Tag Archives: sales

Out of Touch Executives Damage Companies: Go to the Gemba

When your customer service organization is universally recognized as horrible adding sales requirements to customer service representatives jobs is a really bad practice. Sadly it isn’t at all surprising to learn of management doing just that at our largest companies. Within a system where cash and corruption buys freedom from market forces (see below for more details) such practices can continue.

Such customer hostile practices shouldn’t continue. They shouldn’t be allowed to continue. And even though the company’s cash has bought politically corrupt parties to allow such a system to survive it isn’t even in the selfish interest of the business. They could use the cover provided by bought-and-paid-for-politicians-and-parties to maintain monopolistic pricing (which is wrong ethically and economically but could be seen as in the self interest of a business). But still provide good service (even while you take monopolistic profits allowed with corrupt, though legal, cash payments).

Of course, Adam Smith knew the likely path to corruption of markets made up of people; and he specifically cautioned that a capitalist economic system has to prevent powerful entities efforts to distort markets for individual gain (perfect competition = capitalism, non-competitive markets = what business want, as Adam Smith well knew, but this is precisely not capitalism). Sadly few people taking about the free-market or capitalism understand that their support of cronyist policies are not capitalist (I suppose some people mouthing those words are just preaching false ideas to people known to be idiots, but really most don’t seem to understand capitalism).

Anyway, this class of protected businesses supported by a corrupt political and government (regulators in government) sector is a significant part of the system that allows the customer hostility of those politically connected large businesses to get away with a business model based on customer hostility, but wasn’t really what I meant to write about here.

Comcast executives have to know they are running a company either rated the worst company in the country or close to it year after year. They, along with several others in their industry, as well as the cell phone service providers and too-big-to-fail-banks routinely are the leaders of companies most reviled by customers. Airlines are also up their for treating customer horribly but they are a bit different than the others (political corruption is much less of the reason for their ability to abuse customers for decades than is for the others listed above).

Leaked Comcast employee metrics show what we figured: Sell or perish [Updated]
Training materials explicitly require a “sell” phase, even in support calls.

The company’s choice to transform what is traditionally a non-revenue-generating area—customer service—into a revenue-generating one is playing out with almost hilariously Kafkaesque consequences. It is the nature of large corporations like Comcast to have dozens of layers of management through which leadership instructions and directives are filtered. The bigger the company, the more likely that members of senior leadership (like Tom Karinshak) typically make broad policy and leave specific implementations to lower levels.

Here, what was likely praised in the boardroom as an “innovative” strategy to raise revenue is instead doing much to alienate customers and employees alike. Karinshak’s assurances that he doesn’t want employees to feel pressured to sell in spite of hard evidence that Comcast demands just that are hard to square with the content of the document.

So what is going on here? Most people can easily see this is likely a horrible practice. It is a practice that a well run company theoretically could pull off without harming customers too much. But for a company like Comcast to do this it is obviously going to be horrible for customers (same for all those too-big to fail banks, cell phone service providers and other ISPs and cable TV providers).

Lets just pretend Comcast’s current leadership executives were all replaced with readers of the Curious Cat Management Improvement blog. And lets say that for now you are suppose to focus on improving the policies in place (while thinking about policy changes for later but not making them yet).

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Toyota Production System for Sales…

Corporate profile: the Toyota Production System [the broken link was removed] by Sarah Perrin:

Within Toyota itself, non-production personnel support the TPS approach. “We very much value the Toyota way,” says David Betteley, managing director of Toyota Financial Services (UK) and vice president operations for Europe and Africa. “The key values of the Toyota way are teamwork, respect, challenge, kaizen and genchi genbutsu.

“You produce a new product and it can be replicated by a competitor almost immediately, so you have to be always innovating. We are very dealer focused. We have to provide not only a competitive service pricewise to dealers, but also be competitive in terms of the length of time it takes to deal with things. We have to be moving and changing all the time and never sit still.”

Applying the TPS to non-production areas of the business isn’t easy, of course. “It’s a challenge converting these best practices in Toyota that have been developed for production and moving them down into sales and marketing, which is what we do,” says Betteley.

It is nice to see this article in Accountancy Age. One more nudge toward lean accounting.

Related TPS non-manufacturing posts: Toyota IT OverviewLean RetailingMarketing in a Lean CompanyMore on Non-Auto ToyotaJapan Airlines using Toyota Production System PrinciplesKeeping score with lean accounting

Six Sigma in Sales

Can Six Sigma Work in a Sales and Marketing Environment? [the broken link was removed] by Paul Selden:

The more systematic view demystifies sales….
As such, that system can be subjected to objective analysis using tools common to Six Sigma and other well-grounded disciplines.

Sales is often an area that is treated as though it were separate from the company. That leads to all sorts of problems. Sales needs to be seen as part of the system of the organization and managed in that way. Just remember systemic thinking (viewing the entire system) will be needed, not just analysis (viewing the components of a system).

Related: Marketers Are Embracing Statistical Design of ExperimentsAppeal for Marketers to Apply Deming’s IdeasMarketing in a Lean CompanyProblems with BonusesFree, Perfect, and Now (book by Robert Rodin)Design of Experiments explanation

Marketing in a Lean Company

Where Is Marketing In All of This? [the broken link was removed]:

The problem with all of this is that it is based on the idea that sales and manufacturing are distinct entities, with a one way flow between them, rather than hopelessly intertwined elements of the same complicated business.

An essential element of lean manufacturing is a level loading of demand – or at least reasonably level. Toyota uses pricing to accomplish this.

It is becoming more and more apparent that lean is a company wide issue and that giving any department or function an exemption leads to failure.

I agree. The company needs to be viewed as one interdependent system not independent departments [the broken link was removed and replaced by a new link] . The system needs to be optimized as a whole. And that means optimizing the overall system not optimizing the individual departments independently.

World class management understands this concept. But so many of our current management practices undermine attempts to optimize the overall system: rating and ranking people, accounting systems, performance goals, focus on quarterly profits, etc. Some have difficulty understanding that optimizing individual components of a system is not the best strategy to optimize the overall system but that is the truth.

Book, online articles and web links on systems thinking

Design of Experiments in Advertising

How Two Guys From the Gold Country Are Changing Advertising Forever [the broken link has been removed] by Robert X. Cringely

James Kowalick and Mario Fantoni, two guys who say they can show you how to use science to design ads that cost less while being 10 or more times as effective as doing it the old way.

Their secret is the Taguchi Method, which is a technique for designing experiments that converge on an ideal product solution.

“I taught over 300 courses for industry where we designed cars and electronic devices, but it wasn’t until one day I took over my wife’s kitchen and used Taguchi to perfect my recipe for vanilla wafer cookies that I realized how broadly it could be applied,” Kowalick recalls. “It took 16 batches, but by the end of the afternoon I had those wafers dialed in.”

It is great to see the application of Designed Experiments increasing. I am reminded of an article by my father, William G. Hunter, from 1975: 101 Ways to Design an Experiment, or Some Ideas About Teaching Design of Experiments. Examples of the topics of the designed experiments his students performed:
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