Lean Production Archives

What Day Is Laundry Day?

When you think about laundry, what comes to mind? Lost socks? The folding? Or maybe you simply don’t like to do laundry (like the 100+ year-old woman I saw interviewed on Johnny Carson many, many years ago. “What don’t you miss?” asked Carson. “Warshing Dey!” She exclaimed) . A lot of what I write about centers on lean thinking the application to Smart Sales Operations. But I’m not just about smart sales operations. As I’ve stated elsewhere, I think about efficiencies and how to get more efficient all the time—in every facet of my life.

And one evening when I found myself conversing about doing laundry with a fellow hockey player, I realized my obsession with cranking through laundry wasn’t only my secret obsession. He and I were both about getting laundry clean and put away as quickly and as efficiently as possible. It was our children and spouses who created our OCD, but the growth in our compulsion was through experience: things like finding mildewed wet loads left in the washer and our bedrooms and family members’ various pieces of furniture looking as if hit by a yard sale. Clothes laid on furniture instead of put away in closets or drawers–basically clean clothes left out for cats to sleep on and children to pile up dirty over clean. So, he and I discussed how we crank it out, getting from dirty to clean to put away in one fluid and very compressed event.

How does clean, folded laundry relate to Smart Sales Operations? First, let me clarify if any have concern about me doing the laundry versus my wife please understand that I have no issue. My dad and his generation might, but me? I just want it done. And since I work out of my house, I do most of the laundry. I ended up taking it over completely when I started working out of my home, and what clinched it was one of my past companies had a series of calls every Monday morning which were interminable. Since I was an hour ahead of the main office, by the time our calls ended it was usually noon my time.

To make better use of that time, I started throwing in laundry before the first Monday call and transfer loads in between the queue of calls, pulling clothing from the dryer so things wouldn’t wrinkle, and then when all the calls and laundry were finished, take it upstairs for eventual folding.

Now, don’t judge my parenting skills, but the intent was then to have my children (and sometimes my wife) fold their clothes. Or, what usually would happen is the clothes would sit in a chair in the bedroom and I would end up folding them— on the following Sunday.

So what really happened is clean laundry sat for week in the chairdrobe. Sometimes it would sit for more than a week depending on my travel schedule and what I had going on that weekend. There might be two weeks of clean clothing in my bedroom chair waiting for folding. My children would ask where particular items were and I would palm my forehead wondering if they understood where the clean clothes were and what they were capable of–that is, folding and putting laundry away as well me.

And then one day, many years after I had been away from the company where I formed this habit, I realized doing laundry on Monday wasn’t achieving what I really wanted, which was to get everything completed in one day. My habit created a situation that hung over my head. In the vein of David Allen, think Getting Things Done, I wasn’t getting things done or prioritizing so I could get things done.

The epiphany came one day when I had to do the laundry on a Friday. Per my usual, I finished everything and had it upstairs in a day, and then realized when folding it on Sunday I only had two days between getting the dirty laundry clean and getting the clean laundry put away.

Eureka!

If I were in manufacturing, this would be akin to combining assembly stations or cutting out a step where the next pick in line had to wait to add value to the product.

Do you see why this relates? Why I got excited enough about this to write about it? By rethinking what I was trying to achieve (clean, folded laundry) I had to change how I approached my timeline to get it done. I went from a process which could take up to seven days to one that takes only up to three.

Part of the struggle evangelizing Smart Sales Operations is there are two jobs to do: first is to educate what is “Smart Sales Operations”. Second is to point to the company’s sales operations and get them to see it could be better. The best possible outcome is they “get it” and engage to correct. Sadly, what I’ve come to learn is most companies and most people don’t realize they have a problem in their sales operations. Like my laundry, they just don’t see that gap of four days, because things work well enough that it isn’t apparent to them—so they don’t acknowledge the pain it is causing because the expected outcome has never been measured. Because no data has been applied to their process, the end users downstream live with it because it is all they have. It is very much like cutting the end off the ham.

Think about your company processes. Where are there forms, reports or reporting which are redundant or extraneous? Or where do expectations march along without too much question because management isn’t affected by them? Where are the places in your sell chain where you are unaware of the friction it creates for their sales reps? (This is a “known unknown” and will be addressed later.)

And, we all have the same thing going on in our personal lives. We have habits, and we have training, and we have our way of executing—it takes a lot for us to raise up our heads and look around with fresh eyes. We tend to do what we know, and judge from a our perspective

We are always capable of learning new things—and your company is desperate for change, believe it or not.

So, what are you going to look at anew? Better yet, when? The sooner the better.

Thinks, Inc. is a consulting firm which specializes in Smart Sales Operations. If you’d like for us to come and assess your chaos, drop us a line at contact@thinks-inc.com

How Lean is Lean? When Do I Quit?

In my humble opinion…

Great words to start a post, eh? But the fact is, most of business and business process is based upon opinion. It is like a very loosely constructed scientific experiment with no great way to prove a hypothesis except with 20/20 hindsight. So when I speak of Lean in this post, it covers a lot of different ways waste and efficiency have been tested in business, but also tries to show when the experiment might be over.

From my perspective, there are two things to remember about lean practices in an organization: 1) Lean implementation is meant to take out the waste all organizations suffer from in the implementation of their manufacturing or intellectual processes. 2) Lean is like an asymptotic function and will never be “completed”.

It is this second point which I want to focus on today, the “never completed” idea. Let me set up a few scenarios for you:

Manufacturing: Elimination of muda across a production line over several years. Success has been demonstrated, and returns are harder to come by/prove, but management is still driving for 5% annual improvements. When does this cross the line from improvement to impossible?

Purchasing: The elimination of excess spending is implemented, incenting the purchasing department to challenge spending and vendor costs. Typically the more purchasing “saves” the company, the higher the bonus Purchasing receives. After years of paring down costs, vendors and excess spending, the parameters originally placed still exist, making it harder to show percent savings. Purchasing has completed the task but are required to continue to show the same result.

Sales Effectiveness: The sales processes put in place to bring all sales representatives up to minimum quota levels have been implemented, but as the goal attained, but process remains in place. In a normalized distribution, the best performing sales reps remain, but the distribution is so tight that even A-players are at risk for remediation.

The problem with all of these is there comes a point where the goals of the original program have been achieved (or nearly achieved–see asymptotes, above), but the program or initiative which was implemented remains in place. Not only the program, but also the infrastructure of people achieving their goals and objectives. Which means this becomes a hard beast to kill once the objectives have been reached since someone has taken ownership or is responsible for the program (a little job protectionism…).

Anecdotally, let’s take purchasing…from a sales perspective, the purchasing department is the enemy (I’ll get to the reason why in a minute). From the executive suite perspective, the Purchasing Department is a tool to leverage or recoup margin by driving down spend. To incent the purchasing department to do this, typically they get paid on percentage saved. Let’s use a paper purchase from Dunder Mifflin as an example. DM provides paper for the company and Purchasing has been tasked with reducing office paper costs. DM has a three-year contract to supply paper to the company and when the contract comes up for renewal, Purchasing negotiates a 5% reduction in overall price based upon an achieved volume. Now, whether this is really a company savings or not AND whether this is really a hit to DM’s bottom line is to be hashed out in details which aren’t relevant for this example. For now, let’s assume Purchasing has achieved its goal, so that 5% is represented back to them in some form of bonus, either to the group (less common) or to the manager (more common).

Buoyed by this success and newly realized profits, the company CEO declares ALL vendors will undergo a 5% price reduction, enacted every year, from now on.

Now let’s pause for a second and think about some of the consequences which could happen. If we are buying a physical good, there is a floor which the vendor cannot go below, since there is a hard cost in the goods. For services, there is a floor which the service provider cannot go below, since the service provider has to pay for the people who provide the service. If I ask for a year-over-year reduction of 5%, the vendor will have to remove some level of profit from their margins, and if they do this…

What happens? If it is a physical good, after a while, there will probably be a degradation in quality. If it is a service, then there will be a degradation in the quality of service (e.g. a cheaper resource, usually less experienced, as a replacement for the experienced resource).

So, cost cutting works in its initial phases by trimming excess spend. But in a long cycle, it is not a sustainable practice. The program quickly reaches its asymptotic limit (and usefulness), and great results have dribbled to almost results.

So why is Purchasing the enemy of Sales? Because Purchasing is missing a key component in its evaluation for cutting costs: Value.

If Dunder Mifflin provides only paper, then it is easy to say they can be replaced by any paper provider. But if DM provides 24/7 onsite service, free tech support for paper jams, whatever, then these value-added services can’t be evaluated for cost in a 5% reduction.

Recently I was discussing this with one of my colleagues, and where we saw the disconnect was ensuring Purchasing knew where the value was in the chain. Yes, Purchasing can drive price down, but if Vendor A has provided value up front, be it in consulting, configuration or evaluation, then they need to recoup that cost. Looking short term and purchasing from Vendor B may provide a lower initial cost, but there is a high probability Vendor B can’t match Vendor A in value.

This delta in the intrinsic idea of value is critical. Value separates the experts from the wannabes and quality manufacturing from defects. It is intangible but tantamount to excellence.

There is a story which I haven’t been able to track down, about General Motors many years ago. Apparently the CEO at the time told his suppliers they were going to cut their costs to GM by 2%. The thing is, telling them to cut 2% might sound trivial, but as we all know, this will flow down hill. The quote I remember from one of the equipment suppliers, and I’m paraphrasing here, was GM would get their 2% reduction in price, and a 20% decrease in quality. And they did. The problem is you can tell someone to cut their price (I’m so tired of hearing, “Sharpen your pencil.”) but the company you’re buying from still has to make a profit. If you put them in a situation where they can’t make a profit but are obligated to supply you, they will figure out a way to find that profit, and it probably won’t be to your advantage.

So, in the end, think about programs which look for perpetual improvement. If it is something where this can be applied, by all means do so. But if a program has run its course, put it to bed. There are other things which need streamlining in your organization.

Thinks, Inc. is a consulting firm which specializes in Smart Sales Processes & Operations. If you’d like for us to come and assess your chaos, drop us a line at contact@thinks-inc.com

PS The Infrastructure Guy and Smart Sales Operations are Trademarks of Thinks, Inc.

Productivity

I am going to preface the following by telling you I am a big believer in Lean. Most people think of Lean Methodology as something only for manufacturing, but more and more people are coming to see organizations can implement Lean practices to improve operations and internal harmony. Dan Markovitz is an avid proponent of this philosophy and he is one of my influences when I’m consulting for companies, or thinking how companies could be better.

Recently, I was listening to a book-on-CD (yes, I still do that) by Womack & Jones called Lean Thinking. The title caught my eye because I thought it would be in line with my thinking. Alas, the book, written originally in 1997, is focused on manufacturing and the gains to be had by using lean practices. But something the narrator said caught my attention and it is completely applicable to sales and sales operations.

Briefly, the discussion was around “muda” or “waste” (the big three are muda, mura & muri or waste, overburden & unevenness). In Lean Manufacturing, waste is money down the drain, either by time or production. But where it is easier (but maybe not just easy) to track down waste in a manufacturing line, the 3M’s , but mostly muda, can be seen constantly in business on the sales and marketing side.

And this is the crux of smart sales operations–we look at sales processes as additive. What do I mean? I mean instead of looking at how a sales rep gets their work done and how do we extract information from that work stream, we layer a process on that sales rep to report on that work stream.

Let me give you an example to illustrate. A new sales rep is given a book of accounts in a given territory. Then, the sales rep is given a tool like a CRM, to prospect into these accounts, build a pipeline and funnel and start to close deals. Most of you are probably nodding your head in agreement, “Yes, that’s how it’s done.” Next, management wants to track the progress of the rep, so they ask the rep to produce a report. “No big deal,” you say, as all the rep has to do is create a report in the CRM and run it and give it to management. Then, management wants to know where deals stand, so they ask the rep to produce a report. Again, you may say, “No big deal,” and the rep produces another report. Soon, management wants to meet to go over the reports, which by now has grown to multiple reports and multiple meetings. The sales representative who was hired to sell has now become a reporting fool, spending significant time on administrative tasks, and trying to figure out how to balance their time with the other priorities of the job–like achieving quota.

As a personal example, my most recent experience was a manager who asked us to create a report used only by himself so he could present the team numbers to his management, showcasing the manager in the best light possible. The report was tedious, arduous and an exercise in frustration as it required two or more hours to produce each time (it was a Word doc, and none of the information gathering could be automated). This, coupled with the one hour accompanying meeting to go over the report and then the additional one hour meeting with the team to go over the collective reports was almost criminal in how much time it sucked. When confronted about this (as every rep had) the manager would say with his default response, “It only takes five minutes.”

Tying this back to Lean, what was wrong here? Waste. Waste of time, of processes and specifically of consideration. (While you might feel consideration can’t be wasted, how many times have you thrown your hands up in the air when your patience has reached its maximum? If someone who has been trying your patience continues to come back to you with the same issue again and again, you would more than likely snap, tell them about your frustration and tell them to get their problem fixed before they came back to you again.)

The problem for all this is a foundational issue: If the data has been captured in the beginning, then there should be no reason it couldn’t be pulled in an automated report. Computers are great at manipulating data, it is what they are built to do. So why was (I’m sorry, is–he’s still doing it) my manager wasting his team’s time to pull data he could have pulled? Because he didn’t value his team’s time. Why, as in the first example, is management layering on a report when the data for the report is readily available if it is being captured in the first place?

Smart Sales Operations deals with these issues in a foundational manner. We need to first look at what’s being sold, what is important information for the sales rep to keep track of and what is important information which sales management needs for visibility, and we build our tools around the information needed.

Recently I was having a discussion with a former manager of mine who has gone on to sales performance consulting. Our disciplines overlap a little, but his perspective on sales comes from a different angle than mine–he is looking to use tools to get more out of the reps, and I am looking at what is in place which can removed/tweaked/re-worked to produce better results. In the end, we both are working with companies to get more sales, for as I have said before, if the rep is making money, then the company is making money. Anyway, back to the conversation, he is a huge proponent of Salesforce. He believes it is infinitely tweakable enough to put processes in place to get the desired behaviors from the reps. My take on Salesforce is that it has morphed from a tool for the rep to manage customer interactions cradle to grave, becoming a reporting tool for management. While my former manager and I both see each other’s perspective, what I think is at the overlap of this Venn diagram is data. What is captured, what is needed, what is reported.

I’ve spoken about clean data before, and I am a huge proponent of data hygiene. But also in consideration is what data needs to be collected and how does this affect how the collector goes about their job. Because if your sales rep is spending more time creating reports, collecting data and meeting with their managers, then they aren’t out in front of customers doing what they were hired to do. They may be internally productive, but overall, they are not PRODUCTIVE.

Help your reps be productive. No muda.

Thinks, Inc. is a consulting firm which specializes in Smart Sales Operations. If you’d like for us to come and assess your chaos, drop us a line at contact@thinks-inc.com

PS The Infrastructure Guy and Smart Sales Operations are Trademarks of Thinks, Inc.