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As Jacques and I walked to the front door of the Klinester Corporation, I turned and looked over my shoulder. You know the feeling you get when you feel like you are being watched? I had felt eyes on me all morning. I never have these feels, but this morning it was almost tapping me on the shoulder and saying, “Hey buddy, who’s watching you? I am. Don’t look now.”

Seeing nothing unusual, I turned back around and opened the door for Jacques. He was in one of his best suits. From the polished wingtips, along the tight creases in his slacks, the dark grey, pin stripe suit fit him like a shape in a drape. He said thank you and gave me nod as I made my way to the front desk. I wasn’t worried about what I had on. I have other things on my mind. I was nervous. I was anxious. But, I was able to greet the receptionist and announce our arrival.

I said, “We’re here to see Marty Moran. We have any appointment at nine o’clock.”

The receptionist pecked a few buttons on her massive phone console and spoke into her head set. She wore a pale chiffon dress, it was nipped and tucked in all the right places. He lipstick was a subtle shade of red. Her smile nonexistent. She said, “Marty, the two gentlemen are here for your nine o’clock.” Efficient. Cold. She directed us with a wave to a coffee stand by the guest seating area. I didn’t need coffee, but Jacque picked up a cup and added cream and way too much sugar.

After a few minutes, Jacques said, “We need the next order from these guys. From my sources inside the company, they are about to get a large order from a large Las Vegas hotel chains. If they do, they will need our services and a lot of them.”

I said, “As I said, my primary mission is to confirm our reliability offer. I need their feedback on what works and doesn’t work to move more deals into your sales funnel. And, I expect the hit rate to go up and you’ll need to be able to respond to more quotes and RFPs.” He was focused on making sales. That’s his job. If this meeting leads to more sales, that would be icing on the cake.

Jacques said, “And, like I said, you’re here because you won a bet on the golf course. I’m willing to take the risk because you may be on to something. You have cleaned up your act, but I’m not convinced it will make any difference to this customer. They are all about getting the best price. Always has been. Always will be.”

I said, “That’s what we’re here to find out. I want to find out if there other ways to secure more business by capitalizing on the operational capabilities we’ve built.”

I was going to continue with my explanation, but the receptionist interrupted us and said Marty was waiting for us in the main conference room. Jacques took his coffee and we made our way down the short hallway. With another wave, the receptionist directed us into the room.

Marty sat on the opposite side of the large, oak conference table. He was a big man, broad shoulders, and his muscled arms stretched the fabric on his short sleeve shirt. He looked up as we entered, stood and walked around the table. He was a hulk of a man. Taller than I expected.

He said, “Gentlemen, I’m glad you are here. I’ve set aside 30 minutes for this meeting, so let’s get to it. I’m very busy this morning.” His voice was higher than I expected.

We shook hands and I introduced myself. His grip left my hand feeling like a crumpled piece of paper. Jacques seemed to know him well and gave a nod. We took our seats on the opposite side of the table. Marty returned to his side. The field of battle was set. Marty’s dominate position, on home turf, and his imposing figure was distracting me.

Jacques said, “Stewart has something to ask you and he needs a few minutes before we talk about your upcoming order.” He looked over at me and grinned. I was the same kind of grin a lion would have after cornering its prey. I was a sitting duck and he had opened the gate to let the lion out.

I was in a curious mood. No, it wasn’t a mood where I felt uncertain or unclear about how I felt. I knew I was terrified. Pushing it aside, I wanted to hear the responses from Marty about our new offer.

I said, “Thanks for your time this morning, Marty. We are developing a new offering and I would like to check it with you. It may seem a bit unusual coming from me, but you are the best person I know to check it. Any opinions you have about it will be appreciate.”

He nodded. Out of the corner of my eye, I saw Jacques leaned back in his chair. Ready for the show. I took a slow, calming breath.

I said, “I know you and Jacques have worked together for a long time and you have been a customer of ours for over 30 years. But, over the past few years, we’ve let you down. Especially, by promising lead times and due date and then not meeting them. Sometimes by a few days, sometimes by a mile.”

Now Marty was nodding his head. He said, “That’s right. As much as I like Jacques and the services you provide, I was getting too many phone calls from my own people to find a more reliable supplier. You’ve broken your promise too many times.”

I said, “I understand and I’m here to see what we can do about that. We took some time to figure out why our processes we so unreliable. We looked in a lot of places and tried a few things to test our assumptions. Let me try to explain.”

I said, “What if you could completely trust your system integrators?”

Marty said nothing and looked at me like the RCA dog. Marty glanced at his watch and looked back into my eyes. He said nothing.

I said, “Our industry has always been focused on helping customers get what they want by creating custom tailored products. We meet your tight quality standards. And, we offer our solutions at a competitive price.”

He nodded and then was about to say something, but I continued, “But this environment is filled with uncertainty. We never design or produce the same systems twice. Your quality standards are hard to meet sometimes. And, sometimes we don’t get the margins we want. All this uncertainty effects our due date performance because its hard to predict how long all this work will take.”

I want to make sure I don’t blame Marty or his company for any of the issues I’m presenting. The way to build rapport was not talking about golf or the weather. Building rapport with Marty was going to based on understanding where the issues were and where they were coming from.

Marty said, “I see, but what does this have to do with me?”

I said, “You get what you asked for according to the specifications in the RFP, right? But, with all the uncertainty from accepting the order, the engineering, and shipping it out, you are forced to guess what you are going to receive your order. We are forced to guess, too.”

He nodded. He said nothing. Marty must have been practicing his Stoicism. He sat there with his arms crossed. The fabric of his shirt stretching even tighter. His granite face seemed to grow bigger as he waited for me to continue. So, I did.

I said, “Here’s where our analysis starts to get a little mirky. And, I’ll need your help to confirm a few things.”

He nodded.

I said, “When suppliers deliver late, what happens to your planned production schedules?

He said, “We have to reschedule the whole shop. It’s a real hassle.”

I said, “What about your workers’ efficiencies and equipment usage?”

He said, “They go down. We don’t like them to go down.”

I said, “What happens to the priorities you’ve make for your other supplier and subcontractors?

He said, “They have to change, too, since we don’t have the space to hold the inventory which is piling up waiting for all the parts to arrive. The phone calls telling a supplier to hold their shipment aren’t one’s I want to make. In some cases, I told them the week before to expedite their shipment. How’s I’m telling them the opposite.”

Now, he’s showing some emotion. But, I went for it. I continued to pour gas on the fire.

I said, “And, what about the planned commitments you’ve made to your customers when a supplier delivers late? Your lead times and work in process must go up, too.”

He said, “The customer’s procurement guys are the worst. The one thing we can’t do is blame a measly supplier for why we can’t deliver a customer’s order. They don’t care, they have their own due dates to meet.”

I tried to interrupt. He was on a role. I let him speak.

Marty continued, “Let me tell you that I’ve had to order replacement parts for some of the orders we’ve been working on. And, at expedited prices, because Engineering was forced to redesign something. If we used the original design, it would have taken too long and would have missed our due date.”

I said, “Do you see how one late shipment can disrupt many different things in your organization? But, as bad as it sounds, I’m sorry to say there are plenty of other bad things that happen to your company. Do you want to hear them?”

Jacques said, “Companies like your also want to be lean, efficient and on time, right? What happens when have to reschedule, waste resources and protect your operations from unreliable suppliers? I’ll tell you. There is a hit on labor costs, carrying costs, engineering costs, and overhead costs. Your cost of sales go up, margins are squeezed, sometimes penalties are paid, and cash get sucked up in the wrong places.”

I looked over at Jacques in surprise and gave a small nod of appreciation. This guys was paying attention after all.

Now Marty nodded.

I said, “There is a price for obtaining our products and services, but there is also a price for not receiving our products and services. The price for not receiving an order, on-time, from your suppliers is much larger than the few cents you squeeze out of Jacques.”

Marty sat back. Stunned. All the color left his face. His shoulders went limp as if being resigned to the vaccination shot he didn’t want.

On the way over, Jacques told me about a large customer of the Klinester Corporation switched to another supplier. Why? Because Klinester couldn’t meet their lead times. The large customer was a significant part of Klinester’s annual sales. It hurt. The news was all over the industry gossip line.

I said, “Integrators who deliver late and break their promises don’t make it easy to improve your company’s profits, do they?”

Marty shook his head side to side. Did I see a bit of appreciation in his face, too? I wasn’t sure. But, I had hit a nerve or two. Perfect, I had him where I wanted them. But, I’m not out of the woods yet. I may have convinced him the damage we’ve done to their company was way worse that anyone thought. Anger and resentment grew like weeds in that kind of environment. I still had some work to do.

Marty said, “Your 30 minutes are up, but I want you to continue. If you’ve got a solution, I want to hear it.”

I nodded. I said, “Before we go through our solution, let’s be clear about what a good solution for you looks like.”

My challenge now is to look at those problems with through the lens of the criteria for a good solution. I want to help Marty see that our solution is the only solution which will meet the criteria for a good solution to his problems. He’s agreed with the problems. Let’s see if he agrees to the criteria for a good solution.

He’s made commitment to other suppliers. His company has put in place things to protect themselves from unreliable suppliers. At some point, he will have to defend his decision to move more orders to our company. The main thing the other folks in his company know is that our company is not to be trusted. No more orders for you, sunshine.

I said, “Since an unreliable supplier causes so much damage by being late with their deliver, the first criteria must be to deliver order on-time, every time. Agreed?”

Marty said, “Agreed.”

I said, “The second criteria is to make sure we don’t cut the corners of any of the other things you need from a reliable supplier. Things like having competitive lead times, maintaining high quality levels, and offering fair pricing. Agreed?”

Marty said, “Agreed, but you also have to be able to respond on time to the RFP’s we send out. You take too much time getting them back to me.”

I made a note in my notebook and said, “I’ve made a note about it and I agree. That has to be improved and we’ll make it a part of the second criteria.”

How was I going to improve our quote response time? I didn’t have time to worry about it right now, but there had to be a way.

I said, “The last criteria to consider is that a supplier is reliable from the day they say they will be. Once you get used to working with a reliable supplier, all the things you are doing to protect yourself and your company will not be needed anymore. Your folks will realize they don’t have to place orders as early any more. You don’t have to hold buffer inventory anymore. You don’t have to reserve capacity in your shop to cover up the mis-synchronizations.

When all these things are gone and a once reliable suppliers delivers late again, real damage will occur. So, the final criteria is to be reliable for the long term. Agreed?”

Marty said, “I agree.”

I said, “If a supplier can meet these three criteria, the issues unreliable suppler cause go away now and into the future. What more could you ask for?”

He said, “I’m not going to give up on trying to squeeze every penny out of Jacques and try to get better deliver times.”

I nodded and took a deep breath. I wasn’t ready to go there and I wasn’t going to take the bait.

I said, “We don’t have a name for what we are offering yet, but there are some key features I want to tell you about. There are three of them.”

He nodded.

I said, “One, to provide a stable workflow, we limited the amount of work in process. This means there are no overloaded resource overloads. Overloaded resources cause slow downs. And, no resources which are starved for work. Starved resources lose momentum. Both situations cause bad multitasking. And, bad multitasking extent lead times.”

Marty said, “That sounds counter intuitive, but it’s your business. What can I say.”

I said, “Two, everyone is working on the right jobs at the right time. We agreed on a single priority system which improves our ability to focus everyone’s attention on getting orders completed on time,” I said.

Marty said, “That makes sense. Again, I’m not sure how you did it.”

I said, “And three, to sustain the ability to deliver on time, we watch the load on our resources. In this way, we will know ahead of any overloads what capacity we need to add and be able to promise delivery dates.”

I said, “Can you see how these three elements help our ability to deliver on time?”

Marty said, “I’ve been in procurement most of my working life, so I’m can’t say for sure. For the most part, they make sense. I am glad to hear you are doing different things. If you came in here blowing smoke, I wouldn’t be sitting here for very long. Please continue.”

I pulled a graph out of the notebook I brought with me and said, “Take a look at this chart. It shows our actual due date performance over the past eight months. As you can see, our due date performance was bad at the beginning. It turns out it was considered the standard in our industry.”

Marty looked at the chart and followed my finger to the 55% on time performance data point.

Marty said, “It takes guts to show this data to me. If I wasn’t desperate to find some reliable suppliers.” He trailed off and looking up at me.

I said, “We didn’t like it either. It was painful living this day to day. But, we stopped doing to stupid things, got some help, and made some key in the way we operate changes. Our performance improved and we are not in the mid-90% range.”

Jacques said, “I’ve been checking around with our competitors.” He looked at me with a grin that told me we was more interested in this than I thought. He continued, “As far as I can tell, our due date performance is well above the norm in our industry.”

Monty pursed his lips and raised his eyebrows.

There are some things we’re doing which will make this performance even better.

I said, “But, there is something I want check with you. What would it take to convince you we are serious about delivering your orders on time?”

Marty said nothing. I could see he was thinking. I didn’t want to leave him hanging too long, but it was satisfying to see him stumped for a moment.

I said, “Talk is cheap. We need to hold ourselves accountable for the promises we make. We we deliver on time, we should share in the benefits that brings. If we don’t deliver on time, we should be penalized.”

“Really?” Marty said. He looked at me unconvinced. I was ready to deliver the one-two punch.

I said, “Really. Here’s what we are proposing. For every week after we deliver late, we’ll take 10% of our selling price.”

I waited. In my mind, I came at him with my left jab getting his attention. Marty actually leaned back a little.

I said, “We want you to know that we take our promises seriously. A self imposed penalty like this should help you see that. What do you think?”

He said, “Ive tried to penalize you in the past by charging you late fees and liquidated damages. But, I would have never believed you would be come to me and offering a penalty ahead of time.”

In my mind, with my right hand, I punched him right in the nose with the second part of our penalty element.

I said, “And, for every week we are late, we’ll continue to take 10% off our selling price. That means if we are late by five or six weeks, we’ll loose our pants. Our margins will be wiped out. But, we’ll continue to take 10% off the selling price until your order is delivered. You order could be free.”

The right hook landed right where I wanted to. Right on the nose. Marty looked at me in disbelief. He was a big man and recovered well.

He said, “There has to be a catch.”

I said, “There is no catch. It’s a promise like our promise to deliver on time. We’ll even write in our response letters. But, there is some not so fine print. For example, before we make a promise, we need all the information about the order to do so.

If you make a change to the order, we’ll check and see if it effects the due date and give you a new date, if necessary. If we have to wait for you to approve a major phase of work, we could adjust the due date and give you a new date, if necessary. And, our payment terms need to be adhered to. Any issues with these things?”

He said, “I guess not. Sounds fair enough.”

He sounded encouraged. He was engaged in our conversation and I could tell he was paying attention. I took a quick glance at my watch and we’ve been with Marty for over an hour. A good sign.

I said, “Good, thank you. I have one more thing to check before I turn you over to Jacques.”

I turned to Jacques and gave him a look which I hope he interpreted as “don’t mess things up now.”

I turned back to Marty and said, “How well will what you’ve heard today meet the criteria for a good solution to your issues? Remember, the criteria? Deliveries are on time, every time. No compromise on product development, quality, customer service, lead-time or pricing. And, the supplier must sustain reliability over the long term?”

He said, “Let’s see, if you deliver on time I’ll have fewer hassles to deal with. I get less nasty phone calls from my folks because the shop will be running smoother. We’ll have more time to do good work on our orders. And, we’ll have a better chance of delivering our orders on time to our customer.”

A supplier who is on time and can deliver when they promise does bring benefits to their customer. At least in this case, but Marty is not that different than other customers of ours.

Our meeting started contentious and Marty was suspicious about why I was here. But, exposing the pain we’ve caused him and his company of the years was something he liked to bitch and moan about. We also talked about the pain inflicted on his company’s financials.

But, some relief came when the criteria for a good solution were agreed to. These criteria would clarify in Marty’s mind what to listen for from us, but also what to expect from other poor performing suppliers.

Once I showed Marty the things we did to change our environment and the results we’ve achieved so far, he was seeing things from our side. He encouraging me to continue. But, it was the penalty element which hooked him. No supplier, I am sure of it, has ever offered him to pay a penalty for poor delivery. Let’s see some other supplier do that.

And, the not so fine print was no big deal for him.

So, I said, “Here’s the next steps I would like us to take. I’ll turn you over to Jacques to review your quote response time needs and determine the best way to resolve any price and lead time issues.”

I’ll let Jacques ask about at any quotes Marty has open at the moment. I’ll have to help Jacques with the way to deliver our responses to those quotes. We will include these commitments in writing.

I said, “After you have experienced our good on-time performance, I want you to let me come back to gather some evidence that you have indeed experienced the benefits we’ve promised. Deal?”

Marty said, “You have guts, I’ll give you that. It takes a good man to come with this crazy offer and get me to agree it could help us around here.”

I smiled.

I said, “Do you have any reasons not to proceed with these steps?”

Marty said, “No I don’t. Let’s take a break, go grab a coffee while I spend some time with Jacques going through some open quotes.”

I turned left out of the conference room and taking one, then two, deep breaths. What a good meeting. We can bring benefits with the capabilities we’ve built. We can exchange those benefits for more business. Let’s see if it works out that way.

Marty may seem like a tough cookie, but that’s because he has so many problems to deal with. They would make anyone grumpy. If someone comes along and offers a solution to those problems, like us, we have a good chance of making a sale or two. If we get the chance to deliver a few orders on time, I hope we’ll get more.

I drink my coffee in the waiting area and waited for Jacques to appear. I looked through the polish glass of the Klinester Corporation’s front window and thought I saw same car I thought I saw following us this morning. The light off the glass made me squint, but I saw enough to feel uncomfortable. Never mind, I was feeling good about what we did this morning. But, that was about to change.

What Happens to Peace & Happiness

Being at peace and being happy are goals I would like to achieve someday. But, the promise I made to lead a sales meeting with an unhappy customer is getting in my way. Being in front of this customer, who we’ve upset often over the years, is not the best place to find happiness. Or, peace.

My default position is to remain safe and secure. To avoid pain. To go on living without the added stress of putting myself in challenging situations. But, I do like to challenge myself. And, putting myself in uncomfortable positions will be challenging.

When challenged the outcomes have been amazing and beyond anyone’s understanding. I did find the courage. I did take a risk. I did stand up for what I believe in so that others could live in a better world. Well, at least have a better work life. And, most folks I worked with spent a lot of time at work. When I see a better way of doing something and it can help others, I will do my best to get the greatest effect from my knowledge and understanding.

Fear

The one thing which keeps me from being courageous is simple. It’s fear. Plain, unadulterated, paralyzing fear. And, when I realize this is what’s holding me back, I get depressed because I sometimes believe I’m helpless to overcome the fear. And, being helpless at my age, is a depressing thing. I hide from my responsibilities. I procrastinate. I need things to be perfect. I’m sure something terrible is about to happen. Somewhere in there the anxiety starts, the faithful companions of worthlessness and of being un-loved come along for the ride.

Fear Does Not Last, Sometimes

I don’t know where it comes from but there are times where I can get past the anxious feelings, become worthy and feel the love of others again. Maybe I got enough sleep. Maybe I got enough sunshine. Maybe I got good exercise. Maybe I had a stimulating conversation with someone. Maybe all these things happened and I find myself in a productive mood. Not only that, I realize there is nothing threatening me. No impending harm is standing outside the front door. Or no foreign entity is about the destroy me in some deadly, but silent way. I hold out hope these things are not happening and will not happen in the few minutes. I hang on to these feelings as long as I can. I have faith.

I can relate to the pressing issues our customer has. I have faith I can show them from where these issues come from. I can take it on the chin and admit our company is at the root of the problem. And, I have faith I can show them we have a solid solution to these issues. They need to give us a chance to prove it. But, before they give us a chance, I need to be prepared for the next sales meeting.

Brainstorming the Sales Meeting Flow

Enough about me. It’s time to dismiss the fleeting thoughts, the feelings that come with them, and the distractions. As my staff takes their seats the coffee cups land on the table top. I hear a peasant good morning here. A pleasant good morning there. I’m satisfied to see the casual way everyone gets along these days. If you would have seen this group six months ago you would have thought they hated each other. So competitive. So sensitive. But, today it is different.

I clear my throat and say, “Good morning everyone! This morning’s staff meeting is going to be a little different. I need your help preparing for a sales meeting next week.”

“What do we know about sales boss,” Jim said.

You Know More Than You Think

“Much more than you think,” I said. “We are about to test the impact of our reliability engine on our customer’s environment. We don’t need to focus on features and benefits of our catalog of offerings. We do need to focus on showing how a reliable suppler can improve the financials of our customer. We know a lot more about this than we think we do.”

Looking at Jim, Karen said, “We do know enough about our customers business because I have taken more than one tour of their facility. Customers like bringing us in on these tours with their customers because of our unique product offerings. Although their facility is state of the art, it’s follows a predictable and conventional production process.”

Look at Your Own Problems for Guidance

I said, “It’s the same way we look at our own problems like rescheduling hassles, procurement headaches, and holding higher than necessary inventories (to protect ourselves from our own poor suppliers performance). But, this is the tip of the iceberg. In the old days, our late deliveries created these other problems.”

As Jim was speaking, our CFO took a seat in the back of the room. I glanced over at him, gave him a one minute sign, and looked back at my notes.

I said, “Exactly. I talked with Gary and he gave me some guidelines to follow. Jacques is allowing me to start the sales pitch and hand it off to him at some point to close the deal.”

Karen said, “Are you going to start off with what our company has been focused on, e.g., product development, quality improvements, and competitive pricing? These are well known facts about our company.”

Objections & Gaining Commitment to the Reliability Offer

I said, “During the sales pitch, we want to keep the number of objections to a minimum. This of an objection as a thought or a comment from the customer which implies or stated another way means they don’t agree with what I said. Gary told me that the number of objectives raised is proportional to the likelihood an advance or a sale will be made. If was off the cuff advice, but it sounds like a good guideline to follow.”

“OK,” Karen said. “At some point, to include these things can show that we are not sacrificing what customer like about us to be reliable. The changes we’ve made over the past few months are still surprising to me and I was here to make them. Someone not involved with the changes we’ve made may wonder if we cut corners somewhere along the line.”

I said, “Good point. We can focus on product development, quality improvements, and competitive pricing. But, not at the expense of our on-time delivery and consistent delivery lead times. Customers know what they are going to get, but have to guess at when they will get what they ordered from us.”

What Does Everyone Agree On (For Sure)

“That sounds good,” Karen said. “But, to prevent any objections, focusing on what they are already telling us, we are an unreliable supplier, would be the best place to start. Everyone agrees on that point, no argument.”

I said, “I agree, but there is something even more damaging that everyone will agree with, too. It’s that customers don’t trust us. We’ve promised due dates and broken our promise so many times they don’t trust us, no matter how well designed and manufactured our solutions are.”

Protecting Operations

Jim said, “Right, look at what we do when we don’t trust our suppliers. When we are on the receiving end of poor on-time delivery and inconsistent delivery lead times, it forces us to protect their own operations. We do this by planning for longer lead times than quoted by suppliers, hold inventory, if we can, and place orders with only preliminary information.”

I said, “This also forces us to pass on longer lead times to our own customers. It increases our work in process inventories (both raw and work in process). And, it reduces our flexibility to make changes because of the time consumed by the expected change orders. I’m sure they will be able to relate this these things.”

Wasting Resources

Karen said, “Don’t forget when supplier deliver late and delivery lead times are inconsistent, this forces us to waste our own resources. For example, we are forced to take extra efforts to manage suppliers, work overtime or subcontract expensive outside resources, and under-utilize equipment.”

I said, “This leads to more hassle and frustration of managing more suppliers and reducing our efficiency. I’m sure they will be able to relate this these things, too.”

Rescheduling Hassles

Jim said, “Poor supplier delivery performance also forces us to reschedule our orders. What a hassle. We are forced to shuffle In-house operations, re-prioritize sub-contractors & other suppliers and then you have to manage our customer’s expectations. Sorry about that, boss.”

I said, “I dread having to make those phone calls. But, this also leads to a negative impact on other orders, more unhappy customers, and missing other commitments. We are going around in circles sometimes.”

Estimating the Financial Impact

Our CFO, Rodney Rabinowitz, said, “You have a good handle on how our own unreliable supplier make things difficult for us. Let me give you some more perspective on these issues from a financial perspective. Our customers focus on reducing costs like everyone else. They have programs to put in place lean production methods, and focus on efficiency, and they have their own goals to be on time. But, they are forced to work with unreliable suppliers. They have to guess about the best way to reduce the impact of the supplier’s delivery variability. In other words, suppliers don’t make it easy of our customers to make the margins or profits they would like.”

I said, “I don’t know how much worse we can make things appear. Do we all agree that our customers experience the same things when their suppliers deliver late?”

There were nods all around.

We’ve covered the direct effects of late deliveries on our customers operations. We’ve covered the continued negative effects on a customers resource use, rescheduling and the necessary ways needed to protect their own operations. And, to convert these issues into an impact on their financials is the sour cherry on top of the cake. Once I go through these impacts, I’m sure a customer will agree I understand what their problems are.

I look back at the notes I took when I was on the phone with Gary.

How To Solve the Customer’s Problems

I said, “Next, we need to get agreement that there is a way to solve these issues. Gary said to first review the criteria for a good solution, to any solution, the customer is considering. Our customers are not sitting on their hands waiting for a reliable supplier to appear. In fact, they have given up looking for one. They don’t think it’s possible. So, they’ve put things in place to protect themselves like Karen mentioned earlier.”

Rodney said, “If you don’t mind, I’ll stay for the rest of this meeting.”

Looking at me, he said, “I may be able to contribute something. In the meantime, please continue. I’m curious to see how you are going to dig yourself out of the deep hole you’ve dug for yourself.”

I smiled. I was curious, too. I worry a little that we have have laid on the problems too thick. Made things sound worse than they seem. A little over the top. But, the I want the impact to overcome the denial that anything is wrong. Or, rely on what they’ve learned to do to live with unreliable suppliers. They still make money. They are still in business.”

Criteria for a Good Solution

I said, “Plus, setting criteria for a good solution will also blocks a customer from considering any other supplier who don’t meet these criteria. I know our competitors have not made the same kind of improvements we have. So, I’ve written down these criteria for now. They are, on time, every time, consistent and competitive lead times without compromising product development, quality improvement and competitive pricing. These are all the things I’m confident we can do.”

Rodney said, “And, the solution must be sustainable over the long term. This should stop most, if not all, competitors in their tracks. Depending on their situation our competitors may be able to match up from time to time, but not for the ling haul.”

The Proof

Jim said, “The first thing I would show them is our on-time performance for the past six months. It shows a starting point of about 50% and making a steep climb to the high 90% range after a few months and staying there.”

I nod.

I said, “We can also show this kind of performance is not a fluke. It’s not because we have excess capacity coming out of our ears. There are some unique operational changes we can share. We don’t have time nor do we want to go into too much detail. But, we need to say enough to show the customer something different has happened with our operations.”

Easy to Understand Changes in the Way We Operate

Rodney said, “For example, we’ve limited our work in process. This provides stable a workflow. We use a single priority system so that we work on the right jobs at the right time. And, most important, we recognize the load on key resources which ensures we sustain the ability to deliver orders as promised.”

I looked at Rodney in surprise. I had no idea he was so interested in the main elements of our CCPM solution. Not only that, he summed them up so well. Very unlike any CFO I know.

I said, “The CCPM solution elements we’ve used are obvious to us now. But, I bet they won’t be obvious to our customers. Remember, we will be talking to the procurement department. Unless they have operational experience they may not be able to relate to anything of these things, but we’ll leave them in for now.”

No-one spoke. Jim and Karen were looking down at the table. Rodney was glancing away.

Getting Serious About Our Offer

I said, “But, here’s the thing I know will get their attention. We need show we are serious about being on time. Remember the story about the plumber who promised on time delivery? He offered to let me reduce the invoice amount any the amount of damage we would have caused if he didn’t arrive on time. This self-imposed penalty told me he was serious about being on time. There has to be a way we can show this same level of commitment to our offer.”

Karen said, “In other words, if we fail to deliver on our promise, we’ll pay.”

I said, “That’s right. We are announcing, for the first time in our industry, a self-imposed penalty for non-performance. I’ll work out the details with you, Rodney, and test some penalties before the sales meeting. We need to get a feel for how much of penalty it will take for a customer to take us seriously.”

Rodney looked surprised. His eyes looked at me and then scanned the others in the room.

I said, “Keep in mind if we maintain our excellent performance, we will never have to pay the self-imposed penalty. Don’t worry Rodney.”

Other Elements to Support Our Offer

Rodney said, “The only other thing we can say are the things which support our long term criteria. We are a fourth generation, family-owned and have been in business since 1910. We’ve had no work stoppage in our history. Our safety rating is the best in the industry. We are ISO Certified. And, we have financial flexibility due to our complete lack of debt.”

Jim said, “I’m feeling better and better about our company. Thanks, Rodney. I didn’t even know about some of these things. But, shouldn’t we expect something from our customers in exchange for what we are offering?”

I said, “What are you thinking, Jim? We expect them to order more from us. Isn’t that enough?”

The Not So Fine Print

Jim said, “I’m no expert at sales, but I’m thinking about any loop holes we need to close. With a unique offer like this there will be some misunderstandings. For example, it’s important to us that when we make a due date promise, we have the information necessary to be able to keep that promise. The due date should be provided when we have full working documentation, drawings and specifications. I can’t promise something I don’t have all the information for.”

Karen said, “I agree, but sometimes customers need to make changes to their order. In such cases, how about we review the impact of the change and provide a new due date. if necessary.”

I said, “You guys are on a roll. Here’s another element to consider. In some case a customer is an integral part of the order fulfillment process. They need to provide approvals, inspections, etc., A delay in such a step impacts the ability to ship on time. So, a new due date will be provided when the step is completed.”

Rodney said, “Let me pile on two more things. One, the penalty, whatever we decide it is, will not apply in the event of fire, war, terrorist activity, strike, lockout, flood or natural catastrophe. It’s the lawyer in me, sorry about that. And, two, we are counting on their adherence to our agreed upon payment terms.”

I said, “Wow, I didn’t think these things would come out so well. Good job everyone!”

“Give us some credit boss. We’re good,” said Jim. Everyone nodded. I smiled.

A Sigh of Relief

It was good to be working with others. It wasn’t always this way. I thought the only way to get things done was to be on my own. I didn’t need anyone. No one could do it as well as I could have. I’ve come to realize how egotistical that position is. The work we did in our staff meeting proves I do enjoy working with others. We did do some good work and in far less time and effort than I could have done by myself.

I said, “Where are we at this point in the presentation? I can ask the customer how well they think we’ll do to meet the solution criteria. I’ll get agreement. If so, it’s over to Jacques to close the deal or advance us to the next stage of the sales process.”

Rodney said, “Good job everyone!” Turning to me he said, “I’ll do some calculations and see if I can give you a number for the costs savings your CCPM program has produced. I know that wasn’t the point, but it will help customers with their decision about the benefits of our reliability offer.”

I said, “Thanks Rodney. Is there anything else for this morning?”

No one said anything. Everyone looked at everyone else and then left the room as they came.

Finally, Some Peace & Happiness

I felt encouraged. I needed to do more preparations, but I now have the content I need to make the sales pitch. It will be unconventional, but it’s the start I need to help me find peace and to be happy. I hope it will help others, as well.

The YouTube personality wanted, no they demanded, that I Like, Subscribe and “hit the bell” icon. You are asking me to do this at the start of your video. A few minutes in is not enough time to decide to commit to do any of these things.

I don’t mind the over the top self-promotion, but I clicked on this channel to learn more about selling value. The personality stated his name and said, “This video is about five things you need to know about value selling.” Without offering anything of value, he wanted me to like, subscribe and hit the bell? My finger was already moving closer to the browser’s exit button. It was time to get to the office anyway.

I thought about the YouTube experience on my way to the office. What if I approached a customer this way? What if I asked them for something without providing something of value to them first? What kind of response would I get? More than likely, not the response I expect nor want.

I expect more sales from customers who value our new operational capability. Being able to meet our delivery date promises has to bring benefits. But, getting more sales is a big ask. The value we can provide will need to be well understood by the customers. And my hope is our sales folks will want to sell our new reliability capability, too. Getting them to do that is a much bigger ask than what I’m asking from our customers.

Initial Preparations

First, I need to work through the way to present our reliability pitch so that it doesn’t trigger the YouTube effect which I experienced this morning. I don’t want to raise any more barriers than I have to. I get the feeling it will be hard enough for many of our customers to believe. But, I worry more about our sales folks not understanding it. Or worse, dismissing it. Many of the them have years of experience selling things in a conventional way. Selling our products features and benefits. And, they have plenty of history of broken promised I’ve inflicted on them by my own organization.

Getting Help

The help I needed was not easy to find. I thought of Gary, our non-sales software salesman, but he was difficult to connect with. He sold me and he did it in a way that was respectful, exposed the cracks in my thinking. My Admin kept getting his voice mail, but the next day he called back.

I explained to him what I was attempting to do. I was going to pitch the benefits of our new on-time delivery performance during an upcoming sales meeting. I’m assuming if the customer sees value in offer (buying from a supplier who can meet their due date promises), then we are in a much better position to close a deal. Of course, the value they perceive has to be high enough to make the switch from their current suppler, too.

Building Rapport

I asked him, “How do I build rapport with our customer before I get into the guts of the meeting?”

Gary said, “Wrong question. In my many years of experience, the customer is already dreading the meeting before you walk in the door. They also have many years of experience dealing with salespeople who want to sell them something. And, don’t forget they have heard companies like yours break promises about when their order will be delivered. Not a good track record to build a relationship on. It’s nothing personal, that’s the way it is.”

I said, “Then what do I do? The meeting is a week from today.”

Gary said, “The main thing is to prevent the customer from raising any more objections to your pitch. You’re already starting off on the wrong foot, so be very careful about what comes out of your mouth. One way to start is to be curious and empathetic about their situation. We’ll assume you’ll be meeting with your customer procurement representative. What do you know about them that establishes some common ground?”

Fess Up

I said, “This is going to sound unconventional. I would start by saying something about how we’ve broken their trust by not living up to our due date promises.”

I’ve learned to admit when I’ve been wrong and let the other person know about it. But before I do, I’ve also learned to be ready to make amends for the wrong I’ve done. Some people shrug it off and say it’s no big deal. But, the relationship is never the same. To make amends is not saying you’ll do something different. You need to be prepared to do something different and do it. Actions do speak louder than words. As soon as possible.

Gary said, “That’s a good start. It definitely something they can relate to and you will be able to let them you may have a solution to this issue. But, don’t forget there are also many reasons for why they bought from you in the past. You don’t have to be too hard on yourself or your company.”

I said, “Good point, we make quality products, price them fairly, and have good customer service.”

Evaluate Your Own Environment First

He said, “But, also realize what kind of environment you are working in. It’s a multi-project environment. This environment exists within your own company, as you well know, but your company is only one of many within your customer’s environment. That’s a multi-project environment, too. What is a key feature of this kind of environment?”

I exclaimed, “There is a high level of uncertainty.”

“Right, and there is plenty to be uncertain about. For example, your customer requirements are unique, meeting their quality specifications can be difficult, and doing so at a price they are willing to pay all come with challenges. And, may times there is a high level of uncertainty about one or more of them,” he said.

I said, “So customers know what they are going to get, but are forced to guess when they will get it?”

He said, “You are getting the hang of it. Why do you need me again?” I heard splashing in the background.

I said, “To me this is the easy part. I can relate very well to their poor due date performance complaints since they’ve told us over and over again they are a problem. Sometimes I’m surprised when they don’t say anything about them.”

Gary said with a giggle, “They have given up mentioning them since they don’t see any hope in them every being resolved. This will also be why it will be necessary for you to take them through how your performance has changed and why it will continue to perform well for them. But, we’ll talk about that later.”

I said, “OK, but what’s next. I’m sure they haven’t been sold because I can describe their environment.”

The Negatives in the Environment Are Easy to Find

Gary said, “How about describing the negative effects of how you impact their environment? At this stage you have to be willing to be self depreciating and fess up to the size of the pain your company has inflicted on them.”

I said, “That’s going to be a tough pill for some of our folks to swallow. But, where do I get this information? I don’t work inside my customer’s company.”

He said, “You know more than you realize. What happens when one of your own suppliers delivers late and what are the significant issues they cause you?”

I said, “I see, that is easy. Our planned production schedules change. The priorities given to our subcontractors change. And, even the planned commitments we make to customers are effected.”

Gary said, “What about your workers’ efficiencies, equipment use, and work in process?”

I said, “Those take a hit, too. More work in process can mean our lead times go up. The relationships with our subcontractors suffers and we may not have the leverage to work with the one’s we want to.”

Linking Negative Effects to Financial Performance

He said, “See, you do know enough already. But, you’re not done yet. What effect do these issues have on your customer’s financial performance? Try to get as close as you can to generally agreed upon financial measurements they may be using. At this stage you want to expose the financial damage of late deliveries. Or, what is the financial damage of working with unreliable suppliers.”

I said, “This is also easy to understand since we have measures in place to support our cost control efforts. Our CEO is always looking for ways to improve our efficiencies. And, our new found focus on on-time performance. Is that what you mean?”

He said, “Yes, but what specific financial measurements might they be using to track these things.”

I said, “There are a many things, like labor costs, carrying costs, overhead costs, penalties and other cost of sales. And, there are always ways to link these costs to your customer’s sales, margins and cash flow.”

I said, “That’s a lot to keep track of.”

The Hazards of Being a Salesperson

Gary said, “The customer knows that you are a salesperson. You are there to offer them a potential solution and they will be willing to listen to you for a short while. That’s why you need to prepare well and practice getting to this point in your pitch as soon as possible. And, don’t forget, without raising any objections along the way.”

He continued, “Some general questions about people, equipment, materials used, etc. are a crucial part of the inquiry process. But, they have to be asked at the right time. Customers tend to lose their patience when they are asked too many questions. Each question asked by experienced salespeople has a purpose. I urge you to prepare well.”

Basic Preparations

The preparation I need to do is an important part of capitalizing on our good performance. If this first meeting, or any later meetings, with customers don’t advance the deal towards closing on a deal, I’ll be stuck. But, being stuck doesn’t mean I’m dead in the water, it just means I have to find what went wrong and make corrections for the next time. If there is a next time.

I needed to change the subject for a few minutes. I was thinking to far into the future and making predictions which may or may not come true. There are too many variables to consider and I can’t be the one at fault if things go wrong. Remember, I need to be curious and keep an open mind. I do want to hear everything the customers are saying. I can’t take it personally.

I said, “When do I talk about the things we’ve done to improve our performance?”

Gary said, “Before you do that, you must build a solid base to present your offer as the best solution to the customer’s problems. The prospect has already been thinking about ways to deal with their problems. If we would like the customer to listen to us, we must block any unsatisfactory direction for solution that they might have in mind, as soon as possible.”

I said, “After the customer has agreed that they have a big enough problem, what’s next?”

The Criteria for a Good Solution

He said, “Yes, you must show what you are offering meets the most important criterion. Then you can use these criterion to transition from talking about their problems and talking about your solution.”

In the background of Gary’s phone, I heard a child’s excited screech. And, then a splash.

Overcoming Obstacles

Gary said, “I’ve got to go soon, so pay attention to this next part. The customer might raise some obstacles during your presentation. The procurement folks are masters at finding ways which will prevent them from making you and offer. Any obstacle raised by the customer should be written down and the discussed with them. But, delay them until until all the characteristics of your offer have been presented. In most cases, you will have overcome their obstacles anyway.”

I said, “Do I need to get the customer’s agreement on the actions to take to overcome these obstacles?”

Gary continued, “Any way you can make them a part of the solution is usually a good thing. The more obstacles you can overcome, the more likely the sale will move ahead. In general, first do no harm. Don’t say something which will raise an obstacle in the first place. This is your primary mission. Second, if they do raise an obstacle, help them to be part of the solution. Also, be prepared to change your offer or the detailed terms and conditions.”

I said, “If nothing else, I’ll have a clear idea about what’s blocking the sale. But, most important, I will have raised the customer’s level of trust in our ability to perform.”

He said, “If all goes well, they may even agree to give you an opportunity to bid on the next project they have. If they don’t offer, be prepared to ask them to send you their next Request for Proposal. Don’t expect them to pull business from one supplier to another in mid-stream.”

Don’t Forget to Follow-up On Their New Understanding

I said, “Follow-up is important. That’s seems so obvious now. We can’t take it for granted that it will happen naturally.”

Gary sad, “That’s right. Remember, what you will go through with the customer will be something new, something they have never heard before. It will be hard for them to believe until they see it happen. And, even then they may not believe you. They may think it’s a fluke. Once you start being reliable, you have to continue being reliable. They will be waiting for you to slip up and be able to say ‘I told you so’.

The phone went dead and I took from my head and looked at it. Gary did spend a lot of time with me and he was with his grand children. I’m glad he was enjoying himself.

Now, it was time for me to enjoy myself, too. But, in a different way. I’ll feel much better once I’ve prepared for the upcoming sales call. I want to make some progress convincing others of the benefits of our reliability offer.

 

 

 

The lush, green grass of the golf course was bright enough to sting my eyes. At this hour of the morning sweat was starting to form on my forehead. Our top salesperson, Jacques, was decked out in his infamous lime green pants and yellow polo shirt. He looked like a character from the Moppets with his wild, blond hair. He was tall, lanky, and had a build perfect for playing golf. His low handicap reflected his commitment to the sport and so did his generous expense account.

He walked up to me and said, “How are things going back at the plant? I’m working on a major deal with one of our pissed off customers. If we get it, it could mean more business, but I want to make sure we can deliver. We can’t afford to break another delivery promise.”

I said, “We’ve made a few changes in the way we operate and I can show you the graphs of our monthly delivery performance. We can deliver 95% of our orders on time now.”

He looked at me sideways and said, “What are you doing to bring your costs down? I walked through your section of the office the other day and I don’t feel any sense of urgency. Your overhead has to be higher than it was before.”

I ignored him. Salespeople are always trying to compete on price and are always complaining our prices are too high. Sometimes it’s the only bargain chip they have. Jacques may be our best salesperson, but not if we ranked them by the size of the sales margin.

He was getting under my skin, but I was not about to show it. So, instead of letting my emotions get the best of me, I deflected his comments and asked, “What happens at a customer’s plant when we deliver late?”

As he approached the tee, Jacques said, “Someone picks up the phone and calls me to bitch and moan about their late delivery. I never like getting those phone calls.”

I said again but in a different way, “I wouldn’t either, but what do the folks at the plant have to do to respond to our late delivery?”

Jacques said, “It’s what they don’t do that bothers me. They stop giving us orders. Or, they threaten us with late delivery penalties. Isn’t that enough.” His ball sailed straight down the fairway.

As I approached the tee, I said, “Yes, that’s bad enough. And, as we know, they can find another supplier. I know. I know.”

“What’s your point,” he said it as we walked back to the golf cart. Not interested in my response or my shot down the fairway.

I paused for a second and said, “What do you think our CEO always seems to be upset with everyone?”

He said shaking his head, “What does that have to do with anything?”

In a voice urging him to humor me for a moment I said, “His position requires him to focus on the flow of cash coming into the business. If there is enough cash to cover our costs, pay our debts and have some left over, he’s satisfied.”

“Or course,” he said, “and he seems to back off and not interrupt me every five minutes to close the next deal. But, since our prices are never low enough, I can only do so much to secure new business by lowering our prices.”

See what I mean. Always complaining about price. I said, “I understand, but look where are our main costs drivers are coming from. Our labor costs go up when our internal lead times go up. Our inventory carrying costs go up when our internal lead items go up.”

I continued, “Our overhead costs and working capital costs go up when we are holding inventory longer than Finance planned on. And, our engineering hours go up when we have to do rework and take the last minute customer change requests into account.”

“Don’t blame our customers for your problems. You know customer change their minds all the time. It’s a fact of life in our business. You know that,” he said.

“I’m pointing out that when our lead goes up, one of the moan reasons is that one or more of our own suppliers delivered late. Our costs also go up since we have to work overtime and some weekends to try and deliver on time. And, before you say it, the chance to cut corners and trim some of the customer’s order content is tempting,” I said.

“I would say it’s more than tempting since there have been a few memorable field service issues I had to sing and dance around,” he said.

I said nothing. He was right. I was there when some of the tough decisions to deliver on time or take the time to deliver a quality product were made. I regretted them then and I regret them now.

Someone far off in the distance yelled, “Fore,” and we both ducked our heads.

But, isn’t the there a cost of making a decision about shipping a product on-time, but before it’s ready to go also come at a price? Somewhere down the line the cost will be a field repair, or a full replacement of the item, or reputation suffers.

He said, “I thought we came here to play golf. I wanted to get away from the stress at the office and take in the fresh breeze off the bay.”

The air had the smell of fresh fertilizer and cut grass, but I got his point. I said, “Me, too, but here’s the thing. When our suppliers deliver late, we experience the same issues our customers do when we deliver late.”

He said, “I assume they go through all the same gyrations you are complaining to me about.”

I said, “Our customers costs also go up. Their customers don’t let them change their original due date either. And, hassle of dealing with more than one late supplier is a significant issue for them. Like it is for us.”

He said, “Sum this up for me, we’ve got to move to the next tee.”

I said, “At the end of day, there is a price our customers pay for our product. But, there is also a price they pay for not receiving our product on time. Which price do you think irritates them them most?”

Jaques said nothing. He was thinking. But, I let him off the hook.

I said, “They may save a few dollars by squeezing you on price, but what is the price late supplier deliveries have on their margins? They go down. And, if they also deliver late to their customers, what is the price of losing business, or worse, losing a customer?”

Resigned, he said, “A lot, much more than what I can save them by lowering our prices.”

I said, “What if they could find a supplier who’s deliveries are on time, every time. If this supplier doesn’t compromise on their product development or quality. And, it they don’t compromise on their customer service, lead-time or price. And, what if they could sustain their on-time delivery reliability over the long term.”

He said, “I would begin to trust them again. Not at first, but I would trust them to do what they say they are going to do. It might even take some of the pressure off of focusing on price all the time.”

I said, “What if I told you the changes we’ve made in our operations have built this kind of supplier? Like I said, I can show you our on-time delivery graphs and our actual deliver lead times for the past three months.”

He said, “OK, OK, let’s finish this round and look at our calendars to see when I’ll be back in the office. I’m very busy these days.” He pressed the pedal on the golf cart and we shot off to the next hole.

I said, “It’s your shot. But, let’s make a bet on this hole. If I tie or under your strokes, not only will you sit and look at our performance charts. I want to take the lead during the next sales call with this past customer you want to close new business with.”

He froze in mid-swing and looked right into my eyes. He eyes squinted and it wasn’t because of the morning sun. His mouth turned into a small, straight slit of something akin to anger.

Before he could speak, I said, “What I’m offering is a new capability you have never sold before. Never in the years you have been with our company have you sold a customer on how reliable we are. Never have you had to convince a customer the changes we’ve made are not a fluke. Never have you admitted the reason so many of their internal problems have been our fault.”

He said nothing. His face was now blank. Only the perspiration above his upper lip shimmered in the sunlight.

I said, “I’ve had to sell our internal folks and address all these issues myself. Only then did they start to understand and agree to make the changes which made us reliable. I know how to sell this idea. Give me a chance to sell it to our customers.”

After taking a deep breath and standing erect, he said, “Fine, what do we have to lose. We are not getting business from this customer anyway. The only reason they are talking to us at all is that their internal policies requires them to get three quotations.”

I said, “Find some time and come in and listen to my pitch. If nothing else, it might be fun to see me struggle at my attempts to sell to you.”

Jacques smiled and teed off. Not a bad shot. I teed off, but mine was better.

The Interview Bologna

A Quicker Way to Get Results

More Questions About What Was Taught

Stability Improves the Ability to Focus

Good Marketing Has Its Advantages

Some Documented Results

• • Only 38 percent of projects finish on time and within budget, according to new research by Project Management Institute (PMI).
  • “Organizations continue wasting $109 million for every $1 billion invested in projects and programs,” according to Mark A. Langley, president and CEO of the Project Management Institute.
  • Within the last year, only half of projects finished on time and 55 percent finished within their initial budgets, according to the 2,800 project management leaders surveyed.

“The PMP adds value. CIO magazine ranked the PMP as the top project management certification in North America because it demonstrates you have the specific skills employers seek, dedication to excellence and the capacity to perform at the highest levels.”

One More Interview and a Glimmer of Hope

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Key Element #1

Key Element #2

Key Element #4

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