All posts by Steve

Competition, Customer Management, Customer Relationship

Sun Tzu, Competition and Customers

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Sun Tzu was a Chinese military general in approximately the 5th century, B.C. He is renowned for never losing a battle. He wrote a treatise on conducting campaigns called “The Art of War”. It is an excellent book and I highly recommend it.




Most people apply what Sun Tzu wrote to the on going battles with competitors, and this may in fact be a very good application of some of his axioms. Most people apply Sun Tzu’s writings from the point of “winning” that battle, when in fact he wrote about “not losing” the battle. He was renowned for never losing a battle. He didn’t win them all. Many times he chose not to engage the competition because he felt he did not have a sufficient enough advantage to assure his victory.




Sun Tzu wrote;


“If you do not know your own capabilities, and you don’t not know your adversaries capabilities, you can not win.


If you do know your own capabilities, and you don’t not know your adversaries capabilities, you can lose half the time.


If you do not know your own capabilities, and you do know your adversaries capabilities, you can lose half the time.


If you do know your own capabilities, and you do know your adversaries capabilities, you can not lose.”




This is very interesting stuff, and I have written about it before. The question I would like to address here is how this relates to Customers, not competition.




Once the engagement with the competition has been won, a new engagement begins with the customer. Once the customer has been won, they are not guaranteed to be your customer for life. The idea here is to follow the idea of “not losing” the customer. If you know your own capabilities (and you probably do because you won against the competition) you must now learn the customer’s capabilities in order to be assured that “you can not lose”.




Over time (either short or long term) your corporate / business / group focus can change. These changes may not be perceived as congruent with the directions and desires of your customer. Over time the people and requirements of your customer will also change. These changes may change their perception of the value of having the current business relationship with you. The key is to be aware of and adapt to these changes in both your and the customers “capabilities”.




Research shows that it is 5 times easier to sell a new product or capability to an existing customer than it is to sell to a new customer. Every customer that is lost out of your customer base takes 5 times the effort to replace. What this shows is that winning customers is great. Not losing the customers you have is 5 times better.




Once the competitors are beaten and the customer is engaged, it stands to reason that you can modify Sun Tzu a little to read;



“If you do know your own capabilities, and you do know your Customer’s capabilities, you can not lose.”

Challenge, Change, Change Management, Culture

Don’t Produce…..Create

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Happy New year to all. Here is to working toward a great 2011.

We have all heard the statements regarding the need to “produce” results. In these days of ever tighter budgets and greater demands for profits and performance, the phrase “produce, or perish” might never be more accurate. It is possible that after so much time trying to improve and refine our production that it might be time for a new approach.

“Producing” results had normally come from finding a way to do an existing job or process incrementally better than it had been done in the past. This incremental approach to producing and improving results has a tendency to run out of momentum due to the law of decreasing returns. It eventually requires more and more incremental process refinements to produce less and less incremental results improvements. After several years in the current economic environment, it may be possible to say that we are in fact in the region of decreasing returns when it comes to incrementally improving, and producing results.

What is required today in the business environment is a quality that seems to be in short supply during tough economic times: Creativity. In down economic times the “Risk / Return” relationship in business seems to invert. That is to say that the “Risk” part of the equation takes on a greater and greater importance vs. the potential for the improvement of the return. In down times it assumed that the “Return” will be more and more difficult to attain, so the process focuses more and more on reducing the risk and in many instance the cost of the change. This process plays more and more into the “Incremental” approach to improving and producing results.

The time has come for businesses at all levels to start looking at the data differently; to rethink the processes and to “Create” new business and new ways of doing things, not incrementally producing and improving the current results. This is obviously much more easily said than done. You cannot command the team to just create new ways of doing things, but as the leader of the team you can become adept at recognizing what is incremental improvement and what is the creation of new ways of doing business.

Again it is usually easier to accept the incremental improvement proposals. Some may be valuable and can be implemented; however as they say “Necessity is the mother of invention”. If you can show the unwillingness to increment, and the willingness to implement and reward the creation of the new, you can start to change the way business gets done. The responsibility to recognize and foster the creation of new processes and business needs to be vested with those that have the authority to accept and make those changes.

The time has come for businesses and business leaders to stop producing results, and start creating them.

Execution, Follow up

Familiarity…….

I have been Blogging for a couple of years now. It may have taken me a little while to become comfortable with the creation, format and process associated with creating a posting, but I thought I had it down. I was familiar with how to do it…I thought.


 


The old saying is “Familiarity breeds contempt”. I don’t think that is the case. For me familiarity seemed to breed a confidence in my capabilities that resulted in a lack of attention to detail.


 


I wrote my last article (“It’s Not “What””) and did all of the appropriate and required steps in the process to make sure it was posted. I then went out to all of the various and assorted sites where I announce a new article and updated them. I thought I had done everything. Why wouldn’t I? It’s what I have been doing for the last 2 years.


 


The only difference was that I normally go out to my site to make sure the article is posted and that it is accessible. For some reason, I didn’t do that last time. I must have gotten distracted, or something else came up. In any event, I didn’t go look. I didn’t double check the end result / finished product.


 


If I had, I would have seen that I had not in fact posted my article. I had left it in the “Pending” file. I did a great job of notifying everyone that there was a new article posted for them to read, but didn’t close the loop of actually putting a new article out there for them to read.


 


In the process of becoming so comfortable, so familiar with the Blogging process I created both my own problem and a topic for my next article.


 


It is hard not to put things on “autopilot” when we are doing something that we have done many times in the past. When we are doing something we are familiar with, we have a tendency to not give it our entire attention. The end result is that eventually a mistake gets made in an area where it should not normally occur.


 


I would not have thought to talk about a continued focus on the basics and standard processes, but then I would have thought that I would not have made such a basic mistake as not making sure that I had in fact posted my last article.


 


I will check to make sure that this one does in fact get appropriately posted.

Communication, Leadership, Strategy

It’s Not “What”

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We have all attended senior management “all hands” meetings. These are invariably the meetings where senior management fulfills its obligation to try and communicate with the rest of the business. These meetings have the potential to really inspire the team. The reality is that they usually do not.

All hands meetings are usually appreciated for the attempt by management to communicate to the team. It has been a while since any of us has been graded on effort alone. We get reviewed on results. They can also be easily interpreted as management fulfilling its obligation to meet its self measured object to “communicate” with the team.

Much of the issue lies in the content presented to the team in the all hands communication session. There is usually a review of the group’s performance. This is good. Everyone wants to know where the team stands with respect to its goals or targets, and how it is doing with respect to previous periods. This provides the team with an overall frame of reference for their performance and position.

What follows is normally a review of “what” is to be done next. What the next goal is. What is yet to be done. What needs to be improved. When I hear this sort of information I am reminded of the satires of war movies where the general addresses the soldiers preparing for battle and tells them.

”Here’s what we’re going to do. We’re going to take that hill. When we’re done there, we’re going to take the next hill. After that we’re going to take the next hill. When we get up on top of that hill, we’re going to look around and see if there are any other hills we want to take….”

Objectives are great. Now everyone knows “What” the team is going to do. Everyone probably had a good idea of what they were going to do next before the meeting. The team now wants to hear How they are going to achieve the goal. Which resources are to be used. Who will have leadership responsibilities. In short, they want to hear a high level review of the “The Plan”.

An all hands meeting where you do not communicate the organizational strategy or plan is almost akin to telling your organization that you don’t have a plan, even if you do. I have stated in the past that if you provide your team a blank page (no information) chances are that you will not like the story that they will write on it. That is the case here.

The individual members of the team need to at least understand the high level aspects of the team strategy, so they can internalize them and create their own individual strategies and goals that support and contribute to the team goals. By providing more than just a “what” is needed, and including a little more of “why” its needed and “how” we propose to get it, you can turn an all hands meeting back into a much more useful management tool.

Change Management, Competition, Customer Relationship, Decision Making, Sales

Equipment is Becoming a Commodity

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It used to be that if you made the best products, you had a distinct competitive advantage. However, today it appears that things have changed. If you are not making the best products, you are not at a competitive disadvantage, you are out of business.

Off-shoring, and its new euphemism “Right-Shoring”, have reduced the costs of everyone’s products. Moore’s Law (the doubling of technology’s capabilities approximately every 18 months) is well understood, and in some quarters is thought to be close to having run its course. With so many open standards, products are no longer comparable, they are virtually interchangeable.

As China emerges on the technology scene as an economic super power, it is using its competitive labor advantage (most technology based companies have their products manufactured in China by various Contract Manufacturers), and its technical parity to try and make every customer’s buying decision a price based one. In trying to make every buying decision solely a priced based one, it is in effect “commoditizing” the equipment.

If there is no ability to differentiate equipment, other than price, what can be done? The obvious choice is to start focusing on the non-equipment differentiators: the level of relationship and trust between the customer and vendor, ease of equipment installation, ease of product maintenance, warranty length and breadth of coverage, etc. In short Service.

As products become more technically capable, they can have a tendency to become more complex to operate. Their installation and implementation have become more specialized. Their maintenance and the ability to trouble shoot their problems require much more training and specialized support.

Customers do not seem to buy technology for technology’s sake. They are buying a “use” or application to fulfill their specific need. The ability to simplify and reduce the customer’s perceived risk associated with the implementation and operation of their equipment in the delivery of its functional usage can be significant equipment decision differentiators.

With it becoming so difficult to differentiate commoditized equipment, it will pay to try and differentiate the ease and simplicity of product usage, the depth and breadth of support, and the comprehensive level of service that will accompany the equipment. When the competition is trying to make the customer’s buying decision a price based one, you will need to try and make it a service based one to change the decision criteria back in your favor.


Leadership, Responsibility, Roles

Make Music

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I would like to think of myself as something of a musician. I have actually been up on stage at a few venues (including The Hard Rock Café) and performed in various bands and even got paid for doing it. I guess that minimally qualifies me as a professional musician.

 

Every now and then however I have had the pleasure of associating with “real” musicians. These are the people who have “the” talent. They can play. I understand music theory and application. I enjoy practicing, learning new works and with time can master most techniques, but I recognize that in some instances I really don’t have “the” talent that will elevate me to the exalted levels of a “real” musician.

 

I have also learned that I don’t care.

 

You need to enjoy making music. It is something I want to do. I have found that I would rather be the weakest player in a very good jazz combo than the best player in a garage rock band. I have been both. Being the weaker player in the better group doesn’t embarrass me. It motivates me. I find I work harder, to get better, to not let down my band-mates, and that the final product that we produce is always better.

 

You also learn that being a musician requires a certain amount of interpersonal skills. I have been in a few bands that were pretty good, but could not survive more than a gig (performance – I have to use band “speak” lest people think I am really not a musician) or two simply because they could not get along. The band needs to understand the personal arrangement in much the same way as they have to understand the musical arrangement. Not everyone can be “the” leader, and not everyone can solo at the same time.

 

It is said that the band “Cream” (Eric Clapton, Ginger Baker, Jack Bruce) were three virtuosos soloing all the time. They were great, and in some cases spectacular, but they couldn’t hold it together either, and quickly broke up. They have reunited some forty years later for a few concerts, but think of all the spectacular music that didn’t get made.

 

I found that bands I was in, where the members brought down their personal desires to solo and lead made better music. The final product (at least for me, and I think them too) was ultimately much better, and much better received by the audience. There is a time and a place to step forward, but not everybody can do it at once.

 

You want to be in with musicians that smiled. Making music is fun. You are getting to do something that not everybody gets to do. It should be a pleasure. It is something to enjoy. If you are not having fun, if you can’t find the enjoyment, even in the practice and the mundane aspects of making music, than you shouldn’t be doing it.

 

I do have fun. I hope my kids see that I do and that they do too, some day. I was well out of college before I learned to enjoy it, but I did.

 

I play the bass. As I said I would like to call myself a bass player, but that might insult some of the bass players out there who can really, really play. I know my role. The bass is a transition instrument which helps connect the melody (guitars / keyboards – chords) to the rhythm (Drums – beat). I try to be the best bass player I can within the group, whether I am playing a simple repetitive riff, or improvising a walk through changing keys and chords. I enjoy them both.

There is a musician joke that holds very true for me.    Who is the guy standing around with all the musicians?…..The Bass player.
 

I also practice the bass. I try to learn new songs, new styles, and new techniques. The Jazz group I am currently in is playing several old standards, but in varying new and different styles. Old standards that were written to be played as a “swing” sound new and are interesting to play as a “Tango” or “Bossanova”. It seems that with music you can continue to take the old and make it new again. It helps keep you, the music and the band refreshed.

 

I would like to thank the other members of the band I am in. Gene (keyboards), Jay (Guitar), and Billy (Drums) – Thanks. I am having a ball. I hope you guys will continue to let me play in the band.

 

I guess a lot of the same ideas associated with making music would also apply to business, wouldn’t they.

Commitment, Compliance, Time

Reason and Force

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I recently read an article where the author contended that there were only two ways to get people to do something. You could reason with them and get them to do what you want of their own volition, or you could use force to compel them to do as you would desire.The authors thesis was that the gun was a sign of civilization in that by being armed you removed everyone else’s capability to compel you to do anything (due to your capability to meet force with force) so that the only way to get things one would be through reason. It was an interesting argument, but not one I will go into here.

What I would like to address is the concept of force and reason to get thing done in the business arena. As business leaders, you can in fact use “force” to get things done. By being in the position of authority you can compel people to do as you want under penalty of potentially losing their job. We have all known those managers that have employed this method of management, and may have also employed it our selves from time to time.

Force and reason in the business environment equate to compliance and commitment by the business team.

If the team is “forced” to do something, they most normally will “comply”. They will do as they are told.They will not have bought into the plan or project, or internalized their motivation. All motivation will have to come from you, and it will normally be a “negative reinforcement”, meaning they will work to avoid the negative consequences that would arise from not doing as they are told.

If the team is “reasoned”with, in order to achieve a goal, they will become “committed”. They can buy into the plan, and internalize their motivation. They can align their personal goals with that of the organization and their motivation will be positively reinforced and based on achievement instead of based on the fear of lack of“compliance”.

The down side of reason / commitment vs. force / compliance is time. It takes time to reason issues through and gain commitment. It takes far less time to just tell someone to do something. The key to leadership is to know how much reason is required and how much force to use in order to get both the commitment desired and compliance needed to attain the desired objective within the allotted amount of time.

Meetings, Travel

The Elegance of Travel

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As the leader of your organization it is your responsibility to be both visible to the team, and to be where you are needed. This will necessitate travel. In some situations, a significant amount of travel. Do not delegate it. Get the ticket. Get on the plane and go.

 
Many people consider the concept of travel to be elegant. They associate it with the way it is portrayed on TV. I guess it depends on what your definition of “elegant” is.

Most of the time you will be leaving later in the day (so that you can get at least some work done earlier in the day). You will be arriving at your destination later in the day / evening (if you are traveling domestically. If you are travelling internationally there is no telling when you will be arriving).

You will travel on what amounts to a glorified bus with wings, except that it will be more cramped than a bus, with less leg room. There will be only stale, recycled air to breathe and no place to put your luggage. You will strive to get to the front of the line to board so that there may be room for your carry on bag because you don’t want to take the risk of losing you bag should you be forced to check it.

You will rent a small car, at night in an unfamiliar town. You will not be allowed to rent a GPS system due to cost saving measures by your company. You will then try and locate an unknown hotel, in the dark, based on directions given to you by the stranger behind the car rental counter. Since this is the only map and directions you have, you will trust them implicitly.

Once you find the hotel, in the dark, you will rent a room. There are two types of rooms at hotels; Non-Smoking, and those that are uninhabitable. Hopefully you will have reserved the correct one. You will then hang up your clothes for the next days meeting and put your toiletries in the bathroom.

Here is where the “elegance” will come in. You will most likely order Room Service for dinner and start scanning the channels on the TV for anything of possible interest.

You will eat hotel food for dinner. You will sleep poorly in a strange bed. You will get up, eat (again, hotel food), rely on the directions from the stranger behind the hotel desk on how to get to your destination (hopefully on time), and try to navigate the rush hour in a strange town, amongst the friendly people on the road who have little to no time for people who do not know where they are going.

You will have your meeting.

You will then hurry back to the airport to try and return the car, get through security and get on your glorified bus in record time so that you can get home before midnight so that you can get a few hours of sleep before your 8:00 meeting the next morning in your office.

 
Conference calls are good, but they are sometimes not a substitute for “being there”. It is your responsibility. Pack up and go.

And just smile and nod when someone reminds you about how much fun, and how elegant travel is.

Communication, Customer Management, Sales

Great Expectations

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A colleague of mine had been working with a difficult customer for some time. He was making good progress with the customer and their issues. Late on a Thursday he sent me a request for support with a customer deliverable for the following Monday morning at 7:00 AM. This request would require essentially a one business day turnaround, or the team to work over the weekend.

 
Now sometimes a customer request should and does require the weekend work. After a little discussion with my friend it was determined that his request was a “nice to have” not a “have to have” capability for the customer. I then asked why we wanted a “nice to have” deliverable in a “have to have” time frame. He responded by saying he was trying to show our responsiveness to the customer.

 
I explained that my concerns were multiple: I didn’t know if we could scope the work (estimate the time effort and complexity of the request), and implement properly it within the time frames he was trying to set. I also told him I thought that there was a significant risk that our demonstration of responsiveness could backfire on him. He asked how.

 
Customer satisfaction is based (in my opinion) on economic expectation theory. Simply stated that means if you set your customer’s expectations at a specific level, and then meet those expectations, your customer will be satisfied with your performance. In this instance I pointed out that if he set the customers expectations for receiving this incremental functionality (nice to have) in an achievable time frame, and we in fact were not able to deliver it in the desired interval, we would not have met the customers expectations. This would have turned a potential opportunity to build customer trust and relationship into a negative experience for the customer.

 
It would not have mattered that we were trying to do something for the customer that might have been above and beyond the requirements of the contract. What would have mattered is that we would have committed to providing something to the customer within a certain time frame and then not delivered on it. The point here was that when you commit to providing something, even something you are not contractually required to provide, it becomes an expected deliverable and is viewed as such by the customer.

 
What we instead did in this instance was commit to providing the desired incremental functionality for the Monday a week later than my friend wanted. This provided us with the time required to properly scope and perform the desired tasks. We ended up providing it on the Thursday of the week that my friend wanted (not the Monday) and were able to be perceived by the customer as both providing incremental functionality and providing it ahead of our commitment – a two for one on the customer satisfaction score card. More over we were able to set a reasonable expectation by the customer and then meet it.

Leadership, Reorganization, Team Building

Don’t Ask – Do Tell

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I think we have all be in organizations that have implemented reorganizations. Some of us have been through it several times. We have seen some good ones and we have seen some not so good ones. In most instances difference between a good reorganization and a bad one depends on the first steps taken by the new leader. Those first few statements and actions by the new leader set the tone for the new organization.

 
Those leaders that took a little time to meet and understand their new team showed they were taking the time and interest to understand what the team faced. A team will normally respect this approach. Those that took immediate actions showed they had a plan and were going to be decisive. The team will again normally react positively to this approach as well and look for the logic and goal associated with the changes.

Then there are those leaders whose first action is to question their team.

They will ask if the team has the competitive drive, the talent, the training, the spirit, the desire, etc (pick one or more) to accomplish the task or challenge that is in front of them. This is not what a team needs to hear from its new leader. The team does not want to hear the leader questioning their capabilities or mind sets.

A team wants to see those attributes in question, in their leaders. They want to see it in statement, action and deed by the leader. The members of the team don’t want to be questioned about their own commitment or attributes. An organization is a reflection of the leader. A new leader needs to be dynamic in setting both the new structure and clearly annunciating the organizational goals and expectations.

A new leader needs to step in, and up and clearly state what the needs and goals of the new organization are. The leader should not ask the team if they have the requisite attributes. The leader should tell the team they have the attributes needed to achieve the desired goals.

It is a small but very important difference in getting a new organization going.