Hidden Costs are Killing Margins

From The Lean Solutions Podcast by Patrick Adams

May 5, 2026 · 40 min · Season 5 · Episode 17

About this episode

The episode discusses hidden costs that erode margins and practical ways to uncover and address them.

What You’ll Learn in This Episode: In this episode, Patrick Adams, Catherine McDonald, Shayne Daughenbaugh, and Andy Olrich unpack the hidden costs that quietly erode margins, and why most organizations don’t see them coming. You’ll learn how these costs often live outside traditional financial statements, showing up instead as rework, inefficiencies, poor handoffs, and constant interruptions like “hot jobs.” The team shares real-world examples of how these hidden issues build up over time and significantly impact performance. The conversation highlights practical ways to uncover these costs, including going to the gemba, mapping processes, making data visible, and engaging teams through consistent one-on-one conversations. They also emphasize the role of leadership in either allowing waste to continue through workarounds or actively eliminating it by creating clarity, standards, and accountability. If you’ve ever looked at your financials and wondered where the margin is going, this episode gives you a clear and actionable approach to finding and fixing the leaks. Key Takeaways: Hidden costs don’t show up on financials—but they directly impact margins Rework, poor flow, and “hot…

People in this episode

Host: Patrick Adams

Guests: Catherine McDonald, Shayne Daughenbaugh, Andy Olrich

Topics covered

hidden costs
margins
financial statements
leadership
process mapping
efficiencies

Keywords

cost leakage
rework
inefficiencies
GEMBA
leadership behavior
data visibility

Mentioned in this episode

Organizations: Lean Summit, Lean Solutions