How to sharpen the curve?

After I published the previous article [1], I could not stop thinking about the Tough Timers.

We at TOC Sales and Marketing (a Focusate Group company) spent a decade on the front line of sales and saw a lot. We rescued plants who made unrealistic investment decisions, recovered those who lost key customers, broke through after the sales curve was horizontal for years.

We’ve been always dealing with organisational chaos, excess capacity and high pressure. 

The solution has been always the same, very simple while not very easy: 

1. Make sales a flow [2] (implementation of a four-week project regardless of the size of the organisation)
2. Keep the flow running steady (we dedicate missing professionals to help execute the plant sales process)
3. Improve the flow (Theory of Constraints tools in action)

In 2 weeks of lockdown, the majority of plants worldwide became Tough Timers. There must be millions of manufacturers who suffer severe symptoms like:

• sales declined due to significant volume of customer orders are canceled or postponed,
• sales team is doing what they can, but cannot compensate the drop.

They really can’t because current customers cancel orders instantly while new contracts with the alives can be closed only after a sales cycle of a few months is over. 

So operating expense starting from April 2020 will be much higher than throughput (or contribution, as you probably call it) .

If sales don’t catch up, the plant has no option but to do furlough or layoffs.

THE WIND OF CHANGE

One of our own plants that produces interior hardwood products became a Tough Timer too (another of our facilities that produces safes is almost fine). We immediately reallocated all sales people to rescue own plants rather than provide Sales Factory service for external customers after a few of them quit the game.

Worth mentioning that even though our plants were good at selling before the crisis (the processes, division of labor, CRM, etc.), now they would have sucked if we hadn't added more sales people - thinkers and doers - to stay in the game.

What can you do?

If you’re IKEA preferred supplier for furniture, honestly I have no idea how to stay in the game. If you’re a manufacturer of demolition robots for the mining industry with a warehouse full of stock, hm, I’m sorry too. A large ship that floated on the shallows is now stuck until flood tide.

But if you’re flexible enough to catch a wind, there’s good news: the ocean has never been so rough!

Majority of supply chains got shocked and froze (automotive, IKEA, non-essential goods, fashion, etc.)

Minority got shocked and boomed (medical equipment and gear, daily food products, liquid disinfectants, guns and ammo, tissue paper, notebooks, packaging, etc.)

So it’s like a complete change of the wind in demand. But still not the root cause for waves. What is it?

It is capacity variability.

COVID-19 hits factories not only indirectly but also directly. One positive case on the shop floor triggers the whole shift or department to go off for two weeks minimum. Lucky you if the capacity constrained resource (the first candidate to become the bottleneck) is located in another department. But if you're a lean organisation with “well” balanced (and little excess) capacity, each loss in capacity means loss in output.

In other words, very few are able to deliver what was promised if they lose a shift or department. Probably, it’s more realistic to think “when they lose” rather than “if”.

This daily changing wind of capacity, or supply, moves orders in bulk from infected manufacturers to those who are still OK. COVID-19 not only makes the most reliable factory a loser over a week, but also gives a chance for the fellow suppliers who have been losing competition for years. 

Now is our time, fellows, to catch a wave.

(Regardless of other efforts, I encourage you to simply keep telling your potential customers you have capacity. If your customers work in a booming supply chain, there’s a great chance they will need to activate a backup sooner or later by lockdown ends.)

ONE IN A MILLION

Even though there are millions of Tough Timers, at TOC Sales and Marketing we have capacity to service only 1 more. We’d love to do it for free and thus contribute to the global fight against COVID-19. When sales go up, people save jobs - what a chance!

We’re looking for a plant in Europe and USA which:

• faces biggest ever decline in sales AND
• has a sales team busy on mitigating sales drop AND
• has technical capabilities to supply for booming supply chains AND
• is quick in decision making.

This organisation does not want to give up. They desperately need to quickly catch new wind and change the course. To be more precise, they need new products/offers to win new customers in new markets. And they need experienced no BS doers for this to happen in weeks, not months.

If only there were a special force that could conduct a special mission to sharpen the sales curve, they would probably call it.

NAVY SALES

This is what my team got ready for after the lockdown shock. I believe we can deliver this even if it may seem unrealistic in time.

#1. Crisis segmentation and unrefusable offer (1 week)

If there exists a market for anything your plant can technically produce, together we’ll define it. Then we’ll do cause-effect analysis from customer and product/service perspectives, find a root cause and resolve it - all is done using so-called Thinking Processes. To quickly come up with an initial solution it is necessary to involve in the workshop data driven senior executives with technical expertise.

While the action plan is under rapid implementation (R&D, internal changes in operations), the offer is finalised and documented using Layers of Resistance so the sales team was equipped for hunting. 

During the peace times, it used to take a month or two to make unrefusable offers, mainly due to fighting for management attention. For the last two weeks the “only” time killers are kids at home. Seriously, so far it was the hardest issue in the process!

A week’s lead time is not an extreme: we once locked with executive students - plant managers - at ISM auditorium and succeeded to make 6 mafia offers over the weekend! [3] 

#2. New flow of opportunities (results seen in 2 weeks)

If your sales team is overloaded with customer retention issues, this is fine. I mean, it is the right time for them to focus on keeping current business.

What I suggest is to add more professionals who will focus only on finding new customers and passing these opportunities to your sales team to close. Amount of “more professionals”, working at TOC Sales and Marketing is limited and determines our Navy Sales capacity. [4]

Navy Sales consist of Lead Collectors (who do nothing but search companies according segmentation criteria), Business Development Coordinators (whose job is to find and reach decision makers, the busiest people in the world), a PM (who manages the flow) and analyst.

It takes a week to set up the process, internal communication rules, IT systems, marketing materials. Another week is required to see market responsiveness and feedback. For sure there will be a flow of new opportunities: quite slow in the beginning but much faster every day.

If your company does not have a CRM, we will implement Odoo CRM TOC edition, I believe, in a week, for free. Our software developers from Focusate spent half a year on coding TOC fundamentals into CRM to make it implementable in 1-2 weeks.

#3. Adjustment of segments and offer, then go to step #2.

The flow of opportunities generates either orders or information about why customers reject or procrastinate [5]. Based on market feedback the segments and the offers are adjusted and the new version is quickly tested in reality. This principle is popular in managing uncertainty the TOC way: start with the best guess, monitor signals and react quickly.

***

Will this work for your plant? If your intuition says “no”, then “no”. 

But if intuition approves Navy Sales help, let’s discuss “yes, buts” on Linkedin Messaging, then online. 

We asked a couple of fellow customers for references in order to encourage you to ask for help [6].

***

ANNEX

[1] How to hibernate the COVID-19 crisis (published on March 24, 2020)

[2] This is how sales opportunities flow looks like (real data)

[3] My post on mafia offer workshop at ISM Executive School last semester

[4] The last photo of the part of our TOC Sales and Marketing team before the lockdown

[5] Out of many reports we use, I like these 2 the most:

a) Load to Capacity charts remind us of times when face-to-face meetings were part of the business. 

b) Diagonal Buffer chart shows how opportunities move forward (to the right) given their expected trajectory in time (green is good, red is bad, black is very bad).

[6] Customer References

By Tadas Sprindziunas, Commercial Director at KG Group LT

I have to admit that our cooperation with the TOC Sales and Marketing team resulted not only in the successful deployment of the CRM software and Tableau analytics tools, but also let us to move our sales processes and culture to a whole new level.

First of all, we identified the export and local market sales processes, wrote down the sales stages, terms, and other details that made it possible to standardize this "living organism," which is usually subjectively judged based on each salesman's seniority and reputation within the company. If you have had some deeper insights into how companies sell goods or services, I think you understand what I have in mind. Especially when we talk about more complex products or long-term projects you can hear very different stories on how to do it. Such stories have a tendency to repeat, the only difference being the customer.

Thus, by standardizing the sales process we got the opportunity to look at everything objectively. By identifying the sales process stages, we have characterized what and when we have to do in order to move forward through the sales process. This is how the rules of division of responsibilities and functions (staff regulations) were born organically. Administrative activities were crystallised and redirected to lower-skilled workers, freeing up precious salesman time for more value-creating activities.

Another important point is the weekly Stand-Up Meetings. Using Skype (or any other online collaboration tool) all sales managers, wherever they are in the world, connect and present to the managers and other team members about late and today's Opportunities. Short, few minute briefings of everyone according to CRM agenda, gives you a “BBC news” level overview of the sales and marketplace situation. Such meetings include not only Sales but also Marketing and other related staff.

And the result of all these activities is crowned by Tableau reports (weekly, monthly, etc.), which allow to quickly observe the dynamics of sales progress, the number of opportunities won and lost, and most importantly the salesmen's sales perspective in terms of volume and time.

And back to the TOC’s team - professionals, converting theory into easy to understand and apply solutions. People are always available to help! :)

Reference by Ramūnas Stani?auskas, Head of Quality and LEAN at Girteka Logistics

TOC Sales and Marketing team has been a valuable business partner for Girteka for over a year. I very much appreciate their input to transforming Girteka’s sales organisation, as well as deep knowledge, result-oriented approach, and professional manner of identifying pain points and delivering solutions to such a huge corporation as ours.