ADAPTING TOTAL QUALITY MANAGEMENT TECHNIQUES TO THE DISCIPLINE OF SALES LEAD MANAGEMENT ppt

ADAPTING TOTAL QUALITY MANAGEMENT TECHNIQUES TO THE APTING TOTAL QUALITY MANAGEMENT TECHNIQUES TO THE DISCIPLINE OF SALES LEAD MANAGEMENT DISCIPLINE OF SALES LEAD MANAGEMENT PREPARED

ADAPTING TOTAL QUALITY MANAGEMENT TECHNIQUES TO THE APTING TOTAL QUALITY MANAGEMENT TECHNIQUES TO THE

DISCIPLINE OF SALES LEAD MANAGEMENT DISCIPLINE OF SALES LEAD MANAGEMENT

PREPARED BYPREPARED BY KEITH D BURWELLKEITH D BURWELL SVP SALES, KALEIDICOSVP SALES, KALEIDICO

techniques as they are applied to the manufacturing discipline, their purpose, and how they can translate to increased productivity as well as sustainable, quantitative

measurements in sales organizations within any vertical market

What Hath Poor Sales Performance Wrought?

According to the Bureau of Labor Statistics, the average American productivity increase since 1949 has decreased steadily While this means we are still improving how we work,

we are steadily losing ground A popular study done by America Online and Salary.com several years ago backs up this data by indicating the amount of time wasted by age group each day of work per individual

unfortunately not been translated from vertical market to vertical market as it is, by and large, two separate societal groups that comprise professional sales versus

manufacturing

In many sectors of the American economy, we have seen massive off shoring and

outsourcing of manufacturing jobs that have found new employees around the globe, leaving many individuals skilled at performance measurement without an outlet

Meanwhile, generations of American youth are growing up and taking jobs that are

traditionally sales focused as we become a heavier retail and services oriented economy Therefore, the idea of productivity and performance measurement has unfortunately escaped much of our emerging workforce

In order to effectively raise the productivity of the American sales sector, it is vital to begin

to properly apply these traditional manufacturing techniques to our sales teams and organizations It is no longer enough to simply measure monthly or quarterly sales

revenue and haphazardly adjust budgets accordingly

The State of Most Sales Teams

The typical sales organization has been the pointy end of the economic spear in many companies To continue the analogy, when dull they get sharpened through layoffs and cutbacks of poor performers and in strong sales periods they are the ones that are looked

to for the production of revenue and are rewarded as such As long as the spearhead continues to provide dinner, the spearhead stays intact Unfortunately, it often takes a misstep by the sales group—a missed quarter, a blown projection, or a lost deal to

suddenly and backwardly attempt to repair the damage Current methods of “control” are often the equivalent of dialing a thermostat left to right without seeing the temperature-simply a guess based on instinct and feelings

This has resulted in the unnecessary raising of marketing budgets, reduction of staff, pointless and often unobtainable sales goals, as well as alarmist reactions translated into inflated budgetary projections, allowances, and cutbacks Roaming targets set by worried sales executives simply translate to longer hours on the sales floor, an over anxious (and

soon to leave) sales team, and ultimately a cutback in personnel in order to meet

whatever “seems” to be the right number this quarter This may sound overly comical, unduly harsh, or simply counterintuitive to our expectations However, the fact is that many of these organizations are being run by someone skilled in “anything” other than sales

Lead Management is Not a Skill Held by Most Business Owners

According to statistics from the Small Business Administration, 99% of all American

businesses are small, with an average of one location and 10 employees This sector is responsible for over half of the non-farm workforce in America and the entire net gain of 1.86 million new jobs in 2004 (the most recent year data is available) We can reasonably infer that the majority of business owners 1) did not start their shoe store, software

company, mortgage brokerage, insurance branch, cookie manufacturer or other specialty concept because they were skilled at utilization of sales leads and were simply looking for

an outlet for this managerial ability and 2) the typical 10 person shop is going to have a sales staff run by the owner or, more likely, a moderately skilled former salesperson

Either of these two facts is grim if we are expecting a disciplined sales process,

appropriate management techniques, and procedural adherence over extended periods of time to come from our largest business sector

What becomes necessary then is to adapt large business models of effective

management for small businesses Typically, as we see individuals stay in their respective disciplines and become more refined and specialized, sales performance management

isn’t a primary focus Therefore, more often than not, poor habits of under-managing and over-correcting in other departments becomes the quasi-norm

In order to correct for such an imbalance and to right a listing ship, some level of discipline must be understood and placed within our sales economy Too many business owners and managers rely solely on sales “techniques” to drive to the next level Often the focus becomes about “changing the pitch” or selling “differently” as opposed to addressing the fundamentals of the environment, the process, and all of the steps leading up to the

conversation and then the follow through When the engine is failing, neither putting more fuel in the tank nor going faster will correct the issue at hand, yet that is the overarching strategy employed by the majority

Organizations reliant on a sales team for revenue generation, either in part or whole, need

to evaluate their functional groups for proper efficiency and re-calibrating Simply pressing Marketing to add leads or creating inflated budgetary targets and using strong arm

techniques to drive goals are no longer considered strategies worthy of companies

attempting to gain market share, hit targets, and continue to grow

The remainder of this paper will focus on specific methods typically found in

manufacturing settings that have very strong correlating results within sales teams These techniques are typically foreign to most professionals within a group dedicated to

engaging potential clients and working directly with external individuals However, this paper will address the methodology, the purpose, the expected results, as well as the typical application in order to create a complete picture and understanding of not only how

to apply the techniques to one’s organization but why one would and should strive for full implementation

Understanding TQM Methodology- a Primer

Total Quality Management, as it is called, is the concept of reducing waste from a

process Typically it is structured within a manufacturing setting with the goal being the highlighting, removal, and resolution of waste within a given process It is meant to make the machine, assembly line, worker, or team as productive, efficient, and streamlined as possible

While TQM is agreed to be a conceptually lofty goal, it is nonetheless, a target that is always attempting to be reached Arguably no organization has completely removed waste in toto, but this is one of the more salient points regarding the process—it is indeed

a continual process designed to be a recurring and always present reminder of what

should be as opposed to simply what is

It is hard to argue with the success of the methodology as it has been utilized over the last half century Countless organizations, most notably Toyota, and consequently many auto industry giants, have seen enormous savings through implementation and by creating a culture wherein TQM can be embraced GM has seen $9 Billion in savings through only three years of system implementation

Does TQM Translate To Sales?

In order to determine whether the methodology will actually be an effective tool within a sales environment, it is necessary to find symmetry of problems between Manufacturing and Sales groups If, in fact, there are similar problems, then we can reasonably assume that the solutions may indeed fit

What, then, are the problems in manufacturing that are solved by TQM? First, wasted time

is one of the most egregious harms inherent in a manufacturing environment Wasted time

is found in machine spacing, work levels, amount of work, behaviors, and many other processes Can we see this in Sales organizations? Yes We know that a sales

organization will have issues with work levels, processes, behavior, and time between work functions Therefore, we can begin the discussion at wasted time as a symmetrical problem in both types of environments

Other areas of like occurrence would fall into categories of inventory (where raw material

is equal to leads), process setups, workloads, changeovers, work environment issues, as well as development of a value stream

We could rightly say that the Sales team is a work cell dedicated to manufacturing It is in the business of manufacturing closed deals The variables are the raw materials, the suppliers of those materials, how the material is stored, accessed, worked, developed, the quality of effort placed into the final product, as well as the time spent to create the

product, the efficiency of the work environment, and the communication between

necessary groups

When viewed in this way, a sales team can be assessed, valued, monitored, and

controlled much more efficiently than we typically have done in the past

The remainder of this paper will discuss in detail various techniques found in Total Quality Management methodology, their intended purpose and problem it solves, the explanation

of the same problem in the sales function, and finally the application of the technique within the sales discipline

TQM Techniques and Their Implementation

Technique: 5S

Definition: 5S describes a workplace organization method (five words that begin with S)

in which the worker is continually making their workstation efficient by ensuring its

cleanliness, order, and standardization

Implementation: The first S, Sorting, speaks to the necessity of the worker to maintain an

environment with only the most essential items present We can think of this not only in our desk area, office, but also, more significantly, our computer desktop How does the sales person organize their email inbox or the important documents that are used

frequently? Sorting is clearing the work area of only essentials While we may find it clever

or entertaining to see sales personnel with various basketball hoops, games of chance, dartboards and other implements of time abatement, one would probably question their presence on or around a tool and die machine in a factory This illustrates a common

paradigm—why is it acceptable for a sales production worker to have these types of

“escapes” yet unthinkable for a manufacturing production worker? One is led to

believe that if it is unproductive for one group of producers, it is likely unproductive for the other, no matter what the prevailing assumptions may be

The second S, Straighten, or Set in Order, is about maintaining a “clean” environment to achieve the goal of simplifying the process, quick response to client and prospect, ease of use, and quality control Straightening minimizes the problem of shuffling through papers, throwing away important articles, or wasting time by having to find emails, names, contact information, or various data Sorting is the first step in organizing and managing the work environment

The third S, Shining, refers to a continual (daily or periodic) maintaining of the order and cleanliness of the workstation When sales people finish their work each day, their

workstation (computer, desktop, files, etc) should be arranged so that work can be

immediately accomplished at the next shift start In a manufacturing setting, it is

unthinkable to leave a work area without bringing it to the level of usability that the

personnel began the day with There should be no difference in a sales organization Maintaining the level of organization, cleanliness, and usability is translated as efficiency

at the next shift start

The fourth S, Standardizing, relies on a consistency in work assignments If there are shared work stations, for example—printers, copiers, filing cabinets, etc.—then

Standardizing stresses the importance of everyone knowing and following through on, their individual responsibilities By standardizing the work practices, sales teams can be assured that shared areas are always in working order, thereby minimizing downtime from individuals either performing tasks they are unsure of, improperly organizing, loading, adjusting, or repairing When everyone has assigned tasks and responsibilities that they are proficient at performing, efficiency in this area is greatly increased

The last S, Sustaining, is about reviewing and implementing best practices It is about adding new ideas, improving existing workflows and processes, and ensuring that the entire group is aware of the changes, gaining buy-in, and implementing to improve

efficiency while monitoring to make sure the desired outcomes are achieved

Some reading this may feel that this is overt and unnecessary for a sales oriented

atmosphere and that to place such draconian tactics on sales teams would certainly be the first and largest step to seeing them exit This author strenuously disagrees An

important point, and one that you should heed as you read the remainder of this paper, is

that every employee you have that is worth keeping is looking for ways to improve

their performance They may be actively or inactively pursuing methods and concepts to

better themselves through techniques, self-improvement methods, better habits, and many other ways Or they may not know HOW to improve To begin implementing these methods even in skeletal formats is throwing many of your future best personnel a life preserver of sorts Help them to embrace the techniques by clearly advocating their potential for increasing manufacturing (of sales and closed deals)

Technique: SMED

SMED is an acronym for Single Minute Exchange of Die This may be one of the most remarkable advances that the Lean / TQM Method brought to industry The history and definition will give you a good understanding of how the concept works, but the real life practice that we can all relate to will certainly make this technique crystal clear

SMED began by Shingeo Shingo for Toyota in the late 1950’s The issue was with large production machines that needed to make multiple products (ex.—a left and a right side body molding) but each product had a certain production run before the next could be run The downtime between production runs was due to changing over the dies in the

machines Shingo found there was a way to reduce the downtime to less than 10 minutes (or single digit minutes) to change over the dies, thereby greatly reducing downtime from 8 hours as was typical to less than a few minutes!

We see this technique every Sunday during racing season for NASCAR A pit stop is a perfect example of SMED principles It is about eliminating every second of down time and maximizing every second the wheels are not turning Pit crews are able to change 4 tires, fuel a car, clean windshields, and other various tasks, all in less than 25 seconds How did Toyota and NASCAR do it? Is it only about simplifying the process or are there

standardized techniques that we can use in a sales setting?

Internal vs External

SMED, at its core, is about separating external from internal processes External meaning those processes or components that are not critical to be performed while the “wheels are stopped” Internal processes are those that can only be done during the actual down time

By truly evaluating those components of the work that need not be performed while the machine is stopped and allocating that to time outside of the changeover, total downtime

is massively reduced

A sales organization faces a very similar problem on a daily basis, yet since there are no machines present, many a manager would miss the abundant opportunity for efficient improvement Let’s start with defining internal processes for a sales team Internal

processes or actions are those that involve direct contact with the client such as meetings, conversations, networking, calling, emailing, or other communication When equating sales with manufacturing, it is these activities which correlate to a production line machine

What, then, are the External processes that are to be “separated” out? Researching a client, prospecting, writing contracts, building out a sales pitch or slide deck, expense reports or any other administrative function would fall under the category of External Here

is the critical oversight and the paradigm that is accepted—most organizations would find that their sales staffs oscillate in and out of Internal and External duties throughout the day However, communicating with clients (production) can only be done during certain times of the day Your sales staff likely cannot contact prospects before 9am, even though they may be in the office Reserving this time for performing the External tasks, thereby allowing for more direct communication during the “uptime” hours, ensures greater contact potential By performing client research, searching for phone numbers and company officers, and attending to the administrative tasks of the job during these outlying time periods will maximize the time spent in direct communication with the client, or to continue the analogy, more production time and less downtime

Many companies currently perform SMED on a small scale—whenever someone calls for

a “Power Hour” or a block of time dedicated to the phone, they are implementing the principles of SMED Imagine how much more efficient these teams would be if they were able to remove the external processes inhibiting them to make all day a “Power Hour”?

Technique: Just In Time (JIT) Inventory

By definition, JIT is an inventory strategy that aims to ensure only enough materials on hand to meet the current needs It is necessarily averse to carrying costs of any inventory sitting on shelves The argument is that if you are warehousing materials, you are paying

for the warehouse space, the warehouse personnel, the liability of spoilage or damage, the possible overrun, as well as inefficient cash management by replacing cash on hand that could be earning interest and placing it in warehouse shelves, translated as raw material, which bears no economic fruit until it is a finished product

In a Lean environment, the storage of raw materials is looked at with as much disdain as holding trash or other waste It serves no economic purpose and can only be termed a liability as it relates to an efficient and effective production line

Within a sales environment, as has been put forth prior, this paper equates sales leads and prospects as raw material They are the pieces that go into creating the finished good-

a closed deal Therefore, we can examine the way in which sales leads are treated by organizations and find efficiencies in JIT inventory of these “raw materials”

A sales organization can begin to gain efficiency in their lead inventory by ensuring a policy of immediate utilization Surprisingly, many organizations do not immediately

process their leads A company may receive their inventory of leads through their website, television ads, purchased lead sources, and other marketing channels, all leading to a central “hub” or “warehouse”, from which the production workers then receive their raw material The sales leads sit, age for hours and sometimes days before use, and

effectively take shelf space until they are put “in process”

Wasting Lead Inventory

Here are the overlooked financial aspects of this lack of JIT inventory for sales leads By bringing leads in and allowing them to age, the company is increasing the risk that the lead will underperform or “spoil” by going elsewhere It is possible that the by setting the leads in the “warehouse” they will 1) need someone to “manage” the warehouse

(database) which means an added cost, 2) leads are collecting in the warehouse faster than they can be utilized on the production line, therefore, causing more spoilage, 3) cash spent on marketing and advertising which caused a large influx of leads over a short period of time cannot be reclaimed and is being poorly utilized as the result of the ad spend sitting “on the shelf”

Moving your sales organization to a JIT inventory can be effective but it needs to be a coordinated effort between sales, marketing, and management In order to effectively accomplish this methodology, it is important that many other factors such as Load

Balancing, WIP, KanBan, and the concept of a Visual Workplace all be adhered to as well