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.

Advertisements




The 3 Y’s – help for difficult decisions

29 06 2007

An organization’s management and leadership team is responsible for making timely decisions, supplying and applying resources when required, in order to efficiently reach known or perceived goals and objectives.

In order to make these decisions; research, information and analysis of the pertinent information is required.

Here is where management bogs down or leadership can make serious misjudgements.

  • Poor incomplete analysis or lack of the critical information required to assess the risks, obtain the required resources or understand the probable benefits.
  • Lack of understanding of the changes or resources that the decision will provoke.
  • Making the decision too early, or too late.

A quick and useful trick is to apply the “3 Y’s” to assist when faced with a difficult decision.

The “3 Y’s”

  • Why Me?
  • Why Now?
  • Why Not?

The First Why – Why Me?

  • Who is requesting that I make the decision? Why?
  • Is this in my area of responsibility? Why?
  • Is this my area of expertise, do I know what I’m doing? Why?
  • Do I have enough key information to make the decision? Why?
  • Can I obtain more information, in how much time and at what cost? Why?
  • Do I understand the analysis of the data and the conclusions? Why?

The Second Why – Why Now?

  • Does this need to be done or decided now? Why?
  • Is it in response to an emergency, part of “normal” operations or a change in strategy and objectives? Why?
  • Who depends upon this decision or is affected by it? Why?
  • Should the involved parties be informed of how the decision will affect them? Why?

The Third Why – Why Not?

  • What happens if I don’t make the decision? Why?
  • Are there other options, solutions, or alternatives? Why?
  • Do I think this is the best solution or decision available? Why?
  • Do I fully understand the short term and long term effects on resources, customers, work systems, goals and objectives that this decision will provoke? Why?
  • Who are the internal or external “experts”, what is their recommendation? Why?
  • How far am I putting the organization at risk with this decision? Why?
  • Are there metrics to measure or contingency plans in place in case this does not go as planned? Why?

By reacting and making difficult decisions without reflecting on the WHY we miss identifying the real problems and issues.

We miss solutions and strategies.

We miss opportunities to unify and support the organization.

We find ourselves responding to symptoms and not solving or responding to the core issues.

Related Links

Can’t make a decision

9 steps to better decisions





Can’t make a decision?

23 05 2007

 There are times our decision-making is stalled due to fear of making the wrong decision.

Next time you’re in that indecisive state of mind, answer these questions and see if it pushes any buttons to move the process forward.

  1. What is the “best case”desired outcome?  Will your decision move you toward that outcome?
  2. What is an “acceptable” outcome?
  3. What is the worst thing that could possible happen if you make the “wrong” decision?  Can you accept this?
  4. Is your decision reversible?
  5. Will a wrong decision destroy value, confidence or trust of anyone involved?
  6. Do you have enough information to make the decision?
  7. Do you have too much information?
  8. Who knows more about this subject than you….what are their recommendations?
  9. Are you the right person to be making this decision?
  10. Will avoiding making a decision now make the situation better, worse or have no effect?
  11. Does the decision provide a short term fix or will it solve the problem permanently (long term)?

Related Links

How to systematically analyze any situation for better decision making

Why don’t they?

9 steps to better decisions





Marketers beware

27 03 2007

This is embarrassing.

A Corporate public relations nightmare.

Incompetence at a very high degree.

I suppose it makes it more incredible and shocking that GlaxoSmithKline was caught in a lie about the ingredients of its product by two 14 year old girls in high school chemistry class.

Ribena caught out by schoolgirls 

How does a product get approved, manufactured, marketed and sold without someone asking if it really is what it is?

Where are the controls and communication between the production, the executive office and the marketing people?

What responsibility does marketing have to verify information and take responsibility for misleading the consumer?

This is fraud and unethical behaviour at an enormous level or incompetence at ridiculous proportions.

Adding insult to injury is the fine of USD $ 156,000.00 and an apology by GSK as the remedy.

Seems like a very small slap on the wrist for fraudulent advertising, incompetence and deceiving the public.

Perhaps that small risk and penalty is what drove them to take the decision to lie in the first place?

Related Links

CNN- Ribena caught out by schoolgirls 

How we react to unethical actions and behaviour

Is your company noble, moral, ethical or virtuous





How we react to unethical actions and behaviour

21 03 2007

There are a number of reasons why individuals and organizations refuse to perform in an ethical manner or raise their voice against unethical behaviour.

6 Reasons why we don’t object to unethical actions or behaviour.

1. Ignored and Ostracized. We will be eliminated from the “group”. Showing opposition to an idea that was created by someone with power or the power of persuasion can result in being ignored and left out of future decision-making.

2. Fear. Not on board with the company philosophy? You might get fired. Fear of unfavorable personal consequences.

3. Demoted. Will lose power, prestige, and income if you speak up or oppose the idea or practice.

4. Insecurity. Perhaps we are not sure if the means justify the ends. Inability to clearly see the situation as unethical or wrong.

5. Reward. We see a payoff (money, power, prestige) that overwhelms our sense of ethics. Justifying wrong in order to receive personal gain.

6. Lazy or uncommitted. Unwilling or unable to challenge the group or idea.

5 Reasons why we should speak up and question unethical actions or behaviour.

1. Be true to yourself. Stand up for your own beliefs.

2. Be a leader. Others in the group might believe the same thing, but are timid or afraid of voicing objections. Create a dialogue and open a discussion of the issues.

3. New point of view. The group might not have thought of the consequences, or not see the situation as an ethics related decision. Open their eyes.

4. Protect the organization. Your intervention might save the organization from scandal, embarrassment, legal and financial problems.

5. Clarify. If you are unsure, voice your concerns and let the group present their case in order to clarify and resolve any doubts that you might have.

Related Links

Is your company noble, moral, ethical or virtuous

Sales and marketing terrorism 

Corruption, bribes, mordidas and tips – Doing business in Mexico

Where do you draw the line





Is your company noble, moral, virtuous or ethical

15 03 2007

The terms noble, virtuous, ethical or moral seem out of date.

In fact they seem to be words right out of a fairy tale.   Words and  concepts that have faded away with the modern world and it’s complexity.

Perhaps it’s not cool to be labeled as virtuous, moral or ethical.

Is it because we live in a complicated world that has us making more decisions about the “gray areas”?

We don’t read about organizations being ethical or noble.   In fact we hear about unethical companies and employees much more often.

Business magazines doesn’t write front page articles about virtuous executives and CEO’s (I hope this is because it’s not popular and not because there aren’t any).

Are there any reasons to promote and reinforce these values in your organization?

Are there good reasons to avoid discussion of them?

Perhaps the fact that unethical behaviour is reported, and considered scandalous, is a clear signal that it is outside of “normal” business conditions and draws attention.

Let’s begin with definitions, that should clear up some of the confusion.

Moral – Conforming to a standard of what is right and wrong, correct, trustworthy.  How could anyone want to work with others who don’t know right from wrong and behave?

Ethical – Principles of conduct governing an individual or group, a set of moral values, a guiding philosophy, decent, respectable.   OK, this one sounds like it should be part of the package too.

Noble – Moral eminence and freedom from anything mean, petty or dubious in conduct and character.  In simple terms doing the “right thing” all the time, excellence.  If it looks bad, don’t do it…pretty good advice and words to live by.

Virtuous – Implies moral excellence in character.   Not only knows good from bad, and adheres to it, but is exemplary in their behaviour and practice of their beliefs, honest, good, without reproach.  I can’t find any customer, shareholder or employee who wouldn’t want their company to be virtuous.

Which of the terms can your company live without in their employees?

Are any of these characteristics that should be found and promoted in your management and leadership?

Which of these concepts and behaviours are important to you, your customers and your organization now and in the future?

Do you have a written policy in place to promote, identify, and create noble employees and a virtuous organization?

Do you point out and recognize when a person or organization has done something noble, virtuous or ethical?

Related Links

Corruption, bribes, mordidas and tips – Doing business in Mexico 

Where do you draw the line 

The future of our entry level workforce – gloomy





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)