Friday, December 26, 2008
Monday, December 22, 2008
While many other business guru's come and go like the latest fashions, Deming's teachings are always important. There is so much of his work that one can cite in a post. Art mentions his theory of Profound Knowledge and 14 Points as good starting points. I agree.
The W. Edwards Deming Institute offers some great materials, including a nice summary the theory and 14 points. For a nice review, go to The Deming System of Profound Knowledge at the site. I've reproduced the 14 points for review.
- Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.
- Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.
- Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
- End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.
- Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.
- Institute training on the job.
- Institute leadership (see Point 12 and Ch. 8). The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
- Drive out fear, so that everyone may work effectively for the company (see Ch. 3).
- Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.
- Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force. Eliminate work standards (quotas) on the factory floor. Substitute leadership. Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.
- Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.
- Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective (see Ch. 3).
- Institute a vigorous program of education and self-improvement.
- Put everybody in the company to work to accomplish the transformation. The transformation is everybody's job.
It is easy to blame others about the crises we face, but the recovery will begin only when each of us takes personal responsibility in providing thoughtful leadership within our organizations and communities. Using Deming's teachings as a road map is a great start. Now it us up to us!
Wednesday, December 17, 2008
Friday, December 12, 2008
It seems, as things were getting tougher, management was pushing sales to "go out and get more deals!" In an effort to keep their funnels full, the sales people were chasing bad deals. They were deals in which the customer had no real interest, urgency, or funding to go forward with a project. Deals in which my client's solutions were marginally competitive. Deals that were the wishful thinking of hungry sales people.
- The lower quality deals have significantly lower win rates, yet consume significantly more sales, pre-sales, and management time.
- The few times those deals were won, the cost of supporting those customers was much higher. Customer satisfaction was significantly lower--impacting the perception of my client in the market, customer support costs were higher, decreasing profitability, and too much sales and management time was involved in dealing with these situations.
- The "inflated" funnel set the wrong expectation in the business. Management could not really determine the real performance or expected performance of the sales organization and the gap to plan. Consequently, they were not implementing the right recovery strategies.
- The time spent chasing bad deals, robbed the time sales people have to prospect and find quality deals. They were missing good opportunities, simply because they were spending too much time managing low quality opportunities.
Maintaining a quality funnel in very tough economic times takes courage, but it is the only way sales professionals and management can optimize their business results. No individual or organization can afford to waste any time or resource on non-productive activities. Maintaining or increasing the quality of the funnel, is critical to maximizing results and sales productivity.
The fastest way to increase sales productivity and building quality funnels is to get sales people to focus on vicious disqualification. They must focus on deals where customers have an urgent need--in today's economy, organizations will only invest in the most urgent, highest return areas. Sales must focus on deals that hit their organization's sweet spot---these are deals that have a higher probability of winning. There may be real deals out there, but if they don't fit your capabilities and sweet spot, you probably have little chance of winning them.
If sales people focus on vicious disqualification, the quality of the funnel will improve dramatically. Win rates and productivity will soar. Management will be able to accurately forecast the state of the business and develop strategies to address gaps. Sales people, with lean, but quality funnels will have more time freed up to prospect and find more quality deals.
It may seem counter intuitive, but vicious disqualification and the highest quality funnels are the best way to maximize business and profitability in a down economy. Your thoughts?
Thursday, December 11, 2008
Wednesday, December 10, 2008
I'm often called upon to speak about Value Propositions! Every time, I do some quick research about the topic. It continues to be one of the most popular subjects:
1. Yesterday's Google search on "Value Propositions" yielded 4,140,000 hits, up from 2,900,000 in January.
2. It continues to be a "hot topic" in blogs and in consultant pontification (I guess I need to include myself on this).
3. In our own web marketing (SEO) programs, it is the second highest performer, just behind strategic alliances and partnering.
4. When we talk to our clients' customers, one of the biggest issues they have is they don't understand the value their suppliers bring.
5. In these tough economic times, everyone is searching for value.
I believe one of the reasons this is such a "hot topic" is that most of us are remarkably bad in developing and communicating meaningful value---whether it is to our customers, colleagues, employees, employers, or communities.
There is a lot of good stuff that has been written on the topic of developing and communicating differentiated value. For this post, I won't repeat it. However, there is one area that I never see any mention of:
In every interchange -- particularly those we initiate and whether it is with customers, colleagues, or others, it is critical to think: What value will I create in this interchange?
If we can't define the value we will create, then we are wasting time---we're wasting the time of the people we are meeting with, we are wasting our time.
If we can't define the value we will create, we are best off cancelling the meeting until we can define the value.
Imagine what would happen if each of us started doing this in just our professional lives. Imagine the number of useless meetings that would be cancelled. Imagine the number of thoughtless phone calls or conversations that would be eliminated. Imagine the time that would be freed up to really accomplish things that create value.
Creating value starts with each of us. We can improve our own productivity and effectiveness by making sure in every meeting, phone call, conversation or other interchange we create value for everyone involved.
It isn't tough, creating value is not about solving world hunger. The test of whether you have created value is: Can the person or people you meet with say, at the end of the meeting, "That was a worthwhile investment of my time." If we design all our meetings and conversations to achieve this goal, then we have created real sustainable value.
Saturday, December 06, 2008
All around, I see erosions of trust---little things, here and there, a commitment made and missed, a confidence betrayed, selfish or thoughtless actions. A close business friend took many months to pay a large invoice and decommitted on a project, in the middle of the project --- costing me thousands of dollars. He has told my how badly he feels, but it was a rather large betrayal. Another friend made a commitment to meet with a major client --- then backed out at the last minute. In reality, none of these was malicious, but each represented a lowering of standards by these individuals I had trusted.
I was starting to feel a little down about things, almost feeling like pointing a finger and blaming all the people that were no longer trustworthy. Then I start to think, am I trustworthy? In the everyday rush of business, have I started to lower my standards? Am I starting to betray trusts, unconsciously, and certainly not maliciously, but am I no longer trustworthy.
I thought of the colleague that, over the past several weeks has left several telephone messages --- I've failed to return a single one. I'm embarrassed and ashamed, my standard it to return every call within 24 hours. I thought of the report a client was waiting for, I delivered it several days after I had committed it. I had good reasons --- maybe excuses, but I still caused him great difficulty in meeting commitments he made to others.
I've made a decision, I can't control what others do, but I can commit to being trustworthy. I where I have betrayed trust, I must start to repair it. If I start taking personal responsibility for being trustworthy ... and someone else (perhaps someone reading this article) ... and someone else ... and so on, collectively we might make a difference.
Several years ago, Stephen R. Covey, wrote a great book, The Speed Of Trust. I've been re-reading it recently. It's a powerful and important guide. Everyone should read it.
In the end trust starts with me, I can't be angry or bitter about others. I have to focus on being trustworthy, I know it will have an impact on me, perhaps it will on others.