• Getting lean and staying lean…without an office linebacker

    11 July 2011
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    I had a mid-year Board meeting last week, and it was déjà vu to hear the executives from other companies talk about the economy.  What did they say…again?

    One theme was making sure you’re selling smart – focusing on your best customers and your best offerings – and doing more of what is most profitable and less of what isn’t.

    An even bigger theme was to get lean, and stay lean – don’t do things the way you’ve always done them.  Instead, look for ways to get more efficient – whether that means changing people, moving people to new roles, redesigning processes…

    In the meeting, my mind couldn’t help but go to the ads with Terry Tate, Reebok’s Office Linebacker for Felcher & Sons:

    How do you get lean – besides hiring a linebacker?

    There are 5 different levers that I use with my clients to get lean, or leaner – people, processes, structure, compensation, and measurement.  We’ll talk about all of them on our upcoming teleseminar (register here), but let’s look at measurement in more detail here.

    Why measure?  Virtually every measure I’ve worked with has told me something about the business that our instinct didn’t (and couldn’t) tell us.  It’s what really is happening in your business – what do you really sell, who are really your best customers, how much time do people really take to do that.  It shines a light that almost always tells you something – and often something useful and surprising.

    Unfortunately, as anyone who has tried to create metrics will tell you, it is not as simple as it seems.  Most people start with good – and big – intentions, but they typically run into trouble in 2 ways.  Either they aren’t clear about what to measure, and so they create too many measures; or they don’t take into account the time that measuring is going to take, and so they create an administrative nightmare that collapses after a month or two.

    So, how do you create metrics?

    First, plan to spend some time on it.  This is going to take you and your team 5-10 hours to talk about and think through.

    Second, ask yourself what the 3-4 activities are that you have to get right to be successful.  This will take some time – your first answer might be “Serve customers well,” but after some time (and asking yourself how you’re going to measure that), you’ll get to, “Meeting with the VP of Marketing once a quarter and with the CEO once a year” or “Completing the customer needs assessment once a year.”

    And lastly, look for simple ways to administer the measures.  I read a great example a few years ago about a company that gave everyone different colored marbles, and each day people dropped the appropriate marble in a jar as they left for the day.  At the end of the month, someone counted the different color marbles.  Similarly, I often recommend using a simple sheet of paper with check marks when possible.

    The value of metrics is in their specificity, but that’s also what can make them so challenging.  It’s almost assured that you will not be able to have the specificity you want, because it’ll take too much administration.  So, once you’re clear on what you should measure, then think about what easy measuring system can give you most of the information you need to know whether you’re on track or not.

    Getting back to the Board meeting, let’s combine the two thoughts – selling smart, and getting lean.  What are some measures that could track how well you’re selling:

    –          Proportion of customers who buy more than one offering

    –          Proportion of proposals accepted

    –          Profitability of each job/project (if it’s hard to measure, just use Hight/Medium/Low)

    –          Number of hours needed to close a prospect

    –          Number of hits on the web site

    You get the idea.  There are lots of possible measures, and the ones you should look at depend on what you want to improve in your business.

    We’ll talk about all 5 productivity levers – besides hiring an office linebacker, that is – on our teleseminar.  (Register here.)

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