I’ve seen variations of this matrix many times, though the most extensive use witnesses was by Adrian Joseph just after he joined Trafficmaster. The real theory is that nothing should be in the urgent and important square; it’s normally a symptom of bad planning or a major unexpected (but key) surprise.
When I think back to things i’ve done that have triggered major revenue and profit spectaculars, almost all fit in the important but not urgent box; instead, the pressure to move quickly was self inflicted, based on a clarity of purpose and intensive focus to do something that made a big difference to customers. The three major ones were:
Generating 36 pages of text of ideas on how to increase software sales through Digital’s Industrial Distribution Division, then the smallest software Sales “Region” at £700K/year. Having been told to go implement, I never made it past the first 3 ideas, but relentlessly executed them. It became the biggest region two years later at £6m/year.
Justifying and getting funding to do the DECdirect Software Catalogue. The teams around me were fantastic, giving me bandwidth to lock myself away for long periods of absence for nearly three months to work the structure and content of the work with Bruce Stidston and his team at USP Advertising plc. That business went 0-$100m in 18 months at margins that never dipped below 89% margin.
Getting the Microsoft Distribution Business at Metrologie from £1m/month to £5m/month in 4 months, in a price war, and yet doubling margins at the same time. A lot of focus on the three core needs that customers were expressing, and then relentlessly delivering against them.
The only one I recall getting into the Urgent/Important segment was a bid document for a sizable supply contract that HMSO (Her Majesty’s Stationery Office), where I was asked to provide a supplementary chapter covering Digitals’ Servers, Storage, Comms and Software products. This to be added to a comprehensive document produced by the account manager covering all the other product areas for the company. I’d duly done this in the format originally requested by her, but asked to see the rest of the document to make sure everything was covered – and that we’d left no gaps between the main document and my own – with two days to go. At which point she said she’d had no time, and had decided to no-bid the work (without telling any of us!).
The sales team really needed the revenue, so they agreed to let me disappear home for two days to build the full proposal around the work i’d done, including commercial terms, marketing plan and a summary of all the sales processes needed to execute the relationship – but just for the vendor we were accountable for. We got the document to Norwich with 30 minutes to spare. Two weeks later, we were told we’d won the business for the vendor we represented.
The lesson was to put more progress checks in as the project was unfolding, and to ensure we never got left in that position again, independent of how busy we were with other things at the same time.
With that, i’ve never really hit the urgent/important corner again – which I think is a good thing. Plenty that is important though – but forcing adherence to what Toyota term “takt time” to measure progress, and to push ourselves along.
As mentioned yesterday, I finally got Tableau Desktop Professional (my favourite Analytics software) running on Amazon Workspaces – deployed for all of $35 for the month instead of having to buy my own Windows PC. With that, a final set of trends to establish what I do right when I consistently lose 2lbs/week, based on an analysis of my intake (Cals, Protein, Carbs and Fat) and Exercise since June 2002.
I marked out a custom field that reflected the date ranges on my historical weight graph where I appeared to consistently lose, gain or flatline. I then threw all sorts of scatter plots (like the one above, plotting my intake in long periods where I had consistent weight losses) to ascertain what factors drove the weight changes i’ve seen in the past. This to nominally to settle on a strategy going forward to drop to my target weight as fast as I could in a sustainable fashion. Historically, this has been 2lbs/week.
My protein intake had zero effect. Carbs and Fat did, albeit they tracked the effect of my overall Calorie intake (whether in weight or in the number of Calories present in each – 1g of Carbs = 3.75 Kcals, and 1g of Fat = 9 Kcals; 1g of Protein is circa 4 Kcals). The WeightLossResources recommended split of Kcals from the mix to give an optimum balance in their view (they give a daily pie-chart of Kcals from each) is 50% Carbs, 30% Fat and 20% Protein.
So, what are the take-homes having done all the analysis?
Breathtakingly simple. If I keep my food intake, less exercise calories, at circa 2300-2350 calories per day, I will lose a consistent 2lbs. The exact balance between carbs, protein and fat intake doesn’t matter too materially, as long as the total is close, though my best every long term loss had me running things close to the recommended balance. All eyes on that pie chart on the WLR web site as I enter my food then!
The stupid thing is that my current BMR (Basal Metabolic Rate is the minimum level of energy your body needs when at rest to function effectively including your respiratory and circulatory organs, neural system, liver, kidneys, and other organs) is 2,364, and before the last 12 week Boditrax competition at my gym, it was circa 2,334 or so. Increased muscle through lifting some weights put this up a little.
So, the basic message is to keep what I eat down to the same calorie value, less the calories from any exercise, down to the same level as my BMR, which in turn will track down as weight goes. That sort of guarantees that any exercise I take over and above what I log – which is only long walks with Jane and gym exercise – will come off my fat reserves.
Simple. So, all else being equal, put less food in my mouth, and i’ll lose weight. The main benefit of 12 years of logging my intake is I can say authoritatively – for me – the levels at which this is demonstrably true. And that should speed my arrival at my optimum weight.
Off the top of my head, what are the expectations of the various folks along the flow of vendor to end user of a typical IT Product or Service? I’m sure i’ve probably missed some nuances, and if so, what is missing?
Vendors
Provide Product and/or Services for Resale
Accountable for Demand Creation
Minimise costs at scale by compensating channels for:
Customer Sales Coverage and Regular Engagement of each
Deal Pipeline, and associated activity to increase:
Number of Customers
Range of Vendor Products/Services Sold
Customer Purchase Frequency
Product/Service Mix in line with Vendor objectives
Investment in skills in Vendor Products/Services
Associated Technical/Industry Skills useful to close vendor sales
Activity to ensure continued Customer Success and Service Renewals
Engagement in Multivendor components to round out offering
Establish clear objectives for Direct/Channel engagements
Direct Sales have place in Demand Creation, esp emerging technologies
Direct Sales working with Channel Partner Resources heavily encouraged
Direct Sales Fulfilment a no-no unless clear guidelines upfront, well understood by all
Avoid unnecessary channel conflict; actively discourage sharing results of reseller end user engagement history unless presence/relationship/history of third party reseller with end user decision makers (not just purchasing!) is compelling and equitable
Distributors
Map vendor single contracts/support terms to thousands of downstream resellers
Ensure the spirit and letter of Vendor trading/marketing terms are delivered downstream
Offer Credit to resellers (mindful that typically <25% of trading debt in insurable)
Centralised Configuration, Quotation and associated Tech Support used by resellers
Interface into Vendor Deal Registration Process, assist vendor forecasting
Assistance to vendor in provision of Accreditation Training
Resellers
Have Fun, Deliver Good Value to Customers, Make Predictable Profit, Survive
Financial Return for time invested in Customer Relationships, Staff knowledge, Skills Accreditations, own Services and institutional/process knowledge
Trading terms in place with vendor(s) represented and/or distributor(s) of same
Manage own Deal Pipeline, and associated activity to increase one or more of:
Number of Customers
Range of Vendor Products/Services Sold
Customer Purchase Frequency
Product/Service Mix in line with Vendor objectives
Margins
Assistance as needed from Vendor and/or Distributor staff
No financial surprises
So, what have I missed?
I do remember, in my relative youth, that as a vendor we used to work out what our own staffing needs were based on the amount of B2B revenue we wanted to achieve in each of catalogue/web sales, direct sales, VARs and through IT Distribution. If you plug in the revenue needs at the top, it gives the number of sales staff needed, then the number of support resources for every n folks at the layer before – and then the total advertising/promotion needed in each channel. It looked exactly like this:
Looking back at this and comparing to today, the whole IT Industry has gotten radically more efficient as time has gone by. That said, I good ready reckoner is to map in the structure/numbers of whoever you feel are the industry leader(s) in your market today, do an analogue of the channel mix they use, and see how that pans out. It will give you a basis from which to assess the sizes and productivity of your own resources – as a vendor at least!
I’m a big fan of the work of Geoffrey Moore, whose seminal work “Crossing the Chasm” i’ve cited before (in fact, the one page version is the #1 download from this blog). However, one of his other books is excellent if you’re faced with a very common issue in High Technology companies; having successful, large product line(s) thats suck all the life out of new, emerging businesses in the same enterprise. The book is “Escape Velocity”:
Unlike Crossing the Chasm, i’ve not yet summarised it on one sheet of A4, but have outlined the major steps on 14 slides. It sort of works like this:
The main revenue/profit engines in most organisations occur between the early and late majority consumers of the product or services; that can last a long time, denoted by the Elastic Middle:
That said, there are normally products that sales will focus on to drive the current years Revenue and Profit targets; these routinely consume a majority of the resources available. Given a fair crack of the whip, there are normally emergent products that while not material in size today, are showing good signs of growth, and which may generate significant revenue and profits in the 1 to 3 year future. There are also likely to be some longer term punts which have yet to show promise, but which may do so in a 3 to 6 year timeframe:
The chief way to categorise products/services against the relevant Product Horizon is to graph a scatter plot of revenue or profit for each line on one axis, against growth on the other (10% growth is a typical divider between the High and Low growth Quadrants):
Any products or services on Horizon 0 needs to be shielded from core resources and to be optimised to be cash generative while it lasts. The other product/service horizons are segregated and typically have a different go-to-market team (with appropriate Key Performance Indicators) assigned to each:
The development pattern for Horizon 2 products are typical of the transition from “Chasm” into the “Tornado” stage on the normal Chasm lifecycle diagram. It’s a relentless learning experience, ruthlessly designing out custom services to form a standard offering for the market segments you target:
As you execute through the various sales teams and move between financial years, there’s a lot of introspection to ensure that the focus on likely winners continues is appropriately ruthless:
The sales teams driving Horizon 2 offerings should be seeking to aim high in customer organisations and drive strategies to establish a beachhead, then dominate, specific focus segments. In doing so, be mindful that a small supporting community tends to cross reference each other. Good salespeople get to know the people networks that do so, and work diligently to connect across them with their colleagues.
The positioning of your Horizon 2 offers tend to vary depending on price and benefit; this in turn looks about like the findings from another seminal work, “The Discipline of Market Leaders”. That book suggested that really successful companies put their relentless effort into only one of three possible core competences; to be the Product Innovator, to be Customer Intimate or to be Operationally Excellent:
Once you have the positioning, the Horizon 2 sales team relentlessly focus on the key people or organisations that make up their target market segment(s):
The number of organisations they engage differ markedly between Enterprise (Complex) and Consumer (Volume) markets:
So the engagement checklist needs to address all these areas:
The sales team need to be able to articulate “What makes their offer different”:
Then pick their targets:
Above all, be conscious who your competitors are and where you’re positioned against them:
That’s largely it. Just a process to keep assessing the source of future revenue and profits, and ensuring you segment your sales teams to drive both this years business, and separately working on the green shoots that will provide your future. And avoiding what often happens, which is that the existing high revenue or high profit lines demand so much resources that they suffocate your future.
You can probably name a few companies that have done exactly that. Yours doesn’t need to be the next one now!
I heard a report on Friday related to the Metropolitan Police possessing an internal “culture of fear” because of a “draconian” use of Performance targets, based on an interview and survey with 250 police officers. The report author went on to say that officers who missed targets were put on a “hit list”, with some facing potential misconduct action. Some of the targets were:
20% arrest rate for stop and searches
20% of stop and searches should be for weapons
40% for neighbourhood property crime
40% for drugs
and some for one policing team in 2011:
PCs to make one arrest and five stop and searches per shift
Special Constabulary officers to make one arrest per month and perform 5 stop and searches per shift
Police Community Support Officers (PCSOs) to make five stop-and-accounts per shift, and two criminal reports per shift
But Metropolitan Police Assistant Commissioner accused the reports authors of “sensationalising” the issue. He also then said something that threw the red flag up in my simple brain – that “it was the Met’s job to bring down crime“. Then said that since it had a “more accountable way of doing things”, rates were down by nearly 10%”.
One officer told the report: “Every month we are named and shamed with a league table by our supervisors, which does seem very bullying/overbearing.”
Another officer refers to a “bullying-type culture”.
The report says: “There is evidence of a persistent and growing culture of fear spawned by the vigorous and often draconian application of performance targets, with many officers reporting that they feel almost constantly under threat of being blamed and subsequently punished for failing to hit targets.”
But Scotland Yard denied officers were being unfairly pressurised. In a statement, the force said it was faced with many challenges, but insisted it did not have a bullying culture.”We make no excuses for having a culture that values performance,” it said.
“We have pledged to reduce crime, increase confidence and cut costs. It’s a big task and we have a robust framework in place to ensure we achieve this. The public expects no less.”
A source of confusion here
I thought that the “it was the Mets job to bring down crime” comment was a very curious thing to say, not least that I traced it’s origin to his ultimate boss, the Home Secretary, who also said the only Police metric important to her was that of reducing crime.
Think about that for a moment. Does the Police have total control to dictate the crime rate? I wouldn’t dispute they have some behavioral, presence and advisory influences, but in the final analysis, there are many external influences (outside their control) that i’d suspect have a much greater impact on that measure. With that, you’re entering into a world where your main control at your disposal – that of diligently recording the statistics to back up a political narrative – is wide open to wholesale abuse.
Meanwhile in Bristol
The private sector is far from immune also. At one stage earlier in my career, I worked out of a company branch office in Bristol, serving IT customers in the South West UK. For the most part, we were very matter of fact, honest and straightforward with customers. And then came the annual customer satisfaction survey, a multiple choice questionnaire sent to the IT Managers at most of the key customers we dealt with in our work.
I remember being in an office with the IT Manager at Camborne School of Mines (we had a big VAX doing scientific work, supporting their drilling for warm underground water as a potential future energy source). The customer satisfaction survey was sitting open on his desk, with the page showing his yet to be filled in customer satisfaction measure for quality of Field Service Maintenance. In walks the Field Service engineer who’d just arrived, said “Hello, i’m here” around the door, and was called back by the IT Manager. The Manager then held the tip of his pen over the 1-10 rating boxes on the survey, and said “When can we have the new disk drive that arrived yesterday installed?”. Field Service engineer said “Is next Wednesday okay?”. Pen moves over to the 1/10 Customer Sat box. “Eh, I can probably do it just after lunchtime today!”. Pen moves over the 10/10 box. “Yes, you’ll have everything working this afternoon”. With that, the 10/10 box was ticked. A wry smile from everyone, and a thought that if genuine feedback was sent back by customers in general, it would result in service improvements that benefitted the company.
As it turns out, very naive on our part.
A missive rolled down from the European HQ in Geneva that said our office was the 3rd worst office for customer satisfaction in Europe, and hence someone in the office would be nominated to enact changes to improve performance for next year – with serious consequences if big improvements weren’t delivered. And with that, the European President said – to all 30,000 staff in Europe – is that the minimum acceptable performance next year would be an overall 8/10.
So, what happened? The guy in the office nominated to manage the transition to high quality (wry smile here) was the same guy who did the large scale benchmarking exercises for prospective customers against competitors of that time. Where the main skill was politically getting things coded into the customers benchmarking spec handed out to every vendor that suited the performance characteristics of our own machines, and in generally playing whatever games he could to win on key measures on which the bidding competition would be judged.
Customers known to be unhappy magically disappeared from the survey mailing list. Anyone visiting customers routinely in their working week were trained on how to set customer expectations that anything under 9/10 was deemed a failure, and that 10/10 was a norm. And everyone knew who was going to get a survey, and worked doubly hard to ensure those customers were as happy as we could make them – with the minimum marking scores in mind. Several thought of it no more than one week when they had more blackmail capital than at any other time of the year, but otherwise complied with the expressed wishes.
End result: Top office in customer satisfaction in the country, and only 3rd among all the branches in Europe (1 and 2 in Austria – suspicious that, but hey).
Were customers any happier? No. Was the survey a useful improvement device? No. Did it suit the back story for the political narrative? You bet! And with that the years continued to roll on.
My own Lightbulb moment
Somewhere along the line between Bristol and more senior roles in the same company, I came upon one W Edwards Deming, and one thing he routinely did to managers to fix this sort of malaise. But a slight detour first (based on what I did after that following my experiencing one of his lessons).
Doing things right (I think)
When I was Director of Merchandising and Operations at Computacenter’s Software Business Unit, the internal Licensing Desk reported into me; a team of five people who dispensed advice about how to buy software in the most cost effective way possible without unwanted surprises. And administering all the large license orders with vendors in support of this. A super team, managed by Claire Hallissey.
Claire had one member of her team consolidating data collection on the number of calls coming into the team and how long each enquiry was taking to handle; not something i’d imposed on the team at all, but I suspect for her own management use. It became pretty obvious from the graphs that growth in demand to use her team was far outpacing the revenue growth of the Business Unit, at a time when we were likely to be under pressure not to increase headcount.
So, what did we do? I indicated that the data collection was brilliant, and didn’t want to see effort or accuracy of that compromised in any way. However, if they managed to work out any way of reducing the volume and length of calls into her team by 15% by the next quarter end, i’d put a £150 bonus in each of their pay packets. The thinking here is that they were the folks who could ask “why” most effectively, and enact changes – be it local office new sales support hire training, simplifying documentation, and generally tracing back why people were calling in the first place. And then relentless putting their corrective actions into play.
In the event, they got overall call volume down by 25%, the source data quality stood up to my light scrutiny, and all duly got the £150 bonus each – plus senior accolades for that achievement. One of the innovations was adding a sentence or two to standard template response emails they’d built to answer common secondary questions too – and hence to take out repeat calls with better content in the first email answer sent back. With that, the work volume growth trailed the sales volume increases, and the group more productive – and less bored by the same repeat questions, ad nauseum.
Then in Southend
Likewise on day 2 of my job at Demon Internet, when a group of us walked into the Southend Tech Support Centre to see a maxed out floor of people on the phones to customers, and a classroom with 10 new recruits being trained. The Support Centre manager, looking very harassed, just said “that’s this weeks intake. We’ve got another 10 next week, and another 10 the week after that”. I think I completely threw him when I said nonchalantly “But why are customers calling in?”. He just looked at me as if i’d asked a very stupid question, and replied “We just haven’t got enough staff to handle the phone calls”.
Fortunately, his deputy was able to give us a dump of their Remedy system, so a couple of us could sample the call reasons and what specifically was requiring technical assistance. In the event, 27% of the calls related to setting up the various TCP/IP settings; we then changed the product and simplified it’s supporting documentation to work those issues away. At least some respite until Microsoft shipped Internet Explorer 6, which resulted in the Customer Services Director admitting later as having “fundamentally broken my call centre”. But that’s another story.
W Edwards Deming
But back to metrics. The one thing in all my career that made my light bulb go on related to measures and metrics was an experiment conducted by W Edwards Deming. Deming was an American statistician who was sent to Japan after World War 2 to assist in it’s reconstruction, and found himself teaching motorcycle and car manufacturers on how to improve the quality of their products. As quality improved, they also found prices went down, and companies like Honda, Suzuki, Kawasaki, Datsun (now Nissan) and Toyota went from local to worldwide attention with motorcycles, then cars. The products from which, unlike their western counterparts, rarely broke down and remained inexpensive – so much so, western governments instituted quotas to arrest the siege on their own manufacturing industries. To this day, the highest accolade for excellence of quality in Japan remains “The Deming Prize”. It was only much later that the work of Deming was widely acknowledged, and then used, by western manufacturers as well.
During his training seminars, Deming conducts what is known as “The Red Bead” experiment. Unfortunately, the comedy of promoting good workers, firing underperformers, and urging improved performance with no control over the components of a process is largely lost in videos of him running this himself, given that he was well into his 90’s when recorded. His dry humour is a bit harder to spot than it would have been earlier in his career – when he openly acknowledged that some Japanese managers routinely imposed the same class of bad metrics on their staff as those of the worst examples he found in the West.
If you can buy a copy of his seminal book Out of the Crisis, you can see the full description between pages 109-112, in Chapter 3, “Diseases and Obstacles”, following the subtitle “Fair Rating is impossible”. Something the Home Secretary, and all echelons of Managers in the Public Sector, should read and internalise. If they did, I think the general public would be pleased with the changes i’m sure they’d enact based on his wise knowledge.
In the absence of an original Deming version, a more basic version of the same “your job security depends on things outside your control” sentiments can be found on this (it’s around 2 minutes long):
or a longer 24 minute version, truer to the original real McCoy:
Unlike Crossing the Chasm, i’ve not yet summarised it on one sheet of A4, but have outlined the major steps on 14 slides. It sort of works like this:
, you can see the full description between pages 109-112, in Chapter 3, “Diseases and Obstacles”, following the subtitle “Fair Rating is impossible”. Something the Home Secretary, and all echelons of Managers in the Public Sector, should read and internalise. If they did, I think the general public would be pleased with the changes i’m sure they’d enact based on his wise knowledge.