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Sunday, 18 November 2018

Driving Excellence in the Business? It’s More About Driving Change!

In the early days of my career I was allocated to the Inspection Department of my employer, a major aircraft manufacturer in Manchester. My tasks consisted of checking random components against the appropriate specification and either passing or failing them.

Depending on the failure rate we could then either pass or reject a whole batch of items.

It was very simple but it did give me an insight into the need for quality across the board.  Obviously if a component on an aircraft failed the results could be catastrophic.

We used all the old type equipment, surface tables in cast iron or granite and a wide range of physical measuring equipment like height gauges and callipers that had to be calibrated against a regular schedule to ensure consistency.

Everything was laboriously recorded to set up a paper trail so that we would have a record if anything went amiss.  How things have changed.

My early experience was in inspection leading to quality control and the responsibility for compliance rested with the inspectors whose word was law.

The system was reasonably effective albeit cumbersome and inefficient and as time passed there was a realisation that random batch inspection was not an acceptable method.

Both manufacturing methods and measuring equipment improved enormously and it became feasible with advanced technology to ensure that as components were manufactured, they were automatically inspected and the machine adjusted itself if necessary.

This was a new departure called quality assurance in that batch checking was no longer necessary as every component would be compliant.

In the early days of QA I heard a story of a UK company that ordered number of components from a Japanese supplier and stipulated that the failure rate must not exceed 1%.

When the shipment arrived there was a separate bag included carrying a number of components and when this was queried the buyer was told that they were the 1% rejected items that had been specified.  We only supply correct items that are cleared to 100% of specification, they were told, so we had to make the incorrect ones separately.

Perhaps this story is apocryphal but it does emphasise  the changes in attitude that spread throughout manufacturing.

Attitudes can be catching be they negative or positive and it is no longer sensible or even feasible for a manufacturing section to operate in an ineffective and inefficient organisation.

The consequence is therefore is that quality, per se, or preferably excellence becomes one of the most significant values espoused by a business and needs to be at the centre of everything that the business projects to its stakeholders.

We must dedicate everything that we do to the constant drive to achieve excellence in all aspects of the business, small and large.

Renowned US consultant and spacer Tom Peters, says:

Excellent businesses don't believe in excellence, only in constant improvement and constant change.

The point is that excellence, like perfection, is unattainable so  we should embrace the need for constant improvement brought about by change.

The pursuit of excellence is a journey not an objective.

We live and work in a competitive environment and this must never be equated to price.  There are many other criteria that persuade people to deal with us and price is only one of those reasons.

Check how excellent are you in terms of customer service for example, how quickly is the telephone answered (no more than three rings) , do your people tell the truth (I’ll call you back in an hour and then don’t).

The best people to ask about our service are our customers.  Check on how your people relate to them, what changes do they (the customers) want from us, how satisfied are they with us.

Send them a regular three-question survey (like Amazon) and then send them the results and any action you propose to take.

Remember, we don't have to be sick to be better so we must constantly embrace constant change to achieve an ever higher level of excellence in everything we do.


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Sunday, 11 November 2018

Forecasting the Future? You Can Only Be Wrong or Lucky!!

One of the most contentious issues that leaders encounter is that of forecasting, both financial and generally commercial.

Leaders in business are bombarded on all sides by learned so-called experts with their  strictures on the absolute necessity to plan for the future and no sensible argument can be found against it.

Going blindly into the future is not a very bright idea but it must be accepted that there is a significant difference between planning and forecasting.

Planning involves the generation of an amount of data relevant to the business in the relatively short term, considering it in total and then making some assumptions that can lead to a reasonable level of confidence.

It should be noted that planning and the setting of objectives is done with intention; that is, an intention to give the business a structure for the future however short or long that might be.

The word ‘objective’ in my lexicon implies that which we intend to achieve and is not a forecast except in in a limited  descriptive sense.

The planning process therefore includes assessments of potential sales and income, possible changes in costs of supplies generated from scrutiny of published information, and possible effects of PESTLE (political, economic, sociological, technological, legal and environmental) changes that are outside our control in the wider sense.

It is perfectly feasible, for example, to look at the past performance of the business covering as long a term as makes sense and then use spreadsheet technology to calculate the average change using linear regression analysis.

This will overlay a straight line growth or decline average on the plotted graph and this can be extrapolated to give an indication (and no more) of what might happen in the near future.

The problem then arises as to how much further can this be expected to be realistic.   In general terms given, say, a 3-4 year monthly rolling annual plot of sales it would not be sensible to assume much more than a few months.


Good planning for the future makes absolute sense but it must be constantly understood that the underlying results will always be based on uncertain information, that is, what will the future look like?

On the other hand, however, the very process of forecasting is based far more on PESTLE criteria and as a consequence, is subject to much more uncertainty.

My great friend and top Vistage speaker, behavioural economist Roger Martin-Fagg says with much perspicacity that when we forecast there are only two alternative outcomes; either we are wrong or we are lucky.

Most of the polling organisations in the UK use a weighted sample of around 1,500 respondents to come to what they cheerfully would call a conclusion about voting intentions.

Sampling theory is a science on its own or at least within the science of statistics and it can be shown that after a certain time and number of responses, there is virtually no change in the results.

The clues are in the words”weighted” and “virtually”.  The weighting of the sample covers age, gender, socio-economic considerations and much more and it is obvious that a very minor variation in the assumptions could lead to a major variance in the results.

Accordingly most polling companies publish their finding without mentioning that there may be anything up to +/- 2% error.  Is it any wonder that their conclusions can be viewed with some scepticism.

We are being battered on all  sides by so-called experts pontificating on the malign (they are always malign) effects of what is going to happen in their estimation but once they have pontificated, no-one remembers what they have said and in truth doesn’t care very much.

If I hear another gloomy prediction about the dreadful consequences of a no-deal Brexit I shall have to be very cautious not to want to put a brick through the TV.

Treat every forecast, considered or otherwise, with the respect it deserves.  Remember that it is only guesswork in the end.


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Sunday, 4 November 2018

When Should We Start The Sales Campaign? It Should Have Started Ages Ago!

Many years ago I started my own business consultancy practice and was very fortunate to be able to secure two or three client’s business in the first couple of weeks.

Looking back I am not really sure how this happened but it served me well and for the first several months I was kept very busy.

However, to coin a cliche, all good things come to an end and the contracts did the same leaving me with happy memories and not much else.

In something of a panic I went to see my Bank Manager (remember when we had Bank Managers?) who looked at me with some surprise and said: “What’s your problem?

I explained that while I had been gainfully employed for the past several months I would be short of work in the immediate future and this was an initial warning.

Much to my amazement he brushed my concerns aside saying that if I could again secure business like I had then he would have no issues. This cheered me up and reassured me that I was doing the right thing.

Of course, I wasn’t doing the right thing.  I had fallen into the trap of unwitting complacency and that can be the death of small businesses.

The one thing that I had done during my busy and productive activity was to forget the great lesson that sales and marketing can’t just be turned on and off like a tap whenever we need business.  It is a never stop activity and needs to be viewed as such especially when we are busy.

A great friend of mine (George) was a partner in an engineering design business in Liverpool and was also regarded as the person who generated new business.

However they were always in the complacency trap and that resulted in his partners, early one Friday afternoon, pointing out with some asperity that all the work was running out and they had thirty or so mouths to feed.

Suitably admonished, George made immediate arrangements to go to see one or two of his major contacts to see what could be achieved.

His first visit was successful. The contact told him that they had been trying unsuccessfully to design some tooling and as George reassured him that they could rely on their experience to solve the problem he happily passed it on.

On his way back to the office George popped into the library and took out a book on tooling design that could help with the project, one that was completely new to them.

Of course, it was successful and the client was delighted as were the partners to have such a prestigious contract.

Luck?  Of course it was but just consider the alternative. It was a situation that could have been a disaster as easily as a triumph.

Last minute solutions made under pressure are usually undesirable mainly because the decision is likely to be made emotionally rather than rationally.

It strengthens the realisation that one of the most desirable attributes of any company is that of a sensible pipeline of orders is very desirable. It removes or at least diminishes the feeling of panic that results from an uncertain future.

I recall an occasion when a possible consultancy client called me in to discuss their difficulties.  I asked him how the problem manifested itself and he said:

The phone has stopped ringing

and that summarised the whole position. There was no conventional marketing, they were unaware that Far Eastern competitive imports were flooding the market, they had no promotional material or indeed any formal sales activity and overall were in a downward spiral.  They just sat and waited for orders to come in as before and they didn’t know what to do when they didn’t.

The answer is to be thoughtful and rational. It is not sensible to undertake a strategic plan without an underlying marketing plan. It is that which will consider and hopefully establish the sales line of the strategy which seems to me to be a fairly sensible starting position.


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