Also: Better questions for selling, reduced procrastination, and women's summer work attire
Operational excellence is about more than cost control and efficiency. But our narrow focus on those two areas means it's dying a slow death, Toronto consultant Andrew Miller argues.
Counter that by focusing your operational excellence efforts on accelerating growth and maximizing profitability. "Downsizing and cost cutting and standardizing and eliminating waste are so passé. Use better words like growth and innovation and retention and alignment," he writes in Industry Week.
He recommends finding your "ideal state." That comes by asking this question: "Where would we like to be 12 months from now?" One client wanted to sell its existing products into new industries while another focused on reversing the decline in its customer base.
Once you identify your ideal state, determine what he calls "your one priority" – the fastest and most effective way to achieve that position. The client that wanted to move into new industries retrained front-line staff to have better conversations with potential customers. The client that wanted to reverse a customer decline developed strategies to attract only the company's ideal customers.
For growing businesses, he says on his blog there are only six metrics you should be looking at:
· Customer retention: What percentage of your best customers are you retaining? Thriving organizations retain more than 85 per cent of their best customers every year.
· Employee retention: What percentage of your top people are you retaining? You should be well above 90 per cent.
· Revenue per customer: Are your customers spending more with you each year? This metric should be increasing every year.
· Profitability: Is your profitability increasing even if your revenue is not? This metric should also be increasing every year.
· Customer base: Is your customer base growing – do you have more customers this year than last? Again, this metric should be increasing every year.
· Vitality index: What percentage of your revenue comes from products or services created in the past three years? He says top organizations have a vitality index of greater than 30 per cent.
2. Sales questions to ignite your curiosity
Salespeople can become jaded and overconfident. They know their product and the kind of sales situations they encounter, and assume that the right questions to help the customer can easily be summoned up.
Consultant John Spence thinks they could use a dose of extreme curiosity, to encourage probing customers' minds more thoroughly. "Think deeply about the specific information you need to obtain in order to offer the perfect solution to your customer," he writes on his blog. "Remember that you don't have an unlimited number of questions, so make sure that every question counts and helps you collect the critical information that will allow you understand the customer's real needs and move the sale forward."
In a business-to-business situation, he lists these questions that you may want to keep as a handy starting list:
· What is the time frame to make this decision?
· Who will be involved in the decision-making process?
· What is your budget for this project?
· What are your selection criteria?
· What other companies are you looking at to help you with this project?
· What are the top issues that you hope we can help you with?
· What are the financial implications if you can't find the exact right solution?
· What would the financial upside be if we can deliver the exact right solution?
· What would the exact right solution look like to you?
Don't leave it to chance in your meetings. He urges you to write out the 10 most important pieces of information you have to get from every client and then some elegant and focused questions to obtain it.
3. The four traits of successful transformational leaders
When companies hit bad times, they often reach out for transformational leaders. Usually, they want winners. But ironically, because transformational leaders embrace risk – and are often thrown into fragile if not hopeless situations – they will have failed in the past, executive search consultant Charles Tribbett writes on ChiefExecutive.net.
But he stresses they fail well, leading successfully again later. Indeed, when interviewing them, he suggests you may fare better by prying into failure stories instead of success stories. "Interesting information about the ability to transform can be gleaned," he says.
He offers three additional traits to keep in mind as you search for such a leader:
· They are strategic: Transformations usually require both strategic and operational change. But transformational leaders lean toward the strategy side, which can create tension since the operational deficiencies seem stark. But often you have strategic challenges and can hire terrific operational people to assist the CEO.
· They take the long view: Transformational leaders will be looking to the future, even if it may seem wrong given the company's current situation. If you have a five-year time frame for this leader, that's not a bad thing. You may want to use scenario planning to outline future possibilities and engage candidates in a discussion about those possibilities.
· The right transformational leader may be an outsider. "Under the current conditions of rapid and intense business model disruption, knowledge of the business can, in fact, interfere with understanding the sharp changes in direction an organization may need to take," he warns.
4. Quick hits
– When brainstorming new possibilities, we often seek incremental improvement – a solution that is, say, 10-per-cent better than the current situation. But Google aims for a solution that is 10 times better than the present. Stretch your thinking!
– The biggest procrastinators are usually sophisticated, sensitive, creative and intelligent people, says productivity guru David Allen, because they have a large number of possibilities in their minds about what they can do on their various tasks. Solution: For each project, figure out the next step you need to take, and push other thoughts to the sideline.
– Developing your employees is like brushing your teeth, advises consultant Julie Winkle Giulioni. You have to do it every day.
– Sleep-deprived leaders are less inspiring, research shows. Christopher Barnes, assistant professor of management at the University of Washington's Foster School of Business, says sleep deprivation of both leaders and team members can undermine leader charisma. Sleep-deprived leaders are less inspiring and sleep-deprived team members are harder to inspire. "This is important because many leaders are sleep deprived most of the time. Moreover, leaders often create sleep-depriving conditions for the people they lead," he writes on HBR.org.
– Air conditioning season is upon us and for women in particular a time to freeze in offices designed for men in suits. Beyond layering, blogger Helena Negru recommends wearing closed-toe shoes, which will keep your feet warm, and scarves, since apart from the feet, your neck is the other exposed area very sensitive to cold.
Harvey Schachter is a Kingston, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online column, Power Points. E-mail Harvey Schachter