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5 things managers can do to deal with QQ

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QQ is a very North American phenomenon. European work cultures have always valued work-life balance and long-term sustainability for employees. Europeans in general take more vacation and work within more clearly defined boundaries. Perhaps the pandemic-induced shift in working dynamics sparked a “market correction” that was overdue in North America. In any case, QQ is … Continue reading →

2 Comments Management, Organizational change & improvement
  • It's an age-old challenge for any large business: Which is more important, success in the aggregate or success in the individual P&L (profit and loss centre) / BU (business unit)? Corporate would say both are important and that one serves the other, but each PL/BU leader will have a different answer. The real tension between PL/BUs, however, arises when their cooperation is needed to sell to and serve customers. This tension takes on many forms: Corporate struggles to align PL/BUs and create as much synergy as they possibly can, so as to maximize aggregate performance. Each PL/BU struggles to get the others to help and support their given individual service efforts as they try to support their customers. The Sales & Marketing organization struggles to get each PL/BU to contribute to sales and service opportunities and challenges. Potentially large, lucrative enterprise-wide solutions never get developed in the solution-building process for a given customer because each PL/BU wants to talk only about their own products/services. The Customer Service organization struggles to get cross-functional issues resolved for customers because each PL/BU wants to maximize its own profits - there are no customer metrics flowing across PL/BUs and no incentive-compensation tied to value stream performance. Each PL/BU has its own targets, metrics and IC plan. These metrics have nothing to do with helping/supporting other PL/BUs. Sometimes it gets further complicated because each PL/BU also has its own sales and service team. When this happens, there can be even more confusion and ambiguity between corporate-wide sales & service and the sales/service teams in each individual PL/BU. The Alignment Solution: Behavior follows incentive. Study the table below and you see value streams being mapped with PL/BU partners. The resulting collaboration opportunities, once clearly identified, can then be encouraged by gradually tweaking the incentive-compensation elements of the PL/BU leaders. We have identified six steps to make this gradual process happen. Identify your key customer value streams (VS) - the services and the solutions you offer your customers. Map each VS against those P&L/BUs which support it. This results in some form of the table below. Assign an executive owner for each VS, just as each P&L/BU currently has an executive owner. Create objectives and metrics for each VS and tie incentive-compensation elements to its performance. The VS owner is now incented to drive VS performance, but she needs the interdepartmental alignment of the PL/BUs. For Inter-departmental alignment: Develop service level agreements between the given VS and each of the PL/BUs that support it. Tie the IC of each PL/BU to the performance of the VSs they support. Now each VS is driven for performance and each related PL/BU has incentive to support the VS and not just its own silo performance. Instant synergy. For encouraging inter-departmental collaboration on solution development during sales process: Adjust revenue-related IC so that each P&L gets a small portion of the IC tied to any other P&L’s sales revenues or earnings. Think of it as social capitalism. In addition, service level agreements can also include expectations and requirements for supporting one another on strategic sales proposals and campaigns. Mapping Profit-Loss Centres & Business Units With Value Streams:                                    Repair     Overhaul     Parts     Service     Sales     Warranty Value Stream 1            X- - - - - - -X- - - - - - - - - - - - - - -X- - - - - - -X- - - - - - -X Value Stream 2                              X- - - - - - - X- - - - - - -X- - - - - - -X Value Stream 3            X- - - - - - - - - - - - - - - X- - - - - - -X- - - - - - - - - - - - - - X Study each of the three value streams in the above table and you may be able to call up examples from your own experience in a large organization. Warranty needs a repair done for a customer by next week, but the repair shop puts them on the back burner while they serve higher premium customers first hand. Meanwhile the parts group is trying to maximize sales and so they are reluctant to make the overhaul team's request for parts a priority - they'd rather sell parts at top margins to external customers. Whether in pricing or in timing, conflicting goals and IC plans between PL/BUs lead to conflicting priorities which can hurt the aggregate organization at worst and make everyone's life unnecessarily difficult at best. Time and energy spent negotiating between PL/BUs robs from time and energy required by continuous improvement, increasing sales and improving customer service. A few results of cross-functional collaboration: You sell more You serve customers better You have higher employee engagement You spend less money on wasted time and customer concessions You earn greater trust from your customers  
  • By Brent Finnamore (2012). Problem: When a customer makes a proposal request, it instantly goes into a process on a first-in-first-out (FIFO) basis and becomes work-in-process (WIP). Little’s Law: Lead time =   Amount of WIP / Average completion rate (quotes per day). You can improve lead time by reducing the amount of WIP that comes in and/or by speeding up the average completion time. Ex. If the team can process 21 quotes per day (completion rate) and the customer wants a turn time of 3 days (lead time), you can use Little’s Law to determine the number of quotes you can have in process at a time: 49. Reducing Amount of WIP by Filtering for High Quality RequestsIf your average completion time for each RFP activity remains the same and you only reduce the total number of RFPs allowed in the process at one time, your lead time will quicken. To accomplish this, you may want to create a triage for assessing RFP quality. Score each item from 1-3 and multiply them: Ease of proposal. Assuming there is significant variance between different kinds of RFP’s, how easy is it to develop this proposal? Is it complex or straightforward? Will it require many people or few? Will it require many steps or few? An easy (vs. a difficult) proposal will move through the process faster, and possibly place less burden on resources to produce. 1pt - Difficult to develop. 2pts - Easy to develop. 3pts - Very easy to develop. Profit/margin potential. Some proposals are higher in volume and/or margin than others. How much can we charge? Can we turn it into a larger opportunity? What will the service cost us? 1pt - Low margin – we may only break even. 2pts - High margin – we will make money. 3pts - Very lucrative. Winnability. How likely is it that we will win this proposal? What is the competitive environment? Can we win it? 1pt - Unlikely we’ll win. 2pts - Probable we’ll win 3pts. - Highly probable we’ll win. Multiply the scores to determine the value. The higher the value, the sooner it enters the process, ahead of RFPs with lower values. An RFP that scores 18 would go into the process ahead of one that scores 12, even if the 12-point RFP was requested first. It has to wait. Possible scores include 1, 2, 3, 4, 6, 8, 9, 12, 18, and 27. Then you may decide that scores between 1-8 are politely turned down, while scores of 9-18 are entered into the process according to score. Work with your team to determine your best three criteria and how to weight them. Use a visual board to determine how many quotes/proposals are in process at any given time so you do not exceed your capacity and increase queuing. One distribution company who adopted this approach was able to book 70% more revenue and 80% more profit. Reducing Average Completion Rate To help reduce queuing, consider requiring daily proposal “production” meetings for all departments involved in proposal building process. Treated as a production meeting, all departments must meet once each day to move their piece of the proposal process along. Daily meetings help to ensure takt times remain efficient. Schedule a waste reduction Kaizen project for proposal development. Use DMAIC. If you are unwilling to control the number of requests you process (by triaging them and pushing higher quality requests through first), then the only way to improve lead time is to improve processing time – and once waste has been removed via daily meetings and a Kaizen project, increased capacity is all that’s left as an option. That means hiring more people – and that may be a more expensive option. Review Of Steps: Identify/confirm the service level you want to achieve (ask your customers what lead time they want). Determine your work group’s completion rate (based on data). Use Little’s Law to determine maximum WIP. Cap the active work in the process at the maximum WIP. This provides a quick “improvement” to RFP lead time. Put all incoming RFP’s through a filter of three criteria. Use it as a triage system to determine which RFPs get processed first, and which ones have to wait. Continue with process improvement efforts to improve your average completion rate (requires more time than the triage remedy).
  • Effective leaders say the same thing more than twice – they are proactively redundant. Brent Finnamore, 2011. To get employees or colleagues to do something new or different, managers need to explain it and ask for support. Everyone knows that, but research now confirms that we need to do it more than twice. And the amount of power you have does not appear to be a factor (T. Neeley, P. Leonardi, 2011). Researchers followed thirteen managers in six companies and found that effective managers naturally restated or re-issued key messages multiple times, using different technology, in order to ensure it got noticed, absorbed and done. These managers moved their projects forward faster and more smoothly than those who communicated only once. They also moved key metrics faster and spent less time in crisis mode trying to salvage late schedules. The most common form of “proactive redundancy” was a verbal request or message followed by at least two email follow-ups. They also found that executives behaved differently than middle or front line managers regarding communication frequency. They naturally tended to be less redundant in their initial messages and requests, and tended to only use redundancy in a reactive fashion – after they have not received an adequate response. Part of the reason proactive redundancy works is top-of-mind awareness. People are distracted by a constant bombardment of messages from multiple types of media. Redundancy helps your message stand out and gives it more mass. Then there is the more subtle sleeper effect: When people receive a message to which they have resistance or an objection, given time, they come to accept it. The next time they receive the message they have less resistance to it (Tarcan & Dolores, Psychology Bulletin, 2004, vol. 130, No 1). Researchers believe it happens because given time, many people will realize on their own that their initial objections were incorrect or insufficient.

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