November 16, 2006 - Distribution Channel Commentary (DCC) # 94

November 16, 2006 - Distribution Channel Commentary (DCC) # 94

 

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If you know what these commentaries are about, go to "TOPICS" below; otherwise, read on.

 

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TOPICS:

 

1.      THEMATIC QUOTES FOR THIS DCC AND ’07 NEW YEAR.

2.      REPUBLICANS LOST THE VISION; HOW’S OUR’S FOR PROFIT POWER?

3.      COLLABORATIVE SPACE ON “PEOPLE, SERVICE, PROFITS” HOW TOs.

4.      SIX, CULTURE-OF-INNOVATION “MEMES” (SLIDE SHOW # 18 POSTED).

5.      HOW TO MAKE THE KEY ACCOUNT “5-5-5 REPORT” HAPPEN.

6.      “COMMON SENSE ECONOMICS” FOR EMPLOYEES (DVD promo prices).

7.      SOFT LANDING OR TOUGH RECESSION – REPORT WITH GOOD SLIDES.

8.      DO WE HAVE THE SEABISCUIT SPIRIT FOR 2007?

9.      IN CLOSING, “When the one great scorer…”

 

1.      THEMATIC QUOTES FOR THIS DCC AND ’07 NEW YEAR.

 

“Give us clear vision that we may know where to stand and what to stand for--because unless we stand for something, we shall fall for anything.”          Peter Marshall (U.S. TV game show host)

 

“Vision without a plan is a dream; a plan without a vision is a nightmare.”     Unknown

 

“There is nothing so useless as doing something efficiently that should not be done at all.”

      Peter Drucker

            (DBM question: Why do we continue to let 1% of our accounts cost us 20% of our profits?)  

 

“An idea not coupled with action will never get any bigger than the brain cell it occupied.”

            Arnold Glasow

 

2.      REPUBLICANS LOST THEIR VISION; WHAT’S OURS?

 

Since our last commentary, the biggest news might have been the “thumpin” that the Republicans took on Election Day by losing both the house and the senate to the Democrats. The Democrats ran more conservative-sounding candidates who ran against, among other things, a “culture of corruption” just as the Republicans successfully did with their “contract with America” in 1994. But, that ’94 contract also had a national vision to reform government and return money and power back to the American people. Newt, Armey & Co. even had specific action steps that they were going to pursue to fulfill that vision. We’ll have to see if the Democrats can now conjure up a compelling vision beyond the same “bringing home the bacon”, local politics, fiscal irresponsibility that the Republicans drifted into.

 

Doesn’t the Republicans regression back into politics as usual over the past 12 years beg the question of: what is our vision that actually speaks to and makes sense to all of our stakeholders – employees, customers, suppliers and shareholders? And, how do we distill that vision down to a catchy bumper sticker phrase? I believe that any service company can adopt FedEx’s motto of “People, Service, Profits”(PSP). This presumes that we can dive deeply into this tip-of-the-iceberg phrase to fully educate all stakeholders who will then help us make it happen in a continuously improving way with no regression to mediocrity.

 

If you would like a quick refresher course on how motivating and effective this motto can be, here are a few references to check out:

·          Read about how the service profit chain works and reinforces itself in this article of ours:  http://www.merrifield.com/articles/3_7.pdf.

·          To tune service metrics to the right customers in the right niches we will need to explain the competitive strategic game of business to all employees. Here’s a how-to article: http://www.merrifield.com/articles/5_8.asp.

·          Because neither article defines specifically what the metrics are for “great service” or specifically who your best customers are in your best niche to tune those metrics around, you might want to read these two notes: “How To Define Perfect Service” http://www.merrifield.com/articles/3_1.asp; and, “Measure Customer Profitability and Act” at http://www.merrifield.com/articles/2_3.asp.

·          How fluent are we in communicating the 4-way-win, stakeholder symmetry theory? If that sounds like nonsensical jargon, then for a refresher on how to use the advice above to grow the pie for a 4-way win consider skimming this one: “Growing and Coordinating Stakeholder Commitment” at http://www.merrifield.com/articles/2_6.asp

 

I could go on, but will close with these key objectives for the bottom 80% of every service organization’s payroll:

·          Make sure that every employees’ heart, mind and wallet are wired into the metrics and gainsharing that flows from the PSP vision stuff above.

·          And, know that it can’t happen if every employee doesn’t know the answers to the following quiz.

 

SERVICE ALIGNMENT QUIZ: (vision quest energy check)

A)      Describe our number one niche of customers that we seek to provide distinctively better service value to.

B)      Who are the 5 most profitable customers in that niche who we use to tune our service metrics and extra services for best customers?

C)     Who are our top 5 target accounts in that niche for whom the answer is “Yes” regardless of their special needs?

D)     If we can partner those target accounts, as they grow faster than their industry, won’t they grow us too? True or False?

E)      What service metrics do we measure and post everyday to let everyone know whether we are achieving and maintaining the best service in the marketplace?

F)       What do you do directly and indirectly to make sure that even during high-order, under-staffed times, we keep the service faith promise with, at least, our best, most profitable customers?

G)     Why should you care about all of these questions and answers? What’s in it for you? (WIIM) How are you continually educated and reminded about continuously improving and WIIM?

 

3.      COLLABORATIVE SPACE ON “PEOPLE, SERVICE, PROFITS” HOW TOs.

 

If you would like to stay in touch with PSP vision management, then go to my collaborative space entitled: “PSP Scorecards and Systems” which is at a website entitled near-time that is a collaborative web service for all. Although this space is open to the public, you have to know about it to get there, so hit this link to express your way in:

 http://psp-scorecards-and-systems.near-time.net/news

 

  

4.      CULTURE-OF-INNOVATION SLIDE SHOW # 18 POSTED

 

Regular readers and Merrifield.com site visitors know that I have been wrestling with how to boil down all of the great new research on “innovation management” so that “small-medium enterprises (SME)” can apply it to their own firms in a substantially do-it-ourselves manner instead of paying fancy firms millions to do it for you.

 

My latest attempt is to offer six “memes” (a unit of intellectual knowledge that can jump from mind to mind within a close population) that every business should be practicing in one way or another within their firm to create an environment in which maximum change for the better can happen. So, check it out at this link: http://www.merrifield.com/articles/SixCultureOfInnovationMemes.pdf

 

5.      HOW TO MAKE THE KEY ACCOUNT “5-5-5 REPORT” HAPPEN?

 

Regular readers again will know how keen I am for branch managers in service chains to focus on about five customers in each of three categories in 2007. They are:

·          5 most profitable accounts which should be totally team sold to not only keep from losing any business from them, but ideally to take them to a next level relationship with further penetration. There is nothing with higher flow-through impact to the bottom line than selling more old items to existing customers on a larger average order size basis.

·          5 best target accounts (based on what weighted, selection criteria). Marry gazelles and they will grow you.

·          5 biggest losing accounts which need to transformed into profitable accounts by re-organizing how both parties buy and sell to reduce small transaction activity costs that are hurting both partners.

 

To help field and sales managers really understand why this type of focus is the most strategically effective thing that they can do and then figure out how to do it, because most reps assigned to such accounts can’t, we have compiled a 30-page training kit in a PDF file. If you want to check it out, go to this link:  The 5-5-5 Kit

 

6.      “COMMON SENSE ECONOMICS” FOR EMPLOYEES (DVD promo prices)

 

Below is a link to a book review article on a book entitled, “Common Sense Economics”. What’s great about the article is that it summarizes the top 10 economic concepts that every company, and especially every one of our employees, needs to know very well. The rest of the book, according to Amazon.com reviews, is a bit up and down.

 

To be honest, one of the reasons I liked the quick review of the top 10 concepts is that just about every one is addressed in distribution specific language in the first 12 modules of my DVD-based training kit entitled: “High Performance Distribution Ideas for All”. Read the review and decide if 2007 is the year that your company should educated all employees to be part of the service-improvement, profit-growing solution or be part of the passive resistance problem. If so, you will want our revolutionary training tool, and between now and the end of the year we have “New Year Special Pricing”. Contact Karen@merrifield.com for details.

 

Here’s the link to the book review: http://www.townhall.com/Columnists/WalterEWilliams/2006/11/08/common_sense_economics.

 

7.      SOFT LANDING OR TOUGH RECESSION – REPORT WITH GOOD SLIDES.

 

On 11-15-06, the Federal Reserve released their minutes from last month meetings. The gist of it was that they think that they have the interest rates just right and should plan on holding them for a long time. The Fed Heads are telling us that we will have a soft landing in our economy, so we don’t have to pay any attention to the still-looking-for-a-bottom, housing and domestic auto industries declines.

 

Well, two things that I know are that:

·          It’s impossible to forecast accurately what will happen in both turbulent weather and economic systems. Right now we have a housing slump in the making the likes of which we have never seen, and a global financial system awash in liquidity with unprecedented hedge fund money racing into financial derivatives on top of derivatives that no one really understands. Be vigilant and ready to act quickly.

·          The Fed hardly controls the global and US economy with the ability to make and take money supply to fix short term interest rates. The world of structured, leveraged financial products is creating unprecedented amounts of dollar-denominated, credit units (which is money to buy stuff) which is floating all markets, paintings, etc. higher.

 

So, for an interesting, succinct summation of the housing bubble and the credit bubble behind it, here is a link to a report that has great graphs. What amazes me about the graphs are the changes in the acceleration rates behind the lines on the graphs. See what you think at:

 http://www.safehaven.com/article-6292.htm.

 

8.      DO WE HAVE THE SEABISCUIT SPIRIT FOR 2007?

 

Part of doing well in 2007 by investing in continuous improvement and discontinuous innovation is having the right spirit. We have to want to go for it knowing that as long as we limit our downside risks through cheap experiments, there are no bad outcomes. Sometimes an athlete or a race horse comes along that just has a terrific winning attitude. For any of you who either read the book Seabiscuit: An American Legend by Laura Illenbrand or the saw the movie spin-off starring Tobey Maguire, you might enjoy reading the recap of the actual race by one of the greatest sports writers of all time, Grantland Rice. Here is the link:  http://www.secondrunning.com/seabiscuit_war%20admiral.htm.

 

9.      IN CLOSING, “When the one great scorer…”

 

The reference to Grantland Rice’s article above reminds me of two phrases that were chiseled into things that I saw most everyday – and therefore into my mind – when I had the privilege of attending the 6th and 7th grades at the Pingry School in New Jersey. In the wall that greeted us as we came in from the playing fields was this quote:

 

“For when the One Great Scorer comes
To write against your name,
He marks-not that you won or lost-
But how you played the game.”

                                                            Grantland Rice

 

And, in a simple, but big, strong table that stood on the stage in morning chapel there was another quote:

 

            “The Fear of the LORD is the beginning of wisdom”

(Psalm 111:10)

 

What was going on with my learning process at that time? Some other relevant quotes might help at this juncture:

Repetitio est mater studiorum (repetition is the mother of learning); and,  

“When the student is ready the teacher will appear”.

I guess the repetition of seeing those quotes did bump into a young mind that was ready to receive them back in 1961-1963.

 

How will we “score” in 2007 powered by what noble vision and values for the 4-way win?

 

How can we change our culture to open the minds of our employees so that they might be ready to receive some teachings that are immutably correct concerning “People, Service and Profits”?

 

All the best,

 

 

Bruce Merrifield   (bruce@merrifield.com; 919-933-7474)