Tag Archives: Quality

How Do You Respond to Unrealistic Demands? Six Suggestions

Situation: A tech company is having difficulty with a customer. Given three options – high quality, low cost and rapid delivery – the company can deliver any combination of two, but the customer wants all three. When the company asks which two are most important, the customer responds that they want all three. How do you respond to unrealistic demands?

Advice from the CEOs:

  • The Devil’s Advocate response to this question is to look at your processes. Is it possible to do all three, and if so under what circumstances?
  • Think from the perspective of the customer:
    • What will you need and when?
    • Integrate the customer into the decision process as much as possible.
    • Demonstrate where trade-offs exist, and work through these in binary fashion until you reach agreement on the scope of work, delivery timeline and price.
  • The challenges change depending upon who within the customer company you are working. For example, the engineers understand the challenges and complexity of the product in question. However, the purchasing agents do not necessarily understand the product, its complexity, or how critical it is to their final product.
    • In this case try bargaining with the purchasing agent – if the purchasing agent goes back to the engineers and gets their agreement that your company can change the quality or delivery spec, perhaps you can be flexible in your pricing. Put the ball in the PA’s court – but make sure that the PA knows that he/she will be responsible for any project delays for not giving you the order today
  • Use stories to set expectations – better yet, use stories, combined with metrics about the costs associated with attempting short-cuts to develop authoritative arguments in support of your position.
  • Create a User Guide for your customers – paper and web formats – to sell your story. Sell fear, uncertainty and doubt; for example, if the PA wants to go another route here are the potential costs in terms of time, market share and profits lost.
  • In particularly difficult negotiations, use the real estate mantra: Some Will, Some Won’t, So What, Who’s Next?

How Do You Change Suppliers for a Key Product? Four Thoughts

Situation: A company buys several important components from a single US supplier. They are considering an offshore source for one of these components which makes up a large portion of what they purchase from the supplier. Does off-shoring make sense in this case, and how do they mitigate the risk? How do you change suppliers for a key product?

Advice from the CEOs:

  • The key consideration is the off-shore partner’s ability to reliably make the component at the price promised. If they can, why not outsource offshore?
  • The decision depends upon two additional factors: the amount that you stand to save by off-shoring your source, and the potential cost to you of inconsistent or unreliable components from the off-shore supplier.
    • If the cost of failure is high, a modest savings is less valuable. You may want to wait until you have higher volume and higher potential savings before looking at off-shore sources.
    • In the US, we assume – with some security – that a pilot run predicts a large run. Historically this has not been shown to consistently apply to offshore suppliers.
  • Can you afford to invest and potentially lose the amount that it would cost you to secure your first production order from the off-shore source?
    • If the answer is yes, invest the time and effort to visit the supplier, and secure resources to monitor their production – your own or a trusted partner’s. Your presence and interest are very important.
    • The principal challenge will be quality and consistency of raw materials, and varying age of production equipment used to produce your components.
  • Are you concerned that your current supplier might cut you off?
    • The CEO is not sure, but has identified this as a risk.
    • If this is the case, start now identifying second sources for other components made by this supplier – if only to keep them honest in price, quality and delivery.

How Do You Develop a Revenue Model? Six Recommendations

Situation:  A company has a crowd sourcing solution which is co-creational. You ask a question and get multiple answers. The company then uses technology to select the best answers. The challenge is developing a business model. What parameters are predictable and dependable? How do you develop a revenue model?

Advice from the CEOs:

  • Revenue is always, in the end, a matter of value received – both potential and actual.
  • High dollar per click comes from delivering better responses, particularly if you can demonstrate higher sales conversion rates.
  • High value responses are valuable. If you can deliver these consistently, consider charging a subscription instead of pay-per-click. Pay per click is fine for attracting first-time users, but move to subscription for ongoing access.
  • Limit your initial audience to crowd source participants who have knowledge and experience – like CXOs on LinkedIn. Create relevant communities.
  • In addition to best practice answers, provide an opportunity for participants to share failures – experiences from which they learned. Simply Hired created an early, and lasting audience by creating a companion site called Simply Fired when they started. Based on the responses to this site, they created a Top Five Reasons for getting fired, with inappropriate behavior and sexual harassment at the top. This exercise helped them to create a lasting presence.
  • Make your site clean and show clear steps to a revenue model for users. This will take time and you won’t see results immediately. Over time it will pay off for you.

What’s the Next Version of Our Business Solution? Four Ideas

Situation: A company that provides personnel services wants to adjust their business model to make it more appealing to employers. They are unique in that they focus on social issues, rather than purely on business services. From the perspective of a hiring Manager, what would you want to see? What’s the next version of our business solution?

Advice from the CEOs:

  • The idea of a social issues-based brand is unique. To some employers this may have appeal.
  • Your obvious differentiator is the tie between existing communities and social networking. Emphasize this.
  • As an employer, the focus is on finding quality employees for the right price. This will always take precedence over other factors for most businesses. In fact, over-emphasis on social issue-based hiring could subject an employer to discrimination issues. It also will not appeal to everyone. How can you address quality employee for the right price through your service? Here are some things to consider:
    • The employers’ challenge is finding good candidates. How do you solve this problem?
    • Employers have specific needs to fill. Help them by identifying and screening candidates so that it makes their job easier.
    • The question for the employer is whether your helper audience can crowd source the screening function. Screening is the challenge of the employer. Solve this and I as an employer want to talk to you!
    • Within your model, instead of asking for monetary contributions from your helper audience ask them to donate time to screen candidates. Not being a recruiter is a plus.
  • Pitch your new ideas to your company insiders – see what they say.

How Do You Define Your Sales Offering? Four Recommendations

Situation:  A company is having difficulty finding the right sales candidates for the opportunity that they offer.  They have had good conversations with prospects, but once they present their offering the candidates reply that they’re not interested. How do they define their offer to attract good candidates? How do they adjust the conversation to produce better results? How do you define your sales offering?

Advice from the CEOs:

  • This is the same conversation that you have with your biggest client prospects.
    • Good people have options. If you have not convinced yourself that you have a great opportunity, you will never convince them that your offer is better than other options.
    • You are selling YOU.
  • Change early process.
    • Be sure that you are as passionate about your opportunity as you are about positioning your services with clients.
    • Divorce the conversation about the opportunity from the general screening interview.
  • Here’s the process:
    • Your recruiter does not sell.
    • Just ask the recruiter to identify potential; not to initiate the sale.
    • Do this sale yourself.
  • Aspects of the story – much of this is the same story that you present to your clients:
    • Your performance within your industry.
    • Strength of your people and brand name.
    • The quality of your clients.
    • The unique opportunity that the prospect has joining you at this stage of your business growth.

What Efficiency Metrics are Most Important? Six Suggestions

Situation: An early stage manufacturing company has established repeatable operations that produce the desired quality. The CEO now wants to focus on efficiency. Early research suggests a number of areas on which they could focus. Based on your experience, what efficiency metrics are most important in manufacturing?

Advice from the CEOs:

  • Much depends upon what is being manufactured, and both the complexity and labor intensity of the manufacturing process. Start with the basics: looks for a relevant quality metric, and a time / delivery metric. Test these for relevance to your operations and adjust or change them as necessary over time.
  • Start with simple metrics and make them more complex over time.
  • On an ongoing basis, monitor your processes for continuous improvement. If an employee comes up with an improvement that increases efficiency and saves money, recognize and reward that employee.
  • Be selective. Limit your focus to 2-3 metrics per quarter. Make first period performance the baseline for the next period.
  • Areas in which to focus:
    • Cycle times.
    • Statistical process control to monitor:
      • Yield
      • Throughput
      • Fall-out
    • On time delivery to production schedule.
    • Quality check at end of production – yield rates versus pre-set targets.
    • Use Google to see what others are using. Google “Manufacturing Performance Indicators”.
  • As you develop your efficiency metrics, include your most effective metrics in performance measurement for bonus awards.

How Do You Best Leverage Networking? Six Suggestions

Situation: A company is actively marketing to prospective clients and also engages in networking. They want to assure that they are up to speed with current trends in marketing. What are best practices for following up on marketing or networking contacts? How do you best leverage networking?

Advice from the CEOs:

  • Timing is everything. A prospective client may or may not have an immediate need for your product or service, but may develop a need in the future. Assure that you have a program that provides ongoing follow up via:
    • Social Media
    • Phone calls
    • Emails
    • Regular personal follow up
  • Initial follow up should be rapid. Ask for permission to follow-up and set the time frame when you meet a new prospective client. Ask how the prospect prefers for you to stay in touch. Do they prefer newsletters follow-up via social media, or personal follow-up?
  • Draft letter, email and social media communication templates ahead of time so that rapid follow-up is easy.
  • Use an electronic or print newsletter to stay in touch with prospects. Social media have become an increasingly important way to stay in touch with networking contacts.
    • Basic newsletters are usually 2-3 pages, or a one pager with links to see full articles.
  • Look at contact management software: for example Salesforce.com or ACT.
    • Basic sales and marketing subscriptions from Salesforce.com start at $25/user/mo. for up to 5 users, or $65/user/mo. for a complete customer relations management (CRM) system.
  • Quality of collateral is important. It is a face of your company. High quality collateral should have a consistent look and feel, and should remind the prospect why they were interested in you and your company in the first place.

How Do You Balance Two Businesses? Four Thoughts

Situation: A company provides both contract staff and consulting services. They have a large client for whom they provide staff, but not consulting. The client routinely requests discounted rates on contract staff from the company. The CEO believes that the client requests lower rates because they, in turn, offers consulting to their customers, using the company’s staff, and want to offer these services at a competitive rate. How can the CEO better respond to the next requests for discounted rates? In addition, is there a way for the company to market their consulting services directly to the large client’s customers? How do you balance two businesses?

Advice from the CEOs:

  • Don’t avoid the conversation on your rates. Make sure that your client knows that they are getting top quality services and that this is reflected in your rates.
    • Make the issue a price / quality trade-off. If cutting costs is important to the client, offer lower quality options at a lower price and let the client decide what will fill their needs. This positions you as flexible and willing to work with the client, without losing margin.
    • Offer modest discounts for incremental business, but not current business.
  • Tell the client sooner, rather than later, that your prices are as low as you can make them. Don’t wait until you are in pain.
  • How can you promote your own business to end customers via the staff that you provide for this client?
    • Give them business cards to give out that reflect your business, not your client’s.
    • Provide them with wear nicely embroidered “Company” shirts to wear at work.
  • Be aware that your desire to approach the client’s customers directly with your services will be a threat to your client and may result in them firing you as a provider of contract staff.

How Do You Maintain Company Culture as You Expand? Six Ideas

Situation: A company wants to open a satellite office in a lower cost geography where they can provide current services at a reduced cost to improve margins. In doing this, the company wants to maintain the same culture and controls on quality of work that they enjoy in their home office. They also need to accurately forecast revenue for the new office. How do you maintain company culture as you expand, and how would you forecast revenue for the new office?

Advice from the CEOs:

  • Maintaining company culture is tricky as a company expands geographically. Assign one of your current managers, someone who buys into the company culture, to head the new office. Also maintain the same hiring and personnel management policies that you have at the home office.
  • As the biggest concern is cost efficiency, make sure that the office manager has clear objectives to realize anticipated savings.
  • Look for an incubator that can handle all the peripheral office details so your staff can focus on their work instead of managing facilities.
  • When it comes to revenue forecasting:
    • Given the lower costs associated with the new geography, look for opportunities to trade margin for longer contract commitment windows to improve revenue forecasting.
    • Both margin and delivery can be lumpy when opening a new location. Obtain a credit line to help you smooth the rough spots in your revenue stream.
    • Investigate deferred revenue options to spread revenue risk – right of first refusal on next generation projects in exchange for a lower cost per project to the customer.

How Do You Eliminate a Them-Us Cultural Divide? Six Thoughts

Situation: A company acquired an office in a new geography at no cost – just a commitment to keep the office going. The immediate challenge is transferring the previous owner’s client base to the new owner’s service. The people in the distant location are OK, but it will take coaching for them to deliver the new owner’s level of service. However, these people are proud and resistant to change. How do you eliminate a them-us cultural divide?

Advice from the CEOs:

  • Involve the person who facilitated the acquisition in the integration process. Get his opinion of what is needed.
  • Your prime commitment is to the client base and past practices that built the client base. Maintain or surpass this level of service.  As long as the team meets this level of performance, they are serving your objectives.
    • You and the key manager of the newly acquired office should meet with their most important clients. Help the manager convert those clients for you.
  • Your other implied commitment is to the manager and employees that you inherited through this deal. Educate them on your approach – “we will do all that we can to create success for our clients.” Connect with the manager, understand how this person serves clients, and coach the individual.
  • Be fair – the fairest method of managing is a meritocracy.
  • Manage by results, not process – if the core values between the two sites are similar, allow for cultural differences in local practice.
  • If all this doesn’t work and you want for “them” to become “us” you will have to have someone from the home office move to the distant office and manage it.