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Sunday, 26 September 2010

Restructuring? Only If It Means Better Service for The Customer!

This week sees the annual Vistage UK Speaker Reception and it reminds me of the wonderful resource that we have in Vistage.

Looking back over many speaker sessions, I now realise how many of them have had a direct influence on the way that I look at business and, even in some cases, how I look at life.

One of my members recently discussed how he would like to restructure his business and that brought back a remark from a speaker that "the only rationale for restructuring the business is to give better service to the customer"".

That is a very powerful statement and brings into play many consequential thoughts.  A great deal of restructuring is done for internal reasons - we lose a key member of staff, the market changes in some way, suppliers change and so on.   Very infrequently do we assess how we deliver good service and then restructure to give even better service.

I recall a member of one of my groups who was a manufacturer of flavours and essences for the food industry.  He was experiencing Chinese Wall problems with his organisation which was, as is so common, structured on functional lines - vertical functions such as sales, exports, finance, technical, operations and so on.

Each of the functions seemed to be in conflict with another rather than acting as collaborators to satisfy the market needs.  Protectionism was the order of the day.  That meant that departments made sure that they were never at fault and a blame culture ensued with functions competing against each other instead of with each other.

He decided on a really radical approach to solve the problem.  Because the company supplied effectively four markets - savouries, desserts, soft drinks and exports, he decided to restructure on market rather than functional lines.

As a consequence, each team, dedicated to their own market sector, had sales, technical and operations people with finance and IT acting in a floating role with all the teams.

This matrix organisation had several benefits.   Firstly it served the needs of the customer in that there was a dedicated team for each market sector, who became more expert in the particular requirements of that sector, secondly, the teams started to work together because the blame culture dissipated and thirdly, the teams retained their competitiveness but in a smart way to the advantage of themselves and the business.

All in all it was a resounding success with dramatic improvements in performance and morale.

Its success is, of course, dependent on the business having a range of markets in which it operates although it is also feasible to analyse the current customer base to see if there is any way in which that can be divided into realistic semi-sectors.

Perhaps the big learning comes from the general need to get away from the standard functional organisation structure which by definition almost, contributes to introspection and protectionism.  In the end, it must be to the advantage of the customer and hence the business to root that out.

For more information visit www.vistage.co.uk and www.vistageblog.co.uk
To contact us, email to ivan.goldberg@vistage.co.uk

Sunday, 19 September 2010

There Is a Better Way To Do It - Find It!

That relentless inventor and producer of numerous quotable sayings, Thomas A Edison said: "There is a better way to do it - find it!"   The equally articulate great physicist, Albert Einstein, put it another way.  He said: "The definition of insanity is doing the same thing over and over again and expecting a different result".

I said in an earlier posting that there is no such thing as the status quo.  True, but there are many who devote all their energies to trying to maintain the impossible. On a purely personal note, I love traditions and rituals but accept that as time passes, subtle changes occur which do not in any way diminish them, but rather enhance them.

Once again it is that acceptance of the inevitability of change that many find so difficult, and change can be effected in many ways both subtle and dramatic.

Lee Thayer, one of our great Vistage speakers from the USA, says that dramatic change is necessary in many instances in order to achieve dramatic results.   The concept of the BHAG (big hairy audacious goals - slightly modified) can deliver a shock to the system which can materially change thinking both in an individual and also a business.

There is a need to get over the "it will never work" syndrome and once that is achieved, the world opens up and things start to happen.

On the other hand, the Japanese concept of kai-zen, incremental change, has been shown to be of great value and certainly, most people find it far more acceptable.  In some cases they don't even notice that it is happening.

Combine that with a relentless search for the better way to do it and great results can be achieved.   It is the leader's responsibility to demonstrate to the team that this is the desired and achievable reality, at the same time eliminating the fear of failure.

Edison said that he hadn't failed; he had just found 10,000 ways that won't work.  If we take on the idea that failure is merely a step on the road to success and sell that to the team, then we won't go far wrong.

For further information visit www.vistage.co.uk and www.vistageblog.co.uk
To contact us, email to ivan.goldberg@vistage.co.uk

Saturday, 11 September 2010

Want To Know What You Are Selling? Ask Your Customers!

It has been said that the best way to discover what you are selling is to ask your customers because they certainly know.  This may seem a little strange but when we dig a little deeper, we often find that our view of our offerings differ widely from that of the market.

The problem is that we know our products or services so well that they become second nature whereas the customers only know them on an occasional basis, and then in a generally more perfunctory way.

I had a large accountancy firm as a client and they were continually banging on about the need for cross selling.  There were many audit clients, for example, who went to other firms for other services which irritated my client enormously.  So what did they do about it?  Very little except complain, mainly because there were different departments involved and hence some entrenched thinking and certainly some vested interests.

Research in the past has shown that it takes around seven times the effort to generate a new customer and build them to the level of existing customers.  Similarly, that four box matrix beloved of consultants, the Ansoff Matrix, says that he best way to build a business is to sell more existing products to existing customers.  Pretty obvious, of course, and the next best approach is to offer new products or service to your existing market.

The advantage is that you are known and presumably accepted as a supplier but even then it will take four times the effort to make it successful.

Offering your existing products to new markets is more problematic because here you are not known and so you will need to get over that hurdle first before you can start to sell your products.  In this case it is said to take up to eight times the effort.

None of this says don't do it - it just emphasises the need to understand that ploughing new furrows needs time and effort to make it successful.

We can become very inward looking with our product range if we are not careful.  I once telephoned a potential supplier for some long forgotten technical product and was greeted with "Is it the XR200 you want or would you prefer the XR205?"

Another client once held a suppliers' conference (an excellent idea, by the way) and during his presentation he said that he needed the suppliers to mark the packaging of components with his part number, either as well as or instead of their own.  A fair requirement, it must be said.

One supplier stood up and said that he would find that difficult because their computer program wouldn't be able to do it.   The client said: "Don't worry, it isn't a problem, another supplier has told me that they will be happy to do it for us".

There ensued the fastest piece of computer programming ever.

The customer knows what we are selling because they buy it and they use it which makes them even more expert in our products than we are.  They know how to apply it and we know how to buy it or make it and sell it.

Alright, that is a big generalisation, but the point remains, if you want to know what you are selling, ask your customers - they certainly know.

For further information, visit www.vistage.co.uk and www.vistageblog.co.uk
To contact us, email to ivan.goldberg@vistage.co.uk

Saturday, 4 September 2010

Change? Change? What's All This About Change?

"The only constant in the business is change" has become both a mantra and a cliche for many leaders and the achievement of change has become, in many cases, almost a holy grail.

A little thought on the concept of change in a business and indeed, how a business runs dynamically, brings one to the inevitable conclusion that there is no such thing as the "status quo".

The only way in which a business could be run without any change whatsoever (the status quo) is by a computer programmed to operate an inviolable system.  To put real people into any system automatically ensures that change, of some sort, will happen.

Conventional wisdom says that if people are in comfort zone, which seems to imply, with the minimum of significant change in their lives, and some action is taken to alter the system, the process, the management, the working conditions or anything which impinges on the individual psyche, then the first automatic reaction is generally denial and/or denigration.

This usually takes the form of "it won't work", "we tried it before and it was a disaster", "They don't realise what it means to us" and similar negative messages.

After some time to let the change take effect, the normal reaction tends to develop into a level of organised chaos and confusion until the whole system has settled down.  This period is also, more often than not, more positive with people trying to make the new system work.

The next phase is the aforesaid holy grail, that of renewal and regeneration when the system and the people are in harmony and are achieving the objectives of the change.

Of course, this being an iterative process, the next phase is back into comfort and complacency until once again change is imposed.

What does all of this imply for the leader?   If we accept that there is no such thing as the status quo and change is both constant and inevitable, then the acceptance of a system which is innovative and dynamic is far easier to achieve.

Yes, there are different levels of change; some change is dramatic and life changing, some is inevitable, some is radical or reactionary and some creeps up on us almost unnoticed.

Whichever it is, it can be for good or for evil and it is up to us all to make it work positively whenever possible.  How many Jewish mothers does it take to change a light bulb?  None - she says "You're too busy, don't worry about me, darling, I like sitting in the dark".

Have a great week!

For further information, visit www.vistage.co.uk and www.vistageblog.co.uk
To contact us, email to ivan.goldberg@vistage.co.uk