Robert Tripp | A Master Black Belt Explains Organizational Change and Operational Excellence

10 sept. 2019 · Sales Process Excellence Podcast

Michael Webb: B2B sales and marketing works to find the highest quality prospects, reach decision makers, and sell value. Operational excellence uses data and systems thinking to make changes that cause improvement and eliminate waste. My name is Michael Webb and this is the Sales Process Excellence podcast. In the next 30 to 40 minutes, we're going to destroy the myth that these two groups conflict, and show you how to bring both strategies together to create more wealth for your company and your customers.

Michael Webb: I'm pleased today to have a fantastic person on our show. His name is Robert Tripp. He has a very long career as a consultant and a trainer and a master black belt. Robert, welcome here.

Robert Tripp: Yes, thank you Michael. It's good to be here on the call with you.

Michael Webb: Robert is with a firm, Argo LLC. Robert, for our audience, please provide a little, you know, where did you come from and how did you get where you are and what does Argo LLC do?

Robert Tripp: When I began my career a few decades ago, I never would have thought that I would, I guess, evolve into a space that allowed me to concentrate in process improvement, and process excellence, and quality management systems, but it all really began back in 1995. I had been working in the finance community in a manufacturing organization back in 1995, and I got tapped on to engage in a Six Sigma training effort to become a black belt. I thought it seemed new and unique and different, and I thought yes, let's give it a try.

I started down the path in 1995, which eventually certified as a master black belt. Soon after that, and by 1998, I was consulting, and that was just at the time when the industry was really starting to become active. There were a couple of small deployments early on, starting with Motorola and then it moved into a little bit with Texas Instruments and ABB and then Allied Signal. I was working at Allied Signal at the time.

But then beginning in 1998, I was able to begin working with a lot of different clients and that's when my consulting career started, and I started down the path of designing deployments, creating content, delivering training coaching projects, developing people and leaders in the organization to drive Six Sigma within their own communities.

Somewhere along the line there was a merger between the whole concept of Six Sigma and Lean and the ideas around both and how they really compliment each other and so. I'd say around the mid-2000s it became more of an effort around marketing and involving myself in Lean Six Sigma, and really that's what I've been doing since then. For the last few years I've been working with a number of different clients, but really in a small cluster of course partners, and in the last six months I've been independent, so it's been an interesting path.

The company that I have created is Argo LLC, and we basically work with organizations, large, small, and medium size to deploy continuous improvement tools. It ranges from grand corporate-wide deployments, which I'm working on right now, to smaller deployments, which just involves training and coaching a few project., You know, the landscape has changed, so the versatility and being able to apply the tools in different environments is important, and based on the, you know, the history I think we're able to argue that.

Michael Webb: You've been at a perch where you could watch the industry sort of unfold and watch the changes that have taken place, so what have you observed?

Robert Tripp: Well, I think one of the most interesting things that I've observed, it's really in the late nineties, early two-thousands, Six Sigma was a foreign concept. Winning was an important concept and well, maybe, you know, maybe organizations coming out of the manufacturing arenas had great familiarity with similar tools, if not tools of the same name. The broader scope of the industries, including financial services, health care, a lot of different government offices, things like this, they did not have exposure to Six Sigma. But as we sort of evolved and developed through the two thousands and in the last, you know, five to 10 years, it's really becoming ubiquitous.

Almost everybody you run into certainly has heard of Lean and Six Sigma. In addition to that, they've had some exposure either in terms of participating in Lean Six Sigma deployments, or former employer or being part of the projects or even maybe taking classes through collegiate courses and things like that. It's been interesting to watch the general level of awareness increase, but with that also comes a level of lack of awareness in the same way, so in other words, that people are getting exposed to it at a very superficial level. They know conceptually what it is, but they are not familiar still with how to deploy it and how to execute to really drive results for the organization.

Michael Webb: What is the percentage of Six Sigma deployments that actually achieve the goals that their companies start out with?

Robert Tripp: You know whether it's the stated goals as they are put down on paper and published to the rest of your organization to justify the resources being the time and effort being spent to deploy it. That may be a little bit different than the vision and the hopes than the people who deploy it who want to achieve, so just starting with the stated goals, you know, it's 90 to 100%. I don't think that, you know, the payback on Lean and Six Sigma is never, or I don't think it's ever a negative payback. The challenges, you know, are you really reaching the cultural, you know, DNA of the organization and that's where things fail, and it takes time to do that.

It takes patience and persistence to make that happen, but in addition, that sort of cultural transformation is difficult to measure so to say that there was a specific goal in that arena I think is a little bit difficult, but I would also say that there are a lot of people that are not satisfied with the way that their deployments are, I guess sustained within the organization's management system over time.

Michael Webb: I have heard statements not just about Six Sigma deployments, but about also other kinds of deployments, Lean deployments and so forth that, you know, it's typical in the industry that more than 80% of these initiatives they end up being disappointing, they end up not actually achieving the goals and objectives. Have you heard that?

Robert Tripp: Yeah, I have heard that sort of thing, and we agreed to the extent that they have not achieved the sustainability and the cultural transformation that the proponents are looking for. However, what they do achieve is certainly bringing some level of improvement in customer satisfaction and the level of improvement of internal, the process quality performance, and with that financial results that pay for the resources invested in the deployment. That being said, yes, no question there are a lot of deployments that do not exceed, or might exceed, but achieve the overall goal, but I would not say that they were a waste of time.

Michael Webb: Let's examine that dark side there for a minute about not achieving the cultural, I mean, I have heard the term even Six Sigma Nazis inside of a big company. The Six Sigma department ends up attempting to enforce some standards on how projects are done and to the people doing the work, it ends up feeling like process for process sake. In fact, when I was writing sales and marketing the Six Sigma way, there was a fellow who had a great project and I included it in my book and he was frustrated with his company. He had to confess that the company did not accept that project even though it had business results because he didn't follow the rules that they had set out. He didn't use particular statistical methods and they were Six Sigma Nazis. What do you tribute that to?

Robert Tripp: The actual causes of that sort of behavior is probably very different from one corporate culture to the next. However, I would say that there's general thing where people seem to like the convenience of checklists and that being said, they like to be able to have a standard format, a standard set of tools, even a standardized way of thinking that makes them feel good about what they're doing, because if they can check anything off the list, they feel like they are doing things the right way.

The problem with that is that checklists such as this, in trying to force people into a specific way of thinking, does not make you many friends, okay. I mean the human condition is we all want to have our own way of solving problems, and we want to be able to make our own contribution in a way, and I think the problem here is that a lot of times Lean and Six Sigma continuous improvement approaches to force everybody into a very constrained way of thinking about solving problems.

In the end if you're trying to sustain a deployment or a cultural change the people in the organization have to buy into it, and we're not going to buy into it unless they see value, unless they see benefits both to them and to the working environment coming from the changes you're trying to initiate, and so when Six Sigma is deployed in a very structured and rigid and, … I'm not going to use the word discipline because there has to be discipline behind it. It is that when its deployed in a structured and rigid way, and I think you turn people away from it, and that certainly creates difficulties in capturing that sustainable initiative that a lot of people are looking for.

Michael Webb: Yeah. It's kind of a baby in the bathwater kind of a problem here, and it goes both ways. If you're trying to help your organization get the most out of this methodology, you know that the rules of thought, the rules of evidence have to be followed, but then you can end up with the backlash of some sales guy somewhere or some general manager somewhere saying, you know, we're doing these training projects, but they're just training projects. We're not getting any benefit from it. And then, likewise, I have heard many times of companies … I had one just last fall, where a company had started down the path toward a process excellence, operational excellence initiative, take a very skilled person, put him at the head of that initiative, running it for six months and then financial pressures start hitting them, so they end up putting them in charge of a couple of plants down in Texas.

It's not a corporate commitment, and it isn't... It didn't pay off quick enough, and that's a baby in the bathwater thing too, right? I want to try to kind of parse out what's going on with that, and so let me ask you another question because you made a comment to me earlier before we got on our call here. You said you know the kind of a Six Sigma industry earlier in this call you said we grew starting in the 90s, grew really fast and then before we talked you said it's kind of plateaued a little bit. It kind of leveled off, so there's a number of companies out there that have adopted it and there's a demand, and a need for the kind of knowledge that is required to be effective using the Six Sigma approach, but why do you think it leveled off?

Robert Tripp: I think the market got saturated. I think enough people had been introduced to it, they had tried it, but there wasn't an organizational infrastructure to support them in the application of the Six Sigma concepts or Lean Six Sigma concepts in a structured way, so, you know, the interest sort of dies off. Now, what's interesting to me is, going back to the comments you were making just a moment ago, is yes, there is a lot of latent exposure to Lean and Six Sigma and continuous improvement tools.

And I'm working with a client right now where, you know, they haven't had for about seven years, they haven't had a large bureaucracy. That is, a leader of Six Sigma reporting, you know two or three levels down from the CEO, whose sole objective is to drive Six Sigma. This is kind of, this experience that I'm talking about. It's a client who's trying to build Six Sigma, I'd say from the middle out, meaning that they have a middle manager who manages a fairly large budget and is offering training through his budget and through his organization, to his own employees as well as everyone else in the company who wants to join, okay? And they apply the tools and the projects, excuse me, the tools and the concepts and documenting the projects, you say and that sort of advertises the projects. And if you want to join the training, you're welcome to. Now, the company does support it in the sense that there is an internal mechanism for charging back the cost of the students going into the training, but it's much cheaper than the students going to the training externally.

You know, a lot of people say, yeah, we're interested and yes, we're happy to get a certificate through attending the training within this, you know, corporate unit whose part of the job has nothing to do with Six Sigma, but they found it valuable to themselves and they're willing to open it up to the rest of the organization and it's great. What's exciting about that, is you're getting pulled from the rest of the organization because they see value, they see a deliver benefits, but we haven't created a massive bureaucracy and infrastructure to support it, so that when the financial winds change, all that really needs to happen is we just adjust sort of a focus on the projects to focus on the critical financial issues of the day. We don't have to worry about paying for what's perceived as a bureaucracy that doesn't really add value to the organization.

Michael Webb: Yeah, and I think that's an interesting observation. I have also seen that in some companies. There is a sort of a natural pull among middle management that may want something like this. They need something like this, but there is no corporate, at least not with a huge funding, you know, some sort of corporate bureaucracy that has a quota imposed on it for how many millions of dollars of cost savings that they're going to claim each year.

Robert Tripp: Yeah, the whole organizational structure or people managing other people, and responsible for projects, they keep it very, very simple. But what's great is it's organic, and people are joining this because they want to and they see the value in the way of thinking. You know, the interesting thing is what Lean Six Sigma is trying to do is, it's trying, obviously, improve processes. But it's also trying to develop people, and it's trying to give people a sort of a consistent, and disciplined approach to addressing problems in the organization using data, and some analytical techniques. You know, it's not trying to force it down their throat. And these concepts, what they will not do, okay, the idea of applying them to unique and different situations is exciting to people because they can see the that you can really acquire your own sense of creativity, your own contribution to a project, working with your project team to solve a variety of different issues of your organization.

One of the things we like to do is we like to talk about, talk to the people about seeking of themselves, not as people with a title or certification, green belts or black belts, but essentially, you know, mini-entrepreneurs, within the organization, who develop a portfolio of projects and going through this training offers a tremendous sort of development. It offers a tremendous opportunity to really do something in the organization that they can document and share with the rest of the organization as they progress through their own career path.

It's exciting to see people take that on and really engage in this notion of, "Yes, there is a certain entrepreneurial spirit that's alive here because every time you went to sell an idea, you are a salesperson. You have to justify it, and there's significant and rigorous study. You have to find the right people to network and make your ideas readily accessible to people, to other people in the organization. And that's how you build a name for yourself and help develop your career.

Michael Webb: Yeah, so people are using it as an instrument to help themselves. They see it as a way to help solve problems and they distinguish themselves by their ability to actually do that.

Robert Tripp: Of course, yes. Now, when companies run into trouble, in my opinion, is they undermine that process and that spirit of self-development, and again, I'll say the spirit of entrepreneurial-ism. They undermine that by creating black belt or green belt positions that they go externally to hire and fill from the outside. Because then the position becomes a destination point. It doesn't become a path for people to flow through on to something else. Unless you create it, it would be defined as a destination point. It tends to put out … it's like throwing water on a fire. It puts a damper on the energy behind the sort of grassroots trying to gain these tools and concepts and ideas and apply them to their own organization as a way to benefit from their own careers.

Michael Webb: Well, and I think there's another thing, that might be going on sort of surreptitiously in the background. I believe Six Sigma was formulated to sell to senior executives. It was very marketable in that it was very palatable. Here's a set of rules, you've got engineers, there's hard evidence here, you follow these rules, DMAIC train people to go through this. Everybody, like GE approached it. A very top-down, very command and control company, and so take this Six Sigma pill and, you know, force it down your throat and get some results from it and you know, fire the bottom 10% of the organization and that's how you make this beast get better, right?

Robert Tripp: Yup. That's really interesting, and it gets back to the point you were making before, was why has the industry sort of plateaued? And that may be one of the core reasons. It's not new and it's not exciting as an initiative for executives to buy into.

Michael Webb: Right, and there's enough backlash out in the marketplace. You know, it's interesting. Toyota is and in the whole continuous improvement world … people who've worked for Toyota, don't always have the same view of continuous improvement as people communicate or described it as. I had a client, a potential client, I'll say. They never actually became a client, and I learned many years later that the reason for that was that, because I work with VPs of sales instead of VPs of manufacturing or also General Managers, but all my work is focused around sales and marketing, right?

The VP of sales in this company was adamantly opposed to any kind of process work and not because he's a concrete head, he didn't get it, right? He was doing a pretty good job and he knew that he should measure stuff, but his wife had worked for a number of years at a Toyota plant and had been treated in such a way, that she thought it was awful, and he absorbed that kind of attitude, and so there was no way that I was going to win this company as a client when the VP of sales is adamantly blocking the door. No way, right? And he was making his numbers, so he didn't really have any problem that had to be solved and the president of the company backed down and said, okay, well we're not going to force this issue.

I think there's a lot of confusion out there in how this is positioned. Another clue. The industry is organized sort of semi-organized right? There's the Six Sigma-oriented people, there's the Lean-oriented people, there's the continuous improvement people, you know, the Deming people, the Shingo-oriented people. Honestly with the exception possibly of the Shingo oriented people, the number one concern you hear or complaint or frustration of people in the industry, and you tell me if you heard this as well, is that it's difficult for the practitioners to get senior management to pay attention. To recognize this stuff is important for the whole company. It's important to senior management. It's not just a tool for the shop rats, it's not just a tool for the people in the plant or the engineering department, right? And they have trouble getting that message across that. Have you seen that also?

Robert Tripp: Oh, absolutely, absolutely, and again, if we can engage the people who are going to the training and applying the tools and facilitating teams to deliver successful projects, you know, deployment as a whole is only successful if we deliver results project by project. It's always good to be difficult to work with management who have to make decisions based on several criteria not just those that are of interest to the specific project teams so it gets back to the practitioner, whether it is a green belt or a black belt, the person facilitating these improvement teams, it gets back to these practitioners understanding what they need to sell to the senior management to help their solutions be better accepted in the organization.

It's not always an easy formula to follow. In fact, this is part of the challenge. It's not formulaic. You can't make it, again, we'll get back to a checklist conundrum. You can't make this a checklist. You have to make this something that people evaluate the circumstances of their own situation effectively and find the right pitch to create value to the end-user, or the person that has to buy the solution or the result of whatever you're trying to deliver.

That being said, yes it's difficult to get management to engage because they have a lot of competing priorities. One thing we can do when we deliver projects is be as rigorous as possible at driving towards some sort of financial estimate or qualification of the results of the project, and we don't have that. We don't have much to work with. So that has to be at the most basic piece of things, but your projects can have great value beyond whether we've accounted for using standard, you know, accounting practices or management accounting practices. There's a lot more to be said with projects in many cases within simple financial numbers. But it's a starting point and we have to build that discipline in.

Michael Webb: Right. I think that was one of the other sort of subtle hidden assumptions in the way Six Sigma is talked about and taught and presented to management, which is that everything's a project. And yes, in fact, everything is not a project, right? We have some ongoing things that must continue even after our production system must continue, right? And we need to be able to measure and demonstrate that we're actually creating improvement there, and it's not a project, and a little project which may have very little payoff. Well, for example, there's this great story that, I'm trying to remember the name of the fellow, the former head of LEI Lean Institute, used to spend time, he worked at Toyota for a number of years. GM would send people in to observe them. Like, at the Nummi plant, in California. And the VP of finance sent somebody in his department to go observe them and told that person, "Look, I want you to bring back only improvements that are more than a hundred thousand dollars a year. That's what I'm interested in. Not things, you know, little crappy things. I want the big hits that we can implement."

Well, the guy goes there and he sees them in the midst of a project where the union people had requested that the soda machines be moved closer to the break room. The next day, they had five electricians and you know, they're doing it. Where's your payback on that, right? He couldn't include that in his list to send back to the VP of finance of GM. In fact, Toyota was getting huge return on that. You just couldn't measure it because the Union people, now knew that they were being listened to, right? It's not about projects, it's about something else that obviously was not on the radar of that VP of finance at GM.

Robert Tripp: Well that's really interesting because lean and Six Sigma way of thinking, right? What's funny is that we tend to get into this thought pattern or, I'll called a paradigm that you know, every day as you said, "Everything is a project." Primarily because that's how it's taught, okay? But the thing is, is once you kind of become adept at something, you don't need to actually practice it necessarily in exactly the same way that you were taught it. The project is a vehicle that's been, or an architecture, that's been created for the purpose of teaching people who are unfamiliar with the tools or giving them exposure that they get comfortable with the sequence and the way the tools relate, and how their thinking flows through the problem solving, the discovering process.

The reality is, you don't really want people in the end, to practice your way of working in that manner. So, it's interesting, you know, it really gets back to this checklist. I think we get so ingrained into a particular habit, and the way we apply a set of tools that we're not willing to sort of work out outside that box and say, "You know what, this organization is different than where we started. Now it's time to think more critically about how do we get people to engage in practices simply as a way of working, not as a project-based infrastructure?"

Now, there's the trade-off. If it's not project-based, it doesn't have a defined beginning and end and it's going to be very difficult to evaluate a financial benefit. On the other hand, you know, you're getting the benefit of sort of a culture, you know, way of changing the organization. So I think there may be an opportunity here to balance both, and of course it's going to vary from one situation to the next. But, that's the organizations who are starting down the Lean Six Sigma and the continuous improvement process certainly want to design their structure around project execution, but I think it would get more maturity, they need to consider a more fluid approach that allows people to deploy these tools, both in a project architecture and outside of work.

Michael Webb: Now, you said something I'm going to push back on, I think you would agree with this but so let me just put it out there. You seem to imply that if you don't have a project focus then you can't measure improvement. And I heard a different interpretation, of process improvement. There was continuous improvement which takes place in something, the kind of work that's done repetitive on and on and on like in a production plant, right?

Like sales and marketing. It means every day you have to go do something that makes more people find you, finds more qualified prospects, brings those prospects closer to giving money to you. It's a production process, a production system. Likewise, you have to find the right raw materials, you've got to bring them in, they've got to be prepared properly, and assembled properly according to the schedule and a SPEC. All those are all production processes and managements try to use things called key performance indicators.

They're going to be making their desired result, but then, that system, sometimes, needs to fundamentally change the way it works. That's a project, right? There's breakthrough improvement versus continuous improvement, and you're using at the root, you're using the same principles of how you use your mind. But you're managing it with a beginning, middle, and an end in a project case and you're managing it with improvement in those data-driven KPIs to determine if we're improving continuously and also to determine if that project created a difference that goes to the financial statements. What do you think of that characterization?

Robert Tripp: I think it's a fair characterization. My concern is that we can define a project however we want to define it, right? I mean the issue is we need to have a specific beginning and end to a sequence of activities. We acquire projects to address maybe issues or opportunities in these processes. We define those projects as a sequence of events that are being delivered to achieve a specific outcome. Typically those projects have, you know, one of the KPIs, as the beginning and the end, right?

The amount of time it takes, obviously, there are other KPIs related to new services required, and then the outcome of that project as well, is certainly being measured. So it's kind of, maybe the combination of those three elements that are... They're helping to define, you know, the boundaries of that project experience. But when you are certain with that specific beginning and end, it's much easier to estimate the financial impact for sure.

I don't think that, you know, if you're not defining boundaries on the event, then you wonder when they stop accumulating metrics to say how well you performed. Now you can watch incremental changes take place. So, let's say we introduce a continuous improvement program that has, the intended effect of improving some KPI on a process. Well, you can apply specific projects within that continuous improvement program, but the program itself then is not the project, is considered that projects are the events that are driving the change. So, I'm still sort of in this place where you have to define the beginning and the end to your, you know, sequence of events, if you want to evaluate the results of those events with a specific starting point. I'm not sure I answered your question, Mike.

Michael Webb: Well, if you have a process that's functioning, and then you can put a process behavior chart on it, and statistically determine if there is a change to the capability, the variation, right? The output, the yield of that project. So, theoretically if you have a breakthrough improvement, suppose you change the website, and it now has a great way for people to get information and self-assess their needs and then reach out to get specific information about solving a problem that then goes to the sales force. And the purpose of that project is to generate a higher quality of lead to the sales force.

Well, before you have that project implemented, you have a rate of leads and a quality of the leads that are coming in. After that project is done, you have a different rate of leads and quality of leads that's coming in. You can put that on a process behavior chart and tell that an improvement took place.

Robert Tripp: Right, right.

Michael Webb: That's what I'm talking about.

Robert Tripp: Yes, but you defined the beginning and the end, with the project you defined an endpoint to that project where you can evaluate, "Okay, did we make the changes of the KPIs, and that you're interested in changing?" Now, what defined the end of that project could be timing, could be reaching a certain level of performance in the KPI. I don't know, but there is something specific that defines the end of that project, right?

Michael Webb: Yeah. Well there is, but lots of times those projects end, and I guess the point is, and I know this from a guy who wrote the improvement guide as a matter of fact, who I hope to have a future show. His name is Cliff Norman. You shouldn't measure the process when you changed, you know, use the dates, the beginning and end, in the project to measure the process. You should just be measuring the process and then see if the data tells you that there was a change in the capability.

Robert Tripp: I think that's a fair statement.

Michael Webb: Yeah, it's a fair statement. Okay, so geeking out here a little bit, and then we will pull it back to something that's sort of relevant to sales. And then, that's going to take us into management, and then maybe we can wrap up. I was quite shocked back in 2006 when I wrote Sales and Marketing the Six Sigma Way, to realize that the Six Sigma industry had precisely the same problems as the sales training industry.

The two were structured the same, right? They sold training. It was relatively easy to sell. It was pretty easy to buy. People understood what it was. They made money by putting buns on seats. Universally there is a problem of demonstrating results. And so the training consulting companies tried to sell field coaching with management, you know, for implementation. And the managements who bought the training often were reluctant to buy the field coaching because they just thought it was a high profit add on an unnecessary type thing, and that was just a state of the industry, right? And because they're focused on training. In Lean, many times it has been similar because it's the same kind of thing. The solution to that dilemma is to not allow the focus on the consultant's product, but to change the focus, the consultant has to change the way they work to give it a focus on the customer's problem. That is a huge shift in mindset, so my question to you is, do you agree? And how do you do that?

Robert Tripp: In your assessment of the similarities of the two industries, I agree 100%. I think it's fascinating that you sort of, you observed that from the sales and marketing and selling training side of things, but you can certainly see it also in the consulting side of stuff. You have to look for the value proposition in anything that you're trying to sell. And one of the advantages I think that we have, or could have within the Six Sigma industry, again is to focus on helping the people quantify the impact of their projects, you know, financially as much as possible.

And, I realize that, you know, that can create difficulties and challenges down the line as you start to mature as you are in the organization with deploying these tools. Because the focus on financial qualification tends to draw people's attention away from the other benefits as part of the conversations we've already been having. And so that can be an impedance to driving a cultural change in the organization. That being said, yeah, I agree with you 100% that it's difficult to sell this without, you know, understanding exactly what the organization needs as a result of the training, and the human resource development that you're proposing.

Michael Webb: Right. Well, and when we get into sales and marketing, that whole concept of the ability to measure, that's a whole new world because they think that getting measured all the time, but they're not. All they measure is the end result, and the net of that is they end up doing the same things over and over and over and expecting different results. And it's been a big Chinese wall between the sales and marketing world and solving problems and the operational, you know, production management world where they can solve problems and produce measurable financial results with a lot of credibility.

That would be a great topic for another conversation with you. We've sort of been chewing the fat here going around, you know, a bunch of different poles and a bunch of different observations. But it is useful to step back and say, this industry is here for a reason. It does have results. It does have some ramifications that people would prefer not to be the case. There's this story in the industry, a fairy tale, I mean, not in the industry but, a girl was thrown into a dungeon, full of hay and manure and they check on her and she's just thrilled. She's digging around, and then they ask her, why? Why are you so happy? She says, well, if there's a lot of this manure in here, there has to be a pony, right?

Well, that's kind of like where we. There's some really good stuff in this operational excellence industry, right? And we've found some of it, but it hasn't really stuck, and until it's understood that sales and marketing needs it, engineering needs it, human resources need it, most importantly, none of those people are going to think they need it until senior management recognizes that they need it. And it is how we're talking, and we're trying to penetrate that barrier.

Robert Tripp: If I could add to that, real quick Mike, I would agree with you 100%, and even to the extent that we try to emulate or replicate the Toyota model for Lean production, execution and design. I think we have to recognize we're dealing with different cultures and different business models. And we have to be willing to incorporate our own sense of judiciously applied continuous improvement tools and methods, based on the culture and the method that exists, and I think the same would go for your sales and marketing processes as well. I think too often we get, again into our paradigms according to the way we learned it, or according to the way it's been advertised, it was practiced, but forget that you have to be creative enough to apply it to your unique circumstances and flex and mold and really craft your own deployment and approach to match the environments to work again.

Michael Webb: Yeah, right. I agree with that, and then how you stay on the rails and make that effective and prove it with data. Yeah, that requires a lot of thinking and you can't use checklists. You need thinking people. Anyway, I love talking about this stuff and trying to solve the problems in the world. I want to thank you for being interested enough to spend this time with me. Let's pick another topic because guys like you have really, really valuable experience and-

Robert Tripp: I'd love that, that would be great.

Michael Webb: I appreciate your interest, and we'll see how the audience reacts, hopefully, they'll ask us some questions and this will spur a further productive conversation. So if someone wants to get ahold of you, at Argo how would they do that?

Robert Tripp: The best way, really is through my email. You know, I'm not a very sophisticated marketing machine here, so I've got my personal email address at [email protected]. Also, you can reach me at 317-506-4849, on my phone and you know, we'll engage in a conversation, that would be great. I'd be happy to talk to anyone, whether they have questions or ideas or thoughts to share, it's always, it's a fun field to sort of explore, so, yeah. Thanks for the opportunity, Mike, it's been great chatting with you. I appreciate this.

Michael Webb: Same here, and we will talk again soon.

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Bruce Hamilton | Playing As a Team
16 sept. 2020· Sales Process Excellence Podcast
Michael Webb: Good morning, everyone. I am pleased to bring you my guest today, Bruce Hamilton. I met Bruce several years ago at a Shingo conference and Bruce has... Well, Bruce, let me just give you a chance to explain your background to my audience. It's largely sales managers and company presidents. Many of whom may not be familiar with the kind of work you do and much less the Shingo Institute. So take a couple of minutes and describe your background.
Bruce Hamilton: Thank you. And good morning, everyone. I appreciate whoever is joining in. Appreciate you being out there. I've been in a number of different careers in business, started out actually in sales promotion and spent seven years there. And I loved that position actually. And oddly, my interest in problem-solving led me to IT. So I spent seven more years in IT thinking that some of the issues we had in sales and marketing would be solved through IT.
Bruce Hamilton: And so the bad news is it's not really a panacea. I learned a lot about IT, however, and those kinds of problems. While information technology has changed remarkably since I was in that position, a lot of the thoughts behind computer systems have not so much. It's more or less has to do with the speed and scale that we have today, but the basic algorithms, as we say, not remarkably different. But systems led me into materials management. I worked in a manufacturing company and at the time we were implementing MRP and it was not actually doing much for us. And so I ended up transitioning from a computer systems to manufacturing. Never spent any time in manufacturing, not even in the manufacturing building. So this was an eyeopener for me, definitely. It was a world of pain with many problems. Some of them actually caused by the computer systems that I was involved with. And that brought me to the Shingo prize incidentally.
Bruce Hamilton: We were a company that had a lot of issues. We couldn't deliver on time. Like many companies back in the '70s and early '80s, our profits were flagging and we were trying to find ways to get around that. When I was in sales and marketing, we raised prices twice a year. And we Pat ourselves on the back about how our sales were increasing, but they actually weren't, we were just printing prices. So now I suddenly found myself on a different side of the coin, still with that thinking in mind from sales and marketing and focused on the customer. But I noticed I joined an organization that actually was shielded from the customer. We had very little to do with the customer. And this created its own set of headaches. But Shingo prize and particularly the ideas of, shingo and some of the others...
Bruce Hamilton: And they're not all Japanese. A lot of them came out of the US, but a lot of that thinking was critical for me? And it was just my good luck that since I had no background in manufacturing, I had no biases. And therefore I started to study this and that led to award of a prize for our company in 1990. And there were some remarkable improvements. We were still awful, but we'd made an awful lot of improvement. That in fact, led to some attention back in 1990 from Toyota, who at the time was for purposes of trying to be a good corporate citizen and trying to overcome an image of taking jobs, which killing American auto manufacturing, which they didn't really need any help. They were kind of hurting themselves.
Bruce Hamilton: They helped us out for or five years. And it was exciting, very exciting. They felt like as they like to put it, being dragged through a keyhole. So there was this technical knowledge from Shingo and some lot about behaviors of people. And then dealing with the folks from Toyota, understanding what management's role was in this. because I was not totally clear about that, about how the whole thing fit together. It's a whole system. It's not just one thing or another. One piece. We often talk about lean is a bunch of pieces and that can create a lot of confusion and misunderstanding. Because unless you're looking at it as a whole, you don't really get a decent understanding. That finally led me into general management. And at that point I was back actually working with sales.
Bruce Hamilton: So I started out in sales and I ended up in sales. Then 20 years ago, hard to believe, 20 years ago I quit my job. Loved the company, it was doing okay, but I got so excited about continuous improvement. And actually I think it was my interaction with the Shingo prize and the Shingo Institute and getting to go out and visit other companies, not just in manufacturing, but in lots of kinds of different businesses. It was exciting to do that. So I became a consultant and that's where I am today. I worked for a, not for profit organization that's been around since 1994 and it's our mission to keep good jobs, predominantly here in the US. We're parochial that way. Don't begrudge anyone else but we liked the idea of overcoming challenges that we have and particularly in our own region. So that's me and happy to be with you today.
Michael Webb: Looking back on that, a couple of points, I guess, to ask about, because I'm similar age to you, right? And so I went through different... Coming from the sales background, but during this period of time when first mainframe computers and then mini computers and then microcomputers were upending the way businesses managed themselves. And I remember observing, and I wondered if you did this to back in your days of IT, the IT department... I remember realizing, wait a second, if you're going to have a computer, that's going to be able to do all these real fast calculations and make reports. And people from all over the company are putting information in them. That means everybody has to define their terms exactly the same way. And that's not the way it works right now. That's a revolution to help over smplify things. Because that's one of the reasons that computer systems didn't work.
Bruce Hamilton: That was true back then and it's still true today. Different parts of an organization. We talk about language barriers, sort of the English versus Spanish or Vietnamese, but there are huge language barriers between engineering and sales. And when I was in sales that released. We would say it was released in sales promotion, that meant that there was a concept on paper and we were going to take it to a trade show. Whereas released in purchasing meant we purchased all the parts. Released in engineering meant we've finished the prototype. So every part of the organization had a different definition. They were all wrong. The computer system then tries to codify this, but the codes are all messed up. One of the better parts of MRP that I participated in was that it actually forced us to ask the questions. Ali White , who was an early leader, liked to say that it's a people system which utilizes a computer and he emphasized all people. This is probably the first time I think in my company where sales felt they had any connection to what was happening in operations.
Bruce Hamilton: And that was pretty reluctant too, it was like, they felt that you're putting us on the spot. Forecasts are very difficult because of the, let's say, less than friendly relationship between sales and operations. They're immediately on the defensive. So a lot of those conditions persist today. Organizations are, siloed, is a popular word. I used to say compartmentalized. We're all in our own little cubbies and we don't get out much. Even if there aren't physical walls, we just don't go to certain areas.
Bruce Hamilton: So the language is kind of messed up. Computer systems take that language and they make it look official. And once it comes out of computer, it must be right. I honestly did not have a concept. There was a guy back then called James Martin who was a futurist. And he talked about back before there was even a hint of a laptop. He talked about that and he talked about communication. He talked about computers and devices, but it didn't really hit me for 20 years, most of us.
Bruce Hamilton: And that's where we are now, what we've got is this connectivity and more processing power. And surely it amplifies the opportunities, but it also amplifies the misunderstandings.
Michael Webb: Yeah. So, then to build on that, because I went a kind of a similar path, only I was selling MRP systems for a while, integrating the wholesale distribution and then production control, cost accounting system and like that. And was very eyeopening for me to learn just how complex things were inside a production facility. And I was fortunate enough in high school and college to work in a couple of manufacturing plants. And my goodness, your eyes open up to all this stuff. And if you've ever been in that before, you don't realize the complexity of it.
Bruce Hamilton: It surely is. There's complexity in every systems. There's complexity in sales system. Some of it's just because things are complicated and some of it's because we make it unnecessarily complicated. Complicated in any system.
Michael Webb: As you help companies to improve in their profitability, their quality, their performance, a lot of it has to do with helping those people understand each other and what their words mean. I'm guessing that's a key element. I know Shingo model focuses a lot on respect for people and drawing on what they think and thinking jointly together. Why don't you cover that?
Bruce Hamilton: It's not the only thing. And the Shingo model focuses heavily on it. And it adds a lot to the opportunity for improvement. But I think you need to be careful that it's not just that. There actually are some concepts which are hard to wrap your head around and some tools which seem crazy at first glance. And so you need to get to be able to lead the horse to water. And it's often difficult if you haven't actually tried it. And this is where the interpersonal relationships become really important. Dialogue is a really important word for me. It's so easy to, the minute it's an argument, we're just back to where we always were. It's us and them. And that's where most organizations start.
Bruce Hamilton: As a Shingo prize examiner. I listened for those two words or those kinds of words, totally, all the time, because the minute I hear them, I know that there's issues with interpersonal relationships. And I want to know who them is? Who are they? Could be management, could be other departments, could be the customers. It could be the employees. And so if we are looking at this as a whole, we need to have more of a shared understanding. That's where the interpersonal relationships become so important.
Michael Webb: Since you spend a lot of time in production facilities and your focus is largely with management of those facilities. What was interesting, your sales background and many of your customers, your clients end up needing to engage the sales departments. I guess two questions on that. Why does that happen? And then what are some of the special problems that you've run into as you tried to do that?
Bruce Hamilton: There isn't a single answer for that. First off, not every organization has the same problems. Organizations can be very different. Different types of organizations. And they all look... You'd mentioned how you were surprised how complex systems could be in manufacturing, but sometimes that's easy to understand if you're building a jetliner, it'd be easy to say that's pretty complex, but if you're bottling water, you would say, nobody should mess that up.
Bruce Hamilton: In fact, each system has got its own kind of conditions and problems. And those problems are not just on the production floor. Coming out of sales, I think in sales promotion, I'm a very top line-oriented guy. I learned early along that management is much more interested in what you can do to improve the top line then what you can do to save money.
Bruce Hamilton: Not that I think saving money is unimportant and unfortunately, a lot of the things that organizations do to save money don't really make sense. They only save it on paper. That resonates particularly well with sales because sales is charged with generating revenue. Okay, so what can we do to help sales create revenue? And there's a number of things. Like margin flexibility is a really big deal, particularly today. A lot of companies just give up on certain segments of the market because they feel they can't compete. And they can't compete because they haven't managed to get that connection between what the customer needs and what operations can provide. And engineering, by the way, it's not just production. So that's one thing, margin flexibility.
Bruce Hamilton: Another thing is just things that are specific to salespeople, territory management. And oftentimes that hasn't been looked at, at all. We set up when certain areas of the country were not populated and had no industry. Now things have changed, particularly for older companies. And it's never been looked at. So you've got one person, salesperson who's out there trying to cover a million square miles. And another one who's basically rolling around in a neighborhood. There's so many different things in sales, like distribution policy, like pricing, like discounting, all of those things. They're all systems which are important to salespeople. So it's not so much finding a problem. It's more a matter of, well, what do you work on first? It's no different than working in operations. Yeah, we got lots of things we could fix, but what's bothering you the most.
Michael Webb: Which you have to find with any group of people, if you're going to get them-
Bruce Hamilton: That's right.
Michael Webb: So in all my years in sales, four different industries, a bunch of companies, and then consulting with hundreds of companies, you find that the sales department is often just like all by its lonesome. Yeah, we need to improve sales. So what do we need? We need sales training. So they hire these real expensive sales trainers because after all, if they weren't good salespeople, they would be cheap. So we teach the salespeople the magic words and they go out and they do their best to implement it. And then a year later it doesn't really look like much has changed. The sales department is still trying to push more proposals and more orders. And it's a tough thing. That's just the way sales is managed. Why is it that sales, from what you've seen, why is it that there's this division in companies between how sales is managed versus how the rest of the company is thought of as a system?
Bruce Hamilton: I'm going to maybe answer this in an oblique way. Salespeople and production workers have something in common. They're measured by their output and it's out there in hard numbers. You may feel it's unfair, but there it is. Other departments, not so much. Hard to measure some other departments that way. I worked in sales promotion and, jeez, nobody could really figure out how to measure us. It was like, how many leads do we get? How many qualified leads? But salespeople, they have sales quotas, things that they're supposed to hit. And that's what they would like. They'd like to figure out how to do that better. So in that respect sales, isn't really too much different than other organizations. I think as a whole, we continue to have a misconception that all the problems and all the opportunities are in operations.
Bruce Hamilton: So that's something to get by. Let's focus on pain first. Not saying that people are doing a bad job. Because that's what you hear in manufacturing. I know you're saying we're doing a bad job. When you say waste, you're saying I'm wasting time. No, I'm not saying that. I'm saying there are things that get in the way of your work. That's what that toast video was about. I don't know for those of you who had seen the toast video, it's just about somebody trying to provide a service or a good and struggling to do it. Has these problems, information problems, don't have the right equipment, don't have the right instruction. So for sales, oftentimes... I know in my own sales organization, the thing that they hated most was groveling. They did not want to waste their valuable time, apologizing, making excuses.
Bruce Hamilton: First of all, they couldn't sell when they were doing it. And second of all, it just felt awful. That's not what they're being rewarded for. So we focused on that. And of course, that goes right back to operations. What are those problems? Let's get specific. What can we do for you? Is it late delivery? Is it quality? There's this image that you often hear in lean of the problem funnel of taking a vague general problem and boiling it down to something specific and then fixing that. Okay. So that has two benefits. One is, it gives me a little bit of a boost because something got better. And second of all, it gives me an idea that there's a process which can make things get better generally. And that, in fact, in order for that to happen, we probably need to work together on this. Can't do it alone. Each of us has some significant part of the solution to the problem. But if I'm sales now, sales is the front line.
Bruce Hamilton: Sales is our front line. And I'm talking about people who are in the field, not so much the folks who are in the office handling complaints and taking the orders and so forth. And they're very important too, but I'm talking about the people who are out in the field, They're out there alone. Something didn't happen right. They got to deal with it. They don't want to be doing that at all. That's not sales. It's like rework. People in production hate rework. There's no plus in it. And then they get punished for it. It's like it's their fault or something. So in that sense, I think even though salespersons... It's a tough job. It's a tough job being out there and having to answer for anything that happens, having to put your best face on every single day, even when things are not working. Working with systems that don't work. I called that order in, where's that order go? That pricing is all wrong. All those things that go wrong, very frustrating to them.
Bruce Hamilton: So I think it's more a matter of just getting folks the same... Anybody, it doesn't matter which occupation you're in. I say in that toast video, it's not about the work. It's about all the things that get in the way of the work. It's all those things every day, which just gives me a headache. You can't find anybody who can't give you a long list of those.
Michael Webb: And by the way, we will include a link to The Toast Video. Very well worth watching in the show notes. When I work with sales organizations, one of the things... You talked about leading the horse to water. One of the things we have to get them to recognize is that whether you created value or waste in sales, you have a number at the end of the quarter, whether you made your number, but all the work that led up to that, which part of it's value? Which part of it's waste? That's invisible. You have to invent a way. We have to develop a way to determine whether we're wasting our time or whether we're creating value. And whether that value is for us or whether it's for the customer.
Michael Webb: We have to do things with the salespeople to help them have an experience, that says, oh, golly. I guess when I use the word customer, I'm referring to somebody different than you. What other terms might we have to define?
Michael Webb: Do you have that same kind of thing when you're doing that with production folks or when you start working with order entry or customer service or salespeople too? Have you gone through the same thing?
Bruce Hamilton: There's a kind of a spectrum, particularly I think in smaller companies. There's pretty good understanding of who the customer is. There's a shared understanding of the customer. Larger companies, even there. I think many organizations that we work with... Yeah, I guess I have to qualify. If we're just starting out with an organization, usually operations is removed, maybe twice removed from the customer. Their idea of the customer... Worst case, they see the customers as the problem. You have that kind of belief. I don't know if I'm answering your question here.
Michael Webb: It's not hard to go into a company and say to one department, who's the customer? And they say, well, it's the guy at the distributor who signs the cheque. Ask another person, who's the customer? Well, it's the person who's got their hands on our machine and using it in the shop. And somebody else says, well, no, it's the plant manager who's going to benefit from it.
Bruce Hamilton: Companies that have had some background with TQM will generally say, think of the internal customers the next process. And they're aware that, that leads to someone outside. Once you get outside, it gets a little dicier, depending upon the industry. Is your customer the patient? Is your customer the doctor? Is your customer of the hospital? Is your customer the insurance provider?
Bruce Hamilton: All of these are, actually like that term, stakeholder. And it's kind of relative to the problem we're trying to serve. We'd like to keep everybody happy. All those customers are important. And I worked for an organization that made products that might go into a piece of cooking equipment, but ultimately the customer might've been McDonald's. That's who we're really trying to make happy. The customer for a part that we make could also be the person who's taking that part and assembling it into the product our customer makes.
Bruce Hamilton: So it doesn't stop at the purchasing department or the stock room. It goes right to the person who is going to then need that part. And that's important relative to problem-solving. So if there's a problem with a part, it tends to get discovered at the point where... It's not discovered, typically. It might be a might get discovered on receiving, but it might get discovered when, I'm the assembler and I'm trying to put it together and it doesn't work. So if I don't have that frame of mind as my customer. I'm not going to solve the problem. I wrote a post about it called The Salesman's Gamble . We made a sensor and it was a type of RTD sensor, had three wires. And the three wires had a particular protective coating on them, an armor prevent the wire from being damaged.
Bruce Hamilton: But when we manufactured this, we sometimes nicked one of the wires and then that would be rejected, its customer. And we spent hours and hours analyzing the work, trying to figure out how we could manufacture that part without nicking it. And it was hard because it wasn't really concentric. So we get into manufacturing issues. And we were struggling. We're getting better, but still the stuff would come back from the customer, we nicked the wire again.
Bruce Hamilton: One of our field salesman from the Midwest was in the plant and we invited him to the meeting, and he asked this question, why do they need the armor? Now that's a question, that armor on the wire. None of us would ask that. It was just a given. He asked the question, why do they needed the armor? And I actually traveled to that company with the salesman. And the first person we asked was the buyer. And she pulled out the prints. She says, the armor is absolutely necessary, but we pursued it onto the floor. And we talked to the person who was assembling it. And he said, and I'm not exaggerating here, He says, not only do we not need the armor, it's a pain in the neck. It's hard to get that armor to thread through when we do the assembly. And when we've dug into it, what it was, was it was a repurposed sensor that we had made years before. And they just use the sensor in new equipment. And in the new equipment, A, the armor was not needed. And B, the armor was a problem.
Bruce Hamilton: So because we had all that engagement and particularly from our field sales guy, we actually reduced the cost of the part because we didn't need the armor anymore. And they got a part that they wanted. So there's a perfect example of how, when you have the right interpersonal relationships, you can really solve a problem. In another environment, that would have gone on and on forever. We probably would have lost the customer.
Michael Webb: Think of an environment where salespeople are measured strictly on revenue production, not on nuanced understanding of what the customer's problem is. That's what a lot of young kids today who go into sales and hired by these companies, into telephone boiler rooms and make a million calls a week and it's just push, push, push. There's no real analysis of what's the value to the customer. Is there an easier way to get some attention and create something useful for them as a way of getting engaged. Salespeople today are struggling so hard because customers are trying to avoid them. And so we had to step back and take a more value-oriented way of redesigning sales processes and stuff.
Bruce Hamilton: Yeah. Salespeople, as I said, have a very hard job. And there's a certain set of skills which are unique to sales. A type of sales training is very valuable. I coached soccer for a while. And not that I know much about soccer, but the first thing you do is you teach people how to dribble and you teach them the basic skills. And that's essential. You can't play the game if you don't do that. And then there are tactics that you... How you're backing around and how you manage the field. And that's important, just as it's important in sales. But then finally, there's this overall strategy of how are we going to win the game. And this is typically where organizations tend to... They don't put enough effort into that. And we win the game. As I used to say, we beat better players because we're a better team. Because we play as a team. Same story is true in healthcare, manufacturing, anywhere. So its' our ability to look at the problem from many sides to solve it.
Michael Webb: As they say at Toyota, I think, we build people before we build cars. The people have to understand each other. They have to understand the problems they're trying to solve. They have to use evidence and data instead of opinions and biases and drawing people through that critical thinking. As I understand it, that's management's primary role.
Bruce Hamilton: But there's another piece behind this, which can make it difficult, Michael. And that is how we're measured. Manufacturing will be measured in such a way that does not necessarily promote good customer service. And you can't blame them for that. It's normal to cherry-pick jobs in order to hit a bogey. And it just is it's normal in sales to pull orders in that the customer doesn't need, so that they can be...
Michael Webb: That's something that we really don't want.
Bruce Hamilton: And I don't hold them accountable. It's the measurement systems that we use. And this is where senior leadership really, really can play a part. They're the only ones who can look at this and say, you know what? I'm not going to argue with Gap accounting. When we pay our taxes, this is how it's done. It's done a certain way. We can't do much about that.
Bruce Hamilton: So we're not going to fight it. We are just going to fail to take it seriously because we know, because we can see, because we're business people. And we realized that building something just because we want to activate resources is not actually making us money. It's not turning into sales. In fact, it's eating up our resources that we could use to sell products to our salespeople. One of the first things I tell companies, the nonproduction departments, I tell the financial people, be prepared for an excess of cash. That's the first thing that's going to happen. Because when we stopped doing things that we never should have done in the first place, making policy decisions. Eli Goldratt called them evaporating clouds. Just like, we made this decision, and now we're just not going to do it. A controller of my former company said, I think we just need to stop forcing orders at the end of the month so that we look good this month and then have nothing to build the following month.
Bruce Hamilton: He needed to say that. That's an evaporating cloud. It was a policy decision. It was a self-inflicted wound, that we were not late to customers. Well, we were late the first of the month, because we ran out of parts building things that weren't needed. So that's one kind of thing. And what I say to salespeople is, you best be prepared to find new markets for all the capacity that we have now. Otherwise, we're going to have that problem. We stopped making things that were not needed. And now we have this capacity and with this capability, let's make sure that we use it. Let's go out and sell the factory.
Bruce Hamilton: One of the challenges that I had early on was, there are people from sales who would say, Oh, you see what this is doing? Our backlog is dropping. I said, no. Our backlog is not dropping. We are not forcing customers to order a half a year in advance of when they get to the order. We are just the same amount of sales. We are just not not forcing companies to make decisions that they really can't make, because they don't know. As a result, we're putting heavy pressure on our competitors because they still are taking six months to deliver. And guess what? We can do it in a very short period of time. Sell that. And that worked, actually. It worked, after a while we figured this out. And our marketing programs started to talk about how we can deliver quickly customers love that. Customers are a good spot to go to get support for this process. And that they'll talk to salespeople. It's a great opportunity.
Michael Webb: When you are leaning out and making the production operation so responsive to the market, I think your point is huge. Now the salespeople have to go out and find new markets and new customers. That is not a trivial thing, right? The whole scientific method, so that you can be pretty confident in the sales forecast.
Bruce Hamilton: That's the strategy I was talking about. We're beyond tactics now. Where are we going to move? We're going to move out. Are we going to develop new markets or are we going to develop new products? Are we going to develop new sales channels? Where do we go? And this is what salespeople can and should.
Michael Webb: All this critical thinking. Respect for people is hugely beneficial. It's the only way that I know of to help organizations actually be more effective. So if someone wants to learn more about your organization, how would they get in touch with you?
Bruce Hamilton: We are at Gbmp.org, we're online presently like a lot of organizations. We do a lot of things virtually. You can find us at www.gbmp.org. You can find us at the Shingo Institute as well, since we're an affiliate of the Shingo Institute. If you'd like a few minutes of entertainment once a month, write a post under the heading of oldleandude.org. And also if I may, make a plug for our upcoming conference, which is in October seven and eight, and it's virtual as well. And it's called 21st century lean. All the things that we see in the 21st century. And this has certainly been a rip-roaring 20 years. If you think about it. Of all the things that we have had to struggle with and the changes and how do we pivot quickly. And we're all trying to do that right now. So the theme was kind of prophetic. We set it up over a year ago.
Bruce Hamilton: We had no idea what kind of a mess we'd be in right now. That you can find us at northeastleanconference.org. So there's several ways to get in touch with us. I'd be happy to get with anybody. So thank you. A hope that we will see a couple of folks from your listeners at the conference and happy to chat with anybody. And I appreciate you asking me to participate with you today, Michael.
Michael Webb: Well, my pleasure. This has been a great opportunity. Thank you very much. This is really valuable. I'm sure we'll be talking real soon.
Bruce Hamilton: All right. Thank you Michael. Peace.
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Ardath Albee | The Gap in the Middle
25 mars 2020· Sales Process Excellence Podcast
Michael Webb: Hello everyone. This is Michael Webb with the Sales Process Excellence Podcast. I am excited to introduce you today to someone I have followed for a long time. Her name is Ardath Albee. And she is the author of two revolutionary books in marketing. The first one, eMarketing Strategies for the Complex Sale. And the second one is a book called Digital Relevance: Developing Marketing Content and Strategies That Drive Results. So Ardath, welcome to the podcast. I really am glad you're here.
Ardath Albee: Thank you, Michael. It's a pleasure to join you.
Michael Webb: And I think it would really be helpful for my audience if you could spend a few minutes and just tell us where you've been in your career and how you got into doing what you're doing now.
Ardath Albee: Sure. So I come at this from, not a marketing background, so I ran companies in a past life, mainly hotels and country clubs, so on the B2C side. And then one day my sister called and asked me to move to Minneapolis and help her build a software company. And I kind of laughed and told her to go get funding, thinking that she would go away. And she got funding. And so I moved to Minneapolis and we built the company. So this is back in the year 2000. So think, the first-ever iteration of marketing automation software designed to also run your website that marketers could use without IT. And back then, of course, it was a big heavy lift, a custom install, because we didn't have SAS. And corporations at that time had basically taken their brochures and put them online and turned them into websites, remember? Back in 2000.
Michael Webb: Oh yeah, right.
Ardath Albee: So they've moved that content into the new technology and then they'd say, Well, nothing changed, nothing happened. And so I started going out and looking at their websites and thinking, no wonder, who wants to read this. And so my background is, I'm a writer, I always have been, have a degree in English as well as a degree in business. And so I started helping them rewrite their websites, and focus on their customers more so than their products, which was a fight kicking and screaming a lot of times. And they started seeing change and they started asking for more and more help. So in 2007 when I realized I could make a living doing something I love, I jumped and became a consultant, and that's how this all got started.
Michael Webb: Interesting. So there's a pretty famous study that's been going on by CSO Insights. You might be familiar with that. For the last seven years in a row, the percentage of B2B salespeople making their quotas has declined, seven years in a row, in a time of recovery in the economy.
Ardath Albee: Yeah. I think even more frightening than that is that what's the percentage right now? 50, right around 50% of sales reps are to make quota.
Michael Webb: Yeah. That same company said it proved that a CEO of a company might be better off taking the capital they invest in their sales and marketing organizations, especially with sales organization, and putting it on the craps table in Vegas because the odds are better.
Ardath Albee: That's just terrible.
Michael Webb: Why? But why is that happening in your view?
Ardath Albee: Well, I'll tell you what I see and I've been doing work on both the marketing and the sales side, but what one of the things that I thought was really interesting was something that I heard a lot about at the Gartner conferences this year.
And one of those things is that buyers used to say nothing's relevant to them. We're not producing content that speaks to them. It's all about our products or whatever. Now they're saying, Hey, 85 of them are saying, we go out and we find quality content, but you know what? It's still not relevant to us. And then they say, and it's confusing us because there are no apples to apples comparison between what all the different vendors say. And as buying groups get bigger, every one of them goes out and does their own research, and they all bring back this information that conflicts with each other. And so these buying groups are now struggling to deconflict all this information.
In fact, Gartner says it adds another 20% of time to their buying process if they even decide to buy at all. And as many deals are ending in no-decision as companies or vendors are losing to the competition, which is frightening because buyers can't figure out how to even move forward. And so-
Michael Webb: Wow-
Ardath Albee: It's difficult. It's changed a lot. Buyer expectations have increased exponentially, just because they're business to business doesn't mean they forget about their consumer experiences when they're going into the office, right? So they have expectations of instant information and being able to find things that are relevant to them. And we're not, as B2B companies, really following through with that. But the other thing that I find really interesting is a lot of what I hear is go forth and provide value, but nobody ever defines, what exactly does that mean. What's considered valuable, right? And so what I find is that companies really still don't know their buyers. They don't keep up with them.
In fact, a lot of times they do the research or some of it creates a persona and say, okay, great, check the box. And they put it in a folder. And they don't use those insights or that information to inform their strategies, their go-to-market strategy, their marketing strategy, their sales engagement strategy. They just say, okay, we did that work, file it away. And they don't understand how to use it. And so what we get is content that yes, arguably is high value, but it's not doing anything to help orchestrate the buying process. And your buyers don't care whether they're getting stuff from marketing or from sales, they just care that it's relevant to them, that it matches their context, that it provides some kind of valuable insight they can actually use.
Michael Webb: There's a wonderful quote from one of your blog posts. It was, "We need to start looking at the buying process as a continuous experience that sometimes plays to the strengths of marketing and other times to those of the sales team." So are you saying that the prospects are looking for conversation? Help us understand how that issue of figuring out, how to give into relative chats applying to this desire for conversation if it does?
Ardath Albee: Yeah, absolutely. I think it does. And one of the things that I find really interesting, it's one of my favorite parts of building personas, is understanding all of the questions that they have to get answered in order to continue to make forward progress towards solving a problem and buying your product. And so if you actually look at what a conversation is, just like you and I talking, you're asking questions, I'm answering. If this wasn't a podcast and we were just talking, I probably answer and then say, and what do you think or ask you a question to follow on. So if you think about it, Q&A is actually the basis of conversations, a lot of times.
And so the other thing about it is that marketers and sellers are disconnected. So marketers spend the majority of their time, and research shows this, creating content for awareness and engagement at the beginning of the buying process, or sellers focus most of their time at the end, right? The products, solution briefs, information negotiation, whatever closing the deal, those kinds of things. There's this huge gap in the middle. And what we need to figure out is how do we connect the dots all the way through. Because what's happening now is, for a long time there was that statistic out there that said buyers are pushing sellers to the very end of their buying process. Now what they're finding is buyers are so confused. They're saying we're willing to talk to sellers at the beginning of the process, but they have to bring us something relevant.
They have to be helpful. They have to bring that input, value thing. And so we've got to look at this as how do we get marketing and sales to work together throughout the entirety of the buying journey? How do we align all of that? Sales enablement is one way to try and bring marketing and sales together if it's done well. But we tend to look at this as in silos still. And our buyers don't. They don't say, well today I think I'm going to go find a piece of marketing content, tomorrow I think I'll go find a piece of sales content. They're just looking for how do I get through this? How does it all-
Michael Webb: So back in the day and you were probably there as I was, the big thing was to transition the company from selling products to no, no, no, we're supposed to sell solutions. And what you're talking about is way more sophisticated and nuanced than that. I mean we've already used a bunch of terms here that I get nervous when these buzzwords get floating around. Let's define them. Content strategy is one.
Ardath Albee: Right, well, content strategy is really creating this storyline or narrative for how you get a buyer from problem to solution. What do they need to know? What expertise can you bring to bear? What are the different decisions they have to make along the customer journey, the buying journey, so it's a combination of all of that stuff. How are you actually going to use content and information to reach your goal of growing the company, expanding your accounts, whatever those objectives are. That's really what a content strategy is. But how this story relates across different channels? Like whether marketing is telling it or sales is telling it. How is everybody on the same page being consistent in the story they're sharing?
Michael Webb: Well, but in addition to that, it's very common for one function in a company to realize we got a problem here we need to solve, but in order to solve it they have to go to another function in the company, to get their support and participation. And then when they get something that makes sense and they've tested it out and then they have to go to the CEO for approval and then it goes to the purchasing department. So that four different buyers are involved in making that decision. So I mean that makes your content strategy a lot more complex, doesn't it?
Ardath Albee: Well sure. And it's actually more than that. So the account is now up to 11 plus people involved, and it really does complicate things. And one of the things that can simplify it is looking at who was involved the majority of the time and who just comes in and out for specific purposes. For example, if a business lead is buying something, maybe IT has to come in and bless it. But they only involve for that evaluation period or whatever. They bless it, you move forward and then somebody else could step in and say, Hey, wait, if you install the system, it's going to affect all my processes and my team. So what do they need to know? And so I've created this system because otherwise, it gets really expensive and time-intensive. And it's hard enough to convince companies to do this groundwork and research.
But build primary personas for the ones that are involved all the way through, the champion, the deal that are the ones who are really selling it up to get the final sign off and involved every step of the way and then look at the people that come in and out and figure out what you need to know to create the content that they need. Just that. You don't have to create content across the entire buying process for somebody who's going to be involved for one month of a nine-month process, right? It only has a couple of questions that you have to answer to get them to consensus.
And so we have to look at things more strategically because creating a persona that you're going to engage across the entirety of the buying process and most of my clients are selling complex solutions that have a one-year, two-year, three-year buying process, that's a lot of content and companies don't have the resources to create all of that. So we have to be really smart about what do we absolutely need to have as a baseline in order to move this buyer from start to finish, given all the other people that are going to come in and out over time.
Michael Webb: So-
Ardath Albee: And-
Michael Webb: Okay. I'm straight, go ahead.
Ardath Albee: Yeah, no, I was just going to say, so it reduces the amount of effort you have to do to get those insights that you need so you can create this consistent connected story, that helps you engage and get consensus from those people that come in and out.
But you have to look at it a little differently. So for example, I got a call the other day from a VP of marketing, we said they'd identified 52 personas and I said go shoot your team now. Line them up by the wall and shoot them, because how are they ever going to create content for 52 personas across a nine-month buy cycle, which is what they were averaging. I said that's not even realistic. And after I took a look at them, we boiled it down to, there were really maybe 11 and only three of them were personas that were primary, right? That we're going to be involved across the entirety. And the other ones we could do many personas for, because we only needed to learn just enough to be able to get them on board and so, but I mean it's just people scare themselves.
Michael Webb: Okay, so a buyer persona, let's define that. What does that mean?
Ardath Albee: A buyer persona is a composite sketch of a segment of your buying audience, that is responsible for solving the problem that your solution solves. So think about it when I say composite sketch, think about the commonalities across a segment of your audience. So for example, let's say VP's of marketing, okay? So I don't care if one of your VPs wear stiletto heels and has a poodle and drives a Corvette. I don't care. I can't do anything with that. What I care about is that the majority of VPs of marketing, and I'm making this up, the majority of VPs of marketing have been in their role for at least three years, that they tend to have been in their careers for over 20, that they're trying to shorten time to get products into the market, that what are their specific goals, that they all align around, that they all would nod their heads and say, yes, this applies to us.
I don't care about the outlier things because the goal as a marketer is to reach the widest swath of a particular audience as possible, by being relevant and addressing context, right? Now when you move, of course, closer to getting sales involved, they will apply the one-to-one, but as marketers, we can't do that effectively, even with AI. And I don't care what everybody says, AI, a lot of times the data can tell you what somebody does, but not why they do it. So you need to understand that background information as well. And so-
Michael Webb: So how do you get into their mindset to understand that sort of thing?
Ardath Albee: Well you talk to them.
Michael Webb: Okay, well there you go. I found a salesperson, right? With the skills that I learned, painfully achieved of preparing for a meeting and asking, well-thought-out questions, active listening. And for a salesperson who is taught way back in the day, all the 16 different ways to close the sale and all these objections to overcome. You have to break yourself of that habit and not talk about your product. You have to really zero in and use what the prospect tells you to ask deeper questions, right? Well, this is a sales interview. How do you get to talk to these people in order to be sure that you've got a cross-section that's representative and then how do you know you're on the right track? I mean-
Ardath Albee: Right, well, I need to talk to, when I build a persona I want to talk to, I mean my goal is 20, usually I'm lucky if I can get 10 or 12. But what I want to do is get to the point where I start hearing the same things again and again and again. And then I know I've got enough to be able to help the company create content and storylines that are going to engage the majority of that audience. You have to learn to ask the right questions and believe me, I've had to learn to do it in 30 minutes or less because that's about all the time I can get a customer or a client's customer to give me. And it's one of the first things I do of course is talk to the sales team, find out who are they talking to.
One of the mistakes marketers make is they say, Oh, we've got to get to the C-Suite. And so they go out and they tried to build a persona on the C-Suite. They can't talk to him, so they go out and they just buy a pizza sitting around and decide, okay, this is what's important to them. And you can't build a persona that way. But secondarily, unless you're selling something that is really, really strategic, the CxO is not your buyer. They're going to delegate it to their team. That's why they hired them. They may take a look at it and give the ultimate blessing, but they're not the ones that are going to be buying it or recommending it to themselves with our view. And so we need to get really rational about who we're trying to engage rather than this aspirational we have to get to the C-Suite.
I had one client that was insistent upon C-Suite when I talked to their sales team. What I learned was there was no way they could have conversations with the C-Suite because they weren't prepared. I have a conversation at that kind of a strategic level, nor was their solution strategic enough. So you have to, first of all, make sure that if you're going to do this work, that you're doing work that translates to the sales team. Because otherwise, you're going to generate a bunch of leads and sales is going to say, Nope, not our buyer and go look for their own. So in order to get this alignment on buying, we've got to talk to sales and understand where they are at in this process, who they're talking to, what they're hearing, and then go out and validate that.
Michael Webb: So in the process excellence world, there's this idea of voice of the customer. And traditionally, it has been too narrowly construed into, what do we need to understand about the customer and the jobs they're trying to do in order to design a product. But in fact, you need to know much more than that about the customer. And very few companies actually have any thought put into what do they need to know about a customer. And so we will learn and work with them, helping them develop and measure and improve their sales process. That they really need to have an ongoing plan whenever they come in contact with a customer, trade shows, in conferences, in customer service calls, in account reviews with the customer. They need to be planful in uncovering information that they need to know. I'd love for you to say a few words about the kinds of things that companies should think about for a well-structured voice of customer program that can feed this valuable information for how to interact with them in a digital marketing or sales enablement or just regular marketing.
Ardath Albee: Yeah, well there's a couple of things. In my experience, voice of customer, the same is sure, not well done. And part of the reason for it is, they lead the witness. They're looking for accolades, instead of looking for information and understanding and empathy, right? And so there's a difference there. And when you're looking for accolades, you're asking questions that are kind of loaded already with bias, right? And so what we need to really understand is perspective. What words are our buyers using? How do they view the problem they're solving? Is it the same way you're talking about it or is the marketing spin your companies put on it, alien, we'll talk about it that way. We need to actually be able to address context. We need to understand, what does this problem mean to these people on a daily basis?
How does it impact their job or their team or their ability to achieve the outcomes they're tasked to? What's the risk to them professionally? If the problem remains unsolved and what the heck is in the way of them fixing it? Why haven't they solved it already? And how can we help with that and help them? A lot of times it's because they don't even understand the impact. They've created a workaround, it's just no, this is the way the day works. And so a lot of times we think people are further ahead in the buying process and they aren't, they may not even be in it. Their status quo may be. This is a pain in the butt, but it gets the job done. So heck with that.
Michael Webb: Bigger fish to fry, yeah?
Ardath Albee: And so we have to understand how to talk to people. And one of the things that we really need to understand, given that buyers do not buy in a linear process, is what does that process look like? What do they do? Where do they go? Who do they talk to?
Look at the new things down there that are here that weren't here a couple of years ago. B2B buyers are using review sites for heaven sakes. Now that wasn't around a couple of years ago. Their number one thing that I hear in a call is the first thing they do is reach out to their network. Lots of times on LinkedIn and say, Hey, is anybody else dealing with this? How would you solve it? What'd you do? And so there are a lot of things that go on behind the scene that we need to understand so that we even have a prayer in hell of addressing them. And those are the things that we overlook, we think, Oh we just put a white paper out there or whatever, really? Where you're going to put it? What is it going to address? And so we need to get really savvy about how we're engaging.
And the other thing I think that's interesting is this whole conundrum about personalization. And so, we don't need to know their shoe size in B2B. What we need to know is how does their perspective about the problem that our solution solves that they're struggling with. And how to apply it so that it's relatable to them in the context in which they're dealing with it. That's personalization and B2B. The sales rep will get to the one to one, but from an engagement perspective, we need to put stuff out that gets them nodding their head and saying, Yeah, that's what my day looks like. How do I deal with that? Oh good, click here. We need to connect the dots for them in a way that makes sense.
Michael Webb: Now, do you think that the sales force, that these individuals can be useful in gathering this kind of research? Or does it require a specially skilled person like yourself?
Ardath Albee: Well, I've trained a lot of marketers on how to do it, the salespeople aren't going to do it. And I'll tell you why. Because they're focused on selling. They're not focused on this other stuff. They're trying to get to understand the person in the account they're dealing with and they come to us with very specific singular focus. Like Harry at ABC company would say this, so your persona is wrong, right? Because that's not the conversation they had this morning. What they fail to understand is if they look across all of the conversations, and they took an average about what the conversation was, would this be relevant? And so it's different. Salespeople are very one-on-one focused and they're reacting to the specifics. The stiletto heels or the Corvette or 49ers fan type of thing. Marketers are looking across the bigger picture.
And so somewhere you've got to find a happy medium between the two. But salespeople also dislike anything and they should, that impacts their selling time. So they're not going to do your research for you. And I'm lucky if I can get their attention on calls when I'm working on client projects to tell me honestly what they think and who they're talking to, and tell me what else do they need? What do they feel they don't know. What would be really helpful for them? Because unless we shaped these projects to actually serve the sales team, then marketing is not going to get the ROI or the performance out of the programs that they create.
Michael Webb: Okay. So what would be the differences in your mind, in the focus of someone who's on the marketing team building this content strategy versus someone who's on the sales team who needs to execute? How they work together? What is their relationship? How do you make that positive? Love to have your thoughts.
Ardath Albee: Yeah well, for example, I just read some research from Corporate Visions that says that 75% of all sales calls are now done remotely, right? But most salespeople have been trained in face-to-face selling. It's very different to sales more remotely. So salespeople are now using more content, more digital assets, right? To send to their prospects and what have you haven't really talk about them? They are not going to go read your entire content portfolio. Trust me on this. So as marketers, can we create little microlearning modules that'll say this thought leadership piece's great for somebody struggling with X? Here are the three takeaways and here's what you need to know to use it. Boom, the salesperson has that in two minutes. Is there a way we can provide email templates that help them? Present an idea that could spark a valuable conversation with a buyer and get them on the phone.
Is it for remote selling? How are we talking to them? Salespeople are reaching out via email, via phone, sometimes via text. Those kinds of different things. How do you get their attention in a world where you're saturate? And I can tell you right now, I took a couple of days off for Thanksgiving, came back with 567 emails in my inbox. That was not a pleasant experience and most of them were irrelevant.
So I mean in order to get people's attention today, you have to be really relevant. And so not only do we need to provide the sales team with training on skills and products and that kind of stuff but also on buyers and on content and on how to engage them. And marketers who do all of this research and persona creation and understanding the audience and creating customer experiences and all of that kind of stuff, are often in the best place to help sales with this kind of stuff. And so, when you're trying to work with one foot in both sides, face-to-face or remote, how do you become effective at both of them when they're different animals if you will?
Michael Webb: Okay. So another question from my years in sales training for real senior-level sales organizations. One of the things that I struggled with was that the sales training industry, there's a lot of very talented people and a lot of very good processes. They call them processes and material methodologies out there. But almost uniformly, what they're trying to do is to get a sales team to all do the same (sound of dog barking). Oh, to the benefit of the audience, we have a student participating with Ardath, it's her new puppy who's a year old and has definitely has something to say about our topic. So please bear with us.
Ardath Albee: Sorry about that.
Michael Webb: But, so they would follow step one of the sales process, follow step two and then follow step three and, but sometimes those steps don't exactly fit and there's no real feedback. A real process has a cause and a result, right? An activity and a result and you adjust according to that in the interim as things are happening. It is not a rigid methodology that must be followed from A to Z. And it strikes me that there's probably people in this digital marketing world who likewise are coming up with a sequence and boy you put it in an autoresponder sequence. And it's going to go out, but they don't necessarily build in the feedback that tells you if it's actually working or not. Is that something you see and how do you counteract it?
Ardath Albee: Well, yeah, I see it all the time and one of the things that I'm not sure people understand is that if you understand your buyers and you're creating content to help them with this specific thing, the way they engage with it can give you a lot of feedback. And one of the problems that I see a lot of clients have is that they will create in quotes campaign, which I hate the word campaign because they start and stop instead of continuously tell a good story. But they will create a campaign and they'll put all the pieces together and they just shove it in the marketing automation platform, right? And hit go. So every week or so, every two days, whatever it is, an email shoots out regardless of what has happened with the last one. And so it's kind of set it and forget it thing, which automation has enabled for us, which really kind of stinks in my opinion. Because the only way we can actually improve engagement is to monitor what goes on and make adjustments, and tweak things and figure out what's working and what's not. And why?
Go find out why, and we don't do that. We tend to evaluate campaigns and say, well this one worked and this one didn't. But we still don't have any understanding about why. And part of that is because we haven't gotten to really understand our buyers. We don't know and we're not using our data in a way that helps us evaluate. Did the content do what it was supposed to? And one of the examples for that is, I see a lot of dead-end marketing or we're more concerned about sending the email out with LinkedIn and they clicked on the link. Great. They read that piece of content, but there's no what's next. There's nothing else for them to do, except maybe request a sales color or demo. Well, what if they're not there? What else should they learn next?
And we're not connecting the dots. And so if we think that they're going to go out and look for what's next on their own, we're crazy because they don't have time. They're not going to, they're going to just leave and say thank you very much. I call those drive-by views and go on with their day, rather than engaging. And so the point should be how much engagement can we build by telling the right story, right? Because if they're not learning from you and they're intent on solving the problem, they're going to learn it from somebody. And if it's you, then you become the anchor for the reference point for how they're going to solve a problem. If it's somebody else, you've just abdicated that.
Michael Webb: Still, so obviously this is a rich and deep subject. I could talk about it all day and you have really valuable insights and experience on it. If someone wants to get educated here, get their head into this, and learn to understand a structured, effective approach to think about this and then to begin implementing this. Which of your two books would you recommend?
Ardath Albee: Well, it's interesting that you asked that because I wrote eMarketing Strategies in 2008, it came out in 2009. It's now outselling Digital Relevance because people finally caught up to that. So it depends on where you are. I figured by the time they catch up to digital relevance, I'll be retired. So it just depends on where you are. I think both books are good. What's validating to me is that the book I wrote back in 2008 still relevant 10 years later, but Digital Relevance, of course, is more up to date. I received a comment via email from somebody who just bought and read eMarketing Strategies, and asked me why I didn't have more stuff in there on social media, social selling? And I responded, the book was written in 2008 we didn't have that.
Michael Webb: Very good. That's fascinating. It sounds not to be presumptuous, a little bit similar when I wrote Sales and Marketing the Six Sigma Way in 2006, and when people read my new book, which came out in 2014, Sales Process Excellence, you're like, Holy cow, what an advance, well you went way farther than you had before so. That's great. So both of these reading them one after the other would probably provide a very good structure for someone who wanted to do this. And I know that there's a lot of people out in the audience who would be interested in learning about that and experimenting with it. So if someone wants to get ahold of you, how would they do that?
Ardath Albee: Well, they can come to my website, which is marketinginteractions.com or they can find me on LinkedIn under Ardath Albee or on Twitter @ardath421.
Michael Webb: Superb. Ardath, this has been great. I have a bunch of more questions to ask you, but looking at the time, and we've already been on here for about 40 minutes, so thank you for this. Would you be able to come back to the show at some point, do you think?
Ardath Albee: Absolutely. I'd love to. Well, you and I can talk about this stuff for days, so.
Michael Webb: All right, good. Thank you very much. This was really, really helpful and useful and we look forward to the next time.
Ardath Albee: Thank you. It's been a pleasure. Bye bye.
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Drew Locher | It Takes Energy From Leaders
10 mars 2020· Sales Process Excellence Podcast
Hello everyone, this is Michael Webb, and this is the Sales Process Excellence Podcast. Today I have a guest that I've been looking to for quite a while. My guest is Drew Locher, a management consultant par excellence. And I've been following Drew for quite a while. Drew, could you tell us about your background, introduce yourself and how you got into what you're doing today.
Drew Locher: Thank you Michael. And thank you for having me on your podcast. I greatly appreciate the opportunity to speak to your colleagues and constituents. So a little bit of background. Basically I grew up in the 1980s in a corporate management development program at the General Electric company. And it was there that I got introduced to, what we called at the time, world-class enterprise and quality management concepts. And we were expected to apply those concepts in whatever management role that we had.
I was with GE for seven years. I left in 1990, went back to school for organizational behavioral science. Up to that point my background was in engineering, several engineering fields. And at the same time I went out and started working with different organizations in different industries trying to see how these world-class and quality management concepts applied in different environments. And that's what I did throughout the 90s, working with typically smaller and medium size organizations. That kind of grew into working with larger organizations by the end of that decade.
So I've been working with all kinds of different industries over the last nearly 30 years on my own, including healthcare as well as manufacturing, financial service companies, even higher education. They're currently trying to apply these concepts to their operations. And I've been kind of doing that for 29 years, 30 years. And wrote a few books, which kind of gets you some notoriety as you know, in the field. Mainly focusing on the application of the concepts, what we would now call lean concepts to non-production environments. Three out of my four books are on that topic. So how do we apply the concepts to finance and accounting, sales and marketing, designing, product development or any development really. And that's what I've been doing for a long time now.
Michael Webb: Excellent. Excellent. Unlike me, you sort of started off in management and got introduced to this and have been in the quality and productivity sciences of management for almost your entire career. I started out in sales and I had to go to three different industries. So very interesting and a really deep background. And maybe that's why you write such a good newsletter. I love following you.
Drew Locher: Oh, thank you.
Michael Webb: I've been following it for a while now. And in April you wrote about a topic, it caught my eye, The Science of Management. And you reflected on your training as an engineer and you observed that there's principles or laws that explain how reality behaved, and that some of them also apply to management of organizations. I thought it was really insightful. So before we drill into them, I thought maybe I would just cover an overview of the ones that you introduced and then we'll kind of dive into them.
The first one you used as the example was a Newton's first law of motion, right? An object at rest stays at rest, an object in motion stays in motion. The second one was the second law of thermodynamics, right? That energy or order decreases without effort or work. And third, you introduced the idea of a system, that feedback is necessary to keep results in the desired range. And then fourth was a reference about learning in organizations, and that seemed to be more about the human mind than about a principle of physics. But we'll get into that.
So these are fascinating topics. I promise you there are people in the audience who might think, "Oh my God, you're talking about physical properties, this isn't going to apply. How could this possibly apply?" But it really, really does in a fascinating way. So Drew, let's start at the beginning. This first law of motion, an object at rest stays at rest. Tell us how that applies in the science of management.
Drew Locher: So I only chose four, I'm sure there's more. But those are the four that came to mind when I wrote the piece. But that particular one, it dawned on me as soon as I went back to school in 1990 for organizational behavioral science because there was an expression they used, organizational inertia. And I'm like, "Oh, I know a little bit about inertia." And so it caught my attention early on that one. And as organizational behavioral science folks have recognized, the application of that theory for a long time now, at least decades.
The second one, the second law of thermodynamics, that was something that sort of dawned on me as I was studying organizational behavioral sciences. And I've seen subsequently people also referring to it, entropy in particular, and not always applying it or citing it or referring to it properly. So that for the last few years has been in my mind thinking I need to write a little bit about this at some point just to kind of clarify things because I've seen people refer to it and not always correctly.
Michael Webb: So let's take those two, right there. As it applies to management, what does management have to do as a result of the law of inertia?
Drew Locher: Well, they just can't leave things be. They've got to inject energy into any system. And an organization is a system. A closed system. And we've seen evidence of that in any... pick a topic. I think in the newsletter, I refer to Five S. I often hear organizations or leaders of organizations kind of complain that it can't sustain Five S. And I'll talk to them about, "What is your sustain model?" And they kind of look at me puzzled and maybe they do periodic audits or maybe they used to and they got away from them, or maybe they did them, but they didn't really do them properly. They didn't engage people in participating in them, so it became like a police action when people did the Five S audits.
And it's true really of any organizational change. You have to continue to follow up for various reasons, not just injecting energy but really making sure new habits are formed. One of the other things I studied in the early 90s was habit forming. What does it take to create habits or overwrite existing habits? And that all takes effort. It takes energy really on the part of leaders in particular.
Michael Webb: So you're saying that management needs to recognize that in order for things to change, they can't just issue an order or tell people what to do, they have to plan that people aren't going to be able to keep it at that level or keep that change in place unless they have a plan that keeps it in place. What would be an example of something that managers and executives would need to put in place to keep a change in motion?
Drew Locher: Well, in lean terminology, it's just go see. We always say go to the gumbos, as Toyota calls it. But you need to have a focus when you go see. So the focus could be on, are we sustaining Five S? And, oh, by the way, I should involve people from the area in that observation, that go see activity. And I can use it to reinforce the importance of it, I can use it to teach people more deeply of what that topic is, and what it's not. And you can use, again, pick a topic, visual management, leaders have to go and use the visual management. They've got to go see how other people are using it if they want to sustain it over time. If they don't, it sends a message that, oh, this is important, or this is just a flavor of the month kind of thing, with a beginning and an end. And people will make assumptions that, oh, leaders don't find this important anymore, so we'll just stop it.
Michael Webb: Okay. All right. So in operational excellence and lean, there's this idea of standardized work, which a lot of salespeople just bristle, right? In fact there's a lot of value of that in salespeople, but are you referring to something that managers have to do? Well, it means like something called management standard work. So what would be some of the things... I mean, there's got to be some of the things that would be necessary to keep entropy from the order or the energy from declining. What would we be involved there?
Drew Locher: So you bring up the topic of standard work. So that would be a focal point or a focus of a go-see of a manager. They should go see existing and observe being performed, existing standard work in their area of responsibility, with a particular focus on standard work that was recently changed, is what I always suggest. So that's another topic for go-see. And all of the go-see activities as well as other activities make up the lean management system, and a leader's personal commitment to that system should be documented, I believe, in what we call today leader's standard work, which is just really a multitasking version of regular standard work. It's a leader's plan of how they're going to participate and support the lean management system on a daily, weekly and monthly basis.
Michael Webb: So question, if I am the leader of a sales and marketing organization, and I'm interested in this idea of standard work and standard management work, and I want to try to figure out what that consists of and translate it into my world of selling marketing, servicing customers. Is there a good succinct description of what are the components of management standard work that I could use as a model to figure out how it applies to sales and marketing?
Drew Locher: Well, there's a model. A matter of fact, I have a brief, I think a two part YouTube series on the topic of what leaders standard work is, what should be in it, and also the process of creating it that they've learned is helpful. But really, fundamentally, people have to recognize that what they do are processes, and that is not always apparent to people in the sales and marketing world. That they take great pride in the creative nature of what they do, the relation, the strong relationship management nature of what they do. And they don't always recognize process because the leader standard work is created... It actually documents all of the different activities or processes a leader is expected to be involved in. Just like standard work is for a particular activity or process. So first and foremost, people have to recognize the processes they perform. And that's usually where I start and say, "Well, tell me what your processes are?" And that's not always a quick response to talk it through.
Michael Webb: Right. Interesting. Okay. We'll put the link to your video, your two-part video on management standard work in the show notes page for everyone. Out of curiosity, I ran across a book a few years ago by Jim Lancaster, The Work of Management: A Daily Path to Sustainable Improvement. I thought that was very well done because he talks about starting at a state where management was just kind of by walking around without a lot of forethought and planning to it, and how his mind got changed by his experiences, and now he's able to improve the order and the productivity of his managers by design, by the way he goes through it. So I thought that was possibly a good list. Are you familiar with that book?
Drew Locher: Oh, I'm familiar with Jim. He's the real deal. His company LandTech, his father was an early adopter of lean concepts. Matter of fact, they were written up in the original lean thinking book from Jim Womack and Dan Jones. And Jim has taken over the business, the son. And he's a deep system thinker. Great. He's the whole package. I mean, he's got the interpersonal skills. So it's a book I highly recommend put out by the Lean Enterprise Institute.
Michael Webb: All right, cool. So then there was this third idea. So we have, if an organization is in a certain state, it's in motion and it needs to change, you have to inject energy. And when you do inject the energy and change its direction or its momentum, you have to have a way to maintain it over time. Your third idea introduced the concept of a system, right?
Drew Locher: Yeah.
Michael Webb: And systems thinking. Let's talk about that. And then you went from that to feedback. So tell us how those things apply to in a management context.
Drew Locher: Yeah. I was actually introduced to the concept of system thinking to organizations before I returned to my studies in the early 90s. And it was really Deming. If everyone knows Dr. Edwards Deming, he's the father of quality management and all these principles were trying to encourage organizations to apply. And I was introduced to his concepts in the 1980s as part of my training at GE.
In one of the readings, I believe, there was a picture, a graphic of a system model, which really kind of struck me. And his whole thing is organizations are breathing, living organisms that have to adapt. They need inputs to tell them where they need to adapt. Things like voice of the customer. And that's why the sales and marketing folks are so important to a lean enterprise at some point.
Michael Webb: Right.
Drew Locher: So then when I went to do my organization behavioral studies, then it really sunk in. I was like, "Oh, okay, I get this." Because we were introduced to system theory thinking, which was taking hold in the early 90s, really late 80s, early 90s.
Michael Webb: Okay. And so systems thinking, the way I think about that, and I just bounce this off of you, I think about it, what it really is, is the law of cause and effect.
Drew Locher: Absolutely.
Michael Webb: Entities behave according to their nature. And so you can describe those in the physical world by the law of motion and thermodynamics. There's mathematical that we've observed that entities behave in these ways that are predictable by mathematics. And so in an organization there's cause and effect also, right? And so in a... We call them systems, but really it's cascades of systems, right? Because the company exists in a market, the market exists in a political environment. Inside the company, there are functions and departments. Inside the departments are the people and the roles that they play. And there's the systems, the software that dictates how they do their reporting. And then there's the training that they have and how they're compensated. All of these things make it a very complex environment that often behaves in counterintuitive ways. So tell us about the requirement for feedback and why is it necessary? What does it enable us to do?
Drew Locher: Well, it's even a little more fundamental than that. You have to have a plan, a standard, a normal condition, whatever terminology you want to use, so that then you need sensors to tell you what the actual condition is to compare it to the two. So it's no different than your thermostat in your home, right? You set it and then it's constantly measuring the actual ambient temperature and adjusting accordingly. So it's no different. But it starts with what is your standard or normal condition, so we can have something to compare it to and then adjust. And in lean terminology, that's this whole plan versus actual concept, which is prevalent throughout lean thinking. Again, I can use Five S as an example. There's visual standards, and when we go observe are we sustaining? We can see things are out of place or things aren't being replenished like they should. That kind of stuff.
We can see those quickly and easily only because we have standard conditions to begin with. Measurement systems of any form, process measures, lean enterprises all have an abundance of... It's not just the chart and the data, but we always say you have to have some sort of standard or goal. So we can see, are we hitting the standard or not? And if we're not, then that stimulates a conversation in electronic and electrical systems. That conversation is more audit or can be automated. Again, much like your thermostat, it'll automatically adjust. The key is to have the right sensors in your organization and measures help with that. But we've got to be timely measures. Your thermostat is operating in real time, and too often metrics or outcome metrics that are very backwards looking. And it's particularly true in sales and marketing, but it doesn't need to be these days.
Michael Webb: No.
Drew Locher: But it's not just that, there's quantitative, but there's also qualitative. So we talk strongly, and have for decades, about voice of the customer and what are your processes for voice of the customer? What are your customer touch points, and have those processes developed standards so we can kind of keep feeding the feedback loop to see where we need to change or improve or even more strategically where's the market going?
Michael Webb: Yeah. So in sales and marketing, in a lot of organizations, this term key performance indicator. And I have had companies I worked with and clients as well to say, "We're going to go look out in the market, in the industry, and find the best key performance indicators and bring those best practices into our organization." And that never seems to work. Could you speak to why?
Drew Locher: I think a lot of it is this lack of process thinking because if I don't see a process, I don't have to standardize on it. I don't have to measure it. These are obstacles I've encountered quite often working in a sales and marketing area.
Michael Webb: Okay.
Drew Locher: So how do we get people to see process in what they do? That's often the first step.
Michael Webb: I remember being in a conversation a number of years ago, and some executives of a pretty well-known company were talking around a big conference table, and we were talking about Deming's management cycle, plan, do, check, act. Or plan, do study, act. And one man made the observation, "Well, a lot of the people in my team, they just don't want to do that. They're just not interested in that." And the comment came back a little bit later, "That's a management problem." If your employees don't want to do that, if they don't want to follow a process, they don't want to do PDCA, you have to find out why, and if you don't, you're not going to be able to create improvement. Would you say that's fair?
Drew Locher: Oh, absolutely.
Michael Webb: So then why don't executives, why don't managers, excuse me, why don't employees want to do process or PDCA? And what can managers and executives do to break through the barriers?
Drew Locher: So I don't know if you've read the newsletter I wrote on Psychology of Learning. That was another one that came out, I think, earlier this year.
Michael Webb: Okay.
Drew Locher: The first thing you have to do for anyone, that you're asking them to do something different, right? Measuring or just even seeing process, you have to give them a purpose. So why? Because if people don't have a purpose for whatever you're asking them to do, then they're not going to even consider it. So leaders have to provide that purpose. So why we need to see process and sales and marketing? What are the problems that we're having today that are not being met maybe due to our lack of process or really defined processes?
So sometimes things are going okay and everyone believes it's going okay, and then leaders have to create a gap and say, "Okay, well we have to strive to improve or reach this new goal and here's why." Maybe something's going on in the market and the competitive set that they're dealing with. So a good example is... And I'll use a specific sales and marketing one. We were going to map out the process of bringing on board a new sales person at a company, this was years ago, and before we mapped anything out and got the team assembled, I asked, "Why?"
They weren't real clear, the VP of sales and marketing, or I think it was this title. I said, "Go gather some data." High level data. And we talked about some possibilities. And he came back. And what he showed was that when they had a change in a salesperson in a region, he could show the economic impact of that. The negative economic impact of that in the transition. And it was millions of dollars. When you added it all up, it was several hundred thousand dollar impact per salesperson. And these guys were in the commodity business. A lot of salespeople working in the retail industry. And once he had that, now he was really clear on what the motivation was, and then he could articulate that to others. And that's what we did when we kicked off the event. People were like, "Oh, we had no idea." I was like, "No. No, you didn't."
We always had to get purpose for anything we're asking people to do differently, and the purpose could be addressing existing problems, which are gaps, or leaders have to create a gap, forward looking gap of higher level of performance. But to have a reason why too, not just because, "Oh, we've got to get better." Unfortunately, that's not enough for most people. Well, everyone wants to improve, right? Well, no, not actually. It's not the way humans were. They're comfortable in their known and familiar environment, they don't really want to change. I'm sure you've heard the expression comfort zone, right? People's comfort zone.
Michael Webb: Well, and it's even more than comfort zone. I mean, this story leaps to mind. I had this sales executive in a professional association here in Atlanta, and he was lamenting about how hard it was for his sales team to find qualified prospects because there were so many of them. And so they were just hitting the phones, doing prospecting calls, and they expected them to do 75 or 100 phone calls a day. And so I said, "Well, there might be some scientific kind of experimental ways to make that work a lot easier. Would you be interested?" "Oh sure." "Great." "So, tell me about the experiments that you do." "Oh, we do experiments all the time." "Oh, that's really cool." "So what kind of data did you have?" He said, "Excuse me."
Drew Locher: Yeah.
Michael Webb: "Yeah, what kind of data?" "Oh well, just the standard data that's in our CRM." "Oh, okay. So what kind of improvements have you done?" "Well, our guys are all doing experiments every day." Of course, it was on their own, it was completely unstructured, there was no baseline, there's no cause and effect thought process, they're just out working. And that's what he thought experiments were. So a lot of sales managers they don't even get the concept.
Drew Locher: Oh yeah. It's amazing. Certain terms like an experiment can have a very different meaning in different people's minds. It's like the term problem. It can have very different meanings in people's minds.
Michael Webb: And that has led me down a path, let me bounce this off of you also. Deming spoke and much of his work was brilliant illustration of the power of understanding variation. And in sales and marketing, we have almost no data in most organizations. Well, we used to have almost no data, now we got things people think are data, and there's too much of it. Right? But if you don't understand what that data means, how it ties to reality, if you don't have operational definitions, if you don't understand variation in terms of words and concepts, then your numbers are out of context. They don't mean anything. So you have to understand variation in your operational definitions first. So to the point you just said, people don't really... They have the word experiment. The word customer means different things to-
Drew Locher: Oh, yes.
Michael Webb: ... the same company, right? So you have this system, you have these animals, wild animals, these human beings that are in the organization, and you're trying to get them to improve. And as you pointed out, they have to have a purpose, so you as the executive need, you can't just give them a purpose, right? You have to see what's important to them too, right?
Drew Locher: Well, it should be an inspirational purpose. So people should be able to relate to it on a personal level, and be able to see how they can affect that purpose.
Michael Webb: Yeah. I remember working in a sales training company, and the inspirational purpose we were given, we're going to be the best senior level sales training organization in the market. It was a great purpose because we had a great process, we had great skills.
Drew Locher: But what does that mean, what you just said?
Michael Webb: Exactly. What does it mean? What do we do differently?
Drew Locher: What is great?
Michael Webb: What are the executives going to do differently? It was like the same guys, our managers would go around and interview each of the sales trainers and take our feedback in, and then the company needed to make some important decision. So they heard what we said, and then they announced their decision, it had nothing to do with anything that the guys called them. It was like they were kind of doing the dance but not walking. They were, what do you say, talking the talk not walking the walk. And so this idea of a vulnerable... Not vulnerability. I guess it is vulnerability. Leaders have to understand what are the problems that are preventing the people in the organization from improving. And you have to kind of go back and forth with them to make agreements about where we're going to prioritize and why we need you to try this for a while. I find that especially in sales organizations, I'm curious, have you seen that too?
Drew Locher: Oh yeah, absolutely. A lot of folks in the sales and marketing world, they're very independent, they're very individualistic, tend to be. And sometimes it's the nature of that, just the traveling and things that they often do. Sometimes they lose connection with the organization because of that. I've seen that firsthand. And then couple that with there's just lack of process thinking. It makes it for some formidable obstacles, but it can be overcome. Those obstacles can be overcome if we are properly motivated.
Michael Webb: Right. Okay. And so now let's wrap up here on the fourth reference, which was about learning in organization.
Drew Locher: Yeah.
Michael Webb: That struck me because it wasn't really a physical principle that applies. So speak to that a little bit.
Drew Locher: So the idea, and what I referred to in the piece is artificial intelligence, which I studied as part of my computer engineering degree studies. And within AI, in the 1980s, it was just kind of starting. Within AI, there was a thing called knowledge based management. And I learned that in the early 90s. And actually we had applied some of those concepts, I didn't know that's what they were called, in the late 80s in GE in our aircraft engine business. Where we were starting to kind of do predictive maintenance, where you could predict when you needed maintenance. This is different than preventative maintenance. Again, conditions of the aircraft engine would change and you would know that, okay, I've got to do some maintenance on that. Well that came from experience. And people a lot smarter than I in our aircraft engine group because I had a chance to work with them briefly on this project was they were developing software, which was drawing on those experiences.
So that's kind of where I saw it, but then when I learned about AI in particular in school a little bit. Actually it was around the same time, now that I think of it. I was like, "Oh, okay, I get this." And then when I went to study what does it take for people to learn and develop habit and skills, that's when I started realizing, okay, this is all part and parcel of the same concept. It's not physics per se, but control systems isn't physics really either. It's about taking information and reusing that, whether you can infer from it or just set up some simple rules that people can follow. It's all part of that.
And there was a great book, if you haven't read it, I strongly recommend it, even though it's about 30 years old now, which is Peter Senge's The Fifth Discipline. The art and practice of the learning organization. It was way ahead of its time. So when I read that in 1990 I was like, "Oh, wow." What's interesting in sales. For example the sales and marketing, oh, we do lots of experiments, but we're not learning because we're not doing it in a scientific way. We're not capturing that learning for reuse. So that just people off on their own winging it, which is not really good learning.
Michael Webb: Right. And you have unarticulated assumption that sales is about what salespeople do, and it's way more than that, right? The sales process doesn't start when the customer calls a salesperson. The sales process starts by whatever caused the customer to call the salesperson. The market awareness. And today in particular, customer prospects don't want to hear from salespeople. They want to do stuff that's going to help them solve problems. And they're looking on the internet. So if your company doesn't have the right kinds of offers and assistance, the salespeople, their job's getting tougher and tougher. Banging the phones, making calls, and that's a sinking ship. But if you think about this... Your example of the engine is a great one, I think, because they have sensors and they detect subtle changes in the vibrations of the behavior of the engine and they've learned which ones are indicating that a bearing might be going bad, or the oil is losing its viscosity or whatever.
So they can detect that preventative maintenance needs to happen in organizations which are filled with physical systems, machines and software, and human systems, which have hearts and minds, right? Free will. We need to capture our learning in a manner that those hearts and minds can use it. And so in sales organizations, if you have properly defined your operational definitions of what makes a good prospect, it presents an opportunity to detect changes in the quality of the input of prospects to the sales process, which gives you a signal long before the market turns right, or a recession happens. So instead of your company floating along and when the tide comes in, we do great, and when there's a recession, we do bad and you're helpless, you have some forewarning. You have some ability to do counter measures, but that's at a high systemic level. And it requires these people in the organization just like in the manufacturing side, to have a clear shared understanding of the causes and the effects and what's value and what's waste, so that senior executives can see signals that actually tie down to observable reality.
Drew Locher: The example you just gave where, let's say, you found what makes for a good prospect, and I had not, for whatever reason, I'm a slow learner, I'm new to my job. Boy, if we could take what you learned and document that in some simple way and share that with others, we can have huge impact on ourselves and our organizations because people can get up to speed quicker.
We talked earlier about standard work, and I do a lot of lean in office environments and other environments where it's more like knowledge workers. And I would always say sales and marketing people are knowledge workers. Engineers are knowledge workers. Even certain manufacturing environments are knowledge workers. Well, what does knowledge worker mean? It means what information I need, where do I get it, and what do I do with it in terms of what decisions or actions do I take. And if I can kind of standardize all of that, I can transfer that to others, shorten their learning curves, improve their performance in timely manners. I mean, that's the essence of knowledge reuse.
Michael Webb: And the essence of a learning organization.
Drew Locher: And the tools that are available to do it, I'm describing it, they're readily available. You mentioned CRM systems earlier, the capability that's there is amazing if we use it. So I've got to take some time to put some notes or something in it so you could reuse it later maybe for that customer or we run some reports and things that show us trends or just having conversations of best practices
Michael Webb: Yes. To have so-called best practices that actually are proven by data that shows the cause and effect, right? And I've said for years, CRM systems is software, but if you don't have the wetware, what goes on between people's ears lined up and organized, the software is not going to do you much good. Right? At least in collecting data across a system. Now software can encourage people to capture the right kind of information. Now we're back to the forethought and thinking of managers to identify what are the signals and what's the noise, what are the important things and how do we change the behavior and keep that energy from dissipating in the organization.
So Drew, this has been a great conversation. It turned out exactly the way I hoped it would. So thank you very much for being here and your great examples and your really authentic way of thinking about it and addressing it. If someone in the audience wants to start reading your newsletter or get ahold of you for a reason, how would they do that?
Drew Locher: You can go to my website and there's on the front page, I think the homepage, there's a place to sign up for the newsletter. I don't put them out regularly, it's just when the mood strikes me and I think I have something to say that people might benefit from. So I might put out four or five a year at the most. But people are welcome to sign up for that and they can do it through the website. You mentioned also some videos I've been putting out on YouTube. I have a YouTube channel and people can sign up for those so they get notice of when something's been added. We mentioned earlier about leader standard work. I have a video I just put out on metrics, and kind of the process of figuring out how do you come up with metrics? Not specific to sales and marketing, but any process. How do you turn to determine a set of metrics that you want to start, outcome and process metrics. That might be of interest too.
Michael Webb: I want to leave all these links. So what is the URL for your website? Just so the audience will be able to find you.
Drew Locher: The letters CMA4results.com.
Michael Webb: CMA for Change Management Associates.
Drew Locher: Yep.
Michael Webb: Number 4.
Drew Locher: Results.com.
Michael Webb: Dot com. Okay, cool. Drew, this has been great fun. Thank you for being here and I would look forward to having you again sometime.
Drew Locher: All right, thank you for having me.
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Oscar Trimboli | The Cost of Not Listening
18 févr. 2020· Sales Process Excellence Podcast
Speaker 1: You're listening to the Sales Process Excellence podcast with Michael Webb.
Michael Webb: B2B sales and marketing works to find the highest quality prospects, reach decision makers, and sell value. Operational excellence uses data and systems thinking to make changes that cause improvement and eliminate waste. My name is Michael Webb and this is the Sales Process Excellence podcast. In the next 30 to 40 minutes, we're going to destroy the myth that these two groups conflict and show you how to bring both strategies together to create more wealth for your company and your customers.
Hello, this is Michael Webb and I'm delighted today to introduce you to a fellow I just learned about about two weeks ago with a fascinating background and a very fascinating and important topic. His name is Oscar Trimboli. Oscar, welcome to the podcast.
Oscar Trimboli: Good day, Michael. I'm looking forward to speaking to you and listening to you as well.
Michael Webb: Oscar, if you can't tell from that little snippet of his voice, he is currently speaking from Sydney, Australia. And so it's in the morning his time; in the afternoon, my time. And our topic today is going to be listening. Everybody knows in business to business, listening is a crucial topic, not just interpersonally but inter-organizationally. So Oscar, please give us a little background about your career and how you got into this fascinating topic.
Oscar Trimboli: Michael, I'm on a quest to create 100 million deep listeners before I leave this planet. I think I'm obsessed with the commercial cost of not listening. Every employee that's ever left an organization, every customer you've lost to a competitor, every supplier that's not giving you their best, has all come about through a lack of listening. Every project that's run over schedule and every pipeline that's blocked in the middle, like a plumbing system where the surges is backed all the way back up, it's all a result of not listening.
A lot of us think that our pipeline should have this mythical shape that's a beautiful wide funnel at the top and it comes narrow towards the end. And then these crazy people, the customers, get in the way. And the reason most of us have this really wide funnel right in the middle where it should be narrowing is because we're not listening.
And the most important thing we're not listening to is what's not said. Too many of us are listening to what is said and not enough of us spend time exploring what isn't said. So if you take one thing away from today, it's the 125-900 rule. I speak at 125 words a minute, but I can think up to 900 words a minute. So that means the first thing out of my mouth, there's an 11% chance that what I'm saying is what I'm meaning. And for most people in sales, what they do is they only listen to what's said. Great sales leaders, great sounds professionals, listen for what's unsaid.
Michael Webb: You have a background in B2B you were mentioning before, run through that for us. I think my audience would... It would help them understand where you're coming from.
Oscar Trimboli: I started off as an audit clerk in an accounting firm. And six weeks in, we were working on manual spreadsheets in those days. A3 pieces of paper with pencil, so I'm dating myself here. And my manager discovered six weeks in that I had this thing called dyscalculus, which meant I transposed all my numbers, which kind of ended my career in accounting very, very quickly. And as a result, I was kind of on a cadet ship where they would pay for my books while I was studying and working full-time. And I was completely devastated because my dad had always said to me, "There's one job that will never get done awy with... You'll always have to have accountants. So become an accountant."
And my managing partner of the accounting firm came up to me and says, "Well, Oscar, what do you know about computers?" And I said, "Well, Bill, I know absolutely nothing." And he said, "That's fantastic. We'll never lie to each other going forward. You will now install the accounting software in this organization or you'll need to leave. So the choice is completely up to you." So that started a journey of installing, implementing, and selling, doing the professional services and installations and implementations, training beyond in accounting software, whether that's sort of small accounting practices or large corporations. And I spent two decades doing that.
Then I went into work in product management inside a big telecommunications company and spent a lot of time intersecting between engineering, marketing, and the sales organization. And then finally 11 years at Microsoft doing a range of roles from sales, product management, operations. And even rebuilt the graduate program while I was doing my day job there as well. So most of my life has been stepping into lobbies inside buildings, going and visiting reception, and having conversations with customers who want to buy software of some kind.
Michael Webb: Okay. So now you speak and you consult about listening, which is the Jack of all trades tool that you need to have in your pocket if you're trying to deal with and influence people. So what experience did you have that caused you to make this big transition from being part of an organization and helping them succeed to an independent person helping people with this tool or method? What experience was it or trials caused you to do that?
Oscar Trimboli: Michael, many people often said to me, "Could you teach me how to do that?" And often I'd say, "What do you mean 'do that'?" And they said, "The way you listen, you hear things that no one else in the room is hearing." And I kind of often brushed it off, but then a vice president at Microsoft said to me after a very tense negotiation we had, at about the 20-minute mark, I asked a question, which was simply, "What assumptions are we really holding tightly that could be completely false?"
The room shifted, the change in dynamic was very noticeable, and at the end of the meeting the vice president said, "Can you stay behind?" That's kind of like when your wife says to you, "We need to talk." It's not a good moment. All I was doing in my head was calculating how many weeks of salary I had left in my bank account. And Tracy said something that stayed with me for the rest of my life. She said, "Oscar, you didn't notice what happened at the 20-minute mark, but if you could code how you listen, you could change the world." And all I could say out of my mouth at that time, Michael was, "Do you mean code or code code?" And she said, "No, I mean code code," which is turn what I know into software, which eventually I guess I'll do. Code just meant make it into a methodology and put it out in steps like we've done with a book and like we've done with the playing cards and the jigsaw puzzles and all these other things we use to teach leaders how to listen.
And during that time I came across a really interesting statistic. By the third decade of a corporate career, you will have had up to 15 training courses in how to speak, yet no training whatsoever in how to listen. Now, if we believe that communication is 50% speaking and 50% listening, with only 2% of us having any training in how to listen, I think that's one of the big productivity hacks of the 21st century. If you want to stop doing back-to-back meetings, if you want to stop having conversations about opportunities that are slowing down, I think it's listening that's the key. So if it wasn't for Tracy pointing out to me that there is a way to code listening, I wouldn't be talking to you today, Michael.
Michael Webb: Articulate it into something that other people could implement what you do. The way your mind works then enables you to exhibit that behavior. What were some of those things?
Oscar Trimboli: Yeah, we've coded it down now to the five levels of listening. The five levels of listening start with listening to yourself first; listening to the content second; listening for the context third; listening for what's unsaid four; and then listening for meaning, level five. Most people don't understand that the listener's job is not to make sense of what the speaker is saying. The job of the listener is to help the speaker make sense of what they're thinking.
And for a lot of us, we spend all of our time trying to make sense of what they're saying, where all we need to do is use a couple of really simple phrases like, "I'm curious what else you're thinking about. Tell me more." Or, "What else?" If you can use these simple phrases you'll start to unlock what's unsaid. You'll start to unlock those 900 words that are stuck inside their head.
So for a lot of us, we get obsessed with fixating and focusing on words that people actually say, yet there's eight times as many words stuck in their head that they haven't said. Now, Michael, you've often been in situations where if you're saying, "Tell me more," they will draw in a breath. They'll go and they'll say, "You know what's really important we haven't discussed?" Or they'll say, "You know what's critical? You know what matters the most to me? You know what I mean to say is..." All these phrases will start to come out because people have been given the time to think a little bit longer about what they want to actually say. For most people, what's inside their head is like a washing machine on wash cycle. It's dirty, it's sudsy, it's agitated, it's moving around. And the minute they talk, it's like they're in the rinse cycle.
So I don't know about you, Michael, but at my stage in life, if I go to a doctor and they give me an 11% chance of surviving a surgery, I'm asking for a second opinion. But most of us in B2B conversations take a punt every single time we take an uncalculated bet that we will work with the 11%, rather than doubling our odds and simply saying, what else? And doubling that to 22% to get another 125 words out of the speaker's mouth. But our ego gets in the way. We want to get to listen for product or service codewords that we can latch on to. So I think for a lot of us, everything we do, we go, hey, they speaking at 125 words a minute, but they've got 900 stuck in the head. Ask them, what else? And you'll quickly get to the end of the solution faster.
Michael Webb: It sounds like what you're really saying is that the job of the listener is to help the speaker improve their ability to think critically.
Oscar Trimboli: That's the job of the listener. The listener's job is not there to make sense of it themselves because the likelihood that the first thing that comes out of their mouth is something that's sensible, is 11%. And most of the time clients will say to me, they'll try these techniques and they go, "Wow, that took a little bit longer, but I realize it actually made it shorter in the longterm because we got to the point of asking who else is involved in this approval process?" Or we got to the point of asking, "When projects like this have been running your organization before, what have been the obstacles getting in the way?" And all of a sudden this huge landscape opens up not just to the current opportunity, but it also opens up opportunities for people to think about that they've never considered as well.
I think one of the big things that sellers don't do well... I think sellers do a good job of trying to beat the competition, but they don't do a good job of selling the business case because they outsource that to the client. So one of the things you want to be able to do is listen for how the organization, not just how they buy, but how the business case gets approved internally. I've always worked with great salespeople, and three of them just all happen to be Scottish, Michael, and all of them said to me, "It's not enough that we beat the competition. We're competing against toilet paper, we're competing against telephone purchases, we're competing against oil consumption. You don't know what you're competing against, Oscar, until you understand what it's going to take to get a business case over the line." And if you listen for the business case, rather than beating your competition, the bottom of the funnel will move much faster as well.
Michael Webb: Yeah, so I spent about eight or nine years in professional sales training, and one of the key skills that we taught our clients was essentially active listening. We called it conducting research meetings and it was active listening. So the goal was be able to talk only 5% of the time and get the client or the prospect to talk 95% of the time. Because you're asking great questions and you're using what they tell you in response to probe more deeply. People love to talk about themselves, but a key to doing that was preparation. You had to spend some time before that meeting, to find out what you could learn about their business and about the person you were talking to, what they've accomplished, their personal and professional kind of a background, so that you could use that information and by the way you sort of automatically word your questions that way, Once you've done that homework, your questions are more intelligent.
They're reflecting an insight and a knowledge and a respect for the person. If you've done your preparation, you've done your homework, you've got a plan for the meeting and so forth. A lot of the listening, it's in the moment when we're having the conversation. I'd like to ask how important do you think it is, the preparation and then the follow-up after the conversation?
Oscar Trimboli: Listening takes place before a conversation, during a conversation, and after the conversation. There's three parts to listening. Most people do hearing well, but they don't do listening well. The difference between hearing and listening is action. Actually taking action, because you can go on, hear a conversation three times and the person will think you're not actually listening to them if you haven't taken action. Listening is also the willingness that-
Michael Webb: My wife accuses me of that all the time. She tells me it over and over that I'm not listening. I'm sorry. I digress. Go ahead. I didn't mean to interrupt.
Oscar Trimboli: Oh, no. I can totally relate. Look, Michael, it reminds me of a guy called Mick who called me up on a Monday, two years ago. I can still remember the time on the clock in the car when he called. It was 8:15 on a Monday morning and he said, "You nearly cost me my marriage, Oscar." And this was a guy who's actually in B2B selling. He said to me, "You nearly cost me my marriage last Friday. My wife said to me something you never want to hear. She said, 'Mick, we need to talk.' The kids had been put to bed, and after 12 years, I was really worried and my wife just came out and said, 'You can tell me the truth. Who are you having an affair with? I know in the last 90 days you've been having an affair with somebody.'"
And he said in his head he wanted to say, "What?" But what he said is, "Tell me more." And she said, "Well, the way you've been paying attention to me, you're obviously covering something up." Mick looks at her straight in the eye and said, "It's not what you think. It's a man." And with that, she burst out crying and he said, "No, no, no. I'm being taught how to listen by a man and he warned me not to do this at home because it would leak over and have unintended consequences. I've been taught how to listen." And straight after that, his wife said to him, "I've never felt sexier in the last 90 days because you've paid me so much attention."
Now what happened next, I can't tell you on this podcast because it's R-rated. But sometimes we just have to ask, tell me more. Even when it comes to our wives. By the way, there is a listening difference between men and women. Women listen to feel and men listen to fix. So men, stop trying to fix women cause they ain't broken.
Michael Webb: Now, that's a good way to sum it up. When we were doing sales training, we would try to get the client to think ahead about the person that they were going to be talking to, and to be on the lookout for potential personal wins, right? And then also, if they're a department manager or a vice president, past professional accomplishments and what they might be wanting to accomplish professionally. And I really liked what you said, listening means acting. But let me clarify then because that differs between what we said a moment ago about listening is helping the speaker to think critically. Speak about that. You're helping them think critically, but we've just said they know you're listening because you took an action. But that action has to be something more than just inside the conversation.
Oscar Trimboli: Absolutely. And I'll give you a really practical, simple example. we're in a conversation and the customer says, "I'm curious if your product or service does this, could you send me a case study where other customers have done it?" Okay. Simple request. If you don't act on it, they think you haven't listened to them. Simple request. Are you doing the followup that you promised to do? Now, most people might think that's all 101 stuff, but most of us don't even take the time to confirm in that part of the conversation. So Michael, just so I'm clear, you'd like two case studies from this industry around how they've implemented this part of the product? And they go, "Yeah, that's exactly what I want." Now if you'd don't confirm that and you go away and find two generic case studies, again, whatever you bring back they think you have only heard but not listened to them.
So it's the action you take, which is one of the primary cues that defines your listening effectiveness from the speaker's perspective. The other oneis the visual signals that you're giving back to them, but listening is about action in that context.
Michael Webb: Also then, listening is considered to be something that individual people do and it is, but people exist within a system, right? Within the business you're operating in. I have two questions related to that. The first one is what can executives do to encourage their organization to encourage better listening?
Oscar Trimboli: There's two simple things executives should be focused on. One, do an annual customer satisfaction survey. Do what's in the annual customer satisfaction survey. In fact, do not survey your customers again until you've done what they asked you in your last survey. Most market research surveys are very expensive doorstops. Twenty, 30, 40 pages of pie charts and verbatims. The customers are telling you exactly the same thing year after year after year, and you go, "Yeah, yeah, yeah, but the competitors are doing this" or the market trend is that.
The other part of this is go back to the customers and tell them what you've implemented. Now, the same is true for employee engagement surveys. For any executives out there, for goodness sake, stop sending out employee engagement surveys and stop sending out emails to ask people to participate in employee engagement surveys. They will believe that the employee engagement survey's worth filling in when you do what they asked you to do in the last engagement survey as well.
For a lot of people in B2B selling as well, you need to be listening to your regulators, and a lot of us do a really poor job of listening to the regulators because we comply with the most minimum requirements around compliance rather than listening to what's really behind that particular outcome.
Michael Webb: What do you mean by listening to regulators?
Oscar Trimboli: A regulator might be if you're in the banking industry, you'll have a banking regulator. If you're in the pharmaceutical industry, you'll have a regulator. If you're in the transportation industry, you'll have a regulator. And a lot of CEOs do the minimum when it comes to listening to the regulators. So we need to understand the intention of what the regulators are trying to achieve, not just the bare minimum. If we want to do listening at table stakes, our license to operate as a business or an industry will eventually evaporate if we're not careful. As a leader in a system, the most important way you can help the organization to listen at a systemic level is you need to be a role model for listening.
There's an interesting parallel here, Michael. A lot of people ask me, "How do I teach my kids how to listen?" And I said, "You already are by your actions. The way you listen to your kids is the way they listen to you." And the same is true for CEOs. If you think your sales team aren't listening, it's more than likely you're a great role model for a lack of listening.
So are you taking that extra bit of time to understand what pressure the sales team's under and helping them with that? Meaning, are you helping them with the actions they need from you, whether that's pricing relief, whether that's engineering support, whether that's a marketing support, whether that's partnerships that you need to form. These are all ways that a CEO can be listening. And the thing a CEO does much better, and is much better positioned than others, is the listening beyond the organizational boundaries and listening to industry trends and overseas trends.
Michael Webb: I said there were two parts to that about listening for leadership in the organization and you already answered the second one, because my question was going to be how do we help our organization become a better listener?
And you said, do voice of customer surveys but don't do another one until you act on the first one. So that's brilliant. I haven't ever heard it stated that way before, but I have heard organizations where the senior executives are so interested and riveted on the financial results, and naturally people who work there are giving them the information about the financial results. But those same executives aren't asking questions about the customers and what value the customers get from working with us, and what problems that customers have and how do we know that? And unless the CEO is interested in listening to that, his employees aren't going to be interested in listening to it either. Have you seen that sort of thing too?
Oscar Trimboli: And that's a really simple thing. In working with some CEOs in these environments, one of the questions I always ask them is color-code your calendar. Color-code it internally and externally. Color-coded meeting invites you're sent out versus meeting invites you're accepting. And of the external meetings you're having, what percent are actually with customers? Now, often we assume that CEOs are spending a good chunk of time with customers and their calendar's tough. That's why they have helpers. They have chief of staff, they have executive assistants who make sure their calendars work.
I have consistently found the correlation between sales growth and the lack of sales growth is the CEOs who spend more time riding shotgun with sales teams to go and visit customers have greater sales growth than those that don't. And they're not there to lend anything other than their presence to the conversation; they rarely will do anything. And the most effective CEOs will always ask on the drive back or the flight back or the train trip back from the customer meeting, "How did that go?"``
And they're asking for what the sales rep listened for, and equally what the sales rep wasn't listening for.
Michael Webb: Yes.
Oscar Trimboli: I think great leaders that I've worked with in those situations aren't prescriptive. They ask really good how questions and what questions, because why questions are loaded with judgment. So be careful where you use why-based questions. So if you say to the sales rep in that case, "Why did you talk about our pricing at that part of the conversation?" As opposed to, "How is it that you're brought up pricing at that part of the conversation?" These have got the same intent but they're heard very differently by the rep.
For us, we need to think about the first time we ever got asked why-based questions was between the age of four and seven when we did something wrong. "Why did you spill the milk?" "Why did you use crayons on the walls in the house?" And we are triggered back to those times. A lot of FBI hostage negotiators and suicide counselors all talk about the fact that asking why-based questions too early in the relationship is completely counterproductive. And I think methodologies that bludgeon people with five whys and fishbone diagrams without some finesse and some nuance might miss the point. So how- and what-based questions will elicit more insight for the conversation than purely five whys in a row, as an example.
Michael Webb: I think that's a great point because a lot of the people in my audience... There's a lot of profound knowledge in process excellence and the training that you get to be able to figure out the five whys to solve a problem, the training that you get to map out the flow to measure things. These are very, you call them left brain I guess, but there are tools that really do open up understanding of causes and effects.
But you're right, inside an organization you have human beings and human beings are subject to cause an effect also. And what they can read into your questions may not be what you intend. And so until you have a relationship and a culture there where your intention is, it's clear that you're not criticizing someone. I totally agree with you. I think that's a really good tip. Helpful information.
Oscar Trimboli: Yeah, Michael, this showed up for me about a year-and-a-half ago. I was presenting to a room of 86 people, managers, inside a pharmaceutical company. I was brought in to talk about the five levels of listening, but if you ever walked into a building and you can feel the dripping from the air conditioning ducts... I was speaking in this really narrow room and so normally when you speak the room's wider than it is longer. This was the opposite. It was narrower and it felt darker, and there was just tension in there.
Twenty minutes into my speech, I turned to my host, the CEO, who was down to my left in this very narrow meeting room and I said, "If you don't mind, I just sense I need to ask the audience a question." And he looked at me as if we were in a comic strip movie and he just laser-lighted through his eyes and blew my head off as if, "Why you going off script? This is not what we agreed. You're here to talk about listening. What do you mean? Asking questions of the audience?"
Michael Webb: "Tell them about listening, dammit!"
Oscar Trimboli: I just turned to him and said, "Look, do you trust me?" And he goes, "Well, do I have a choice?" Said with every bit of contempt you could think. And I said, "Yes you do. I want to do this with your permission." And he goes, "Go ahead." In my head, the captioning was going, "Well, I'm not getting paid for this job." So I asked the room, I said, "Just turn to the person next to you and have a quick chat. What movie is playing out on this site right now?"
And the room exploded from a very tense silence to exploding laughter and people were laughing and giggling and all of that. And the CEO came up to me, switched my mic off, and basically said, "What the heck is going on here?" I said, "Don't you feel the tension in this room? Don't you sense that there's something that's wrong?" And he says, "I have no idea what you're talking about." I said, "Just the why people are." I said, "Just give me five more minutes and we'll see where we go now."
This is a pharmaceutical company. We have intelligent, sophisticated, complex PhDs in chemical engineering. We have Six Sigma black belts all over the place. And I asked for the movies to come back. Michael, the movies were Diehard With a Vengeance, Titanic, every air plane crash, disaster movie you could think of, yet it's what happened next that changed my mind permanently about the power of listening.
The CEO stepped up on stage, kind of pushed me to one side and grabbed the microphone and said to the room; he almost bowed down when he said it. He said, "Look, I'm really sorry. I'll offer you my apology. I hate it that you think coming to work every day is a disaster movie. I don't know what Oscar saw, sensed, or felt in this room, but with his permission, Oscar, can you spend the remaining time to help us fix this issue?"
Now, Michael, at this point of time, I have no idea what the issue is. And I thank the host, who's very humble in front of his room and leaves the stage by saying, "I need your help to solve this problem. Oscar can help us so far, but I need your help when he leaves the room." It was part of that mixture that made this a success. So I simply said to the room, "Hey, again, turn to the person next to you. Who aren't we listening to about this problem?" And again, the room exploded in a whole bunch of energy. The summary was very simple. They weren't talking to the production line workers, and what I was to learn later on that there was a contamination in one of the lines.
It was a sterile manufacturing plant. An employee who was a 35-year production line worker had pointed out to his manager at daily control meetings for three days in a row and got ignored, and pointed to a pipe he felt was faulty six weeks earlier. And despite the fact they had very fancy pants, Six Sigma, very fancy pants, they weren't able to identify the issue. They went to this 35-year veteran and asked him what's wrong and he pointed to the pipe now with these engineers and they fixed the problem in under three days. Now up until that point it was three months. It was tens of millions of dollars stuck in quality assurance because they couldn't validate the batches that were going out because they couldn't verify that.
Now the point of this story is really simple. Who aren't you listening to that's at the front line? What dogma are you holding onto? Because listening is the willingness to have your mind changed. Now, these people, the cost of not listening for them was stacking up at about a million dollars a week, but a production line worker had told them what the problem was even before it began. And for a lot of us we get bound in process and forget to listen. Don't get me wrong, process has its place, but process only without listening is like driving a car without a safety belt. You can go as fast as you want, but at some point you're going to have to swerve or brake and there's going to be some implications. Listening are the airbags that's going to make it safe for everybody to speak up.
Michael Webb: That's a fascinating story, and this podcast is about integrating people and process, helping everyone to become more critical thinkers. And if we grew up in organizations who respected that, then automatically listening would be a higher value. So I really appreciate that story. I appreciate you, Oscar. Thank you for being here. If someone is interested in your work, if they're interested in learning more about you, your book, how can they get ahold of you?
Oscar Trimboli: Oscartrimboli.com/whitepapers, Michael. You're going to get the five most common myths about listening, but more importantly, what to do about them both as a one-on-one conversation, as a team meeting, and as a system. How do you listen systemically as well? And that'll provide a gateway to a whole bunch of resources. The books, the playing cards, the jigsaw puzzles, the Apple award-winning podcast where we interview professional listeners, whether they're judges, air traffic controllers or suicide counselors or FBI hostage negotiators. Oscartromtoli.com, that's the place to to get everything from there.
Michael Webb: Again, thank you for coming on the Sales Process Excellence podcast. It's been a great discussion. I really appreciate it and would love to chat with you again soon.
Oscar Trimboli: Michael, thanks for listening.
Speaker 1: The Sales Process Excellence podcast is sponsored by Sales Performance Consultants. Discover how to improve your B2B sales with systems thinking at Salesperformance.com.
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Brian Carroll | Connecting to What The Customer Cares About
21 janv. 2020· Sales Process Excellence Podcast
Michael Webb: You're listening to the Sales Process Excellence Podcast with Michael Webb. B2B sales and marketing works to find the highest quality prospects, reach decision makers, and sell value. Operational excellence uses data and systems thinking to make changes that cause improvement and eliminate waste. My name is Michael Webb and this is the Sales Process Excellence Podcast. In the next 30 to 40 minutes, we're going to destroy the myth that these two groups conflict, and show you how to bring both strategies together to create more wealth for your company and your customers.
Michael Webb: Hello, everyone. This is Michael Webb and I'm excited today to have on the phone a friend of mine from many years ago, Brian Carroll. Brian, welcome here.
Brian Carroll: Thanks for having me.
Michael Webb: It would be great if you could tell the audience a little bit about your background and then how we got connected, oh, I guess it was probably 15 years ago, or 14 years ago.
Brian Carroll: Yeah, yeah. For everyone, my background, I've focused primarily on the intersection of marketing and sales. I wrote a book, Lead Generation for the Complex Sale. I've worked with the who's who of technology, really forward thinkers. I had an opportunity to work with some of the largest, most well-known brands. SAP, Google, the marketing tech world, Eloqua, Marketo.
Brian Carroll: So as you think about all the changes we're experiencing today, very early on, we were implementing technology to connect with customers and develop leads for sales teams, and so, Michael, you and I connected around your work with sales process and the notion of Six Sigma and continually optimizing. That's where I came from. We'll talk about a little bit, but I had this Jerry Maguire moment, 2014, working with my own team and how we connect with customers, so I shifted my work and focus around not just looking at how do we get more leads and higher quality leads and driving pipeline, but just really recognizing that we no longer have an issue around conversion in the same way we did. It's actually harder now to connect with customers. That's what I've been doing for the past three years is seeing empathy as a sales and marketing super power.
Michael Webb: As you went from your own firm, which was, Leads to Sales I think it was called, and it was acquired by MarketingExperiments group, right?
Brian Carroll: Yeah, so MECLABS owns MarketingSherpa and MarketingExperiments, and you know, I admired both of the brands so much. I was speaking at a conference and just the things we were focusing on, what I wanted to do is bring more science and more research, because in best practices you take something you learned and you apply it to another customer base and it doesn't work. Experience doesn't always determine you're going to be successful, and what I wanted to understand is why.
Brian Carroll: Most people focus on how do you get marketing working. And what I've always wondered is why isn't it working. That's why I really loved being able to sell my company to MECLABS because we were trying to understand what really works and why by understanding how customers make choices. While I was there, we saw the motivation, the customers, the most important thing. After I left MECLABS to do my own work, I've really focused on this notion of customer motivation, because neuroscience, a breakthrough happened in 2014 where it had been previous to that, but just finding... Antonio Damasio is a neuroscientist that found we aren't thinking machines that feel, we're feeling machines that think.
Brian Carroll: So, that's how all the focus I had previously done on value proposition, and messaging, and specific channels and cadences, what I realized I was missing is this deeper understanding of how emotions drive all of our decisions. That's the important thing that I'm working on today is how do we better connect to what people care about.
Michael Webb: So, that's why you're so interesting because you understand the scientific mindset, and then you're also into this, your new positioning is around empathy. How do other people feel? What are they thinking? What motivates them? Which is traditionally thought of as a soft fuzzy, you know, you can't measure that kind of thing. So let's start out with what is empathetic marketing? Is that what you're calling it?
Brian Carroll: Yeah, yeah.
Michael Webb: What is that, empathy-based.
Brian Carroll: So, why it matters. I always start with why. Why should you care about this? What I saw is today we have more ways of reaching our customers. Every few months we have a new channel we can reach our customers through. The other thing is we have more data about our customers, behavioral data. I just went through an experience with someone on their own website where I knew that they have my behavioral data, they have my chat data, they have information about who I am because Clearbit and other tools and discover.org tell them personal data, and so there's all this research around persuasion.
Brian Carroll: Cialdini's work around how do we use behavioral economics and tools to connect with people. We have all the stuff, and what's happening though is that it's still not working. The issue has shifted from focused on conversion that the gap we have is connection, connecting to what our customers care about. Ironically. So you have more ways and more data, but actually connecting what your customers care about has never been harder. So when I talk to marketers, that's the struggle. And what empathy based marketing is, is moving your focus from if I were the customer, how would this appeal to me? Most people think, well, I'm already empathetic. I already care about my customers. I'm already curious about them.
Brian Carroll: But the issue is, is that what science has shown is that we think we're being empathetic. We think we're thinking about the customer, but we're using our own bias, our own preferences. We're trying to get what we want, and we actually aren't connecting to what our customers care about. So what do they do? They read in-boxes to delete things, not to read them. They ignore messages. They are immune because what's happening is that they got to care about it. We got to connect with the care about. And then the shift is, is no longer about funnels. It's about becoming a Sherpa.
Brian Carroll: So, here's the way to sum up what's empathy-based marketing. It's being your customer to understand what they care about so that you can create messages that resonate and focus on what matters, either problems they have they don't want, results they want they don't yet have, not only that, but you're like a Sherpa helping a mountain climber climb the mountain. You know, they still got to climb, but we now are moving to this mode of you can't make someone do something, but what you can do is equip and enable them.
Brian Carroll: You can bring science to this process. It's just you have to appreciate, it's the emotion. Even in complex sales that's way bigger now because the stakes are higher. It's riskier to make bad decisions.
Michael Webb: So when you say, "Shifting from conversion to connection," by connection you mean something that is valuable to them in their activity goal, mission, something tactical that they can use it they're interested in?
Brian Carroll: Yeah, and I think that the thing is, is when people, especially for your listeners who have complex sales, people are not buying a solution or product or service, what they're buying is they're buying something to enable them to support a change they want to make. And change is hard because when you're trying to get multiple people involved, and you need to get buy in, you actually need to emphasize points of agreement. You actually need to help the champion, or the mobilizer, to be able to bring an idea into their organization. And here's the thing, people, when I talk with companies, and if you look at sales pipelines, they are not losing deals to competition as much as they're losing deals to companies doing nothing.
Michael Webb: Right. No decision, yup.
Brian Carroll: No decision. It's the status quo. My premise is, is the reason why there's no decision is that for the buyer, the question is this, they may start out with hope. "Hey, I can make a change in my company." "Hey, this is going to help us address the need," and so you have somebody who's researching to solve a problem or to get a result, and then they move to this place of, "Oh my gosh, how am I going to get my team involved in this? Is it worth it? How is my team going to see this? What's this going to mean is how the things I need to make?" What we focus on often is the company value, like what's the value to the company? What's the value to the department?
Brian Carroll: What I'm saying is you actually have to recognize the value to that person because Gartner now, it was CEB, in their challenge sale, challenge your customer, they found that personal decision making actually is the biggest factor, that personal value, that question of, "Is it worth it? How am I going to get this done?" Because when you're trying to drive change, you've got to get other people involved and it's hard. It's painful.
Brian Carroll: If you ask customers about their buying experience, it's never been easy. They don't want to repeat it again. And so that's why we need to shift our compass from, it's actually not a lead conversion thing. It's really helping that customer connect, and then also help them drive the connections inside their company so they can ultimately make a decision, make a change, and ultimately free us. We just don't sell a deal. We have lifetime value with customers. They don't buy just one time. There's ongoing relationships. And so you actually need to think about what's the transformation you're making for your customer.
Michael Webb: Before we dive deeper into that, let's circle back. Why is this important to senior executives? Why do they need to pay attention to this?
Brian Carroll: Well, I think there's a few things. First of all, there's the culture of your organization. So if your team's focused, and you may think your team's doing this already, and I would say we're entering fourth quarters, we record this right now.
Michael Webb: Yeah.
Brian Carroll: If people aren't on plan, there's often this anxiety aspect of how do I get on plan? And so if you just want to look at how we're wired, when we feel anxious, it can do some good things for us, or when we feel rushed, the cortisol in our brain helps us focus. But also what it gets activated is our amygdala, which is the fight or flight. Why this is important for a leader, is I'll say there's this inner game of sales marketing, which drives the outer game. So if your team feels fear or anxiety, what begins happening is we start becoming more sociopathic because our fight or flight is activated.
Brian Carroll: How do I get my needs met? How do I achieve my goal? And so what happens is I've noticed when I talk with marketers, and we really, really dig in, that email address doesn't represent a person. Like when you have access to someone's inbox, that's an intimate thing. That's the first thing they often see in the morning, and you have to think about, is what I'm sharing actually useful, helpful, valuable, worthwhile or not.
Brian Carroll: So I'm just saying there's this inner game that we can become more sociopathic in survival mode, and what you need to move from is helping your team be more in where we think about others. In our cerebral cortex is where empathy happens. It's where caring about others happens. It's where being curious about customers and what they want happens. To get someone to that place, we actually need to find ways of removing pressure.
Brian Carroll: Often leaders put pressure on their team. "We got to do this." And frankly, I used to be that guy. I used to have huddles with my team and I was that guy. I wrote a story that when I helped my team and stated this question, "What would you do if you weren't afraid? What would you do for this customer if you weren't in a rush right now? What's the best way to to help them?" I've always felt the best selling in marketing feels like helping, because it is is. I even shift my inside sales team, for example, from being conversion-oriented, how do we get more sales accepted leads and opportunities, to ask the question, "Hey, what motivated this person to download this white paper? What were they trying to get done? What were they trying to achieve?"
Brian Carroll: Then the biggest thing I needed to do is focus my team on trying to understand that and just simply helping that person get what it is they originally wanted. Here's the thing, and we can share a back story, but when I started my team doing that, not focusing on getting leads, but simply connecting to what, and here's the question. Here's a power question your listeners can write down" "What motivated you to do X, Y, Z?" So, "What motivated you to download that ebook? What were you trying to get done?"
Brian Carroll: You can follow it up. Listen. They may say, "Well, I was researching for my boss," or, "I was trying to get this done." Now our tendency is to jump to solution, but what if you actually connected to the next level? When I had my team do that, it took a lot of coaching, but we actually focused on being more empathetic and just more like a hotel concierge helps guests, instead of conversion to people. Within six months we generated 303% more sales-accepted leads by not actually focusing on getting leads, just actually understanding motivation and helping.
Brian Carroll: This is why it matters to leaders, is that we focus on the short game of how are we going to get the results this quarter. What I'm saying is, what you need to understand is if you talk about customer experience and your team isn't thinking this way, you're just talking, or empathy, it's easy to talk about, but it's actually hard to do. So there's processes you can implement around messaging and other things, but you actually have to set the culture to get your team to do this.
Michael Webb: In summarizing what you said, why is this important to senior executives? I heard two things, which we sort of traditionally think of as opposing each other. One of them is it's good for senior executives, important for them, because the productivity of your business is going to increase if you understand how to do this, and of course senior executives, they need that to happen. The business needs to be more productive. It needs to be more profitable. We need more revenue, more yield from our investment in sales and marketing. That's good.
Michael Webb: Flip side though, you said, you can't be demanding it. You can't be creating an environment where you're pressuring people to make this happen because that creates the opposite reaction sort of automatically. Did I get that right?
Brian Carroll: Yeah, and that's the tension, right? I think that's really the challenge as leaders is we all are under pressure. There isn't a single person I talk to in sales and marketing who feels that they have time to reflect, or that they have time to to rest or set aside time. We're always on. What I found is, is that we need to help our teams feel safe in an environment that's competitive. And the other side to this is then there's practical things you can do, so you can have empathy be a point focus thing. Just saying, "Hey, what if we improved our messaging?" I can talk about how to empathy-power your messaging. There's a tool called the empathy index, but I would say the lasting change, or if you want to have a lasting competitive advantage that the companies that actually undergird their people to not be fear-based and onto that place, they have a better resulting experience.
Brian Carroll: And so Harvard Business Review for the past few years has shown there's been a study of the top 100 most empathetic companies and all of them have better financial returns and results when they care about their customers. Everyone of course says they care about them, but you actually got to go that next level of empowering your team to take that and make it real.
Michael Webb: I talked with a senior executive recently. He told me that, you know, he feels like he has had sort of a challenge because he likes to facilitate, he likes for people to talk about things in open environment and so forth and empower people, but there's inherent conflicts among the people, and different opinions of the people who work for him, right? And so he has to figure out when is he going to stamp his feet and say, "No, we have to do things this way." That's a big challenge for senior executives to figure that out, right?
Brian Carroll: I'll build on the story before. My Jerry Maguire moment, and this is as I was driving change with my team, it was difficult and I'll give you some examples. So 2014, someone sent me a video. It was a CBS news story about a company and two things stood out. First they said this company has an endorsement. The CEO is endorsed by Mother Teresa while she was still alive. And the secondly is that he had been nominated for a Nobel Peace Prize. Now, here's the shocking part. They said, "You'll never guess what this company does. They're a collection agency." So I'm watching this. I'm a lead generation guy, and I'm thinking, you're kidding me. Mother Teresa endorsed the CEO of a collection agency? What? Why?
Brian Carroll: And here's why is that Bill Bartmann had gotten inspiration from his team. He said, "I want to practice compassion collections." They're over a billion dollar company. I think they're based out of Tulsa, Oklahoma. The company's called CFS2. He empowered his employees to propose some ideas in how they could do it better, so this wasn't even his idea. In a group in place said, "What if we actually helped our customers deal with why they can't pay their bills? They lost their jobs, so what if we actually help them get a new job?" You know, and all the things required to do that.
Brian Carroll: And they've listed, they knew all the reasons, because they heard all the reasons, but what do most collection agencies do? They'd beat customers over the head. They threaten them. They embraced this experiment and they focused on doing it, and they're in 35 states, maybe more now, but they literally did that. And here's the bottom line impact. So I'm watching this and it's only a two minute, 30-second segment.
Brian Carroll: The newsperson is like, What's the impact of doing this?" And he was like, "Giving away all the free services, we're 200% more profitable than we were." It's not only that, single-handedly they're reforming the collections industry, like they're hated because... You know, in fact they're trying to pass laws to make it better for customers.
Brian Carroll: So I'm watching this, as I said before, the best marketing is somebody that feels like helping. I was just like, "Oh my gosh." Monday morning, this was Sunday night, I sat down with my team and I said, "You guys, watch this video and I want to say, how could we do this for our customers?" It was crickets, and someone raised their hand and said, "Brian, if we focus on helping people like this, then how are we going to get any leads?"
Brian Carroll: In the first three weeks as we tried this, it was awkward because we had to change how we're doing things. I had someone say, "I'm going to quit. I don't even know what my purpose anymore." And so there was things I had to do to work with our team, like their compensation was based on leads. So we need to address how they're being paid. Whatever you made in your highest month, getting your highest level leads, I'll make sure you get paid that because I want you to focus on the customer. And then we had to go through-
Michael Webb: That took some guts.
Brian Carroll: Well, it did. I had to get buy in from our CEO. You know, he was supportive of the idea because we said we're about customer first, but making it happen was then coaching people, because we literally had these behaviors. So I had team members who were fighting about what's the best way to do it.
Brian Carroll: There's this point of when you're trying to make change in your company, there's going to be disagreement and there's going to be challenge, and people are not going to be happy. My team when we first tried doing this was not happy, because I disrupted how we did things. What my challenge was is how do we move this from my idea to us talking together where it became our idea.
Brian Carroll: There's this part of leaders sometimes relent, and there's something where you need to be differentiated because emotionally when you're trying to drive change, research shows emotions are caught like a cold. They spread like a virus. And so you need to inoculate your team around this negativity. One bad negative person can actually negatively impact the whole team. And so what I found is, I as a leader had to be differentiated, so that's the inner game. I needed to be present to what was happening in the room. And that's there with how I feel emotionally, because it wasn't easy.
Brian Carroll: There was times where I felt like, am I doing the right thing? You know, this isn't working. And we saw modest improvements, but I just knew big picture. When I saw this 200% improvement, and I was like if a collection agency can do this, surely... If a collection agency can revolutionize and change things, what would happen if we actually tried to help our customers solve problems in the same way? It's different, and they're a consumer company, we're B2B. We had a complex sale. My main thing is it's worth it. I can share some links of things I found helpful in that.
Michael Webb: Yeah, that would be great. So I'm hearing a couple things here. Just what strikes me is that you are doing something counterintuitive, right? A collection agency was actually helping people solve their problem. And as in marketing, you know, in talking to someone who calls in over the phone, you're finding what problem are they trying to solve and seeing if you can give them something that would help.
Michael Webb: At first blush it sounds like, oh, we're being altruistic, but we're not. We're actually finding something that's important to them and important to us, right? So it's a win-win by doing that, but it's a win-win you've kind of pulled out of thin air because you understand them a little better. You're spending time to try to understand how they think a little better, right?
Brian Carroll: I like how you've teased that out, and really what you're doing is you're demonstrating value to someone. There's two ways I found to building relationships with people. One is having conversations, you know, and then in that you're doing empathetic listening. I hear you on that listing to reply. So this is stuff Stephen Covey talked about in 7 Habits.
Brian Carroll: But also what you can do is I'm saying take it to the next level of empathetic listening, was trying to listen to what's motivating, what's behind what's being said? You're not just processing the content. You want to understand the context and what the feelings are. So someone won't say, "I'm feeling frustrated." You can often hear they are, or they describe the scenario, and you're like, "Wow, it sounds like you're frustrated."
Michael Webb: The other thing I'm hearing in this is that in the whole experiment, scientific kind of thing, I suspect that companies, and especially some marketers kind of get trapped in wanting to look at the data, meaning stuff that came from a server, stuff that people filled out in a form, they think that's data. But in reality, what people say and their emotional intonation that you can pick up, and the insights you can get by asking them, having a real conversation with them, that's data too. A lot of people don't use that. They don't pay attention to that. Is that right?
Brian Carroll: Yeah, and I would say, for example, people do a lot of research to build personas, for example, and I think it's useful, but personas don't tell you what stories will matter to that customer, because you actually don't know what the context is of their particular situation. So if you treated every title, for example, a CIO in the same way, even if they work in a like company of the same size, the story of what they're trying to do and what they care about is different.
Brian Carroll: This is where, the second part I said, conversation and listening, but there's this thing. The term is reciprocal altruism. In Cialdini's book, he called it the reciprocity effect, but the point is when you do something for someone literally without expecting anything in return, so the collection agency, why should I trust you? They could reply, "Hey, when we help you do better financially, we make more money. We're invested together."
Brian Carroll: The point is is when you're thinking about connecting with people, there are customers you're talking to who shouldn't buy, and I remember I interviewed Jill Raleigh. She was the number one sales rep at Eloqua. She spent time telling customers, "You shouldn't buy this yet. Yeah, you're not ready for us." "But we want to buy." "No, here's what you need to do." What's amazing is is that when you can actually... That's the level that Carrie and I were talking about. She walked away from people who wanted to buy because she wanted to actually empower them and thought big picture of success beyond the deal.
Brian Carroll: What's amazing, she took that in Eloqua, she went into Marketo, and has done very well. The whole mindset is is when I interview customers, what made the biggest difference for you? Here's what I hear. "My sales rep was my advocate." "I felt they cared more about me, in me achieving a result than their company's profitability." "I felt like they went above and beyond." Those are the things, and think about all of that. That's all emotional. Despite all the data, despite all the tech, when I said we need to focus on connection before conversion, it's that connection that actually drives conversion.
Brian Carroll: The good news is is those who embrace this are going to do dramatically better, but it starts with this intent that CEOs, you need to go beyond saying, "I care about how my customers feel and their experience," to look at how are our employees actually caring about our customers and their experience? How do I help empower them so they can actually do that? You know, it's similar to any processes. That's the last mile, that as a leader, if you take away one thing from our conversation today is how do you empower your team to focus on connection ahead of conversion, connecting and what your customers care about, and from that, that's innovation. That's human-centered design. That's where new ideas come from. That's where better sales outcomes come from, better marketing, et cetera.
Michael Webb: And from what I'm also hearing in here, and then we need to wrap this up. This is a great conversation by the way. It's exciting, because what you're saying is that while the emotion is so important, we have to get at the emotion. But in order to do that, what you're really doing is getting to the reasons that are underlying the emotion. Having this openness and this ability for people to be genuinely curious, to understand other people, that's how you do it.
Michael Webb: So man, this is fascinating. It sounds like such a deceptively simple thing, and those are the things that can be most powerful. So if someone wants to learn more about your work and they want to get in contact with you, how could they do it?
Brian Carroll: So, Markempa, it stands for where marketing meets empathy, M-A-R-K-E-M-P-A.com. I have a lot of free resources, and if you go to the free resources you can read the how-to primer on what is empathy-based marketing. Then also you can find me on LinkedIn as well, and I'm fairly active there. If you have questions feel free to reach out.
Michael Webb: Brian, thank you very much. I would love to have you, there's so many more things we could talk about and case examples we can go into. I would love to have you back on the show again, so thank you very much for being here.
Brian Carroll: Thank you, Michael.
Michael Webb: Until next time, bye bye.
Michael Webb: This Sales Process Excellence Podcast is sponsored by Sales Performance Consultants. Discover how to improve your B2B sales with [email protected].
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Cliff Ransom | A Wise Individual, Who is Still Learning from Others
8 janv. 2020· Sales Process Excellence Podcast
Speaker 1: You're listening to the Sales Process Excellence podcast with Michael Webb.
Michael Webb: B2B sales and marketing works to find the highest quality prospects, reach decision makers and sell value. Operational excellence uses data and systems thinking to make changes that cause improvement and eliminate waste.
Michael Webb: My name is Michael Webb, and this is the Sales Process Excellence podcast. In the next 30 to 40 minutes, we're going to destroy the myth that these two groups conflict and show you how to bring both strategies together to create more wealth for your company and your customers.
Michael Webb: Hello, this is Michael Webb, and I am excited today to introduce you to someone I've known for a number of years. His name is Cliff Ransom. Cliff holds a very unique position in the industry. I'll let him give you his background, but he has this unique position between the investor relations and management community and the lean community. And what we're going to talk about today, I think is going to be illuminating and quite interesting, especially for the senior executives in the audience. So Cliff, welcome here.
Cliff Ransom: Thank you very much, Mike. It's fun to be here.
Michael Webb: Yes. Yes, we're going to have some fun today. So, if you could give 30 seconds or a minute for the audience so they can kind of get the idea of where you've come from and where you've been and what you're doing now.
Cliff Ransom: I'm going to try to put 47 years into 60 seconds. Here we go. I've been in the investment business, almost exclusively, with institutional investors for 47 years. Almost 30 years ago, I became deeply involved with Danaher, which became my prototype investment and my prototype corporate mentality. I have a very unusual, I can't say unique, but unusual business model, and then I have three legs on my stool. One is 47 years of connection support for learning from institutional investors, portfolio managers, analysts, at some of the biggest and best firms in the world, quite frankly. The second leg is that I have very consciously built a deep presence in the lean community. That includes practitioners, the authors, the consultants, gurus like yourself who have very specialized knowledge of lean applications. And then perhaps most importantly, I've worked with several generations of C-suite corporate leaders, and they understand what it is that I do and make sure that I get the access that I need to learn, because I learned by going to the Gemba; going to the place where the real work is done. And we can elaborate on that later if you'd like, but that's, in essence, what I'm doing today.
Cliff Ransom: For the last 15 years, I've run Ransom Research Inc., which works with a deliberately constrained group of senior investors, because they're the guys who can afford me. And they want me to exercise those three legs of that stool. And I think, in a nutshell, that's about as close as I can get.
Michael Webb: Okay, super. So, obviously you're on a first-name basis with senior executives at the Shingo Institute, at the Lean Enterprise Institute, and a number of corporations.
Michael Webb: Tell me about why you think the senior executives don't quite realize the power of lean, because I agree with you, but it's hard to describe.
Cliff Ransom: Everything you ever say in this business, you're changing constantly. There's a webinar or up on the LEI site that I've been trying to get them to take down for 15 years because I say, "Guys, I don't believe any of that stuff anymore." This continuous improvement has to be applied to your intellectual thinking, as well. In the '90s, I counted the number of Kaizens. That's how simple-minded I was.
Michael Webb: Yeah.
Cliff Ransom: And that was way before I understood that what Kaizens you did are really indicative. They pertain to how you think about lean. You can do 10,000 Kaizens and have a minuscule benefit. They'll all benefit, but minusculely. Or you can do three things that have a profound change on your employees, your customers, your suppliers, yourself. I became quite adamant that this had to be a cultural transformation because particularly as an investor, the last thing I want you to do is to start on this course of action, start in collocating these mindsets, and then give up on them, because you'll only confuse your employees, your suppliers, your shareholders, your regulators. It's the worst thing you can do, is to start and then kill it.
Cliff Ransom: I was the Chairman of the Board of Shingo, so I love the Shingo Model. I used to get in trouble with the professional staff because they would ask me to give speeches all around the country, all over the world. I would say, “I don’t give a damn whether you ever apply for the Shingo Prize, I just want you to live by the Shingo Model. And I think everybody should understand the model.” And then the staff would turn to me and say, “Uh Cliff, you know we make our money by helping people apply for the prize.” I would say, “Yeah, yeah, yeah.”
Cliff Ransom: It’s like a friend of mine I ran into on the street this morning and she said, “We were one of the 12 finalists for the Deming Prize. We got interviewed and we just missed it.” I said to her, “Good” and she looked at me with a stricken look, she works at a hospital. And I said, “The Deming Prize is not what you want to do. What you want to do is live up to the Deming Philosophy. That’s what you want.” She said, “Okay, okay, I get it, I get it, I get it.” I said, “If you want me to come out to chat with your folks about why that is an important distinction, I will be happy to do it.”
Michael Webb: So to me, this is about helping companies learn to think more critically. All the people inside the company need to be enrolled in that effort. And most especially, the senior people. They have to lead it by how they ask questions, how they respect the accomplishments and failures of the people who work for them.
Cliff Ransom: You know, you talk about inquiring minds; an inquiring mind, by definition, requires the willingness to listen to alternative VCs, to gather data. Toyota says the data will speak to you, but you have to do it with an intention. I was working with LEI, they were doing sort of one of these CEO seminars. By the way, nobody in the lean business has yet broken the code on how to get CEOs to go to seminars. But I said, "You know, John," to John Shook, who's ... Been a dozen people who have been incredibly patient and generous and giving of their time and sensibilities to me, and Shook's one of them. I said, "You know, John, this business about asking questions really comes hard to me. My line is humility does not come easily to me. The idea of asking questions rather than barking orders; I always succeeded in life from the military on up by ... " You know, they'd say, "Take the hill," I'd go take the hill. I might hire a bunch of North Korean mercenaries to do it, but I wouldn't tell them that until I had the flag up there.
Cliff Ransom: But I said, "Just asking questions is hard." I said, "But I'm really working at it. I'm really trying to do it." And he said, "Yes." He didn't quite say, "Wax on, wax off, little grasshopper," but he said, "Yes, Cliff, I can tell you're working very hard at this, but you're also asking questions that still drive people to your preconceived conclusions. It is like an axe right between the eyes. I do this all the time. Every time I think that I've gotten to kindergarten, one of my sensei very politely slap me right back down to kindergarten." And that was the first time I realized it, and it happens, I don't know, monthly now.
Cliff Ransom: But that's good, because that allows you to draw on everybody around you. You asked earlier, and I didn't answer, why don't CEOs get it? When I used to give speeches, I guess I still do, but I don't do it much, I had seven PowerPoint slides with seven bullets on each slide of why people didn't do it. And the last slide was great big letters. It said stupidity. They couldn't get how powerful this stuff was. They couldn't give up, "I'm always right."
Cliff Ransom: Now, I don't blame them in many respects, because they got to be CEO or Executive Vice President by being a firefighter, by succeeding in the face of adversity, and by doing it and then driving other people to do it their way. I tell CEOs today, "Take your biggest firefighter and fire him, because he's probably your biggest arsonist. He sets the fire so that he can watch it and so that he can put it out, and those are not the helpful people." Those are not the helpful people.
Michael Webb: By the way, your observation ... The first thing that leapt to my mind when you said, "You're asking questions that drive people to your preconceived solutions," isn't that what salespeople do?
Cliff Ransom: I know you know this, because we've talked about it, but I'm going to bring it up and I'm going to start with when I was the Chairman of the Shingo Institute. And we were really trying to get healthcare involved in lean thinking, because I mean, I felt that healthcare is the second biggest problem in this nation after education, but nobody wants to try to change educator's minds. Doctor's minds are hard enough to change. Medical administrator's minds are hard enough to change. But we found ... We did one of two things. We either ... Not we. I'm a Senior Advisor, one of those amorphous capital letters, non-corporate titles for five different lean consulting firms. And to get the administrators to believe it, we'd go in and, in a week's Kaizen activity, in the pharmacy of the hospital, you'd take out $20 million worth of stuff you don't need to have. You know?
Michael Webb: Yeah.
Cliff Ransom: Aspirin. They'd have three years of supply of aspirin, when you can get aspirin in 24 hours, any place in the country. Or they'll have six weeks of some very fancy HIV drug, which is going to be obsolete in four weeks, and it's $15,000 a dosage. And you suddenly dropped $20 million in their lap with the cost of a couple of people during the week, they get it.
Cliff Ransom: Then what we did is we went to the nurses. We. I'm going to have to stop saying we. They went to the nurses and they said, "Why do nurses go into nursing?" They don't go in for the reasons that doctors do; to make a lot of money, to get social status, to become famous. They do it because they want to keep healthy people healthy and make sick people well. They know that if they are not touching physically, if they don't have their hands on that patient, it's almost impossible to add value. It has to be two feet away. Every minute, you teach them how to value stream map, and they suddenly say, "Wait a minute, I'm spending 80% of my time chasing pillows, asking for the maintenance guy to fix the valve on that oxygen line, sorting the bloody pill cups? That's not adding value. That's all derivative stuff." And when you go to a salesman and he says, "Oh, this is my territory. I've been doing this for 30 years. I know everybody. I played golf with them," and then you get them to value stream map and they say ... Because they know that unless they're face to face with that customer, they ain't going to write a ticket. They're not going to have an order.
Michael Webb: Right.
Cliff Ransom: And you say, "Do you know you spend 40% of your time driving around in your car? Do you know that you spend 40% of your time delivering late products? Do you know you spend 20% of your time chasing down an order that's fallen through the cracks somewhere?" And they go, "Wait a minute. Tell me how to tell me how to spend 90% of my time doing value added work." And they become real zealots. Real zealots.
Michael Webb: Right. Right, you have to show what's in it for them.
Cliff Ransom: Absolutely.
Michael Webb: And just as in a factory, just as in a hospital; in sales, it has to do with the assumptions that we walk around in our head, the assumptions about reality, some of which may not be true.
Cliff Ransom: Absolutely.
Michael Webb: And that's the hard part to break through. So you, as the lean practitioner, like back to the quote of what John Shook said, you have to ask the questions that are based on the context that the other person has presented, because you're trying to stimulate their insight about how to get better.
Cliff Ransom: And there's no better place to apply the five whys. You know?
Michael Webb: Yeah.
Cliff Ransom: Well, why do you do that? Why do you do that? Why do you do that? Why ... 200 days a year I spend on the road. I tell people I'm really only 37 years old, but I look like this wreck because of my travel schedule, which is a lot of time gone, so that I can watch. They say genchi genbutsu, go to the Gemba, the place where the real work is done and see.
Michael Webb: Right.
Cliff Ransom: I've sort of expanded that to say, "Go and watch," because you have to be able to understand the flow and the velocity. If you can't see it in the HR department or on the factory floor or in the new product lab, if you can't see the dashboards. If you can't see whether they're ahead or behind for the day, they ain't doing it. They may think they are or they have some fancy electronic board, but they're not thinking that way.
Michael Webb: So-
Cliff Ransom: They're not building those habits into their everyday actions.
Michael Webb: So would you say that a key role of the senior executives is to try to get, or to help the employees, the middle management especially, to make their assumptions and their thinking more visible?
Cliff Ransom: It almost always goes the other way. I make the comment, and I'm trying not to be absolute here, I have never seen a lean transformation be sustained unless the Chairman, the boss, the CEO, Head of the Board or the owner was the champion. Never. I've seen enormous improvement, but I've never seen it stick unless that person is the boss. You need a George Sherman at Danaher. You need Larry Culp moving from Danaher to GE. I think he's going to do it at GE. This is 215,000 people he's going to have to change. It takes a Bill Kassling at Wabtec. It takes Michael Lamach at Ingersoll Rand when he told his folks, "Now that I'm the Chairman and CEO, we've been messing around with this lean for 15 years. But as of today, it's non-negotiable." And he said to me, "I'm going to work on one lean activity a month." And I said, "Oh my God, Mike, you'll kill yourself. You're running a," at the time, "$12 billion company." And he said, "If I don't set the model, not to lead the Kaizens, but to be on the team, these boys and girls are not going to believe me."
Cliff Ransom: I just went and spent a week in a pump factory for Gardner Denver in Princeton, Illinois which is in the middle of soybean and corn fields that go for tens of thousands of acres in all directions. I kept saying don’t these folks know we are at war with China, who are they going to sell all of this stuff to? Anyway, they had a, let me think of what they called it, Inquiry to Order, they had to configure these products, that was like 45 days. And, everybody else in the industry was at 30. And when you are buying a $10,000 pump you are going to buy it from the guy who can get it to you in 20 days instead of 30, or whatever it was.
Cliff Ransom: Well, we took it to 4 days with 3 days of Kaizen work, 4 days. Now, we built a room, we put everybody who did it around the same table. I mean it wasn’t easy, but we did it. And the fact of the matter is we had sight lines to make that a day. When they get to be a day, they are going to get so many, I said to the operations guys, “You better get ready because you are going to get so many orders you are not going to know what to do with them all.” And that’s a nice problem to have, isn’t it Michael?
Michael Webb: Oh yeah.
Cliff Ransom: I try not to put myself as a role model, because I'm still learning so much, but I've only got four things that I do that add value. I visit companies, I am called upon by my clients, and this is a mantra for them, and it's been the hardest thing for me to do for a lot of reasons we don't need to go in them today. I should write short, bulleted, inclusion-oriented reports, not magnum opuses. I should travel to see ... Or, most importantly, the third thing is, travel to see or carry my clients with me when I visit facilities, meet with managements, go to trade shows, industry events. And then there's a fourth one, which is build my lean presence. That one's pretty amorphous, but it reflects the fact that's how I'm going to learn.
Cliff Ransom: And I work out of a 200-year-old house in Baltimore, and as I have 1.2 ladies who support me, and we work out of two great big rooms, wide open. The entry between the two is probably 15 feet wide. And if I hang up the phone, one of them will ask me, "Well, now, Cliff, that sounded like an interesting conversation you had. Can you describe to me how that will add value for this client, or that value, or some other client?" And it's again, that axe right between the eyes. And I'll say, "Dammit, I'm allowed to have dinner with my friends every once in a while." But the rest of the time, I have to concentrate on what adds value.
Cliff Ransom: So you and I have talked about this, but I got a lot of ... My tagline for my business is the way of lean investing. It's just, feel that sort of zen-like portion of the Toyota way, but call it lean investing, very specifically, and all kinds of people, I note most of the time it was people who aren't my clients, but people interested in lean, say, "You got to write the book, you got to write the book."
Cliff Ransom: So I started writing the book, and we reorganized my time and the ladies picked up stuff and we filled a lot of stuff that was non value added, and I was going to spend 20% of my time on the book. I wrote 10 chapters, and I sent them off to all my long-suffering sensei mentors. And the first guy to come back was Jim Womack and he said, "What's your purpose?" The second guy to come back was John Shook and he said, "Who's your audience?" And the third guy who's one of my major supporters said, "What's your voice?" And I realized I couldn't answer any of those questions.
Cliff Ransom: So I tore up those chapters, and I outlined on one, two, three, four, I'm looking at them, big whiteboards, with three by five cards, 22 chapters of the book. And I looked at it and said, "I don't know who's going to derive value from this. It's not really for corporate executives. It's not really for lean practitioners. It's certainly not for investors. So why am I writing it if I can't define the people who are going to add value?" People, for years, would say, "Well, it's part of your legacy." I'd say, "I'll be dead! What do I care about my legacy?" And so I killed the book.
Michael Webb: Wow.
Cliff Ransom: Of course, I wound up spending about half my time instead of 20% of my time. But these are all learning opportunities. Right, Mike?
Michael Webb: Absolutely.
Cliff Ransom: When I look at companies, I have three categories. One is the super achievers in my universe. These are people who are very process-driven; process-driven to the extent that it becomes a bonafide culture. And then I have a group of companies, inelegantly named, a good implication in the name, and I call them next generation Danahers. There are only nine super achievers, in approximate order of ascension to my list. That was Danaher, ITW, United Technologies, GE, and we can come back and talk about that if we want to, because I've got a lot of egg on my face. Well, I will say, because most people do start laughing, I didn't start buying GE in my 47-year career until 2008. I looked brilliant between '09 and, I don't know, '11 or '12. And then, of course, I looked stupid again. Now I'm back to looking okay because I'm about back to my average cost.
Cliff Ransom: The point is that the others added, later, Roper. I would comment that Roper and ITW are not classically lean thinking companies, but they have extraordinarily disciplined and well-articulated and well-followed practices. I added, later, I added Roper, as I said. I added Honeywell. I added Fortive when it was spun out of Danaher, because obviously it's the same DNA.
Michael Webb: Yeah.
Cliff Ransom: And I added Parker Hannifin and Crane most recently. I find it instructive that in 15 years of running my own firm and using that categorization, I've only got nine companies that I can call truly world class practitioners of organized thinking.
Cliff Ransom: I've got about 50 names that fall into the next generation Danaher category. I sometimes frustrate those organizations because they can stay on the list for five or ten years before I'm convinced that they're really sustained. All but the first four, of the super achievers started on the next generation Danaher list. So I would say there are very few people that do it.
Michael Webb: One last question, and then we're going to try to wrap it up. I had a fascinating conversation from a gentleman, he was in his early eighties, and he had founded a company, it was up in Ohio, and they were a company that had made a huge impact in the market with organic fruits and vegetables. They served high end restaurants. And he made a comment, he said, "We need a sales process, because our eight salespeople ... It's just not working the way it needs to. And I'm getting old." And he said, "I hear this lean stuff and empowerment kinds of ideas," but when you're starting a business, you have to be a dictator because you're the only one who knows what the customers want and how to give it to them, and you hire a bunch of people who are coming in to do stuff so that you don't have to do it all. He says, "There's just no other way to do it than being a dictator in the beginning." And then-
Cliff Ransom: And how did you answer that?
Michael Webb: Well-
Cliff Ransom: I know what my answer would be. I want to hear yours.
Michael Webb: Well, so what I thought from that, my conclusion was, "Well, that makes a lot of sense, but there has to be a transition, at some point." There has to be a transition, at some point, where you are engaging people for their ability to think and not just as pairs of hands to go do your bidding. So sometimes, like in a corporate turnaround situation, this is what I thought, and I'd be real interested in your thoughts; is corporate turnaround, sometimes managements must make dictatorial decisions just because they have to, it's an emergency, like in combat, or something. But most of the time, they shouldn't rely on that. Most of the time, we need to be developing the people in order for these emergencies not to happen. That was my answer, so-
Cliff Ransom: Well, what he was really saying was at the beginning, and I would ask, "At the beginning, you obviously had ... You grew half an acre of vegetables, you sold to restaurants, you decided you wanted to go to 2,000 acres and sell it to restaurants, you need 100 sales people." I would say, "Why wouldn't you have a dialogue with the people that you're going to hire?" Hopefully hire some good ones first and say, "This is the way I look at it. What do you think? What is your experience been?" Or, go visit some guy who's growing organic vegetables in California, selling them to restaurants who you're never going to be a competitor to and say, "How about if we exchange ... I brought two of my salesmen with me. How about if we exchange ... Swap laws," as I call it, "And learn about each other's business?" Why wouldn't you reach out and see if somebody had a better idea?
Cliff Ransom: Michael, you and I both know it's not that we're smart. Or, maybe we're smart, but it's not that we're experts.
Michael Webb: Right.
Cliff Ransom: Because I've already told you how I feel about that. You go into a plant and you say, "Well, why do you do that?" And 90% of the time they'll say, "We never thought about it." It's just fresh eyes. And I would say you don't have to start by demanding that they do it your way, because God bless you, you may have been successful, but by definition, it wasn't the best way. Because continuous improvement says there's always a better way. So if you've been successful with a dictator, just steal it, find the two or three things that really were important to it; eliminate the four or five or 50 things that actually detracted from it that you didn't realize it until you had some fresh eyes.
Cliff Ransom: I cannot disagree more with that guy's statement, because I think there's a better way to do it. There's always a better way to do it. You know? That's the difference between the United States Army in the US Marine Corps. I was in the parent company of the Marine Corps, the Navy, so good, I've just irritated everybody who was in the military. If the General on the battlefield gets killed, the Colonel can take over. Maybe the Major can. Captain probably can't. In the Marine Corps, you could kill everybody down to the PFC and he'll go take the hill because he knows what to do.
Michael Webb: Yeah.
Cliff Ransom: And he doesn't need to have a whole lot of people telling him what to do. That independence of action, first with independence of thought ... I have to tell you, based on the thousands of companies that I've been in, 99% of the people that I talked to want to do better job.
Michael Webb: Yeah.
Cliff Ransom: They want to better bosses. They want to have more impact on their customers. They don't want to go home and say, "Hey, honey, we made 2,000 cars and 3,000 of them are in the rework shop." They don't want to go home and say, "Oh, Fred just lost his other arm because the light shield on his 150 ton Minster press failed, and they chopped it off." They want a safe, productive environment. And if you tell them the difference between empowering to do it, which means they're allowed to do it; and telling them that's their bloody responsibility to do it, that it's imperative that they do it better every hour, every day, every minute, I think most people rise to that occasion. So that guy ... I'm picking on a man who was 80 years old and God bless him, he had a bigger business than I do, but I think there would have been a better way to do it.
Michael Webb: I think that's a fascinating response. I had not come up with that on my own. And so, thank you. This has been a great deal of fun. Thank you very much for being here.
Cliff Ransom: Thank you, sir. I love talking about this stuff. You know? So, there it is, how I learn.
Michael Webb: Super. So if someone wants to learn more about lean, or if someone wants to get ahold of you, what would you recommend?
Cliff Ransom: Well, I have to say, by regulation, by law, I'm allowed only to talk about investments with institutional investors. That's just an SEC kind of thing. But I love talking about lean. I would say either call me, 410-522-0061; email me at [email protected]; you can Google me. But if you Google me, Google Cliff Ransom lean, because otherwise you're going to get all of the references to my son, who has the same name but a different number and he looks like a brilliant Renaissance man, Editor in Chief of Popular Science, Senior Vice President of Science Magazine and Nature Magazine and Scientific American, the excavations in the Yucatan for Mayan temples. I'm just a dull lean guy, so put Cliff Ransom lean in, and that'll tell you ... It's kind of everything you need to know about me.
Michael Webb: All right.
Cliff Ransom: But if you want to contact me, do that.
Michael Webb: Excellent. Well, I hope they do, because you're a fascinating fellow and not very many people have been in the corners of the world or had the fortitude to withstand all the challenges and changes that have taken place. So thank you very much for being here, and I would look forward to our next chat.
Cliff Ransom: Thank you, sir. Very kind. Bye-bye.
Speaker 1: The Sales Process Excellence podcast is sponsored by Sales Performance Consultants. Discover how to improve your B2B sales with systems thinking at salesperformance.com.
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Bill Bentley | Finding the Tipping Point
17 déc. 2019· Sales Process Excellence Podcast
Michael Webb: B2B sales and marketing works to find the highest quality prospects, reach decision-makers and sell value. Operational excellence uses data and systems thinking to make changes that cause improvement and eliminate waste. My name is Michael Webb and this is the Sales Process Excellence podcast. In the next 30 to 40 minutes, we're going to destroy the myth that these two groups conflict and show you how to bring both strategies together to create more wealth for your company and your customers.
Hello, this is Michael Webb and I am excited to introduce you today to someone I have known for many years and who has brought an amazing insight not just to business but to measurement problems and statistical analysis. Bill Bentley, welcome here.
Bill Bentley: Thanks Mike. Glad to be here.
Michael Webb: You just have this most fascinating background. I want to kind of walk people through it. You got an engineering degree at Rensselaer Polytechnic and then you began as an automation engineer for Procter and Gamble and Frito-Lay, right?
Bill Bentley: Right. I was at Procter and Gamble for quite a while. Then went to Frito-Lay from there.
Michael Webb: As a manager at Frito-Lay, right?
Bill Bentley: Right.
Michael Webb: And then when we met, you had been hired by Rockwell Automation. Tell us about why they hired you.
Bill Bentley: They hired me because I had just lost a job during a downturn. I was in charge of all the industrial automation and electrical engineering at Nabisco and when KKR bought them, they kind of dissolved the company, broke it all up, and Rockwell was a big supplier to us and they called and offered me a job in their sales force to help the sales teams sell to people like me or people who had jobs like the one that I had just left. So it was very interesting. My first reaction to that job offer was actually, "No, I'm not interested in that. I spent my whole life avoiding salespeople. Why would I want to be one?" But after a few weeks, realizing that I was unlikely to get any other work, I called back and changed my mind and that turned out to be a very interesting job and lot of fun and I enjoyed it.
Michael Webb: And likewise, I was hired by them in around, trying to remember, I think it was '81 or '82, not at the level where you are at. I wasn't an executive, but I was a sales manager and I was brought in to help their large vaunted sales force of degreed electrical engineers to make this shift. The president of the company, his name will come to me in a moment, was trying to turn Rockwell from a manufacturer of industrial controls sold in brown boxes through industrial distribution, limit switches, push buttons, PLCs, stuff like that. And he wanted, instead of selling the pieces in parts, he wanted to be able to sell integrated systems with all the margin covering the labor and all that, he wanted them to be able to sell solutions. And so I was in the field sales force in the St Louis branch and I met you as one of the guys at corporate who was helping us.
Rockwell had made it's success in the automotive industry. It was a way to automate and better control systems of relays. And now they were trying to move from that on off digital kind of manufacturing environment, into a more higher level control system environment, especially with continuous controls. So that was a fascinating, fascinating time. We worked on, and I think you were involved in, we made the first proposal to a large brewery, Anheuser Busch in St Louis, to use digital automation controls for what had always been controlled in the past by a distributed control system, which was a continuous analog factory control. That was a $20 million project that we bid, we proposed, you remember working on that Bill?
Bill Bentley: I do remember it and I remember the sales guys make a whole lot of money, maybe I should do that rather than be an engineer.
Michael Webb: Yes indeed. Yes indeed. So from Rockwell, after that, you were a general manager, senior executive at least one engineering firm, right?
Bill Bentley: I was, I was general manager of a contract engineering firm in Tennessee and we were actually a captive engineering group for a Procter and Gamble plant, a very large Procter and Gamble manufacturing plant. So I had about a hundred engineers and designers and programmers working for me at that plant.
Michael Webb: And then when that tapped out, a lot of us had some difficulties after 9/11, the economy kind of went South and then there was the financial crisis in 2008, so you founded a successful Six Sigma training company for yourself. Tell us about that.
Bill Bentley: After that stint, I came to Atlanta to be the CEO of a software company and that's the company that folded when 9/11 hit. So I worked again. And I did start my own consulting business and training business and that business lasted for 18 years. It's still going at a low level, but 18 years is the longest I've ever spent in any company. And it was my own company. So I was happily self-employed and I loved it. It was quite interesting. It started as a community service project to teach people who are out of work, how to do Six Sigma and ended up being a national training and consulting business.
Michael Webb: Which is a fantastic outcome. Not many people would be able to make all of these transitions in their careers and then a few years ago I was surprised, shocked and interested to see what you did next. Tell us what you did.
Bill Bentley: After 18 years of doing what I was doing, I started to get itchy feet, it started to become routine and I could see that business going down hill slowly. So I actually went back to grad school. I've got a new degree, a masters in applied statistics. I picked a bunch of other courses online and declared myself a data scientist and now I had the credentials to back it up. Went looking for a job and I took a full time job as a data scientist for a very large company here in Atlanta.
Michael Webb: And that's fantastic. I don't know, just because you had a passion, you really like the way, the analytical part and the creativity involved in the mathematics of statistics, if I understand that right.
Bill Bentley: I did. Right. And what drove me to do that and choose that is sort of my retirement job, I guess you could call it because the stuff that was the most interesting to me was the analytics stuff, working with numbers and teasing information out of them. A lot of which I did for you when you and I worked, did projects with your clients, I chose to pick that as my next field.
Michael Webb: Right. Super and so very cool. So let's get into that. I want to describe the projects. There were several of them that we worked on. I would get hired, this was after or at least around the time, right before and after, Sales and Marketing the Six Sigma Way was published and I would get hired by an executive, senior executive of a company, sometimes a big company, sometimes a small company. The first thing we would need to do is to figure out, actually like the second thing we would need to do but is to figure out, okay, what makes a qualified prospect, let's define what that is. And I started trying to do that using Likert scale questions, with a one to five scale. And so I took the sales force through some facilitated exercise to define these questions and had them gather data according to it.
And so they would have a question. And for example, a coach network. A coach for a given sales opportunity, a coach is somebody inside the customer's business who wins if you win, there's something good for them if you win and they are in a position to help you win, they can tell you what people are thinking, they can tell you how to position yourself so that it better communicates your value. And so in any given account, you might have, well I don't know who in the business is a coach and that would return a zero score or at the other end of the scale, the decision maker, I know them and I know their coach. So that would give you a five and then you can identify observable things in the middle. Several different ones. I know someone, but I don't know if they a coach or I do have a coach, but they're not in a position of influence. I do have several coaches, but I'm not sure if they can influence it very well or they can influence it.
Anyway, all these different gradiations and I remember what you told me when I was going to bring you data using a Likert scale. What did you tell me?
Bill Bentley: I told you that in those cases, Likert scale data is useless. That what it really is, is people's opinions which are described in words and which we, for various purposes, convert them to numbers and just like you can't find the average of a cow, a pig and a horse, you can't find the average of a one and two and three when they represent opinions instead of actual measured data.
Michael Webb: Right. And so I talked you into proceeding ahead anyway. And the results tell us, I mean I thought the results were spectacular. Tell us what you saw in the data.
Bill Bentley: You had an advantage, while we worked on this together, we were able to do something that most people who work with Likert scale data can't do. And that is you had the ability to train the people who were doing the scoring. So it was the same people over and over again and the sales people who were scoring clients. And we got the data for our model, looking at the things they had sold in the past year, I think. So you were able to give them some basis for choosing whether it's one, two, three, four, five and you have to train them. So because you could train them, the quality of that data was much better than it would have been had you, for instance, been collecting data through a blind survey and sending surveys out to somebody who would only answer it once and that's the worst kind of Likert data.
So you had the best kind of the Likert data. And the result was that we were able to make a statistical model that predicted the probability that that company would buy from you, given the answers to certain questions. And it was a very good a model with very good high reliability and had good ability to predict. So I was as surprised as you were that it came off that well.
Michael Webb: Well I wasn't as surprised. I knew that there was some value in that data. I didn't know what was going to look alike. But way back in the beginning when I first went independent from my sales training job, my first client was a fellow from some work I had done with the sales training company and he was a regional sales vice president for Marriott Corporation. This was before I started working with you on these statistics and I got them to ... I didn't know exactly what I was doing, I was helping them operationally define, after a fashion, what made a high quality account for them because they were selling repeating relationships. And they came up with, my goodness, they went crazy in this exercise and it took a day and a half, most of which was on the phone with their teams because they had, I forget how many, 20 or 30 sales people and they came up with 37 questions and they collected the data and I had another statistician do it and he was able to find some profound tendencies in the data that was actually quite helpful to Marriott.
I remember my wife was very nervous about me going independent and when I got the $20,000 check to pay for this engagement, I made her take it to the bank so that she would say, "Yep, you can do this." And so it was several years later before we landed this business, when the first one was with a small software company called Replicon and they had about nine salespeople, I think. And the sales manager was very skeptical. But when the data, the results started coming in and he started realizing how accurate this was as a forecast indicator, he was quite impressed. Then there was another client about a year later, this was right after Sales and Marketing the Six Sigma Way was published, a company called Maquet and they had I think 36 salespeople at the time, M-A-Q-U-E-T. They made a very high end, very sophisticated set of equipment for healthcare, for operating rooms especially.
One of them was a respirator, the machine that breathes for you if you can't breathe. And so we got them to define a little bit better this time, the observable characteristics of their sales opportunities and we gathered a couple of hundred, the number 240 rings to mind, to my mind of instances of sales opportunities across the United States over a couple of year period of time. Actually, we let them go historically to gather that data. One of the first things that came out of it, I don't know if you remember, we did a pareto chart of the salespeople by close ratio and it was pretty even, but the person who had the lowest close ratio, you remember what you told me about him?
Bill Bentley: Yeah, I think, as I recall, I said, "If he worked for me, I'd fire him."
Michael Webb: Yeah, that's right. And I didn't know who the fellow was, hadn't met him, but we told the client we're going to be open about this stuff. And we put that chart up there with the bar chart, with the lowest close ratio and the sales people's names were on it. And I remember there was silence in the room and then there was some sniggling and shuffling of feet and a little bit of tittering and chuckling and I'm just going, "So tell me about this. What are you thinking?" It turned out that the guy with the lowest close ratio was a salesperson who had the highest performance, a sales guy by a large margin and one of the reasons was that he really truly bought into the mission of the CRM system. So if anything smelled like an opportunity, he would put it in that system.
Most of the other sales guys, we're not that way. The sales VP had engineered it so you could not get a quote unless you entered it into the software. And most of the other people simply entered in a deal once they had to quote it, then they would be forced to enter it into the system. But the top sales guy was drinking the Koolaid and he would enter all of his deals and so he had the lowest close ratio. And I thought, "Wow, is that eye-opening about measurement systems in sales forces?"
Bill Bentley: It was pretty interesting and I do remember that. I think I discovered at that time, it was that when I looked at the data that each of the salesman had collected, I was able to determine that two of them had faked the answers.
Michael Webb: Yes. You said these two guys are not in the same universe as the others and you told me who they were and the day before you told me that, I had been on the phone with the sales VP and he was telling me about some circumstances where they'd had to change their comp plan and some of the sales people were really, really upset about this. And it was those two guys. So they were trying to queer the data and you could tell. I thought that was another astonishing outcome of measuring the data this way. And then a story I've told many times, some of the questions were way more predictive than others. I think there was like eight or nine, remember that?
Bill Bentley: In terms of what we call in the data science business, which are statistically relevant predictors, we only had something like eight or nine out of the 30 or so things that you had them collect data on. So in effect, they could not bother collecting data on the others. And I think at the time while I said you can forget collecting that data, but the head of that company didn't want to do that because he didn't want the sales people to know which of the factors were the ones that mattered.
Michael Webb: And then there was another crucial insight that came from this data, remember it?
Bill Bentley: From that we were able to make a graph in effect, which showed the probability that you would close the deal given the values of the data that you had. So it told them which jobs to go after and which ones to stay away from. Don't waste your time on those. And if they had some extra time and if the company would let them actually look at this data, it would show them why the score was low, which factors were driving the probability low and if those were factors that they had some influence over, if they could do something about it and it gave them some things to do. So your extra time, go after these low probability deals. But the model told them what to do in chasing these low probability deals to make them better.
Michael Webb: Yes, it was all traceable. It was all traceable down, so they could tell and I called it the tipping point after that because it wasn't a gradual increase in probability. Those are pretty sharp increase in the range of the scores. Say the lowest score on the qualification assessment was 30 or something, 28 or something and the highest possible score might've been 120. Well there's some range, perhaps between 62 and 81 where below that was almost no chance of closing, above it was almost a hundred percent chance of closing. And so as you said, salespeople could walk away. But what they ended up doing was looking at it and saying, "Well wait a second. There was a lot of these questions where I really don't know what the answer is." And unwittingly that caused them to go when they were working with those accounts to make sure that they asked those questions.
So without realizing it, they were aligning their sales behaviors. We didn't have to tell them to do that. The qualification criteria was credible to them. And so they used it like a recipe. I need some of these and I really need to increase that one. I need some more of the ... I need to know the answer to that question. So we ended up helping them see that if they can't increase the score, then they have permission to walk away. And in some cases you had to kind of force them to walk away. This is like an x-ray machine looking at your sales funnel, because it tells you where things are broken, where the parts are missing, where we need a new x-ray and it's very, very productive. There was another thing that we were able to get out of that data. Do you remember what it was?
Bill Bentley: Well I do. But some of your questions, which everybody expected that the higher the score, the greater the likelihood that you would land the client. When I did the modeling, the answer came out to be exactly the opposite. The higher the score, the lower the probability that you would land this customer.
Michael Webb: Yes. And an example of that was that same one I mentioned earlier about your coach network and boy we were scratching our heads for awhile trying to figure that out. But because this is set up as closed loop, we're getting data back from the use of this instrument, we were able to learn what it was. We interviewed some of the salespeople, it only took two or three interviews to realize what was going on. Maquet's strategy had been to hire, degreed, not degreed, but experienced respiratory therapists who managed respiratory therapy departments, not professional salespeople. And so they were respiratory therapists first. And to them a coach, they were just interpreting it as, "Oh, this must be my friends back at the hospital where I used to work."
And so because they were misinterpreting the meaning of the question, the data was coming back wrong. And so we worked with them. And there are actually two or three questions. I think there were three like this and we had to go back and rework the questions with the sales people's help and then as a result of that, we produced a new instrument and moving forward the forecast accuracy of that, as I recall, it was like 94, maybe even higher then 95%, you remember what it was? Really high.
Bill Bentley: I don't remember the number, but I remember believing for this kind of a process, it was an amazingly high number.
Michael Webb: Yes, and the president of the company told me several months later that it was incredibly effective for the sales force. They had a lot of respect for this data in this qualification criteria. And so when they would get to a prospect and they couldn't figure out how to increase the score, go back and ask the questions, then they were supposed to walk away. Sometimes you had to kind of encourage them to walk away, but it gave them permission, so it's like an x-ray inside their funnel. I may have said that before, to see what's going to happen and what's not. This is very profound and because it tells the sales force A, are we going to make our numbers or not so they have a little time to compensate if there's not enough good leads in the funnel.
Another thing it does is it allows you to measure the impact. Suppose they decided, other data showed them that they needed some sales training of some kind to be able to get customers to talk to them more effectively during sales meetings or to better be able to present value propositions or build more coaching relationships. Well you would be able to see the effect of the sales training in the quality scores that the salespeople were producing. And so now you have the potential to calculate ROI on what has been called soft skills training. And it's really not because there's cause and effect relationships as professional salespeople know. It's not like a machine, but there's definitely causal effects going in there, happening in there and now we're getting at it by use of this operational definition approach. Have you seen stuff like that happen in other places or implications of this in other places Bill?
Bill Bentley: I've done a lot of models and I have seen other instances where models produce results that were unexpected. Nothing in this system like I working with you, not in the sales business. Doing analytical modeling in sales is pretty unusual. You have a pretty unique business. But in other kinds of businesses it's normal practice and they tend to be more mechanical and more physical and more process oriented. But even there we have found where variables don't have the effect on the process that we thought it had, or the effect is limited to a narrow range, just like you were describing with the tipping point. Sometimes the effect is limited to a narrow range. And sometimes the effect is only there when other effects are there.
So we provide interaction and that's very difficult for a person to recognize that certain circumstances, this activity that they perform or this value that comes out of a sensor is going to have a positive effect. And on the other times it has no effect at all or a negative effect. And that's because some other part of the process is doing something to mask it. And that can come out in the modeling process and give them great insight into what's happening.
Michael Webb: You and I shared an affinity in this recognition of the scientific method and how effective it was. And actually, it's difficult. You have to learn how to do it, controlling your own mental processes to be able to do it effectively. And that's something everybody has to learn for themselves. But I had grown up in sales and constantly seeing these situations where in a manufacturing environment they would apply a technique like this and things would improve when they did it right, had data instead of just somebody's idea. But in sales, everything was subjective. It was just, work harder. So I knew there had to be a way to do this and these projects that you and I worked on prove that. And if you step back and you look at the so-called data that is available by the hundreds of thousands of gigabytes now in CRM systems, and yet none of the salespeople are defining their terms even in the same way because executives don't realize they need to develop that discipline throughout their whole organization, not just on the sales team, marketing team, sales team, service team.
And then you look at the fact that the percentage of B2B sales forces that are sales people, that are making their quota every year has been declining. It's eight years in a row now, as I understand, it's just barely above 50% of sales make their quota. This is from CSO Insights. They do this survey every year of like 2000 companies around the world. And that's what they're seeing. And I mean that is a systemic issue. There's something in the way management is managing sales and marketing that is causing this because all those companies are trying everything they can to improve their sales productivity and it ain't happening. And so I believe that this bringing this scientific mindset to be more reflective about what are the observable characteristics that cause a sales opportunity or a customer account or a distribution channel account or a salesperson for that matter.
What are the observable characteristics that make them high quality or low quality, that creates a theory and you're articulating that theory and you're articulating by observed observation, this operational definition, that is data that can only help you diagnose what is actually happening in your organization and the experiments that you and I were fortunate enough to do together definitely prove that so I thank you for that. I couldn't have done it. I'm a major in math but not like you Bill.
Bill Bentley: It just takes time and sweat, that's all.
Michael Webb: I'm sure there are other people out there, maybe some other stats geeks like you, who might want to know how to do this or chat with you. How can they get a hold of you Bill or are you open to that? I mean you are retired now.
Bill Bentley: No, I've started a brand new career. I have a full time data science job now.
Michael Webb: Okay. But I mean it's a retirement job. I mean are you okay if people reach out to you to chat about this stuff or something else?
Bill Bentley: I am. My value chain business is continuing and I'm still doing training, I do it virtually. I'm still open to doing consulting work. I'm just limited in when I can do it. I can't do it in the middle of the week when I have my other job to do but I do look for it and I'm interested in doing it. I'm working on a project right now on a muddling project, that has a lot of the same similarities that you're saying muddling projects had and that is that they're using Likert scale data to make decisions, only unlike on your project where you had the ability to coach and teach the salesman on how to answer these questions. These companies are having the questions answered by strangers in effect, who are only going to do it once. So they had no ability to help them answer the question and they're making big decisions based on what I considered to be very iffy, flaky data.
They're not the only company to do it. It turns out there are a lot of companies that are doing this. I don't know if I'll be the one to blow the whistle on it and tell them to all stop. But we'll see.
Michael Webb: Well, and likewise if you find somebody who wants to know how do we do this with our people, motivate them to be more anal and more precise as a team. And if you want help with that, you can send them my way. But this is a great story. It's a wonderful discovery. I was really tickled to be part of it. So how can people get a hold of you, Bill?
Bill Bentley: The best way to do it is to go to my website at value-train.com and all my contact information is there.
Michael Webb: So we'll include a link to that. I'll include an example on the show notes page of one of the statistical charts. I remember one in particular that showed the borderlines of the tipping point for one of these clients so that the stats geeks can look at it and kind of see how we did it. And boy, this was a fascinating story and I really appreciate it. And maybe there's another topic that you and I can talk about again. Would you be willing to come back to the show?
Bill Bentley: Sure. I'd be glad to, this was fun.
Michael Webb: Well thank you very much. And until next time, take care.
Bill Bentley: Thanks Mike, talk to you later. Bye. Bye.
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Tripp Babbitt | The Deming Philosophy is a Way of Learning
3 déc. 2019· Sales Process Excellence Podcast
Michael Webb: You're listening to the Sales Process Excellence podcast with Michael Webb. B2B sales and marketing works to find the highest quality prospects, reach decision makers, and sell value. Operational excellence uses data and systems thinking to make changes that cause improvement and eliminate waste.
Michael Webb: My name is Michael Webb and this is the Sales Process Excellence podcast. In the next 30 to 40 minutes we're going to destroy the myth that these two groups conflict and show you how to bring both strategies together to create more wealth for your company and your customers.
Michael Webb: Hello everyone. This is Michael Webb, and I'm pleased today to bring to you a guest that I have not spoken with before, but because of his background, as you'll see, I'm very excited to have this discussion, and I think there's going to be some pretty interesting discoveries that come out of our conversation. I'm on today with Tripp Babbitt. Tripp is the president of a firm called the 95 Method. Tripp, welcome here.
Tripp Babbitt: Thank you Michael. Thank you for having me on.
Michael Webb: Now you're also... Have been involved with the Deming Institute, and remember my audience is mostly executives who are focused in on sales and marketing. Most of them have heard of Deming, but could you just kind of share your background, because as I understand you came from a place very different than people who come into a sales and marketing career typically come from. So tell us where you've been and what's the journey you've been on.
Tripp Babbitt: Interestingly, I actually started in sales, but-
Michael Webb: Really? I didn't know that.
Tripp Babbitt: Yeah. Yeah. Absolutely. I worked for an industrial distributor in the midwest. Then I got my MBA. I was a manager for an industrial distributor, and I got invited once I became a manager to a seminar by W. Edwards Deming from Allison Transmission, one of his original four-day seminars that he did across the US.
Tripp Babbitt: I had just completed my MBA and I was expecting kind of more of the same types of stuff with the education I get out of the seminar, and what I got instead was a big smack in the face. Dr. Deming's seminar was pretty much the opposite of everything that I had been taught in my MBA program and is still being taught today in MBA programs throughout the US.
Michael Webb: Parenthetically, my son just signed up for a very expensive, very prestigious MBA program. I tried to talk him out of it and I couldn't, so we'll make the most of it that we can.
Tripp Babbitt: Very good. We could talk about that too if you like. But I was really intrigued by the Deming philosophy, so I eventually started my own consulting business and I used the Deming philosophy. It's based off of his system of profound knowledge, which is systems thinking, which I know is near and dear to your heart, theory variation, which is the data, theory of knowledge and psychology.
Tripp Babbitt: I use that as kind of the basis of what I call, and you mentioned, the 95 Method. That's kind of the short and long of it I guess so to speak, of kind of my story and how I got into this.
Michael Webb: Many of the people who are in my audience, they've learned about process improvement or process excellence and the Deming philosophy. They got to it through being trained in Six Sigma or in Lean. So it would be great to get your perspective on this I don't know what you would call it, this operational excellence marketplace, because there's several different flavors, and I'd love to understand your perspective of where you sit compared to, for example, people who go at it from a Six Sigma orientation or a Lean orientation or the Shingo Institute.
Tripp Babbitt: I think you have to have a little bit of history in order to kind of understand. The Deming philosophy in Japan... When Dr. Deming went to Japan in 1950, he basically started a whole new program, and some of the things in his system are profound knowledge. It was the beginning of what would be later called Lean, and I would even say an offshoot of that would be Six Sigma too, because he used Walter Shewhart's control charts.
Tripp Babbitt: So the base philosophy of Deming to me is what is exactly missing from Lean and Six Sigma. I am a Six Sigma Master Black Belt, so I went and did that under a lady by the name of Dr. Frony Ward, and I also worked with Dr. Don Wheeler for a little bit in order to get my data smack.
Tripp Babbitt: So I believe these are Lean, being the Toyota production system in essence is what it's based off of. You got to remember, in Japan Dr. Deming worked in a number of industries, not just the auto industry, and just within the auto industry he not only worked with Toyota, but he also worked with Nissan and... Well, it was Datsun at the time, and then Honda, and then a number of of other companies throughout.
Tripp Babbitt: So to me Lean got off I think for a long time focused on tools, and the Deming philosophy is just that. It's a philosophy. It's not a method. It's a way of learning, and one of the things I always challenge Lean folks to is so what new tools have you developed, because I always hear about the same old ones.
Tripp Babbitt: Deming's philosophy was set up for us to continually update and innovate the way that we think about work and product and everything else, and management for that matter.
Michael Webb: Let's dig into that a little bit, because I agree with you the Deming philosophy, the four fundamental principles, seem to me to be at the root of the tools of Lean, the method of Lean, right, focusing on flow and distinguishing value from waste, and using that as sort of your North Star.
Michael Webb: But they're also unpinning the tools of Six Sigma, which is much more measurement oriented and statistically oriented, and it also is underpinning the ideas of the Shingo Institute, which is way more management focused. Would you agree with that?
Tripp Babbitt: I don't know much about the Shingo Institute. I know a little bit more about Six Sigma. I think there are some tools in there that they use, statistical tools, that are unnecessary, matter of fact most of them. But the one tool that I often find even new Green Belts and even Black Belts on occasion, they aren't with Shewhart's control charts, and that's a shame, because that's a very primary tool.
Tripp Babbitt: As a matter of fact, any organization not using Shewhart's control charts that Dr. Deming made famous are really missing out on an opportunity to look at their data in a refreshing way, and gets to some of the things that you talked about in this podcast about using systems thinking so you can understand what's attributable to a system versus attributable to social causes or the individual.
Michael Webb: Yes. Absolutely right. What I understand about the Shingo Institute, it's very interesting and it's very compatible with what you're doing, as I understand it, and we'll get to it in a minute, about the 95 Method. But it's a set of principles for how senior executives can help change the culture.
Michael Webb: So they don't get a lot into the tools. They fully recognize the error of teaching people about tools and why when you try to introduce this change to a business to give them these problem solving tools it typically doesn't get sustained because the people in the business don't know why. They don't know why to do this, right? So they just have a bunch of tools. It doesn't help much.
Michael Webb: But when they understand the why, then they can see... They can invent their own tools, right? They can put them together in creative ways, and the Shingo Institute... It sounded to me like it was a similar type of a focus to what you and perhaps the folks at the Deming Institute were trying to accomplish.
Tripp Babbitt: The Deming Institute itself is more focused on just the fundamentals of the Deming philosophy. What I found lacked in the environment was a way to transform an organization through the individual. One of Deming's famous quotes is... And it's actually from The New Economics, which is the last book he wrote before he passed, but the first step is transformation of the individual.
Tripp Babbitt: One of the things that I heard when I was listening to some of your podcast episodes with people talking about, you know, people just don't understand, those types of things. Well, a lot of that is rooted in neuroscience, where we don't like to feel unimportant as an individual. We want a predictable future. We want to have control of things. We want some freedom. We want to be social. We want to have some integrity or fairness within our organization.
Tripp Babbitt: So one of the first things, and the reason I put the 95 Method together, and you've alluded to it in your podcast before also, is that 95% of the performance of the organization is attributable to the system, so the 95 in the 95 Method focuses then on the system.
Tripp Babbitt: So that's the steps, and actually what I am building, and I am building it with people that have volunteered within organizations to help steer what works and what doesn't work, is a method to go through to first understand their organization. A lot of changes are made kind of top down or because somebody has a great idea, and what I find better is that you need to involve everyone, because they want that control or freedom, and if you're going to change people on the front line, or really anybody in their organization, you need a method for making that change occur so that they can see things differently, and that's really what the 95 Method is all about.
Michael Webb: Let's distinguish that. With that helping people see things differently so they can change, where does that fit in with the job of management?
Tripp Babbitt: If if the transformation begins with the individual, whether you're in middle management, front line or an executive, then you need a method to kind of understand your organization. The larger your organization gets, the more complex and bureaucratic it becomes, and people don't really understand everything that's going on within their system.
Tripp Babbitt: The best way to get to understand their system is customer end, so taking a view from sitting in the customer's seat, and where that happens is typically... You know, a lot of organizations have contact centers, and listening to phone calls and listening to what customers say and what types of interactions are they bringing to the table so that they can understand exactly what's happening within their organization and how their front line folks react to that.
Tripp Babbitt: Now when you do that obviously then executives try to fix things, which you don't want to do. You just want to understand how your system is working, and if people are doing things wrong they're doing it probably for a reason, and those are systemic changes you need to do.
Tripp Babbitt: The thing that's lacking in management today, and it doesn't matter what management position that you're in, is that ability to see the entire system, and this, Michael, dates back to really the industrial revolution, which is where we had craft industry, where the person that came into the shop, you know, and they were going to make a shoe, they made the whole shoe. They worked with the customer until it fit right and did those types of things.
Tripp Babbitt: Then the industrial revolution comes along with Frederick Taylor, and then you got your specialization, your different departments doing different pieces, so people don't lack the view of seeing things systemically or end to end. So part of what I'm building with the 95 Method is that the beginning part is to understand how things flow through your organization, and not because of what you think it is doing, but because you have knowledge of what you're doing.
Tripp Babbitt: That applies to anybody, whether you're a salesperson, front line, middle manager, executive, because getting that view and getting agreement on what customers are trying to get out of that system helps you not only prioritize, but it also tells you how your system is performing.
Michael Webb: Let's take what you just said, that craft industry, to multiplying the division of labor, the complexity of it, and then how that applies or impacts on the commercial side, the sales side of an organization, for a moment.
Michael Webb: And I wanted to see if you would agree with this. From my reading of it and consulting with companies over the last 17 years, the Frederick Taylor days... Frederick or someone would study how the work is done, use a stopwatch, come up with a new design, and give it to the people to do as though they were a machine, automatons, just go do it. It creates all kinds of backlash, immune reactions. People don't like that.
Michael Webb: The next kind of phase seemed to be well, there's all these tools that you can use, so they teach people to use the tools, but they didn't know why to do it. So likewise, okay, we'll do it for a while if it works great, but if it doesn't it falls into disuse.
Michael Webb: What appears to me to be today, and this is so critical in sales, where people are constantly given a sales process, but having been in that role I know you have to just give lip service to the sales process, because only parts of it really help you do your job. Most of it does not help you do your job. It gets in the way of doing your job, so a salesperson is in a difficult spot.
Tripp Babbitt: The proper role of the quote process is for the people doing the work to express how best to get it done, how best to achieve the objective. The proper role of the process is not for somebody on high or outside the company to come in and tell people how to do the work. Would you agree with that?
Michael Webb: I do. And there's actually in the military now, where everything used to be command and control, it's now done through something called the commander's intent. It's not take the hill and do these steps. It's take the hill, you figure out how to take the hill.
Tripp Babbitt: Absolutely what you're saying is right on, and what I'm trying to do is develop a method for people to be able to understand that to the point that the people doing the work may have to make adjustments. You know, if you're going to take that hill and all of a sudden the whole army that you're fighting against is on the front part and you're told to go right straight up the front part, then you may need to adjust your theory and maybe try a different method in order to achieve the end that you're looking for, the goal.
Michael Webb: I really appreciate the fact that you started out as a salesperson in industrial sales and now you have all this background and experience and studying you've done about management systems. I mean what are your observations about the marketing and sales side of the business and the pains and problems they have and what this approach can do for them?
Tripp Babbitt: It helps you understand not just the piece that you're in, so if you're in sales you have a tendency to be very focused on trying to make the sale and that's the only thing. It has to be much broader than that. There has to be something, that you're gaining knowledge about the customer, you're gaining knowledge about different things.
Tripp Babbitt: I would even say as part of the 95 Method one of the big things that's missing from a lot of organizations, big or small, is innovation, and I don't necessarily expect that from a salesperson, but they do get insight and they are valuable players and can be in innovation, and certainly anybody that's selling knows how easy it is to sell something new that people want. It makes the sales job a lot easier.
Tripp Babbitt: I think today we still kind of have... And it's disappearing I think slowly, but from a sales management perspective we still have a lot of command and control. It's a formula. You know, if you make so many calls and you go and you check these many boxes, that's not systemic enough. That's too command and control and doesn't understand necessarily the broader system that is at work.
Tripp Babbitt: It's been a long time since I've been in that type of sales, but we're all selling everyday to a certain degree, but education on products and services and really understanding... When I was with an industrial distributor, understanding how manufacturing work was something that I had to gain knowledge on in order to be able to sell products or find new products that would help them increase their productivity.
Tripp Babbitt: These systems come into contact when a salesperson meets up with someone, whether it's a manufacturing firm or a service company or an individual, so understanding their system has got to be a major part of that process.
Michael Webb: And salespeople are caught in the cross-hairs of a pretty big dilemma, because the companies that employ them employ them to bring money to the company, bring customers in who are going to pay us money. That's the oxygen. We have to have that.
Michael Webb: They may say we got to sell solutions instead of products without ever really defining the problem they're trying to solve, right, so they'll hire sales training. I was in the sales training industry for seven years. There's lots of very valuable skills, active listening skills, research skills and communication skills, that can help salespeople be more effective in these complex sales environments where there's multiple different decision makers, but they all take more time and they take more energy.
Michael Webb: The salesperson very quickly reaches a point where he doesn't have enough time to do all the things that he needs to do, but the pressure to bring the money in is there. So the salespeople are in a difficult kind of environment and there's nobody in the company that's looking around to see how can we make this job easier.
Michael Webb: Instead, they take the guys or gals who made the most revenue and they reward them handsomely. The rest of them are just slackers, and you need to go do some more training and you need to organize yourself better, so they're all just individual contributors instead of the fact that they actually work in a system. I guess you can tell there's a little personal frustration there, because I was there for 17 years.
Tripp Babbitt: Yeah. Well, Michael, you're exactly right. I think one of the first things that I learned and I'm putting the 95 Method together the way that I am is you got to lose the judgment, the judgment of people and the judgment that this is the right way, and we have the one right way. That's the very old Frederick Taylor type of thinking and industrial revolution age stuff.
Tripp Babbitt: I think what you have to do is kind of sit back and take an inventory, and this is part of what I'm building, is understand the theories that are at work, here's what I believe works, and you write those things down, I believe that you need to hammer the salesperson and those type of things.
Tripp Babbitt: I'm very non-judgmental about those things these days because I want to understand why they believe that that theory is working and what results are they getting from that thinking. Typically they're going to have high turnover, they're going to have unhappy customers, those types of things.
Tripp Babbitt: So maybe we ought to look at some new theories, and when you go through this process of developing new theory you want to try different things. This is how organizations can innovate, whether it's reading or listening to a podcast or new salespeople, or even the existing salespeople... If they build something that they believe will work and you try it out, and preferably on a small scale, then you can start to learn new methods that work better.
Tripp Babbitt: So in order to make that change happen, it's not a matter of me being the sales manager, the old-school sales manager hammering out people, but kind of coming back and saying all right, I need to get rid of this judgment thing that I have, that I have a perfect method and they just need to follow it.
Tripp Babbitt: People have views. They want to explore. They want to be curious and they have ideas, and getting those and starting to develop new theories is the best way to go about it, because the organization with the best theories, whether it's in sales or operations or whatever, is the one that's going to win in any industry.
Tripp Babbitt: So constantly challenging existing theories that are at work is what you want to do, and you want to do that in a non-judgmental way. Unfortunately, alluding to your frustration, a lot of times that's not done without judgment, you know. Oh, you didn't try hard enough. It's not a matter of that. It's a matter of working smarter.
Michael Webb: It's not the judgment that's the problem, but how we make the judgment. Because if you come up with a new theory, a new experiment, and it works because the data shows you that we've had improvement, then you can judge that this is a better theory, and we need that judgment. We need to make those decisions, right?
Michael Webb: But it's the judgment in absence of data, it's just by going from the executive's gut feel or what have you. Would you agree with that?
Tripp Babbitt: To a certain degree yes, and to a certain degree no. Deming is famous... There's often a quote across the internet Deming was all about data, and without data you're just another person with an opinion, and stuff like that. Well those are not things that Deming said. As a matter of fact, Deming often talked about the unknown and the knowable types of data.
Tripp Babbitt: So you have to work off of theory a lot of times and then take data that is basically casting a shadow. So I may never know the cost of an unhappy customer, right? Supposedly they tell 15 or 20 other people, but we'll never know what the number is. But we can get an idea by the attrition of customers and things of that sort.
Tripp Babbitt: So that being the known data, and data can be helpful, the data is basically the feedback loop for what you're doing, and you may often not have the type of data that you directly need and you're going to have look elsewhere for ways that it's coming across. So we have to develop theories based off of what we're learning in the organization sometimes without data, and look for ways to get data on what it is other than the end result. Data is always helpful if it's available, but it also can be a double-edged sword.
Michael Webb: And here we enter into a area that is rich with opportunity, because there are differences in the culture between sales and marketing and in a manufacturing environment. In the manufacturing, especially in the engineering side of things and the process excellence side of things, I mean they know that they have to have operational definitions, a method of how you arrived at that number, that data.
Michael Webb: Those operational definitions, they take the form of words and concepts. So you have data and you don't know what you're measuring, it doesn't mean anything, right? Data outside of context is not meaningful. In sales and marketing we have all these words we use.
Michael Webb: Customer, we sort of assume we know what we mean by a customer. The fact is you can go in most companies, especially large ones, and ask four different people maybe in different departments who's the customer and you are virtually guaranteed to not get the same answer.
Tripp Babbitt: There's a few things that go through my head as you talked there. One is the need for a shared aim, shared purpose if you will, and getting that has to come through some type of method for people to be able to agree on things. So whether it's operational definitions or whatever it is, you get agreement.
Tripp Babbitt: The approach that I'm taking is that they take a customer in view of the organization and a method to do that, so they're all kind of singing from the same music that they're seeing the same things when they're listening to phone calls or listening to interactions with customers.
Tripp Babbitt: By getting that kind of shared understanding of what's happening within the organization and having a shared aim or purpose associated with it, then you are going to be able to get people singing from the same sheet of music, and that's really... Again, what I'm trying to build in the 95 Method is a method for doing that so that an engineer or a salesperson or an operational person or an executive or a contact center person can all sit there and have a method go through and they can talk about it.
Tripp Babbitt: There's no reason that somebody on the front line can't talk to an executive other than cultural barriers that exist within organizations, which are just foolish. Having those interactions and talking about... You will argue about everything in an organization if you take your functional view.
Tripp Babbitt: If you are talking about what the customer saw, that's a better conversation, because now you have kind of this touch point that you can go to and say here's what the customer is saying and here's the data associated with it, getting back to your need for data, to be able to say this is how we're performing. This is how we're viewed by our customers, and that kind of gives you that rallying point, and then I think after you get that type of knowledge, then I think you can start to build a better aim or purpose from that and that kind of gets people on the same page.
Michael Webb: In support of your concept of that customer... That outside in view, I was doing a podcast with Brian Carroll, who's the president of markempa. He's focusing on marketing and empathy. He also wrote a best-selling book called Lead Generation for the Complex Sale back about 10 or 15 years ago. That's how I met him.
Michael Webb: He learned something a few years ago that has sort of changed his direction. He had heard that there was this really odd company that was making all sorts of record growth and customer satisfaction, but it was a collection agency. Yeah. Yeah.
Tripp Babbitt: I heard the story, yeah. Go ahead.
Michael Webb: Okay. So when he learned that the secret of this collection agency, which was growing and way profitable, way outside the norm of its industry, was that instead of pursuing their people, who didn't have any money, and beatings will continue until you pay the bill and all that, they took a reverse kind of approach and tried to understand what those people needed, and if they needed to find a job they'd provide something to help them find a job, right? If they needed to find an apartment, help them do that.
Michael Webb: Whatever it was that they needed, they found ways of doing that. You wouldn't expect that at all from a collection agency, but by doing that they won support from their so-called... I don't know, I guess it's the customers, but from the client anyway, and they created all this goodwill and it had this counterintuitive approach.
Michael Webb: Brian started trying it in the company he was working for, doing lead generation, and instead of trying to find somebody who's ready to buy our product they're trying to find out when the person came to the website and downloaded something what were they looking for, and they tried to find other things to help that person.
Michael Webb: Counterintuitively, they grew 300% by taking that approach. Rather than a sales approach, here, do something I want you to do, it's what do you want to do, and let me see if there's something I might be able to do to help you, and it seems to have worked.
Tripp Babbitt: Yeah, I've heard that story before, and when I hear it the first thing that comes to mind is that they understand the business that they are in. So if you go back to some of the famous Deming maybe analogies that would go with that, if you thought you were in the buggy whip business or the carburetor business, you're out of business.
Tripp Babbitt: Now if you understood that you were in something to do with motorized vehicles, support for that, or that you were looking for ways to getting the gas to come together so it would be able to run the car, then you would have been in the business to understand that my purpose isn't making better buggy whips or carburetors, but a greater aim, a greater understanding of what business that they are in.
Tripp Babbitt: So this gentleman that you're talking about in the collection agency understood that there was a broader perspective associated with what businesses they were in, and I think that a lot of organizations are struck in this. They're trying to get better at just what they are doing and they're missing the opportunities associated with kind of the greater purpose associated with the business that they're in. By virtue of that they're missing opportunities to innovate, and innovation now is so critical.
Michael Webb: There's kind of a baby in the bath water problem I think that causes a lot of senior executives to not understand the value of this, and that is that... In my opinion, I would be curious about your thoughts here, that we get this concept confused with altruism, that our job is to find out anything that would be good for the customer and make sure they get it. But wait a minute, we got to make a profit, and the more profit we make the better.
Michael Webb: What this is really doing is finding what a customer's problems are and seeking win-wins to help them that may not cost as much, and if they're not qualified for us to help them, then we point them in a direction that will help them. That actually saves our sales costs, rather than trying to convert an unqualified customer.
Michael Webb: But then by earning their respect and appreciation for really understanding them, you can find those that are qualified and then we have a much more credibility with them to make the sales process go faster with us. It's selfish. It's win-win. It's not altruistic, and a lot of people don't make that distinction I think.
Tripp Babbitt: I read something in a book and it really hit me. It said that if we were selfish enough we would be altruistic. When I heard that, and I was reading about altruism is that by virtue of being altruistic we are being selfish because it serves the greater purpose.
Tripp Babbitt: So my thinking on that is... Along that line, is that if we were selfish enough we would be altruistic, and that we would be wanting to help everyone because it's to our benefit. You know, you look at the example, for instance of... Are you familiar with Mattress Mack? He was a Deming proponent.
Michael Webb: No.
Tripp Babbitt: Mattress Mack... You can look him up online, out of Houston. They had the hurricane that came through. What did Mattress Mack do? He opened his warehouses to people who didn't have... Who were flooded out of their homes, and so hundreds of people came to his warehouses to sleep, so that's where people migrated to.
Tripp Babbitt: Now did he lose money doing that? Absolutely. But what greater good did he do? He did a lot of greater good and people are so grateful to him, and the business that he's been able to increase by taking that altruistic attitude, it helped grow the business. So I'm a big fan of altruism, but with the understanding that if we were selfish enough we would all be altruistic.
Michael Webb: Well that's a subject that we should maybe pick up at another time. I have a little different take on it. Definitely the intent is the same, so this has really been a fascinating conversation, ranging all over a broad bunch of things, but I think that they're things that are very important for senior executives and for sales and marketing to have a perspective on, because there is a system there, cause and effect does apply, you can measure it, and this isn't about giving people processes that don't work or making compliance.
Michael Webb: It is about pulling what people know from them and helping the organization to achieve more for the customer, while also giving the employees more satisfaction, more income, more success for everybody, and that all requires innovation.
Michael Webb: Any closing remarks or observations, and then how can someone get ahold of you if they want to learn more about what you're doing and the 95 Method?
Tripp Babbitt: I actually have a document that's a free download. It is at my other podcast that I started. It's called mindyournoodles.com/overview, and they can become a part of what we're building. We're getting feedback and input and so forth on how you can go look at your organization's customer, and I believe that everyone would benefit from that. It's being updated constantly, so that's why we ask for your email. They can obviously listen to me at the podcast.deming.org for the Deming Institute podcast, and you can reach me directly at Tripp, T-R-I-P-P, @the95, which is the number, method.com.
Michael Webb: Super. And we'll make sure these links are in the show notes. Thank you very much for being here, Tripp. I really appreciate it. I know my audience is going to get a lot of value from it.
Tripp Babbitt: Very good. Thank you for having me.
Michael Webb: Until next time everybody, take care.
Michael Webb: The Sales Process Excellence podcast is sponsored by Sales Performance Consultants. Discover how to improve your B2B sales with systems thinking at salesperformance.com.
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Bud Hyler | Aligning Sales and Marketing Through Feedback
18 nov. 2019· Sales Process Excellence Podcast
Michael Webb: You're listening to the Sales Process Excellence Podcast with Michael Webb. B2B sales and marketing works to find the highest quality prospects, reach decision makers, and sell value. Operational excellence uses data and systems thinking to make changes that cause improvement and eliminate waste. My name is Michael Webb, and this is the Sales Process Excellence Podcast. In the next 30 to 40 minutes, we're going to destroy the myth that these two groups conflict and show you how to bring both strategies together to create more wealth for your company and your customers.
Hello everyone, this is Michael Webb, and I can't tell you how excited I am to introduce you to my friend, Bud Hyler. Bud, welcome here.
Bud Hyler: Thank you.
Michael Webb: Please tell the audience a little bit about your background so they have an idea where you're coming from and why I'm so excited.
Bud Hyler: Well, it's a combination of two forces. My early training was in physics, so it taught me to be more structured than average. And then my second training came from an MBA with Stanford, which taught me about the customer. So it was combining the structure of physics and the customer orientation of MBA really caused me to bring those two things together. We want to keep the customer focus but add structure. Without structure you can't scale. You can't compete or replicate.
Michael Webb: I was going to ask you, why is this important to a CEO, but that word structure says it, because CEOs are about scale. They're about making the organization work, not just make the product work or make the sale work or make the manufacturing work.
Bud Hyler: A lot of companies I go see, they had a really bright revenue officer, either marketing or sales, who instinctively got the principles and he was doing the right things. And they got the company humming, so revenue is going up, productivity's going up, but then they left. I mean, the average life expectancy for a job in sales and marketing is what, three to five years or less? So the guy whose instincts were right left. With him left all the principles. Then they hire another marketing and sales person who's more average, who may not get it. And so things start falling apart, because there's no structure in place. They were following the instincts of the leader, and when they left there was no momentum to keep the growth going. If you can't repeat it, then you can't leverage it. And the structure [crosstalk 00:02:41].
Michael Webb: Yeah, if you can't articulate it, you can't grasp it. Right. Before we lose this issue, I asked about your background, can you tell us a little bit about some of your business experience where you began to learn how to apply these thinking principles from physics into business problems after business school?
Bud Hyler: One of my managers told me, you can tell how fast you're learning by how far back in time you have to look to realize you were stupid. I've been fortunate enough to have a lot of good company experiences, starting with Digital Equipment Corporation, where I ran marketing and sales for the commercial group marketing. There were no constraints. It was a free group, so you would go talk to sales people all the time, and we had a great arrangement. It was so good that the salesmen would introduce me to their accounts as the supervising manager for the company, simply so that when the the account got angry at the salesman due to some mistake, they'd call me. They thought that was the way to lash out. That was great. I'd much rather have them call me than call a competitor.
The first time DEC was selling to a bank, salesman in making a sales call to Manufacturers Hanover Trust, and it wasn't going well, because DEC was an engineering company. As he was being asked to leave, he said, "I'm sorry, maybe I just don't understand enough about what you do. Could you explain what the leasing department does?" And as the customer was kind enough to explain it, the salesman said, "Oh, you do financial engineering." "Well, you're right. I engineer financial instruments." "Oh, well I can tell you how to do engineering much better." So it created a tie between DEC products and the customer. When the salesman called me and told me that, it took two days to get it out to the rest of all the salesmen calling on banks. So that's how I learned the power of the linkage between sales and marketing.
Michael Webb: This is back in the days when computers were sold as a product, right? And there was a market for computers. People would buy them. I was in that business too, worked for a company a little bit later than the early days of Digital Equipment Corporation, but I remember those days. When I got hired, they trained me to sell computers. They said, "Here's what you got to do. First of all, here's all the features and benefits of our product, this disc drive and this operating system and these interactive terminals and stuff. Now here's what you do. You get a phone and a phone book. Call people up until you find someone who is going to buy a computer."
Because I remember this diagram they had. It was a bowl of water. It was boiling, and the little bubbles would start to reach. When they get to the top, at the top of the water, they burst, then they buy something. You find one of these bubbles on the way up and show them your product and you're likely to get an order, because our product was better than IBM's. And that's as sophisticated as it got, but that company almost went out of business a few years later, and they had to teach the whole sales force how to begin learning and understanding what customers really, what problems they were trying to solve and attach our value to that. And that was a huge transition.
Bud Hyler: Yeah. I learned so much at DEC. I remember we had a great salesman. His name was Ken Cannizzaro. He could sell refrigerators to Eskimos. He had just inherent people skill, communications capability, people trusted him, so he made quota easily in the first part of the year. Well, I was so stupid that I put him in front of the branch in New York and said, "Here, do what Ken Cannizzaro does. Well, that was so stupid. That was like telling me to become an NBA basketball center. I don't have the skills to do what Ken Cannizzaro did. There I learned the hard way that I can't simply replicate what the best salesman does, I have to transform that into something the average salesman can do also. And it can't be all skill-based. We had a lot of those.
Then from there I went working with IBM and AT&T, Microsoft, Hewlett-Packard. All of them taught me something, what they had in common and how they were different. I started my business because I was going to events and they say, "What do you do?" "Well, I'm in marketing." And they'd introduce me to the other marketing person who was an advertising. Well, they care about fonts and colors and branding, but they didn't understand the basics of what caused the customer to buy. So that taught me that there was no process base for revenue generation, and that's when I decided to start my own company to create that process base that revenue production needed. The principle here is, to go back to your original question, marketing has the same relationship to sales that engineering has with manufacturing.
Michael Webb: Yes. You're the first person I ever heard say that, and that has stuck with me over a bunch of years now. Say more about that.
Bud Hyler: The key is, what processes have engineering and manufacturing developed together to enable them to create an ERP or a marketing sales factory that produces products by teaming together? They weren't always teamed. I don't know if you knew that or not, but in the early seventies, Xerox almost went out of business because engineering wasn't designing for manufacturability.
Michael Webb: Right. I remember hearing stories about that.
Bud Hyler: And so there was a meeting and the CEO asked how they could effectively combat Japan, and he learned that the manufacturing guy was drooling over the Japanese product. He said, "Why?" "Well, I can make these. I can make these offshore at low cost and high volume. Our engineering product is probably a much better design, but I can't find the worker that can make it and I can't do it in high volume." So that's where concurrent engineering came about, of getting engineering to design for manufacturability. It was not easy. You could still hear the screams from engineering. They didn't want to work with manufacturing, but that happened and now production happens. Manufacturing worked with engineering on day one on making sure products are designed for manufacturability.
Michael Webb: So now, how does that relate to principle or a structure as you were relating it to your training in physics and science and stuff?
Bud Hyler: Well, one is the structure of how the two interrelate. Just having a common coffee pot doesn't cause communications. So how do you structure the communications between engineering and manufacturing and between marketing and sales so that content comes out? I was with a company, Computer Associates, and they were rolling out their marketing material. I talked to them, and they said, "All right. Well, we reviewed this brochure with sales before printing it and they said it looked good." Well, I went and talked to salespeople, and they said, "We don't know what questions to ask. The pictures look pretty, the words sound good, the colors were great, it was readable, so it looked good." They didn't have the structure in place for a diagnostic on was the content there to help the customer buy and to help the salesmen sell? You need to have structured diagnostics to make sure the material is effective for selling, which is why the majority of material produced by marketing is not used by sales.
Michael Webb: Because there's no closed loop telling them that it isn't useful, it isn't working, it isn't doing what salespeople need it to do.
Bud Hyler: What do salespeople want to do? They want to close the sale. They live to close a sale. They're motivated by money and ego to close the sale. When they ask for information about a product or a solution or an industry, what does marketing give them? They give them information that's useful for generating awareness and interest, but it's not useful for closing the sale. How is the information required for closing a sale different than the information required for generating awareness and interest? We know that. We never use it, so we never check the information being given to sales to make sure it's useful closing the sale, which is what they want.
Michael Webb: In manufacturing, don't people have more of a sense of this closed loop and I did something expecting a result, but it didn't happen, whereas in sales, they don't have this sense of closing the loop?
Bud Hyler: It's a social closed loop. They meet for coffee, they meet for staff meetings, and they try to be friends, but there's no hard feedback. I have to tell you a story. I was product manager for DEC and life was good, and one day the VP of manufacturing came in my office, and he took my desk and turned it upside down. He was a big guy. I said, "What did you do that for?" He said, "The product you sent over to me is not well designed. You're wasting my manufacturing resources compensating for your poor design. Don't ever do that again." Oh, it took me a day to clean my desk back up. When does that ever happen? When has sales gone into marketing and said, "You're wasting my sales time, because the programs you sent me aren't useful for selling. Don't ever do that again"? And then have a process behind that to back it up.
Michael Webb: This is one of those parallels that you're talking about. You're talking about the nature of the two functions actually is similar, but we don't treat them similarly.
Bud Hyler: Exactly right. I'm glad you said that. I'm not that articulate. It's exactly right. Imagine a salesman telling marketing they can't introduce a product, because the marketing material is not sufficient for closing the sale. Another story. I was at Northern Telecom and the CEO of Northern Telecom America had a meeting, because manufacturing was under pressure to make revenue. They got revenue when they shipped a product, so given that pressure and all, manufacturing starting shipping short. They'd make a shipment to the customer where one of the two of the elements the customer ordered was missing, short shipping. That wasn't useful to the customer. The customer needed the whole solution, not a partial, so the customers are having a fit.
So the CEO called a meeting, saying, "We're going to make sure we don't short ship any more, so let's define what it means to be ready to ship." He got on a whiteboard and started writing, and it was a good meeting. He was sort of identifying, here's a minimum requirement before manufacturing can ship to a customer. Well, about two-thirds through the meeting, the VP of sales stood up and said, "This is really great. Can we have a similar conversation when we're ready to sell? When is the product ready to sell? When it's produced? When marketing finished their awareness? When is it given to my salespeople and they expect revenue to happen? We don't have a checklist on what constitutes ready to sell."
Michael Webb: No, but you have a hundred salespeople out there looking for some way to get customers to buy, and when they hear about some new sexy thing that might be coming down the line, they want to show it to customers and [crosstalk 00:13:21].
Bud Hyler: No, they don't have a way to sell what they have.
Michael Webb: Right They don't have a way to sell what they have, so that causes so many problems.
Bud Hyler: Don't get me wrong. There's a lot of really good salesmen that can sell anything, so sales are happening, but too often... We all know about crossing the chasm, don't we?
Michael Webb: Yeah.
Bud Hyler: That means if there's not a crossing the chasm between the innovative customers and the average customers, you won't get the revenue you expect. Well, there's a chasm in the sales channels. We have any number of salespeople at a large company, so you can have the innovative salesmen learn how to sell, given their skillset. But you have a chasm in the sales channels. What does it take for the average salesman to adopt your product to sell? They have choices of what they can sell. How do you cross the chasm in the sales channels? Are you aware there's a chasm? Do you manage the chasm or just throw it out over the wall?
I learned a technique at DEC. I segmented my sales channels by two parameters, one innovative versus average by district, and technical versus business. What I learned to do was to take the innovative sales districts, I take my material pre-release and give it to them for a month to sell before I send it out to the broad sales channels. During that month they were supposed to rewrite it, augment it, write the script, and basically finish it.
A salesman finishing material is so much different than a marketing person finishing material. The language they use is different. The material they use is different. So by having them finish my material, when I rolled it out, that district was stood up, saying, "We finished this material. It's ready for use," so the rest of the salesmen followed. I had the entire sales force following the leading district. It cost me three to four weeks of time, but the materials were ready to use. It was ready to sell.
Michael Webb: Because you did a pilot, you did a a trial in a small area before you launched it globally.
Bud Hyler: It was not only a trial of what I had, but I engaged them to finish it. I told them, "Here's the PowerPoints we have, change them, but the script's lousy. Write the script that should go with it."
Michael Webb: All right. This is a fascinating subject. Let's go back to the original question, the parallels between manufacturing and sales. Can you list off three or four parallels?
Bud Hyler: Marketing should be selling to groups of people, sales sells to individual customers.
Michael Webb: And how is that a parallel between manufacturing and sales?
Bud Hyler: Because the parallel should be they both want to sell. I don't know what caused marketing to stop their efforts at awareness and interest. They stop. The parallel should be, marketing sells to groups, salesmen sell to individuals, so marketing should be charged with selling to groups, from awareness through closing.
Michael Webb: Let's pull on this string a little more. You said marketing is to sales as engineering is to production, right?
Bud Hyler: Right.
Michael Webb: In production, they're producing value. In marketing and sales, they're producing value. But the value is different. But there's still cause and effect relationships there. And in manufacturing, the value is typically tangible. In sales and marketing, it's invisible, right?
Bud Hyler: Sometimes.
Michael Webb: It's a decision someone makes in their head. It's a action that they take in their mind first, ultimately. Is that right?
Bud Hyler: Yep. You may have heard me talk about the material I do is creating the ERP for the production of revenue. Companies run today off ERP for product production. Imagine you took ERP away, other than SAP and Oracle being very unhappy. Well, the basis of ERP is each group understands the needs of the subsequent groups they work with. Purchasing has to know exactly what manufacturing needs to use so they can buy it. Well, they understand exactly manufacturing needs. Suppose they didn't, they just bought products that manufacturing couldn't use. It'd be a disaster. So ERP is based upon the principle of one group understands the needs of the following subsequent groups.
Michael Webb: Another parallel between the two would be that manufacturing has a basic set of stages that it has to go through to produce its value. So likewise, sales has a set of stages that it has to go through, and there's different departments created to enable that flow to take place. And are they equally measurable?
Bud Hyler: Sales certainly has measured the stages they go through, and we think we understand the stages the buyer goes through, although probably not as well. They're both process-driven. Most sales managers focus on their process, that's often with a people skill. The key is, I would argue that marketing does not understand the needs of the sales channel.
Michael Webb: I would agree with you there. And what do you think the reason is for that?
Bud Hyler: They've never asked.
Michael Webb: Why haven't they asked?
Bud Hyler: You have to have respect. There was a study done on the success of new product introductions when engineering and manufacturing respect each other. The same was true between marketing and sales. When marketing and sales respect each other, they're more inclined to listen. One of the things I did, probably illegal when I did it, was when one of my marketing people wanted to go to the field and see a customer, I said, "Sure, here's the travel money, but I'm not going to pay for a hotel." They said, "What?" "Yeah, I'm not going to pay for a hotel. I'll help you arrange to stay at the salesman's house. They all have a spare bedroom, and so I'll help you arrange that, but you get to stay at the salesman's house, not a hotel."
Well, that was outrageous, but they did it. You know, it's funny, after you had dinner with a salesman and his wife, you bounced their kid on your lap, you tell stories, the salesman's not so stupid anymore. You listen to them, and when you listen to them, you start meeting their needs. That did more for helping me grow revenues than most major marketing programs.
Michael Webb: What a sort of a disarming, counterintuitive story. But when you hear it, it makes so much sense. It's about people communicating with each other.
Bud Hyler: A lot of working people talk about salesmen are all the same. You put a quarter in their ear, and they sell. How respectful is that?
Michael Webb: It's also not true.
Bud Hyler: It's not true, but more marketing people say that, and that's what they want to believe. And they don't segment the sales channels. Do you think all salesmen are the same? No.
Michael Webb: No, and all customers aren't the same. This goes towards one of our second topics here. In addition to the parallels between manufacturing and sales, what are some of the common principles? In manufacturing, they have to segment all sorts of things, the grades of raw material, the quality of the product coming through various stages of manufacturing, the kinds of variations they have. They have to stratify all this stuff and analyze the causes of it in order to make improvements take place. In your mind, what are some of the common principles besides that that are common between manufacturing and sales?
Bud Hyler: Marketing has to understand the segments of the sales channels. I mentioned two that I liked before, innovative versus average and business versus technical. What I mean by that is, what's the inherent orientation of the salesperson? Is it a business sale? Are there fundamentally an orientation towards the product and technical sell? You're not going to change that. You use it to maximize revenue. Steve Jobs once described the computer as a bicycle for the mind, and I like that description. Bicycles are very useful. You give me, if you could see me, you realize I'm not exactly in the best shape, but if you give me a bicycle, I could probably win a marathon race.
Michael Webb: Against other people who are on foot.
Bud Hyler: Yeah. Marketing should be in the position of making bicycles for the sales teams.
Michael Webb: And whole companies should be in the position of making bicycles for customers.
Bud Hyler: Right. Those two are very common. Think about the bicycle for the sales team, given different salespeople have different skills, or the different types of bicycles I need to produce. How are they different based on the skillset? So marketing needs to understand the skillset of the sales team, in order to make the bicycles needed by each of the different sales skill segments. Some salesmen call on executives, other salesmen don't. What bicycles do they need? If I have a salesman calling on a CEO, what bicycle do they need?
One of my pet peeves is what people call the elevator call. What's the elevator call the salesmen have? Well, you pick up the cover now and the elevator call is about the product. It's a court-up. Suppose you're in the elevator with the CEO. Is that the right bicycle to use, a product dump of product features? No. The CEO doesn't care about your product. What customer problem are you helping them solve? That bicycle is what you need to give salesmen who have the ability to call on CEOs.
Michael Webb: Companies are not very good at that at all. What other principles come to mind?
Bud Hyler: It's the same old, same old of trying to get people to change is just very, very difficult. I was thinking of how to explain it to you during the conversation. If you went to a systems thinking class in Carnegie Mellon or MIT or any major university, it's filled with engineers. There's no marketing people in the systems thinking class.
Michael Webb: What a good observation. Wow.
Bud Hyler: And it's because they don't think that way. You talk to a marketing person about more than awareness and interest and their eyes glaze over. We still haven't figured out how to link salesmen's efforts with social media, with seminars and programs. They seem like they're separate activities. They happen to maybe meet, but they aren't coordinated as a battle plan as much as I'd like to see them.
At Microsoft, we would take customer seminars and webinars and divide them. The opening would be given by Microsoft, and the product-specific, solution- specific areas would be given by the VARs. The reason for that is, Microsoft had a credibility to introduce customer problems to the audience. They could talk at a broad level and set the stage for how the customer would listen to the product issues. Everyone seems to want to talk about the product.
It's tough to understand what customer problem does your company and your product solves better than the competitor? More than one CEO has gotten perplexed about that. The product domination persists. I had a friend who was an EVP of Chase Manhattan Bank. He made the most revenue for the company when during customer visits the product sales team forgot to brief him. So here you have the customer coming in, and he knows about the customer, but he hasn't gotten briefed by the sales team. So what does he do? He talks about the customer, he talks about the customer problems, talks about how Chase can help and relate to those problems. Revenue always went up a great deal. When the sales team briefed him, he felt the obligation to pick up the baton and carry it, so he focused on product issues and the product message. The customer was polite but basically didn't care.
Michael Webb: So in the first case, he was probably asking them questions about the customer, and in the second place, he assumed he knew what he needed to know.
Bud Hyler: Right. I think that's interesting, is how do we keep the focus on the customer problem that we address better then the competition, and what's the value of addressing that customer problem better?
Michael Webb: I keep thinking, taking this back to that issue of the principles in manufacturing, and what comes to mind is the ability to be very cagey in distinguishing value from waste, be very cagey in figuring out is the customer liking this? Is the customer responding to this? And if so, why? And preventing yourself from doing something that they won't like, by studying the variations in what some customers do and other customers don't and what the circumstances are. That whole breakdown, that whole kind of critical thinking or engineering sort of mindset. You're looking for good variations and bad variations and figuring out the cause system so you can create more of the good ones and less of the bad ones. That's definitely sort of a manufacturing kind of a principle or production principle.
Bud Hyler: It's hard to remember that customer value is not defined by the product alone. Customer value is defined by the context of the problem you're addressing and what the product brings to it. You have two animals, a bear and an alligator, and they're locked into a fight to the death. I can answer any question you ask me, Mike, about the bear. I can tell you his claws are 10 inches long. And answer any question you have about the alligator. His jaws have 10,000 pounds of pressure. But given that, what one question can you ask that will predict whether the bear or the alligator will win the fight?
Michael Webb: What?
Bud Hyler: You're supposed to ask a question. What question would you ask?
Michael Webb: I don't have any idea what the question would be.
Bud Hyler: Are they fighting in the woods or the swamp?
Michael Webb: Ah, okay. There you go. The context, the broader picture.
Bud Hyler: The alligator's not going to win in the woods, the bear's not going to win in the swamp, and we want to set the stage of the customer of where are we fighting the battle? Is the customer in the swamp or in the woods, and how do we move them to understand the problem that we can solve for them and focus on that? Now you know whether the bear or the alligator will win the fight, don't you?
Michael Webb: Yes, you do. That's a great analogy. Let's bring this then back home and kind of wrap this up, because the whole point was, why is this kind of thinking so important for senior leaders? And to my way of thinking, the commercial productivity of businesses today is being threatened like never before. I mean, at least that's my idea and that's my concept of it. How would you answer that question? Why do senior executives really, really need to know about this and think about this and drive these questions through their organization? Why is it important?
Bud Hyler: It's easy to get stuck on poor performance. You know, you look at someone doing basically shoddy work, although they don't know it and you don't know it. It doesn't strike you, and the results are mediocre. How do you get up the energy and the drive to lead those people to the results you need? How do you break marketing out of awareness into revenue generation? How do you break sales into teaching the customer how to buy? How do you inspire the leadership so that you're not in silos anymore with marketing and sales, but they're working together for the production of revenue for your firm? They need to escalate up their objectives and the standards of what does it mean to be good at marketing? What's it mean to be good at sales? What does it mean to be good at revenue production? If you're not managing your ERP for the production of revenue, who is?
Michael Webb: Because the companies that can figure out how to measure and improve the production of revenue, the cultivation of the customer's attention, their interests, their consideration, their belief or trust in you, if companies can figure out how to do that in a measurable way that they can improve, they're the ones that are going to win the market.
Bud Hyler: And revenue is the key to success 90% of the time. Now, we've gotten addicted to having great products solve our revenue problem. We're waiting for the next great white hope as our product to come through and drive our revenue for us. Now, that's great. Anyone that can invent penicillin deserves the revenue, but that doesn't happen often. You don't have revenue being produced by products that add value, that are good for the customer, because we don't manage the process of production of revenue. We don't have an ERP system. So companies need to step up to managing revenue with average salesman with average products. That's the challenge. If I were talking to a CEO, I'd go, "I know your company is good at managing revenue with excellent, great products. Tell me your ERP system for managing revenue production with average salesmen and average products."
Michael Webb: Because everybody knows that's probably who you employ.
Bud Hyler: That's what you got most of the time.
Michael Webb: That's right. That's right.
Bud Hyler: Unless you plan on making revenue that way, you're dependent on the great products instead of being a cherry on top.
Michael Webb: Excellent. This has been really interesting, I knew that having you on the phone here, you have such a unique angle at this, and I know from other conversations we've had, there's tons of other examples of marketing tools and ways of getting marketing to produce something that salespeople can really use and measuring that. There's tons of things that we could talk about, so I'd love to have you back on the show at some point in the future. If someone wants to know more about you, I know you're a management consultant and you do work with companies all the time out there on the West Coast, how would they get ahold of you?
Bud Hyler: My phone systems, I'm not here often enough to be consistent. I am religious about email. If you drop me an email at [email protected], I'll answer it. My name is Bud Hyler. That's the B-U-D-H. My company name is Logical Marketing, that's L-O-G-M-K-T.com. That's the best way to reach me.
Michael Webb: All right, and we will include those in the show notes, and I look forward to chatting with you again. Bud, thank you very much, and for everyone, bye-bye for now. We'll be back soon.
The Sales Process Excellence Podcast is sponsored by Sales Performance Consultants. Discover how to improve your B2B sales with systems thinking at salesperformance.com.
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Bob Lambert | Helping Customers Through the Buying Process
29 oct. 2019· Sales Process Excellence Podcast
Michael Webb: B2B sales and marketing works to find the highest quality prospects, reach decision-makers and sell value. Operational excellence uses data and systems thinking to make changes that cause improvement and eliminate waste. My name is Michael Webb and this is the Sales Process Excellence podcast. In the next 30 to 40 minutes, we're going to destroy the myth that these two groups conflict and show you how to bring both strategies together to create more wealth for your company and your customers.
Michael Webb: Hello, this is Michael Webb and I am thrilled today to be able to introduce you to Bob Lambert. Bob is the president and I believe co-founder of Samurai Business Group. Is that right, Bob?
Bob Lambert: Yep.
Michael Webb: Okay. Boy, we've known each other since my days back in Chicago more than 10 years ago. Please tell the audience what Samurai Business Group does and how you got to this point.
Bob Lambert: Well, thanks Michael, first of all, for having me on. You're right, we've been friends and trying to conquer this thing called sales and metrics and all the rest of it, but Samurai Business Group was started up in '01. It was my fourth startup company, which is no longer a startup, and for the last close to 20 years what we've done is flipped the coin on the whole sales process, and that is about how people buy versus how you sell them. I jokingly tell people today, I feel like Willie Nelson, that it a 25 year overnight hit. Because all of a sudden he was a big ... We've been talking about this for over 20 years and all of a sudden we're seeing the direction of things starting to change at the buyer's journey.
Bob Lambert: It's about the buy and all that stuff. But what we set out to do, Michael, back then was to change really what classic sales training had been. My partner and I had been through a lot of sales training, a lot of leadership training, and we just kept thinking it was going against what we really basically want to do, and that was relationships with human beings. Because when you boil it all down, and the whole essence of what we're talking about here is exactly that, because human beings are buying something. And so through neuroscience and behavioral science and a lot of studies, not our own stuff because it wasn't self-serving, is taking the viewpoint of the buyer when they're making this decision to buy. What that really started to manifest itself in, there is a process. There's a system people go through all over the planet pretty much all the same type of way that they go through it, but there's no two people that do it the same way, and you won't do it the same way a second time.
Bob Lambert: So there's a discreet way that you go through this process and we blocked that out in our buying decision model. We've had the privilege, the honor now of being affiliated with DePaul University for over 18 years and their Center for Sales Leadership, that is the number one sales curriculum in the country now, has been for some time leading the charge. When we started with them only 30 colleges and universities had even a sales class or curriculum. Today there's over 160, so we're very proud of the fact that we were invited in to be a part of that curriculum and then also invited in about six years ago to put together a semester-long case based on the buying decision model that we created.
Michael Webb: It's a very successful track record. I've already got three questions here in my head I want to ask you about. Let's start with this one that we had mentioned before we got on the show here. The idea is, there's been some substantial sea changes in the market, in the economy in the last 20 years, and as you're pointing out, the way that you sell seems to have changed. What are the big changes that you've seen, and why are they such challenges?
Bob Lambert: Well, without question, 1995 was a pivotal turning point. When we published the book in 2010, How to Put the Wind Back in your Sails, it really was an introduction of how the internet has impacted sales. It's really mitigated the whole sales process, the whole upfront process. Up until '95 if you want to buy something, generally speaking a buyer would ... I'm talking about the marketplace and corporations. Business to business, they would have to invite salespeople in to get the information because they had the keys to the kingdom.
Bob Lambert: That turned dramatically with the internet, with all the Google and the information that's available now. Buyers know more about you, your products, your services, your competition, your pricing before you even walk in the door. So you better be prepared when you're walking in there to find out through a discovery process what is it that the buyer is really looking for? They'll tell you, if you'll let them. Our method facilitates that. When you start thinking about focusing on human beings and not on products or services, that was a big tipping point, because buyers today want to understand what you're going to do for them. What's in this for me if I do business with you? They're not doing any business with anybody they don't trust. So fundamentally what we get to is the relationship, because corporations don't buy, people do. They buy for their own reasons and they buy in their own self-interest.
Bob Lambert: And so through the body of research and the work we've done, and of course thousands of people we've had through the program, this becomes really a self-revealing thing, once people start to realize when you get on that side of the table and you make this a joint thing, it's not a we/they thing, it's us versus them, it's we together are going to help to find some kind of a resolution, a solution to some of these issues you're having. What we've identified is three apparent reasons why somebody will even have a conversation with you that lead to three what we call compelling reasons why they'll buy. We know now through empirical data and also studies now that people buy do buy emotionally; they intellectually justify that decision. What that looks like is basically that when you are emotionally connected to something and you can talk about any of a number of things that you're emotionally connected to, even the most hardcore procurement agents I've interviewed and been with will relate that, because when I start to share with them, the salespeople have called in, the ones you bought from what is distinct about them?
Bob Lambert: Invariably it's a human connection. It's an emotional connection that they go to, why they buy from these people. It could be that they've got my back, they always have my interest at heart, they bring me new information. They are constantly thinking about us and ways to improve the business, outside of the scope of what they may even provide. I published an article. This is a freebie for anybody who wants it, called Beyond Trusted Advisor, Becoming a Trusted Asset. In that I layout basically what this thing is and what it's about to become a trusted asset to somebody. Viewed as useful and valuable person on advantage and a resource relationship or build a mutual trust. Character and confidence go beyond business, proactively provide business-building opportunities from divergent resources.
Bob Lambert: Their guidance has proven profitable and expanded the scope as a result or a resource to the customer. They go beyond what is expected. They establish a level of trust through honor, service and commitment. This is global research stuff that we got on the side of buyers talking about ... There's only 4% of salespeople around the world that are rated as being excellent. When we've dug under the covers to that and understand why did you rate these people excellent, they didn't use the word salesperson, they didn't even use the word account manager or anything. They use part of our staff, part of my team. Then the three words that really stuck, or the three descriptors that really struck to me was, they're a trusted advisor, they're a trusted asset and they're a trusted resource. That goes with beyond sales.
Michael Webb: Oh, absolutely. It goes to all sorts of things. So let me switch the context just a little and now ask the question of the challenges that places on the salespeople. If I'm a young person and I'm in this profession of sales and I'm working for a company, there's some huge challenges I face. My company may or may not understand that the market has changed from 25 years ago. Right? And the company may or may not make it easy for me to understand the customer and build the trusted advisor relationship. As you've talked with these folks who come into your classes, because you do public classes as well as corporate classes, what do you think are the biggest challenges that salespeople themselves face?
Bob Lambert: Well, without question, getting prospects. That's the number one thing on all their minds is how do I get better prospects? How do I do a better job of prospecting? How do I get in front of decision-makers? All the typical classical things, and I'm still absolutely amazed at how people are still pushing cold calls. It's the biggest waste of time I've ever seen, and today more so than ever before, because (A) people don't use the phone like they used to; (B) voicemail is almost going the way of the dodo bird. People are getting bombarded and overwhelmed with all kinds of marketing campaigns. It's just unbelievable to me. I get solicited all the time from marketing people. How they got my email, or whatever. For them to be able to market me, and I think to myself, why would I use you if you're violating a basic trust premise in the first place? I never gave you permission to even talk to me about this stuff.
Bob Lambert: So I don't know about you, but my inbox, I've really clamped down on it. But what's happening now is we just become numb to all this. So today, personal relationships and getting to people through networks and getting through personal introductions and personal referrals, that's where the game's at. And that takes time. What I'd share with you is, the new generation of young people coming in, they grew up as digital natives and they don't understand this whole personal relationship thing and how to go about that. Their communication skills are tough. I'm not being discouraging about this. This is well documented. But that's one of the areas too that we're working with a lot of these young people on, is to basically get in front of people, have a real meaningful conversation, show empathy and compassion and interest in other people.
Bob Lambert: There's a lot being talked about EQ and IQ today. Well, guess what? Big companies are starting to realize that that's a huge part of what they have to do. Not only from the internally within the organization, but externally certainly with clients or prospects or anything else. They've got to get this thing nailed down. I would share with you that the digital revolution, while it's been great and it's given us a lot of information, a lot of data and everything like that, it's almost too much now. There's kind of a pushback now. I was just reading an article where people are just getting themselves off the grid. They're tired of it. So the real challenge is really, how do you now get to these people that are decision-makers?
Bob Lambert: They're out there. They're checking things out. LinkedIn has gone a big way. I was in the first a hundred thousand on LinkedIn when I saw that thing coming, because I go back to the days where I was hiring clipping services. I was doing everything I could possibly do to be relational to people that ... I have what I call Bob's Law of 20, that you touch 20 people in your database per week. Now the math that comes out of that is absolutely astounding, because a lot of people don't really realize the geometric explosion of getting to people. Here's how it goes, Mike. You touch 20 people a week. The average work weeks in this country are 48. That's 960 touches to somebody, and it's actually that, touch. I don't care if it's carrier pigeon, drone, email, texts, voicemail, whatever. You are touching these people that you already know they're in your database or that you've got introduced to.
Bob Lambert: When you think about this, it is well documented that the average adult person in the United States today knows over 250 people. Now, when you think about 960 touches times 250, that's a quarter of a million people. People don't realize how these nodes in population explode. Now you can cut that in half, 250,000, 240,000, 120. Cut it in half again, that's 60. Cut in half again and I've gone four layers deep to 30,000 people. Maybe there's somebody within 30,000 people need to know you and you need to know them. I've been doing that for a long time.
Michael Webb: Doesn't it depend on how you communicate your message? A message that communicates something that from the other person's point of view is something that they really want, it's going to be way more effective than something ... And that can be hard to come up with. Right?
Bob Lambert: Well here's the deal. You have to understand something. These aren't just business contacts. This is everybody you know, because what I have found overdoing this a long, long time is people shut down, and oh my cousin's a plumber, or Joe is this, and Shelly's this, and they can't help me. You're wrong. You do not know who somebody knows. And that's what I really help people understand. And by the way, these touches are touches. It could be an anniversary, happy birthday, could be an article that somebody just saw. All you're doing is touching them. What is amazing about that, what happens out of that. This just happened me, guy that I hadn't talked to you for about three or four years. I left him a voicemail, he got right back to me. Something like this, and I said, I start on that side of the desk. I always want to engage them in the conversation. What's going on with you? Well come to find out, he had another child, they've got a grandchild, all these other things that go on down and he was in a job transition. I was able to understand what was going on with him and how I could help him.
Bob Lambert: Well, invariably the conversation then tipped back on me. He said, hey Bob, what's going on with you? Briefly, I'm glad you asked. I could use your help. And I shared with him some of the initiatives that I'm doing and how he might be able to help me. Now, his contacts and everybody he's got, I sent him a couple things, and now he can take and virally get that out to other people that know him and trust him and will read that stuff. And all of a sudden through that halo of trust that he has with other people, now I'm being introduced into his network.
Bob Lambert: A real good example of this was, a number of years ago I got invited in to do a big conference in DC. It was an international conference and it was over Memorial weekend. I'm thinking, why in the world are you planning some on Memorial weekend? Well a lot of these people were from outside the United States, so it wasn't their holiday. With that I got this gig and I'm going to be in front of thousands of people doing a workshop and all that kind of stuff, it was great gig. I'd wanted to do a CEO forum group, a peer group that the following week is, we have a check-in as to how ... Once a month we check in with each other, how we're doing both business and family-wise. And so it came my turn. I said, hey look, I just scored this big gig. It's going to be over Memorial weekend, months away.
Bob Lambert: But I've got a bit of an issue with it. My young son and my family, we're going to take ... Because I'm being put up in a five star, I want to take the family too and make it a nice holiday for us in DC. And so my young son, knowing that I was this networking guy and I knew a lot of people, he says, well dad, I don't suppose you can get us a personal tour of the White House? Wow. There's a challenge. So in that meeting, I shared with them, I got this gig, but here's my challenge. My young son wants me to try to be able to get a personal tour of the White House while we're there. I don't suppose anybody sitting at the table here would know somebody like that? The guy sitting directly across the way from me, Scott, said, yeah I do. I was just there in DC, spent 20 minutes with Barack and Michelle and the kids and had a personal tour of the White House. I'm looking at him and my eyes are bugging. I said, how in the world did you do something like that? He says, my college roommate was the director of tourism at the white house. I said, hey, I don't suppose you could help a guy out here, could you? And sure enough, that was the introduction that was me to be able to do that.
Bob Lambert: It's those kind of things, Michael, that people don't really understand how all this stuff works. That's just one example of now that you put my lap here is what's the challenges today? That's one of the biggest challenges, how do you get to people? And it's not about you, it's about them. To your point, what's the message? If you're doing it as far as an outbound message, trying to communicate, I'm simply advocating just touch people. Touch people you know, and you'll be surprised what can come back to you out of that.
Michael Webb: But obviously touching them with something that's of value to them is going to be more effective than something that's not.
Bob Lambert: Well, guess what? It's of value to somebody if it's their birthday and I put the note out there, I take the time to write them a note, a personal handwritten note or something like that. What do you think happens out of that? And again, these aren't all just pure business contacts. I want people to get their head screwed on straight, that every person is valuable as far as contacts go. You really have to look at it that way as to how can you help them.
Michael Webb: Okay, good. So let's take this a little further because you just touched on something that's a very profound and universal principle within process excellence or operational excellence, and that's respect for people. And respect for people means respect for what they think and how they think. And that means having some insight or attempting to learn something about what they want and what they value. So yes, sending someone a nice birthday message and so forth, those are nice things to do, but it strikes me that companies could do a better job to give their salespeople methods of doing this that are highly professional and highly valuable to customers, that attract the kinds of prospects and customers that that company wants. So as an example, let me just run this by you and see what you think about this. One of my clients, and for those of you on the podcast, you've heard this story before, it's a company up in Southern Michigan called Burr Oak Tool. Very technical industry, they sell capital equipment that makes the components of heat exchangers, the radiator fins like you have in your car or your air conditioner outside.
Michael Webb: These presses are very customizable, so it takes an engineer to sell it, and the engineer has to do three, four, five, six, seven iterations of the quotations to sell these things. They were coming out with a brilliant new design product that would revolutionize a portion of the industry, and they decided to put up on their webpage a configurator that would allow people to enter some basic information about their production operation. What kind of metal substrate do they use? Are the pipes made of copper or aluminum or some other metal? How many different stock keeping units and changeovers do they do in a shift? Do they run 24 hours a day or two shifts a day or one shift a day? Basic questions like that, and then it would give that customer a cost per part compared to three of their best competitors.
Michael Webb: Didn't price the machine, but it was able to size it within one of the three basic categories or versions of this machine and give them a pretty decent approximation of the cost per part that they would incur. They put that up on the webpage. Now, this is a mature industry. The salespeople know all the companies that buy this stuff. But in the first 90 days ... No, I think it was six weeks actually, that this webpage was up there, three engineers from different countries around the world that they'd never heard of before, they'd never met these people, and I think a couple of them were even new companies, filled out this form and they were now qualified prospects for the sales engineers to talk to, and they were ready to talk about specific projects that their companies were doing.
Michael Webb: The salesperson didn't have to make a visit, didn't have to do two or three or four quotes. A lot of the work was done for them because the company came up with an offer that was valuable to the customers, that helped guide the salespeople to those prospects who were the best ones for them to be talking to right now. That's what I'm talking about. Does that fit in with your philosophy, right?
Bob Lambert: Yeah, absolutely, without question. There's a lot of different paths to get to to the destination. I'm not advocating that this is the end-all and be all. I'm saying it's part of the mix of things to be done. The social selling, the social marketing, a website, all these things are in combination. Back in my day when I had my marketing agency, we had four basic disciplines. We had advertising, sales promotion, public relations, and direct marketing. We were basically agnostic to any of those. We took the ones that were going to work best for delivering the result that needed to be done. It's the same thing that you're saying right here. If you've got great material or stuff that people are going to want to see or hear about, then they're going to go out and search it. These people are no different than anybody else. They're going to go out and use the web to search out the type of thing that they need. In this case your client had great content on there. It was obviously something that resonated with these prospects, and they self qualified themselves coming in.
Bob Lambert: That's great. I think it's wonderful. But there's other issues out there and other things too that they need to be doing besides just that one thing, to be able to try to get to people. Again, the network is one of the most valuable tools. I've been a networker for a long time. I can tell you that 98% of my business is done because of my network. It's not done because I'm out there cold calling or I'm doing a big social media blast and all the rest of that stuff.
Michael Webb: Okay, but a lot of times when people say networking, a lot of times they mean, well, you should go to, what is it? One of these local Knights of Columbus meetings and network there, right? Or the local networking meeting in your town, and what are they called? These business clubs and stuff inside the towns. Is that the kind of networking you mean?
Bob Lambert: Well, it's an accumulation of a lot of different things. There's a lot of different kinds of ... You have affinity groups by way of example, your alumni associations, or any kind of an affinity group, if you're a gun collector or you happen to be a hunter or you happen to be into soccer, or whatever it might be. Those kind of things are like-minded people coming together. Now when you talk about those kinds of things, so it might be a faith-based organization, might be a political organization, you have people that are collecting together that have a common interest, right? Well, people have an affinity to people who have a common interest. I'm pretty agnostic about the kind of things you do. I have categories of that. I teach and coach this stuff.
Bob Lambert: Here's the kind of things you want to go to. There's the kind of things you want to explore going to, and not just cutting yourself off, because unfortunately, people put self-limitations on this whole idea of what they're ... Because they've got to get out of the comfort zone to do some of this stuff. I'm working a lot with financial services people and wealth management and CPAs and all that. That's a crowd that isn't really extroverted. Also engineers, architects, people like that. It's interesting to me, though, when they get into a group of people like themselves, man, oh man. To stand back and listen to the conversation that goes on there is amazing. Get them out of that element though and put them into something else and man, they clam up. They're eating their beans and weenies in the corner trying to get out of there as fast as they can.
Michael Webb: That's interesting. So a big shift that's taken place also then in the last 20 years has been not just the internet and the web pages and the blogs where people ... And search engines where people can find you, but the whole social ... Web pages like social sites, like LinkedIn and Facebook and others. So there's a lot of talk now about social selling and social marketing, and you mentioned that in the very beginning when I first asked you to introduce yourself. What's the difference between that kind of stuff and the face to face kind of selling skills that you typically work on with clients?
Bob Lambert: Well again to your point, just like the example you cited where they create content on a web page and people went out and found it, the social media platforms right now and the social marketing platforms, what they really do give you is an opportunity to express some expertise if you're a subject matter expert, for you to comment on things and put that out there in a way that would draw people or interest people in what you had to say or what you're about. Not some big commercial message, because like you, Mike, you're very intellectual and you go deep and people are attracted to that, if they feel that you're somebody that has credibility and that's really what that is. It's really taking your persona and putting it out there and making yourself credible to people. Not being a pitch person, not trying to sell them something. Help them to understand what value you can bring to them, and it can be expressed in an opinion, it could be expressed in a white paper, it could be expressed in a whole lot of different ways.
Bob Lambert: But just think about this. We didn't have that kind of communication. This is global stuff now. You're now able to get out there globally and show your stuff off if you want to. Now it's not to be bragging about stuff, but if you truly are a subject matter expert or you have a viewpoint that you want to get across, you have a point of distinction that you want people to know, then certainly this has really expanded the ability for people to go out there and do that. You see all kinds of crazy stuff out there now. It's amazing.
Michael Webb: It was a few years ago I had a chat with a salesperson, found my website, was real interested in stuff that we do here, and he confessed to me he was working for ... This was back when I was in Chicago. He was working for a fairly small company, I guess they maybe had 100 employees, and it was a family-owned company, and he was expected to go out and make lots of cold calls. Here he'd found that he could reach people on LinkedIn, so he was in the office and he was working his LinkedIn network, and he was getting in trouble. He was getting in trouble, because the owners wanted him out of the office. And that was a conflict. So sometimes executives, just because of the way they think about sales, they put some blinders on inadvertently. Have you seen that?
Bob Lambert: Yeah, without question. I have to tell you, Mike, in all my sales career and my marketing career, the biggest challenges I had were the internal challenges, not the external ones. I loved getting out and meeting other people. Oftentimes there are these barriers and blockades that block you from doing things internally, and you cited, it's a great example. I've worked with a lot of entrepreneurial companies and the entrepreneur isn't a salesperson. They don't understand it. They're usually the innovator or they started the service or whatever. And they don't understand sales. They don't understand salespeople, and oftentimes they're their own worst enemies, because their perception of what that is and the myths that they've been drawn into really blocked them from really understanding what it is, and also helping facilitate things, get out of the way. My biggest challenge and when I was in sales management, in the corporate sales management was blocking and tackling for my sales guys with the people above me. It never ceased to amaze me what an impediment they were to doing business sometimes, but it was what it was and you got to be able to navigate that.
Michael Webb: That is exactly the experience I had as well. It's a reason why I think that process excellence is one of the most crucial, critical, most powerful tools that any company could employ, because it provides the framework for other people who are not familiar with sales and salespeople and how business is done in the customer-facing role, it gives them a framework to be able to distinguish value from waste, to be able to say, well maybe they're not just coin-operated as the old adage goes. Maybe fewer higher-quality deals does make more sense than a full-funnel of low-quality deals. And maybe it's not just a salesperson's personality. That's a mission I've been on for almost 20 years now, trying to help executives to define those observable things that can tell you whether the sales department is adding value to customers or adding waste.
Bob Lambert: Yeah, and I applaud you for it, Mike. You've been out there in a desert shouting to the roof about this kind of thing, and you have my I admiration, because I think the tipping point is coming. More and more of the stuff we're seeing, like you shared prior to the interview, these scenario-based things that are coming, BI, business intelligence, a lot of that is coming around to this when you get into the analytics and good data. When I was in the data game, basically information that you don't turn in the knowledge that you can execute on is zero, it's worth zero. That's where I see there's a bit of an issue today, because the plethora of information that's out there today, the data is just unconscionable. I can't even imagine, we had a data facility down in Tyler, Texas that was like the Pentagon, and it housed all of the US household data. They also had government data and all the businesses back then when I was doing this, back in the late '90s. It was an enormous amount of data. I can't even imagine or even fathom what it would be like today with all the stuff that's on the internet and all the other data. It's very much a challenge.
Michael Webb: Yeah. I like the old comparison, information versus knowledge, and what you're after is wisdom, right? You're after what's the best way to create a win for the customer and for us. That requires a lot of context and it requires ... There's a lot of layers I guess and nuances to that. In a business, you want the value-creating part to be baked into the business, not just between the sales people's ears. You want to make it easy for salespeople to create lots of value.
Bob Lambert: That's why a lot of times when I go into companies we take the swath of and the approach that anybody that touches that customer is in sales and business development. So literally we'll go into the sales department, outside sales, inside sales, customer service. I've even been in the accounting department training people on certain modules that we train that are relevant to their job. As you know, we implement the buying decision model to the Socratic method, so teaching them and coaching them with Socratic method. Also, how to understand the behavioral style of the person you're dealing with. We use DISC to help them understand that and navigate that. We keep it simple for people to do that. We're not trying to turn them into amateur psychologists. It's amazing, what we found is people coming back and say, guys, do you realize what you have here?
Bob Lambert: I say, well, we think so, but what? I had a guy telling me several years ago, he says, I got my relationship back with my teenage daughter because of what you taught me. These are life skills, Mike. That's why I try to tell people, look, this goes well beyond business development, sales or anything. These are life skills. Being able to ask great questions, being able to shut up and listen, those are the two biggest things when I lecture at Northwestern University in our entrepreneur class. I have a whole exercise around this that I do with the kids. I tell them also, if you get this right, you're going to be able to win prizes and money at the bar by doing this little exercise. And of course they're all ears then. But those are the two things. I said there's two basic principles here. If nothing else you take out of here, ask great questions and shut up and listen.
Michael Webb: So we've been going on here for a little over a half an hour. Now let me ask you this question about that little exercise, because I'm intrigued. Is that something that you could write out in a paragraph or two?
Bob Lambert: Sure.
Michael Webb: So if people are listening to this podcast and they would like to find out about that, then we can post it up on the web page of this podcast. You and I'll prepare it after the call. Is that fair?
Bob Lambert: Absolutely. Absolutely fair. Just in a nutshell really quickly, what it is is basically I write something on a piece of paper. This has happened to me down at Northwestern University where I have a whole room full of kids, 70 to 80 kids, and I'll write something on a piece of paper, and before I even explain what this is all about I say, okay, you got two minutes to ask me any question you want, except for one. You can't ask me directly what I wrote on the piece of paper. But you have two minutes to ask me any question you want. I will answer it as truthfully as I can, as to what I wrote in this piece of paper. Then I take them through the Socratic method as to how it does, and I got to tell you something. It's profound. It is absolutely profound how it changes the way they do things.
Michael Webb: This is going to be great then. This is super. Thank you very much for your interest in talking with me on the Sales Process Excellence podcast. I know that there's a lot of people, especially ones in the Chicago area perhaps, that might want to know more about Samurai Business Group and what you do, so how could they get ahold of you?
Bob Lambert: Well you can get ahold me several ways. I respond to emails, which is [email protected]. That stands for Samurai Biz Group. They can go out and visit our website, samuraibizgrp.com. There's also a free white paper that you can download. What do customers really want? That we published out there, and also you can reach me by phone. If somebody wants to contact me by phone, they can. 847-922-1498.
Michael Webb: Super. Bob, thank you very much. We'll be back with the next edition of the Sales Process Excellence podcast.
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Tiffani Sierra | Yes and… and Other Lessons For Salespeople and Leaders
29 oct. 2019· Sales Process Excellence Podcast
Michael Webb: B2B sales and marketing works to find the highest quality prospects, reach decision-makers, and sell value. Operational excellence uses data and system thinking to make changes that cause improvement and eliminate waste. My name is Michael Webb and this is the Sales Process Excellence podcast. In the next 30 to 40 minutes, we're going to destroy the myth that these two groups conflict, and show you how to bring both strategies together to create more wealth for your company and your customers.
Michael Webb: Michael Webb here, and I am excited today to bring two very interesting people to your attention. We have Adrian and Tiffani Figueroa, and Tiffani has founded a firm called Improv It Up that is devoted to using the skills of improvisation to help B2B salespeople to improve their performance. So Adrian and Tiffani, welcome here!
Tiffani Sierra: Hi!
Adrian Figueroa: Hi Michael.
Tiffani Sierra: Thank you so much, Michael, for having us.
Michael Webb: Well, you're quite welcome. I think this is going to be really interesting since improv is something that always fascinates people. And how it's connected to B2B sales. Could each of you take like 30 seconds and help the audience understand just a little bit about your background, and in your case especially, Tiffani, go on and say how did you get started in doing this?
Tiffani Sierra: My background is as an actress. I spent my whole life as an actress in the theaters, San Francisco and New York and L.A. I started teaching an acting class out in West Hollywood, and I was working with actors mainly, because improvisation is vital if you want to audition. It's really important that you're able to be able to think on your feet and just pick up things quickly. But what started to happen was, I was getting non-actors coming into my workshop. So I started to get engineers, scientists, business owners, priests. I'm being honest when I say that. You can imagine that you know all of the jobs they've probably come through our workshop. What was happening was all of these students that were coming to my class were saying that improv was really changing their lives.
Tiffani Sierra: Just to kind of backtrack just a bit. I went to the Second City, which is a huge improv school based in Chicago, but I went to the L.A. location. And improv really changed my life. I went through a really tragic family situation and improv really became my therapy. It was at that point that I really realized that the therapeutic elements that were happening in improv, that I could help others. So what started to happen was that was translating into people's lives and obviously really translating into the workplace, no matter what job they had. It was helping them to be more confident. It was helping them with so many other skills. But I realized that this was something not only for actors but really for anyone, that these skills could be used.
Tiffani Sierra: So really Improv It Up was born in West Hollywood through my experience of working with non-actors. Then really we just grew the business over the past several years. We also work with middle and high school students, we have programs. We're a social enterprise, and what that means is, I like to think, is a for-profit business with heart. So the heart part of what we do is our school programs and then we have our corporate and business programs as well.
Michael Webb: Okay, wow, what a fascinating background. So real quickly, Adrian, your background's quite different, right?
Adrian Figueroa: Oh yeah, significantly. Tiffani's story's much more exciting than mine. For me, it's going the path of the engineer. My background, engineering, mechanical engineering, then the MBA. Working in the industry, being a part of building products in aerospace, those being my strengths in industries. Then through there just getting certifications with Lean, Six Sigma, supply chain, and so just growing the process side of it. Tiffani and I met each other and she had this business going, and I started sitting in on all the workshops years ago then became a facilitator alongside with her.
Adrian Figueroa: It was marrying both of our loves and passions where, we like to say, I'm the left brain, right? I'm more methodical and a little cool. Probably tending more toward the hard skills. And then Tiffani comes in as the right brain, being more the creative artistic and the soft skills. What we offer businesses is you get the best of both worlds. Hard, soft skills, left brain, right brain. We kind of complete each other.
Tiffani Sierra: We're very opposite.
Michael Webb: Yeah! So some neat people who listen to my podcast regularly may remember Adrian. We did an interview a month or two ago, I think, and your day job is Lean facilitator at Cadence Aerospace, as I understand.
Adrian Figueroa: Right.
Michael Webb: So you've been able, it sounds like, to use some of these improv skills in your leadership at the aerospace company, is that true?
Adrian Figueroa: Yes, every day.
Michael Webb: That's amazing.
Adrian Figueroa: Where I'm most effective is being able to use that soft skills side to actually commit to and bring forward the hard skills. Profits and results.
Michael Webb: Okay, all right. So Tiffani, why did these men and women off the street who are not theater majors, why did they want to attend your improv class and what did you give them that made it so valuable?
Tiffani Sierra: Well, I think a lot of these non-actors, salespeople, entrepreneurs that have come to our class really have come because there's a lot of fears. You might have the fear of public speaking. We have a lot of students that come to us, believe it or not, that even work in sales. They have fears of public speaking. Or fear of failure is a huge one. We actually, Adrian and I, facilitated a workshop called Fail Into Success. It was really obvious, them trying to get comfortable when they're uncomfortable. So that's something that we see a lot. I would say those two things, and building confidence, really, the confidence to be you. I can't tell you. It sounds so simple. But when someone can have such ownership of who they are and really be their authentic self, I just believe that helps to draw authentic connections with other people. I think that's just such an important piece of being a salesperson, coming across as authentic and genuinely connecting with people. So I would say those are probably some of the top things that a lot of people have come to our classes for.
Tiffani Sierra: How improv works is, just so your listeners can kind of understand, a lot of people who have maybe never seen an improv show might think that you just make up whatever you want. That there's no structure. But believe it or not, if you watch shows like Whose Line Is It Anyway, have you seen that show, Michael?
Michael Webb: Yes, I have and it makes me laugh because those guys are funny.
Tiffani Sierra: Okay, well, they're great and wonderful improvisors. Actually a lot of them went to the Second City, the school that I went to. But they're great because there's a structure behind what they're doing. There's rules and principles. And those rules and principles are really what guides all of the work that we do. For example, one of the rules of improv, the cardinal rule you might hear, and that a lot of other corporations and business professionals might use, is the rule of "yes, and." And what that rule says is that you work in agreement with others. That you're not negating what other people are saying. So how that works in an improv setting is if Adrian and I were doing an improvised scene and he makes me the Queen of England, I'm not going to go at him and say, "No Adrian, I'm not the Queen of England, I am the Queen of Wichita," whatever that might be. I would say, "Yes I am," and I would go with that. Because in an improv scene, we're going to find that we're going to have a lot more opportunity to grow that scene.
Tiffani Sierra: Well, the same thing could be said for a workplace. So for example what we hear a lot of times is, you're in a meeting and people are pitching different ideas. And somebody starts out with an idea and another person says, "No no no, I don't think that idea is good enough." So that shuts that person down and possibly that person might not share their ideas again. But what happens, as you see, that thought then dies. Improv allows that thought, the rule of "yes, and" allows that rule to be built upon. When you're building upon ideas and you're "yes, anding," not only are you creating an inclusive environment where people feel comfortable sharing their ideas, but you're also building upon an idea to make something far greater than what it could be.
Michael Webb: Okay. So "yes, and." How do you come up with comes after the "and?" I mean, you're still going to have people drawing a blank.
Tiffani Sierra: This is true, and actually we have a lot of people come to us. They say, "I don't know what to say." This is really where it comes to working with being yourself. In the improv world we always like to say, "Your scene" or "Your dialogue", through the other person's eyes. So when we're making those authentic connections, we'll always have something to say. When we're honoring our truth, whatever that may be, we'll always have something to say. So the and part could be really anything. It's just that we're building upon an idea in a positive way. We're not negating what somebody else has said.
Adrian Figueroa: And Michael, just for an example. One of the workshops we did a few months ago, we actually had this particular salesman, and he said exactly what you just asked right now. On day one, his fear was, he's a salesman, but he's fearful of speaking to somebody and not knowing what to say. He thinks he has to watch all the sports, watch all the market,watch to come up with ideas and figure out what he can possibly speak to them about. And so exactly what you said. On day one of the workshop, we're going through one of our exercises and it got to him and he blanked out. Deer in the headlights, exactly like what you said. We just waited there and paused for a moment and then we just guided him through it. Because he literally said out there, he's like, "Uh, I don't know what to say." And okay, first thing. What are you thinking about? "Um, I don't, I don't know what to say." And he just kept repeating it. And so, it's like, you know, it's okay. First spot. He finally gave a first spot. The class celebrated. Yay! And then move on.
Adrian Figueroa: We kept going with the exercise. By, I think it was the third workshop with the same salesman, we actually saw a breakthrough. Where he started making these comments and it was just, "Whoa, where did this come from?" He didn't hesitate anymore. He just allowed himself, his first spots to come to mind and come out. That was a major breakthrough that we saw with him. We celebrated and throughout the rest of the workshop, you could just see the growth in him being really more comfortable with himself. By the end, he was coming up and thanking us for the work he'd done there in the workshop, for the tools we'd provided for him. He was real appreciative of everything he'd learned because he felt more confident in that.
Tiffani Sierra: And really what he was doing, he was working through a lot of his fears.
Michael Webb: Okay, well. And so, to that point. It strikes me that the skill you're referring to here doesn't just apply to sales. It applies way more broadly to social intelligence and self-awareness more generally, wouldn't it?
Tiffani Sierra: It does, really. That why I said the people that started coming to my classes 10 plus years ago back in Hollywood, they were of all different walks of life. When you start to work on one facet of who you are, it can't just affect one portion of your life. It's going to benefit your work life, it's obviously going to benefit your personal life. For example, Adrian and I really try to implement the rule of "yes, and" in our marriage. Not only in the work that we do individually in our own careers but even in our marriage. Like I said, it just helps you build upon and not negate what somebody else has said. There's other rules of improv, Michael, I didn't get to them. I don't know if you wanted me to mention some of the other rules.
Michael Webb: I do, but let's hang on a minute on this "yes, and." Because we haven't mined that one all the way through, I don't think.
Tiffani Sierra: Okay. It could take up years. I tell you.
Michael Webb: As you're describing this, I'm thinking about the environment that a lot of us grow up in as kids. It's not always a healthy environment. Depends on the kind of family that you have, right? But if you grew up in a family like I grew up in, where there was a lot of negativity and a lot of "Shut up!", as a kid you can close down and actually not even become aware of how you feel, much less the people around you feel. This "yes, and" idea sounds like it's sort of changing the way your own mind habitually works by dipping in a little bit more to what you might be feeling and therefore what other people around you might be feeling. And that's the only way you can get the material to have a response, isn't it?
Tiffani Sierra: That's so true and I think you've touched on something that's really important. That you are essentially rewiring your brain using improv. Through experiential of learning your whole body, you are able to rewire the way that you think. I think that's why Adrian and I have our really different backgrounds. All of his skills have been engineering and his left brain. A lot of the work that we do tends to lend toward a lot of the therapeutic side. I have some background, I'm certified in being able to use the arts as therapy. I'm not a therapist and we don't process, we're not going to do therapy with anyone. But we find that there's a lot of therapeutic benefits to what we do.
Tiffani Sierra: For example, when we're working with middle and high school students, you're right. If they come from an environment where they're used to being told no and living in that negativity, it can be really challenging for them to be in a positive environment. But again, with just the consistency of learning the language of improve, and through the games and exercises that we do, it's possible to rewire your brain so that you can develop a different language.
Michael Webb: The next thing that came to my mind after the sort of childhood memories, and I think we all have to go through a period where we become more conscious of ourselves and how we're thinking and how we're feeling and if you pursue that you become a more mature sort of person. You can have much better executive functions because you can manage yourself better. Well, that also leads to the ability to manage other people. Really good leaders have very high social acumen. They can readily influence all the people from all the different backgrounds of all the conflicting interests inside of an organization. And they're really good at working through all that. They would have to have the kind of mind that readily does that because they get stuff thrown at them all the time. So it's leadership skills and then obviously that moves towards, or it implies, really good sales skills. That's really fascinating. Let's move on. What are some of the other rules and how do they help people?
Tiffani Sierra: One of the other rules is to listen, so obviously you need to be listening with your whole body. I would say, I'm not trying to be a good listener, I'm trying to be an impeccable listener. And what that means to me is, I'm not just listening with my ears but I'm also paying attention to body language. I facilitated, actually did a workshop, and I had maybe up to 100 people in my workshop. It was all professionals. So either they were entrepreneurs or they're business professionals. I did this whole statement on body language and how important it is that when we are talking to somebody, either in networking situations or in sales situations, that we're not only listening to their words but we're paying attention to what their physical body is saying to us. A lot of times we don't pay attention to that stuff. So that would be one of our other rules of improv.
Tiffani Sierra: Another rule of improv is making your partner look good. That's something that I love because it really shows how selfless improv is. It's really about building the other person up and not focusing on yourself. That kind of takes the 'you' out of any situation and puts the focus on the other person. For example, how that would work is if you're in an improv scene. You'll see this a lot on Whose Line Is Is Anyway. One of the improvisers will, it's called endow or label, the other person with something very grand like being a queen or something really high status. We'll often laugh and just get a kick out of that. Then that person, the theme becomes about the other person. So that's really an important role of improv, to make your partner look good.
Michael Webb: So explain this a little more. If I say, "You are the Queen of England," that would be me making you look good, right?
Tiffani Sierra: Yeah, it would be endowing me with something really fun and positive that I could play with.
Michael Webb: And then you go, "Yes, and I love being fat," or whatever, whatever the Queen of England is, right? But how would you turn that around and then make the person who just gave you that line look good? Is that what the goal is here with each interaction?
Tiffani Sierra: Sure, sure. When you're working with a really experienced improviser, you'll find they're really able to coach another improviser that maybe doesn't have as much experience. And by making them look good, it just means that I'm not going to let you fail. If you're working with me, I'm not going to let you fail. I think that's something that's really important because, as I mentioned before, we find that a high percentage of people that come through our workshop have this great fear of failure. So the rule of making your partner look good says I'm not going to let you fail. I'm going to have your back. I'm going to support you. Not only am I going to support you, but I'm going to make you look really good.
Michael Webb: You're both up there in an improv situation. You're both up there for sort of a common purpose, right? To create entertainment. And you have to entertain yourself, right? If you're entertaining yourself and enjoying it, it's going to be more infectious for the audience. If that other person fails, that affects you too, so you're not up there being altruistic. It sounds like you're up there accenting the good things and building on the good. In the Lean philosophy, one of the bedrock principles is respect for people. That means respect for their ability to think and be rational. They may have different backgrounds, they may be more obstinate, they may not really understand the point that they really need to understand. And in a healthy Lean culture, I'm sure Adrian, you've seen this, you have to respect people if you expect them to grow. Is that fair?
Adrian Figueroa: Yes.
Michael Webb: This builds on the same thing, doesn't it?
Adrian Figueroa: Right, yeah, it's exactly that. Most examples you have when you're working in the private sector or anywhere in the corporate business world, you have more so what I see leaders that just expect a job to be done from their employees. It's very rare that I'm finding those that are doing exactly what Tiffani has said, where they said I'm not going to let you fail, we're going to do this together. The leaders are normally, well this employee's terrible, that employee's an idiot, this employee can't do this, this employee can't do that. You have that, and that's the way they look at it. Literally, we just need to get somebody else or we just need to move whatever they're not good at and give it to somebody else. That's part of my role. I look at that behavior and I go and coach those leaders along the way. That's not what we're here to do, think about it this way. Maybe we have to work with this individual in this certain manner.
Adrian Figueroa: Back to what you said, lead with respect. We had a CEO come to us last year in a workshop. She's what she thought was a good leader. She has all her employees there in the business, and she comes up and says, "I thought my employees really liked me but our business isn't thriving very well and all of a sudden I started getting feedback." A lot of the employees didn't really like her because she would come across as very cold. Very stone-faced. And she was like, "What I'm missing is empathy. I know you guys offer that. What can you do to help me in training to understand what this empathy is so I can utilize that within my business and get the other piece that I'm missing as a leader?"
Michael Webb: And how did improv help her?
Tiffani Sierra: When you're doing an improv scene like I mentioned with making your partner look good. One of the things is that you're listening to what the other person is saying and you're able to reflect that back to them. Somebody that doesn't have skills of empathy is really not able to voice and reflect back what was just heard. Empathy says that I can hear what you just said and I can kindly or warmly reflect that back to you in a positive way.
Michael Webb: I can feel it and I can respect it and I can say, "Oh." In other words, I'm not criticizing how you feel, I'm identifying it.
Tiffani Sierra: Really, empathy says you're not alone. It says that I can feel with you. That's really the definition of improv, I'm feeling with you. That's what we've found a lot of executives in high positions are really lacking those skills of empathy. Like the CEO that came to us. She's very prominent in the business world and she's a best selling author. She's an amazing woman. But that was one of the skills that she wanted to work on. Through one of our workshops, through some of the games and listening, and really being able to take in and really digest what was being said to her and then reflect that back to somebody, she really learned those skills. She started to implement them and she came in, I remember, to our last workshop. It was a six-week workshop. She said, "People are noticing a difference. I'm making change. I'm really implementing what I'm learning in here. My employees are noticing the difference. Thank you."
Michael Webb: Wow, that's awesome. That's a great testimonial. These are interesting stories. So we've got "yes, and", listen with your whole body, make your partner look good, what else?
Tiffani Sierra: Another rule that we have is to tell a story. This is something that's actually really great for salespeople. In improv, we tell a story, beginning, middle, and end. Storytelling is something that's been used for ages. There's so many different components of storytelling and what makes it so powerful. We like to think that improvisers are really great storytellers because they can concisely tell a story from beginning, middle, to end. Sometimes within about 30 seconds. There's games and exercises that we use that help to implement those storytelling skills. That would be another rule.
Tiffani Sierra: There's other rules in improv that we use. For example, if I were working with actors, the rules that I mentioned to you are pretty much the cardinal rules. Although I'll add one more. That is to try to be truthful, not funny.
Michael Webb: Try to be truthful and not funny.
Tiffani Sierra: Correct. Let me ask you a question. What makes something funny, to you?
Michael Webb: It is something unexpected, a surprise, and in particular... You could have a surprise and it makes you scared to death, so there's something about being funny that is a surprise. I don't know exactly what it is. It's unexpected, it's a surprise, and it's funny. I don't know. Tell me.
Tiffani Sierra: Those are all true. What if I told you that what makes something funny is truth? We laugh because we're a part of something. We laugh because it's truthful. For example, where we live, the 405 Freeway or the 91 is just madness. If I were to say anything about any of those freeways in front of an audience of people that live in L.A., they're probably going to laugh because they get it. They're in on the joke. But if I'm out in, let's use Wichita, Adrian was recently in Wichita. I just love saying Wichita. I don't know what it is about Wichita. I just love saying it. Let's say that we're in Wichita and I made a statement about the 405. You're going to have people saying, "Huh? What?" They're not going to be in on it. It's not going to feel truthful for them. So they're probably not going to laugh.
Michael Webb: So you have to know your audience in order to know what's funny. The context is crucial.
Tiffani Sierra: This is true. If you're doing an improv show, you want to know your audience. But there's a lot of universal truths for all people, right? The majority of people are all on social media. There's kind of a lot of truths that come with being on social media. Things like that could be funny. But what makes someone funny is someone who is honoring their own truth. That can only be true for them. The one thing for myself that I have learned is I'm a very quirky kind of person. I'm very spontaneous. I'm very kind of fly by the seat of my pants person.
Michael Webb: You're also the queen of England, right?
Tiffani Sierra: I'm also the queen! Let's not forget that. Adrian's going to buy me my crown later. You're laughing with me right now, which is exciting for me. I love that. I thrive off it. What makes it really interesting is that I'm honoring who I am. When we honor who we are, it doesn't matter what personality traits you have. That's where connection comes from. There's so much importance in connection and in being able to connect with people. Social media is built on people don't feel connected so they go to be online. What if we could create true and authentic connections in our own lives? What if salespeople could create true and authentic connections just from a quick conversation? Really, what if it started by them just being themselves and setting the ground for that space of comfort? Because when we're our authentic self we invite others to join in and for them to be themselves.
Michael Webb: Wow, that's interesting. You brought to mind an important idea here. Something that was said, I'm trying to remember the author's name. Russell Ackoff, Systems Thinker. I have to paraphrase here because I can't find that file. He said that most of the time when we're trying to improve things that we make the mistake, we improve the wrong thing. Because we don't understand the system that we're in, right? In a human system, the issues, as we've pointed out here, could be in your own mind because you're unaware or you have a block. So it's hard for you to get a connection with the other people around you. This improv could help with that. So I can see readily how it could help salespeople to be better communicators.
Michael Webb: On the other hand, there are lots of poor salespeople who are thrown out there to make a million cold calls as fast as they can because that's the only way they can find somebody who might be ready to buy something. Unfortunately, there are people who think the solution to everything is all about the salesperson, but that's not always true. One of the reasons why there's such high turnover in sales organizations because nobody is paving the ground to make sales easier for people. Have you seen places where improv won't help an executive or a salesperson?
Tiffani Sierra: I haven't. I have not honestly come across a person who has not benefited in some facet from the rules of improv, the work we do and growing. I think there's always opportunity to grow. I think there's always something we can work on. With that being said, I just haven't seen it yet.
Michael Webb: What's your observation about that, Adrian?
Adrian Figueroa: I feel the same way. You can go to all the top CEOs in the world and yeah they're making a lot of money, but are they really successful? What is going behind the scenes that nobody else knows about where they probably wish they could speak up and become their authentic selves. They really need help with this, really need help with that, this is going on in my social life, pr this is going on behind the scenes that nobody knows. They're going with the flow of fear of what others think and how the world views them. Yeah, they might have tie ins where they want more money or they want more this or that. If they're allowed to be their authentic selves and come forward, they'll continue to grow. As Tiffani was saying, hey, I need help in these facets. What can improv do? It would make them a stronger leader. A better person that can grow connections.
Michael Webb: Yeah, that's interesting and kind of fascinating. You're answering the question in a different way than what I expected. This respect for people idea is huge in organizations. I have to say that the number one issue that I have. I have people who find my books and my articles on my website and most of them are people who are in an organization. A lot of them are salespeople or sales managers or even VPS of sales. And they're in an organization where the management culture does not respect in this way. They would love to try to do some of the things that we bring to them, defining the problem and using observable characteristics to prioritize opportunities and reducing waste and improving the quality and the value that's created within the sales and marketing function, but they can't. Because they're trapped in this organization that does not respect people and they wish that there was some way they could get their leaders and managers to get it. That's like ten to one of the people I come into contact with and subscribe to my materials and things, compared to the one who's actually...
Michael Webb: If you are on top of one of those organizations and you're trying to improve the culture, you've got huge challenges too. I can see it definitely in the case of that second executive, helping them become more self-aware and more facile with their emotions and picking up on those of other people and being unafraid to be transparent. Deal with the environment and the real issues. I can see where that would have a huge impact. And I think you're right. Even at a low level, if you're an entry-level salesperson and you have the ability to do this, you're going to have a better impact and earn more respect of the people around you including your customers. It's just that the impact is a little more limited.
Adrian Figueroa: Normally what I tell executives at that level is that they just have to do it. At whatever level you're at, you just have to do it. Whatever you wholeheartedly believe in, you just have to start somewhere and start implementing it. Because others will follow and you'll be much stronger within the position that you are. Because you'll have a lot of followers that will help you. I know that's -
Michael Webb: I'm sorry, go ahead.
Adrian Figueroa: I was going to say that, I'm not going to go into the story because it was on a previous podcast but that was my story of how I was able to help and thrive and make all the hard improvements is just because I decided to do it. This was what I was going to do within the lines of what the business needed. But I was going to spin it in this way, improve it, and then the company succeeded but they didn't understand how it really did. What was the driving tool.
Michael Webb: Right. Well, and you all are bringing home a real crucial point, I think. In the operational excellence industry, Lean or Six Sigma or just about any of the flavors of operational excellence, most of the companies that attempt to go down this path of this style of doing initiatives, it's not as successful as they would like it to be. Especially in the past when the focus has been on the tools or the method. And/or it's on the project. It's not about how we show up and how we think, it's about following the Six Sigma process, or being Lean. We're going to follow these rules even though we don't know why we're doing them. So they don't have the successes they would like to have and it's hard for them to sustain this more arduous way of being analytical and gathering data and making decisions and performing experiments.
Michael Webb: You have to make it part of the culture. If it's part of the culture, that presupposes that the people value it. The only way that people can value it is if they're aware of it and they're communicating about it and authentically discussing it. I wouldn't have thought that improv would have an impact on that but you've just shown me that it does. So thank you.
Tiffani Sierra: Awesome, well, thank you for having an open mind to it. That's where it starts, right?
Michael Webb: Yeah. And it helps if you're really quick-witted and can say funny things.
Tiffani Sierra: True. We could teach anybody how to do that.
Michael Webb: Yeah, because I often find myself being caught not having anything funny to say. The funny thing is, my wife is laughing at me all the time and she says I say funny things but I don't know. The funny ones just come out and when you're stuck for something you can't. And that's what you remember.
Tiffani Sierra: But remember that she's probably laughing because you're saying something that's truthful. As long as you're honoring your truth, Michael, and this is true for anyone. People will often find comedy in that. You'd be really surprised.
Adrian Figueroa: We actually go through that ourselves, Mike. When I say something and I'm just being normal, like right now as I'm speaking to you at this moment. I'm just even-keeled, regular tone voice. I'll say something and Tiff will just start busting up. And I look at her like, what are you laughing for?
Tiffani Sierra: And it's because you said something that was really truthful that I could connect with, typically.
Adrian Figueroa: And to me, it wasn't even funny at all. I was just repeating the truth.
Tiffani Sierra: Because he has a very particular way of talking so I often laugh if you word something a certain way because it's just funny. He's just being him. There's humor in that. People want to laugh so bad, especially right now. People really do want to laugh. Isn't it fun to laugh?
Michael Webb: Oh yeah, and it's healthy too. This is great. This has been awesome. I've really enjoyed it. How can people get ahold of you if they want to learn more about what you do? Where can they go? How can they find you?
Tiffani Sierra: They can find us at our website improvitup.com. You can also find us on social. We're on Instagram, Facebook, LinkedIn, and Twitter. We often will post ways to improv your life on our social media pages. Be sure to follow us, so you can see tips. For business professionals and just anyone, we'll post some helpful tips on how to improv your life and improv your work.
Michael Webb: That sounds great. Well, I thank you both. I want to start following your work and may take some of those tips and put them into an article or something. Maybe we can have you back at some point in the future. Thank you very much for being interested in the Sales Process Excellence podcast. Glad you were here. And to my audience, so long until next time.
Adrian Figueroa: Thank you, Michael.
Tiffani Sierra: Thanks, Michael.
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Claude Bardy | Are You Asking the Right Questions When Coaching Your Salespeople?
8 oct. 2019· Sales Process Excellence Podcast
Michael Webb: B2B sales and marketing works to find the highest quality prospects, reach decision makers and sell value. Operational excellence uses data and systems thinking to make changes that cause improvement and eliminate waste. My name is Michael Webb and this is the Sales Process Excellence podcast. In the next 30 to 40 minutes we're going to destroy the myth that these two groups conflict and show you how to bring both strategies together to create more wealth for your company and your customers.
Michael Webb: I'm excited today to introduce you to Claude Bardy. Claude is a consultant in France. Claude, welcome here.
Claude Bardy: Thank you, Michael. I'm excited to be here.
Michael Webb: So we have only talked a couple times in the past and I'm really interested to learn about your background here. The audience will see why here as this unfolds. But tell us about your background and what has led you to what you do today.
Claude Bardy: Okay, yeah. Thanks, Michael. I am a French national, born in France, lived in France and Europe, and the US of A. I consider myself an international French person. Multi-culti, speak five languages, so I've been around in various environments. And from a work perspective, I trained initially as an engineer, so technical background. I hold an engineer's diploma from one of the French schools. But I moved to sales almost 30 years ago. No, more than 30 years ago, sorry, and haven't gone back. I've been doing sales since 1987. It's a decision because I wanted to concentrate on relationship, on helping businesses grow, and I thought my contribution was best in the sales, and I like the challenge.
Michael Webb: Okay. So out of curiosity, what was it you were selling in the very first sales job?
Claude Bardy: I was selling CAD CAM systems.
Michael Webb: Okay, cool.
Claude Bardy: Computer aided design. It's one thing led to another, my first job was a technical job with the software company called Dassault Systems, which produces or designs the software called CATIA. And from there I tried selling it and started my sales path using that, or based on this CATIA software, CAD CAM software. And I've sold that to small businesses in France. I've sold that to larger businesses in France, but that was only France. And after, how is it? '93, so six years, I moved to selling telecom systems, international.
Claude Bardy: So there I did a couple of, no more than a couple, seven, eight years in the telecom and payments field. So my customers were international operators, telecoms, banks, all over the world, all over the world. As I say, I lived on in C 66 K in a Boeing 747 flying all over the world.
Michael Webb: All right, and so what what led you then to what you're doing today?
Claude Bardy: I stopped my sales career as an employee in 2009. I'd been selling managing sales team and running sales organizations, business units, focusing on sales. And since 2009 my employer and I split up in 2009. And I set myself up as a consultant, still interested in sales. I like sales, I like sales teams, I like trying to improve and help a sales team sell better. And so I set up shop as an independent consultant in 2009. And now I help businesses develop sales projects usually related to new businesses or restructuring and changing a sales organization.
Claude Bardy: And along the way I have acquired a bunch of other competencies. I'm a certified coach because I felt this was needed. Sales is also a people thing. So new products are important, processes are important, but people are also very, very important. And coaching was, to me, obvious as a set of skills which I needed to be successful.
Michael Webb: So what kinds of principals in the process oriented world, operational excellence, systems thinking, lean six sigma types of things. What sorts of principles have attracted you, and especially with respect to how they apply to sales?
Claude Bardy: Right. You can imagine the situation in 2009 when I started my consulting business. I said, "How am I going to go from a wish to a business in helping a sales organization?" I had been exposed to very primitive sales processes, or in-house self developed mom and pop CRMs. And I thought there must be some better way to do that.
Claude Bardy: So I simply honestly very directly Googled, "Sales process," and came across a guy called Michael Webb who you might be familiar with, and I liked what he said. So I bought his words, read that and try to apply that to my consultancy cases. And to come back to your question, principles, I think that there is not a single component which explains sales performance. I think it's, sure, product a little bit, pricing. It's like the three or four Ps of marketing, product, pricing, sure. But people, and process, and also how you manage the sales team. I must make, let's say, define a little bit the scope or the field I'm working in.
Claude Bardy: I work only on B2B and usually B2B to C kind of businesses. I don't do B to C. It's a different set of principles and rules. But in B2B, face to face complex, remember I'm an engineer. I like complex solutions, complex situations. And selling in those environments are ... Well, you need a process approach. But success doesn't come just from having the right process. You need to manage the thing.
Claude Bardy: And just to give an illustration, I believe in the power, lots of Ps today, in the power of a sales review done as quote, "Coaching kind of sales review." I have seen with my customers, and I must say I've been slightly guilty too, sales reviews which are just and only focused on the weighted expected revenue shown in the pipeline. I think that is a partial approach, and the reason is the following. Salespeople, sales managers, sales directors, as we call them here in Europe, have a lot of pressure to meet the numbers.
Claude Bardy: This is all over the world, and not just in France or in Europe. But this pressure, number one. Number two, human nature being what it is, people tend to too easily move an opportunity down in the funnel. And with the weighted average, the pipeline looks like nice. The weighted year and revenue looks nice. Whereas the sales, I told the process, the real sales just does not reflect the actual chance of reaching that forecast revenue. Do you see what I mean?
Michael Webb: Yeah, I do. So, I'm hearing two things in there. I'm hearing, it's sort of like if you've ever seen maybe a young adult or a teenager, sometimes an older adult, and they get a dog as a pet. And the dog gets out of the house and is starting running outside. And they don't want that to happen so they start yelling at the dog, "Come back here, you." And he'd chase the dog. Right? "Come back here," and that's just going to make the dog go the other direction. Right?
Michael Webb: And so sort of our human nature is if you want more sales, you go push for the sales, and the sales people are going to tell you what you want to hear. I mean, it's-
Claude Bardy: Absolutely.
Michael Webb: Right? So that's one of the things that's going on there. Then the other thing that's going on there is if I'm correct, that well, what is it that has to happen in the sales process to make actual progress? We create value instead of waste. That's not something that everybody automatically understands. Right?
Claude Bardy: Absolutely. I think there's a thing called cost of sales, which is an, I call it a indicator; it's a French word translated into English. Cost of sales, not just in salary and so on, but in terms of energy, in terms of time. Cost of sales, are you pursuing the right opportunity? Is this opportunity which you have set at a stage, almost the closing stage with a weighted revenue of so much, are we really at that stage?
Claude Bardy: Are we not pursuing the wrong opportunity? And these quote, "Tough questions," which are normal questions, are very rarely asked, according to my experiencing with my customers and in the companies where I have worked as an employee. In other words, everybody's very happy to seize opportunity moving through the funnel and seeing the weighted average, the weighted revenue nicely growing as the thing is moving on.
Claude Bardy: But have we speak a quote, info team, Miller Heiman language, have we covered the buying center? Have we really spoken to these guys? Have we seen? Do we understand the value we are providing to them, to all of them? To the CEO, to the guy head of operations, have we seen them? Have we spoken to them? And I must say the conversations I have seen or heard, been witness to, are not tough enough; are too complacent. Is that the English word? We accept too easily what the [crosstalk 00:12:30]
Michael Webb: Sure. Well, yeah, you're talking about critical thinking here. Right? How do you know what you know? Right?
Claude Bardy: Yeah, yeah.
Michael Webb: And it sort of reminds me, a lot of times in the world of sales and sales management, and sales training, and this kind of work, we ... Make no mistake, there's some sharp critical thinking people there. But when you try to convey to simplify it to help other people learn to get better at it, they tend to come up with these old, they're old because they've been around for so long, rules of thumb. One of my favorite ones to pick on is [bant 00:13:11], right?
Michael Webb: Does the customer have a budget? Do they have a need? Right? Or are you talking to the authority? Does the person you're talking to have the authority to buy? Do they have a need and what's the timing? Right? And yeah, those are the qualification rules of thumb. And I had a client that bought into that, and so they structured their whole sales process around it and decided that we can have just yes or no on each one of those things. And then we've got a qualified opportunity in the sales funnel. Right? And I mean, have you seen somebody do that?
Claude Bardy: Well, I've seen people putting a lot of effort into designing a sales process. I've seen sales teams go through the motions, actually. That's, I think, the best expression, the best way of putting it. They do everything which is required, but the forecasted revenue doesn't materialize because we are too complacent with each other. And I must say, most of the sales people, and it's human nature once again, tend to be very reluctant to put on the back warmer, any opportunity. Because, "No, no, this one's going to come up. This one's going to come up.".
Claude Bardy: I've been seeing that. I was a big believer a long time ago into saying, "Well, the guy is naturally going to go on the one that closes immediately and leave on the side the other ones. But [inaudible 00:00:14:56], I said, "Sales, human nature being what I've seen, people are reluctant to remove opportunities from a pipeline, especially when it has been officially put in the sales pipeline.".
Claude Bardy: Therefore, I think my overall blanket feeling is that we need to understand that it's better value for everybody, for the organization, for the sales team, if we have tougher sales reviews. It's better for everybody, including for the sales person who will unfortunately at the beginning have a very thin pipeline, but he will spend more time on better opportunities once he understands that he well has, for example, covered the buying center.
Michael Webb: So how do you that?
Claude Bardy: Does this makes sense?
Michael Webb: Yeah, it makes sense. But how do you do that? I mean, how do you do critical thinking on these opportunities that everybody on the team is happy about and things are fine?
Claude Bardy: Well, I wish there was a foolproof method. Unfortunately I have not found one, call it a foolproof method, a silver bullet, or whatever. I think it's a a case by case situation. I usually tend to work on the sales manager, sales director, or head of sales, or whatever his title is, sorry, and get him to understand what we're looking at.
Claude Bardy: I just had an illustration. I was coaching the sales director of one of my clients who told me, Claude, I have a problem. My salespeople are not closing well enough. So let's look at the sales funnel. And yeah, in the stage which was called prior to closing stage in his sales process, it was inflated. It was bloated, actually. There were so many opportunities there. Why? Why?
Claude Bardy: And then we dig into that. We dig into that with the sales manager, and we come to the conclusion, we come to the intermediate conclusion that his sales reps are having trouble reaching the decision makers. The offer's out, the needs have been analyzed, that banting has been done. Okay? But it's not moving forward. Well, why isn't it moving forward? I can't reach the guy. Can't reach the guy. Well, why can't you reach the guy? I don't know.
Claude Bardy: And we entered. I was coaching the sales director to get him to understand which sales conversations to have with his team when he was doing his reviews, to get the salespeople to understand that they were chasing people who were not really interested. Had needs, had a budget, had a timeframe, but hadn't made the critical decision to switch. It's a recurring business. It's an opex kind of business. In other words, the customer, the prospect has already a solution and you're trying to win back, push that existing solution out and you put your solution in.
Claude Bardy: So there's no real compelling need to move immediately. And this question was never asked. So yeah, no wonder the guys had trouble reaching the decision makers because they hadn't, what I say, qualified, they hadn't qualified earlier. So I was coaching the sales director for him to have better, tougher conversations with his sales people to get them to understand that they were not asking the critical questions early enough, and that was part of the explanation, or the main cause. I hate to say root cause, but it's something like that.
Claude Bardy: That was the cause of his bloated closing, or sales funnel at the closing stage, and his not reaching the numbers. People were chasing opportunities which were not going to close. And they don't know why.
Michael Webb: You just illustrated one of the key, most popular and most easy to understand principles of process thinking, right? Either lean, or six sigma or any of those sorts of methodologies, which is the five whys. If you have a condition you see in, but it's undesirable, it needs to be changed. So, why? And then ask why again. And then ask why again. And you keep asking, it's not limited to five. You don't necessarily have to have five, but you ask it until it doesn't make sense to ask it anymore. Right?
Michael Webb: And because the whole universe is connected to it, right? Everything's interconnected, things are causing effects and we don't necessarily understand all those causal relationships. And in sales, those causal relationships are in somebody else's head. Right? So you have to understand them, and what they're thinking, and why they're thinking it, and that's the value the sales people had, right?
Claude Bardy: Yeah, yeah. And to finish on this illustration, the getting the sales director to understand this was not extremely difficult. He needed to find a solution so he was willing to try this approach. It made sense to him. Getting the sales reps, in the conversations, to pinpoint the fact that maybe they should review their qualification was slightly more difficult. But then what do we do? What do we do now? Now that we have an idea of why we are where we are. So what do we do?
Claude Bardy: And this I suggested with the sales director that we change our approach. And not one to one, but use a team approach. Generate solutions to move these difficult questions. Can I switch the customer from his existing solution to my solution? Is there a compelling need or can I generate one? How do I do this? We did this in group. We've introduced, which was completely new to the sales team, that we use the sales team as a group to work on a problem instead of individually. Each sales rep in his country, because it's all over Europe, you've got one for Germany, one for Poland, one for Italy and so on. So each one of them has the problem, how do I better qualify? So we use the sales meeting, the power of the group, to work on generating solutions for this.
Claude Bardy: So that was my input to helping the sales team is switching methodology, moving from one to one. Hey, do this in France or in Italy, or in Germany, to using the European sales team to generate solutions for which could be applicable in most cases, general idea. [crosstalk 00:23:08]-
Michael Webb: And that is another principle of operational excellence, right? Is respect for people. And that everybody on the team, we all have different backgrounds, we have different orientations. We're going to see things in a different way, and there's richness in that. We can learn from each other about that. And we can come up with a consensus on the team of how to solve a problem, and we're all start doing things in a similar way, then we all are able to learn faster as a group.
Claude Bardy: From one another.
Michael Webb: Yeah.
Claude Bardy: Yeah. From one another.
Michael Webb: Very good.
Claude Bardy: Now the limit of this exercise is that Europe is diverse. You can say you've got multiple segmentations. You've got one which is Western Europe, and the other one is central and Eastern Europe. So there's a business culture which is different. You've got language issues. You've got relationship cultures. If you don't relate to a Polish customer in the same way as you relate to a Brit, or a Frenchman, or a German. But there are overarching principles which are common, and we use the group to find those overarching principles.
Michael Webb: So for example, what are some of them?
Claude Bardy: Well, let's put it this way. I'm trying to illustrate this without disclosing too much of information on my customer. And so if you speak to a Polish person, he expects, this is just a very, how can I say, very easy to understand example. You're a salesperson, you reach out to a Polish customer. He expects a certain type of behavior. He wants you to come over to visit. He will not speak on the phone. He needs face time, face to face. Okay?
Michael Webb: Okay.
Claude Bardy: On the other hand for the same kind of conversation, which is the preliminary investigation in a sales project. A Dutch customer will very easily open up on the phone. And you can save some travel time and he will only require face time later on in the sales process. Whereas once again, the Polish guy really appreciates face time from the beginning.
Michael Webb: So what's the principle? The principle is that different people are different?
Claude Bardy: Yeah, that's pretty obvious.
Michael Webb: Okay, okay.
Claude Bardy: True. But I mean, what you cannot do, this is another illustration which I could give if we have time, of things which we shouldn't do. We can't have a uniform sales process, detailed, a very detailed uniform sales process. Flexibility should be given to cultural differences between countries. Because what you want is to provide value to the customer, but you don't do it in the same way in the Netherlands and in Poland, for example. You don't build relationship in the same way.
Michael Webb: So in other words, people are individuals and you need to respect their individuality.
Claude Bardy: Absolutely, and their culture. And the cultural codes, if I may so say.
Michael Webb: Yeah. Once a long time ago I heard someone say, and it just really resonated with me, "The biggest cause of waste, wasted effort, wasted everything in sales, is trying to get other people to do things they're not ready to do."
Claude Bardy: Absolutely. Absolutely.
Michael Webb: And since they're all individuals, you have to understand them individually.
Claude Bardy: Yeah. Yeah, yeah, yeah, yeah. Absolutely, you have to understand the sales team. You have to understand how the sales team is going to relate to the customer. There's a local approach. Once again, here in Europe we have a very diverse landscape with different cultures, different countries, different languages, different histories. I'm French, as you understand, we have a relationship to food which is well known. It's kind of cliche, but a lot of relationship is built around lunchtime.
Claude Bardy: And we do lunch meetings. And we build relationship during lunch. If you go to other countries, lunch for them is a waste of time. So it's just food digestion. And I can stay at my office and it is not a moment where you build relationship. You do it maybe drinking a beer in the evening. I'm thinking Germany here, okay?
Claude Bardy: Or so, this has to be understood. So designing an identical sale, or designing a sales process which fits for all of Europe needs to have some play, some room for there for a local way of doing things. It's obvious, but when you come with a CRM such as, I don't know, we can mention Salesforce but there are many others, you've got a monolithic software, which, how can I say, binds people into a single way of thinking; and that is counterproductive.
Michael Webb: And I totally agree with you there, but let me throw a curve ball, which is that if you are responsible for a corporation that has business interests, branch offices, or you do business in 100 different countries, or 50 countries, or you know? You need to know, you need to be able to predict the future. You need to be able to know what's working and what's not working in those field sales organizations. And with the complexity that you just described, it's impossible. So how can that person-
Claude Bardy: It's not impossible.
Michael Webb: Okay, so tell me more.
Claude Bardy: I have not been exposed personally to global sales, but I've been exposed for decades to European sales, which have, we're Europe, we currently have what? 27 countries, maybe 26 pretty soon. And each of them have their culture, some of them are close, some of them are different. So how do you do this?
Claude Bardy: Well, you have principles. And one principal which I think it's importance should be raised with European sales organizations, is that there's danger in putting weighted averages on each stage of the sales cycle. People input data into the CRM, so expected revenue, you multiply by a certain weight, confidence index or whatever, and you do some kind of calculation and you get a number.
Claude Bardy: What I would recommend is that the principles for putting an opportunity in a given stage in the sales cycle, in the sales process should be identical. The principles, okay? Leave it up to the sales guys to figure out the way to move an Italian opportunity from stage one to stage two, and a French opportunity from stage one, stage two. But the criteria for being in stage one and or be in stage two should be very, very strictly and uniformly applied.
Michael Webb: So then there is a common set of stages across all of the different cultures in places where you do this?
Claude Bardy: Yeah, yeah.
Michael Webb: But the method of moving through them is different. Right?
Claude Bardy: Yes, yes.
Michael Webb: Very good.
Claude Bardy: Yes.
Michael Webb: Okay.
Claude Bardy: That's my take on it.
Michael Webb: Yeah. I would tend to agree with you on that. But I'm sure that there's people out there that would not or say, "Yeah, but the devil's in the details." How the heck do you do that? And-
Claude Bardy: Well, you got to trust your people. I mean, if you've got a sales director in charge of, let's say Germany, I don't see any organization functioning, performing, if it has sales people in charge of sales in various countries whom corporate doesn't trust, whom corporate has to tell, "This is the way you do your job." No, come on. For example, I'm German. I know how to sell in Germany.
Claude Bardy: Okay, you want me to put an opportunity in stage two when it meets this criteria? Fine. Let me handle the way I move the opportunity through the pipeline. That's my job. That's German. That's typically my way of doing it, and I am capable of doing that.
Michael Webb: Very good. So again to the idea of bring your team together to talk these things through and come to an agreement that everybody can accept about how to do it, about what those stages would be, right?
Claude Bardy: Yeah, yeah, yeah. [crosstalk 00:00:32:39].
Michael Webb: Very good. And it's a shame, but a lot of times in the corporate world these basic principles are not understood. And I think that's why you were attracted to sales process and my books and stuff. And you're obviously being successful using these principles, your clients.
Claude Bardy: I try to.
Michael Webb: This is great. So thank you for these stories, and I'm sure that we'll be able to talk again. We're at about 30 minutes here, so if we could wrap up. I'm wondering if someone wants to learn more about what you do and how you might be able to help them, how can they get ahold of you?
Claude Bardy: I'm on LinkedIn, Claude Bardy on LinkedIn. I can be reached by email, claude.bardy@ my company's name, bceuropartners.com. There's a website currently being revamped, so don't look at it in five minutes, please. But you can reach me, yeah, LinkedIn or email is probably the best way to do it.
Michael Webb: Well, Claude, I had a great time listening to your discussion there, and your examples, and particularly that deep dive in what's necessary for succeeding in sales management in Europe. So thank you for that. And-
Claude Bardy: You are welcome.
Michael Webb: Let's do this again some time.
Claude Bardy: Yeah. Had great pleasure talking to you, Michael. And keep on writing those good books.
Michael Webb: Thank you, thank you very much. So-
Claude Bardy: You're welcome, welcome.
Michael Webb: Goodbye, everyone. Until next time.
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Christian Maurer | Respecting the Value Salespeople Create
24 sept. 2019· Sales Process Excellence Podcast
Michael Webb: Some people talk about selling to senior-level decision-makers, making calls, and selling based on value. Other people talk about process tools and measurement of data, systems thinking, analyzing causes and effect. But not very many people talk about how these things can be brought together to motivate people and create wealth for everyone. Today, I'm delighted to have a kindred spirit who I've known for several years, Christian Maurer, a consultant in France. Christian, welcome here. Really, really excited about our conversation today.
Christian Maurer: Thank you for having me.
Michael Webb: Well, so this is going to be really, really fun. Now a couple of preparation notes here. Christian and I are talking on a recorded line, and we have the best audio quality we can get, but something is amiss in it and so I've asked Christian... and Christian has a slight accent, although he's an excellent English speaker, to my ear anyway, some of the stuff that seems to have been a little hard to understand, so we're going to kind of overcompensate. I've asked him to speak especially slowly, and I may even interrupt him, re-enunciate or confirm that I understand what he's saying. And we're not doing that because ... we're just doing it because we think there's an issue in the audio quality. So, I apologize for that in advance, but this I promise you is going to be worth paying attention to.
Michael Webb: As we begin here, Christian, could you tell us 30 seconds of your background, and what kinds of things did you do, and what are you doing now?
Christian Maurer: Thank you. Well, I started out as an electrical engineer. I have a degree from the Swiss Federal Institute of Technology, and then I went into engineering in the sense of product manager and project manager. Then, I got into selling very complex systems, and from there my career took me then more into the corporate world where I was the director of strategic planning for a whole corporation. That's when I came to France. And then after a while, I had enough of the corporate life, and I was headhunted by a little boutique consultancy specialize-
Michael Webb: Who is this again? I'm sorry. Who you were headhunted by?
Christian Maurer: By a little boutique consultancy.
Michael Webb: Okay.
Christian Maurer: And this boutique consultancy was specialized on sales trainings and sales consulting. So, I started a second career as a sales trainer and sales consultant, and this little private firm then was gobbled up by a large CRM company which was gobbled up by a very large software company, and at the end the software company thought that we were a very interesting, special team, but we would strive more if we will be taken private. So, we got a private investor.
Michael Webb: Okay. Hang on one second. I'm hearing ... I hope it's okay if I do this, but I'm suspecting it was target account selling, was purchased by Ceba, was purchased by Oracle. is that right?
Christian Maurer: You got it.
Michael Webb: Okay. Go ahead. Go ahead.
Christian Maurer: You got it. Spot on right. And then-
Michael Webb: Because I worked with IMPAX Corporation. I was, I was a competitor. When I was a sales trainer with IMPAX Corporation, I was a competitor to target account sell. One of the guys who founded target account selling started out his sales training career at IMPAX working for Dave Matlow. So anyways, small world. So, go ahead-
Christian Maurer: Small world. So then, you also know how the story then ended that we became the task group for the private investors. Today, this company still exist. It's called [inaudible 00:04:08]. But after about a year or two, I found out that probably there was only one person who should think in this company and that was the CEO. So, I start become working on my own. But I continued into Royal Golf sales consultancy and sales training. Then a little later, I was approached by two universities in Germany if I would take some courses in the postgraduate level. So, I teach now graduate courses for master classes.
Michael Webb: Okay. Very good. Very good. So, now we get to the fun part. In our conversations over several years, I've learned about Christian that he made some of the same observations I did as a salesperson, sales manager, sales trainer. And what we observed in being in those environments was that there was something amiss, something funny, odd, not right about the way that we were being managed, about the decisions that our sales department heads, sales vice president, sales and marketing executives, and CEOs were making in regard to resources, and people, and how to run things. And there was something wrong. Christian saw some similar things.
Michael Webb: So, let's start there. Christian, what are some of the things that you saw during your time in sales that led you to start saying what's going on here? Why isn't this right?
Christian Maurer: Yeah. You certainly know the old saying to have more feet on the street will make more sales.
Michael Webb: To have more feet, yeah, on the street will make more sales. Oh, yes.
Christian Maurer: Yeah. Right. Okay. The only trouble with that is that there is the law of diminished return on effort. So, if you have a territory which is saturated, if you put a second salesman in there, the only thing you do is that you have two salesmen who can no longer make their quota because there's not enough potential.
Michael Webb: Right. So, you saw that happen I guess?
Christian Maurer: Oh, yeah. That was always what was told, and then afterwards people wanted to ... Another one which is very funny is the must-win deal.
Michael Webb: Cool.
Christian Maurer: Today with CRM systems. If there's a big fish in system that goes up to the VP of sales, maybe even higher, and guess what? It's declared a must-win deal. Now, things are not sold. Things are bought. Now, if you want to force to buy before it's ready, the only way that maybe has a chance to is you lower your price, right?
Michael Webb: Right.
Christian Maurer: So, if you lower your price, guess what happens to the quota of your sales force?
Michael Webb: It goes up. So, you discount your way out of making your quota. Not only that, you rob the company of profitability.
Christian Maurer: Yeah. Or taking another way, sales managers going in at the last moment as the rebate uncle, he's counting deals, right?
Michael Webb: Right.
Christian Maurer: And in sales management trainings, I sometimes made a little thing and said, okay, you have four deals and you discount by 20%. Now, if you still want to make quota, you need to have a fifth deal, don't you? And you get people staring at you like I'm from moon.
Michael Webb: Oh, yes. Oh, brings back so many memories. Then, there's the sales contest. I remember I was selling business forms. What a humble product, but a complicated one. All kinds of details. And I was just working. I was right out of college a couple of years, working 60 hours a week trying to succeed, learn how to sell, and I did okay sometimes, but sometimes I didn't do okay. Of course, then I was in trouble.
Michael Webb: So, they did a sales contest and this was all around the country. There's a couple a hundred salespeople. I was one of this business forms company, and I actually after six months, wow, I did really great. They gave me a barbecue grill, I got a new gold watch. I mean, there was a whole bunch of things I won as we went through these milestones. And I got through that and I looked at it and said, "Now, wait a second, last year I was working just as hard and I won some and I lost them, but I didn't get a barbecue grill or this expensive watch. This year they had the sales contest. My numbers are basically similar, but I got a thousand or $1500 worth of gifts. What gives? I didn't change my behavior. Just got something out of it." The whole sales contest made no sense to me whatsoever, but the VPs and the branch managers were all saying, "What a great thing that was."
Christian Maurer: You know the expression SPIF, S-P-I-F?
Michael Webb: SPIF. Yeah, SPIF. Yeah. My newsletters called SPIF.
Christian Maurer: Yeah. Right? It's special incentive for the field. It's like sales contest exactly the same thing because there are many sales manager who have not really understood yet that you cannot manage a salesforce with so-called motivation, motivational factor, with t-shirt contests, and I got God knows what, and having the ranking. I've heard actually somebody building a notification for your smartphones that people could ring the bell when they won the deal.
Michael Webb: They could ring a bell on the smartphone when they got a deal?
Christian Maurer: Yeah.
Michael Webb: As if they're sitting in the same room.
Christian Maurer: So, everybody who was in the group got that ringing of the bell. That was sold very well.
Michael Webb: It's so, so nutty. And this is discussed at length in some circles of the operational excellence industry. Edwards Demming, for example, is famous for pointing out that external motivation has severe limitations to it. When you try to motivate people by giving them bonuses, or giving them quotas, or telling them something, making conditions around their work that they don't have control over, that backfires. And yet in sales, it is built around this idea of commissions, and salespeople are money motivated, they're coin-operated, and so, wow. I think that there's some elements of truth there to a certain extent, but the vast majority of this, and from what I have seen is the failures, the errors in thought. Errors and assumptions that external motivations can work. Do you agree with that?
Christian Maurer: Oh, absolutely. Absolutely. I have a similar story from Daniel Pink.
Michael Webb: Daniel Pink.
Christian Maurer: Pink, yeah.
Michael Webb: Oh, he's the author of that ... What was the name of his book?
Christian Maurer: "To Sell is Human" was his last book.
Michael Webb: "To Sell is Human." Okay.
Christian Maurer: Yep. The last one he wrote, and he actually did a TED Talk about his whole experience with motivation. He's a researcher and free author on external motivation. In that TED Talk, you have to Google that, the things he tells about there is absolutely mind-boggling, and his quintessence is to say, well, what science knows, practice ignores. It's scientifically known.
Michael Webb: Okay. Excellent. Excellent. So, Daniel Pink. There's a TED Talk about motivation where he shows that these ideas, these concepts about external motivation are scientifically wrong. Did I get that right?
Christian Maurer: Yeah.
Michael Webb: Okay. We'll find that and include it in the notes of our show here for the audience. And yet, that is something that's still it's taught in business schools, it's just taken as the lay of the land. That's just how things work in sales and marketing, and you can't challenge that sort of thing very easily.
Christian Maurer: Well, there is still some light through the tunnel, just for the anecdote. Because when Daniel Pink wrote his first book about I think it's called "Drive"-
Michael Webb: "Drive", D-R-I-V-E. Okay.
Christian Maurer: That book I think was published in 2009, something like this. Then, the whole incentive compensation industry got really troubled about this. Based on their worry about the future. So, there is a group around Andy Zoltner, ZS Consulting that's what they called, and they were also advocates of Incentive Compensation. They have written a big book about that.
Christian Maurer: Now about two years ago, a new book came out where they really rethink the whole thing, and they start to accept that probably incentive compensation, external motivation, extrinsic motivation is not the way to go. They start to put into practice and promote that hybrid systems and ideas which about five, six years ago didn't exist yet. But it took them about eight years to recover from that shock from Drive until they really re-thought their copy and got into a different direction.
Michael Webb: Well, and the thing that's so amazing about this is that that's just one area, incentive compensation. Right? You have whole other areas of management that people just take it for granted. A senior executive who I dearly love and had worked with for a long time, was a client of mine, was very much a believer in the idea of stretch goals. Just put out a big, hairy, audacious goal and go for it. Right? And he believed that that was a constructive thing that could be used regularly in organizations in order to drive improvement. And wow, man, I've been there, and it drives burnout, that's for sure. It drives frustration and fear.
Christian Maurer: Yeah. And what does Demming say? Fear causes errors.
Michael Webb: Fear causes errors. Indeed. Absolutely. Absolutely does. Now, you look at the history of businesses, and originally the old adage, Ricardo I think? One of the early economists, production creates demand, right? If you can produce something that people want, then they'll buy for you. You can generate revenue that way. To the original ... After the industrial revolution, the application of scientific mindset to commerce, they started, you know, Adam Smith's famous story of the pin factory. Well, they figured out how to make pins way, way more of higher volume and lower cost than ever before, he was making money. And so, the whole focus of management was how do we make this production enterprise? How do we make it produce more, and gradually ... So, scientific principles, you can see it happening, right? You can count the inventory and the raw material, and you can measure the quality. So, the scientific principles were readily applicable in sales. When you were making a ton of the stuff, you can saturate your local market but you knew that there was demand in other places, you got to get it sold over there. Right?
Michael Webb: So, now comes the distribution problem. So, as an example, I love to tell the story in the United States, as the interstate highway system was built and developed, they would put billboards out on the highway. All the billboards would have to do is state that something was available. A Brill Cream or a product they were selling, and it would start selling [inaudible 00:17:11]. They're making people aware of it. Companies would ... If they were going to have ... they can make it in Massachusetts, but if they were going to be selling it all around the country they would need to have little stockpiles of inventory in all those major cities to service the demand. That's a gigantic capital investment.
Michael Webb: So, rather than do that, they signed up distributors, and the distributors would invest their money to hold it locally and fulfill the demand. Thereby, putting up a wall between the CEO of the manufacturing company and the end-users in the market. Because he didn't get to see them anymore, didn't care as long as the distributors were buying. So, these enterprises would grow with this mindset, and then they start realizing after awhile the market saturated. They don't realize that. They just realize sales aren't growing anymore. So, what do they do? Sign another distribution channel, and another distribution channel, and another distribution channel. They have all this conflict going on, and people pulling their hair out, and nobody's taking any kind of scientific approach to the sales and marketing.
Christian Maurer: It actually is a very fundamental question - what's the purpose of an enterprise? Right? And I actually love Peter Drucker's definition which says the purpose of an enterprise is to have customers.
Michael Webb: Peter Drucker's statement, yeah, the purpose of an enterprise is to have customers. Trade. Oh, I love that. I remember hearing that before, but that is ... Yeah, think about that.
Christian Maurer: Yeah. You see? And from that moment on, if you take that as your mantra, then you are actually in the idea that if you want to do an enterprise that's customer-oriented, you have to think outside in and not like historically inside out. But you start from the production and you want to get this production somewhere else. So, you thought what could the customer need and then you build something so that customer can meet. Think everything from the customer's perspective.
Michael Webb: And I never thought about it before. When did he write that? That was back in the '60s or '70s? When did he write that?
Christian Maurer: Yeah, yeah. Yeah, I don't know. Probably even in his first book on management. It's probably in the '50s. I just know his citations founded in one of the citation catalogs, but I don't know exactly in which book he wrote it, but it's probably in '50s, '60s.
Michael Webb: Well, as I understand it he was, if I'm not mistaken, he was in the same faculty as Edwards Demming and the systems thinking guy, Russell Akoff. They knew each other. They talked every day for many years as I understand it.
Christian Maurer: That I do not know. The only thing I know is that Peter Drucker actually is an Austrian, born Austrian, then he was then migrated to the United States. He was a journalist and he refused three calls to be a professor at Harvard. He preferred to be a consultant to all the big CEOs.
Michael Webb: Fascinating. And today, I'll just make this observation ... First of all, your involvement with the universities that are in Europe, excellent. Those universities sorely need someone like yourself who has a commitment to reason, evidence, and data, and scientific thinking, and also understands commerce, and people, and how businesses work. I'm sorry to say, my exposure to universities here in the US was just anything but respect for that. There was no respect for that stuff. There was some respect for the scientific approach in the sciences and in the math department. I ended up majoring in math because of that, but when it came to the humanities and then it came to the business courses, it was just I had a terrible ... It was awful. Awful experience]. So, I stayed away, stayed as far away from universities as I can.
Michael Webb: And I've run across people, and this maybe is a topic for another time, I've run across people who are management consultants who when you scratch the surface of their thinking, they're not rational, or logical, or systemic in their thinking at all, and yet they are actively promoting lean and sales or ... The six sigmas, not so much, but there's just a lot of mess out there in the findings of science, and bringing it to sales and marketing management.
Michael Webb: So, bring this back to what we started out with, we saw this as people in the field, in the grip of a corporation, in the grip of having to be productive and bring in revenue, and having these, I don't know, tribal knowledge, these policies that would come out that, okay, at first it sounds right, but when you put it in practice, it's obvious it's not working. It's doing the opposite of what they want to accomplish and why is that happening? So, it makes sales people's lives much more difficult. Wouldn't you agree?
Christian Maurer: Oh, yeah. Definitely. Definitely. And you know in the end what it leads to is that salespeople show a behavior which actually makes you to hate salespeople. Every sales class that I do starts with, "Please raise your hand if you like salespeople." I'm usually the only one raising the hand. And then I ask those students, "And you want to study sales now? Gives me a break. I don't understand you." Then from that, we discuss how these behaviors from their own perspective happening. And I tell them, "If you want to be successful in complex B to B sales, you have to not even touch those behaviors. You have to take another approach so that you are not touched by the certification, but be aware you always will have to fight against this very big fear or disgust even against salespeople."
Michael Webb: Yes. Well, I tell you what, this has been a great conversation. We've only picked the scab a little bit as they say here in the US. There's a pain out there among salespeople, but among executives, too, who are responsible for making their companies grow, and it's way more difficult than it ought to be. And why is that the case? I'm convinced from what I know about you that many of the things you teach in your courses would be beneficial and valuable. So, if you're willing and interested in that, why don't we set up a follow-up visit, and we can talk about some of these basic things that you present in your courses, and share more examples of the experiences you have in the corporations that helped you to learn what these principles are. Would that be all right?
Christian Maurer: That would be fine with me.
Michael Webb: All right. Super. Well, we will look forward to that. And Christian, I want to thank you very much. If someone wants to get a hold of you, learn more about what you've done or about your courses, how can they get ahold of you?
Christian Maurer: Well, I think the easiest is if you just go to the LinkedIn and Google me. LinkedIn, there you have all the things. I also have a blog which is called The Ultimate Sales Executive Resource.
Michael Webb: The Ultimate Sales Executive Resource.
Christian Maurer: ... Executive Resource.
Michael Webb: Okay. Well, I'll put those two links also in the show notes here, and thank you very much. This has been great. I know that there's a bunch of people out there. We've gotten their attention here because they're in the grip of this kind of frustration. We'll pick this up and we'll talk about what some of those learnings and principles are the next time we talk. So Christian, thank you very much.
Christian Maurer: Thank you.
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Robert Tripp | A Master Black Belt Explains Organizational Change and Operational Excellence
10 sept. 2019· Sales Process Excellence Podcast
Michael Webb: B2B sales and marketing works to find the highest quality prospects, reach decision makers, and sell value. Operational excellence uses data and systems thinking to make changes that cause improvement and eliminate waste. My name is Michael Webb and this is the Sales Process Excellence podcast. In the next 30 to 40 minutes, we're going to destroy the myth that these two groups conflict, and show you how to bring both strategies together to create more wealth for your company and your customers.
Michael Webb: I'm pleased today to have a fantastic person on our show. His name is Robert Tripp. He has a very long career as a consultant and a trainer and a master black belt. Robert, welcome here.
Robert Tripp: Yes, thank you Michael. It's good to be here on the call with you.
Michael Webb: Robert is with a firm, Argo LLC. Robert, for our audience, please provide a little, you know, where did you come from and how did you get where you are and what does Argo LLC do?
Robert Tripp: When I began my career a few decades ago, I never would have thought that I would, I guess, evolve into a space that allowed me to concentrate in process improvement, and process excellence, and quality management systems, but it all really began back in 1995. I had been working in the finance community in a manufacturing organization back in 1995, and I got tapped on to engage in a Six Sigma training effort to become a black belt. I thought it seemed new and unique and different, and I thought yes, let's give it a try.
I started down the path in 1995, which eventually certified as a master black belt. Soon after that, and by 1998, I was consulting, and that was just at the time when the industry was really starting to become active. There were a couple of small deployments early on, starting with Motorola and then it moved into a little bit with Texas Instruments and ABB and then Allied Signal. I was working at Allied Signal at the time.
But then beginning in 1998, I was able to begin working with a lot of different clients and that's when my consulting career started, and I started down the path of designing deployments, creating content, delivering training coaching projects, developing people and leaders in the organization to drive Six Sigma within their own communities.
Somewhere along the line there was a merger between the whole concept of Six Sigma and Lean and the ideas around both and how they really compliment each other and so. I'd say around the mid-2000s it became more of an effort around marketing and involving myself in Lean Six Sigma, and really that's what I've been doing since then. For the last few years I've been working with a number of different clients, but really in a small cluster of course partners, and in the last six months I've been independent, so it's been an interesting path.
The company that I have created is Argo LLC, and we basically work with organizations, large, small, and medium size to deploy continuous improvement tools. It ranges from grand corporate-wide deployments, which I'm working on right now, to smaller deployments, which just involves training and coaching a few project., You know, the landscape has changed, so the versatility and being able to apply the tools in different environments is important, and based on the, you know, the history I think we're able to argue that.
Michael Webb: You've been at a perch where you could watch the industry sort of unfold and watch the changes that have taken place, so what have you observed?
Robert Tripp: Well, I think one of the most interesting things that I've observed, it's really in the late nineties, early two-thousands, Six Sigma was a foreign concept. Winning was an important concept and well, maybe, you know, maybe organizations coming out of the manufacturing arenas had great familiarity with similar tools, if not tools of the same name. The broader scope of the industries, including financial services, health care, a lot of different government offices, things like this, they did not have exposure to Six Sigma. But as we sort of evolved and developed through the two thousands and in the last, you know, five to 10 years, it's really becoming ubiquitous.
Almost everybody you run into certainly has heard of Lean and Six Sigma. In addition to that, they've had some exposure either in terms of participating in Lean Six Sigma deployments, or former employer or being part of the projects or even maybe taking classes through collegiate courses and things like that. It's been interesting to watch the general level of awareness increase, but with that also comes a level of lack of awareness in the same way, so in other words, that people are getting exposed to it at a very superficial level. They know conceptually what it is, but they are not familiar still with how to deploy it and how to execute to really drive results for the organization.
Michael Webb: What is the percentage of Six Sigma deployments that actually achieve the goals that their companies start out with?
Robert Tripp: You know whether it's the stated goals as they are put down on paper and published to the rest of your organization to justify the resources being the time and effort being spent to deploy it. That may be a little bit different than the vision and the hopes than the people who deploy it who want to achieve, so just starting with the stated goals, you know, it's 90 to 100%. I don't think that, you know, the payback on Lean and Six Sigma is never, or I don't think it's ever a negative payback. The challenges, you know, are you really reaching the cultural, you know, DNA of the organization and that's where things fail, and it takes time to do that.
It takes patience and persistence to make that happen, but in addition, that sort of cultural transformation is difficult to measure so to say that there was a specific goal in that arena I think is a little bit difficult, but I would also say that there are a lot of people that are not satisfied with the way that their deployments are, I guess sustained within the organization's management system over time.
Michael Webb: I have heard statements not just about Six Sigma deployments, but about also other kinds of deployments, Lean deployments and so forth that, you know, it's typical in the industry that more than 80% of these initiatives they end up being disappointing, they end up not actually achieving the goals and objectives. Have you heard that?
Robert Tripp: Yeah, I have heard that sort of thing, and we agreed to the extent that they have not achieved the sustainability and the cultural transformation that the proponents are looking for. However, what they do achieve is certainly bringing some level of improvement in customer satisfaction and the level of improvement of internal, the process quality performance, and with that financial results that pay for the resources invested in the deployment. That being said, yes, no question there are a lot of deployments that do not exceed, or might exceed, but achieve the overall goal, but I would not say that they were a waste of time.
Michael Webb: Let's examine that dark side there for a minute about not achieving the cultural, I mean, I have heard the term even Six Sigma Nazis inside of a big company. The Six Sigma department ends up attempting to enforce some standards on how projects are done and to the people doing the work, it ends up feeling like process for process sake. In fact, when I was writing sales and marketing the Six Sigma way, there was a fellow who had a great project and I included it in my book and he was frustrated with his company. He had to confess that the company did not accept that project even though it had business results because he didn't follow the rules that they had set out. He didn't use particular statistical methods and they were Six Sigma Nazis. What do you tribute that to?
Robert Tripp: The actual causes of that sort of behavior is probably very different from one corporate culture to the next. However, I would say that there's general thing where people seem to like the convenience of checklists and that being said, they like to be able to have a standard format, a standard set of tools, even a standardized way of thinking that makes them feel good about what they're doing, because if they can check anything off the list, they feel like they are doing things the right way.
The problem with that is that checklists such as this, in trying to force people into a specific way of thinking, does not make you many friends, okay. I mean the human condition is we all want to have our own way of solving problems, and we want to be able to make our own contribution in a way, and I think the problem here is that a lot of times Lean and Six Sigma continuous improvement approaches to force everybody into a very constrained way of thinking about solving problems.
In the end if you're trying to sustain a deployment or a cultural change the people in the organization have to buy into it, and we're not going to buy into it unless they see value, unless they see benefits both to them and to the working environment coming from the changes you're trying to initiate, and so when Six Sigma is deployed in a very structured and rigid and, … I'm not going to use the word discipline because there has to be discipline behind it. It is that when its deployed in a structured and rigid way, and I think you turn people away from it, and that certainly creates difficulties in capturing that sustainable initiative that a lot of people are looking for.
Michael Webb: Yeah. It's kind of a baby in the bathwater kind of a problem here, and it goes both ways. If you're trying to help your organization get the most out of this methodology, you know that the rules of thought, the rules of evidence have to be followed, but then you can end up with the backlash of some sales guy somewhere or some general manager somewhere saying, you know, we're doing these training projects, but they're just training projects. We're not getting any benefit from it. And then, likewise, I have heard many times of companies … I had one just last fall, where a company had started down the path toward a process excellence, operational excellence initiative, take a very skilled person, put him at the head of that initiative, running it for six months and then financial pressures start hitting them, so they end up putting them in charge of a couple of plants down in Texas.
It's not a corporate commitment, and it isn't... It didn't pay off quick enough, and that's a baby in the bathwater thing too, right? I want to try to kind of parse out what's going on with that, and so let me ask you another question because you made a comment to me earlier before we got on our call here. You said you know the kind of a Six Sigma industry earlier in this call you said we grew starting in the 90s, grew really fast and then before we talked you said it's kind of plateaued a little bit. It kind of leveled off, so there's a number of companies out there that have adopted it and there's a demand, and a need for the kind of knowledge that is required to be effective using the Six Sigma approach, but why do you think it leveled off?
Robert Tripp: I think the market got saturated. I think enough people had been introduced to it, they had tried it, but there wasn't an organizational infrastructure to support them in the application of the Six Sigma concepts or Lean Six Sigma concepts in a structured way, so, you know, the interest sort of dies off. Now, what's interesting to me is, going back to the comments you were making just a moment ago, is yes, there is a lot of latent exposure to Lean and Six Sigma and continuous improvement tools.
And I'm working with a client right now where, you know, they haven't had for about seven years, they haven't had a large bureaucracy. That is, a leader of Six Sigma reporting, you know two or three levels down from the CEO, whose sole objective is to drive Six Sigma. This is kind of, this experience that I'm talking about. It's a client who's trying to build Six Sigma, I'd say from the middle out, meaning that they have a middle manager who manages a fairly large budget and is offering training through his budget and through his organization, to his own employees as well as everyone else in the company who wants to join, okay? And they apply the tools and the projects, excuse me, the tools and the concepts and documenting the projects, you say and that sort of advertises the projects. And if you want to join the training, you're welcome to. Now, the company does support it in the sense that there is an internal mechanism for charging back the cost of the students going into the training, but it's much cheaper than the students going to the training externally.
You know, a lot of people say, yeah, we're interested and yes, we're happy to get a certificate through attending the training within this, you know, corporate unit whose part of the job has nothing to do with Six Sigma, but they found it valuable to themselves and they're willing to open it up to the rest of the organization and it's great. What's exciting about that, is you're getting pulled from the rest of the organization because they see value, they see a deliver benefits, but we haven't created a massive bureaucracy and infrastructure to support it, so that when the financial winds change, all that really needs to happen is we just adjust sort of a focus on the projects to focus on the critical financial issues of the day. We don't have to worry about paying for what's perceived as a bureaucracy that doesn't really add value to the organization.
Michael Webb: Yeah, and I think that's an interesting observation. I have also seen that in some companies. There is a sort of a natural pull among middle management that may want something like this. They need something like this, but there is no corporate, at least not with a huge funding, you know, some sort of corporate bureaucracy that has a quota imposed on it for how many millions of dollars of cost savings that they're going to claim each year.
Robert Tripp: Yeah, the whole organizational structure or people managing other people, and responsible for projects, they keep it very, very simple. But what's great is it's organic, and people are joining this because they want to and they see the value in the way of thinking. You know, the interesting thing is what Lean Six Sigma is trying to do is, it's trying, obviously, improve processes. But it's also trying to develop people, and it's trying to give people a sort of a consistent, and disciplined approach to addressing problems in the organization using data, and some analytical techniques. You know, it's not trying to force it down their throat. And these concepts, what they will not do, okay, the idea of applying them to unique and different situations is exciting to people because they can see the that you can really acquire your own sense of creativity, your own contribution to a project, working with your project team to solve a variety of different issues of your organization.
One of the things we like to do is we like to talk about, talk to the people about seeking of themselves, not as people with a title or certification, green belts or black belts, but essentially, you know, mini-entrepreneurs, within the organization, who develop a portfolio of projects and going through this training offers a tremendous sort of development. It offers a tremendous opportunity to really do something in the organization that they can document and share with the rest of the organization as they progress through their own career path.
It's exciting to see people take that on and really engage in this notion of, "Yes, there is a certain entrepreneurial spirit that's alive here because every time you went to sell an idea, you are a salesperson. You have to justify it, and there's significant and rigorous study. You have to find the right people to network and make your ideas readily accessible to people, to other people in the organization. And that's how you build a name for yourself and help develop your career.
Michael Webb: Yeah, so people are using it as an instrument to help themselves. They see it as a way to help solve problems and they distinguish themselves by their ability to actually do that.
Robert Tripp: Of course, yes. Now, when companies run into trouble, in my opinion, is they undermine that process and that spirit of self-development, and again, I'll say the spirit of entrepreneurial-ism. They undermine that by creating black belt or green belt positions that they go externally to hire and fill from the outside. Because then the position becomes a destination point. It doesn't become a path for people to flow through on to something else. Unless you create it, it would be defined as a destination point. It tends to put out … it's like throwing water on a fire. It puts a damper on the energy behind the sort of grassroots trying to gain these tools and concepts and ideas and apply them to their own organization as a way to benefit from their own careers.
Michael Webb: Well, and I think there's another thing, that might be going on sort of surreptitiously in the background. I believe Six Sigma was formulated to sell to senior executives. It was very marketable in that it was very palatable. Here's a set of rules, you've got engineers, there's hard evidence here, you follow these rules, DMAIC train people to go through this. Everybody, like GE approached it. A very top-down, very command and control company, and so take this Six Sigma pill and, you know, force it down your throat and get some results from it and you know, fire the bottom 10% of the organization and that's how you make this beast get better, right?
Robert Tripp: Yup. That's really interesting, and it gets back to the point you were making before, was why has the industry sort of plateaued? And that may be one of the core reasons. It's not new and it's not exciting as an initiative for executives to buy into.
Michael Webb: Right, and there's enough backlash out in the marketplace. You know, it's interesting. Toyota is and in the whole continuous improvement world … people who've worked for Toyota, don't always have the same view of continuous improvement as people communicate or described it as. I had a client, a potential client, I'll say. They never actually became a client, and I learned many years later that the reason for that was that, because I work with VPs of sales instead of VPs of manufacturing or also General Managers, but all my work is focused around sales and marketing, right?
The VP of sales in this company was adamantly opposed to any kind of process work and not because he's a concrete head, he didn't get it, right? He was doing a pretty good job and he knew that he should measure stuff, but his wife had worked for a number of years at a Toyota plant and had been treated in such a way, that she thought it was awful, and he absorbed that kind of attitude, and so there was no way that I was going to win this company as a client when the VP of sales is adamantly blocking the door. No way, right? And he was making his numbers, so he didn't really have any problem that had to be solved and the president of the company backed down and said, okay, well we're not going to force this issue.
I think there's a lot of confusion out there in how this is positioned. Another clue. The industry is organized sort of semi-organized right? There's the Six Sigma-oriented people, there's the Lean-oriented people, there's the continuous improvement people, you know, the Deming people, the Shingo-oriented people. Honestly with the exception possibly of the Shingo oriented people, the number one concern you hear or complaint or frustration of people in the industry, and you tell me if you heard this as well, is that it's difficult for the practitioners to get senior management to pay attention. To recognize this stuff is important for the whole company. It's important to senior management. It's not just a tool for the shop rats, it's not just a tool for the people in the plant or the engineering department, right? And they have trouble getting that message across that. Have you seen that also?
Robert Tripp: Oh, absolutely, absolutely, and again, if we can engage the people who are going to the training and applying the tools and facilitating teams to deliver successful projects, you know, deployment as a whole is only successful if we deliver results project by project. It's always good to be difficult to work with management who have to make decisions based on several criteria not just those that are of interest to the specific project teams so it gets back to the practitioner, whether it is a green belt or a black belt, the person facilitating these improvement teams, it gets back to these practitioners understanding what they need to sell to the senior management to help their solutions be better accepted in the organization.
It's not always an easy formula to follow. In fact, this is part of the challenge. It's not formulaic. You can't make it, again, we'll get back to a checklist conundrum. You can't make this a checklist. You have to make this something that people evaluate the circumstances of their own situation effectively and find the right pitch to create value to the end-user, or the person that has to buy the solution or the result of whatever you're trying to deliver.
That being said, yes it's difficult to get management to engage because they have a lot of competing priorities. One thing we can do when we deliver projects is be as rigorous as possible at driving towards some sort of financial estimate or qualification of the results of the project, and we don't have that. We don't have much to work with. So that has to be at the most basic piece of things, but your projects can have great value beyond whether we've accounted for using standard, you know, accounting practices or management accounting practices. There's a lot more to be said with projects in many cases within simple financial numbers. But it's a starting point and we have to build that discipline in.
Michael Webb: Right. I think that was one of the other sort of subtle hidden assumptions in the way Six Sigma is talked about and taught and presented to management, which is that everything's a project. And yes, in fact, everything is not a project, right? We have some ongoing things that must continue even after our production system must continue, right? And we need to be able to measure and demonstrate that we're actually creating improvement there, and it's not a project, and a little project which may have very little payoff. Well, for example, there's this great story that, I'm trying to remember the name of the fellow, the former head of LEI Lean Institute, used to spend time, he worked at Toyota for a number of years. GM would send people in to observe them. Like, at the Nummi plant, in California. And the VP of finance sent somebody in his department to go observe them and told that person, "Look, I want you to bring back only improvements that are more than a hundred thousand dollars a year. That's what I'm interested in. Not things, you know, little crappy things. I want the big hits that we can implement."
Well, the guy goes there and he sees them in the midst of a project where the union people had requested that the soda machines be moved closer to the break room. The next day, they had five electricians and you know, they're doing it. Where's your payback on that, right? He couldn't include that in his list to send back to the VP of finance of GM. In fact, Toyota was getting huge return on that. You just couldn't measure it because the Union people, now knew that they were being listened to, right? It's not about projects, it's about something else that obviously was not on the radar of that VP of finance at GM.
Robert Tripp: Well that's really interesting because lean and Six Sigma way of thinking, right? What's funny is that we tend to get into this thought pattern or, I'll called a paradigm that you know, every day as you said, "Everything is a project." Primarily because that's how it's taught, okay? But the thing is, is once you kind of become adept at something, you don't need to actually practice it necessarily in exactly the same way that you were taught it. The project is a vehicle that's been, or an architecture, that's been created for the purpose of teaching people who are unfamiliar with the tools or giving them exposure that they get comfortable with the sequence and the way the tools relate, and how their thinking flows through the problem solving, the discovering process.
The reality is, you don't really want people in the end, to practice your way of working in that manner. So, it's interesting, you know, it really gets back to this checklist. I think we get so ingrained into a particular habit, and the way we apply a set of tools that we're not willing to sort of work out outside that box and say, "You know what, this organization is different than where we started. Now it's time to think more critically about how do we get people to engage in practices simply as a way of working, not as a project-based infrastructure?"
Now, there's the trade-off. If it's not project-based, it doesn't have a defined beginning and end and it's going to be very difficult to evaluate a financial benefit. On the other hand, you know, you're getting the benefit of sort of a culture, you know, way of changing the organization. So I think there may be an opportunity here to balance both, and of course it's going to vary from one situation to the next. But, that's the organizations who are starting down the Lean Six Sigma and the continuous improvement process certainly want to design their structure around project execution, but I think it would get more maturity, they need to consider a more fluid approach that allows people to deploy these tools, both in a project architecture and outside of work.
Michael Webb: Now, you said something I'm going to push back on, I think you would agree with this but so let me just put it out there. You seem to imply that if you don't have a project focus then you can't measure improvement. And I heard a different interpretation, of process improvement. There was continuous improvement which takes place in something, the kind of work that's done repetitive on and on and on like in a production plant, right?
Like sales and marketing. It means every day you have to go do something that makes more people find you, finds more qualified prospects, brings those prospects closer to giving money to you. It's a production process, a production system. Likewise, you have to find the right raw materials, you've got to bring them in, they've got to be prepared properly, and assembled properly according to the schedule and a SPEC. All those are all production processes and managements try to use things called key performance indicators.
They're going to be making their desired result, but then, that system, sometimes, needs to fundamentally change the way it works. That's a project, right? There's breakthrough improvement versus continuous improvement, and you're using at the root, you're using the same principles of how you use your mind. But you're managing it with a beginning, middle, and an end in a project case and you're managing it with improvement in those data-driven KPIs to determine if we're improving continuously and also to determine if that project created a difference that goes to the financial statements. What do you think of that characterization?
Robert Tripp: I think it's a fair characterization. My concern is that we can define a project however we want to define it, right? I mean the issue is we need to have a specific beginning and end to a sequence of activities. We acquire projects to address maybe issues or opportunities in these processes. We define those projects as a sequence of events that are being delivered to achieve a specific outcome. Typically those projects have, you know, one of the KPIs, as the beginning and the end, right?
The amount of time it takes, obviously, there are other KPIs related to new services required, and then the outcome of that project as well, is certainly being measured. So it's kind of, maybe the combination of those three elements that are... They're helping to define, you know, the boundaries of that project experience. But when you are certain with that specific beginning and end, it's much easier to estimate the financial impact for sure.
I don't think that, you know, if you're not defining boundaries on the event, then you wonder when they stop accumulating metrics to say how well you performed. Now you can watch incremental changes take place. So, let's say we introduce a continuous improvement program that has, the intended effect of improving some KPI on a process. Well, you can apply specific projects within that continuous improvement program, but the program itself then is not the project, is considered that projects are the events that are driving the change. So, I'm still sort of in this place where you have to define the beginning and the end to your, you know, sequence of events, if you want to evaluate the results of those events with a specific starting point. I'm not sure I answered your question, Mike.
Michael Webb: Well, if you have a process that's functioning, and then you can put a process behavior chart on it, and statistically determine if there is a change to the capability, the variation, right? The output, the yield of that project. So, theoretically if you have a breakthrough improvement, suppose you change the website, and it now has a great way for people to get information and self-assess their needs and then reach out to get specific information about solving a problem that then goes to the sales force. And the purpose of that project is to generate a higher quality of lead to the sales force.
Well, before you have that project implemented, you have a rate of leads and a quality of the leads that are coming in. After that project is done, you have a different rate of leads and quality of leads that's coming in. You can put that on a process behavior chart and tell that an improvement took place.
Robert Tripp: Right, right.
Michael Webb: That's what I'm talking about.
Robert Tripp: Yes, but you defined the beginning and the end, with the project you defined an endpoint to that project where you can evaluate, "Okay, did we make the changes of the KPIs, and that you're interested in changing?" Now, what defined the end of that project could be timing, could be reaching a certain level of performance in the KPI. I don't know, but there is something specific that defines the end of that project, right?
Michael Webb: Yeah. Well there is, but lots of times those projects end, and I guess the point is, and I know this from a guy who wrote the improvement guide as a matter of fact, who I hope to have a future show. His name is Cliff Norman. You shouldn't measure the process when you changed, you know, use the dates, the beginning and end, in the project to measure the process. You should just be measuring the process and then see if the data tells you that there was a change in the capability.
Robert Tripp: I think that's a fair statement.
Michael Webb: Yeah, it's a fair statement. Okay, so geeking out here a little bit, and then we will pull it back to something that's sort of relevant to sales. And then, that's going to take us into management, and then maybe we can wrap up. I was quite shocked back in 2006 when I wrote Sales and Marketing the Six Sigma Way, to realize that the Six Sigma industry had precisely the same problems as the sales training industry.
The two were structured the same, right? They sold training. It was relatively easy to sell. It was pretty easy to buy. People understood what it was. They made money by putting buns on seats. Universally there is a problem of demonstrating results. And so the training consulting companies tried to sell field coaching with management, you know, for implementation. And the managements who bought the training often were reluctant to buy the field coaching because they just thought it was a high profit add on an unnecessary type thing, and that was just a state of the industry, right? And because they're focused on training. In Lean, many times it has been similar because it's the same kind of thing. The solution to that dilemma is to not allow the focus on the consultant's product, but to change the focus, the consultant has to change the way they work to give it a focus on the customer's problem. That is a huge shift in mindset, so my question to you is, do you agree? And how do you do that?
Robert Tripp: In your assessment of the similarities of the two industries, I agree 100%. I think it's fascinating that you sort of, you observed that from the sales and marketing and selling training side of things, but you can certainly see it also in the consulting side of stuff. You have to look for the value proposition in anything that you're trying to sell. And one of the advantages I think that we have, or could have within the Six Sigma industry, again is to focus on helping the people quantify the impact of their projects, you know, financially as much as possible.
And, I realize that, you know, that can create difficulties and challenges down the line as you start to mature as you are in the organization with deploying these tools. Because the focus on financial qualification tends to draw people's attention away from the other benefits as part of the conversations we've already been having. And so that can be an impedance to driving a cultural change in the organization. That being said, yeah, I agree with you 100% that it's difficult to sell this without, you know, understanding exactly what the organization needs as a result of the training, and the human resource development that you're proposing.
Michael Webb: Right. Well, and when we get into sales and marketing, that whole concept of the ability to measure, that's a whole new world because they think that getting measured all the time, but they're not. All they measure is the end result, and the net of that is they end up doing the same things over and over and over and expecting different results. And it's been a big Chinese wall between the sales and marketing world and solving problems and the operational, you know, production management world where they can solve problems and produce measurable financial results with a lot of credibility.
That would be a great topic for another conversation with you. We've sort of been chewing the fat here going around, you know, a bunch of different poles and a bunch of different observations. But it is useful to step back and say, this industry is here for a reason. It does have results. It does have some ramifications that people would prefer not to be the case. There's this story in the industry, a fairy tale, I mean, not in the industry but, a girl was thrown into a dungeon, full of hay and manure and they check on her and she's just thrilled. She's digging around, and then they ask her, why? Why are you so happy? She says, well, if there's a lot of this manure in here, there has to be a pony, right?
Well, that's kind of like where we. There's some really good stuff in this operational excellence industry, right? And we've found some of it, but it hasn't really stuck, and until it's understood that sales and marketing needs it, engineering needs it, human resources need it, most importantly, none of those people are going to think they need it until senior management recognizes that they need it. And it is how we're talking, and we're trying to penetrate that barrier.
Robert Tripp: If I could add to that, real quick Mike, I would agree with you 100%, and even to the extent that we try to emulate or replicate the Toyota model for Lean production, execution and design. I think we have to recognize we're dealing with different cultures and different business models. And we have to be willing to incorporate our own sense of judiciously applied continuous improvement tools and methods, based on the culture and the method that exists, and I think the same would go for your sales and marketing processes as well. I think too often we get, again into our paradigms according to the way we learned it, or according to the way it's been advertised, it was practiced, but forget that you have to be creative enough to apply it to your unique circumstances and flex and mold and really craft your own deployment and approach to match the environments to work again.
Michael Webb: Yeah, right. I agree with that, and then how you stay on the rails and make that effective and prove it with data. Yeah, that requires a lot of thinking and you can't use checklists. You need thinking people. Anyway, I love talking about this stuff and trying to solve the problems in the world. I want to thank you for being interested enough to spend this time with me. Let's pick another topic because guys like you have really, really valuable experience and-
Robert Tripp: I'd love that, that would be great.
Michael Webb: I appreciate your interest, and we'll see how the audience reacts, hopefully, they'll ask us some questions and this will spur a further productive conversation. So if someone wants to get ahold of you, at Argo how would they do that?
Robert Tripp: The best way, really is through my email. You know, I'm not a very sophisticated marketing machine here, so I've got my personal email address at [email protected]. Also, you can reach me at 317-506-4849, on my phone and you know, we'll engage in a conversation, that would be great. I'd be happy to talk to anyone, whether they have questions or ideas or thoughts to share, it's always, it's a fun field to sort of explore, so, yeah. Thanks for the opportunity, Mike, it's been great chatting with you. I appreciate this.
Michael Webb: Same here, and we will talk again soon.
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Charles Chen | How Systems Thinking Influences Sales Organizations
26 août 2019· Sales Process Excellence Podcast
Michael Webb: Some people focus on making sales calls, reaching decision-makers and selling value. Other people focus on finding data, understanding cause and effect, and conducting experiments. This is Michael Webb and this is the Sales Process Excellence podcast where we focus on doing both, to create wealth for everyone.
I'm excited today to have a guest, an unusual person. This is Charles Chen who has followed a career that has had transitions that make him uniquely insightful in our quest here to improve sales processes around the world. He was a mechanical engineer, and then he transitioned to being a Six Sigma Green Belt and an engineering project manager at, I think he worked at Ford and then GE and then a bank and then ultimately became a master Black Belt at Microsoft. And has worked on customer-facing projects in sales and marketing. So Charles, welcome here.
Charles Chen: Thanks, Michael. It's great to be with you.
Michael Webb: So it would be great, I did a little bit of a thumbnail sketch there of your background. I mean, tell us how you got to where you are and what kind of motivated you along the way. I know that readers would like to hear a little color commentary on why you're here.
Charles Chen: Oh sure, sure. So my background, you touched the right two points. I started my career a long time ago at Ford Motor Company. Also, an engineer, graduated from University of Michigan with a Masters in Mechanical Engineering. After three years I went to Yale business school. Upon graduation, I started work at GE and this time was not in engineering, it was in sales enablement. So it was there that I earned my Green Belt, but we did a project fundamentally enhanced the productivity of that sales organization.
After two years there, I went to Washington Mutual Bank as a corporate officer. I ran the Black Belt project over there, ran the team as well. Saw that bank was about to tilt a year before it finally did and went to Microsoft. At Microsoft, I've been here for 11 years. This is my fifth role with the company. What's most profound in my career at Microsoft has been when I was in our internal Six Sigma consulting and teaching group and I focused our efforts in sales and marketing. So I personally ran multiple projects at the global scale focused on sales and marketing, improving revenue, either conversion rate or win rate or velocity.
And I personally coached 11 folks on Microsoft to earn their Green Belt, Black Belt certification. Half of them were from sales and marketing as well, even a few from our incentive comp organization. So yeah, that's my background, my last role with ... yeah, that's my background. Thank you.
Michael Webb: So Six Sigma has a reputation for being very doctrinaire, very jargony. Not everybody from a sales background. In fact, a lot of people from sales background get turned off as soon as you say Six Sigma, but there are some very valuable underlying principles that apply in sales. And I don't want to assume that the audience knows the jargon and stuff.
And so I thought I would ask you to tell us on example, two steps here. The first step is, tell us an example of some problems that were taking place when you first started doing Six Sigma work. What were the problems that were taking place in the business that couldn't be solved without taking this Six Sigma approach? So what were they struggling with? Why couldn't they fix it on their own? What did this DMAIC, right? Define, measure ... this Six Sigma. Why was that needed?
Charles Chen: Yeah. Yeah, totally. Let me use an example from my very first project, even at GE. This division at GE is GE Equipment Services. GE Equipment Services they own a lot of assets. And this division in particular own billions of dollars of tractor and trailers. So Michael, if you're going down the highway, you see a 46-foot or 53-foot tractor going down shipping something, that tractor in the back, a huge percentage of those in North America are owned by General Electric. Pretty profound, right? They built aircraft engines, but they also own assets like that.
One thing very, very fundamental about that sort of asset I think everybody can appreciate is how do you make money on that asset? You make them money, you own the product itself, you own it. The moment it sits on your lot it's depreciating. It's just like an airplane, a commercial airplane. The moment it sits on the tarmac you're losing money. You've got to get that thing flying all the time. The same thing with these tractors and trailers.
So what typically happened when I joined that part of GE is, they have hundreds of thousands of these tractors and trailers, spontaneously, suddenly, a whole fleet of them shows up at the GE site. Then the salespeople are running around with their heads mad, trying to get them out the door again. Some of them sit there for months. Every month is losing money. So that was a fundamental issue. It's like their barely making it and everything was reactive, and how do we know that these things are coming back and make sure they don't come back? Or if they come back as barely a touchpoint and then boom, they're back out with the same customer, or with a different customer, or the best part is they don't even come back in the first place. So that was the fundamental problem they're trying to solve. Yeah. So the project how I got involved. Yeah, go ahead.
Michael Webb: Why couldn't they solve it? I mean I'm sure there was lots of people who could see the problem. Why did you have to do Six Sigma to solve it?
Charles Chen: Yeah, I think there's a combinations of that. This division of GE was fairly recently acquired. So a lot of the folks in the senior leadership chain came from GE. So they have a Six Sigma background. And in fact, most of them were Black Belts and Master Black Belts. At the same time, you still have the traditional folks on the site who got acquired with the company. So there was a culture change in the first place. How do you get everybody to recognize that we got to solve this problem together and look at it from a different way?
Michael Webb: And as opposed to everybody, you stay in your own lane, I'm doing a good job. Leave me alone.
Charles Chen: That's right. That's right. As long as I'm making money, as long as I am a seller, I make money, I meet my quota, I'm good. But the cost to the company, which this eludes to, is very real and very material. And to really bring up the margins, you've got to worry about both. And there has always been complaints from the sales team that when they want to get trailers out, they don't have enough trailers. Or they're being bombarded by requests from managers to, hey, I got you to find a way to find homes for 4,000 new trailers. So that added pressure and friction is very real for the company.
Michael Webb: Okay. All right. So that's the problem. And it's pressure and it's not being solved and people aren't cooperating. What does Six Sigma bring?
Charles Chen: Yeah. So I was ... so Six Sigma, actually approaches in the very traditional DMAIC approach, but let's take a step back and not go into the extreme technical details of that. Fundamentally, as a salesperson, as a senior manager, you want to have a pulse on all your assets, all these expensive assets. You want to know sometime before they have a tendency to come back, you already know about them. You want early warnings, early signals that any one of these trailers could be coming back to the company.
So what I did was I work with the executive management chain and the sales leadership and say, what is the most sensible way that we can put together a process that gives us early warnings, at least six months ahead of when you know where you have a trailer is coming back? If that trailer you know that's coming back six months before, we need to have a process to reallocate it to another customer who need it. Or you've got to work with the same customer to do another multi-year lease so the trailer doesn't come back in the first place.
So the project was actually focused on 100% visibility on trailer status six months before expiration. That was the project focus. Once we have six months and the leadership can action on that. Yeah. So Michael, so what we did was, how do you get 100% visibility to a trailer status? We didn't have a system in process to set up. So in the interim, I actually set up our before the ... how should I say that? A former version of early, early version of SharePoint and then we had to go in and provide status.
Not everything Michael. You and I don't need to worry about one or two trailers coming back. 80/20 rule, right? Which biggest fleets of trailers are potentially running out of leads exactly where they should be at six months before expiration date? And that's what the project focused on.
Michael Webb: Okay.
Charles Chen: And yeah, so we went from no baseline to we got to about 95%. We knew 95% of the trailers, six months before coming home, what the disposition status is. Are they going to be extended, are they going to come home? And the ones who are going to be coming home those are the ones the executive leadership and the sales leaders immediately action on. The bottom line is they shouldn't have come home.
And that was what my project was focused on. And it made a fundamental change to the way the company operated. It's about early warning, it's knowing how things operated early so we can action on it. It's knowing it's going from reactive, to proactive and the, yeah, that was my very first Green Belt project.
Michael Webb: Excellent. Okay. And so I think that's a really good example. So some observations and then you, because you're the master Black Belt, I'm not. I'm just a Black Belt. But let me hit through these. I think of these DMAIC or PDCA, plan, do check, act, right? These methods as they're like the bumper rails on the bowling alley. Right? And your mind, you're thinking is the bowling ball, like keep it on track to solving the problem, right?
Charles Chen: That's right.
Michael Webb: And so you define the problem and you realize that people in different parts of the organization are seeing it differently, but you have to have a common vision of what's that is. And then you get to the measure, which is like what are we observing and how do we know and how much is going on of this problem? Right? And then you analyze, once you have that data coming from measure and now you're analyzing, well, 80/20 which are the biggest, the few things we could change that would have the biggest impact. And that gives you a clue as to what changes might be required. That's your improve phase. And then you pointed out they had to have a fundamental change to the way the business operates to the system. That's the control phase, right? They make sure that those changes stay in place.
I had a fellow tell me one time, this is just I'm fanatically committed to common sense. Right? That's what he called DMAIC. That's what he called Six Sigma. And that's really what it is. Is that fair?
Charles Chen: Yeah. Oh, very fair. It's doing what's sensible for the business. Right? Every project that myself and my built or my team have done in the past, I have never ever advocated DMAIC for the sake of DMAIC, it's always about what is fundamentally important for the customer or my stakeholders? And then use the most sensible approach or tool. And so doing the way that everybody embraced and everybody moves forward together. That is really critical.
Michael Webb: So in that case, the difference is the problem solving has to take place not just between a single person's ears but in a group of people working as a team on the same system. Right?
Charles Chen: Absolutely.
Michael Webb: Right. So now let's transition to the second part of the topic or the way of thinking about this, which would be applying this, these bumper rails to our thinking and applying it to something that's actually a sales process in an organization. Where it's not just availability of equipment or uptime or quality problem or whatever, it is actually getting people we don't even know to talk to us and ultimately to buy from us. Right?
Charles Chen: Yeah.
Michael Webb: So the question is for you is I'd like you to tell me an example of a problem that the sales organization was having. And they tried really hard and they couldn't solve it. And then what did this Six Sigma thinking approach, this operational excellence sort of rational problem solving, what did it bring and then what result was enabled to bring it?
Charles Chen: Yeah, great question. Great question Michael. So allow me to use an example, I did as a project I ran for Microsoft. This project took place about four years ago. It was called objection handling. I believe your audience will listen to this podcast who have skills background. Everybody knows what lead conversion rate is. Marketing spends a lot of money, do field marketing, do full marketing, do trial account marketing. And what they do, they fundamentally generate the lead. They send out to the sales team.
What you want to do is convert as many as those leads to opportunities. And once it becomes an opportunity you want that to go as fast as possible. Or the biggest revenue that resulted from those opportunities as possible. So this project was focused on lead conversion rate. So about four years ago I got involved with this project focused on the US Microsoft Telesales team. It was about Office 365 trial lease conversion rates.
So the sales leaders were very gracious to invite me in. They said, Charles, we got the improved lead conversion rates. So I say, okay, let's take a step back guys. What fundamentally impacts lead conversion rates? So the sales leaders were in the room and we white boarded, and we did a little bit affinitizing exercise. Which is meaning everybody's silently come up with ideas and we vote. So everybody agrees there's two most fundamental things that changes lead conversion rates at the point of contact with a customer.
Number one is lead quality. If the quality is really good, if the quality is awesome, Michael sales just need to do a very, very, very little. But most of the time we don't always get that right. Right? Yeah. So the other point that being believed is about objection handling. At the point of sale, when a customer has an objection it can be, I can't talk right now, I don't have a need, I don't have the money, I'm not interested, I don't trust Microsoft. All these combinations are called objection handling. And they said, how do we overcome objections better?
That's what they tasked all of us to do as a team. So how do we leverage this process Six Sigma discipline approach to handle this? First and foremost, how would you define objections, customer objections? So that's the first thing we did. We spent quite, I want to say a lot of time, I will say about one month defining the definition of objections. And ensuring that when we, everybody looks at it, they look at the same way. If you're not aligned on the fundamental problem, that detailed definition, the problem, you might be doing frivolous actions that may not help it. It's about thinning the bases, right? That's the first step. And the next step is data collection.
And objection handling and especially with a customer conversation, it's pretty subjective. So we didn't have automated AI assistance to detect it. So we actually, as myself and a few managers, would just jump on sales people's calls and listen to the conversation and collect data.
Michael Webb: Just take notes.
Charles Chen: Just take notes. So Michael, this is the baseline. What we found out, we listened to probably 500 calls. Out of 500 calls, we have 67 distinct objections, 67. Out of those 67 distinct objections, what we found out was only 33% of the objections were overcome. One out of three objections at the point of interaction with the customer were overcome. The rest of 67%, are lead closed.
Michael Webb: So there's your baseline.
Charles Chen: That was my baseline. That was my baseline.
Michael Webb: So that way when you make a change, you'll be able to tell if you create an improvement or not. Let me interject here for a moment. That is one of the biggest challenges that I see and experienced ... I spent more than seven years in a sales training organization. And it's a good sales training organization. And unfortunately, and it's because the clients aren't asking for it, but very few people in that industry understand measurement. And so they bring this great process and if you just do these behaviors then you're going to get better results. But that process comes with a cost. It takes more time.
Charles Chen: It does. Takes time.
Michael Webb: People have to work harder. It doesn't always apply in every situation and yet, so they're looking for a few of the salespeople to actually implement those behaviors and they work, and great success. And the sales, they, well you need field coaching but there ends up being no data telling you, right? What behaviors, what were the causes of an increase in conversion or not?
And for the sales organization, you'd only work harder for so long, right? You have new people burn out. You're tired of working 60 hours a week for five years. This is just another thing we have to do. So they need a way to be tangible to see that things are getting better. And that requires a measurement system. And a measurement system that isn't bullshit that the salespeople can respect. Right? So that's a huge thing that I think that this operational excellence methodology brings. So I mean tell me more.
Charles Chen: Yeah. So just to follow up on what you just said, right, like knowing fundamentally as a sales advisor to them, I needed to advise them on how to handle this. Because I knew this was going to take time, especially on data that's that subjective. That only you can capture through listening. You need to put a little bit of boundaries around this team and get the sponsor and the champion to give you the room to do that. And I spent quite a bit of time with the sponsor and with the champion to say to do this right we need ring-fenced team and ring-fenced time to do this properly. Without that, this data will be very subjective.
Michael Webb: Also where do you use rings sense? What is that?
Charles Chen: That, yeah, ring-fence. You want the ring-fence, a little bit of space, to be space and time to do the projects the right way.
Michael Webb: Okay. I'm not familiar with this word. Spell it for me. I'm missing something. R-I-N-G-S-E-N-S-E?
Charles Chen: R-I-N-G-F-E-N-C-E. Yeah.
Michael Webb: So ring you mean like, like you're in the ring with them. Is that what you're thinking?
Charles Chen: Yeah, I'm in the ring with them.
Michael Webb: I've never heard that.
Charles Chen: Yeah. And let that team be our beta, our alfa or beta testing team. Right? Yeah. So they still had to meet their targets, but they're really going to leaning into this project with me. So yeah, I was able to buy time with them. And yeah. So what happened from that point on is this. We collected these data points, but these are just the outcome. That's the baseline. This was a very, very in-depth project is that every time we collect in the data on objection, there was other factors that we saw with impact objection handling. And then we want to do analysis, see correlations, right?
And so we also collected data on customer mood and tone, time of the week, time of the day, age and tenure. There was a thought that the more tenure the agent, the seller, the more of their ability to overcome objection was higher. There was also discussion on customer size. And so for every time we collected the objection handling, yes or no outcome, we also collected about 10 data points that goes with that so we can do analysis.
Ultimate in this, we ran the analysis and all this spiel, we always found out was 9 out of those 10 data points, didn't even matter. Customer, seller's tenure didn't matter. Time of the day didn't matter. A time of day didn't matter. What mattered the most is at the point of contact. Did you fundamentally focus on customer needs? It's a black and white yes or no, discrete answer. The managers had to listen to your two specific questions to assess whether the sellers really understand needs.
Number one, did they spend time fundamentally understanding the customer's model and how Microsoft products helping them? And number two, did they spend time asking their current products needs, and the gaps, how potential other products could or cannot help them. The focus is not about, I'm selling to you. The focus is about you tell me your problems and let me come up with options to help you.
I tell you the moment that happened, all the other objections just didn't happen. When that didn't happen, objections are popping up like daisies. You know what I mean? It's like customers are a little irritated. They feel like you're pushing to me. I don't want to talk to you, oh, this is too expensive. Hey, I actually don't trust you right now. I heard that quite a bit. Fundamentally, if I just focus on needs complete outside in focus and which is what Six Sigma is about anyway, the other objection just dissolved.
And while we also ran it into the model, what we found out was every time a seller laser-focused on customer needs, the probability overcome the objections has an odd ratio of 370 to 1. It's kind of like rolling the dice. What is your chance of rolling on the sixth is one out every six, right? When you're rolling the dice. But based on the odds ratio ran by this very enhanced statistical model, if you do that, if we just laser-focused on customer needs, that odds ratio is 370 to 1.
Michael Webb: Wow.
Charles Chen: Very intense. And so what we did ultimately, we fundamentally changed the way ... we didn't even change lead quality, but just based on instilling that new approach with this sales team, their lead conversion rate went from about 7.5 to 13.8%.
Michael Webb: Almost doubled.
Charles Chen: Almost double. And we also tone it down too. We didn't say, okay, that entire differences is ours because everybody on this call who listened to you know that other factors impact sales. So we took that down 30% so that difference we multiply by 0.7 and that's what the project gave back to the team. Yeah. So that was an example of how leveraging Six Sigma and like your friends said, it's about common sense, laser focus on the common sense. Prove it with data and get everybody to go with you.
Michael Webb: Right, right. It's amazing how all those other theories that people would heartfelt belief, it's of course, the longer you're here, the more experience you have. Of course, the more salesy your personality is, the better you're going to do. And then you put data on it in this situation and all that stuff melts away.
Charles Chen: It's about trust, it's about trust. Yeah. It's about trust.
Michael Webb: It's about trust. Meaning the data helps create a trusting environment? Is that what you mean?
Charles Chen: No it's about when you laser for this specific sales scenario.
Michael Webb: Oh customer trust.
Charles Chen: Yeah. It's about the customer trust. And the first thing you've got to do on the call is to earn that trust. And the earning that trust, you can't demand it. You do it through action you do it through really being there for the customer. I'm here and I'm so gracious. I'm so grateful that you gave me time. I want to focus on you and I want my focus is about fixing your problems. And yeah, most of the time that conversation just goes very, very well.
Michael Webb: And so the traditional focus of management and it makes sense. You can understand where executives are coming from. We're spending a lot of money to have salespeople there. We want to have the best salespeople. We want to have the best return for our investment in the sales organization. And so we expect them to produce and of course we're going to measure the performance of our salespeople by how much they produce. And so they start measuring that one thing, but they're not measuring the causes of that production. Right? They're not measuring this is a salesperson creating trust?
And notice your project started out around a problem defined around handling objections. You have a low conversion rate of the sales process and only 13 and half percent I think of the objections were actually answered. And what you ended up realizing was that we had to solve the trust problem. We had to get salespeople to focus on the customer's issues, and the objections went away.
You learned the cause and effect system there. And I think that's something that every salesperson would know kind of by instinct. Of course, that's the case. But they couldn't articulate it in a way. And then salespeople are only stuck with their own sphere of influence. They can control their own behaviors. They can't control their manager's behaviors. They can't control the marketing department.
Oh, this gives them sort of an operating system for identifying the causes and effects so that we can make sales easier for everybody, and be able to shine a light on those individuals who are really doing a good job and provide guidance and support for the people who are struggling. It's just a radical difference in the way the organization can be managed and the productivity that can be achieved from it.
Charles Chen: Yeah. Yeah. So Michael, yeah. A lot of, when I think about like a sales team, right? The Six Sigma, like the approach that you and I just talked about, you and I may not impact the exceptional sellers. Those folks are creating magic because there's something unique about them. This program that I talked about listed on average, the entire organization now, but the exceptional ones they may or may not benefited from this, it's probably just a reminder for them, you know what I mean?
It is the average ones or the newer ones or the ones who don't quite get it yet, they approach sales a bit robotically focused on features. Focus on their own company. This Six Sigma does this kind of approach lifts on average an entire organization up, so we avoid what you will call elephant hunt. Have you heard the term elephant hunting in sales?
Michael Webb: Looking for the biggest, baddest, largest accounts that we can get, the big deals, the whales.
Charles Chen: Yeah. You look for ... if you lead a team of eight people, you have two or three people that are exceptional killing it and you leave those two alone. The rest of the five, what happens if they're not making numbers? And sales manager's tendency will be naturally to focus on the elephant deals. Trying to make the numbers.
Michael Webb: 80/20 rule. Right?
Charles Chen: Exactly. But this discipline, this example that you and I talked about, is about lifting everybody up in a very systematic way. In a very consistent way. Right? So yeah.
Michael Webb: And it's not done. As I recall, there was another chapter to the story that remains perhaps to be done because there was a deal. You were talking about deal quality. Can you say something about that issue?
Charles Chen: Absolutely. So the way we disposition leads, so let's just say 100 leads come in, a percentage becomes opportunities, and which is that 13 point something percent I just share with you earlier, the rest of the 86.5% what happened to them? What we did is look through those data intensely and go, okay, which ones are true that this is a legitimate, we're not going to proceed, but which ones are ones that shouldn't even come to our sellers in the first place? If a lead has no chance ever, ever, even 1% chance of becoming an opportunity, why are we spending our sellers time on that? Because that's very expensive resources you can imagine.
Yeah, so as I work with the sales leaders in that group to really dig in, what we found out is that almost 50% of the disqualify leads, so out of that 86.5% I just mentioned, half of that were leads that came from what you would call a Microsoft partner. So what is a Microsoft partner? Microsoft sells a lot of our products through our partners. Like you have partners out there who sell our products directly to the customer because the customer may need additional integration help. Yeah. So as simple as that.
So half of the disqualify leads, were actually Microsoft partners. And I listened to numerous of these calls. We call and say, hey, I notice you have one of our products as a trial. How is that working for you? Can you tell me where your customer wanted to go? Oh, I'm a, oh, this is who I am. And I'm just trying to play with this tool to serve another customer. Oh, they're a Microsoft partner. Those, they can play with our products as much as they want. They are totally entitled to it, but those are not the ones that we need to sell to because they're selling our products.
Michael Webb: Right.
Charles Chen: So yeah.
Michael Webb: So the salesforce has to call them up anyway because they come in as a lead.
Charles Chen: Yeah. Because salesforce are also, how should I say it? They are also mandated to make sure you cannot have leads sitting more than two or three weeks in your inbox. Because as days go leads age, and the more they age the customer attention is less. So yeah. So I work upstream with a Microsoft product group and directly went to their marketing group and we realized that the way we sign up for leads is we let everybody sign in and we ask three or four fundamental questions about them.
We just want their contact info, address, and a few other things. And that's it. After that, they're totally entitled to download the one month, the trial account. Yes. So our next focus with them was about how do we get rid of partner leads? Don't just don't create them as a lead and forward down to our sellers. Yeah. So that was the next phase of the project. And I got to be very transparent with you, Michael. That happened about four years ago and unfortunately, I was unsuccessful in that change.
Michael Webb: Well, and looking at it as I recall looking at it from the marketer’s point of view, look, we don't want to add friction and ask a whole other question on the page. We have to make this be very, very simple for them. So no, we're not going to change it. Unwittingly, sub-optimizing as they say, the whole system.
Charles Chen: Yeah, yeah, yeah. And also like to make that kind of fundamental change it really required the most, most, most, most up chain of the level and marketing executive leadership and sales leadership to have an agreement.
Michael Webb: And which leads to another theme that I keep hitting on all the time, that senior executives are the ones with the most to gain by understanding what these little simple bumper guides on our thinking. Right? What's the objective to get the ball down the bowling alley to hit the pins and how do we stay on track? You got to have understanding variation, systems thinking, value to the customer, cause and effect, and do experiments, and unfortunately, that is not the natural operating system of most corporations especially large ones.
Charles Chen: Yeah. I think a big part of it, I can understand the predicament they're in. Most public traded corporations, and I ran into this all the time internally. Is that sales leadership are measured on a monthly and quarterly, every month did you make your monthly budget or quota? Every quarterly did you meet it? That kind of cycle time is pretty stressful. I've been in there with them, I get it.
And so as a result when running this sort of project, which can take a little bit longer than a monthly cycle time, it takes a lot of convincing. At the same time, if your vision is to really have a lasting long-term impact on the company, the investment is worth it. And that's why people like me need to approach them in a sensible way. Right?
You can't pound your chest and demand DMAIC that just, it doesn't work that way. You've got to give the executives what they need right now and then let them see the value of this when done right. Just like what I said, it's focusing on the need. But even when you have the right medicine, you got to feed it over and help in the way that the patient or your most critical client is ready for it. And a lot of people lose sight of that. And they run into an immovable object. And it can give this discipline an underserved name.
Michael Webb: So thanks to individuals like yourself, we now are getting more stories of real corporations and real people solving real problems using real scientific approaches rather than chutzpah and working harder and the traditional stuff that many sales organizations fall back on. And so I really appreciate the time and your willingness to participate here Charles, this has been great. If someone wants to learn more about you or get a hold of you, how would they do it?
Charles Chen: Yeah, the best way is find me in LinkedIn. My LinkedIn profile is very straight forward. Charles T Chen C-H-E-N or yeah, just go there.
Michael Webb: Charles T as in Tom?
Charles Chen: As in Tom. Yeah. And then my contact info is all in there. And like I mentioned-
Michael Webb: You work for Microsoft currently, right?
Charles Chen: Yeah. I'm in Microsoft currently. I never say no to a good conversation.
Michael Webb: That sounds wonderful. I really appreciate your time here. I know a lot of people are going to be commenting on this interview because we were able to get enough down into the weeds to make it real. But we were able to look at the overall big picture. So well done. Thank you very much. We'll be talking again in the future I'm sure. Take care.
Charles Chen: Thank you so much, Michael. Bye. Bye.
Michael Webb: Bye Bye everyone.
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Adrian Figueroa | A Foundation for Excellence
12 août 2019· Sales Process Excellence Podcast
Michael Webb: Some people focus on making more sales calls, reaching higher-level decision-makers, and selling value propositions. Other people focus on finding data, understanding cause and effect, and conducting experiments. My name is Michael Webb. This is the Sales Process Excellence podcast, where we focus on both of those things in order to create wealth for everyone.
Today, I'm thrilled to have a guest, Adrian Figueroa, of Cadence Aerospace. Adrian has a background as an engineer leading manufacturing organizations, leading continuous improvement and lean initiatives in several different companies. From our little chat here before we got started on this podcast, I'm really excited about the kinds of things he's going to be able to bring to us.
Adrian, welcome here.
Adrian Figueroa: Hi Michael, thank you for having me on your show.
Michael Webb: It'd be great, can you just give us a minute of background and tell us how you got to be where you are, and what you do at Cadence Aerospace?
Adrian Figueroa: Yeah, so my first start was a Manufacturing Engineer in the aerospace industry, and there I was learning just the principles of achieving the numbers. All I cared about was doing my job well. From that point, I started getting a little bored with what I was doing, and I went back to school. I ended up finding a new job which gave me more opportunity to grow. That's actually where actually I fell into Lean Manufacturing.
Lean ended up opening my world, up until this point in my life, where the expansion from being able to use those tools, methodologies in manufacturing, but then in other industries. It just became so at first overwhelming, but so exciting at the same time. From my first job going to my second, beginning to implement the Lean principles, I ended up…
Michael Webb: This was in a roofing system, not the first company, but the second company was roofing products is that correct? DECRA Roofing Systems?
Adrian Figueroa: Yeah, I should say I moved from the aerospace industry to the building and industrial building industry.
Michael Webb: Okay.
Adrian Figueroa: From there, that's where I started, again, implementing Lean tools mainly, because I was excited about doing that. Just in general, I love working with people. Over time, it was very, I would say, easy for me to be implementing these tools and talking to the people on the floor. About four years later, after being a Lean leader, I was given the opportunity to move into the Manufacturing Manager role. At that point, I didn't do a thing really within the first month of new large projects, doing all this data analysis, where can we go to next, you just saw a jump in the performance of efficiency and motivation, and I could say morale within that first month to a point where nobody really understood what was going on. They thought maybe I was tweaking the numbers.
Over time, it seemed like... Even I had to get some self-reflection, where I was looking at it and saying, "How did that happen?" The more I was looking into the second half of Lean, or it's respect for people, I started reading more about that. Reading that, hey what I was doing by just listening to others, and working with them on their project teams no matter how big the issue was, I was there to be able to help where I could. Over time, that created a connection with all the individuals on the floor.
By the time I jumped into the role, I had supported everyone along the way that look like they're mirroring that back to me. Now, in my new role they wanted to support me so the motivation was on two sides. The results just jumped, like I said, enormously. It was fun after that point.
Michael Webb: That's the sort of thing that people might call the Magic of Personality, is that right?
Adrian Figueroa: Yeah, I mean that's part of why I do what I do now. I'm mainly focusing on the people side, still within the continuous improvement realms of either Lean or Six Sigma. But, I'm more heavily concentrated on behaviors in people rather than tools.
Michael Webb: That is the field of the sort of thing that people consider to be soft, unmeasurable, subjective. You can't really replicate it. You don't really have any way of knowing what's going on. Do you agree with that position?
Adrian Figueroa: Oh yeah, I think soft skills are very hard to measure and see your gains from that. I think that's why a lot of businesses struggle with actually giving any kind of trainings, or really focusing on that side of it because where are the results from it? That's the type of thing that actually is probably the most time consuming aspect for showing the results. That's what I actually like, is I try and position myself in businesses that are in for the long run instead of a short term gains, because on the behavioral side unfortunately it does take a while to gain that connection with others, and to build that stability with those people and the processes they're working. Because when you-
Michael Webb: Go ahead.
Adrian Figueroa: I was just going to say because you have your process that's built for the employees, or created for the employees, and you can only do so much with them. They come in, they have a bad day, they come in... There's so many variables from the human aspect that can make that process fail, that the more you can in a sense control, but not really, but you're creating that set safe environment for them to work on and have more enjoyment at being at work, the easier flow it is for them to follow those process steps.
Michael Webb: Okay, but would you agree, because I'm going to push back a little bit to one of the things that you said a moment ago. Would you agree that the principles of process excellence, operational excellence, this idea of respect for people and all the ramifications of it, doesn't that provide a sort of repeatable or a framework... So, for being able to tell if you're making progress in those relationships with people.
Adrian Figueroa: Oh yeah, you definitely need both, from both sides. One can't work without the other. From where I see it, it's that too many businesses are just focused on the tools only, and then wonder why they can't see these gains or they see it for a short period of time and then it goes back to normal. You're definitely correct. I'd agree with the framework’s definitely there from operational excellence let’s just say you have to understand where you're at in the business, assess it, measure it, and then implement for whatever journey the business decides to take, go through with those steps, learn from it and make your adjustments as you go. As long as everybody's on the same path towards the same targets or goals.
Michael Webb: Years ago I was a Sales Trainer with a company called IMPAX Corporation. That doesn't matter. There's lots of good sales training outfits out there. One of the things that we did that we focused on with the client, was to help the sales people learn to conduct interviews, questions, conversations, to have a skill at active listening in conversations so that they could learn more about the debates, and arguments even, going on inside their aspect company, their client companies. Because, there is a debate that always goes on inside those companies, where people are trying to figure out what are the right decisions to make? What are the right priorities? What are the real causes of these problems?
Adrian Figueroa: Right.
Michael Webb: To me, what process excellence, any flavor, what it brings is- And I've said in another conversation recently, it brings like the bumper guards on the bowling alley. If your goal is to hit the pins, and that's reality, you need a way to stay in the lane in contact with reality to be able to figure out what the right changes are that will create improvement. You can't do that if you don't respect people. You can't do that if they think you're trying to take advantage of something, or short circuit them, right? You have to have this participation in this rational discussion, and be open to all of the facts and the evidence, and as a leader, demonstrate how to do that effectively. Would you agree with that?
Adrian Figueroa: Oh yeah, 100%. I mean, that's all about where I stand right now with my own personal principles and what I try to bring every day to the workplace, where authenticity and connection are the two biggest things for me in what I try driving within myself and with other people. Because exactly what you're saying, if you're on the sales side and marketing side, you can't just speak to people with, "I'm in it for number one," because people can see right through it from the beginning, even the way you walk up to them and approach the other person. It doesn't matter where you are. They're going to see whether, for lack of a better term, you're full of it, or whether you do want to make some sort of genuine connection and open up about who you are.
Over time, you're going to end up building this relationship which then allows somebody to open up and give more information about their needs, their struggles, what's going on, because everybody's guarded in the beginning. They don't know who you are. The biggest person within a group let's say of two when speaking, is the one that can be the most vulnerable and begin opening up about themselves. From there is when people start to relax, and then again, more information comes out and it looks like you two are working in agreement with each other. Or, if it's a group of people, work in agreement with other. That's where you really get to the customers' needs, and even your own self. It’s fun along the way.
Michael Webb: You mentioned to me earlier that you were looking for a way to influence not just a given department or function, but all the different departments or functions in an organization along these lines with process improvement and these leadership and vulnerability skills, I guess, if you will. Tell us what your role at Cadence, and then if you could, I'm going to ask you to give us an example of a project or a conversation even that illustrates that point that you just made about authenticity and honesty, and getting cooperation when there might not have been some before.
Adrian Figueroa: Okay. Right now at Cadence Aerospace, the Head of Continuous Improvement for our seven divisions... When I first got brought into our Anaheim facility, which is the corporate side, that was the biggest turnaround that was needed. It was by far the worst behind all the other divisions. We're talking on-time delivery around 50%, just loss in profitability month after month, width was just way too much on the floor, and so our cash flow is all tied up. One of the first things we did, we got a new Senior Executive team on, and they are very, very pro-Lean. It was very easy to implement on this top down driven as well.
Michael Webb: Okay, so stop you there for just a second. What kind of experiences had they had in the past that led them to be very pro-Lean, as you put it?
Adrian Figueroa: They're mainly in the aerospace industry. A lot of years in a UTC group. From there, they took a lot of the principles from Lean and Shingijutsu trainings along with them, because they saw how powerful it was and how it worked.
Michael Webb: So they had the opportunity to live it themselves?
Adrian Figueroa: Oh yeah. Yeah, many, many years of doing that.
Michael Webb: Okay, that makes sense. Okay, okay. Continue, please.
Adrian Figueroa: They boarded on with us. Like I said, it was about the same time as I started. In getting that executive help on being top-driven, this is what we're going to do, this is the journey, this is how we see the business growing, let's begin. Like I said again, 50% on-time delivery, loss of profitability. Going along the way where we had to see, is understand where our business was. That was measuring everything that we could, from delivery, quality, just efficiencies on the ground, WIP. We wanted to see, okay where are we at? Now, how are we structured, second step. We need to put these into our Lean value streams. Okay, go through the whole principle using the tools, everything that there is out there about putting into the value streams that is best for the business.
Once we got that, and then it's structurizing the people within those Lean value streams to evaluate everybody we have in the business: their strengths, their weaknesses, where we can utilize them, and unfortunately, you know you do have some casualties of war. I don't think... It might be very rare, but a business to lose some people here and there for ones that just don't really adjust well to the Lean initiatives. So, you have some casualties. But once you really have the right people in place, that's what helps you drive to your goals.
When we had everybody there, third step was in, let's start really implementing the processes of Lean tools along the way. Just, I would say, speed up the to results portion of it. In a matter of only eight months, you wouldn't believe the turnaround. I mean, we dropped our WIP by 12 million dollars. The on-time delivery went from 50% to 95%. We became a profitable business at the same time. No one thought that that could actually happen. On top of that, that's always speaking about operations, right, from the gains you’re there, but the business on the top line growth, I mean initially again when I started, we were losing customers left and right. Nobody wanted to put their... Give us their parts to manufacture, and so they were pulling out business.
We probably lost anywhere from 15-20 million dollars in the course of just a year on business. Now, we have more customers coming to us, plus the ones that pulled out, and we're looking at 35+ million dollars potentially over the next five years per year, because we actually along the way didn't only implement the process within our own people and framework, we were bringing in the customers and they were living it with us. So, it was way more powerful to have them along the way and say, "Hey, we credit them what they were doing, and we're going to back and tell our people."
Michael Webb: Okay, so can you give us an example of an improvement where a group of people were struggling, the numbers were bad, they didn't know what change would create improvement, there was this debate and conflict internally as there always is because of lack of resources, the Blame Game, and not really understanding other people's perspective. Can you give an example of a situation like that, and then where this authenticity, this disarming honesty and vulnerability enabled a breakthrough to happen?
Adrian Figueroa: Yeah, I'll take the WIP example, the reduction of 12 million dollars. This business had been used to large batch systems. So, anybody that has been working with Lean knows what difficulty it is breaking people of batch, using batch mentalities. When you have the people on the floor saying, "No, we need to have this batch of this size," and we're saying, "Why?" and they're coming back with, "Well, you know, that's just the way we've been doing things," it's like well here's some tools, let us train, let us show you what these tools are saying from a theoretic standpoint of view, and let's see if we can make this actually happen.
So, we're using the Lean tools again to figure out what is our actual SWIP numbers along each process.
Michael Webb: What was that? Spell that out. SWIP? S-W-I-P?
Adrian Figueroa: Yes. Standard Work In Progress.
Michael Webb: Standard Work in Progress.
Adrian Figueroa: Right.
Michael Webb: You use a standard costing?
Adrian Figueroa: No, it's just there's a calculation for how much WIP should you actually have in your process.
Michael Webb: Okay.
Adrian Figueroa: That way, you can start to see what makes sense as a batch or not when you're trying to go for a single piece flow. We're training on all the core principles for Lean, and along the way we're challenging the people, with their help to, "Okay, here's where it makes sense to possibly have batch sizes of this size," and so, "Oh, okay." They're listening, so as they see that this what we need to do, yeah well at the same time it's all because that's what the data is telling us.
We still want to achieve single piece flow where it make sense, but we want to maximize to any level whether it's batch system or it is single piece flow. Just by the interactions of working with them day on and day out, here's the tools, here's the data, here's what we're seeing. Do you guys agree, yes or no? Over time, we were actually starting to reduce WIP just because it was getting easier to work with people on the floor and get their buy-in.
Michael Webb: Ah, okay. Out of curiosity, what type of product are manufacturing? Is it like a small part, or a bracket? Or these big pieces? Are they engineered pieces? What type of product are you making?
Adrian Figueroa: Right now we like to call them, for lack of a better term, Stringers. We call them Long & Skinnies, and we have Short & Fat. So, we're somewhere between six foot long parts, to 30 foot long parts right now.
Michael Webb: Made in a metal right?
Adrian Figueroa: Right, aluminum and titanium.
Michael Webb: Okay.
Adrian Figueroa: Those right now, they're made on the CNC machines, so five axis, or even three axis. That's what we mainly feature.
Michael Webb: Are they partly assembled? Do you have to also assemble, or are you just making the parts?
Adrian Figueroa: Yeah, no we do have some assembly operations, but it's very little.
Michael Webb: So things start improving because working on the line with the people is starting to get easier. The reason it's getting easier is because they're understanding better what you're trying to do?
Adrian Figueroa: Right, yeah. Living that day in day out, they understand where we're going whether they like it or not in a sense, because there's always that changed battle between just the new benefits and ways of doing things on the floor. But over time, again, you get that buy-in, but you have to really be working with them daily. You can't just force them down, or else you don't have them on the lines being able to support you at the same time.
Michael Webb: Mm-hmm (affirmative), right. Mm-hmm (affirmative). Okay. What's an example of showing up authentically, where there was some kind of conflict and some vulnerability help to break the ice and help to get to the truth of the matter?
Adrian Figueroa: Yeah, so we have a Production Manager, been there for 15+ years. Very knowledgeable about all the parts. Very knowledgeable on how it's run on all the machines. I mean daily, daily it was just a struggle, a battle about you explaining, you explain the tools, where we're going and, "No, it's not going to work. That's not going to work. No, no, no, no, no." Every day it's like well here's why it would work, or how it can work. You explain to them and then even after let's say a few weeks, you start to try and change the way you speak to them and say, "Hey, I understand. I see what you see, but let's work together. How can we make this work together?" You've got to change it from the no to how can we, and allow them to explore.
Say, "Okay, what's your barriers? What are your constraints?" "Oh, because of this, this," "Okay, forget about all that. Clean slate. How can you make it happen? What do you need to make it happen?" The person who combated with it just say, "Hey, I need this, two, three, four and five." Then the Management team looks at it, "Okay, you can have one, two and three." He's like, "Oh, I didn't know-"
Michael Webb: That's a change.
Adrian Figueroa: "That was even-"... Yeah, he's like, "I didn't know that that was possible." It's like well, so I'm saying you've got to bring everything to the table. "We will work with you, but we have to have it on both ends. Please listen to us. We'll listen to you. This is how we operate. We want to show you that we're here for you guys, as well as we're to achieve the ultimate business goal at the same time." Once they started seeing oh the business is actually willing to invest in us, willing to do things of what we need, then that's what became easier over time. It's really hard to explain on the soft skills side, like we were saying. If I'm speaking to somebody, it can be in the way I'm presenting it. I can't be yelling it. I can't be arms crossed, angry face. You have to be very welcoming and show that safe environment, let them vent, listen to them, and then just have a normal conversation with them but don't get angry.
That's one of the first things I learned when I was really excited about implementing the tools, "No, we gotta do it this way. We gotta do it this way guys, come on. Let's go." I had to learn over time too, it's okay. Teach it to them and it's going to take time, but make sure you don't show too much frustration. It's very hard to do, but you have to again listen to them, allow them to feel like they've been heard, and then work with them. I'm not going to lie, it's a lot of work. It takes a lot of patience, but if you want that sustainable result over a long period of time, you have to put the effort in too.
Michael Webb: That's a great story, and a great example, and I totally agree with you. Human beings are the only creatures that can do the thinking required to create value.
Adrian Figueroa: Right.
Michael Webb: Each one has unique knowledge, unique orientation and skill, and they're doing the best they can. They have unique potential, but they can only think for themselves. You have to find a way that there's a common interest between what they want and what you want, and that requires a lot of thinking also. Arguably, it's harder thinking as the Manager, because you have to think about them and their point of view, and holding the context is a tough thing. So, thank you. You fulfilled my request to get an example of that.
I mean look at this long chain of reasoning from the problem on the shop floor to how we manage the materials and the scheduling of the machines all the way to this Shop Floor Manager, or Machine Operator, thinking from a different perspective and then helping them to break through to some new idea that they don't think will work, and then showing them that we do think it will work, and we will put that energy behind it. And then learning from it together, because it never turns out the way you would expect it to. But slowly, like you said, lots and lots of work over time, but ultimately rewarding work in the end with those kinds of results that you guys have shown.
You've done it several times over the years in your career, so good on you.
Adrian Figueroa: Right, thank you.
Michael Webb: Let's turn, since this is a podcast about customer-facing operations and sales and marketing, can you give me one last story that is a sales and marketing example?
Adrian Figueroa: Yeah, so actually back to my DECRA Roofing days, I was also given the opportunity to work with the Sales and Marketing team. There was no sales processes at all. We were losing business there, and again, I had again an opportunity to work with them just show them, "Okay, here's Lean Manufacturing principles. Here's how they could be utilized in the sales and marketing world." That's actually when I'm looking for new resources back at that time, that's where I found your materials.
I was searching online, what's some reference material out there that I can use for more and more examples that I want to give these guys? I found both of your books, the Lean Six Sigma for Sales and Marketing, and also the Sales Process Excellence. I snatched them right up. Bought those things, read through them I'd say within like a month. I did my own crash course from a lot of your examples just so I can initially get buy-in with the Sales team, because they were spread out all over the state. I was working with the VP of Sales there at that time, and he was a very, very open guy which made it very easy to work with because every day we were saying, "Okay, what's the sales process going to look like?"
I had great reference material from yours. This is what I'm seeing. How could we utilize this? Is it something that makes sense for us? It actually was. The VP of Sales, he had actually been working with a system like that in his prior roles that was pretty close. So, we started mirroring the two together, okay what's the best of both worlds? We then created a sales process, again very similar to what yours states in the books. We were rolling that out to the Sales team, and having more direct contact with them, either flying them back in for meetings, and then just having more connections with them throughout the week on updates on how well they're doing with the new material, and what they're seeing out there on the field, and gaining the information back.
It was, for the first three months we had a lot of good progress. Back then, I think it was... We were probably averaging between $200,000.00-$300,000.00 a month. Within those first three months, we were actually able to gain about another $100,000.00 of revenue. Just the more interactions that we were teaching along the sales process path, and giving them those tools to be able to use, I really felt helped just because it provided that structure for them. I think everybody gets lost. In sales and marketing, there can be really no structure. It's too abstract. No, there's still that structure behind it, and you can measure that. As long as you're learning from it and giving it back to each other, then you'll be able to hit a goal, but along a structured path.
Michael Webb: Excellent. Did you have resistance in the sales force? Or, did they all just jump right in the boat?
Adrian Figueroa: Oh no, the resistance is always there. The main resistance is back to the abstract thinking like Matt. You had a couple of guys that, "You know, it's too much work for me to fill out this document, or fill this out, and talk about things like this, and give a small status update here and there. I just want to go out and do my thing." We definitely, over those few months, still had people that were still doing that. You can tell. They were playing the game, but what their underlying mission was, was to still be resistant for a while.
Unfortunately, I couldn't stay there longer past that time to give you more information, but from what I saw, just the overall approach from everybody and the feedback we were getting, they really enjoyed it because the majority would go out to see the customers and they were kind of just kind of stuck. "What am I going to talk to them about this time?" "I'm not sure." "Well, now that we've given you the tools and methods of recording your work, asking these types of questions, getting this information, now you have follow up questions. Now you have what's their business needs? And coming back to the BTSLs and the other Marketing team, how do we give them what they're asking for? A lot of them really enjoyed that. They really liked being able to go back to the customer and now have, for lack of a better term, things to talk about to them.
Michael Webb: Yes. You're building value into the company rather than relying on the special genius of a few sales people to invent something on the fly.
Adrian Figueroa: Right, yeah.
Michael Webb: Cool, very good. Well, we've talked for over a half an hour here. This has been absolutely great. Thank you for volunteering to speak with me and share some of the stories of the successes that you've had both at DECRA and at Cadence Aerospace. If someone wants to reach out and learn more about Cadence or about you, and the work that you're doing there, how would they find you?
Adrian Figueroa: I am on LinkedIn, Adrian Figueroa. I can send you my LinkedIn information.
Michael Webb: Mm-hmm (affirmative), we'll put that in, yeah.
Adrian Figueroa: Or an email, [email protected]. Again, I'll send that to you because I know the spelling sometimes messes up some people here and there. Also, with the other businesses that I have, along with my wife called IMPROVitup.com, it's [email protected]. That's I-M-P-R-O-V-I-T-U-P.com.
Michael Webb: Okay. That is a consultancy about using the principles of improvisation, right?
Adrian Figueroa: Right, yeah.
Michael Webb: For business? For business purposes?
Adrian Figueroa: Business and even in education for students. Yeah, we use improv as a therapeutic tool, even though we're not therapists. But we use it as a therapeutic tool just for people to discover their potential and their authentic selves, and just to have fun doing that process along the way.
Michael Webb: Well, we should consider perhaps if there were examples in sales and marketing, maybe we could do a podcast with your wife and yourself on that topic. Do you think that would work?
Adrian Figueroa: Oh yeah. Yeah, we do have a great example of some salesmen that were in one of our workshops too, and the transformation that they saw just in a few weeks of work.
Michael Webb: Cool.
Adrian Figueroa: We can definitely get back together again.
Michael Webb: Cool, well that's great. Adrian, thank you very much, and we appreciate that. We'll talk to you again. For everybody listening, goodbye for now. We'll be back again soon. Take care. Bye-bye.
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Greg Helfrich | Building the Sales Process Into the Company, Rather than the Salesperson
29 juil. 2019· Sales Process Excellence Podcast
Michael Webb: Some people talk about selling to senior-level decision-makers, making calls, and selling based on value. Other people talk about process tools and measurement of data, systems thinking, and analyzing causes and effects. But not very many people talk about how these things can be brought together to motivate people and create wealth for everyone.
This is Michael Webb, and welcome to the Sales Process Excellence Podcast. I'm delighted today to introduce you to Greg Helfrich. Greg is the national operations manager at ELRUS Aggregate Systems, and he's the operations manager not just for Canada, but also for the U.S. Welcome, here, Greg.
Greg Helfrich: Thank you. Glad to be here.
Michael Webb: Yes. I wanted to invite you here because ... I wanted to invite Greg here. He has a story that I know a lot of the audience are going to be interested in. Greg had purchased my book, Sales Process Excellence, and as I chatted with him on the phone, he started describing a way that ELRUS has sort of a sales process, a method of selling value, and it's very well thought out. I knew that a lot of people would like to hear about this, so Greg, give us a little 30 or 45 seconds here of your background, how you got to be where you are.
Greg Helfrich: Sure. I got into consulting on an operations and lean perspective after leaving the food industry back in the late 90s. I was trained in Six Sigma and SERD Consulting, and I was doing some supply chain consulting for ELRUS. They just said, "Well, we'd really rather have you just work with us." I joined as national operations manager in 2008, and the position has evolved from being really strictly working in manufacturing and process supply chain and engineering to now being responsible for sales and marketing. My education is in marketing.
But, as we expanded into the United States and grew, my role just basically evolved with it, and so, I wasn't necessarily in charge of marketing all that time, but just got more and more involved. And because I was a buyer, I just had insights into how our customers were thinking, and I could bring something to the table. This is where it just basically evolved from.
Michael Webb: Okay. In your role here as national operations manager slash sales VP, I guess, right?
Greg Helfrich: Pretty much. I'm essentially chief operating officer, is really, if you had to give it a conventional title. We're not huge on titles here, and so we just haven't changed much.
Michael Webb: Okay. You serve the mining, rock quarrying, road construction industries up there?
Greg Helfrich: It's primarily, yeah. We like to say that everybody needs to make big rocks into small rocks in mining, everything, like concrete, they surround us everywhere and all that rock has to be quarried or mined out of a sand and gravel operation process and it looks simple but the specifications for rock for say, asphalt or concrete are really quite tight. The shape of the rock, how it has to hold together within that mix is really quite defined and it's getting harder and harder to make those specifications. The equipment evolves over time to make the product that's required to make the roads and the houses and what have you that we live in. The consumables or the parts of the machine are also very complex in terms of how they sort the rock into different sizes and what have you. Everybody, when they look at somebody else's industry always thinks, "Well that's kind of simple" but there's usually a lot more to it then we think. This industry is one of those. On the outside it looks simple but rock is not just rock.
Michael Webb: I really like your opening there, making big rocks turn into little rocks because I learned a ton from a fellow a long time ago who is an expert in continuous improvement and he would say that's what we're doing in continuous improvement companies. We're helping people take the big rocks, big problems that they have and break them down into little, manageable problems so that it all adds up.
Greg Helfrich: I listened to a fellow the other day who set the world's treadmill record for 12 hours and I can't imagine running on a treadmill for 12 hours. I think he ran 80 some miles in 12 hours on a treadmill. One of the people said, "How can you do that?" At 3 seconds in I'm thinking to myself, "I've got 11 hours, 59 minutes and 57 seconds left." He said, "Anybody can do anything for 5 minutes."
Michael Webb: There you go.
Greg Helfrich: "That's how I did it." The rock analogy, I'll have to use that because that does make sense. Anybody can do anything for 5 minutes or when you break big rocks into small rocks, anybody can figure out how to do it.
Michael Webb: Right. Looking at sales, trying to figure out how to get your customers to buy and pay enough to be able to make money off of them, that can be a big rock also. That's kind of the problem we are trying to solve here. Tell us what you faced when you started into this part of the business there at ELRUS. What did it look like to you as the operating executive that lead you to develop this program?
Greg Helfrich: Let's go back to what triggered it. In Canada, we're an incumbent in Canada. We basically were part of the founding of the industry back in 1975 portable crushing equipment was a very undeveloped industry and Roland, the fellow that founded the company was that typical entrepreneur. He saw a problem because he was a crushing contractor and he was really unhappy with what he was dealing with and he solved the problem. He went and built, he built equipment or had it built for him and wound up selling it before he could get to use it. He never really got to use his own equipment. He built some equipment, showed it to a friend, the friend said, "I want that" and then after three or four episodes he's like, "Well, hang on a second here. I might as well get into the equipment business here because I'm building something people want." This business got started. It never really needed a serious marketing and value proposition work or marketing work because Roland sold it and he knew everybody in the industry and life went on. We expanded in the United States, after Roland's death in 2013 and we probably underestimated or overestimated our reputation and brand equity and things that people automatically do when they enter a new marketplace, they assume it's underserved and they assume that people know about them.
We had some difficulties in getting going and people to understand who we were and the differences we made. That was our big rock. How do we get people to see us as different or see us as a viable alternative to who they use now and I always come back to a process. If you're having a failure of results, it's your process. Sometimes it's your people but you need to look up the process first. What is it about our process that is not delivering the results? I spoke to some of the buyers and I started to figure it out. Really, that's where I came to and a fellow that I work with named Barry, Barry and I came to that it's a multi-layered issue and let's break it down into the buyers, the product offering and then the company overall and how is it that value, what do people value, how do they define it, how do they measure it, how do they prioritize it and so that's what led us to this homegrown approach and it works. We're happy with what it's delivering and we're making changes based on it. I can't say that this is something we've known for decades, this is something that really has evolved in the last year and a half within our business is this three-layered approach to what do buyers value, what is our value and then how do we communicate that.
Michael Webb: Okay. Very good. As we get into that, we're going to get into some details of that here. Help us understand how are you guys organized? I know you have, isn't it seven locations in the US and three in Canada? Something like that?
Greg Helfrich: No, flip that. There's eight in Canada, three in the United States and eight in Canada. We're primarily in the western United States. In the continent of North America, primarily in the west we get sand and gravel. Sand and gravel is glacial tilt. You've got rocks and sand and what have you. Basically it's like an open pit mine. You haul this stuff to the machines and it separates the sand from the rock and then processes the rock. That's how you get sand and gravel. In the east you tend to have drill and blast, quarries and south Georgia has a number of them that supply Florida and others where they'll blast rock or limestone out of a face and then they'll process that rock. Our specialty is really rock processes equipment that's on tires. Wheeled, portable equipment. It's a real feature of the western half of North America because it's primarily sand and gravel where we derive our rock products from in the west. It's used, wheeled portable is used in some quarry applications but it's more often a stationary plant that's affixed to the ground that's used in a quarry application. As I said, our focus is really on the western US, primarily northwest Pacific, Washington, Oregon, places like that.
Michael Webb: Are you selling to contractors who are building roads? Who are you selling to?
Greg Helfrich: We sell to contractors that build roads, we sell to construction companies that are vertically integrated that have the quarries and the gravel pits and also build roads. We're selling to contractors who just crush, who go in and crush for people who are the resource owner. You've got everybody from the Lafarge Holcims of the world who are vertically integrated construction companies that do concrete and what have you, to small independent companies that will go in and crush a couple hundred thousand tons for a landowner who happens to own the resource and he'll sell that to a Lafarge in some cases. It's quite a varied group of customers.
Michael Webb: The salespeople, are they located in these offices that you have scattered around?
Greg Helfrich: They'll report to one of the offices, many of them work from their houses.
Michael Webb: Okay.
Greg Helfrich: Some of them are six and eight hours away from that office but they're closer to where their customers are.
Michael Webb: Okay. How many salespeople put together?
Greg Helfrich: You got me by surprise there. There's 3 primary salespeople in the United States and about 13 in Canada.
Michael Webb: Okay, fair enough. Now, how did you experience this problem as sort of the quasi-leader of sales that they weren't selling value. What was happening?
Greg Helfrich: Well, it really comes down to pricing. What I saw was that some people were able to sell at, call it list price. Some people couldn't sell at list price. Why? One of the things that came to me too was that when you're dealing with some of these large companies and you have supply chain departments, why were we not getting into those supply chain departments and what is it that was preventing us from closing a sale once we got into that supply chain department? This was really the genesis of it was why is this one guy successful and the other person is not successful when both of them are very competent salespeople or I believe to be competent salespeople. Why in this particular region were we having problems? It was just understanding why there was inconsistency in results, process variation that led me down this path. It was really, why is this one particular person successful and not successful and what is this process and what is this person's process and what is that person's process?
This is where I really came to the realization that number one, we didn't really have a sales process or it wasn't consistent across the board. Number two, we didn't have, our sales processes, sorry, that existed, were also not comprehensive. They didn't go back to the customer stage where they realized that they needed to make a change. Our marketing process and online presence really wasn't thought out to the genesis stage where I've got a problem, now I need to do research. What are we enabling the customer to do research on our website or are we just trying to sell product? These are things that we came to through the investigation and reading your book was, it was funny because I'd read the book after I'd done some of the investigation and now I can just put names to some of the things I learned. I got to some of the realizations, I looked at the book and I'm like, "Yeah I really wish I would have read this six months ago because I probably wouldn't have needed to bang my head against the wall for hours and hours trying to figure this out." Necessity being the mother of invention really is how we got to this layered approach that we take at this point in time.
Michael Webb: Okay. Now, a lot of people in your position would start looking around for sales training. Why didn't you do that?
Greg Helfrich: Well, we did actually. We did do some sales training. But what happened was, it was typical, it was traditional, it was actually some good sales training. It was, we wound up talking to some people that do training to our customers on how to differentiate their rock products versus somebody else's rock products. You're really selling a commodity and how do you differentiate your commodity from somebody else's commodity? We took that training and it was really valuable. We did do some more training with some other people and the feedback was, "This was valuable but I'm still missing something." I said, "Okay what are you missing?"
He said, "I'm missing the story. I get that this is how you sell value or here's how you talk about value, here's how you deal with objections. Here's how you get your nose in the door and here's how you organize your day. I get all that. It was great training and I'm glad I went down that path and thank you very much for spending that money. But how am I different or how are my products different than somebody else's? I still can't formulate that argument in a way that's coherent. Talk about features and benefits but what's the difference it's going to make? Which buyers are going to get it and which buyers aren't going to get it and how do I, in some cases, I need to learn how to speak their language and in some cases I need them to start learning how to speak our language. How do I do that?"
It wasn't comprehensive enough. The training we did and I'm going to suggest that this is the same training that most people offer and is out there and what have you, just didn't get into the granularity that was required to make a customer realize the difference between one of our products and another one of somebody else's products and the difference that machine can make in their economics and their operations and their safety and all those things. Part of it was, we realized the way we trained and oriented people in the beginning was incorrect. We weren't spending near enough time having them understand our difference but Michael, one of the things we really understood through this process is that we didn't understand our difference well enough either. We didn't understand, we didn't understand the value that we can deliver as well as we needed to. We talked about features and benefits but we couldn't quantify what the difference was, those features and benefits would deliver for the customer. This was the big aha for us is that we were not able to articulate our value well enough.
Michael Webb: You think of this big rock of variations of sales peoples performance and some can sell at list price and some can't. You gave them some sales training thinking that would help break that rock down into something more solvable and it did in part but then you had salespeople saying, "There's something missing. I understand the logic of that but how do I deal with all this variation I'm facing as a salesperson, different products, different sales situations, different types of customers?" You broke that down into what is value? When you realize that you don't know what your value is to the customer, am I following this correctly?
Greg Helfrich: Yep. The customer didn't know what value was to them either.
Michael Webb: Good.
Greg Helfrich: What we found was is that there's a lack of understanding of what value is in our industry at least and possibly in others.
Michael Webb: Yes.
Greg Helfrich: We couldn't communicate it and other than them picking favorites because they like somebody, they actually didn't know why they were buying, making decisions either. What we came to is that we believe that value, at least in our industry, if you imagine a normal graph you've got an X-axis and a Y-axis. On the Y-axis is the incremental economic impact of a product to that customer. Does it make a financial difference to that customer, that product or service that you sell? We have some products that do make a financial impact over and above other people's products. We have products that really don't make much of an impact. They're not much different than somebody else's products. Then on the X-axis, really we come down to trust factors. If you look at your offering, does it make an economic impact? If it doesn't make an economic impact or an incremental economic impact, pardon me, can they trust your organization to support the product? Can they trust your organization to help them when they're in a bind, those are the kind of things that are on that X-axis, the fuzzy stuff.
We started to realize that we have an economic, an incremental economic impact in some cases that we're not doing a good job of explaining. In the cases where we don't have an incremental economic impact, we're not explaining how we support and make those customers successful on the trust factors or keeping them out of jail I guess is one of the phrases we've used. When they break down we've got somebody who can be there in an hour to help them figure it out when they can't make specification. We can help them. It's a multidimensional, we had to understand what value was on our end before we could communicate it well on their end. It's really interesting to talk to customers and ask them lots of questions and why do you value this and why do you value that? What you find is that customers really don't understand why they make buying decisions either. I guess that goes back to an assertion that somebody's always made that buying decisions are psychological and justified economically after the fact.
Michael Webb: Yeah, there's more to it than just financial measurement. There is the trust factor, there's the clarity factor. You talk about this little diagram, we'll put a slide or two up on the website to accompany our conversation here for those people who might be driving a car and be visual and want to see it. The way you described it here, I think if I'm looking at the right diagram, that the Y-axis, going up and down on the left side is a measurement system. Their ability to know the value and the X-axis across the bottom there is buyer's acumen. Right? Is that what you're talking about?
Greg Helfrich: Yeah. There's three graphs we use to basically put this out there. The first graph is buyers. On the Y-axis you have their measurement system, their ability to differentiate value or economic impact and on the bottom you've got their acumen, their understanding of the difference between cost and price and their understanding of the value of say, support and their understanding of the value of technical advice, the fuzzy stuff on the bottom. The fuzzy stuff is always on the X-axis by the way when you look at those graphs. That's for anybody who is going to ... One on layer you've got buyers. On the X-axis you've got their acumen or their ability to weigh out economic arguments and differentiate between suppliers based on what they know and what they don't know. On the Y-axis you have their measurement systems. We have customers out there that have the measurement system that allows them to know the lifecycle cost of everything they use. These guys are…
Michael Webb: ... sophisticated customers.
Greg Helfrich: Yes. They are the A customers in my mind. These guys know what they need, they know the economic impact, they know, they're willing to do experiments because they know what something will do if it does work out. There are, great measurement systems make great buyers. That's the first layer. The second layer is products. On the Y-axis again, you have the incremental economic impact of that product. We have products that in some cases will last 10 times longer than other products in the marketplace in a particular application. Those products, in some cases, are priced three times what the other product is priced at but when you think about it, 3 times the price for 10 times the life, the cost is a lot less. Those are really unique products. Then we have products that have no real economic impact difference between other products. They're commodities like everybody else's commodities. But you've got to have them. We look at commodities, how we differentiate on commodities is the old saying you can have it good, fast and cheap. Pick any two.
Michael Webb: Right.
Greg Helfrich: We try and have it on hand and we try and make sure it's decent quality but we always have it on hand. When someone's broken down you're the hero when you've got it in stock. It may be a bearing that anybody can get anywhere but one day you've got it and three other people don't have it because they're sold out. You're the man that day. We tend to get that business because we've got it in stock. The third graph really comes down to the whole offer that your company offers versus somebody else's. On the left-hand side, it's really the same graph as the buyer or pardon me, as the products where it's what is the economic impact of your products and services or the portfolio of your products and services? On the whole, can you make an economic impact to that customer that's above and beyond what a competitive offering is? This is something you have to understand holistically about your company.
Do you have products that have an economic impact and do you have products that don't have an impact? On the whole, can you make an incremental economic impact on those customers? If you can't, some can't just because of the nature of what they sell, the bottom X-axis, which is trust factors or nonproduct attributes, your support, your service. That's your only way to differentiate and it's harder to differentiate on that X or pardon me, on that X-axis because now you're talking about things that are fuzzy and hard to measure. How do you measure support?
Michael Webb: That's one of the reasons why many companies pursue operational excellence because they sort of have gotten into a place where they are a commodity, everybody in their industry is a commodity and they seek refuge in, "Well we're going to be shipping on time more often, we're going to have more consistent quality, we're going to have shorter lead times." It is a hard way to live but it is a way to compete.
Greg Helfrich: Yes, absolutely. There are ways, the nice thing about that X-axis or the fuzzy things is that there's always a way to differentiate yourself. You can always figure out a way to differentiate yourself, even on things that are, if your product can't be differentiated, I remember, I was a commodities trader. For 10 years I was a commodities trader for a company out of San Francisco called Wilbur Ellis Company. We differentiated ourselves in the commodities trading world by having the best invoicing system going. We would put out an invoice the next day and our invoicing was 99.997% or Six Sigma correct all the time. We got business, our wheat was no difference than anybody else's wheat and we didn't grow the wheat. We just traded it. We got business from a lot of other companies because of our invoicing, because they didn't have to have a staff of 30 people do sort out invoicing messes that would happen. Something like that can be a differentiating factor if you can't have an economic impact.
Understand that sometimes your price can be an economic impact. If you figured out a way to manufacture at a lower cost and you can offer a better price and still make money, you do have an economic impact. It's the combination of the two but if you have a great economic impact, you're hard to deal with and your invoicing is never correct and your service is crappy…
Michael Webb: ... Entropy, right? Everything devolves and stuff is going wrong all the time. That's the world that salespeople live in.
Greg Helfrich: Yeah. It's hard to run a good show. It's really a sign, when you see businesses that are 30 and 40 years old, I toured a business here in Indiana early in the spring. These guys have been in business for 80 years. They are not the most technologically advanced company out there in their product. They do things, in some cases, the old fashioned way and in some cases there's better ways to do it. I'll tell you, when you break down, they will put a guy on a plane or charter a place if they need to, to make sure you're looked after. Their reputation is sterling. You can overcome, they overcome I would say mediocre product development in some cases. They've got a tried and true product that works, it could be improved. It's not a stellar product but boy, I'll tell you, they've got a reputation of when you're down, they will hold your hand. They make sure you get back running as fast as you can and they deal with things. They will move heaven and earth.
Michael Webb: That goes back to that old adage, it takes the whole company to make the customer happy. Not just operations, not just the sales department. Let's get back to your sales department. You had these people in the field. They had differing skills, differing views of the world and here you come up with these three different essential characteristics of value, the variation in the customer, his ability to measure. The variation in the product and their impact and then the variation in I guess the whole package of the company's offering. Have I got that right? Those are the three?
Greg Helfrich: Yep.
Michael Webb: How did you translate that into something that makes money for salespeople?
Greg Helfrich: The place we started was the buyer. The impact it had, when we explained it all, all three graphs or all three concepts and everybody intellectually got it. It didn't take any time at all for people to get it. It was like watching, it was water is wet. It was as true as that. People just got it. In the presentation, in the first run we had in January with these concepts, there was about 30 people in the room and everybody was nodding their heads. We went through it and we said, "Okay now where do you start?" The where do you start is the buyer. What we decided was that we need to stop spending less time with buyers that have really poor measurement systems and poor levels of acumen, the people who just won't get it. Now, that doesn't mean we're going to tell them they need to go away or anything like that. We just, if you call and you need something, we'll treat you nicely, we'll make sure you're looked after but we're not going to discount and we're not going to chase your business because you may never get it. You're not speaking our language and we're not going to speak your language.
Michael Webb: You needed a way to help salespeople to prioritize buyers along this particular axis of quality or axis of value. If they can detect and measure a value to them, if they had a measurement system and they could detect what was really financial value to them, then you're going to prioritize them higher.
Greg Helfrich: Yeah. What it was is if you could spend less time, if you consciously spend less time with people who will never get it or won't get it, you can spend more time with the people that will and you'll get a higher share of their spend. That will be a higher margin, generally a higher margin spend with a lot less problems.
Michael Webb: Okay.
Greg Helfrich: Our goal is to get a higher share of spend from the buyers who get it, who have great measurement systems, who have preventative maintenance systems, good measurement systems, good business systems and high levels of acumen. If we concentrate our time on those people, we'll get a higher share of spend and we'll do better as a company then trying to be everything to everybody. As a salesperson, you'll be more rewarded by getting that higher share of spend with the people who get it. That's really where we started.
Michael Webb: Did you make a tool for them? What did it look like?
Greg Helfrich: We didn't really make a tool but we said, "Okay here's some of the signs. If you're buyer does not have a preventative maintenance program, they just fix things when they're broken or they don't have a system, chances are good they don't have a measurement system either."
Michael Webb: That is an observable thing about them that gives the salespeople an anchor. I can point to that. Okay. I can ask the question to uncover whether they have that. Okay, that helps. Good.
Greg Helfrich: When you drive in the yard, what do you see? When you drive in the yard do you see piles of gravel and what have you everywhere? Do you see machines that are broken down that are in the same place they broke down a while ago? What do you physically observe when you drive on site? Those two things, what do you physically observe when you drive on site and do they have a preventative maintenance program were two insights that most people just needed to, "Aha, I get it."
Michael Webb: Good, good.
Greg Helfrich: Those are the two things that start to tell me in my mind what I'm driving into and what these people get. There are days when you drive in when something broke down, there are days when you drive in when something broke down where it's going to look crazy but on the whole, what do you see when you drive in? Do they have a preventative maintenance program? Because if they've got both of those things there's a really high chance that everything else is going to fall into place.
Michael Webb: What you just described is a perfect example in your world of what I was trying to write about at the beginning of chapter three, where you had those observable qualification criteria. I presume then that you created similar concrete, observable things around each of these three categories. Is that fair?
Greg Helfrich: Yeah. What we did is we brainstormed on what do you see when you drive in the yard to differentiate buyers. The other thing is, one of the guys suggested if it doesn't have a preventative maintenance program, I generally don't spend a whole bunch of time trying to sell really high-value products. I basically leave them with a line card and go on my merry way. That led us to products. We started talking about and we had to come up with a way of differentiating products. We came up with the products that delivered the most economic impact and were the most unique we call diamonds. Diamonds are really those products, when the iPhone came out it was a diamond. It was unique, it had economic, it had impact, it was unique. We look at products, can a product deliver an incremental economic impact to that customer that nobody else can deliver? Is it unique? By virtue of being one it's probably unique anyway. Those are our diamonds.
In the middle we have staples. They have some economic impact, other products probably have good economic impact too. You can differentiate them slightly. They have an impact but it's very hard to measure in some cases. They're not necessarily as unique. But they're not necessarily ubiquitous either. We call those staples. We use soap is a good example. Soap is everywhere but some people pay $20 a bar and some people pay 4. Some people pay 50 cents. We use that analogy. Then in the bottom you really have commodities where they're ubiquitous, everybody's got them and they really don't have an incremental economic impact in the marketplace. Wheat's wheat is essentially or water is water is essentially what we said. In those products, we compete by having them in stock when people need them. That's our biggest thing is we've got to have them in stock.
We like inventory because in a world where nobody likes inventory, we like inventory because when you got it, you're their friend. This was our way of, what's our catalog, what products have we got, what products do we need to develop and this was the observable characteristic when it came to products is how unique is it and then we got people thinking about portfolio. How do you now put this all together and when you go to a customer what do you focus on and what do you look at in their operation where you can fit? How does your portfolio match their needs? It was a really good exercise. We've seen some serious results from it. It's interesting that we've got customers that don't have the measurement systems and don't have the sophistication and they're now coming to us as we start talking about this and saying, "Help me. Help me build a preventative maintenance program." "Help me build this." It's been a really, really interesting journey and it's just really getting going. We're working to develop some tools that will help customers actually develop some of the measurement systems they need and some of the preventative maintenance of other systems that will help them become better operators.
Michael Webb: We have just a few minutes left here. Can you give us some examples of the results that you've achieved? Then we'll wrap up.
Greg Helfrich: Well, one sales guy, salesperson, what he showed was that he was able to take the time, he dropped some, he went from a frequency of some accounts from monthly to every six months and spent more time on a customer who has a fantastic measurement system and they really get value. His share of spend has gone, we estimate from about 40% with this one particular customer to about 70% because he's just able to, it's just amazing the result. A couple of the customers he spent less time on phoned him and said, "Why aren't you out here?" He said, "Because you don't have the ability to measure some of the differences in our products and what have you. I know they can make an impact but until you can measure them I really can't do anything." They said, "Come and help us develop this measurement system."
Michael Webb: Talk about voice of the customer. That's awesome.
Greg Helfrich: It was a win-win. We've had a number of other circumstances where people have said, "I've spent less time with these guys and they still continue to buy. They're buying just as much as they did before but now I can spend time with the people who really get it." What we're finding is when we spend more of our time with the people that get it, those people are coming to us and saying, "Develop this for me. Help me with this."
Michael Webb: Go ahead.
Greg Helfrich: Totally changed the conversation from a product conversation to a profitability conversation-
Michael Webb: I can imagine.
Greg Helfrich: ... so our people are becoming-
Michael Webb: I'm sorry I keep interrupting you. I want to jump in because there's an observation that I can hear some hardheaded executive owner of a company listening to this conversation going, "But that's all common sense. How come they weren't doing that before? Why did you have to go through all this elaborate Six Sigma stuff to do that?"
Greg Helfrich: I wish I could give you a smart, curt answer except that some obvious facts are not that obvious.
Michael Webb: Yes, they're not.
Greg Helfrich: Or they're obvious in the rearview mirror. I guess that's the way I would put that one, is that there's so many things in this world that you see, you have the benefit of hindsight in saying, "Oh I know that." Well, yeah but at some point in time someone didn't know that and there's a lot more to, there's always more to it than yeah, it's common sense, you should know it. There's a lot of things that are common sense that people just don't know. I mean, look at diet and exercise. Yeah, it's common sense. North America has got a hell of an obesity problem. Tell me how common sense helps you.
Michael Webb: Exactly. Exactly. I have talked to a number of entrepreneurs who struggle because they have some salespeople who can sell the most elaborate, most expensive stuff and others who struggle to sell the basic stuff. They work with those people, bringing in those big numbers but then sooner or later, life happens and that person has to leave. All their knowledge that they built up and their relationships go with them. They struggle saying, "How do I build this stuff?" The process should be in the company. When a salesperson comes in, they're the arms and the legs and the mouth but how do we build the knowledge into the company so that the salespeople can be more effective. Your example describes that just wonderfully well.
Greg Helfrich: Well, thank you. We're seeing an impact with it. If you use these, you've got to figure out your own system but this system might work for some, particularly in a business to business where you're selling a physical good, this system that we've developed could probably work for a lot of people. You put your buyers through it and you put your products through it and in the end, you can put your salespeople and say can you work within this system? If you can, you should see results.
Michael Webb: That system is, I guess I would say in Sales Process Excellence we frame out the bones, the skeleton of what are the components such a system has to have. Would you say that that's fair?
Greg Helfrich: Yes. Absolutely fair because when I looked at our system, our system assumed that the customer was going to call you in the first place. That's changed. People do their research online and we're looking at, it was symbiotic. I read the book and I looked at it and went, "Well, we've defined our sales process from the point in time where someone calls us but we haven't defined it backwards to the point where hey, I've got a problem and I need to do some research."
Michael Webb: Right.
Greg Helfrich: We needed to go back and do that.
Michael Webb: You cannot define the sales process from the point of view of the salesperson. You can't do that anymore.
Greg Helfrich: No. You can't define it from the point in time where you got a phone call because what you're doing is that you're reinforcing your own bias in a way that it's just like the guy who is looking for his keys, the guy comes along and says, "Why are you looking here for your keys?" "Well, because there's a light here." Keys were lost 25 feet away but he's underneath the streetlamp because that's where the light was.
Michael Webb: Yeah.
Greg Helfrich: Just defining your sales process from the point in time where you have contact and you have communication, you're missing the point. There's a whole world out there. Those are the known knowns. Now you've got the known unknowns that you have to work with.
Michael Webb: I think that part, upfront interaction and giving customers the information that they're looking for and putting it in the places where they are looking, is that the next part of your sales process that you guys are working to build out or is there some other bottleneck or challenge that you think are equally important?
Greg Helfrich: No, actually you nailed it. That's exactly where we're focused right now is 20 years ago you got a call when the customer said, or when the customer realized he had a problem 20 years ago you got a call that minute. Now you get a call when you're one of two or three that they view can solve the problem. The whole world has changed. You don't get a call when they have a problem now. You get a call when it's determined that you can possibly help them solve their problems. The level of research done online is way different now and yes, this is something, that's exactly what we're focused on right now is that how do we nurture people through that research stage?
Michael Webb: That is super. We could, I'd like to follow up with you. Thought leaders like yourself who are inventing solutions based on your experience and experimenting with it and having your salespeople answer the questions so that they themselves have some ownership in it and do some of it, would love to see how you do in the future as you work with the problems. I'd like to invite you back at some point in the future when you're ready to tell us about that. Would that be all right?
Greg Helfrich: Sure, absolutely. We're working on some stuff right now and we're going to start rolling it out late summer. This time next year we should have a really good feel for how some of this stuff worked and the impact that it's had. I'd be happy to come back.
Michael Webb: We're going to take the, you sent me a few slides before our call here today. I'm going to try to boil these down into one or two pages and with your permission, you make sure I got it right and we will post that on the podcast page so that the audience has something to look at to go along with the conversation we had.
Greg Helfrich: Certainly.
Michael Webb: If someone wants to learn more about ELRUS or getting in contact with you, how would they do that?
Greg Helfrich: ELRUS is real simple, E-L-R-U-S .com is the website. Myself, just Greg Helfrich, H-E-L-F-R-I-C-H on LinkedIn. You can get ahold of me. The best place is LinkedIn. That's easy peasy. You'll see a guy with thinning hair on LinkedIn and if you want to learn more about what we do in the industry, ELRUS.com. A great website about quarries and rock crushing and what have you is the Ontario Sand, Stone and Gravel Association, OSSGA. They have a great website in terms of how rock product is derived, the process it goes through, things like that. There's other national, NSSGA, which is the National Sand, Stone and Gravel Association in the United States also has a really good website understanding where rock products come from and how they're used and processed and stuff like that.
Michael Webb: Super. Thank you very much for volunteering this information and your time and describing your journey. I really appreciate it. I know that many people out there who come from seemingly mundane industries but they're way more complicated than they look on the outside, a lot of people are going to benefit from hearing your story.
Greg Helfrich: Thank you. I hope they do. Anybody who has any questions, by all means reach out through LinkedIn and I'll do the best I can to help answer your queries.
Michael Webb: Super. To you and to everyone who is in the listening audience, good luck and keep selling.
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Andrea Fabbri | Creating Your Brand Scientifically
16 juil. 2019· Sales Process Excellence Podcast
Say the word brand and most people think of iconic companies like Nike or Apple with flashy slogans or logos.
But in the B2B context, brand is very different. And, as Andrea Fabbri of Branding Business explains, creating a brand identity is not some vague, touchy-feely process.
An effective brand that can guide sales and marketing – even operations and product development – is based on cold hard data and evidence, both from the company doing the selling and the prospects in their target market.
Andrea talks about his approach to building a brand, as well as…
* Why salespeople are vital to this process
* The key differences between marketing and branding
* How to test a new brand identity almost risk-free
* One of the most underestimated – yet most important – activities when making changes in a company
* And more
Mentioned in This Episode: www.brandingbusiness.com
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Burke McCarthy | How to Grow (Relative to Your Competitors) During Any Recession
26 juin 2019· Sales Process Excellence Podcast
Too often, says Burke McCarthy, companies focus on their product… the technology they’re offering, as well as the price. But prospects and customers don’t care about that.
No, they’re looking for value. And that exists only between their ears, not in your product. This recognition fundamentally changes how you approach sales and marketing. Burke reveals the best source to determine this value – it’s closer than you think – as well as how to implement it. And we also talk about…
The two elements that must be in your customer engagement process Learning a common language with your prospectUsing salespeople as “spies” - and market researchersHow to identify advantages you’re not exploiting fully (we all have them)And more
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Bob Apollo | Structural and Cultural Prerequisites for Sales Improvement
19 juin 2019· Sales Process Excellence Podcast
In his second appearance on the podcast, Bob Apollo highlights the three things the sales team as a group must understand about their prospect to sell effectively, efficiently, and profitably.
Bob points out that the "silos" bedeviling many organizations can't be avoided without disseminating this knowledge from the frontline to the back.
Tune in to discover…
Why the Ideal Customer Profile goes beyond demographic and geographic detailsHow sales activity-based sales management sabotages revenue goalsThe right way to use a CRM – it’s almost useless “out of the box”The metric investors miss when looking at putting money into start-upsAnd more
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Episodes

Bruce Hamilton | Playing As a Team

Ardath Albee | The Gap in the Middle

Drew Locher | It Takes Energy From Leaders

Oscar Trimboli | The Cost of Not Listening

Brian Carroll | Connecting to What The Customer Cares About

Cliff Ransom | A Wise Individual, Who is Still Learning from Others

Bill Bentley | Finding the Tipping Point

Tripp Babbitt | The Deming Philosophy is a Way of Learning

Bud Hyler | Aligning Sales and Marketing Through Feedback

Bob Lambert | Helping Customers Through the Buying Process

Tiffani Sierra | Yes and… and Other Lessons For Salespeople and Leaders

Claude Bardy | Are You Asking the Right Questions When Coaching Your Salespeople?

Christian Maurer | Respecting the Value Salespeople Create

Robert Tripp | A Master Black Belt Explains Organizational Change and Operational Excellence

Charles Chen | How Systems Thinking Influences Sales Organizations

Adrian Figueroa | A Foundation for Excellence

Greg Helfrich | Building the Sales Process Into the Company, Rather than the Salesperson

Andrea Fabbri | Creating Your Brand Scientifically

Burke McCarthy | How to Grow (Relative to Your Competitors) During Any Recession

Bob Apollo | Structural and Cultural Prerequisites for Sales Improvement