I’m a big fan of Discogs. I use it primarily to keep track of my music collection. Hopefully this article and the work they are doing there can turn the organization around.
How Discogs built — and broke — a community of diehard music fans and sellers.
Source: Discogs’ vibrant vinyl community is shattering – The Verge
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Rindge Leaphart
If Amazon doesn’t care, I sure do! Welcome back Barnes & Noble.
Barnes & Noble is the US’s largest remaining book chain but, under James Daunt, each of the 600 stores is meant to run like an independent bookstore
Source: ‘Amazon doesn’t care about books’: how Barnes & Noble bounced back | Barnes & Noble | The Guardian
Brief, but decent article on labor shortages in trucking, that I suspect is applicable to most industries suffering from lack of workers. However, I think the article overlooks that even with rising wages, there is a shortage of workers. Salary is obviously important, but not the only factor keeping workers on the sideline.
The US has plenty of licensed truck drivers, but there’s a shortage of well-paying jobs that would entice them to stay in the trucking industry.
Source: There is no truck driver shortage in the US — Quartz
Rindge Leaphart
Several interesting points in this brief article. An interesting tidbit was that loyal customers value discounts and promotions less than other key items, such as trusting the people at the business and their capabilities. That would be a key reason the sales team and I constantly discuss “Serving With Excellence” because in certain segments, service is valued much higher than discounts. Enjoy.
Rindge Leaphart
If you’ve been following my work, you know I preach that there is a difference between repeat customers and loyal customers. While loyalty is the goal, I’ll take a repeat customer—for the right reasons—any day.
Source: Three Out Of Four Customers Are More Loyal To Your Employee Than Your Business
A brief, but good article that covers many key points in running a business including:
Enjoy!
The public image of a soggy, disintegrating paper straw is inaccurate, says maker of paper straws
On a recent excursion for groceries with my 12 year old, I was reminded that: 1. Kids observe the most interesting things and 2. Employee hiring, management, and engagement practices do positively impact the bottom line.
In need of groceries for la familia, the 12 year old and I jumped into the car for what is inevitably a long trip because for one reason or another, I can never find everything I am looking for in one grocery store. On this particular weekend day, we find ourselves visiting three different stores. The first store was a disaster because many of the shelves were barren. Additionally, as a fruit fanatic I was disgusted (once again) by the fruit flies hovering in the fruit section. (Side note, I have previously spoken to the store manager about the fruit fly issue and pointed out to him that his competitor – literally across the street no less – does not have this issue. Said manager didn’t seem all that concerned with my feedback). This particular store (whose name rhymes with toga) is a national chain, not a small mom and pop place. After not finding many of the national items I was in search of, I decided it was time for us to leave (without purchasing anything at all).
We then headed to the competitor across the street. This particular grocer (also national – actually global – in scale), that takes pride in offering low prices was better in terms of stocked shelves. I believe (but I could be wrong) that because of this company’s focus on keeping costs low, they are always low on staff. They must have 8-10 registers that are meant to be staffed by humans and no more than 2-3 are ever staffed. Also, you don’t see many employees walking around the store that you can ask for assistance. The lack of employees on registers does not seem to be a big issue because it rarely takes long to check out as not many other customers ever seem to shop at this store. I’m not quite sure how this particular location stays open.
We then proceeded onto the third store – Trader Joe’s – for what always turns out to be somewhat specialty items you tend not to find anywhere else. As usual, Trader Joe’s has lots of traffic and yes the shelves are always stocked. Even though the store was busy we were able to check out quickly. We probably spent no more than 30 minutes in the store. Upon exiting the store, my 12 year old informs me that Trader Joe’s (I believe this is the first time I have taken her to Trader Joe’s) is her favorite grocery store. I asked her why and she made what I found to be a very interesting observation (so interesting I decided to write a post about, want to read it?) Her comments were along the lines that everyone in Trader Joe’s seemed happy and were nice. They seemed to enjoy their jobs and everyone had a smile on their face and greeted you with a smile. I have previously written a post on said subject: https://rindgeleaphart.wordpress.com/2014/05/26/customer-facing-employees-with-the-right-attitude/ I am not sure of what Trader Joe’s does differently (employee selection, pay, training, or some combination thereof) but it works. Upon further discussion with my daughter she was spot on; the employees at Trader Joe’s did seem much happier, they did smile, and that was radically different from the other stores we visited that day. When my daughter starts shopping on her own, I suspect she will make a beeline for Trader Joe’s. The lesson? Probably many based on your perspective, but for me a great reminder that customers appreciate doing business with others who are pleasant to deal with and who seem to genuinely enjoy their job. Customers can tell, especially 12 year old kids.
Rindge Leaphart
I’ll cut to the chase on this post. Recruiting customer facing employees with the “Right Attitude” drives customer satisfaction and increased spend. The genesis of this post is based on my grocery shopping experiences. I frequent a number of grocery stores on a regular basis. There are several, though, that I am going to comment on in this post. I am always impressed when I interact with employees from the following grocery stores: Market Street, Whole Foods, and Central Market. In my experience, these stores generally have higher prices and in some cases less selection than other grocery stores I frequent. Even with higher prices and less selection of the foodstuffs that interest me, I continue to frequent these stores. Why? The employees. When I interact with employees from these stores, I am always impressed with their customer facing skills. The employees exhibit a number of traits that I do not find in other grocery store employees. These traits are as follow:
I have a recruited a number of employees in the past and while you can teach employees technical skills, I am not sure you can teach them the traits outlined above. What I find interesting is that the majority of the employees I come across in said stores seem to all have the same type of positive attitude. Hats off to the leaders of these stores for recruiting front line employees with the “right attitude”. I suspect employee pay at these grocery stores is higher than at others. If so, this is a great example of why paying more to recruit talented employees is worth it. I am sure there are many other factors at play beyond salary. Whatever they are, there is something to be learned from these companies and their recruiting policies. People often talk about the great service provided by Nordstrom. I believe employees at Central Market, Whole Foods, and Market Street are another example of how recruiting employees with the right attitude can positively impact financials. Because of these employees, I gladly drive out of my way and spend more than I typically would on groceries. I think the image I found below drives home the point. Your thoughts?
Regards,
Rindge Leaphart
http://www.linkedin.com/in/rindgeleaphart
https://rindgeleaphart.wordpress.com/
During my last post (http://wp.me/p2kKle-C), I discussed On-time Delivery (OTD), its importance, and a key step to improving OTD. Let me take a quick step back. The thoughts that I am sharing are not brilliant strategic insights. They are insights learned over the years about how to significantly improve operational performance. As stated in my earlier post, many small to medium sized companies don’t focus on these small ideas, which deliver outsized gains. These posts are focused on doing the seemingly little things that need to be done to make sure the big things (revenue generation, customer satisfaction, etc) get done. Now, back to our regularly scheduled programming.
So you have kicked of your production meeting. What is next? Or more appropriately, what other activities should you be working in parallel? Before I move on to answering that, I want to stress the importance of guidance, leadership, and behavior modelling to attendees of the production meeting. If you have a need to put a meeting like this in place, there is a good probability that people are not accustomed to performing at the level your organization wants or needs. People may not have an idea of what they should and shouldn’t do. People may not be sure what to do when they reach a crossroad and have to make a decision to improve performance. With regards to crossroad, I am not referring to a moral dilemma, but instead a business dilemma. This is where your leadership is most important. At the early stages of the production meetings you have to consistently and constantly model the behavior you want them to emulate. You have to demonstrate to them your thinking process when it comes to making decisions. You have to show them how to do the right thing and not the easy thing. You don’t want them to become clones of you, but you want them to think and do things differently than what they were doing. Many people don’t need to be told what to do, but they do need to be taught how to fish. I do believe this is quite important because it sets the tone for the organization. It also pushes people outside of their proverbial comfort zone and causes them to start thinking differently, and hopefully acting differently.
Okay, I’m off of my soap box. In conjunction with the production meetings, you probably need to do things differently in your purchasing organization as well. Over time, I have come to find that organizations neglect the data in their ERP/MRP systems. As such, the data is outdated and causes havoc within your system. I strongly suggest that the purchasing team scrub the data in the system. Specifically, scrub lead times to make sure they are accurate. Scrub buyer codes and make sure each part has a valid buyer code for someone in the purchasing organization. It never fails that an organization overlooks the purchase of a critical part because it had a buyer code of someone who no longer works for the company. While you are at it, make sure the manufacturing group is also scrubbing your Bill of Materials (BOM) to insure that routings, revision numbers, etc are all correct. Cleansing the data is a time consuming task, but it has to be done. My view has always been to get it done as quickly as possible. Please do not overlook the importance of cleansing your system data. It is neither fun nor easy, but it pays huge dividends.
I will discuss other steps in future posts.
Rindge Leaphart
The Operational Turnaround – what they don’t Teach you in Business School: Part 1
As my 15 year reunion looms, I decided to share my thoughts on operational turnarounds at manufacturing / assembly / distribution companies. I learned a lot at business school, but I can’t say what I learned really helped with my first operational turnaround. Don’t get me wrong, I picked up some great concepts at b-school, became more adept (like everyone else) at analyzing large amounts of data, and learned how to identify core issues to resolve. And while those skills came in handy, they were not what brought the ultimate success at my first or latter turnarounds. By no means am I disparaging business school or the valuable education experience one gets. Is there more business schools can do in this area? Maybe. At business school, we tended to focus on broad strategic issues, which most of us want to go on to face someday. I also took several operational strategy courses, but once again those focused on broad strategic issues. There was no class on how do I deal with a $50 million manufacturing division that is A. not delivering product on-time, B. that has a host of angry customers, and C. is not collecting cash from customers in a timely basis and in fact has over $1 million of receivables older than 6 months. How do I deal with a division where everything that can be broken is broken? Fortunately, at business school I was forced to work harder than I ever did before and that skill came in handy with my first and latter turnarounds.
One of the keys areas that I have found that often gets overlooked with small to medium sized companies is on-time delivery (OTD). In several cases I have found that companies don’t even measure OTD. From my perspective OTD is one of the most important keys to customer satisfaction, which is the key to revenue growth. If you don’t deliver on-time, your customers will find someone else who will. Some customers are loyal and will point out to you that you are not delivering on-time, but they eventually will leave if you don’t get it together. Typically in this scenario you may also find a significant numbers of past due orders, which obviously translates into sales that haven’t been completed and thus cash that has not been collected. So what do you do in this situation? I have seen many companies initially focus on reducing past due orders. My experience is that is the worst thing you can do. By focusing on past dues you take your eye off of current orders, which will in turn go past due if you don’t have a mechanism for keeping orders from becoming delinquent. This point was driven home to me with my first turnaround. I had 3-5 material expediters chasing past due orders. In a chance conversation with them, I asked: “if you guys are chasing past dues, who is focusing on keeping orders current?” Their collective response was: “the system” aka MRP / ERP. That is when the proverbial light went off in my head and we made major changes to our operational group. If you find that your company is not delivering on-time, I suggest the ideas that follow. Make sure you have a DAILY production meeting. At that meeting make sure you have members from production, scheduling, purchasing and customer service. If you don’t already have a daily production meeting be prepared for a lot of griping from team members. Don’t be swayed. Require them to meet every morning to discuss current and upcoming orders. Require them to look at orders that are due to ship in the next 5-10 days. Require people to discuss any material or production issues with the orders. If there are issues, press them on their recovery plan. Make sure you drive home the fact that there is an organizational wide focus on OTD and that they have to do their part in making sure orders ship on-time. There is no magic to this, just plain old fashioned hard work. If you are having issues with orders not shipping on-time, this is probably the most important step you can take to improving OTD and thus customer satisfaction. In upcoming posts, I will describe other critical steps that one should consider in an operational turnaround.
Regards,
Rindge Leaphart
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