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Return on investment case study
Question:
> Wayne > Forget the numbers. Just give us some cash > when you earn your first million or two :^) > I’m not sure how much you are able to tell us. > I would be interested to find out about customer > response or satisfaction initiatives.
One of the beauties of the increased satisfaction from the employees is that no cash incentives nor additional expenses have been incurred. The triple effort by the employees is self-motivation, self-actualization, being a part of a winning team. Sure, they will accept more money, and some divisions are working it so that increased efficiency will be remunerated – which adds fire to the success spiral they are on. > I also want to ask: In your own opinion, do you > believe the same principles will be applicable in > the *US today*? You don’t have to name any > companies to use as examples, just sections of > industry or the types of industry would be sufficient.
YES – YES – YES – What is the biggest problem you hear from employees in the U.S. today? Invariably it is that they are not being heard. They simply do not have the right to be heard in most companies. Yet you ask a typical business manager "Do you believe your people are delivering 100% of their capabilities?" The manager will shake their head and say "Of course not- never in a million years!!!" To which I will ask: "What are you doing to take advantage of this missing stuff?" – And I get the blank stare. Most managers are lost when it comes to Maslows heirerchy of needs. They simply can’t bleieve that people are willing to do ten times what they normally do, if but they are listened to and given the green light to do it. Today’s literature is filled with examples where employees who are allowed to participate in the business make very healthy business entities. What is interesting is that there are many stories, but even if there are many stories, it indicates that these are very unusual companies where employees are allowed to use their full potential. Interesting isn’t it? Kina like management is given a sack full of money to use in creating more goodies to sell – and on the way to the market doesn’t even bother covering the hole in the bag with his other hand but just ambles on thinking the loss is really nothing worth bothering with. All that lost gold, gone to waste. A waste to humanity, awaste to the consumer, to the employee and to the stockholders. But it is the norm for today’s business practitioners. That’s why they need consultants!!! – Hide quoted text — Show quoted text -> Regards > Archie > Gatekeeper: > ‘My friend Archie, who lives here, is a good man. > To speak with him you will need to know that, > [com uk arde dear co demon net] is [T E C H D O G]. > All good people can find archie at C.O.D.E’
Response:
>Have just completed a three year contract with the sixth larges company >in Mexico, a $2+ Billion/yr retailer with some 194 stores. I have been >able to track the managers who have applied the TQM tools taught in the
Fascinating stuff, Wayne. I would be very interested in anything more you have to say on this case. Do you have any more details on exactly where the new profit came from? More sales? Less returns? Reduced need for ads? What do the market share figures look like after Walmart moved in? What was the growth in the total retail sector in that time? I’m particularly interested in the backsliding phenomenon, which I’ve seen in other arenas. Somebody gets it right, and there is a real performance improvement, but the organisation slips back into the old ways. Doug
Response:
Wayne Forget the numbers. Just give us some cash when you earn your first million or two :^) I’m not sure how much you are able to tell us. I would be interested to find out about customer response or satisfaction initiatives. I also want to ask: In your own opinion, do you believe the same principles will be applicable in the *US today*? You don’t have to name any companies to use as examples, just sections of industry or the types of industry would be sufficient. Regards Archie Gatekeeper: ‘My friend Archie, who lives here, is a good man. To speak with him you will need to know that, [com uk arde dear co demon net] is [T E C H D O G]. All good people can find archie at C.O.D.E’
Response:
> >Have just completed a three year contract with the sixth larges company >in Mexico, a $2+ Billion/yr retailer with some 194 stores. I have been >able to track the managers who have applied the TQM tools taught in the > Fascinating stuff, Wayne. I would be very interested in anything more > you have to say on this case. Do you have any more details on exactly > where the new profit came from?
In most cases the increases came from customers telling their friends and neighbors of the fantastic changes in attitude at the store. In many cases the customers reported they were on the verge of never coming back. But the changes are so great that they drag their friends into the stores. Thus an increase in customers with the resulting increase in sales which begets the wonderous success spiral any good business leader would sell his soul for. More sales means more vendor activity with promotions and the like which in turn is a great motivator for the employees themselves because they are actually FEELING AND SENSING the results of the changes THEY WERE ALLOWED TO BRING ABOUT. The major thrust in my seminars was to get the store managers to LISTEN to first line employees in a very active way and then apply the seven steps of continuous improvement at the floor level employee and their immediate supervisors. More sales? Less returns? Reduced need > for ads? What do the market share figures look like after Walmart > moved in? What was the growth in the total retail sector in that time? > I’m particularly interested in the backsliding phenomenon, which I’ve > seen in other arenas. Somebody gets it right, and there is a real > performance improvement, but the organisation slips back into the old > ways.
Exactly. I’ll touch on this now, but would prefer to stay away from it after this because it is such a major problem everywhere and I have not seen any solution to it. Inevitably when somebody does something exceptional, they will be punished for it. In the 33 stores that picked up my tools and ran with them, the first two store managers were fired. The usual. They were not content to simply say "yes sir" they put themselves on the line, faced their district managers to protect the people at the floor level while they did their magic. And of course this is simply not done. Even when the orders for change come from the president and the family. There is no remedy except to fire the whole lot of middle managers and few, very very few presidents have the guts or fortitude to do this. They like being served, they like the comfort zone given by the people who actually created the business — but who simply can’t change. Again – I’d like to focus this string on the actual tools and the way we can prove that CPI and the many tools from lists, to Pareto analysis to project management, to recognition and leadership, from proper delegation to monitoring actually work wonders. These 33 stores pulled off these huge successes even as Wal-Mart, Carrefourt, Chedraui and others opened across the street so to speak. In fact in virtually every one of the 33 stores the competitors come in daily – the managers of the competing stores and the district directors – to figure out just what the heck is goin on. They don’t see anything different — from their paradigm!!! — they see clean stores, neat layouts, no great differences in prices so they simply can’t understand what it is that is making all those people come in and shop. It’s nothing more than happy troopers who are being listened to by their bosses and who feel just dandy for working, even overtime without pay. Traditional management simply can’t grasp this simple truth. So they rationalize it away. At headquarters they say these 33 stores are ‘enjoying an unusual market condition’. Even with all the data at their noses – same data I have from which I am proving the ROI — but they rationalize it away. My biggest mistake was not forcing a measurement tracking we could all agree on from day one. I started with measuring efficiency and loss/gain of customers. It grew from there so that this data is universally available – but top brass do not recognize it. What’s so interesting is that this change is so palpable and the exact opposite is also palpable. Where district managers have insisited in the old way and we see those stores do so poorly even with remodeling, new layouts, special events and the like. Even when they sit in better market niches they do poorly as compared to the old rickity stores where participative management is taking place. For a while. I don’t know for how long. Top brass is shifting toward control again, thinking that Taylor has the solution. Wayne – Hide quoted text — Show quoted text -> Doug
Response:
Have just completed a three year contract with the sixth larges company in Mexico, a $2+ Billion/yr retailer with some 194 stores. I have been able to track the managers who have applied the TQM tools taught in the seminars and workshops and there is a direct relationship between increased customers/profits/sales to the number of tools used by the employees in those particular stores. This is a wonderful opportunity to dissect all aspects of success and failure within this project. We have all the ingredients – district managers who refuse to see the need for change and block any entrepreneurial bent on the part of their store managers – store managers who accept the new tools only to be punished by some big-wig in corporate because it does not fit with the way things used to be – even when the owners want change – etc. It is a wonderful soap opera, but the best part is that now we as consultants and facilitators can put some serious numbers on paper to justify our time, the time of attendees and the benefits to the client. Here’s the bottom line: 11% of participants in the seminars/workshops picked up at least 50% of the tools for continuous process improvement and these 33 stores have increased customers and sales from an average of $1.1 million Dollars in sales per month before the seminars, to an average of $1.5 million after only six or seven months of using the tools. At 22% margins, this means a $40 Dollars cash in the pocket for every $1 Dollar spent in all costs related to the training. This benefit will be growing each month as long as they don’t decide to go back to theory X – which shadow is lurking in the background. Management has a very hard time not being control freaks. If there is any interest on the part of the ng to pursue this I will be happy to expose further data – but not the name of the client. What makes this so easy to understand and measure is that the the modus operendi in Mexico before NAFTA was strictly theory X with fear and abuse of power the means of getting performance from employees. And customers had no choices but to buy from stores where employees treated them like caca. Once NAFTA hit, and Wal-Mart set up shop next door things had to change. So we see a clear before and after situation as well as some changes directed from HQ – on their own – which has not worked at all.