Copyright KnowledgeLab Consulting, Inc. 2009 -
Operations ♦ Sales ♦ Marketing ♦ IT
Business is conducted by people, internally and externally with customers suppliers and other entities. Employees are one of our most expensive assets. Productivity and turnover should be a key indicator of health. Why then do we tend to ignore managing our most important.
The value of relationships, internal and external, is determined by their longevity, value and success of the people involved. Success is based on mutually beneficial relationships or Win / Win. Why then do we only measure business success by short term revenue and profit? Obviously these measures are important but do nothing to tell us about a company’s long term outlook for success. Maximum performance can only be achieved when all aspects of an organization work together; people and processes supporting clear goals with measurable performance indicators.
Authoritative management creates dependent employees. It works in the short term but provides mixed results in the long term with a need for significant management time and effort. Conversely, collaborative management creates ownership with greatly reduced management time in the long run. It is human nature that if you demand something from an employee their natural reaction is to resist. If you ask for their opinion or help, they will bend over backwards to help. Most of us react this way in our personal life (If you doubt this try it with your significant other). Why do we act differently it in our careers? Because we need a pay check. What if our abilities, knowledge, drive, goals and creativity were allowed to be unleashed?
So why do we embrace a management style that is confrontational? We are rewarded for driving our subordinates, sometimes embarrassing them into performing. Ultimately we get short term results but at what cost? Resentment, employee turnover and an environment that is stressful at best. This model can work for the short term, as seen in high growth companies with rich compensation plans but can be deadly when external business environment changes. History is full of examples or high flying companies that have failed due to cultural issues. These principles apply to our suppliers and customers as well. If we do not manage our employees properly, how will they treat our customers? Suppliers? Our success personally and professionally, depends on others.
We are all familiar with processes, supply chain, sales, PO, A/R, etc., that span our entire organization. Many of us have been involved in or heard of process reengineering. Many times these efforts produce positive results but are not sustained as a part of the company culture. The Golden Gate bridge has a crew of painters that start on one side of the bridge and continue to paint until they reach the other side at which time they go back and start the process all over again. Processes are like the Golden Gate Bridge in that they must continually be maintained, assessed and adapted to the changing needs of the business. To be successful process changes must be created, developed and implemented by the workers who perform the work or are affected by the process to include suppliers and customers. The need for external participation cannot be overly stressed for process reengineering to succeed. A significant benefit of process re-
Another key to successful process management is knowing how to manage re-
Maximum Performance Methodology -
As the economy continues to shrink, what separates the losers from the survivors and the leaders? Of the companies that survive which will be positioned to maximize opportunities when the economy begins to grow?
Losers: Short term gain at the expense of the employees, stockholders and customers. Win / Lose. Employees are encouraged to cut corners, exotic accounting and employee turnover is the norm. They cause great destruction as seen in the dot.com bust of 2000 and the financial meltdown of 2008.
Survivors: Traditional companies that ride the highs and lows of the economy. The primary measure of success is the numbers. Creativity and customer satisfaction is secondary to making the numbers each month. Employee “turnover” is managed to an acceptable level, key players are loyal as long as the compensation is better than the competition.
Leaders: This organization always outperforms competitors, rarely reduces staff, enjoys low turnover and produces profit and stock value each and every month, quarter and year. Why? What is their secret? How do they do it? Who are they?
The answer is the ones that know how to effectively reduce costs, increase productivity and maintain employee, customer and supplier relationships. Maximum performance requires looking beyond IT budgets and staff reductions and embracing an approach that systematically cuts across all functional areas of your organization. Companies who have embraced these principals have out-
Maximum performers, the leaders, perform over time. This is achieved by empowering people and processes and then implementing tools to measure results and provide for constant change and adaptation. Customer, people, process, goals, key performance indicators and results are measured across operational structures to achieve at the highest levels. Maximum Performance embraces the values of honest profit, capitalism, customer, integrity, respect for the individual and giving back to the community.
The end result of the maximum performance model is maximized profit during up and down cycles.
Executive Management and Human Capital
A computer resale company had sales of $ 100 million dollars but was losing $12 million dollars per year. Sales and marketing was scattered with no direction, selling to individuals, small business medium business and Fortune 500. Additionally inventory was spread over 65 locations with shrinkage a significant problem with extremely poor delivery . Finally there was a lack of leadership and culture to empower employees and motivate them to be their best.
A quality program was implemented with a culture of achievement and empowerment. The sales and marketing strategy became focused on one market segment and the distribution method was consolidated.
Four years later this company had sales of over $ 1 billion and was the most profitable company among its peers. Employee and customer satisfaction was maximized and shrinkage was minimized. Product delivery became a strong selling point
This mortgage insurance provider had 36 different systems built independently over 30 years to process loans. Most other processes including customer outreach was done manually. Minor changes or new product introductions cost tens of millions of dollars to implement and maintenance was through the roof and due to the age of the systems. Processing was falling behind and the program was failing due to lack of customer service.
A complete redesign of internal processes was conducted prior to implementing a software as a service solution including customer relationship management, business intelligence, work flow, web portal and loan processing.
Process time was reduced from 218 days to less than 25 and process steps was reduced from 57 to 16. Customer satisfaction and sales increased significantly. Web based processing and customer intelligence allowed maximum flexibility and maintenance costs were reduced 50%. They went from COBOL to cloud computing in 14 months!
Sales and Business Development
A technology company had a struggling branch location with low morale, high turnover and dependent on one large account for their revenue. Accounts receivable and product returns were crippling profitability and customer satisfaction was low.
An employee and customer satisfaction plan was implemented empowering employees to make changes and a bonus program was implemented to reward results. Employees were included in planning and educated on why specific goals were important to them and the company. A sales training program was implemented and key performance indicators were established and tracked daily.
Within three years sales grew from $7 to $38 million, net profit grew 240% and rep productivity grew 900%! Returns and accounts receivable fell dramatically and employee turnover was reduced dramatically. They went from one major account to over a dozen and they became branch of the year.
A federal agency was struggling with consumer outreach. They had numerous contracts outsourcing their marketing activities costing millions to the tax payer but not achieving results. Advertising was chaotic with little concern for the geography .and little understanding of who was in their target market. Their web presence consisted of a static web site created in 1997.
A new web portal was introduced with web 2.0 capabilities. Many of the contracts were terminated in favor of a combination of one skilled contractor and hiring internal talent for long term needs. A detailed marketing plan that identified the target market was developed. Marketing materials were redesigned to the target market.
Their web traffic increased astronomically and they introduced You Tube videos and a presence on Facebook. Advertising became targeted producing a significant influx of calls and ultimately a significant expansion in business.