Monday, February 20, 2017

The Inter-Departmental 360 Review

“Magic mirror, won’t you tell me please, what other people think of me…”

So goes the bridge of an old song of the past. But think for just a moment, then let me ask you a few questions: Doesn’t it make at least some sense to better understand how important partners see our behavior? And what if these partners were coworkers who share at least one major goal: increasing your bottom line? Is everybody meeting the needs of their coworkers? Are we as efficient as we believe ourselves to be? More importantly, are we as efficient as we should be to survive?

For years, Human Resources Departments have encouraged us to use 360 degree reviews for our performance. Why not apply this time-tested concept with our supply partners? How about investing time streamlining the communications between operating departments in our own organization?

We have observed distributors with no proactive interaction with their Purchasing Department and their Sales group. The results include issues with predictable stock outages because larger orders were not anticipated. In the world of High Tech Distribution, obsolete products languish on the shelf because the buyer had no way of knowing about the Supplier’s plan for a new model. That weighed in cheaper and better than the previous revision. Further, one client shared the story of how $10,000 worth of product was scrapped because it had not sold for 18 months. The only problem was the more popular version, which sold on a regular basis, was the “stripped down” version of the exact same product. Instead of a reduced margin, the customers ended up with a big fat loss.

Poor communications don’t always result in measurable loss. Sometimes it sneaks up on us as compromised customer service. Delays in shipping, unmet promise dates, and last minute expedites irritate our customers. What’s worse is our sellers then spend their customer face time fixing shipping issues rather than proactively developing new business. They grumble, sometimes management responds. Things get better for a while, but the bandage for some falls off and the issue returns.

An inter-departmental 360 allows company leadership to identify potential issues early on with the idea of building long term sustainable progress. What’s more, a 360 review allows the leader to determine how to prioritize their time and attention, focusing on areas with the highest opportunity for payback.

For most distributors, the inter-departmental interaction looks like this:

All known interactions are identified. For example, we have listed potential outside-inside interaction points below:

Customer Dynamics
·         Customer having product issues
·         Customer having problems with existing products
·         Customer comments on need for training
·         Customer mentions of new competitors
·         Customer refers to new expansion
·         Customer lists new machines under design
Delivery Problems
·         Need for advanced expediting assistance
·         Missed delivery dates which may cause the customer issues
·         Orders that “simply must” be on time
·         Customer needs which stretch the ability of the supplier’s factory
·         Needs for service stock
Major Quotes
·         Requests for quotes that fall outside the normal flow of business
·         Quotes that may be subject to competitive pressures
·         Quotes for unusual materials
·         Quotes for products normally supplied by a competitor
Major Orders
·         First time orders from a target customer
·         Orders for exceptional products
·         Orders above the normal size
Target Accounts
·         Accounts which have been targeted for growth
·         Accounts that require special attention
·         Accounts where we are trying to break doors down
·         Accounts with opportunity to knock off a competitor
·         Accounts with detailed action plans
Supply Partner / Vendor Information
·         Supply Partners who have shared leads
·         Supply Partners with special pricing agreements
·         Supply Partners who have shared competitive information
·         Vendors with strong links to competitive distributors
·         Vendors who may take business direct
·         Pushes with members of marketing groups
Opportunity Pipelines
·         Quotations which could turn into orders
·         Potential for targeted accounts
·         Orders pending
·         Opportunities which may turn into orders in the next 6 months
·         Discovered opportunities based on phone conversations with customers
Follow-up Activities
·         Important dates for talking to customers about orders
·         Calls to check on status of pending quotes
·         Communications with customers on training, seminars, sales events
·         Expiring Special Pricing Agreements with Supply Partners

A similar list of interactions should be produced for each of the functional departments. This is important because in the process, you set expectations of what management thinks should be happening. The act of creating the list will shed light on areas lacking in full duplex communication. Once this list is completed the leadership team of the group forwards the list along with the 360 review form to members of all departments.

What to do with the final data?
As we have already indicated, the data allows the distributor manager to assess the nature and severity of inter-departmental
communications issues. What’s more, armed with this information we can determine the areas of greatest impact. Once this has been established, it is recommended the distributor, develop a plan for facilitating better interaction.

Sometimes this is as easy as setting up a joint meeting between the department and talking about the issues. In our work of setting up sales processes within dozens of wholesalers across the knowledge-based distributor universe, we have discovered the solution comes from setting specific measures to expectations.

For example, a busy inside salesperson cannot take time to review every single quotation for follow-up with her/his outside sales counterpart. But they can advise of quotations above $5,000 or made to a select group of target accounts. Conversely, a salesperson cannot update their customer service support group on every account in their 80+ account portfolio; however, they can cover their top 10 and target accounts. Time frames are established as well. New quotes meeting the prescribed measures must be followed up in 2 business days. Customer issues must be reported within 24 hours. These are the fundamentals of process building.

Here’s where the setting a process replaces random judgments of sporadically trained employees. The process comes with a bonus feature; when expectations are wrapped in numbers, and these can be measured. Bringing us to Pearson’s Law:

"That which is measured improves. That which is measured and reported improves exponentially."

Taking stock of the quality of interaction is the first measure. Setting definitions around exactly how, when and precisely what should be expected is the first step in building organizational efficiency.

A final thought
Your organization may be small, you sit near each other. You have regular conversations during coffee breaks or after work; none of these preclude the need for going through this process. Issues in communications creep into our lives. Duplication of efforts drives inefficiencies; costing your company money and dulling competitive edge in customer service. Time invested in building better communication is time (and money) well spent.

Some may have gone through a similar exercise in the past. Congratulations on being ahead of the learning curve, many distributors have never gone this far. But situations change, technology shifts alone create firestorms of communication breakdowns. Economic trends shift customer behaviors. Finally, adroit competitors tuning their own processes may be giving them a new advantage. It’s an ever-changing world. Why not be the best you can be?

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