As I reflect on the week, there were a number of things that happened (both good and not so good) that I think could make for some great blog posts. I have managed to narrow it down to three key takeaways that I think are universally applicable to almost anyone. Here goes nothing:
Key Takeaway #1: Using Constraint Analysis to Identify Areas for Improvement in your Sales Process
When I was getting my MBA, I remember studying constraint analysis (CA) and how it applied to serial dependent systems (in manufacturing, mainly). In layman’s terms, it means that in order to get something done (or built) is entirely dependent on the previous step in the process. I hadn’t really thought much about constraint analysis in several years, but I recently stumbled upon it while reading a weekly newsletter I get from a friend of mine, George Glover, who manages a CEO peer group. The title of the research paper in his newsletter was called ‘Using The Theory of Constraints to Increase Sales.’ “Sales? How can this apply to sales!?!?”, I wondered. Naturally, I was curious to learn more about this because the majority of early stage companies I encounter seem to struggle when it comes to establishing a consistent process in their sales function.
In the paper, the author begins by describing a traditional product manufacturing process that starts with adding, say, 100 units per hour to a system. Inside the system there are four stations that each unit must pass through before completion. Each of the four stations has a different capacity: Station 1 – 100 units/hr; Station 2 – 75 units/hr; Station 3 – 50 units/hr, Station 4 – 150 units/hr. Most of you have probably already recognized that even though there are 100 units/hr entering the system, the maximum units that will be produced per hour is 50. Why? The reason is because the entire system is constrained by the capacity of the units that can be produced in Station 3. So what has to happen here? The system must be balanced so that each station in the system matches the capacity of the constraint, or 50 units/hr. How does this apply to sales or Customer Manufacturing?
To apply this to customer manufacturing, “you would simply map out your existing process, balance the process, and then go about relieving constraints in the order in which they constrain the system.” No matter what a company is selling (product or service) there is a process involved. The usefulness of understanding constraint analysis is that once you visually map out your sales process, you can begin to see where you may or may not have constraints in your system that need to be modified. For some organizations, it may be the outside sales team is having trouble closing deals because the back office support is too slow at processing orders. Or it could be the other way around; the sales team isn’t that good at closing deals and there are too many support staff to handle the absence of deals not coming in. Or it could be your company spent a tremendous amount of money on a marketing campaign and you’re unable to meet the ensuing demand for your product because you don’t have enough customer service people. For example, I have a client who spent a tremendous amount of money on product development and marketing, but didn’t have enough sales people to follow up on the leads to close the deals. It ended being a very costly mistake.
Effective management teams closely monitor and manage the potential constraints in their sales processes and make adjustments accordingly. As the author stated in the article, “resolving constraint issues isn’t simply a matter of adding capacity, it’s a matter of identifying the cause of the limited capacity at the constraint operation, and fixing that problem.”
The key takeaway is that it can be a worthwhile exercise to visually write out your sales process to understand how improvement can be made in your system. I took the liberty of going through this exercise with a few things I do on a regular basis and I found it quite helpful.
(If you’re interested in reading the research paper I read on this subject email me and I’ll send it over to you).
Key Takeaway #2: Use Your Time Wisely and Use Other People’s Time Even More Wisely
I love building relationships with people – it’s probably the most fun part of my job. However, I also believe it’s critically important to be able to connect and establish trust with people without wasting people’s time (especially during the work day). I think that most business meetings can and should last 30 minutes or less. If I had it may way, I would spend 5 minutes catching up, 20 minutes on business, and 5 minutes wrapping up. I have found that I have earned the respect of very successful people because of how much I respect their time. Depending on your business environment, it may take you more or less time to establish rapport, and maybe 30 minutes isn’t enough. But, I have met and spoken with people all over this country and on average, it seems like 30 minutes is MORE than enough time to get things done. In short, use your judgment on this because it’s not always black and white. However, I do think that in most situations (especially in business) less is more, especially when it comes to meetings.
Key Takeaway #3: Journaling Everyday
I know, I know – there are a zillion articles on the internet about journaling. Well, now there’s a zillion and one. Journaling is not a new phenomenon, but it can be difficult to do everyday especially for busy business people. I have a journal that I write in two or three times a year (usually when I’m venting about something), but I was recently encouraged to start journaling about my career – the good and the bad. It’s been about two weeks now and I’ve written something in my journal everyday, and I must admit, it’s been very helpful. I’ve started to realize that journaling everyday is less about privately venting and more about deliberate daily reflection. For some reason the simple action of stopping to reflect on what you’re thinking about, and then writing it down, can be extremely helpful for solving problems and generating new ideas. In many ways, journaling is similar to meditation in that it forces you to train your mind to realize some benefit or to simply acknowledge what’s on your mind in that moment. Your journal entries don’t need to be long or even well-thought. In fact, your journal entries don’t even need to make sense. The simple act of writing down what you’re thinking frees your mind up to explore and unleash its creativity. I’ve enjoyed getting back to doing this regularly, and I encourage you to think about trying it out. It’s actually quite addicting.
Thanks for reading and I hope you were able to benefit from some of the “takeaways”this week. Cheers. -KM