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Good morning, good afternoon, or good evening, depending on where in the world you are right now. And welcome back to the AI Lean Edge podcast, the continuously improving show where we make AI simple, practical and profitable for small business owners who want to work smarter, not just harder. I'm your host, Brian Bricker, and today we're diving into a topic I think you're going to love. Lean thinking plus AI a perfect match. So we're going to split this episode into four parts. First, I'll bring you breaking news on the state of AI and there's a lot to cover. Second, I'll share an update about my upcoming book. Then I'm adding a in a review, one of my favorite lean thinking books, Kaizen and the Art of Creative Thinking by lean master Shigio Shingo. And finally, we'll go deep into into how lean thinking and AI combine into an unbeatable strategy for your business. So we have a packed podcast today, so let's get right into it.

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Tick, tick, tick. The hours run thin Clock's got teeth and it's chewing Migraine Paper trails and paper cuts A printer jammed I'm going nuts A payroll tight my desk's a mess I could really use some process Finesse I'm wearing 50 hats a day while my profit margin slips away but had a vision, took a breath Automated life support saved from death Chaos out clarity in cut the noise and dial in the wind A I Lean edge stream it, dream it lean it tight A Eileen edge Everything just works right A Eileen edge say goodbye to the sludge Run it clean run it mean hey AI Lean edge inventory psychic now knows what's needed when an and how a bots do math while I sip tea AI found 5 hours just for me.

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Hey. Breaking news on the current state of AI. So in January of this year, President Trump signed Executive Order 14179, removing barriers to American leadership and artificial intelligence, directing agencies to develop a comprehensive AI action plan. Now, fast forward to July 23, 2025. Just a little, a little under a month ago, the White House rolled out winning the AI race, America's AI action plan with more than 90 policy actions under three main pillars. One, accelerating innovation, two, building AI infrastructure, and three, leading in global diplomacy and security. The Department of Labor is emphasizing a worker centric approach, meaning there's a focus on AI literacy and studying AI's impact on jobs and creative creating new workforce models. So all very, very exciting stuff. It really looks as if we are, as a country, positioning ourselves to to be the dominant force worldwide for Artificial intelligence, which is ultimately a great thing because whoever controls the artificial intelligence ultimately will control the world. Okay, next, on the infrastructure side for AI, we've got Stargate LLC, which is a joint venture between OpenAI, SoftBank, Oracle and MGX. They've announced plans to invest up to $500 billion into AI infrastructure. We're talking about new data centers, AI chip development and job creation. It's very ambitious though. As of today, which is Monday 18th August, no funds have currently been raised yet. But, but we were hopeful that this is going to turn into something and we're, we're definitely watching it closely and we'll let you know if anything changes. Okay. In terms of the model updates, OpenAI just launched GPT5 on August 7th. It's what they're calling a unified model, which means it combines a deep reasoning of their O series with the speed of a GPT model. They say it has dramatically fewer hallucinations. And remember, a hallucination with AI is the situations where the AI will invent facts, will invent things that actually are not factual and present them as facts. Which is why you always want to still double check the information you're getting from your, from your AI, because they can occasionally reference case law, regulation, historical things that it will present as a fact, but in fact they're not a fact. It's called a hallucination. It's one of the more interesting byproducts of the algorithms that run these AI systems. But at any rate, the new GPT5 has a significant reduction in hallucinations, especially in critical areas like health, where rates drop from around 12 to 15% of hallucination to just 1.6% now. Reception has been mixed. Some users see better accuracy and cost, cost efficiency, while others say the leap from GPT4 really isn't as big as hoped. You know, because at this point every time there's an update with, with AI systems and as you see, they are coming very fast right now. You know, if you're going to go From a, from a 4 to a 5 in your, in your AI series, you'd want to see a much larger change than what people are, are now experiencing with GPT5 versus GPT4. But more to come on that anthropic has rolled out Claude Opus 4.1. New learning modes. Basically, it's tailored. They're tailored AI personalities for studying, coding or doing creative work. Very interesting. If you get a chance to look into Claude and, and see what the learning modes look like, you may find them incredibly useful. Google's Gemini 2.5 Pro is expanding its context window and improving video generation with its VO3 model now you know, at the tail end. Although spending the most amount of money right now, Meta is still working on its own long context and multimodal capabilities. And in A fun twist, OpenAI's O3 model swept Elon Musk to Grok 44 games to zero in a high profile AI chess tournament. So if you're using, you know, chess as as your measure of which which is the best AI model looks like Elon Musk and his X AI team need to up their game for the next Grok version if they're if they're going to get out of the losing chess column that they're in right now. Now, when it comes to AI ethics and guardrails around the AI systems, for those of you who are concerned about the safety of AI AS as it moves to be more dominant in the world, Meta's chief AI scientist Yann LeCun recently talked about building AI with submission to humans and empathy as core guardrails, meaning AI that not only follows human direction but also understands emotional context. This is going to matter a lot for small businesses that want automation without losing their human touch. So the bottom line, the US Government is going full throttle on AI leadership, the private sector is making big and expensive plans and big models are evolving fast. So ethics is taking a front seat in the conversation, which is something that we all definitely want to see because you've got to have those guardrails and subm addition to human and empathy I think are two, two of the most important guardrails as you develop these models and they gain more and more influence over work in society and society in general. So great news on that front and keep tuned here every single Monday to the AI Lineage podcast and I will keep you up to date on everything that's new that's important going on in AI. And and so with that, now let's shift gears for a minute. I am so excited to announce that my new book Smarter, Leaner, Faster is almost here. There's a Kindle edition and it'll be out in paperback. The Kindle edition is available available for pre order right now on Amazon. Just just search for Smarter, Leaner, Faster or just search my name Brian Bricker on Amazon and and and you'll be able to pre order the Kindle edition and then the paperback is officially going to be available on September 2nd of this year. So just a little under a month you'll be able to order the paperback of Smarter, Leaner, Faster. This book is designed for busy middle aged small business owners who want to leverage lean thinking and AI without getting lost in tech jargon or corporate theory. It's full of real world examples, tools you can use right away, and a practical framework for making business both more efficient and more human. If you've been listening to AI Lean Edge, you already know my philosophy. AI should serve you, not replace you. So this book is the road map for making that happen. So if you're enjoying the show, I'd be honored if you pre ordered today and shared it with a fellow small business owner who could use a little less chaos and a little more clarity. So again you go to go to Amazon right now and pre order Smarter, Leaner, Faster. Okay, now a new component of the podcast that I'm putting in here for episode four. Just to see what sort of feedback I get from you all, I'm doing a book review A book review of one of my favorite books on process improvement. It's called Kaizen and the Art of Creative Thinking by Shigiyo Shingo, who is one of the godfathers of process improvement and lean thinking. So Kaizen and the Art of Creative Thinking by Shigio Shingo is a profound yet accessible exploration of the principles behind continuous improvement, or Kaizen and the mindset that drives innovation. Originally published in 2007 as a translation of Shingo's 1958 work, this book remains a timeless guide to the foundation of the Toyota production system. Remember, Toyota Production system was really foundational towards organizational process improvement and continuous improvement as it's known today. So the Toyota production system was co developed by Shingo and Taichi Ono. And in in this review I'll share some key strengths, insights and a few limitations of the book, which I believe is a must read for anyone interested in lean thinking or fostering a culture of problem solving. So Shingo's core message is that Kaizen is not just about incremental improvement, but about cultivating a scientific approach to problem solving that unlocks human potential. He introduces the Scientific Thinking Mechanism, a structured framework that breaks down complex problems into actionable solutions. Through six unique models, Shingo teaches readers how to identify issues, generate ideas, and implement changes very effectively. So what sets this book apart is its emphasis on empowering every worker, whether on the shop floor or in the office, to become a problem solver. Shingo's philosophy, rooted in his work with Toyota, highlights that true innovation comes from engaging everyone in the process, not just relying on a few creative geniuses One of the book's strengths is its storytelling. Shingo weaves in anecdotes from his consulting experience, illustrating how he guided companies to rethink processes. For example, he shares stories of failed solutions, emphasizing the importance of listening to workers and iterating relentlessly. These real world examples make the concepts relatable and show both the successes and struggles of applying Kaizen principles. The book's simplicity is deceptive, while the language is straightforward. The underlying ideas, such as challenging mental models or quantifying problems, for example Reducing x by y percent to highlight impact are rigorous and transformative. So as Jeffrey Leiker notes in the forward, Shingo's humility and scientific training shine through, making this a Rosetta stone for Kaizen. The demystifies Toyota's secret weapon. Another highlight is the book's practical frameworks. Like the five elements of a problem or 12 steps of idea Generation. These tools are easy to grasp yet powerful for structuring creative thinking. Shingo's diagrams, though sometimes basic, help visual learners understand analytical processes. The book also inspires by showing how small, consistent improvements can lead to massive gains, a concept that resonates across industries. Now, the book isn't without its flaws. Some readers might find the anecdotes loosely connected to modern contexts as they reflect Shingo's 1950s experiences. The diagrams, while helpful, can feel disconnected from the narrative, potentially confusing readers who prefer more of a linear structure. Additionally, the book's depth requires multiple readings to fully absorb, which might deter those seeking quick takeaways. Still, these are all very minor compared to the overall value of this book, and I highly, highly recommend it. So to get the most from this book, I recommend reading it actively, reflecting on how Shingo stories apply to your own work, and revisit sections like promoting improvement ideas when tackling real world challenges. It's a book that grows with you, rewarding deeper engagement. So in conclusion, Kaizen and the Art of Creative Thinking is a gem for anyone looking to foster innovation and continuous improvement. Shingo's blend of practical tools, engaging stories, and a human centered approach makes this book both inspiring and actionable. It's a reminder that Kaizen is not just a methodology, but a mindset that can transform organizations and individuals alike. I highly recommend it to leaders, managers, and anyone eager to unlock creative potential, including small business owners like yourself. All right, let's get into the heart of today's topic on the AI Lean Edge podcast Lean Thinking in Plain English so I use the term lean thinking a lot, but what does that mean? Lean thinking is all about Maximizing value for your customers while minimizing waste in your processes. It's rooted in the Toyota production system, but works beautifully in any business, big or small. The key principles to keep in mind are. One, Value. The whole point of lean thinking is you have to define what matters to your customer, the end customer, for whatever it is that you're producing, whether it's a service or a product. The end customer and what they value is paramount. In lean thinking and in process improvement in general, that's going to be effective. Two, the principle of value stream, which means you map every step it takes to deliver the value that you're trying to provide. Three is flow. You got to keep, keep work moving smoothly without interruptions, and that's known as flow. 4 is pull means doing work when it's needed, not in advance. So it's, it's that just in time for the inventory. So it's about, it's about pulling what's needed rather than pushing what, what may be a wasteful need at that time. And then number five, and this is probably the most controversial concept in, in lean thinking is perfection. Continuous improvement requires you to always seek perfection. Now, of course, we always know you're never going to get there. None of us are ever going to get there, but you. But by seeking that perfection, by always moving towards perfection, you are going to continuously improve your operations, improve your product, improve your behavior, improve your whatever it is that you're focusing your lean thinking on. So you want to keep perfection in mind and continuously move towards that perfect state. And that's where you get that impetus for continuous improvement. And remember, lean is about respect for people, smart use of resources, and a relentless focus on delivering what your customers truly value. Now, what you value, not what your organization values, but on what the customer that you're doing the work for actually values, values. And, and you have to have a relentless focus on that. So now let's talk about how AI can supercharge lean thinking, because this is where the magic happens. AI takes Lean's principles and multiplies their impact. For example, race reduction. AI can catch errors before they go out the door, which is the most important time to catch them. Obviously, you know, AI can do predictive analytics, which can forecast demand more accurately, reducing overproduction, which is one of the wastes. AI can automate customer responses, which will, which will reduce wait times to seconds instead of hours when customers have inquiries. In terms of improving flow, how AI can help there, it can automate repetitive tasks like invoicing or data entry to keep things moving. AI tools like Claude's learning modes or GPT5's improved reasoning can help process information faster and cleaner. And when it comes to pull, AI driven customer relationship management systems or CRM systems can predict when a customer is likely to need your product or service and prompt you to act, creating a just in time experience. When it comes to continuous improvement, AI can analyze customer feedback, spot trends and suggest process changes you might have never seen yourself. It's a great resource for this. Some real small business examples of AI being able to multiply the lean thinking process is in value stream mapping. With AI, you know you can describe your process, AI maps it out, identifies waste, and even suggests automation points. This is amazing. If you, if you get a chance to try this, put in your entire process. AI will map it out. It'll show you places where there may be waste in your process right now, and then even suggest areas where you can use AI tools to automate particular things. For smart scheduling, AI tools can align your staffing with demand, keeping payroll lean without risking service quality. AI can provide customer service with empathy. You know, using AI guardrails like, like LeCun suggests you can automate first line support without losing warranty or brand personality. So what about keeping it authentic? A big concern that I hear pretty frequently is if I bring in AI, will I lose the personal touch in my business and with my customers? And the answer is no if you stay intentional. Meaning you choose tools that you can control and that you can customize. Start small, test and measure the outcome and keep your values front and center, keep that customer experience front and center and the values that, that you have built your business around. And AI should free you up to spend more time on the human side of your business, building relationships, making decisions and creating value. So used correctly, AI will actually maximize the personal touch side of your business and, and then and just minimize the the things that waste your time and that take you away from being able to focus on your customers. So here's a quick action plan for integrating AI with lean thinking and process improvement. So first you want to pick one process that you use every day. Two, you want to map it using lean principles. And AI can help you with this mapping. You want to identify one step where AI could help help either reduce waste or automate something. You want to test it, test it for a small change. You always want to test everything and make sure it actually works the way you think it's going to work and that it's solving the problem. You're, you're trying to solve and, and then measure the results and refine as you go. So you want to implement it and then you want to test it and then see if the results are, you know, closer to where you want to get towards that perfection. And then once, once you, you get those results, then you refine it, you tweak it a little bit and then you test it again and it's, it's, that's where that continuous process improvement comes from. All right, that's it. For today's episode of the AI Lean Edge, we covered the latest in AI policy and tech. I gave you a sneak peek at my book Smarter, Leaner, Faster, available for pre order right now on Amazon. We talked about Kaizen and the Art of Creative Thinking by Shigio Shingo, a book I highly recommend for anybody wanting to better understand continuous process improvement and lean thinking. And then finally, we dug into how lean thinking and AI together can make your business faster, smarter and definitely more authentic. So don't forget to pre order Smarter, Leaner, Fast today Like and follow this podcast, share it with other small business owners and join me next week as we are going to be talking about maximizing customer service with AI chatbots with your business. You don't want to miss that. Until then, stay sharp, stay authentic and keep leaning into AI.