Organizations are sitting on their most expensive waste without knowing it. Employee potential (the skills, creativity, and judgment your people bring to work but never actually get to use) costs businesses an estimated $322 billion annually due to disengagement, silent quitting, and turnover. And most managers have no system to detect it, let alone fix it.

What Is the 8th Waste and Why Does Employee Potential Keep Getting Buried?

Lean Six Sigma names eight types of waste in any process. The first seven are physical and easy to spot: defects, overproduction, waiting, transportation, excess inventory, unnecessary motion, and extra processing. The eighth is different. It is the loss of employee potential—skills, creativity, and knowledge that exist within your organization but never get applied to real work.

Hanna Dafne Bauer has spent nearly 30 years connecting operational excellence with human leadership. As a Certified Lean Six Sigma Black Belt, Malcolm Baldrige Examiner, and founder of HEARTnomics Enterprises, she bridges the gap between process rigor and the human side of performance. Her insight: the 8th waste is not a manufacturing concept. It shows up in every calendar, every meeting, and every job description that clips what someone can actually do.

Hanna built a diagnostic framework to map this problem. She calls it the HEART Index, which tracks five dimensions of employee potential: Hope, Empowerment, Accountability, Results, and Trust. Each connects directly to organizational performance. Together, they help leaders see where the gap between available potential and actual output is widest, and where that gap is most expensive.

This is why the high performer retention problem is so persistent. Organizations hire people for their potential, then build systems that prevent them from using it.

How a Six Sigma Engineer Became a Leadership Philosopher

Hanna did not start out studying leadership. She started in engineering. Process-minded, data-driven, trained to find waste and eliminate it. The pivot came when she realized that the hardest waste to eliminate is invisible on any process map.

“I became fascinated by the human element,” she told me. “Because when you’re looking at the process, the human is the one who can either fix it or break it.”

That observation led her toward organizational psychology, executive coaching, and eventually the Malcolm Baldrige framework, a quality management model used by the U.S. National Institute of Standards and Technology to assess leadership, strategy, and workforce development. The Baldrige framework is notable for treating human capital as an operational input, not a soft-skill afterthought. Hanna applies the same logic to the 8th waste.

The $322 Billion Number and What It Actually Measures

When Hanna talks about the cost of untapped employee potential, she cites Gallup’s State of the Global Workplace report, which estimates the annual cost of disengagement at $322 billion. But she is quick to note that the figure understates the real cost. It only captures what can be quantified.

What it does not measure: the innovation that never happened. The problem could have been solved in two hours but took two weeks because the person who knew the answer was not asked. The customer experience was fine instead of excellent because someone decided it was not worth going the extra mile.

“An engaged workforce is going to be relentless in looking for better ways,” she told me. “That’s where you start seeing the product of human potential.”

The parallel for individual professionals is direct. When your productivity systems fail to connect daily work to meaningful goals, you experience your own version of the 8th waste. You produce output. You stay busy. You hit the metrics. And yet something is missing. That gap exists because potential and performance are not the same thing.

AI Makes Great Cultures Better and Bad Cultures Worse, Faster

I asked Hanna a direct question: Is AI helping organizational culture or hurting it? Her answer was immediate.

“Both. It makes great cultures even better because you can get things done faster. And it makes bad cultures get worse faster. So which fast do you want?”

This is one of the clearest framings of the AI-and-culture problem I have heard. Organizations often treat AI as a fix for operational problems: a way to cut costs, speed up workflows, and reduce headcount. But if the underlying culture has leakage, if people are already disengaged or working in the wrong roles, AI accelerates the dysfunction. It does not fix it.

“You cannot give governance to a machine that does not have a heart,” she said. “The moment the human is removed from the equation, you’ve removed the ability to course-correct.”

The implication for individual professionals matters here, too. Using AI to produce more output while operating in a misaligned environment (wrong role, wrong team, wrong priorities) simply means you exhaust your potential faster. Alignment comes first. Tools come second. This connects directly to the Effectiveness vector in the 4 Productivity Vectors methodology: doing the right things before optimizing how you do them.

a wooden block with the word no on it
Photo by Brett Jordan on Unsplash

What High Performers Have in Common That Nobody Talks About

I asked Hanna what she consistently sees in people who sustain high performance over time, rather than burning bright and flaming out. Her answer cut through the usual list of habits and routines.

“They’re living intentionally on purpose every day, and receiving fulfillment from it.”

This sounds simple. It is not. Intentionality at this level means having a clear answer to what she considers the hardest question she has ever asked in coaching: “What question are you not asking yourself right now that you should be asking yourself?”

High performers are very good at answering the questions in front of them. The rare ones notice the questions they have stopped asking, and stay curious enough to go looking for them.

When I asked the quick-fire question: “What single thing should everyone eliminate from their workday starting tomorrow?” Her answer was not a habit or a tool. It was this: “Things that are not leading you closer to performing your purpose.”

That is a hard standard. It is also the right one. Purpose alignment is not a motivational concept. It is a performance variable. People who do not know why they are doing the work they do will never fully realize the potential they bring to it.

How to Apply the 8th Waste Framework to Your Own Workday

The 8th waste is not only an organizational problem. It is a personal one. Here are three ways to run your own audit.

Step 1: Name the gap between what you are capable of and what your current role actually demands of you. If you are consistently operating well below your ceiling, that is not a motivation problem. It is a structural one. The Prioritization vector in the 4 Productivity Vectors framework is where this work starts: allocating your best cognitive hours to work that actually requires your highest capabilities.

Step 2: Audit your calendar for potential-killing patterns. Meetings that do not require your judgment. Tasks that could be delegated or automated. Administrative work that sits in your queue for hours but could be batched into 20 minutes. Each of these is a small version of the 8th waste in your own workday.

Step 3: Identify the silent quitting signal in yourself. Hanna describes silent quitting as potential leakage made visible over time. If you are doing only the minimum required, the question is not about discipline. It is about whether your environment is asking anything of your real capabilities.

The free Productivity Assessment can help you identify which of the four vectors is creating the most friction in your current setup.

Final Thoughts on the 8th Waste

The conversation with Hanna reinforced something I find consistently true: the most expensive problems in organizations are not the ones that show up in the P&L. They are the ones that never show up at all: the ideas that were not shared, the talent that walked out the door, the solutions that were never tried because the culture could not hold them.

The 8th waste is not a Lean concept. It is a human one. And it applies as much to the way you run your own day as it does to the way organizations run their teams. The question worth sitting with is the one Hanna asks her coaching clients: What question are you not asking yourself right now?

That might be the most productive thing you do today.

Employee Potential FAQs

What is the 8th waste in Lean Six Sigma?

The 8th waste in Lean Six Sigma is non-utilized human potential: the skills, knowledge, creativity, and capability that exist within a team or organization but are never applied to the work. It is considered the most expensive waste because it affects innovation, engagement, and performance simultaneously. Unlike the other seven wastes, it cannot always be measured directly, but its symptoms include disengagement, turnover, and a workforce operating well below capacity.

How do you measure employee potential in an organization?

Hanna Bauer’s HEART Index measures employee potential across five dimensions: Hope, Empowerment, Accountability, Results, and Trust. Each connects to specific organizational functions and can be tracked over time. The index helps leaders identify where the gap between available potential and actual performance is widest. Quantitative signals include turnover rates, engagement scores, and the cost of disengagement. Qualitative signals include whether people bring their best ideas forward or stay quiet in meetings.

What causes wasted employee potential at work?

The most common causes are misalignment between roles and capabilities, a lack of psychological safety, poor management practices, and organizational cultures that reward compliance over contribution. Hanna’s research points to disengagement as the primary signal. When people stop bringing discretionary effort, the 8th waste is already happening. AI and process automation can accelerate this problem if the underlying culture is not addressed first.

How does the 8th waste apply to individual productivity?

At the individual level, the 8th waste manifests as a gap between what you are capable of and what your current work demands of you. When your highest skills sit unused while you handle work that does not require them, you are experiencing your own version of non-utilized potential. The fix starts with alignment: matching your best cognitive hours to work that genuinely needs your capabilities, and eliminating or delegating what does not.

Guest Links

Episode Transcription

Santi Tacoronte (00:01.11)
Hanna Bauer, welcome to Productivity.

Hanna Bauer (00:04.535)
Wow, thank you so much for having me.

Santi Tacoronte (00:07.8)
Hannah, before we enter into this exciting topic we have today, there’s gonna be a lot about Six Sigma. Can you give a one minute, I’m gonna put you on the spot here, a one minute crash course for our audience about what is Six Sigma.

Hanna Bauer (00:27.859)
One minute, that’s when, this is where you wanna get Six Sigma to the 99.9999 % accuracy. What does that mean? You have to have a way to detect when things are not inaccurate, where they’re not accurate working, where they’re not also creating the impact that you want them to create, or they’re creating the wrong impact to the mission and division. Essentially, what we look at Six Sigma is what are the things that are gonna happen?

was the impact to the overall mission, the overall mission, vision, and also most importantly to the customer. Because these are costs that cannot be passed to the customer. The better that we are in being efficient, it’s going to make our bottom line, those profits go even higher, and a better experience for all, both internal and external customers.

Santi Tacoronte (01:13.858)
Wow. Now, that was incredible. Now you have gone from Black Belt in Six Sigma and expert to a leadership coach, CEO. How did you connect these three? How did you move from the more operational bit of Six Sigma into and translated it and scale it up to leadership?

Hanna Bauer (01:15.767)
Did do it?

Hanna Bauer (01:23.212)
Yeah.

Hanna Bauer (01:40.087)
Desperation. Survival. That’s what happened. When we say over here, it’s like what had happened is I have become really good at processes and systems. So good that essentially I broke the system because I left the one thing that really started me even in the process and system journey. And that was the heart of my people. That was the human aspect. We don’t necessarily are.

Santi Tacoronte (01:42.733)
Hahaha

Hanna Bauer (02:07.415)
we’re not necessarily friends with data unless we understand what the purpose of data is. So one of the things I learned as I was implementing processes systems going into the fishbone diagrams, the why, know, like the current state process, and then we’re looking at future state and we’re seeing how are we catching all these mistakes? Well, there’s a lot of focus bringing in on what’s going wrong. I mean, that’s what you’re looking, you’re looking for defects, but for the good of all. But putting those process improvements in a culture.

that cannot sustain those conversations is what, for me, created really an internal crisis, an internal fire. What we’re trying to respond to the external changes. So what did that look like for me? When my top talent, I’m not being able to retain top talent or having stressed workforce and not having people really that not only the…

Resistance initiative change. I mean this excitement with change, right? We all like change. Yeah. Yeah, it looks good But the sustainability aspect of that change of what it meant for us and really what it looked like it did could not take root Unless I was also being just as intentional if not more in creating a culture that was gonna really Not only embody the vision, but where everybody felt like they belonged. So that was really my aha moment when

I realized that I had to go back to my roots. I had to go back to heart. I think it’s easy when you go into leadership to start saying, know, becoming what everybody else says you should be, right? Like, hey, you need to be operating by this. You need to be operating only by performance or key metrics, KPIs, you know, getting all this, being very scientific to it, which there’s a place. The input output mentality sometimes it gets into it. What is the linear part? Except that you…

input the human factor into it and suddenly you have a very complex system. And a complex system with the humans is going to require complex solutions, complex answers, and that’s where leadership came in. So I realized that leadership, raising my leadership bar, being able to create a culture that was sustaining not only the changes that we were implementing, the vision and the mission, became my own personal mission to be better. And that’s where Heartnomics was born.

Santi Tacoronte (04:26.69)
When you think about Six Sigma, measurement is everywhere. You cannot improve or you cannot measure. But when you talk to people and you just refer to people a couple of times, let alone fillings and these kinds of things, measurement becomes a little bit blurry, How do you bring the measurement conversation, which definitely in business is very beneficial?

Hanna Bauer (04:30.079)
Yes.

Hanna Bauer (04:44.885)
Yes.

Santi Tacoronte (04:52.824)
How do you bring it to humans, to people, to their feelings, to their problems, to their ambitions?

Hanna Bauer (05:00.874)
So there’s a couple of things, right? Well, we talk about data, we have qualitative data and quantitative data. So the qualitative data, right? The ones that, the things that we even respond with, like in those customer surveys, that say, how was your experience today? it was great. Now, great for me may mean one thing, great for you might mean another thing. So what comes important in our organization is when we hear great, understanding one is how important

Is that to us, right? So what’s the impact? And what is our internal definition of great? Because we’re looking at mapping out, we’re looking at alignment with what the customer, for example, is referring when they say great. We have a value system to that. And that value system is really looked at how, what is the impact to our overall mission? And what is the impact to the customer experience? So the main thing is, again, it’s gonna be based on culture. Like again,

I’m sure things that I think are great over here where I live are different than what you think is great over there. So we are very much have to be cognizant of that. But what matters here again, we can only control the controllables, which is the other part. We can’t control the outcomes, but we can control the inputs. So in being able to create what is what matters to us is creating not only the common language of the organization, which we all have it, right? I mean, you’ll have lingos inside. We all have different.

vocabulary we use internally, but also assigning, well, how important is this to us? And that is the mission is going to dictate to you what you need to be measuring. What is the impact of that measurement and what are the metrics? So if we’re talking about, hey, our mission is to provide great customer experience and somebody uses the word great. Okay, we have already defined great. What is great for us? That means that it was delivery on time. It means that they were able to, it was easy to do business with us.

It means that they were able to, was it a whoa, wow, you know, what was that, right? So we started putting metrics to that. And that’s something we definitely want to measure. We could sit and measure everything, right? But really what we want to be able to do is assign specifically those things that matter to us. And also what would be something that would not be great? Because if we understand like, hey, this is a complete opposite, no, being that a defect in our customer experience.

Hanna Bauer (07:24.618)
then we also need to have a definition of what that is. A lot of times I ran into problems even in my own organization and in my own company is defining what done is done. There was some people internally is like, yeah, it’s done. it’s almost done. yeah, it’s done. Or is it done, done? Or is it done, done, done? We even had three levels of done. So the understanding even, they don’t have to even be with the customer outside. It can literally be across departments, even within a department.

of what is that, yeah, it’s almost done. Almost to somebody, maybe two hours, to somebody maybe two weeks, to somebody maybe a month. So understanding again what the definitions and coming to an agreement and coming to those, not only the agreement but the permission on what it is, what is the range that we have even in the language that we use. That’s how we become, start making that a process. That’s how we start looking at, this is really, maybe there’s levels to done.

But as long as we’re in agreement with that, we can say, is it done level one? Is it done level two? Is it level three? Or do we need to change our language so that we all know what we’re talking about?

Santi Tacoronte (08:32.942)
Hannah, you were the first woman to chair the board of Ser Familia. There’s a very leadership, different leadership context as to, know, corporations or boards. What did that part of your life and career teach you?

Hanna Bauer (08:38.548)
Yeah.

Hanna Bauer (08:53.134)
well, the importance of governance. So one thing is, great family, I still serve on the board as an awesome organization, just seeing, I love the work that they’re doing here in our city, and really in the state. One of the things is, and this is what I find a lot with leaders, especially in the nonprofit sector, you have very passionate visionary leaders that, you know, there’s this level of success that the organization may get because of the reputation of that leader.

there’s a level of success because of the immense amount of work that that leader is doing to the point of, yeah, burnout. They basically, they leave everything there because they’re completely devoted to the mission and the vision. So one of the things in this case, I was not the executive director, but here I came as a board member in the governance aspect. So for me, it was a great opportunity to see as a governance board, how do we amplify

the work that the executive directors already doing. Not in, which is what I’ve seen in a lot of other nonprofits, not where you’re stopping, but at the same time you also, because you have to be fiduciary responsible. So there’s a financial aspect that we have to bring, but where it allows for the operational excellence to occur within the organization. And at the same time, you are having the governance, know, an outside body who’s not in the internal operations.

but a governance body that is not only allowing, amplifying, and supporting the internal operations of a system. So for me, that was completely fascinating. How I was able to help with the processes and systems, was enabled to mapping out what were the functions, what was the charter, what were the main duties that we had as a governance that perhaps were not being taken care of, or the entire weight of the governance was on the executive director. And also for the executive director,

and between with our governance, how did the succession happen? How did we prevent from losing knowledge? And the way that we prevented losing knowledge was again, we had to prioritize and understand what is the main thing, the main thing. Strategic planning came into place, not only the functions, but the systematic approach to the board also came into place, as well as the other bodies that we were responsible to, like.

Hanna Bauer (11:11.914)
the donors, the grantors. mean, every single one of them becomes really a boss. And not just that, but then compliance issues, right? So there were things that they needed to happen internally compliance, but also there was a lot of compliance dealing with the board. So understanding how do we keep a pulse on this compliance things again, as a board that’s not involved in the daily internal operations, but still is able to provide governance in all and direction in all things.

and be responsible both fiduciarily and also to the standards that were being required from the organization. So I got to help with that, establish that and really see the organization grow.

Santi Tacoronte (11:54.911)
Hannah, in the lean philosophy there is something called the 8th waste.

Hanna Bauer (11:59.69)
yeah.

Santi Tacoronte (12:01.804)
And it’s defined as the, and correct me if I’m saying something wrong, the nonutilized talent, the waste of your most bright people that is not being squeezed because you hire smart people to get the best of them. What do you think is happening in companies these days? And what do you think is the percentage of human potential is actually being wasted across businesses?

Hanna Bauer (12:17.738)
Mm-hmm.

Hanna Bauer (12:28.768)
Sure, okay, so that is a very interesting question. It’s actually one of my passions on why I do what I do with heartnomics. And I first became aware of it because here I am, right, as I’m doing my Six Sigma thing, my black belt, and you know, very data-oriented, and suddenly it was even going back in my face, which I didn’t see right away, the word human, right? I mean, there’s literally…

an entire section and we’re talking about aid waste on the loss of human potential and and and we use that in our language. my gosh, there’s so much potential in them. my goodness. We also talk about unleash your potential, reach your potential. We talk about that. Well, what is that? How do you measure it? You know, what what would how do you know as an organization that you’re not having it? Well, when you’re talking about potential, you’re also talking about innovation, right? You’re talking about the goodwill. You’re talking about that gap even between what’s being required and like the minimum requirement.

but also the ability like what we talk about hey go in the extra mile well how are you gonna go the extra mile unless you have potential so we know there’s even another gear for all of us in what we can do the question is not that if we have it we know if we have it or not internally we all know but why are we not applying it here why are we not applying it now

So those are internal choices that we do. One of the things with loss of human potential, how do you measure it? Well, one of the first measurements we have is saving in the $322 billion that are being lost, you know, again, due to the silent quitting, the disengaged workforce, the burnout, the mental part. So all of those are symptoms, but they’re all symptoms to the loss of human potential. The people that say, hey,

I don’t wanna micromanage. Well, why are we even having to micromanage? Because we know that people can do this type of work, but somehow or some reason they’re not doing it. Or even with all the tools to measure even keystrokes or making sure your cameras are on when we are during the time, I only really have a way to measure your presence and I don’t have a way to measure your productivity. And even if I can measure your productivity,

Hanna Bauer (14:38.556)
how much of that productivity does it really take the eight hours but even if it took less do i have a way to reward that

So when we talk about the human potential, it is the knowledge that walks out the door. It is that what we refer to the silent quitting. It is all part of that. And what does it cost? Well, it’s costing us innovation. It’s costing us results in getting solutions. We cannot try to continue to do the same, remain the same in a world that does not stay the same. Everything around us is changing. So if I don’t have a way to be able to both honor

here.

catch and invest in the potential of my people, I am going to lose out on innovation. I am a product of innovation. I literally, I say I carry the scars of innovation in my body because of my battling a heart disease, a heart disease that at the time was incurable. Not only there wasn’t research much on heart attacks in women, there’s not really much research on heart attacks in kids at the time. It’s just something that you don’t get. So for me, I was battling

not only a disease that didn’t understand, but really when you were looking at a solution, you’re to understand the problem and not having really somewhere to look at from the professionals. Now, me as a kid, I didn’t know that was all going on. All I knew is I couldn’t breathe. All I knew was I couldn’t walk or do the things. So what I did learn back in retrospective, once I got the phone call 20 years later after my surgery, I understood that

Hanna Bauer (16:13.524)
the impact in that it wasn’t just me, I was the first of 3,000 kids that were saved through the surgery. But also, I got to hear my doctor and even their struggle and innovation. But what made them go the extra mile? Well, they saw the human, right? They saw me. They saw me as a kid. But not only that, they also had a belief. They believed that although operationally, my things, had a dysfunction with my heart, that if they just use the knowledge

or the tools that they had in a different way, that indeed that they could come to a solution. And I will say that same mindset needs to be used in our workforce. And that’s what the loss of human potential, that’s the danger. The danger is that we’re not being innovative. The danger is that we’re not looking at the current tools that we have. And it’s not a fact about getting more, even in Lean Six Sigma, it’s about really cutting out. It’s about having less. But in that less, really, there’s

more. What do we have that we can use in a different way? An engaged workforce is going to be relentless in looking for that and that’s where you do start seeing the product of that human potential.

Santi Tacoronte (17:24.91)
If or when you go to fix this waste in companies, where do you start from? The senior leadership, the middle management, or the people that is doing the work? Because we had a very interesting guest last week that said that generally senior management is quite aligned. But this the…

Hanna Bauer (17:30.773)
Mm-hmm.

Santi Tacoronte (17:50.86)
middle layer that creates and interprets their own culture and the ones that are creating those mechanisms of control and also diminishing the potential of humans somewhat that creates that. So how do you go about this?

Hanna Bauer (17:52.276)
Yes.

Hanna Bauer (18:06.344)
Okay, so usually the fact of all this or the dysfunction is felt on my senior, my middle line managers. I mean, they’re really honestly caught in the middle, right? I mean, they may not be the ones that are making the decisions, they’re carrying out decision that may have come top down, and yet they’re the ones that are at the front line for receiving what this decision or what this implementation is gonna look like. So one of the things is usually why do I come in?

Obviously, if you’re not the one implementing the solution or the initiative, you may not catch right away the response of the people when you start bringing out new processes, new systems, even new ways of doing things, right? So the likelihood that maybe a C level or executive vice president or that part or even a board member may come to like, hey, maybe we need to do something about this is usually

down the line when at that point it went from a slight resistance to now I have a fire.

happening. So what does that fire look like? That may mean, hey, they got the sales, the profit, right, the profit and loss statement. So suddenly like, hey, things have gotten more expensive, profit line is looking low. So how do I start usually that or unfortunately lawsuits or that we got fines because we weren’t complying in something and we didn’t realize nobody told us that we needed to do this, right? Or how can they not see that we weren’t doing that? So how can they not be

Whatever. So that’s where the question comes in. When I come in is a lot of times when there is a loss in the sense of the talent that has walked away or a key leader is not getting ready to retire.

Hanna Bauer (19:54.207)
and or move on somewhere else and how are we going to replace this? What is it that they do? You know, how are we going to implement and realizing that perhaps there’s not an immediate person that may even take three people to be able to do the work from this person that may no longer be there. So that’s usually when I get called. That’s usually when people like reach out, hey, we either have a crisis, right? Because that’s the thing about crisis.

crisis don’t create the culture, they reveal the culture. Suddenly some things may come to the surface that were not that could be cooked with or tolerated for a while, but when you are going fast, suddenly these not seemingly things that we tolerate it become to the front and it may become toxic. The other times I’m called is when they want to seize opportunity or hey there was an opportunity that we couldn’t seize because we didn’t see it or this is really big but

I don’t even have the talent pool. How are we gonna multiply it? How long is it gonna take people to train so that we can go after a very good opportunity for us? And the other part is the strategic plan, where there’s a strategy in place, but the strategy is not integrating to the daily activities. So those are the other times that I come in. when there’s already, we got the strategy, looks great on paper, looks great on our walls, looks great on our stage.

of the union address, whatever you call it, but it’s not becoming integrated, being part of our daily lives. So how do I help? How do I usually come in? Again, they won’t say that.

there probably is a communication problem. So there’s something wrong in communication. We’re just somehow not, we’re spending a lot of time in meetings. We’re spending a lot of times like, having to deal with fires every day. We’re not able to really carry out strategy because we’re having to deal with so many, perhaps even human resource problems. Or we’re having to deal with a compliance issue. Or we’re having to deal with these other parts, right? Or the loss of

Hanna Bauer (22:06.968)
of a client. So all of these things are like, hey, did you not see this coming? Hey, you know, when was I gonna find out? Why did nobody tell me? You know, those kind of conversations. So usually it’s defined as a communication problem, but that really is what we see on the surface. At the bottom of it, you start seeing, well, what would be the processes for you to find out?

Well, what is the feedback system? And the feedback system means that there’s a loop system, right? It’s not a top down because the communication is both ways. So what’s your feedback loop? So in that sense is that we start looking at it’s not just a matter of me understanding or let me go take a speech class or let me go take a communications course. That yes, that’s all part of it where I can become a better communicator, I can understand your communication part, but how do I integrate it into my daily processes, activity?

with my team or whoever I need to speak with. How do we have, what’s our communication process? hear a feedback loop with contractors, with global teams, because people sometimes think that, well, if you’re on global teams or on Zoom, I can just be task-oriented and forget the culture. We’re still humans.

We still have needs. We have the need to belong. We have the need to have meaningful work. We have the need to be seen. We have the need to be valued, add value, be passionate. All of that still applies in a digital workplace. And that’s also the other part where I help in is what is the current culture in the different ways, in the different contexts that you perform work in.

Santi Tacoronte (23:51.854)
You mentioned quiet quitting or silent quitting. I want to double down on this topic because I talked to a lot of people, Hannah, a lot of people tell me.

Hanna Bauer (23:57.611)
Mm-hmm.

Santi Tacoronte (24:07.448)
Santi working these days, sacks. Companies don’t have any loyalty towards employees. Employees obviously fire back not having any loyalty towards companies. You can get fired or laid off on a quarter short-termism, all these things. But I wonder, Hannah, how much is for the companies to fix as part of the culture?

Hanna Bauer (24:10.56)
Mm-hmm.

Hanna Bauer (24:14.965)
Mm-hmm.

Hanna Bauer (24:20.704)
Right.

Santi Tacoronte (24:35.34)
versus how many external factors like, for example, inflation and the fact that your salary cannot buy half of the things it could buy 10 years ago. Do you think that there is a lot external as to what people think working in corporations or small or medium large companies is not so great today or you think there is a lot to fix within the company culture itself?

Hanna Bauer (24:46.261)
Mm-hmm.

Hanna Bauer (25:04.456)
I mean you gotta think about it. I just think about the principle of a boat. I mean a boat is surrounded by water. The problem is not the water. The problem is if the water gets in the boat. You’re not gonna be able to decrease the amount of water in the ocean. You still have to navigate in the ocean. So it’s the same thing with organizations. Right now what seem to be very much external change or problems

may not be an issue five years from now, but there might be another issue that’s just as big. it’s understanding that, yeah, it’s the waters. That’s why we said we have to navigate uncertainty. We’re gonna have to navigate crisis. We won’t be able to stop the crisis that happens on the outside. What we can do and need to do is make sure that we are well, like again, to keep the company afloat.

So yes, it’s gonna require consistent internal looking. A boat doesn’t just, you build it once and then, get off you go, go to the ocean and you don’t come back to it again and put people in it consistently and think that you’re gonna make it to your destination every time. You know, that would be irresponsible, right? I mean, when you wanna get on a boat or a ship, that was checked, last time it was checked was when it was created.

So, and get on across oceans and waters that are not, and it’s nice when there’s still waters, but then a lot of times that ocean of water is typhoons. They’re huge. They’re huge waves. So understanding that, there’s always movement.

Santi Tacoronte (26:24.968)
Thank

Hanna Bauer (26:39.336)
So an organization is the same part. When we talk about leadership, we know we’re consistently navigating. So what does that mean for a ship to stay afloat? There’s consistent communication. In times when there’s storms, there’s what? Over communication. There’s things that are activated, systems that are activated specifically for times that may be rough. The same way, even like you talk about hospitality industry. are labor groups that are activated in times of high demand.

because you know, hey, is the summer coming? I’m gonna activate my contractor who can provide me with staff during that time. So you’re activating things. So again, because I know what waters I’m gonna be navigating. I won’t know that even what I need internally if I don’t have a direct pulse on what is it that keeps one.

the water away that keeps the communication going and be able to remain afloat and can I detect the water? That’s a problem. If I cannot detect the leakage, so when we’re talking about what you’re saying, the silent quitting, that’s leakage. I cannot detect that. Every person that leaves or every person that’s not operating or producing at that part is a data point.

Am I ignoring that data point or am I looking into that data? So we have to start also dealing with not only the people if they left, why did they leave? Do I care? Absolutely. You’re right. I mean, as far as like people like the input output, input output, that’s how we want. We wish it could work. It’s not that easy. There’s nothing linear. Success is not linear. You know, our earth is not linear. What is linear? I mean, there’s always constant movement. What happens if you’re linear?

and there’s move what happens? It cracks. You cannot do that. What is gonna be more stable? It’s a bridge, it’s a bridge completely linear. No, it’s consistently constantly moving. Why? when you’re talking about even businesses, you’re talking about matrices, right? It means that you’re operating by function, you’re operating by responsibility. You’re really talking about ownership. And this is one of the things that we’re saying with the…

Hanna Bauer (28:53.674)
The silent quitting well is a lack of ownership by understanding who’s the owner of what function what is again my role clarity and What how does this all fit again meaningful work culture? Definitely tells you that so if you have a business with high turnover, that’s a part of their culture It’s not that’s a problem against our culture. No, that is your culture Understand that that your culture there’s nothing that happens outside of your culture. It’s like character in a person Do you make a decision?

outside of you? No. It’s the same. Character is to a person what a culture is to an organization. So if there was a purchase mistake that was when unnoticed, that’s the culture. That’s a result of culture. Understanding that. If nobody cared even to catch a mistake and we just went on, the culture supports that because there’s no clear

reward or you know anything else to catch to say otherwise. Somebody not showing up or not doing not doing the fullness of the work. Culture supports that because it may not also reward those that are going the extra mile. So the culture supports that. We’re humans. We adapt to our environments. So the main thing with culture is that what kind of environment am I creating?

that will support.

the initiatives, the vision, the mission that we all say we’re doing here. And yes, that definitely requires the commitment and collaboration of every level of leadership. And that’s really goes back again, not only to that, but also psychological safety. When you think about highly productive teams, they’re also highly productive in the reason being is because they see the support, they see the role modeling, and they know where to go.

Hanna Bauer (30:52.672)
in a decision-making. So psychological safety becomes very much to the forefront when we’re talking about even the silent quitting because that is an important thing. mean they said, what is it? Am I safe? Like last time I asked a question I got shut down.

I may have already quit after that, you know, repeated, repeated time and time again. I get asked surveys as a, as an employee, how was my experience? And I fill it out and we never hear about it again until next year when we have to fill out the survey again. Does it matter? Because that’s the thing about surveys. There is an expectation that when I fill out a survey, you’re to do something about it. And when you repeatedly don’t, then you’re telling me even my voice, what’s

What’s the point? It doesn’t matter anyways. And that’s me, seeing this highlight pudding again.

Santi Tacoronte (31:48.974)
Hannah, you created the heart index. What is the heart index? What is the heart? Because I think it’s an acronym and how did you index it?

Hanna Bauer (31:52.554)
Mm-hmm.

Hanna Bauer (32:01.237)
Okay, so there’s a couple of things, right? So we can go all into it, but HART, there’s a couple of parts. HART is a framework for the values-based leadership. So I have HART, the framework, but I also have in the HART index, we’re not just measuring the framework, which is a values-based leadership. In the HART index, what we’re measuring is the impact on the functionalities with not only the velocity, the ability to detect, but also what is the overall impact

or not to the overall vision. So the heart index really brings in what each function is in a business and we all have them. We all have systems. You may not know how your circulatory system is, but you being a human, you have a circulatory system. Like, you know, we have things, the reason why we’re able to to create diagnosis for illnesses or create healing paths is because there’s certain patterns that we look at internally. Well, the same way

there are certain patterns that we look internally in an organization. So the hard index, really what it gets to is both the systematic overall impact of the system. The problem may be coming in finance, but it’s not felt until you go to HR when you can’t hire the labor that you need to to get over the side season. So you may think it’s an HR problem because, how did I not have to hire? But really it became in finance because we totally misallocated the budget.

So as again, looking the heart index will help with that as well as

get into the loss of human potential because there are answers just like in coaching we believe in coaching that you already have the answers within you we have to bring them out to the front the discovering part and the same thing you don’t need more talent you don’t need more systems more processes more all this all that what you do need to do is bring out the core from the inside organization to be able to operating at its maximum so you can grow so that you can innovate so once you’re in alignment try driving a car

Hanna Bauer (34:05.004)
that’s aligned, it’s beautiful. It’s smooth, it goes fast, but guess what else it can do? It can slow down and not go be shaking all over the place. The heart index helps you do that.

Santi Tacoronte (34:20.237)
So when you start implementing the index, because you said something very interesting, which is that a symptom in a department might become a consequence in another one. How do you connect? How are you able to connect all these symptoms and find the root cause where the actual thing is happening?

Hanna Bauer (34:46.998)
Well, Santi, that’s why you have to be part of my community. That’s exactly what hard topics is about. So it’s not something I can go into deep, but understanding one first of all is that you have knowing, I even talk to many leaders, don’t understand, we don’t have a system for that. Or we don’t have a process for that. No, you do have a process for that. Obviously, because if it’s getting done, you have a process for that. It may all be in your head.

It may all be in a piece of paper. That’s still the process. So in looking at the one thing is the awareness, but in the heart index is understanding that everything has a function and everything belongs to a system. I mean, that’s otherwise it has a purpose. So we look at the overall purpose internally and what is the point of this? mean, having you ever asked, ever been at a job where you’re like, you do this, you do something. So what was the point of that?

know, projects that maybe somebody did and like you just never saw it to fruition. It’s like, okay, why did we do all that work? Right? Have anybody done that? Yeah, I know I’ve been like, you know, we have, get involved in those things. So that’s what the heart index gets into, you know, the purpose as well to the activities that we do. And again, if it’s not aligned to the mission or division, what are we doing?

Santi Tacoronte (36:12.493)
You want to take a shot at AI? I want to narrow down the question. Is it helping the culture or is it the culture, bad cultures worse?

Hanna Bauer (36:14.646)
Sure.

Hanna Bauer (36:22.614)
I think both. I think it makes great cultures better because you can do things faster through your line and it makes the bad cultures get worse faster. So both of you have it faster. You want faster? Which fast you want? You want fast up or fast down? So, I mean, again, it’s kind of like you’re a tool. It goes back to it. You cannot, it would,

Santi Tacoronte (36:31.245)
you

Hanna Bauer (36:50.35)
not be smart, it would be foolish in our hands to believe that AI is going to solve my internal cultural problems. It’s just give a tool to something that’s already dysfunctional.

is not going to fix the dysfunction, it’s going to create more dysfunction, it goes faster. So the problem that I see here, really where your audience needs to look at, is who is governing the tool? And if your process or your system gives governance to a automated technology third party tool, anybody who’s ever had a website who has a third party, you can’t change a thing because you gotta control that, knows the frustration.

that you give governance, anything you give governance to somebody else, you lose a lot of the potential, the speed, everything else. So important in AI is have clear governance of these tools that goes back to the human is still has the responsibility and the authority.

The problem comes in, again, if you’re giving authority consistently to something else that we don’t even know it completely understands us. We expect these answers from this understanding of who we are. Well, it’s kind of like asking somebody else, tell me who I am and tell me what I need to do when you don’t know who you are yourself and you don’t even know your dreams or your problems or your things. It’s the same thing. So in an aligned culture, AI, beautiful. It amplifies the work that you do. It can help you get there.

much faster. But in a misaligned culture where already you’re having silos, where you’re already having leakage, know, where there’s already the problems coming in, very easily things can be, problems will be amplified quicker.

Hanna Bauer (38:39.99)
And we wouldn’t even know that they’re a problem. We’re thinking that the solution is a problem. Because understanding, every time you introduce a solution, you’re going to introduce a problem. So the thing is mitigating. mean, try any change, right? mean, even if you just go on a diet, if I want to go vegetarian, I’m going to have a problem every time my family wants to eat beef. So not even my problem. I’m going to have to adapt. I’m going to have to plan. I’m going to have to do things that I didn’t have to do if I just ate beef with everybody else. I mean.

That’s just what comes with it. Same thing in the organization. Knowing that every solution is gonna have a problem. It’s gonna impact somebody else. Question is, can you forecast how do you mitigate it and is it worth it at the end? Because you’ve probably seen that the cure sometimes is more expensive than the problem. Is that a good business?

No, okay, we still have to fix the problem, but we gotta look at a cure that’s gonna allow me not have all the side effects and it’s gonna kill me faster than the disease. So it just comes back to common sense, which is a beauty also that we have as humans.

Santi Tacoronte (39:37.538)
Hmm.

Santi Tacoronte (39:44.558)
Hannah, I have crafted five questions here that I want you to ask in 30 seconds. Want to do that? All right, number one, what is the single biggest waste in most people’s work days?

Hanna Bauer (39:53.942)
Sure.

Hanna Bauer (40:02.939)
the not urgent, not important things that we spend all day doing.

Santi Tacoronte (40:08.653)
Number two, lean six sigma or emotional intelligence. If you could only teach leaders one, which one you choose?

Hanna Bauer (40:19.99)
Hmm only one? My goodness, I guess emotional intelligence. I believe love does conquer all and if we love it will lead us to find a solution down the line.

Santi Tacoronte (40:31.693)
Hmm. Number three, the one word that should replace burnout in every leadership conversation.

Hanna Bauer (40:39.232)
fulfilled.

Santi Tacoronte (40:43.383)
Four, best question you have ever been asked by the thousands of people you have coached.

Hanna Bauer (40:49.846)
Okay, now that’s the hardest one. I can solve the world’s problems, but not that one. The hardest questions I have been asked. What question are you not asking yourself right now that you should be asking yourself? That always gets me. really? I mean, it makes sense because I asked the same question, so it’s a fair game. You know, what question am I not asking? And how do I really know I’m not asking? Can I identify that I’m not asking that in time for me to be able to do something about it?

Santi Tacoronte (41:21.195)
And number five, what is one thing that you want every person listening to eliminate from their workday starting tomorrow?

Hanna Bauer (41:30.164)
Oof, waste, yeah, but I mean, doing the things that are not fulfilling. think the eliminate starting tomorrow, things that are not leading you closer to performing your purpose.

that we all have a purpose at the end of the day we want to have that fulfillment and it really is what is that farewell address going to be to our letter to the world and it only matters when we are living intentionally on purpose every day and receiving that fulfillment and that is in any in any area of our lives give yourself a break give yourself a time get in touch with your purpose and do it

Santi Tacoronte (42:09.879)
Hanna, we just reached 25,000 monthly listeners.

How can they reach out to you? How can they find you? How can they get in touch with you? How can they hire you? How they can know more about Hanna Bauer?

Hanna Bauer (42:25.866)
Well, you can find me at the easiest place, Heartnomics. I’m sure you’ll have also the handles on there by LinkedIn. I’m very active on LinkedIn. If you wanna see some more of the work. And yeah, I am actually about to launch a community where I’m gonna have a lot of nice nifty tools for all of y’all so you can start identifying not only how your heart index is, but get you ready in being really good in the alignment part and the fulfillment. So I look forward to having y’all in my community.

Santi Tacoronte (42:53.261)
Count me in. Hannah, I want to thank you for these very energetic and positive and at the same time very assertive interview or conversation. I’m taking a couple of things away. First one is that I do believe we live in a short sighted times. Short termism is everywhere. Everything that matters is next quarter.

Hanna Bauer (42:55.325)
Bye.

Hanna Bauer (43:09.194)
Yeah.

Santi Tacoronte (43:19.777)
But I think also that humanity is going to bounce back. And at some point when all companies start raising the alarms because people don’t want to work for companies that doesn’t have a heart, humans are going to raise up again and they’re going to be valued again, even above shareholders and the next financial quarter. And the second one is I wanted to answer one of one question you posed here, even if you didn’t ask me directly, but I would like to.

Hanna Bauer (43:40.886)
them.

Santi Tacoronte (43:49.153)
You ask if I would jump into a boat that hasn’t been checked since it was built. I wouldn’t. Hannah Bauer, thank you so much for being with us today.

Hanna Bauer (43:57.351)
Right. Thank you for having me. Thanks so much.