Tuesday 17 December 2013

Make Memories, Not Money

No, I haven’t lost my senses.  I’m asking you to think about what really brings customers through your doors.

Businesses exist to make money, otherwise they’re hobbies.  A business should cover its costs and make extra on top of that.  How much extra is down to the business, the sector in which it operates and how it treats its customers.

Think about it, businesses DO make memories - not all of them always good.  You only have to Google “Complaints about…” and name the company and you’ll usually find a long list of complaints, anecdotes of terrible experiences and (if you’re lucky) advice on how people managed to turn things in their favour.

What all these have in common is that they represent bad memories given substance.  It’s not just one person, but lots.  I often read buyer reviews on websites that allow them to see what people have thought.  Amazon gives a great illustration (if you look at the “1” reviews) of people who weren’t dissatisfied with products and often had problems obtaining either replacements or refunds from the supplier (assuming it wasn’t Amazon).  It’s these memories that influence whether I buy that product or not.  If you want a “real life” example, just look at the user reviews of OSX “Mavericks” – Apple’s latest operating system for its MacBook and iMac range of computers.  Some are balanced, but there are clearly some disappointed people out there…

So what are the memories you want to make for customers?  Remember, if they’re positive, you’ll see one or more of these:
  • Increased revenues
  • Increased profitability
  • Increased word-of-mouth recommendations
  • Reduced costs from handling dissatisfied customers
  • Reduced customer “churn”

Don’t underestimate the money to be made from creating positive memories.  Sadly, many businesses take a “transactional” approach without thinking about what brings people back for more.  What would you do if you had happy customers who told everyone they knew about how wonderful your business was?  

I remember a conversation with the then Minister of Tourism for the Bahamas who pointed out that yes, they had a lot of tourists, but he then asked “But how many come back for a second time?”  He had clearly grasped the point about making sure that tourists went away with positive memories.

By making positive memories for customers, your business will naturally make money.  Your task is to decide where your strengths and objectives lie in order to use the former to leverage the latter.



I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in the world financial services industry running different service, operations and lending businesses, I started my own Performance Management Consultancy to offer solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email . My website provides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

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Wednesday 11 December 2013

How Strong Is Your Supply Chain?

There’s a well know proverb that goes “A chain is only as strong as its weakest link”.  We apply it to many situations, but how often do we stop to think about how it applies to the products or services that we provide or on which we rely to provide our own products and services?

Recently, our home internet service went down.  Where we live, this is starting to become a “regular” occurrence, and we have the service provider’s helpline number committed to memory.  We can’t switch, because there’s only one service provider in our country.  So we have to live with and make the best of the situation.

The impacts of when we lose internet are that I can’t:

·      Work from home
·      Send emails
·      Surf the web
·      Attend conference calls
·      Order goods
·      Do research for clients
·      Stay up to date on current news
·      Do electronic banking (e.g. making payments or checking I’ve received them)
·      … and lots more

I have two children who are students, so they can’t:
·      Do research for projects, homework
·      Keep up with friends
·      Submit homework
·      Check emails form their teachers

We’re lucky in that we can go to the neighbours next door and ask if we can use their wifi, and my office isn’t too far away so I can use the internet there.  It’s not a total disaster, just inconvenient until it’s fixed (and our provider got us back up within 3 days).

The point is that all organisations dealing with customers have a “supply chain”, that is, a series of activities and processes that, when put together in the right order, result in the production of goods or services for which customers are willing to pay.  When something happens to disrupt this harmonious coordination of people, processes and production, there’s a problem.  Organisations then realise how vital a seemingly minor (on the face of it) aspect of the chain can be.  That’s when they identify their “weakest link”. 

The weakest link is often in the most unexpected place.  There’s a great story about a company which built its production plant on high ground to make sure that it didn’t get destroyed by floods.  The floods duly came, the plant was unharmed, but the workers all lived on lower ground.  Equally, suppliers’ warehouses were on lower ground, so workers couldn’t get to work and neither could supplies be delivered. 

Another company realised that the two staff who received telephone orders from customers were they key to its operation; with no purchase orders, they didn’t make money.

How do you go about identifying your “weakest link” (or links)?  To start with, look at what it is your organisation does.  Look at the: 
  • Customer base (who are they and what are their needs?);
  • Outputs (what it produces, and for whom);
  • Quality standards of outputs demanded by customers;
  • Where they go;
  • How they are delivered (road, rail, truck, courier, air, internet);
  • How your organisation gets paid for them (bank transfer, cheque, cash).

 Now step back one pace:
  • Where are these outputs produced (factory, call centre operator answering questions, etc)?
  • How do they produce them (machinery, computer, paintbrush, etc)?
  • How long does it take to produce?
  • Who else is involved in the “assembly” line?
  • What tools do they need?
  • Where are they stored/how are they accessed?
  • How many stages are needed to produce products/services?


Finally, look at the inputs (what is needed to for the production of goods):
  •  What do you need (it may just be electricity, internet service, a laptop and mobile phone)?
  • Who provides it?
  • How do they deliver it?
  • How do you pay for it?
  • How often do you need it?
  • How do you order it?
  • How long does it take to get there once the order is received?
  • What quality standards are needed?
  • Do you have more than one supplier available in case things go wrong?

Do this for both internal and external suppliers and customers.  It’s all very well to be focused on end buyers and suppliers, but remember that a team producing something may also need input from other departments or teams.  To this end, look at:
  • How they communicate;
  • Does one team produce output faster than the receiving team can handle it?
  • Do teams need “buffer stocks” of material to accommodate a team that produces more slowly?
  • How is quality assured between teams?
  • What happens if a mistake is spotted?
  • How many stages are needed to produce products/services?
  • How do staff get to the place of production?

 Think of the structure as “Output”, “Process”, “Input” (OPI for short).  I start with “Output” rather than “Input” because your goal is to deliver (output)  products/services to customers for which they may (or may not, if your organisation is a voluntary one) pay.  This order of looking at things puts the customer (the most important person) first and lets you plan backwards to secure your chain.

When Bangkok gets flooded, PC manufacturers who rely on “just-in-time” stock delivery have problems because a number of hard disk drive manufacturers are located there.  If you rely on just-in-time as well, bear this in mind.  Find out what plans your suppliers have if things go wrong.  Your output and process may be first-class, but you could be knocked over by a supplier who can’t deliver or by not having a backup supplier, and that will be your “weakest link”.


I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in the world financial services industry running different service, operations and lending businesses, I started my own Performance Management Consultancy to offer solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email . My website provides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.



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Tuesday 3 December 2013

Managing & Motivating

It’s “that time of year” when some of us have to give the usual end-of-year appraisal.  Many people I speak to dread it, no matter whether they’re the “appraiser” or the “appraise”.

Why is this?  Generally, the answer lies in several areas:
  • Your performance appraisal determines your bonus or salary increment, so you want it to be as high as possible.  Deep down, you know whether you’ve produced a “meets standards”, “above standard” or “below standard”.  If you’re the “appraiser”, perhaps you have a number of appraisals to give, and you have a good idea of who is meeting, exceeding or not meeting the standards required.  You may be dreading the report to whom you have to give a “doesn’t meet standards” rating because you know that he/she will try to “argue it up”.

  • This is the one and only appraisal meeting for the entire year.  Both of you dread it.

  • Things have changed during the year.  The targets you were set become irrelevant barely 3 months after being set.  Nothing has been done about changing them.  If things have moved against you, there can only be one result, but it’s not really your fault.
  • You’re unprepared, with no (or very little) supporting evidence to back your judgement (appraiser or appraise) because your systems aren’t up to it. 
Sound familiar?  Many of my clients have one (or more) of the above issues.  One recently told me of an issue that was brought up to justify a lower grading;  the event had occurred eight months earlier, and no feedback had been given.  

A lot of it can be put down to several key causes:
  1. Failing to agree targets early enough;
  2. Failing to define and agree the performance standards and measures to be used;
  3. Incomplete, inconsistent or untimely data;
  4. Failing to provide feedback regularly/unwillingness to give “bad news” in a timely manner.
  5. Failure to change targets if circumstances dictate.  Not changing when circumstances move against you or in your favour can only result in a justifiable complaint;
  6. Unrealistic expectations of appraise or appraiser;
  7. Lack of support during the year;


All of these can happen in any organisation.  Some of them may be “cultural” issues, some may be more “systems” related (e.g. lack of valid, consistent and timely data).  In the end, many simply see the Annual Performance Appraisal process simply as a massive “box ticking” exercise and try to get through as painlessly as possible.

What can you do to improve things?  Firstly, it has to come from the very top.  Management needs to set clear, measurable and understandable targets.  Some organisations try a “bottom-up” approach in an attempt to achieve “buy-in”, but then turn around and say that the targets staff suggest aren’t “challenging” enough.  This is bizarre, considering they have come from the very people who deal with the customers, suppliers, machinery, processes etc that make the organisation’s money.  There’s a clear disconnect between what management want to see and the “shop floor” actually knows.

Second, let go of “1-year targets”.  The world can change in 3 months. By all means have an annual goal or vision, but be flexible enough to change it.  Work from quarter to quarter.

This brings me onto the next suggestion: agility.  The organisations which survived the recent crisis best were agile enough to react to changing circumstance whilst pursuing their vision.  You don’t have to be a small organisation to do this, but smaller organisations usually have the management structures to allow them to do it better than large organisations.

Information is key.  You need the right information, in the right format at the right time to decide what to do.  Bulky lists of figures received 2-3 weeks into the following month about last month’s performance that need a degree in code-breaking to understand them are no good.

Timely feedback is essential; the end of year appraisal shouldn’t come as a surprise because reports and managers have been discussing performance throughout the year.  All-too often though, managers wait until the last appraisal to break the bad news.

In short:

Hold regular formal and informal meetings;
Make sure you agree on targets and how they will be measured;
Make sure your information is valid, consistent, timely and supports decision-making;
Be honest (not brutal);
Create the conditions for success (budget, people, equipment); don’t tie someone’s hand behind their back and send them out to fight.

Ask yourself what you do to support and what support you need.



I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in the world financial services industry running different service, operations and lending businesses, I started my own Performance Management Consultancy to offer solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email . My website provides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

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