Well have you? Played the numbers game to look good and not necessarily doing good? No of course you wouldn’t. Would you? Naturally sometimes there is immense pressure to ‘hit the numbers/target’ isn’t there? Your survival may be at stake. But then you have to think, do I really want to spend my life working in an environment like this, especially if you care about how customers get treated.
I know. You don’t believe me. For all that I was saying in my last blog about processing performance data to properly understand your how your business works, you think, Nah! That’ll never work. Particularly as it means moving from a short-term target-driven way of thinking to long term customer-focused and improvement one.
OK, so what about the story of Jim ‘Mattress Mack’ McIngvale of Gallery Furniture a retail store in Houston, Texas. Now Mack’s full story fills a whole book, Always Think Big, but one incident (of many) before he got on the right track typifies the way you should not make customers the fall guys for your arbitrary sales targets. Oh yes, and they are arbitrary because you just make them up don’t you? Nobody knows what is going to happen tomorrow.
Before Mack transformed his organisation the salespeople were paid on commission. This had many bad consequences. For example, when it came to the end of a sales week you might see some unfortunate customers staggering out of the store with armfuls of furniture treatment products. Why? Well the salespeople had sales targets to hit. If it looked like they were not going to make target the salespeople would pressurise customers into buying products, sometimes any products, in order to meet their target.
At the root of the target-driven numbers game is short-term thinking. But, if you are seriously interested in profit, you have to take a longer term view and make the total customer experience your absolute focus!
Fortunately Mack came across the renowned management and quality guru Dr W Edwards Deming whose work advocates taking a longer term view. Eventually this resulted in Mack moving his people from commission to salary. Taking a longer term view and bringing the focus to putting the customer first literally paid off! They were able to decrease costs, improve productivity. When they went from commission to salary, the sales per employee went through the roof! In the 1990’s Gallery Furniture achieved sales of $100 million per year, which translated into the highest sales per square foot of a mid-size store in the USA. Hmm? So are you seriously interested in profit?
There is a stark contrast between looking good and doing good. Try making the work work better. In addition to taking a longer term view and removing arbitrary sales targets you need to use numbers more effectively. You need to use numbers to literally understand what is happening in your business so that you can make the work work better.
So how might you go about making the work work better? That will be the subject of my next blog as we continue to explore the 2F diagram. We’ll be looking at how to make work work better, drawing on both my book Picture Your Business and on our new ebook Simply Manage. Picture Your Business is available from me priced £12.00+P&P. The latest version of the companion 2F Worksheet is now available free in MS Word or PDF on request from me either via a Linkedin message or by emailing firstname.lastname@example.org.