Are you listening to what the customer needs?

9 09 2007

I have been involved in a series of meetings with business owners regarding problems in their companies. 

Declining sales and market share due to international competitors, inability to compete or a decline in the entire industry sector are some of the reasons mentioned.

Solutions that were discussed and debated including cutting costs of raw materials, increasing worker efficiency, lowering logistics costs, streamlining the administration and related costs, government intervention and protection, outsourcing and even forming alliances with the international competitors.

What struck me as incredibly odd was that not once were the customer’s needs mentioned.

Not once did anyone mention creating new ideas, products or services for the customer.

There was no discussion of investing in new technology because “things are difficult now”.

There was never a comparison made between the marketing and promotion, branding or image of the competitors versus the company’s marketing, promotion, branding and image.  Why not? 

Every comment or observation focused on lowering production and logistics costs to the customer, never on increasing the benefits to the customer.

All that mattered is “how can I sell at a lower price”.

That’s right.  The entire future of these companies, and in some cases entire industries are focused on how make their products for less.  How to beat the Chinese, Indonesia or Brazil or whatever developing country has access to cheaper raw materials or labor. 

Common sense tells us this is not a viable, long -term solution.

Each of these companies has stated in their publicity, website and in their mission statements that their focus is on the customer and on customer service.  Why aren’t the customer’s needs and future needs part of the search for solutions when sales are declining?

If the customer really truly cares only about price, your product is a commodity. 

If the customer only cares about price, they don’t care about your company’s service, advertising and promotion, attitude or participation in their business.

If you really think that the low price will guarantee the sale, cut out the customer or technical service.  Take away financing.  Take away delivery and logistics.  Forget environmental and worker protection.  Reduce your inventories.   Standardize your prices and order sizes.   Cut down on sales and promotion. 

Call me when your sales skyrocket and the money pours in. 

I suppose it’s normal when sales fall, to attack costs, and costs are a fundamental element in being competitive in certain goods and services.

It is not the only element.  It may not even be the most important one for your customer. 

It probably is the easiest area to change quickly, and requires no investment.  People like easy solutions that don’t require investment. 

The relationship with your customer, the ability to meet their needs with your product or service and allow them to make a profit is what makes business click.

How well do you know your customer? 

What problems are they facing?

Is your contribution to their product important, significant or fundamental in their success?

Do they see you as simply a supplier of a commodity or an integral part of their supply chain and future?

Have you explored how you can work with them to make them more competitive?

Once this has been accomplished, bring the results to the boardroom and start the discussion of how to aid declining sales and deteriorating margin.

Don’t stop with the easy solutions.

Look for the difficult solutions, the ones that require compromise and long-term commitment.

Look for solutions that require investment of resources; time, money, and ideas. 

These are the solutions that the competitor focused on cost is not interested in. 

These are the solutions that will provide confidence and mutual opportunities for growth.

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Maximize the impact of business conferences, seminars, and special events in your organization

15 06 2007

Attending business conferences, special events, lectures, seminars, classes and courses are part of our professional lives.

Events provide great information, professional tips, up to date industry information, inspirational and motivational ideas, and fantastic opportunities to expand your business network.

Unfortunately not all the events are interesting, useful or entertaining.   At times it is a waste of time and money.

But the occasional great event is inspirational, we leave the room vibrating with ideas, enthusiasm, motivation and the desire to put the words and concepts to work in our own lives and business organization.

Two days later we forgot about what we were going to do, how we were going to do it, and why it was important.

Then we sign up for another event, and the cycle repeats itself.

How can we take full advantage of the ideas, knowledge and opportunities from business events?

To get the most out of these events a bit of planning and follow through will allow you to maximize this knowledge and it’s impact in your professional and personal life.

Before you go

  1. Main reason why are you going to attend?  Write down your reasons for attending; to gain specific business knowledge, exploration (don’t know what to expect, but it might be good), my boss thinks it might be important, seek inspiration or motivation, networking opportunities.
  2. Why do you expect to learn, or who do you expect to meet?
  3. Can you do anything to prepare before you go?  Contact people before you go, read works from the author or about the topic, prepare specific questions?

After the event

  1. Write a brief,  one page, executive summary.
  2. Include the name of the event, place, date.
  3. What was the conference/event about.
  4. Note any reference materials given at the event, where are you going to file or save them?
  5. What did you learn that is applicable to you or your business?  This might be a general concept, or specific information, it’s what you want to bring back and implement.
  6. Who else in the organization should know about the information or is affected by it?
  7. Who did you meet while there, full contact information, how can they be interesting to your business in the future.
  8. What follow-up required (thank you notes, contact specific people, more research, share it with others, file it, forget it).
  9. What should be investigated further, and who should do it.
  10. What does it take to implement or disseminate the idea or knowledge in your business (resources, people, attitude, commitment).
  11. Personal comments or observations, what did you feel.
  12. Retain all these executive summaries in a file titles “Events, Conferences, Seminars, Classes, Lectures” or something similar, organize events by date, subject or month.
  13. Review your summary in 30 days and note progress or lack of progress.   What happened or didn’t happen?

The key to maximizing the impact of a special event in your organization is to take a few moments to reflect upon your objectives before attending and then summarizing your learning, next actions and follow through required after the event.

Simple, focused and effective.

Highly recommended that each attendee from your organization be required or encouraged to keep such a file, and share it with their co-workers or managers.

Related Links

Video: Mind Mapping by Stephen Pierce 

How to systematically analyze any decision for better decision making

9 steps to better decisions





Don’t find a solution, find a way to make it better

12 03 2007

We make a large error in our business and personal lives if we believe that every problem or situation can be solved immediately or in the short term through our decisions and application of resources.

Theoretically it’s possible, but our focus on solution instead of optimizing and making changes to make it better can blindfold us toward evolutionary processes that in the long term provide better, stronger and long lasting solutions.

I’m suggesting that every situation should be initially evaluated based on two basic criteria; can it be solved now, or can it be improved now.

The situations that can be solved now or in the short term, should be. The organization should dedicate the time and resources toward the solution.

An example would be a delivery service that has 3 trucks and cannot cover the current delivery area on-time due to an increase in customers and package volume. A possible swift solution would be the purchase of another vehicle and hiring of a new driver.

A situation that cannot be solved now or ever should be approached by identifying areas where improvement should be made. The time and resources of the company should be focused upon the improvement.

An example would be government’s attempt to eliminate poverty or disease from a population. A perfect solution is not possible or practical, but by focusing on specific areas one can find great opportunities for success or enormous impact (vaccinations for children against polio).

When we look at every situation as a problem that needs to be solved right now we may be missing the best solutions and strategies required to resolve the situation over the long term. Ask yourself:

  • Can we solve the problem quickly and efficiently with simply modification of variables or a shift in technology? If the answer is yes, then set the process and resources in motion.
  • What if the problem is not able to be solved quickly or has no practical or economically viable solution? This is where the approach of resolving and modifying parts of the problem comes into play.

This evolutionary approach to problem solving is not often requested or expected in business (the quick fix is always applauded and sought after), but often the best long term strategy is optimization and gradual modification.

This evolutionary problem solving process will provide new opportunities for change and solutions to be developed in the future.The identification of areas, processes or resources that are the bottlenecks in your organization become areas of opportunity.

Modifying and improving these bottlenecks will automatically create new bottlenecks, in new areas. The focus on identifying and solving these “new” situations leads to a process of continual improvement and a better, stronger organization.

This is one of the fundamental ideas behind the Theory of Constraints (TOC).

Common sense tells us that in a complex world not all solutions are simple, quick or painless. The “quick fix” is a great idea, but not often found in everyday life.

Observation of science, technology, philosophy and business ideas and strategies show us that change occurs through the rare revolution (paradigm shifts and new discoveries) and through the more common evolution (gradual modifications leading to continual change.

What can be changed, fixed or modified today to make the organization, process, product or service incrementally better?

Related Links

Why don’t they?

Starting over

How to systematically analyze any situation for better decision making

AGI Institute – Theory of Constraints

Evolution (Disambiguation)





Starting over

9 01 2007

Ever get involved in a project that requires modifications, and then those modifications led to more modifications and more and more?

Before you know it, the project has lost sight of it’s objectives, and the team is working on solving problems unrelated to the original goals.

I’m reminded of Rube Goldberg and his famous machines. We don’t intentionally try to complicate our work, but if we step back and look at the objectives, and the current processes and procedure in order to reach those objectives, we can often find distortions and diversions of comical proportions.

There are two simple actions that will eliminate and control our spiral into complexity and error.

  1. Step back and look at the problem, objectives and current procedures on a regular basis. What is working, what isn’t working, and why? What are you doing to modify or adjust the solution procedure or process instead of moving closer to a solution?
  2. When you discover that something is not working, and have analyzed why, don’t be afraid to START OVER. Throw out the current plan, and begin again.

We tend to avoid re-doing and restarting a project or activity because we want to salvage the time, money and effort that has been invested.

This inability to “do over” and start from scratch often prevents us from implementing better and more efficient solutions.

Our initial attempts to solve the problem have educated us about the requirements and environment. There is nothing wrong with starting over, in fact it may be the best and most efficient way to solve the problem.

Related Links

12 reasons why we ask for business help

Analyze and plan using 7 simple questions

How to systematically analyze any situation for better decision making

9 steps to better decisions

Rube Goldberg Website





Why do we fail

22 12 2006

No one likes to fail.

We can feel foolish, outmaneuvered, incompetent, insecure, unlucky, silly, angry, overwhelmed, frustrated and in some cases afraid to try again. after suffering a defeat.

Failure is an integral part of the learning process.

Failure is required in order to become successful.

Rare is the successful individual, product or organization that has not met adversity, failure, defeat and loss.

One of the keys to success is the ability to accept failure, learn from the experience and try again.

The fear of failure is so great in some organizations that it freezes innovation, thwarts change and stifles growth.

Organizations try to reduce or limit failure by passing on historically successful methods and accumulated knowledge to new members.

Many times this information is not useful and out of date because the elements, players and dynamics of today’s challenges are quite different from those of the past.

Use the following list to analyze your current projects (and possibly prevent or limit failure), or use the list after a setback or defeat to identify where you can improve.

Reasons for business failure can be broken into 4 main groups:

Planning

  • No plan
  • Incomplete plan
  • Wrong calculations
  • Poor or incomplete interpretation of data and research
  • Failure to take into account all factors
  • Lack of experience
  • Failure to evaluate competitor reactions correctly
  • Failure to anticipate consumer response
  • Significant difference between planned and actual costs
  • Poor cash flow calculations
  • Unrealistic goals and expected outcomes
  • Underestimate risks

Information

  • Didn’t collect all the pertinent information for planning
  • Product or service was not wanted or needed by customer
  • Lack of knowledge of market
  • Lack of knowledge of customers
  • Lack of experience in the industry
  • Lack of experience in manufacturing
  • Lack of experience in sales and marketing
  • Lack of experience in administration

Operations and Follow-through

  • Lazy, didn’t do the work required
  • Undisciplined
  • Unorganized
  • No control of suppliers
  • Did not stop in time and take corrective actions
  • Did not recognize warning signs
  • Ignored warning signs
  • Did not seek professional assistance
  • Lack of attention to logistics details
  • Failure to focus on customers needs, desires and wants
  • Poorly trained personnel
  • Lack of initial capital
  • Not enough capital to maintain operations for first years

Factors outside of our control

  • Important changes in technology
  • Environmental factors
  • International, Federal, State or local government laws, regulations and legislation
  • Aggressive competitor(s)
  • Act of God
  • Change in fashion and trends
  • Theft and fraud

Related Links

Leadership lesson – A Message to Garcia

How to systematically analyze any decision for better decision making

10 things you should never do on a Friday afternoon

9 steps to better decisions





12 reasons why we ask for business help

23 10 2006

Here’s a list of common, and not so common, reasons we seek out business help and hire business consultants:

12 Reasons: Why we ask for business help

1. I know what’s wrong, but don’t know how to fix it.

2. I know what’s wrong but don’t have the resources to fix it, what should I do?

3. I know what’s wrong and I know how to fix it, but don’t want to fix it that way, show me another method that is easier, better or less costly.

4. I don’t know what’s wrong. Help me diagnose the organization or situation.

5. I think I know what is wrong and want a second opinion, validation and confirmation.

6. I don’t think anything is wrong, but just to make sure I want you to take a look.

7. I want you to tell me what is wrong so that I can tell you you’re wrong.

8. I want solutions, if they don’t work I want to blame it on you.

9. I want to achieve specific results and don’t have the expertise. I want to hire an expert in order to save time and reduce errors.

10. I have a problem and want to fix it. I don’t want to be wrong and prefer to use experts to guarantee success.

11. I want to be one of the first to learn and implement the “new and improved” business ideas, theories and practices.

12. I am looking for new ideas to break our routine and make it exciting again, make something new happen.

Related Links

10 Reasons why people hire business consultants

The clients I don’t want





Mexico manufacturing, US inventories and safety stock

21 10 2006

Manufacturers are returning to Mexico after “experimenting” in the Asia Pacific region. Some of the big reasons for this return are ; to reduce time to market, eliminate the financial costs of inventories in transit, lower the logistics costs, and to strengthen the supply chain by moving closer to just-in-time deliveries.

But moving to Mexico isn’t going to solve all the problems.

A September 2006 article in CFO magazine points out how US businesses are increasing safety stocks “just in case”. Delayed in the USA The article points out how supply chain disruptions are being provoked by an increasingly saturated US highway system and bottlenecks in deepwater ports and railyards.

The good news is that Mexico is close to the USA, a truckload of goods can leave any point in Mexico and arrive at the US destination in as little as 4-5 days. The railyards and new multimodal Interior Port in Guanajuato, Mexico allow manufacturers to establish production facilities in the interior of the country. Exporters can now clear customs and load the sealed container onto the rail-car at the new (2006) high capacity Customs port located in the geographic center of Mexico.

The bad news is that unless the US begins to upgrade their highway, port and rail facilities, supply chain managers in the US will be buying and storing higher levels of inventory to assure continuity of operations, “just in case”.

Related Links

Delayed in the USA – Supply Chain

Industrial and Business Parks in Mexico

AMPIP Mexican Association of Industrial and Business Parks