What is Benchmarking?

First introduced by Taiichi Ohno, the legendary & brilliant Japanese manager-turned-consultant behind Just-in-time System of Inventory Management, it is a continuous process applicable in all functions and levels of Business that involves finding and implementing best practices (any where) in all areas that influence customer satisfaction. It is helpful in management as it provides new ideas and conviction to implement those ideas.

According to Wikipedia, Taiichi Ohno was a prominent Japanese businessman. He is considered to be the father of the Toyota Production System, which became Lean Manufacturing in the U.S. He wrote several books about the system, the most popular of which is Toyota Production System: Beyond Large-Scale Production. Born in Dalian, China, and a graduate of the Nagoya Technical High School (Japan), he was an employee first of the Toyoda family's Toyoda Spinning, moved to the motor company in 1943, and gradually rose through the ranks to become an executive. In what is considered to be a slight, possibly because he spoke publicly about the production system, he was denied the normal executive track and was sent instead to consult with suppliers in his later career.

Ohno's principles influenced areas outside of manufacturing, and have been extended into the service arena. For example, the field of sales process engineering has shown how the concept of Just-In-Time (JIT) can improve sales, marketing, and customer service processes.

Once decided to use, Benchmarking involves using a model organization against which our own organization is reflected upon to find areas of action.

Benchmarking as proposed by Taiichi Ohno involves three vital steps- Analysis, Comparison and Synthesis. Analysis: An issue under consideration is dissected – dismantled, to arrive at the various constituents that go into making of that Issue; shall we use an industrial term here Components. Comparison: The constituents or components thus found are compared with those of the model already selected. The differences or the gaps thus obtained provide the basis for next step. Synthesis: The ideas that emerge in the Comparison stage are examined for affinity between them and using those ideas which collectively fuzz together a sense of direction emerges that becomes the guiding force.

In essence the direction thus determined becomes a collective idea based upon the out side realities rather than an insider’s gut feel. This very fact helps drive change in belief systems, behaviors and achieve a desirable focus of respective teams.

Based on the need different organizations may follow one are all forms of this tool: Strategic Benchmarking; Product Benchmarking; Process Benchmarking and Performance Benchmarking.

Are you a Mirchi Seth?

Narayan Murthy, the poster boy of Indian Industry, has often stated, “When the work force leaves for home in the evening, it is the challenge of the management to get them back in fighting fit shape, the next morning.” Looks like, INFOSYS had recognized this in early and what miracle we see today is the result of mastering this simple idea and then to take things any forward. After Murthy said this, lot has been done, reported, suggested, prescribed and reflected upon this topic. Various expertise streams like Employees Engagement, Human Capital Reviews, Talent Management and what have you, have come into existence. The exact words defining such terms may be different from what has been stated by Narayan Murthy but if you think that the situations in your firm demands similar attention then please explore the following text.


While the idea may sound simplistic yet I have noticed some very crude solutions to be in vogue. A few businesses and manufacturing units skip a month’s salary. They pay in the third month, the first month’s salary and thereafter follow the cycle. There is another variation, hold two month’s salary. The employees become tight fisted for a month or so and then begin to follow the cycle with a sigh of relief, after all money is coming. They begin to believe that it must be very bad out there, so why not keep the job by attending it next day. Almost similar to what Narayan Murthy stated or is it any different? There are firms and companies who use other variations of such devices, they keep expenses or incentives or bonuses pending; and some give promotions but release the letter to that effect only after say 4 or 6 months’ delay.


All these sound amusingly effective tactics and even the workforce accepts and there are no waves in the normally calm waters. But, while reading the above, if the taste in the mouth started getting any sour then you could certainly see that such tactics are self limiting one – they do not provide any avenues for growth, a much desired Product of Business or Industrial Activity. The work force considers them selves prisoners of circumstances and negativity, flattery and nepotism prevail. Over the years, I have observed from a distance, many commercial and industrial enterprises loosing in the long term. And owners of such enterprises are forced to find profits elsewhere; some play stock market – currency futures – commodity exchanges, others the real estate, yet others have ventured into education, directly or through a proxy. They can afford to act in a cheap manner, in their chosen business, as their real profits come from some place else. This is some what similar to the story of a Mirchi Seth, a character in Amir Khan starer and a block buster movie Sarfarosh.


Some one who has come out of such situations has the following to share as do-it-yourself solutions:

• Manage your executive time by doing the most productive thing at any given time. This may involve less number of business meals or entertaining. Fixing an earlier time (say at 6:30 pm instead of 8:30 pm or later) to go back home. Take part in only those activities that add value to the activity and delegating the rest.
• Change operating beliefs of your subordinates by communicating with them more intimately. Some of the popular and changeable beliefs are: More efforts will yield more out put. Quantity of out put is more important than Quality. If I let or help my subordinate handle this task, then how will I retain my importance at work place? When changing such beliefs for others, encourage them to find out what their common sense is whispering in their ears.
• The entire communication to be done with sole intent of figuring their beliefs and changing them to a more productive one. Later, they may be encouraged to examine it themselves and inform you, ‘How they changed such-n-such belief!’
• Jack Welch, former Chairman of GE has often stressed on keeping the work place environment similar to that of a small Grocery Store. That intimate work culture, that sense of purpose in handling each transaction. Avoiding the prevalent small shop ills though not stated yet implied.

Way to change is to first change yourself and then lead by being a good example!

God created Advertising...

God created Advertising,

so that in the interlude
Business could enrich its Salesmanship!

Salesmanship is a 3 way street,

TO-n-FRO or FLY!

OPERA OF SOAP BRANDS- WHAT IT IS WORTH?

One Sunday in 1879 Harley Proctor, one of the founder of the candle and soap firm P&G, heard a sermon based on the Forty-fifth Psalm, "All thy garments smell of myrrh, and aloes, and cassia, out of ivory palaces." The word "ivory" stuck in his mind - and became the name of the firm's white soap.


Proctor had great ambition for his product. But it was a commodity. He was an inquisitive young man who decided he was going to figure out a way to differentiate his product. How does one go about doing that? By simply going to the store where soaps were sold and observing what went on over there. Proctor came to know the housewife bought the soap to clean herself, her family and her home.


He had a cousin who was a chemist. He requested his cousin to analyze his soap to see how pure it was. Cousin reported it is "99 and 44/100 percent pure". All the soaps were the same but Proctor decided to capitalize on this knowledge.


In December, 1881, P&G ran their first Ivory ad stating that the soap "floated" and that was "99 and 44/100 % pure," a dual claim which has become one of the most famous ad slogans ever.


Ivory was a remarkable product in a time in which most soaps were yellow or brown, irritated skin, and damaged clothes. The fact that it floated had practical value to those used to being frustrated by trying to find their soap in the bath. Ivory's brand name and its distinctive wrapping, gave customers confidence that they were getting the mild, gentle soap they had always desired.


In 1882, Proctor spent $11,000 in a national ad campaign that resulted in high level of brand awareness, and customer confidence that the manufacturer was backing the product and would stand by it.


Then in 1885, a yellow soap named Sunlight, when introduced to dreary, sun starved England, became the start of Unilever, now one of the largest firms in the world. Unlike Ivory, however, Sunlight gave way to other brands, such as Lifebuoy, Lux, and Rinso.


P&G demonstrated its commitment to Ivory's brand equity during the depression. In the face of tremendous economic hardships, P&G resisted pressures to reduce advertising. In fact, in part by sponsoring "The O'Neills," a radio "soap opera," Ivory doubled its sales between 1933 and 1939.


The loyalty and market presence that Ivory had built was challenged in 1941 by an Ivory clone called Swan from lever Brothers. It was billed as "The first really new floating soap since the Gay Nineties." P&G reacted with aggressive advertising to protect Ivory.
Without any clear product difference, Lever could not dislodge Ivory, and ultimately withdrew from the market.


In few other companies is the power of branding so apparent. Without question the key to the success of P&G is its commitment to the development of brand equity, the brand management system that supports it, and the ongoing investment in marketing that sustains it.


There are a few publicly available numbers that allow a crude estimate of the profits that the Ivory brand name has provided to P&G over the past century or so. Just over $300 million was spent on U.S. measured media during the ten-year period from 1977 to 1987. It is estimated that during this period measured media was about 75% of the total advertising at P&G. If similar ratios hold for Ivory products, the total Ivory advertising expenditure would be around $400 million.


Assuming an ad-to-sales ration of 7% (the ratio for P&G as a firm ranged from 6% to 8% during this period), worldwide sales of Ivory products would have been $5.7 billion. Assuming an exponential sales-growth curve since 1887, the total sales of Ivory products since Ivory was first introduced would be around $25 billion. Assuming an average profitability of 10% (the average profitability for laundry and cleaning products from 1987 to 1989 was 10%), a reasonable estimate of total Ivory profits would be $2 to $3 billion.



[N. B.: Much of this text has been taken from a news paper article published around 1994. I do not have the article to accord the credit due to the author. If any reader is able to recall, please communicate so that due credit may be accorded.]

Sell it like Shahrukh...with Pride

It is common for celebrities to sell products. They endorse a Brand, they act in the commercials, they take part in promos, whatever, it effectively means, they are selling it. So whenever Shahrukh Khan talks about his job as such a Salesman; almost all the times I can sense Pride in his voice. May be taking Pride in ones work comes easy to a star or a celebrity or may be it requires some effort some place.


I have often wondered if same is the case with every salesman in the field who represents a Brand. Not every one says, with that sort of Pride, "I sell.....". And there lies an opportunity. I keep quizzing the salesmen, wherever and whenever I bump into one. Recently while at a Mall in Indore, I saw some one wearing Coke Logo above the breast pocket of his shirt. I stepped aside and asked him, "Do you Like Coke or do you Sell Coke?" Among the various choices he had as an answer, he chose to say it emphatically, stressing each word by taking a long pause between each of these words: "I SELL COKE!" Some Pride it was!


Next day at a Bank, I came across a person carrying a writing pad which had an advertisement of a famous brand of Hosiery. The advertisement was rather small but their slogan was very prominently printed. I asked the gentleman carrying it if he was a distributor of that Brand of hosiery? He said, 'No!' and went on to add, 'Such pads are available cheaper in the market'. He said further, 'Companies desperate for visibility are using almost any place to make their slogans popular.' he made it sound like a cool arrangement, or may be it isn't all that cool. Such indiscriminate use of Advertising Resources has not only adverse effect on the cost of the product, it has an adverse effect on the moral of the salesmen. The catch lies in thinking. Many business owners think ad spend as Asset (right but not always) and expenditure on salesmen a Liability. Where as in every business, "Salesman is the ONLY ASSET and everything else is LIABILITY!" I can justify this line, any time.


When Salesman makes a call, he carries with him (among other things) an invisible package of information, knowledge, bonds, emotional triggers, attitudes. The emotional triggers and bonds he transfers to prospective customers get communicated to public at large. And consumers and users often reflect the same behaviors originally transmitted by the firm's Salesmen.


Take for example, Sales Training. I am reminded of a recent encounter with the owner of a Retail Chain. He says, I train these boys and girls only to the extent they can follow my instructions. If they get trained to a higher level, some one else will take them away. There are some (500 or more) persons in his employment. Imagine 500 people waiting for instructions, not able to use their own head. Not free to think and act. Remember the expression, "An empty mind is devil's workshop!" What level of Pride it can lead to. The Pride of a man who doesn't go to bed empty stomach. What sort of feelings such people will communicate to their Customers? Customers may talk to such employees but bonds will be weak & flimsy and not deep and friendly. Such customers will be polite to those salesmen because those customers are actually polite in their real life.


When a person takes Pride in his job, he radiates such confidence that really transforms prospect's behavior. This is a confidence that doesn't come from using an expensive car, wearing expensive clothes, carrying chick accessories and operational assets, but it comes from deep understanding of the task and Pride of having done a job well. One can not wish and acquire such Pride, one needs to earn it, and there are no exceptions to this.

How to climb down the Advertising Tiger!

In a world where there is too much to do and too little to earn, the ad spends have come to assume a form of notoriety and even vulgarity in some instances.

The only way around is- try touching base with basics of business. Peter Drucker once said: There are only two things a company should be doing, Innovation and Marketing. While Innovation involves R & D orientation and commitment, Marketing automatically emerges a subject worthy of top management's attention. And through this the top management may also provide direction to R & D efforts with the organization.

While at Marketing, let us see what famous Gurus Al Ries & Jack Trout have to say: Marketing is not a battle of Products. It's a battle of Perceptions. Therefore, the primary task of marketing department is to position the product in the minds of Prospective Customers. They add, Positioning is not what you do to the Product. Positioning is what you do to the mind of the Prospect.

Having identified the task of Marketing- Influencing the mind of Prospective Customers, Advertising immediately props us as a clever-n-quick fix solution. This is because; the advertisers perceive that it is the easiest way to influence the minds of prospective customers. "I can sit back while the Advertising Agency, Media, Content Providers, and the Prospects participate in my show. Also the related expenditures are carefully connected to the ability to generate customers' attention, through devices like ABC, TRP, or TRM and their impact on Circulation, Multiple Readership, Viewership, Aided Recall or Unaided Recall, and so on and so forth. All this is well known to the consumers of advertising.

Advertising Men go to the extent of fishing out statistics like, "India has some 17% of world's population and we have been able to come up with ONLY 1% OF THE WORLD'S AD SPEND."

It is a scary situation, for Brands are already overloaded by the burden of Ad Spend like a 9 Tonne Capacity Truck carries a cargo far in excess of 17 Tonnes. The imminent break down does not happen is a miracle yet the threat looms large. Those stunned by Admen’s statistics may please note similar statistics exist for every sector like: Per-capita consumption of Energy, Lubricants, Internet Surfing Hours, Health-care Facility, and so on and so forth. Once we pay attention to the statistics, the issues get blurred and we loose sight of objectives, get carried away and start searching for more funds to support next round of Ad Blitz.

The trick of climbing down the Adverting Tiger is concealed in the published literature of Advertising. Here is HOW of it:-

Let us see what the pioneers of Advertising Industry faced or experienced in those formative years of Advertising and what they have said. Here I am reminded of what Mr. J. Walter Thompson encountered while traveling in a New York local Train. Here it is in words of none other than Mr. James Webb Young:

QUOTE

One winter night, going home, he found himself seated next to a shabby old man, very genial and talkative.

"What is your business?" said this old codger to Mr. Thompson.

"I am an advertising man" said Mr. Thompson.

"Why," said the old fellow, "so am I! What's your beat?"

"I am down on Park Row," said Thompson, with some dignity.

"Well now, ain't that some thing!" exclaimed the oldster. "That's where I am too, and I like it fine. But ain't it hell when the wind blows?"

UNQUOTE

Just like the above conversation, Advertising is a much misunderstood term. People tend to interpret it in ways that is most convenient for their cause. J. Walter Thompson took trouble to clearly define an Advertising Man: He who has the knowledge, skills, experience and insights to advise the advertisers how best to use advertising to accomplish their objectives. And to execute advertising required to do this.

James Webb Young takes a leap forward to define advertising.

QUOTE

A famous and fruitful definition of advertising itself used to be "Salesmanship in print." Today it needs an amendment. To "in print" would have to be added "on the air."

And Salesmanship is the art of influencing any kind of human behavior by putting the proposition forward in terms appealing to the other fellow.

UNQUOTE

Therefore, when Advertising means- Salesmanship in Newspapers, Magazines, Direct Mailers, Radio, Television, Bill Boards, and below the line activities; why not pay attention to the Salesmanship itself. This is easily done by persuading your front line Sales persons to improve their Selling Ability to match at micro level the effect a TV Commercial or a Radio Spot has on macro level. These Sales persons have the potential to do it.

Theaters of Excellence

"All that we see or seem; is but a dream within dream." Those are some very famous words.

I have always wondered as to "Why the dream destinations attract people?" Is it some thing inside those people or it is in those destinations or both or something else.

Trust me, I did not have any answer until a friend came back from a trip. She was describing her experiences. While listening to her, it dawned upon me that she was describing the places she visited - the dream destinations - as Theaters of Excellence.

It seems, people she came across, the actors - the players - the participants - the workers - the vendors - the drivers - the cashiers - the managers - the stakeholders; everyone appeared to treat their respective positions as a part of a grand show. They play their respective roles in an orchestrated manner. They create their own dream world with in the larger dream called universe. Being their own dream it always works out. It started fitting in to the void of several years as to why people are attracted to dream destinations; because those are Theaters of Excellence.

So if I could DREAM my work as a Theater of Excellence and act accordingly then I would be able to attract others to me, my purpose, my priorities and at the same time offering them satisfaction of dealing with Excellent Environment.

Isn't it a dream we weave all the time? So why not begin by- "Visualizing My Work Place as a Theater of Excellence"

Finally, take a look at this anecdote about an ancient Theatre of Excellence-

Around 400 BC, Phidia, the greatest sculptor of ancient Greece was commissioned to make that to this day stand on the roof of the Parthenon, in Athens. They are considered among the greatest sculptures of western tradition. When he submitted his bill the accountant said, "These statues stand on the roof of the temple, and on the highest hill in Athens. No body can see any thing but their fronts. Yet you have charged us for sculpting them in the round that is, for doing their back sides, which nobody can see"

"You are wrong", Phidias retorted. "God can see them".