Our previous post focused on improving the sales process. Along the same lines, we’ve found that the largest waste in most commercial and industrial organizations is the lost gross margin that results from lost sales, sub-optimal pricing, excessive costs and unnecessary costs in the sales and marketing processes.
Consequently, we have written a book, Chasing The Waste Out Of Sales, to help organizations eliminate that waste and create a new culture that produces increased sales dollars.
Chasing The Waste Out Of Sales identifies tools and techniques that will make real differences in your bottom line. This is not just another selling guide; it’s not a “how-to” book on prospecting or territory management, or even negotiating and closing skills. It’s the first and only book available to teach those in customer-oriented and management positions how to collect and analyze key data, share the information on a macro level, study and improve processes and make the changes that count.
We hope you find it helpful, and look forward to your comments.
People readily acknowledge that, like all work processes, the sales process is prone to inefficiencies and waste.
But many people assume that the real waste has to do with poor selling skills or that it lies in poor time or territory management, or that sub-par outcomes are due to competitors’ offerings, practices or increased activity.
And while there is certainly some truth to those assumptions, some of the biggest causes of lost revenue are frequently unrecognized, and are accepted as costs of doing business!
Read on for additional perspective…
Our two previous posts have focused on the importance of workforce engagement. Without it, trying to make sustainable process improvement most often fails! Little wonder that when W. Edwards Deming set out to revolutionize quality and productivity, over half of his famous Fourteen Points refer to one aspect or another of employee engagement.
In a recent discussion with a client that has experienced great success in moving toward a culture of employee engagement, we determined three critical steps, the first of which we’ll address in today’s post.
Step 1: Driving Out Fear
A key place to begin the process involves getting rid of the fear, as people must feel it is safe to disagree, complain, interact and share opinions. “If people are afraid to say something, you will never learn what they think. If they are afraid to make a mistake, they won’t risk trying something new.”
Jeffery Pfeffer, in The Human Equation, makes a very strong case for eliminating fear about job security. The highly successful companies he cites, while simultaneously taking great care in hiring, make job security a bedrock principle and refuse to consider layoffs when economic times are tough. He quotes Southwest Airline’s CEO, “Sure, there were times when we could have made substantially more profits in the short term if we furloughed people, but we didn’t. We were looking at our employees and our company’s long term interest.”
Job security also seems to encourage employees to focus on the longer term. For example, in a 1996 study published in the Academy of Management Journal, John Delery and Harold Doty found that the greater the job security of loan officers, the greater the returns to banks.
But job security does not mean retaining people who do not fit the culture or performance needs of the organization. High engagement employers let people go when they prove to be unwilling or unable to work in a way that is consistent with the company values.
In our next post we’ll discus the second step: Two Way Communication. In the meantime, and as always, we welcome your feedback!
In one of our recent Partners in Improvement focus group discussions, it was agreed that a critical component of maintaining Continuous Improvement (CI) success is gaining the enthusiasm, buy-in and commitment of people at all levels; and a critical step in that process was identified by the group as consistent “PR.”
“PR,” in this case, was defined as sharing news of each success with the organization at large… publicizing achievements, recognizing accomplishments and reporting the status of high-profile improvement projects… and doing so with sufficient frequency which is, by the way, a fundamental principle of marketing.
In our previous post, we referenced Margaret Thatcher’s quote, “You may have to fight a battle more than once to win it!”
When coupled with Samuel Johnson’s well-known maxim, “People need to be reminded more often than they need to be instructed,” which opened our February 14th post , it would seem we have the core elements of the recipe for sustaining a stronger CI effort.
How have you been able to provide effective “PR” for your organization’s CI effort?
The first step in Continuous Improvement is to help people develop the right mental attitude and understand that change is a constant part of long-term success.
But change is not always perceived as being good. In organizations of all types people tend to look with skepticism at new methods, processes and procedures; and people at all levels regularly cringe at the suggestion that there might be a different or better way to do their jobs!
Yet without change comes stagnation and potential loss, and there are countless examples involving well-known organizations that experienced significant declines in market share and profits because competitors introduced new and improved, lower-cost alternatives.
To avoid stagnation or losing market share to more innovative competitors we must accept the fact that change — either in the form of innovation, continuous improvement or both — is a critical component of growth and ongoing success.
And, to continue with our thread of employee engagement, an engaged workforce is a more confident, open-minded workforce — possibly a workforce that is more open to the concept of change?
Doug Hall, inventor and founder of Eureka! Ranch, a Ohio-based invention & research think tank, is often quoted as saying, “feed the brain!”
We couldn’t agree more! In order to take our organizations to the next level; to develop new insights, solutions and opportunities for a competitive advantage, we must actively mine for knowledge that can trigger solutions. All sorts of learning can become a catalyst for change.
Here are five key sources of education:
A key step to continuous improvement is to make gathering and sharing knowledge more systematic; knowledge that can be found in the five key areas listed above. Organizations that have succeeded in this area have systematically established learning goals, created repositories for information, and continually refined systems for seeking and sharing knowledge.
- The market place or “the world at large”
- The work being done within our organizations and the people doing that work
In several previous posts, we talked about growing sales revenue by looking inward to improve processes and also by looking outward to confirm customer interests and needs. The final installment in this series involves the concept of looking “forward” to grow sales.
Consider the fact that, eventually, most products or services become much like commodities — no longer quite as unique and facing stiff competition in the marketplace.
As innovation expert, Doug Hall, is fond of saying: “If what you’ve got isn’t meaningfully unique, it better be cheap!” Innovation provides you with greater pricing flexibility and market options as opposed to simply lowering the price. Remember, to grow you must offer something meaningfully unique; and sooner or later that means you must innovate.
Following are three directions you could explore to innovate and expand the business:
- Adapt your current offering to rejuvenate relationships with existing customers. What new feature or service would make the relationships young again? New features, functionality, packaging or performance?
- Commercialize under-utilized capabilities. What capabilities do you have or do your suppliers have that are under-utilized? \
- Adapt your current capabilities and offerings toward emerging needs and markets. Where is the market headed? What technological changes will influence future needs? What geographical openings will grow in the coming decade? If you were to imagine the future, what would you see?
Finally, don’t forget to feed the brain! And not just by researching current technology and current competition. Read broadly with an eye to implications and opportunities for your business. Like sharks, organizations must keep moving or die. The world is changing every day and some of those changes represent opportunities. Others represent threats.
To sell more and grow, we must constantly look outward to learn from our existing customers and market, look inward to learn how we can and must improve, and look forward to anticipate the opportunities and threats that are headed our way.
Increasing productivity or reducing the amount of “people time” associated with various processes usually sounds like a good idea. In a few instances, the impact of increasing process productivity on the bottom line is clear and simple. It may reduce the expenditures on overtime or contract workers.
However, beyond those few cases, productivity improvements for employees do not directly reduce expenditures, but instead increase capacity; and the extent to which these improvements benefit the bottom line depends on how that capacity is put to use.
The impacts can be extremely profitable or can amount to nothing — or worse!
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