Why Operational improvement and change initiatives usually fail.

Why Operational improvement and change initiatives usually fail.

Aug 2, 2017 | Change, Leadership, Lean, Operations

How do you make short term operational and process improvements ‘stick’ for the long term?

Most change initiatives fail to deliver on their early promise. You get some short term improvement, some changes made, but the effectiveness of the process dwindles with time.

I often see failed improvement initiatives, usually labelled ‘Lean” or ‘6 Sigma’ by those involved, that leave a pile of paper, some awareness and knowledge, and from time to time some useful results, but nothing like the promises of the expensive consultants as they signed you up.

Why is that?

Nobody goes into a change process expecting it to fail

In my observation, the single most common reason these initiatives fail is because they ignore one of the basic tenets of Lean: respect for people.

Lean gets a start because management sees problems they have failed to solve, or do not know how to solve. So they bring in some Lean consultants who reach into the tool box and come out with some of the common tools, go through an education process, implement, and get some quick and sometimes impressive wins, and victory is declared. After that declaration, the focus moves elsewhere,  and the process slowly deteriorates.

Why is that?

Everyone was so committed, excited at the early results, the consultants were paid a shedload, so it should have worked.

In 30 years of doing this stuff, there is always one dominant reason they fail.

The initiative is top down, not bottom up.

Those at the top see problems manifest in the P&L. Their motivations are financial, operational and strategic. They talk about alignment, and people being the most valuable asset, then ignore them.

By contrast, building initiative from the bottom, asking those doing the work how to improve it, then giving them the tools to improve, and rewarding them with acknowledgement as well as a more secure job and maybe a pay rise, is where the action is.

However, for managers, they are trained to see their job as managing. Having some stuff bubbling up from the factory that has not gone through the formal approval processes and subjected to the discipline of  the accountants mandatory NPV  and ROI analysis is uncomfortable and challenging to their authority as managers.

This is where the distinction between managers and leaders comes in.

Managers, usually unwittingly, kill off the grass roots enthusiasm to make their workplace safer, more interesting, and more productive because it makes them uncomfortable, less in control.  By imposing rules, they interrupt the productive flow evident in successful initiatives. By contrast,  leaders encourage and promote the ambiguity that sometimes results, and works with it.

Which are you, Manager or Leader?

 

 

How to choose your marketing and sales automation software

How to choose your marketing and sales automation software

Jul 31, 2017 | Change, Governance, Marketing, Sales

One of the common questions I field is which tools are the best to automate sales and marketing processes.

The right answer is that there is  no right answer.

There are just so many tools out there that may do a really good job for you, some need to be stitched together with others, but there are a few that offer all singing, all dancing solutions.

The latter are usually not appropriate for the needs or IT resources of small and medium enterprises, who typically lack the knowledge  and resources to do a complicated implementation.

While it may seem wasteful, my advice to SME’s is to take small steps, be wary, find ways to work around the shortcomings, and stitch things together, then when big enough take a bigger step and integrate in a larger package.

It does not always work, but experimenting as you go along is usually a very good idea.

However, here are some generic steps that can be taken that should be done at the beginning of the process, no matter what, and how, you are going to implement.

  • Define outcomes. Define the outcomes you want from the software in the context of your strategy. Automation tool implementation without reference to the strategic principals and goals will be a painful experience.
  • Integration. Consider how the software will integrate into the rest of your business. Most implementations I see these days are automating sales and marketing in one way or another, which usually need to be integrated into the existing financial and operational software that has typically already been deployed. You need to clearly understand where the holes between the applications hide, and have considered the manner in which they are to be filled. Excel seems to be the ‘filler’ of choice in most circumstances I come across.
  • Build wide buy in. It is essential that you get the buy in for the functional users, by seeking their input to the tool choice, project planning, training, and implementation. This offers the opportunity to ensure that their current and anticipated requirements are met as far as possible, and that their concerns are able to be aired, if not completely addressed.
  • Fit. Ask yourself how well the new software and existing processes fit together, and how familiar the new processes will feel. Most software is not fully utilised, and this is often a result of legacy systems being useful and familiar. You need to determine how to address these issues of what I call ‘legacy elasticity’.This may seem very similar to the challenges of integration, but they are different, as there is always resistance to change, and  the better the fit to the existing, the easier the evolution will be. Integration implies that both parts of the equation can be altered to achieve a different outcome, whereas fit matches existing parts together.
  • Map your processes. My normal practise is to have someone outside the business map all the current processes, then run that map over the process map that will be implemented in the software. My objective is twofold: remove the inconsistencies and silly bits from the current, and find a process that matches what is left as closely as possible, then implement the software without change. Changing the code in the software package seems easy, but always ends up in tears as unintended consequences rear their ugly heads.
  • Do we go to the cloud? The argument about ‘cloud or not to cloud’ has been had. Go to the cloud. The compromises can be managed, the cost will continue to beat the costs of on premises, but the real value is in the automatic patching and upgrades that occur.
  • Due diligence. As you are doing your due diligence, make sure you ask deep questions, and hold control over the agenda. Software sales people are very good indeed, and will sway the most recalcitrant and reluctant buyer with a vision of the new life you will have purely as a result of their software. Just assume it is all bullshit, that there are a number of options that will meet your requirements, and be clear about what you need, not just in terms of the functionality, but the training costs, ongoing maintenance, upgrades, any internal hardware expenses, and features that may not be included in the base package.

Making a software vendor decision is challenging, but the truly challenging bit, the implementation and leveraging of the software is yet to come. Make sure that the whole project is planned in great detail, and that the vendor is locked into the outcomes.

Do all that, and you might get away with it, and when you do so the productivity gains will be huge.

Image credit: Scott Brinker of Chief Martech. The landscape details 5,381 digital martech automation tools as of the end of April 2017. There will be more by now. I recommend you dig around in the Chief Martech blog for ideas, information and insight.

 

Amazon, Whole Foods and the future of supermarkets in Australia

Amazon, Whole Foods and the future of supermarkets in Australia

Jul 26, 2017 | Category, Change, retail, Strategy

Amazon would not have paid $13.8 Billion for Whole foods without a plan. The purchase came as a surprise to most, but it should not have, they have been evolving into bricks and mortar for some time, with books, Amazon Go, The Washington Post,  and a few other dabbles.

Most commentators look at Amazon as a digital retailer, but when you think about it, they are not: they are a Platform that manages supply chains. Those supply chains just happen to end with consumers, rather than a B2B transaction.

Looking at the purchase of Whole Foods through the lens of a supermarket retailer will lead you to wrong conclusions, as you will be looking for the efficiencies that can be squeezed out of the existing model, with a few wrinkles added in.

Wrong lens, wrong model.

Amazon will reinvent the Whole Foods supply chains, and extend them straight to consumers, probably using Blockchain technology. Wal-mart is experimenting with Blockchain in their Pork and Mango supply chains, and I would be astonished if the work Amazon has been doing developing Blockchain technology in finance markets leveraging Amazon web services in collaboration with IBM was not applied very quickly to Whole Foods.

Amazons success (I predict) with Whole Foods  will be enabled by their efficient systems, great technology, engaged workforce and all the other stuff parroted around, but the real reason is far more strategic.

In the ‘old world,’  whether it referred to supermarkets, newspapers, personal transport, or accommodation, success came with the control of supply, which required capital to be in the game. In the digital world, success comes from the control of demand.

Amazon has demonstrated its mastery of demand management, and has demonstrated that this mastery can be leveraged backwards into the physical world, as they deliver a huge range of goods from their warehouses.

The mission statement on Amazons site states:  “Our vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”  No mention I can see of digital, or technology, just customers!

By any measure, Bricks and mortar is on the slide, but on-line sales still amounts to a small proportion of retail. Just what the percentage is depends on whose numbers, and what they classify as retail, but it is less than 10%, 8.3% according to this study but will be more based on the huge number of filings for bankruptcy current in the US. According to this 2017 Nielsen study, online sales of FMCG accounts for 8% of dollars.

 

 

The split sales between on line and in store is very wide across different categories, but the growth of 80% in digital while off a modest base, is a statistic that should scare the pants off Coles, Woolworths, and other ‘traditional supermarkets around the world. Sainsburys in the UK has suffered in the share price stakes as their profitability has slipped, while they seem to have done a pretty good job with home delivery, and digital generally. Amazon could buy them from cash flow. Just a thought!

 

What will the digital/bricks & mortar split be in 20 years?

Will the current 90/10 reverse itself?

Perhaps not, but 50/50 would not seem to be outrageous when you think of the developments in Virtual reality emerging, where you will be able to visit your supermarket from the convenience of your couch at home.

The future is in personalisation, we all seem to accept that. However, the existing supermarket business model is intent on homogenising the experience in the pursuit of low costs.

Do you see a paradox emerging in this? Retailers are doing exactly what consumers do not want, at least outside commodity categories, as is evident in the foregoing graph.

I think  the era of big box retail is coming to an end, and in its place will be experiential retail. Alibaba, the Chinese version of the combination of Amazon and Ebay has stayed away from owning anything beyond the platform that enables connection and sales, but that is also changing. There are now 13 Hema supermarkets around Shanghai, delivering a step towards experiential retail, and using technology to drive then enable the transactions.

If I was running Coles, I would be experimenting with ‘MasterChef’  sections in some stores. Have a chef, cooking the fresh produce in  the stores, simple recipes that shoppers can see in use, and certainly purchase pre packed bundles that have all  the ingredients along with prep notes. Similarly in the Coles owned Bunnings I would have workshops teaching ‘do it yourselfers’ how to use the tools and materials, running classes that use them to make something. Customers  can then buy the tools, blueprints and product packs to make a work bench, toys for the kids, or whatever they wish. In Bunnings currently, if you want to be stocked, you need to have merchandisers that fill the shelves. The next logical stage is to have branded sub stores, where there is only branded product on sale, and with an ‘advisor’ paid by the supplier, on hand.

A shop within a shop if you like, which is not a new idea, department stores have had fashion brands running sections in their stores for years. Experiential retail.

The supermarkets are going in the opposite direction, commoditising everything in the name of efficiency.

The industry has consolidated and consolidated, fewer brands, retail options, and producers. Perhaps there is a tipping point, and we are just passing it.

The consumer is increasingly looking for natural, local, assured provenance, and  environmentally sustainable product, all mixed in with a new shape of ‘value’ less dominated by price than has been in the past. Communicating and delivering these attributes are the foundations of branding, and the delivery of ‘value’ to a purchaser.

Woolworths will live to regret the closure of Thomas Dux,  but it is just another in a long line of strategic blunders. it started so well. Their in store  ‘Foodies’ were a hit in the stores I visited, but the weight of the Woolworths machine drowned them. Bring it back I say, it may be your saviour, or try and buy Harris Farm again before Amazon come in and offer the Harris family enough to retire in gilded luxury to Monaco.

I like Ray Kurzweil’s observation that ‘The future comes very slowly, then all at once’.

This is classically the emergence of AI and combined with the Gartner Hype cycle makes a compelling case. Gartner’s 2016 Hype cycle has several technologies that relate to and are integral to the development of all the AI and VR stuff being hyped. Amazon has the grunt to bring all this to the table and disrupt the comfortable supermarket duopoly that exists in Australasia.

If nothing else, it will be fascinating to watch

 

Header photo credit: Eli Christman via Flikr.

The simple 4 letter word that underpins every improvement initiative.

The simple 4 letter word that underpins every improvement initiative.

Jul 24, 2017 | Governance, Lean, Operations

Improving the performance of businesses is often like being set loose in a commercial kitchen without a recipe. Random ingredients, absence of some staples, disaffected staff, erratic processes, and severe cost pressures, but still being expected to produce an experience people are prepared to pay for.

Not easy

However, every time I look back on a project, the common factor that has made the most difference is not what you would expect.

It is not the financials, or the marketing plan, or how well the sales force performed, it is more basic than all that, and enables all those things:

Flow.

Simple word, and an idea at the core of all performance improvement.

The concept of flow emerged from the work done to improve manufacturing processes by W. Edwards Deeming, Joseph Juran, and others, and was first widely implemented and documented by Toyota, then spread around the world as ‘Lean thinking’ and the ‘Toyota Production System’.

At the core of Lean is Flow, and at the core of any improvement in any process, physical or otherwise,  in any context, is flow.

The basic confusion is between being busy, and being productive. Jumping up and down in one spot may be  busy, but it is hardly productive unless you are killing ants.

Optimising flow in manufacturing operations requires the configuration of all the lines such that work passes unobstructed from job centre to job centre through to completion. The faster and more uninterrupted the flow, the higher the output.

Flow optimisation always requires the counter intuitive decision to leave unused capacity at points in the process, to avoid building Work in progress inventory, which act as ‘rapids’ in the flow metaphor. It usually feels wrong to leave available capacity unused, but the slowest work centre will be the limiting factor for  the whole process, and to keep the flow steady, the flow rate is limited by that slowest point. In addition, shit always happens, something breaks, an item spec ‘wanders, ingredient fails to come in as required, so there is always downtime of some sort. This means that  some spare capacity in the system is a requirement for  the flow to be matched to demand, or ‘Pull’ in Lean parlance.

A key component of flow is the orderly release of work into the process. A schedule is written based on priority and optimal flow, and is then executed without change. Queue jumping, to meet unscheduled customer expectations, is a common distraction from the plan that multiplies, disrupts everything, and often results in total turmoil in the flow. It is deadly to process optimisation.

These days, not as much manufacturing is done, after all many of us are told we are now knowledge workers.

Exactly the same principals apply. While it may be harder to see because there is no physical product moving down a production line, the thought process is identical.

The trouble with these non physical tasks, is that they come at us from every direction, often with little warning and lead time, and with ambiguous importance and priority. Unscheduled demands on our time.

How do you sort through the mess to optimise your productivity?

A now standard method is the scaling of Importance and urgency into quadrants. When analysing how our time is spent, most of us find that too much is spent in the not important/urgent quadrant, when we should be focusing on the important items, urgent or otherwise. It is almost always the important/not urgent tasks that get shuffled aside, and it is these items that have the greatest long term impact on the performance of an enterprise.

An alternative means to allocate time is on an ‘Impact/Effort’ continuum. Tasks that are high impact, low effort are the quick wins so beloved of consultants, by contrast, high effort, low impact tasks are just thankless tasks, and not worth doing.

Everyone is in charge of managing their time to some extent, the further away you are from a time driven physical process, the greater the amount if discretion you will have. It behoves you to work the tasks in front of you in order of priority. Responding to that email may seem important, after all it has come in, the ‘new email bleep’ (Pavlov would love this one were he still alive) has sounded, there is a sense of urgency generated, but in 99% of cases, what does it really matter of the email goes unopened.

In everything you do, consider the impact and benefits of optimising Flow.

Photo credit  Dirk Veltkamp: Thredbo river.

 

How to ensure your copy does not get read.

How to ensure your copy does not get read.

Jul 21, 2017 | Communication, Marketing, Small business

Copywriting is easy.

That is what you tell yourself, after all, you can write, you are a professional, very used to communicating, and doing it successfully.

My sister is a writer, and every now and again she grabs one of my posts over which I have slaved (yes, it is OK to have family subscribed) and goes into what I call her ‘Teacher mode’

Out comes the red pen and professional editor and she rewrites my posts.

They are subtly altered, so the intent of the post is clearer, makes a greater impact on the reader, and ends up being way, way better.

It galls me a bit that it is a skill beyond mine,  but on the other hand, she makes me feel better by telling me she could never dream up the topics and angles that I do, all she does is polish it a bit.

We are inundated with copy, it comes at us at all times, through all our devices,  and now is increasingly visual  as a means to fight the war for your attention. However, like most things the volume going up does not have any real impact on the quality, if anything the average has dropped as we become ‘do-it-yourselfers’ in order to keep the volume up.

The headline is the most important element of copy in any piece. If you fail to cut through, catch attention, and create an urge to read on, it does not matter how good the rest is, it will not be seen.

There is piles of advice around on how to write a great headline, most of it pretty good, but also so much that we tend to get tunnel vision, and forget most of it, so following are 4 basic things I see continuously that ensures I do not open a piece.

Talking about yourself.

Nobody cares about you, except perhaps your mother, or in my case, my sister. They care about themselves, their lives, and their problems. A good headline reflects those needs, pain points, and offers help to a specific group that you wish to communicate with, and at  the very least, creates interest.

If you are a dentist, do not talk about how modern your equipment is, or how many degrees you may have, address the reason someone  may be looking for a dentist. They have broken a tooth, their child has a crooked bite, or they have a toothache that needs attention.

Using jargon.

Every industry has jargon, it acts as shorthand for insiders, so if you want to grab the attention of your competitors, use the jargon they understand, but if you would rather catch the attention of those who might want to act on what you say, avoid it like the plague.

Last week I saw a headline that promised: ‘to deliver a sophisticated customer centric e-commerce solution to SME’s’ . How much better would it have been if the headline simply promised to make it easy from small businesses to get paid.

Showing how clever you are.

For your potential customer, clear beats clever every single time. It may not get a chuckle from your mates in the pub after work, but so what, they are already your mates, and not required to pay your bills. The most common offender is the use of a pun, never as funny in a headline as in the pub, followed closely by the use of ‘digital shorthand’ such as ‘gr8’.

Allowing grammatical and spelling errors.

Perhaps it is just my age, but a spelling or grammatical error in a headline or sub head ensures I do not open it. Not only does it offend my sense of what is right, it demonstrates that the writer is either too stupid to understand the basic rules of written communication, or that they have so little concern for my time that they did not make the effort to get it right. Why would I read it in either case?

The difference between ordinary copy, and great copy is a big bagful of money, and a lot of effort, experience and specialist skill.