What we choose to work on and how we choose to accomplish that work are the most important business decisions we all make each day.
That means we need a methodology to gather, synthesize and analyze data, a rigorous method of priority setting to decide what to work on (or together more data on) and then effective and efficient ways to accomplish the work/task.
A number of approaches might come to mind when thinking about finding the areas of improvement to work on and how to know if we have identified the right things to work on – such as voice of the employee, SWOT Analysis (Strengths/Weaknesses/Opportunities/Threats), or trends in customer concerns.
What method of prioritizing has worked best in your organization, and how have you gone about measuring success?
In most organizations, the biggest areas of waste are held in place by functional silos. Misunderstandings about requirements, misalignment of priorities, and mistaken assumptions about constraints, costs, and capabilities all add to the waste embedded in nearly every organization.
Some examples we have seen include purchasing organizations placing orders without effective understanding of the quality and delivery requirements in manufacturing, marketing promotional plans that damage production flows and add more cost than revenue, and product engineering designing products with features the market doesn’t value.
In fact everywhere we go, we see some version of cross-functional dysfunction that results in huge amounts added cost and lost opportunity. Addressing these pockets of waste requires working across the functional silos to collaborate on the best solution for the customers and the organization as a whole.
But these are the hardest improvements to make, as the barriers are steep, such as:
- Turf barriers
- Different performance measurements
- Different priorities
- Communication barriers, and more…
To overcome these barriers, some of the experts on cross-functional teams suggest:
- Intensive team building
- Clearly expressed and understood ground rules
- Clearly defined outcomes and scope of authority
- Limited time frame
- The right people on the team
- A strong and active sponsor
Are there other barriers you have seen? What are the best practices you have seen to overcome the barriers and achieve the cross-functional breakthrough opportunities?
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.
The best way to find out whether your customers are satisfied is to ask them. Of course how you go about doing this – what you ask, when you ask, how you ask and how often – is very important.
A properly-executed customer satisfaction survey measures the perceived quality of your products and services from the standpoint of your customers. Consideration should be given to the demographic selection to provide an accurate cross-representation of your customers’ views, and consistency from survey-to-survey is important for comparing data points.
But even more important is what you do with their answers!
The data tells you what your customers think about your organization and provides guidance as to the intervention and changes needed to improve. A survey without an ensuing improvement plan does little good!
How has your organization made prudent use of customer satisfaction surveys?
A high end equipment manufacturer incurred large wastes in excess capacity to accommodate the quarter end spike in shipping requirements. It was widely, though erroneously, believed that the ‘hockey stick’ spike at quarter end was caused by the customers’ preference to buy at end of quarter – perhaps motivated by the perception that the Sales Reps cut the best deals then. Because this driving factor was beyond the manufacturer’s control, year after year, they incurred millions in excess costs without testing their assumption about the cause.
At a commercial print shop, the plant manager was very frustrated. He had chartered an improvement team to address excess paper waste and – unlike the high end equipment manufacturer described above – the team gathered facts and data. But here, too, the results ultimately disappointed.
In each of these cases, people were convinced they understood what was causing the problem and what was needed to fix it. In each case, they were mistaken and left significant amounts of waste in their organizations.
How does your organization search for root causes?
In our previous post we suggested one way to grow revenue involved “looking outward” to identify opportunities for improvement. But that approach alone is most often not enough! We must also look inward…
What processes do you use to generate sales? How well are these processes working? How do you know? You can study and improve your sales generation process just as you can improve any other process — by gathering facts and data about how the process is currently working, identifying the waste in the process, addressing the underlying causes, and measuring and standardizing the results of the improvements. What process do you use to acquire new accounts? What process do you use to grow sales with existing accounts?
Below are several different processes that businesses use to generate sales:
- Sales Calls
- Improve process
- Improve targeting
- Improve frequency
- Distribution Channels
As we described above, to sell more and grow, it is necessary to understand customers and their current needs and values and also to have the cold, hard facts about your current processes.
Several of our recent posts reference efforts to increase sales revenue. One suggestion involved “looking outward” to study customer preferences – what your customers and your competitors’ customers care about most.
A tool that might help with this task is the Kano analysis. The Kano Model is a systemic approach to understanding customer needs and wants and the value that customers place on the various features your product or service offers. It was developed by Noriaki Kano, a Japanese educator, and was designed to help answer the questions:
What does the customer need?
What does the customer value?
What does the customer expect?
What delights the customer? Customers often cannot pinpoint these needs and expectations, but when these unexpected features or products are offered, they “wow” the customer.
For additional information about The Kano Model, please visit our Website.
And, of course, we’d love to hear about how your organization has been able to study customer needs!
Many people believe that process innovation is a fundamental ingredient to improvement.
However, we’ve found that the word “innovation” is frequently misunderstood and often confused with the word “creativity.”
Creativity has been defined as the process of inventing something or making something new. Innovation, on the other hand, typically involves making something that has already been created come into use – making something new happen as opposed to making something new.
Examples: Al Gross invented the walkie-talkie, the first wireless pager, and the cordless phone. But his patents expired before any of his inventions were ever commercialized. He was good at invention, but not at innovation. Conversely, many of us were taught Robert Fulton invented the steam boat, but it was John Fitch who, in actuality, invented and presented it first in Philadelphia in 1787. Fulton was not the inventor but rather the innovator who made the steamboat era idea happen.
Merriam-Webster’s dictionary defines innovation as “…the introduction of a new idea or method.” Wikipedia states, “…innovation is a change in the thought process for doing something, or the useful application of new inventions or discoveries.”
Just as process innovation is a fundamental component of improvement, innovation is the process that can more readily drive our success – which will very often involve making existing ideas better or changing things for the better.