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Just one more thing….

Forty years ago, if you wanted to stop product shortages or missed due-dates, the solution was there. It was clear, it was fast, it was simple, and it was pure common sense. You could do it with the same people, the same machines, the same resources you currently had. 

The results were staggering — some, exponential. 

Things like… Within four years, net profits equal to total sales… Going from the brink of bankruptcy to shares reaching 7300% of their value within seven years… Profitability improved to four times the industry average… Lead times reduced from 40 hours to 8… Seventy-six percent increase in annual sales… In less than 18 months, market share up by 25%, sales up 23%, total supply lead times reduced 90%, new products as a percentage of sales up 50%, OSHA recordables down 86%, and millions in CAPEX deferred… Sales increase of 62%, expenses reduced 67%, net profits up 531%, and return on assets up 403%… In 12 months market share goes from 15% to 80%… On-time deliveries improve from 60% to 96%, inventory decreases by 30% while doubling sales and reducing the cost of quality from 6% to 3.5%.

…Crazy results. 

And not just the Fortune 100. There were donut shops, furniture manufacturing with $3M in sales, warehousing, cabinet makers with $9.5M in sales, spring & wire companies with $12M sales. Small, medium, large — manufacturing, logistics, and projects all saw the same kind of results. 

It favored no specific industry, product, or service. If a company was producing X, Y, or Z to serve their client and the market, then it worked. 

Every company who used the solution had the same staggering results — a preeminent position because of their decisive competitive advantage. 

What’s fascinating, and what caught our eye, was how few companies took advantage of the solution. 

It wasn’t a secret. It was in plain sight. 

You could buy a book for less than $10, authored by the creator, with an easy to digest and very clear do-it-yourself outline.

You could attend events for less than $1000, where companies who used the solution would tell you how they did it. 

Experts trained to help companies use the solution were available and willing to work on results-based performance.

Why didn’t everyone who knew about it take advantage?

Was it inertia that grew out of a commitment to what they knew? Was it fear of risk? Was it disbelief? Was it, ‘yeah, but we’re different’?

Was it leadership okay with being just a little better than the competition — relying on the existing benchmark to judge their performance? 

Turns out, there were two kinds of leaders who used the solution. 

  1. The true, competition-leapfrogging, order-of-magnitude-seeking visionary leader who believed that significantly better performance was possible. And they believed it wouldn’t take a herculean effort. They had a simple but profound belief that more, a lot more, was doable.  

“And the minute that you understand, you can poke at life, and if you push in, something will pop out the other side, that you can change it, you can mold it. That’s maybe the most important thing. To shake off this erroneous notion that life is there and you’re just gonna live in it, vs. embrace it, change it, prove it, make your mark upon it.” — Steve Jobs

  1. The visionary leader with their back against the wall. Things weren’t going well….at all. A crisis, the inheritance of a poorly managed company with severe declining market share, a pandemic, oil at negative prices, a BIG and painful need to do something NOW.

 “Never let a good crisis go to waste” — Winston Churchill

In reality, these are the same because visionaries are always in a hurry — almost crisis mode — they see opportunity in terms of windows of time…and they see those windows close, time and again, very quickly. 

Far different than the ‘If it ain’t broke, don’t fix it!’ mindset.


It’s the bear story — A bear is coming after you. You stop to change into your running shoes. The competitor who happens to be with you asks, “What are you doing? You can’t outrun a bear.” You answer, “I agree, but I really only need to outrun you.”

So, here we are, some forty years later. 

No big surge of solution takers. No world-wide ‘how to’ solution woven into the fabric of corporate America.

The mighty, transformational, order-of-magnitude, competitive-leap frogging advantage is just limping along.

Of course, more and more companies of all sizes and industries have found and used the solution: again, the visionaries and those compelled to take full advantage of a crisis.

So again, we ask, why? 

Why haven’t the vast majority of manufacturing, logistics, distribution, and project-driven companies used this solution? 

Why does it seem so hidden to the leaders of these companies?

Well, it’s not because they are unaware. 

It’s a simple and perfectly understandable reason.

While the solution works with the company’s existing people, machines, and resources, there is one absolute necessity required.

It’s this necessity that stops companies from using the solution.

The necessity?

The company must change how people and ‘things’ are measured. 

That’s it.

And it’s a big IT. The bigger the company, the bigger the IT. 

So how do they do it?

How does a leader deal with this kind of change? 

They shift the focus. 

Because it’s not ever about how you measure someone or something, it’s what matters to the market and your clients. 

They turn the company’s entire focus to one or two (and no more) very clear and easy to see metrics. Maybe it’s product outages. Maybe it’s poor due-date performance. Maybe it’s fill in the blank_______. 

You can name one or two critical things inside any company that drives everything else. 

These leaders use those metrics to change their world. 

They put a flag in the ground and say… “We will reduce product outages to zero, and we will do it in 12 months. We will do whatever it takes to make that happen. Let’s find out what it’s going to take, and those are now what we focus on.”

Is that different than a crisis? No, not at all, really. 

In a crisis, you face doing whatever it takes to get out of that crisis. 

The only real difference is the crisis.

If you are in crisis with everything to lose, that’s different than not having products on the shelves or slightly less than industry norm delivery dates. 

It’s the visionary leader who treats the ‘one or two things to fix that, for certain, drive our company’ as a crisis. 

Now, we’re not talking about panic. That’s different. 

Maybe we replace crisis with intense, laser, don’t mess with me, focus.

It’s the burning of the ships mentality. “This is where we are going; there are no other choices if you choose to be here.”

The visionary leader’s true gift and that of their direct reports lie in how they focus this focus internally. 

Everyone must be on board, and everyone must understand why it’s a crisis and understand their part in getting us out of the crisis. 

They must be so well indoctrinated and aligned that they intuitively ask and answer, “How will what I’m doing affect the crisis?” They must map it out so they can see the cause-effect. They must work as a team, like firemen faced with a burning building and children trapped inside. No one has to ask, “What should I do?” And no one wanders off to grab donuts. 

It takes a visionary leader who can transpose the intensity of the burning building into their one or two key things that need fixing; their crisis; their laser-focus. And one willing to replace all current methods of measuring people and things with measurements that matter to the crisis/goal/focus.

It takes tremendous conviction and a deep understanding of preeminence.

It also takes a deep understanding of why the crisis is upon them and what’s necessary to fix the underlying core problems. 

It’s easy to see how focusing the company on the burning building transforms it and eliminates the barrier of how people and things are measured. 

New measurements will emerge. Those measurements will be in perfect alignment with the singularly-focused objective. 

Is it quick? Probably not. 


Is it easy? Depends on the visionary, their personality, and leadership skills. It depends on the support the visionary receives from those above them. With the right visionary and the right support, it not only can be easy, it can also be fun and breathe new life into the organization. 

Just one more thing…

Where there is crisis, there is opportunity

If COVID 19 isn’t enough of a crisis for you, then indeed that plus the pace at which new technology is emerging will be. 


You’re either on one side or the other of advances in the industry sparked by a crisis and their visionaries, breakthrough technology, oh, and a simple solution created some forty years ago. 

We hope you are well on your way to leapfrogging over to the more profitable side. 

-k

Peter Falk image permission details — This work is in the public domain in the United States because it was published in the United States between 1925 and 1977, inclusive, without a copyright notice. For further explanation, see Commons: Hirtle chart as well as a detailed definition of “publication” for public art. Note that it may still be copyrighted in jurisdictions that do not apply the rule of the shorter term for US works (depending on the date of the author’s death), such as Canada (50 p.m.a.), Mainland China (50 p.m.a., not Hong Kong or Macao), Germany (70 p.m.a.), Mexico (100 p.m.a.), Switzerland (70 p.m.a.), and other countries with individual treaties.

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Fisher Kings, Complexity and Enchantment

Deep in the forest, far away from most others, a widow governed by fear raises her second son. She is determined to keep this son safe from the fate that took her husband and first child. But, boys will be boys, and at the age of 16, this boy steps across his known threshold and comes upon five knights from the Arthurian court. Now, he’s never heard about or seen anything like these knights, and he is mesmerized. He is now determined to become just like them.

Of course, he has to tell his mother, whose greatest fear is just this. She faints with the news, comes to, and sees his determination. She lets him go but insists he wears the homespun shirt she’s made for him and gives him a set of rules to follow along the way.

After some time of riding in the forest, he finds King Arthur’s castle. He makes his way inside, lands before the king, and asks to be knighted. The king is quite amused until the damsel who has not laughed or smiled in six years bursts out laughing. Legend has it that this girl will only laugh in the presence of the greatest knight the world has ever known. Taking notice of this, King Arthur knights the young man, gives him a Paige, a sword, and tells him that “Adventures make the knight.” And, off he goes.

His first encounter is the Red Knight — the reigning king of knights who is so powerful that he rides into Arthur’s court once a year, throws wine in the queen’s face, and leaves again with no one able to stop him. The young boy doesn’t know this but what he does know is that he wants that red armor this knight is wearing. Upon telling the knight he wants his armor, the knight replies, “Sure, if you can get it.”

The Red Knight doesn’t really want to fight this skinny young boy because he sees it as a waste of time, but the young boy insists. They ride at each other. The young boy falls to the ground but is unhurt. Instinctively he reaches for his dagger throws it at the Red Knight, and it pierces him through the eye, killing him.

The young boy struggles to remove and put on the Red Knight’s armor. His Paige helps him but tells him he should not place this armor over his homespun shirt. The young boy refuses to cast the shirt aside and puts the armor on himself.

Along the way, he finds his way to Gornamont, who teaches him how to be a ‘proper’ knight. Like his mother, Gornamont gives this young boy a set of rules to follow, of which one is “To not ask too many questions; otherwise, you’ll look foolish.”

The young boy sets out to go back and see his mother. Along the way, he meets many adventures and defeats all challengers. He never kills them; instead, he sends them back to serve King Arthur.

One day he finds shelter in the Fisher King’s castle. The Fisher King is the Grail King, and even though he has possession of the Grail, which provides endless abundance, he and his kingdom cannot partake. He has a wound that will not heal. He is in agony but cannot die. His kingdom is a reflection of his inner self and as such, is also in agony. It’s in dire straits — nothing can grow, and nothing can thrive — it is wounded. This is the wasteland. 


The people inside are enchanted, and they know they are enchanted. Their lives are in perfect symmetry — they can have different viewpoints, but the situation is always the same. They are deluded and so entrenched in their wasteland, they cannot see the bigger picture. They can only offer cliches of responses. They can only react and cannot create.

Creative acts require a new level of understanding of a relationship to life, others, the landscape, etc. An understanding of what this relationship might be. Creative acts require innovation.

The inability to take creative action is the wasteland—people living only in terms of what has always been, unable to see anything else — enchantment.

As the young boy enters the castle, a ceremony begins. The Fisher King is paraded out, in agony and close to death, but cannot die. The young boy feels the urge to ask about the situation but remembers he is not to ask too many questions and risk looking foolish. He remains silent.

Everyone leaves, the young boy is taken to his room for the night. When he wakes up, his clothes have been washed, and his armor shined, but no one is in sight. He is all alone. He leaves the castle, which evaporates behind him. 

Wandering along, he meets a damsel who scolds him and tells him, “A spontaneous question from you would have healed the king and the land.”

It is here that the young boy knows his name for the first time – Percival. For he chooses the middle – of the valley, of a pair of opposites, of everything.

It is here that Percival realizes he has not achieved the heroic task. He’s told that he can never enter that castle again because of his failure. He dismisses this and sets out to right his wrong. He wanders around for five years. During this time, he has found his own way. He realizes he failed his task because he too closely followed the rules given to him — he fell into natural cliches.

He now knows he must shed his mother’s shirt, follow his own heart, intuition, and belief in himself instead of following the herd. He must take creative action, stick his neck out, and go against the norm. He must see things anew with a beginner’s mind.

“A man must consent to look to a foolish, innocent, adolescent part of himself for the cure. The inner fool is the only one who can touch and heal his Fisher King wound.” — Robert A. Johnson

Percival finds his way back to the castle, asks the question, and becomes the Grail King — allowing the Fisher King to die, the land to heal, and the enchantment to be broken.

The proper response to healing wasteland situations is to heal the wound by following one’s own nature; by being authentic. This is what Percival did — he achieved the kingdom through his character, his loyalty, his courage, and his one-pointed resolution. He inherited the kingdom but not the wound.

The Grail and its many benefits are obtained by people who have lived their own lives. It is a symbol of an authentic life. The former Grail King, the Fisher King, was given his position instead of earning the position, and thus the wound.

Nothing can be healed if it remains in the old Fisher King mentality. To be cured, cliche responses and status quo enchantment must give way to something entirely different from what currently is. The beginner’s mind, the inner fool, is what can heal the wound.

“In the beginner’s mind there are many possibilities, in the expert mind, there are few.” — suzuki

For many companies, COVID has forced the issue of giving way to something entirely different from what is. And it’s the companies and mindsets that approach this force with a beginner’s mind, with the courage to look foolish, stick their necks out and create, who will achieve the Grail.

We are in unprecedented times for innovation and growth. Growth and innovation do not come free; they must be earned through adventure. Throughout, leaders will increasingly find themselves in the forest with no clear path and a new magnitude of complexity. The comfortable, linear-enchanted business world falls quickly to the new, asymmetrical mystery of innovation.

In traditional hierarchical organizations, linear thinking is common and non-linear responses clash with a linear mindset. In operations/production, non-linear (asymmetrical) responses are often tackled with optimization (efficiencies) — operating close to maximal capacity with minimal redundancies, idle capacity, and of course, optimal costs.

The problem with operating close to maximal capacity with minimal redundancies is the unknown. One small blip can give rise to chaos and lots of unhappy people — especially customers. There is a dark shadow, a hidden effect tucked inside the unexpected. 

The unknown (a.k.a. variation) can cause havoc to a beautiful, overly-linear system. When it’s not accounted for, the errors compound and multiply. It’s what P.W. Anderson terms as “More is Different.” It’s what happens when things are added, and the sum of everything becomes increasingly different from its parts. Complexity starts to rear its challenging head. When complexity is involved, it becomes quite challenging to predict how even one action will affect the entire organization. It isn’t easy because of the overwhelming interactivity and interdependency that happens between people, departments, processes, and functions. Throw in a little uncertainty, and you’ve got quite an adventure.

The cliche response to complexity has typically been to break it down into manageable parts and focus on the parts, describing them in a complete, objective, and deterministic way. If every part is made more efficient, the entire company will be more efficient. But with interdependent systems, this is not actually feasible or even possible. There are emergent properties (More is Different phenomena) that cannot be reduced to their parts’ properties. And even if they could, this breaking down does not imply that the system can then start with these parts and rebuild a more effective system (reductionism does not imply constructionism). 

Leaders who find themselves in this forest of complexity can take refuge in a relatively simple approach — instead of trying to manage and make sense of the complexity, focus only on the areas that can benefit the company the most and de-focus, de-emphasize everything else. 

Use the tools of the Grail message — these are the questions Percival finally learns to ask:

  1. Whom does the Grail (our company/genius/gifts) serve? This is translated into the singularly-focused goal of the company. 
  2. What ails you? What is limiting our ability to achieve our goal? 

Most companies see themselves in service to three entities: customers/market, employees, and shareholders. All three require that the company be and stay profitable; otherwise, they all three evaporate quickly. It’s not only okay, it’s very smart to make profit (maximize return on stakeholder equity) the primary goal, with satisfying the needs of the customers, employees, and shareholders as the necessary condition. It keeps everything in check. 

Now, increasing profits is not at all motivating for the vast majority of employees. So while we can put a number on the goal (increase profits 10x in the next 12 months), the ability to translate this into something more meaningful is the key. Profit is the vehicle we will use to _________(purpose-driven goal). In today’s environment, jobs, and meaningful work sound like great purpose-driven ideas. 

It’s the job of the company’s vision (via leadership) to ensure the needs of the customers, employees, and shareholders are met and exceeded in concrete, measurable ways AND in aspirational ways. There is little doubt that the “right” vision will drive success and profitability, but you cannot separate the two. One’s vision can be to “make insanely great products,” but if those products are perpetually unprofitable, vision aside, the entity will parish. 

To avoid being dragged into the firefly dragon-mouth of complexity, a single goal must be identified, and the other things that you’re tempted to call goals become necessary conditions in achieving the goal. One goal with a few (ideally, very few) necessary conditions is the key to surviving and thriving in uncertainty. Keeping everyone and everything focused on this goal is the ultimate quest and test of the leader. 

This last part, keeping everyone and everything focused on the goal, is by far the hardest to disenchant. Hierarchical organizations are born enchanted. It’s their nature to break things down into manageable parts (e.g., accounting, marketing, R&D, operations, H.R., sales, logistics, I.T., etc.), describe these parts in a deterministic way, and reward them for their part-specific goals & efficiencies. 

To keep everyone and everything truly focused on the single-pointedness of the goal requires disenchantment from their nature. It requires the un-focusing and de-emphasizing of the parts to emphasize and focus on the whole. This is the ultimate Fisher King wound that hierarchal companies face. The key to healing this wound lies in how people and departments are measured. To test this out, take the key measurements of how marketing, sales, and operations are judged and see if they are harmonious with one another and focused on the single-pointedness of the goal. If there are gaps, there lie tremendous opportunities.

Once you know the singularly-focused goal, it’s fairly easy to figure out what ails you — what prevents you from achieving that goal. 

You will arrive at the real answer to what ails you only after you’re able to whittle it down to a single or very few causes. If you acquiesce to a hundred differently-perceived causes, you’ll be wandering in the forest for a very long time — enchanted by the notion of complexity and unable to see what others, who are disenchanted, can see.


Systems Thinking and The Thinking Process are very effective tools at identifying the culprit cause(s) that limit goal achievement. It takes effort and time, but the clarity and focus will radiate and invigorate the entire organization. And while everyone in the company will experience the adventure in their own way, leadership ensures all paths lead to the common goal — obtaining the company’s Grail. 

Keep in mind that when someone is involved in the conception, they are eager and determined to nurture, protect, and support what’s conceived. This doesn’t mean it’s a good idea to get 5,000 people in a room for three days while you go through a ‘what ails you’ session. It does mean it’s a good idea to get as many people involved as you can somehow. 

Ride on brave knights — the kingdom is yours.

KE

P.S. The two questions (whom does the Grail serve and what ails you) are also about compassion. These hero stories were written in the 12th century when the world was in tremendous upheaval. The religious wars were tearing countries and people apart. The words were written to serve as guides. Just as in the 12th century, our world in the 21st is in tremendous upheaval. For some, their paths have been completely destroyed. Business owners who’ve been successful for 20+ years have lost their businesses. Many are struggling to pay utilities. Like a tornado, COVID has destroyed many while others were saved. Compassion is a great equalizer. If you can do anything to help another during this time, this is your greatest gift.

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The Nasty Clog Preventing Growth

Illustrations by Karl Krieg, Creative Director, The Business Lab

What Happens When Your Focus Is The Constraint?

A constraint is that thing that limits you from getting more of what you want. 

If you can increase sales by 20, 40, 60%, and not “break” your system, then your constraint is “more sales.” If you can’t keep up with the sales you have, then your constraint is internal – “more capacity.” 

If something is limiting you from getting more of what you want, there is a specific way in which it is limiting you. It makes sense that you’d want to figure out how to remove that limitation. 

Let’s assume you are a manufacturer and can increase sales rather significantly without breaking your system. This also assumes that the market you are in has enough sales to go after. If you “own” the market (80%+ market penetration), then you’ll need to find a new segment (a topic all its own). Note of caution: never risk your core business! 

Here’s what we know about increasing sales.

You can’t ship a part until it’s packaged.

You can’t package a part until it’s manufactured.

You can’t manufacture a part until someone needs it.

You can’t satisfy a need until someone knows about you & believes you can fulfill their need.

Yep, still true – this hasn’t changed…  “nothing happens until something is sold (and paid for!).”

So, what has changed?

The way things are bought.

Products and services are no longer sold; they are bought. While the underlying meaning is the same, the above truth has become “nothing happens until someone buys something.”

This is a subtle but fundamental shift.

Back in the day, customers needed salespeople to get the information necessary for the right decision.

Is this true today?

No, no, it is not.

Why?

Because 72% of all B2B buyers or influencers are under the age of 45.

Okay, it’s not their age that’s driving the change. It’s the fact that they grew up with the Internet and having all the information they need readily available… only a click or two away. 

Why does this matter?

Because buyers can, and indeed are, by-passing your sales teams and, in many cases, your marketing efforts.

Seventy percent of B2B buyers fully define their needs on their own before engaging with a sales rep. Forty-four percent have already identified the specific solutions (a.k.a. companies they are going to contact) before reaching out to that handful of sellers. 

A full 60% of the buying process is complete before the selected sellers even know there is a sale to be had.

How many selected sellers get a chance?

Not many. No B2B buyer is going to spend their precious time vetting every company out there. So maybe they research two, maybe three? Or perhaps only one!

Today’s digital empowerment = impatience. Buyers want what they want and need now! The time between research and purchase is getting shorter. Sixty percent of buyers of industrial manufacturing products, who have been informed online, purchase on the first visit… to that one company they chose to visit. This is even more true for buyers of industrial supply products (79%) and buyers of pack-and-ship products (70%).

Is this new customer acquisition supply chain a problem?

No, not unless:

  • You were unable to get the buyer, without any contact from you, to select themself as a prospect, or 
  • They couldn’t easily, and without connection with you, find what they needed from you, or 
  • Without even contacting you, they didn’t believe you could solve their specific problem, or
  • You blew the opportunity in some way once they finally did contact you

And, of course, if the customer doesn’t perceive the value received to be greater than the price paid, they will not be a happy customer. 

Isn’t there some whiz-bang technology out there that will fix this problem and make sure we are the first to be contacted by a prospect?

Well, there seems to be no end to the explosion of marketing technology, content writing, Instagram snapping, easy-access digital advertising, and analytics going on. 

But, like a lot of data, it turns out to be just data. We’re willing to bet you already have a lot of data sitting around. Data, whose only purpose seems to be to satisfy some certification need, but does little to help you run your business better. 

Describing the benefits of technology often turns out to be a Yogi-ism“We’re lost, but we’re making good time!”

Now, we’re not down on technology. There are some genuinely company-saving-improving solutions out there, and they should be used. We’re only saying… just because you can, doesn’t mean you should. 

To become the company of choice for the marketplace, you only have to do this — change your focus. 

How?

By asking this question… “What job is my prospect hiring my sales and marketing team to do?”

The second you starting thinking in these terms, you’ll immediately switch from an internal, product-centric focus to and outward, customer-centric focus. 

What job is your prospect hiring your sales and marketing team to do?

That may be quite specific for your company – and certainly something you probably know or need to find out; however, here’s a hint.

They are not hiring your sales and marketing team to:

Sell them, or

Tell them

This generation of 45-year-olds and under, despise being sold and told to. Keep in mind, this is the group who invented ad blockers. And, just like that, by 2016 over $4.1 billion in advertising worldwide had been blocked.

Here’s another hint.

Think about what your buyer is doing during their buying process. Remember, a full 60% of the buying process is complete before a buyer reaches out to any of the selected companies. 

What are they doing during this time?

Your buyer is doing their research. They want education and information that will help them make the best possible decision for their company. Why? Because they want to succeed, grow, learn, be acknowledged, and solve problems. Fifty percent of B2B buyers are more likely to buy a product or service when they see personal value (career advancement, confidence, pride).

It could very well be that a simple change in focus will remove the limitation preventing you from “more sales.” 

If so, then following the ‘constraint’ guidance of Theory of Constraints will be helpful:

  1. Identify the constraint/blockage/clog. Done!
  2. Optimize or exploit the constraint – Decide the best way(s) to fully understand your buyer and their needs so that you become the company of choice.
  3. Subordinate/laser focus everything else to optimizing the constraint** – Stay focused on your buyer. Ensure everything you do, say, and project is in alignment with your buyer. Remove or reduce activities that have little to do with buyer alignment. Ex: if your initiative is to focus on your buyer and align your company/products/solution with that buyer, then this isn’t the time to involve the company and leadership in new accounting technology, or even new machinery – even if the machinery will improve output. Why? Because more output isn’t what you need. More output and not enough sales will do little for your bottom line. 
  4. Elevate the constraint – This is usually where you bring in some kind of help and is only necessary if steps two and three are unsuccessful at improving the flow and getting “more sales.” Take care not to have a marketing seizure here and start tossing out content or investing in technology. To fully understand your buyer, you only need to talk with buyers who didn’t buy from you. 
  5. When you are successful at breaking the constraint and obtaining optimum flow and “enough sales,” then the constraint will move to another area. Once you’ve reached that point, go back to step one and start over.

Good examples of subordinating or getting laser focused on an immediate goal:

Automakers who stopped making cars to make respirators (this included Formula One race car companies)

Distilleries who stopped making tequila to make hand sanitizers

Manufacturers who stopped making their product to make masks and other medical equipment

John F. Kennedy’s goal in 1961 to put a man on the moon by the end of the decade

CEO’s all over the world who come in and turn a company around

Gordon Bethune (Continental Airlines) — In 12 months, turned a $55 million/month loss into a $224 million profit

Angela Ahrendts (Burberry) — Used social media to reach a new generation, turned mirrors into catwalk screen, equipped salespeople with iPads and doubled revenue and profits within five years

Steve Jobs (Apple) — Came back, reduced projects from 350 to 50, then to 10. Focused on creating the next big thing = iMac, iPod, iTunes, iPhone and in so doing increased Apple’s stock by 900%

Richard Teerlink (Harley Davidson) — Showed up in 1981 only to find the company’s market share had dropped to 15% and the company reported a loss of $15 million. During his reign he recovered the company’s US market share to 50% and posted annual sales of more than $1.7 billion.

Stay Nadella (Microsoft) — Took over as CEO in 2014 and took an $8 billion loss to completely shut down their smartphone division, moved Word and Excel to the cloud (risking another $8 billion), used cash reserves to build cloud computing centers and by 2018, their stock price had tripled. (Nice to have $16 billion leeway!)

James Rhee (Ashley Stewart Plus Size Clothing) — Took over as CEO in 2013 while the company was facing its second bankruptcy in three years. He turned things around by changing company culture, created a mission-driven dedication to core customers, transparent communication, learning processes and kindness. Reduced corporate headcount by 40, closed 100 stores, analyzed core customer habits and reintroduced a local charitable giving program. The company emerged from bankruptcy in 2014 and by 2015 net sales were growing bu 80% and organic sales were up by 25%. Today, it’s one of the most profitable plus-size fashion brands in the world.

Mark Shapiro (Six Flags Entertainment) — In 2009 the company was $2.4 billion in debit and filing for Chapter 11. In less than a year, they emerged from Chapter 11 and cut debt in half. By 2016 the park’s surpassed 30 million visits for the first time while providing shareholders with a 14% return on investment.

Embrace the constraint. All improvement is through the constraint. 

Oddly, it is the path of least resistance.

Flow on…

KE

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How Private Equity Firms Can Find The Hidden Organic Growth

Illustration by Karl Krieg, Creative Director, The Business Lab

It’s time to pull out the most under-used but insanely useful growth tool of all time. It’s the ultimate formula for increasing sales, reducing costs and improving efficiencies in a key operational area. 

If this thing’s so great, why is it under-used?

Brain defects effects.

Brains are hardwired to crave certainty, stability, and consistency. Processes and systems provide this certainty, stability, and consistency.

Processes and systems are like cultures. Something needed to be done. We came up with a way to do it. It worked. When we run into that situation again, we remember what worked, so we do it again and again and again. A belief is a thought we keep thinking. A culture, process, or system are tasks we keep doing. It’s also known as the status quo. And, it’s not likely to change any time soon. “Everyone wants something different, but no one wants to change.”

It’s why most companies benchmark performance against the competition and industry leader. If you are the market leader, you’re happy that you are one step in front of the other guy when the lion comes at you. 

COVID 19 is giving companies a huge opportunity to shake off the status-quo-ness that creates unintentional inefficiencies. Because COVID is assaulting our notion of certainty, stability, and consistency, companies are ripe for innovation or new and improved ways of looking at things. 

Is this just another “let’s make lemonade out of lemons” article? 

No. Here’s why. This is a real game-changer and the best part?

Hardly anyone will do it.

If you’re one of the few who sees the “reason why-ness” of this tool…AND…you utilize it, you win!

So, what is this insanely effective, under-utilized growth tool?

The Unknown.

Actually, it’s not unknown at all; it’s just been hiding behind the status quo.

If something is successful or unsuccessful, there is a specific way in which it is successful or unsuccessful.

Do you remember this from high school?  

Us either, but, before this formula, all ships were made out of wood. Why? Because wood could float and iron did not. When Archimedes figured out the formula, they could make ships out of iron. Did anything change about water or iron or the laws of the universe? No. It’s just that someone found the specific way in which something works. 

Every industry has a way in which it limits the customer. Every company has a way in which it limits more buyers from buying. 

When you know, and you do or can easily acquire this knowledge, you will use it to your advantage, significantly grow organic revenue and make the competition relevant. 

But hurry. The sooner things get back to normal, the less chance you have of pulling this off.

Because timing is essential, we’ll give you the 500 ft view here so you’ll know where to start.

The Industry

Most every industry has a “way of doing business” that customers complain about. What are those complaints and which of them can you “fix” (especially the most advantageous one) without having to invest a lot of capital? Ideally, these “fixes” will be difficult for your competitors to copy right away. We guess that you have a lot of this intel in-house. Your sales, marketing, customer service, product folks face these issues often. Industry associations and industry forums are also excellent sources of information. 

Examples include:

The Printing Industry — customers complained for years about having to buy in bulk to “get the best price break.” Unless NOTHING changes in your business while you are getting through all that inventory, all is good. It turns out, this isn’t the case, and boxes of business cards, brochures, pocket folder, sales sheets, etc. end up in the trash. This is where digital printing presses came into being. One of the first companies to offer this kind of printing press required you to purchase two machines — because the technology was so new, and they knew they had reliability issues, if you wanted in the game, you had to buy two machines. These were VERY expensive machines. And, companies who saw the digital printing goldmine bought two machines and thrived and thrived and thrived. 

Clothing Manufacturing Industry — they have a similar problem as the printing industry. Customers have to buy months ahead of the season, they have to guess what is going to sell, and they have to buy a LOT of it to get the “price breaks” or even the merchandise. Manufacturers require high minimums of the same thing in order to do business with them. This leaves a lot of clothing stores with a lot of unsold inventory. Manufacturers who figure out how to shorten the supply chain and provide only the clothing their customers need, thrive. The Goldratt Group (Theory of Constraints) has been helping a few savvy manufacturers do this very successfully for years. 

Copier Industry — their customers complained about the cost and the service of large copiers. Xerox figured out how to sell the service vs. the product. No one owns a large copier anymore, they lease it, and the lease comes with automatic maintenance. 

Domino’s Pizza — they understood people did not like waiting for their Pizza, so they invented the “30 minutes, or it’s free” solution. Since then, wise plumbers, electricians, and HVAC business owners have transformed their businesses.

Sephora — they watched and saw that women like to try on makeup before they buy it. Rather than scheduling an appointment with a department store, they created a store around this behavior.  

Look Around — a small hotel in a resort area has a huge parking lot. It noticed cars were gathering there during COVID. Fearful of any COVID issues, they roped off the parking lot. When the hotel re-opened, it put out a HUGE sign saying, “OPEN.” The sign is right next to the parking lot, which they hadn’t un-roped. Eventually, they noticed and opened up the parking lot.

Risk Reversal — many companies understand the barrier of risk for their customers, and now they thrive because they offer 100% money-back guarantees or “pay for performance” models. 

Industry “Issue” Ideas to Consider:

Conveyor Belt Manufacturing Industry – Industrial conveyor belts can cause serious injury and death. The MSHA (Mine Safety and Health Administration) states that over 40% of conveyor injuries are caused while a worker is performing maintenance, another 30 to 40 percent are inured while cleaning an area next to the conveyor. Forty-eight of the 200 fatal mining accidents involve conveyors. Innovation in this industry is almost non-existent, and the problems that existed in the 1930s are the same today. 

What is the single most effective tool to prevent injury and death? Training. But, no one really thinks something bad is going to happen in their company, and besides, managers are too busy to attend training, so they send a junior team member. This person has little to no authority or influence when it comes to training, so..… Even though they train new employees, there isn’t enough focus on conveyor training. 

What can conveyor manufacturers do to help? Here are some ideas:

  • Include Virtual Reality Training and Phone-in-Headsets with each purchase. Require operators to keep the headset with them at all times. When doing ANY maintenance or review, the headset will be accessed to review the necessary safety and maintenance steps. Update the headsets each year with any new education. 
  • Include a Secret Shopper visit four times a year to watch what’s happening and offer solutions specific to the problems. 
  • Install video cameras and sensors to view and monitor the machines. Observing the speed limit and capacity ratings on conveyors are critical. Install sensors that detect overages and alert operators and executives. 
  • Put speed governors on the belts, so it knows the max speed for the given weight on the belt at any time.
  • Send trainers and technicians to each location twice a year for inspection and training. Create train the trainer programs so that operators train each other — maybe they get bonus money from you, vs. their direct employer, to be the trainer. Pay them to record training videos that reside on your website as well as their employers.
  • Send non-identifying questionnaires (one or two questions only) for employees to share concerns; call executives when you see a problem or pattern. Send daily texts to operators reminding them of the top issues: The speed limit of this specific belt, location of the shut-off system, how far away ancillary workers should be from the machine, etc. 
  • Invest in your sales and technical teams to be sure the company is buying the right belt system for their needs. 
  • Create a Technical Institute where you train and place highly qualified employees inside your customer’s facilities. 
  • If elevators, cars, refrigerators, filtered water pitchers (Brita Infinity Water Pitcher that automatically orders filters for you when it’s time), printers that automatically order ink (HP subscription model) can trigger maintenance calls before anyone is aware there is a problem, why can’t conveyor belts? If you say, “price — no one will pay for this,” I’ll bet you are wrong. Price is rarely the issue salespeople, and companies think it is. Price is an excuse, and the last thing you want to be competing on. 

If you manufacture machinery where any stoppage or breakdown is expensive for your customer, include a 3D printer setup to make on-demand parts that are frequently needed for maintenance and repair. 

If you install and implement corporate CRM (customer relationship management) systems, include voice-activated entry for all salespeople to use. Why? Because adoption is the most significant barrier to success, these technologies face. Make it as easy as possible for the sales team to update the system without obstacles. 

SOMETHING within your industry can be altered to create a significant advantage for you and your customers. 

The Solution

You can also ask, “are there companies that would never consider our solution, but could?” That’s what WeWork did. They looked around and saw a lot of business being done in coffee shops. Those people are not candidates for typical office space leases, and they wouldn’t want that anyway because they like the vibe of the coffee shop and the people around them. There are many reasons WeWork is struggling now, but none of them have to do with tapping into a previously unidentified market of need and desire. Had office building owners and managers seen what WeWork saw, the benefit would be all theirs. 

Your Buyers

How many sales have you lost that you don’t know about? Hard to say because you don’t know about them. But, they are out there. The buying process starts somewhere and ends somewhere. Sometimes you are included, sometimes not. But when you aren’t included, do you know why? And, if you know why, can you fix it? 

Would you be more visible to buyers if you knew

  • Why were they doing okay then decided they needed a solution like yours? What happened? What broke that camel’s back?
  • What ‘work-around’ are they using now to ‘deal’ with the situation?
  • Who all is tied to this activity and how entangled is everyone? 
  • How the research started, what the buyer did, and where they ended up in the process?
  • What the buyer believes is relevant to the solutions available to them?
  • What solution attributes did the buyer compare, and why? What was the benchmark?
  • What attitudes, processes, information, perceptions prevent the buyer from considering you?
  • What buying risks are they trying to eliminate or reduce?
  • Why did they buy from the other company? What did they value about this company’s approach?
  • What content your buyer trusts and uses in the decision-making process?
  • Who is involved in the decision, and what kind of influence do they each have?
  • What limitations solution suppliers, including you, place on them?
  • What your buyers were hiring your sales and marketing team to do for them?
  • What your buyers were hiring your product or service to do for them?

Unless you’ve had several unstructured calls purposefully guided to obtain this information from people who did not buy from you, please do not assume you, your sales or your marketing team know this information. It’s a limiting status quo kind of assumption. 

Find out. Then align your go-to-market, messaging, and sales processes with this intelligence and become visible to a lot of buyers.


Reduce your investment in status quo-ness and increase your investment in knowing. 

KE

P.S. We realize that we bypass all the messiness of the status quo-ness and make a big assumption that you can ‘just starting doing things differently.’ We know it doesn’t work like that, but start with understanding your buyers and see where it leads. Your people will immediately begin to see connections, connections you can take advantage of without much resistance.

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How To Waste A Lot of Money

The Sirius Decisions Survey found that 60 to 70 percent of all B2B content goes unused. 

That’s a lot of dollars wasted. But why? 

Why does this content go unused?

Guessing!

The most expensive prospecting expenses are those where you don’t know how a prospect buys. 

Most companies think they know, which is why they create content. Many companies also create buyer profiles…This is John; he’s 37 years old and is an Operations Manager in the Materials Handling industry. He is married with two children and drives an SUV. He has a degree in engineering and loves to play tennis, go hiking, spend time with his family, and attends charitable events often. It tells who he reports to, his objectives/goals, what associations he belongs to, which social media accounts he has, etc. 

They use this information to “speak” to John via content. Content that hopefully brings him their way when it’s time to buy a solution like theirs.

But, is this buyer profile going to tell you—

Why were they doing okay then decided they needed a solution like yours? What happened? What broke that camel’s back?

How he started, what he did, and where he ended up in the process?

What he believes is relevant to the solutions available to him?

What solution attributes did he compare, and why? What was the benchmark?

What attitudes, processes, information, perceptions prevent him from considering you?

What buying risks is he trying to eliminate or reduce?

Why did he buy from them? What did he value about their approach?

What content he trusts and uses to help in the decision-making process?

Who is involved in the decision, and what kind of influence do they each have?

What limitations solution suppliers place on him?

No. No, it is not.

Now, your sales team may say — hey, I know my clients. This is what they think, and this is how we should approach them.

This is excellent intel for buyers who buy from you.

But what about all the other buyers who didn’t buy from you? Or worse, never even knew about you

Products and services today are bought, not sold. 72% of B2B buyers and influencers are 45 years and younger. They grew up with Google and iPhones and access to as much information as they want. They also grew up with Enron and “too big to fail” and a massive disdain for marketing rhetoric. 

Buyers do not want to be sold to. They do not want to be told what to do or what to think. They do, however, trust what they believe and know. And they trust their own processes for obtaining that knowledge and belief. They don’t need sales or marketing people unless those people are a means to their end in finding the best solution for their immediate problem. 

Buyers are 60% through their buying process before they contact any supplier. Because they are 60% of the way through, they only contact suppliers who make their very short list.

What job is your buyer hiring your sales and marketing team to do?

Buyers want to make the right decision for their companies. They want ways to be more and more valuable to their companies. They want to prove they make the right decisions. 50% of B2B buyers are more likely to purchase a product or service when they see personal value (career advancement, confidence, pride).

What will it take to be the company that helps them make the right decisions?

‘I never teach my pupils; I only attempt to provide the conditions in which they can learn.’ –Albert Einstein

If ever there were a time to step back and do what’s necessary to understand your buyers completely, this would be it. 

Keep improving.

Stop Guessing.

KE