuring out where to hit the machine down to the nanometer. We've forgotten that we actually just needed to hit the machine. We only needed to roughly hit it in the right spot, and it was today that it needed to happen.
00:24:31
Michael Riches (Bega):
The engineer's invoice is missing the fact that he attended the plant immediately, he could swing the hammer, and he actually went ahead and swung it. When I'm hiring people, I'm not looking for strategic thinkers. I'm looking for strategic doers with an emphasis on the doing. You can't make the change today that will make tomorrow better if we're just thinking. We've got to get into action.
00:25:09
JP Picard (Factory AI):
You know, that's another great one. I love this story. If you're seeking to hire that person, there's often a lot of conversation right now about the labor shortages that exist in this space despite there being a surplus of workers in other spaces. There are also leaders that talk about the difficulty in interviewing to understand truly how a person would behave once they're working at the site versus how they respond to questions in an interview. Do you have any advice to really capture who that type of candidate is, who is a doer and might be a young individual with an analytical mind but is also quick to get to action and not overdo it in the way you describe?
00:26:13
Michael Riches (Bega):
I can't say I have a silver bullet for that one. Yeah, unfortunate. And I haven't hired perfect people every time, that's for sure. But you can be quick to react and move people to a job that suits them better when you find out they're not the right fit.I usually look for more cultural fit requirements than necessary skills for the job. So I'm not necessarily asking about technical questions in an interview. I'm trying to find out who the person is, what their values are, and whether they'll fit in with the team and get along. And I'll purposely try to stress people in an interview sometimes to see how they behave under pressure.
JP Picard (Factory AI):
I think that's a good idea, considering the work site is probably going to be very stressful. You can't expect to be yourself all day, every day. Thanks for that insight. Maybe one last area to dive into before we bring this to a close. You've spoken very well about people. That's part of why we wanted to have this conversation - your thinking and principles on people leadership and running teams. You're also known to be quite good at using technology to innovate and advance. Perhaps a good place to start there might be if you're open to sharing, are there any recent successes of leveraging technology to create a better work environment and improve productivity?
00:34:13
Michael Riches (Bega):
I mean, we're here talking about innovation and technology in manufacturing. While I've got a bit of experience and some opinions on the topic, I wouldn't call myself an expert.
And I think that's telling of the challenging road ahead for technology in manufacturing, as well as other areas. Not only are there improvements that the field needs to make, but you've also got to get through non-experts like me every day, who are making decisions on whether or not to implement. When I think about how technology is going to play a role in motivating people and getting the best out of the workforce, I break it down to giving people control and autonomy. You want to make sure people are taking action today for a better tomorrow, make it easier for them to get it right, and measure and make visible what "good" is. Technology can help in many areas, like sharing action trackers, making people's jobs easier, and reducing the time it takes to complete tasks.
We had three forklift drivers in our warehouse, one on every shift, just taking pallets off the end of the line and putting them into some racking. So we thought maybe we can replace them with AGVs. We did the math, figured out we needed three AGVs to do the job of one forklift driver. It took about a year and a half to implement. Now we have three AGVs and one AGV operator on every shift. It didn't quite hit the business case, and it's not uncommon that I see this happen where improvements in the automation space don't actually remove a job, rather, they reduce the time it takes to complete a task.
AGV operators now have time to do other things around the site, like stock takes and helping with packing lines during breaks. When you keep doing all these little things to remove or reduce tasks, you end up being able to assign your labor to work on more improvements or change your labor model, but it takes a collective effort. For example, instead of operators writing quality checks on a sheet of paper, we implemented a paperless system that triggers quality checks and brings in digital data, reducing errors and making jobs easier.
OEE used to be calculated in spreadsheets that team leaders ran, so no one really knew how the factory was going until the monthly meeting. With automation, we can now calculate that instantly and display it to operators, motivating them to do better.
JP Picard (Factory AI):
I really like this principle of creating a bit of professional gamification with important metrics like OEE. Did you find, firstly, when it became visible to most operators and people on the floor, was there an immediate impact?
00:35:06
JP Picard (Factory AI):
Improvements happen, it's a simple question, but you want a good answer to make a solid business case.
00:35:16
Michael Riches (Bega):
Typically, with most decisions, you might see a backward trend for about a month, then an upward trend from there. Implementing processes like asset care and autonomous maintenance can take time. For example, shutting down the line for four hours every week. In the first week, you haven't prevented any breakdowns, so it might seem like lost time. But by week four, you start preventing incidents, setting yourselves up to make informed decisions.
00:36:02
Michael Riches (Bega):
Setting yourself up to make those calls, even if it means stopping the factory, requires preparation and flexibility. You can't just halt operations without ensuring you have enough stock to cover the downtime.
00:36:41
JP Picard (Factory AI):
You were discussing the process of implementing changes and referencing asset care and autonomous maintenance.
00:37:00
Michael Riches (Bega):
Yes, setting yourself up for the future.
00:37:25
Michael Riches (Bega): It's essential to do the groundwork to enable these changes. For instance, repairing the factory to facilitate future decisions.
00:38:20
Michael Riches (Bega):
Despite the lack of immediate benefits, sticking to your values and vision is crucial for long-term success.
00:38:34
Michael Riches (Bega):
Our engagement score was dismal initially, but focusing on improving engagement led to positive outcomes across various metrics. We saw significant improvements in safety, quality, OEE, conversion cost, and EBIT.
00:39:19
Michael Riches (Bega):
Discretionary effort plays a significant role in driving improvements, especially in engagement, which impacts all metrics on the site.
00:40:09
Michael Riches (Bega):
Ultimately, it's about driving action through the people who are directly impacted by the changes. They're the ones feeling the pain and seeking solutions.
00:40:26
Michael Riches (Bega):
In an office or a factory, when someone says, "We did all this work and then nothing happened," or "It's been like this for ages, management haven't done anything about it," what they're really expressing is a desire for control over their lives. It's essential to understand the true message behind their words.00:41:06JP Picard (Factory AI): That's a vital leadership principle, reading between the lines to grasp the true message.
00:41:24
Michael Riches (Bega): Yes, it's not a new concept, but it's how I apply it in practice.
00:42:02
JP Picard (Factory AI):
Number four was to measure and make visible what's good.
00:42:06
JP Picard (Factory AI):
I like that a lot. It's simple and very applicable.
00:42:32
JP Picard (Factory AI): Do you have any last closing remarks for our listeners?
00:42:37
Michael Riches (Bega): I've been digging into the imposter syndrome lately. We'll never know the absolute right answer, but if we make better decisions every day, we're heading in the right direction.00:43:29Michael Riches (Bega): Over time, all these little decisions will add up to be much more valuable than a single big decision.
00:43:46JP Picard (Factory AI):
Absolutely, striving for continual improvement each day leads to significant growth over time.
00:44:14 JP Picard (Factory AI):
Thank you so much, Mike. It's been a pleasure. Hopefully, we can have you on again in the future to hear about your new projects and evolving perspectives.