Month: April 2024

Tuesday, 8.48pm

Sheffield, U.K.

The magic formula that successful businesses have discovered is to treat customers like guests and employees like people. – Tom Peters

Here are three things to remember:

1. Marketing is the art of creating a conversation.
2. Sales is the art of creating a customer.
3. Business is the art of creating value.

I’m at the section of John Seddon’s book ‘Freedom from command and control’ where he talks about customers.

Seddon is not a fan of customer relationship management (CRM) systems – after all, he asks, which one of your customers really wants to be “managed”?

Not one, is the answer. No one wants you to track and collect data and treat them like an object, one to be described and cataloged and retrieved and polished and put away.

The problem is that the only messages you get is that the way to do anything is with software.

That’s a message sent to you by people that make tools – so you should really be wary.

The reality is that your customers are people and if you want to create value for them you need to understand what they need and give it to them.

It’s that simple.

But not easy.

I have, I think it’s fair to say, created systems that have enabled the delivery of billions of pounds worth of transactions.

What kind of complicated system was this, you might ask?

It was a spreadsheet.

Not because I couldn’t build a complicated tool – I can and did – but a complicated tool did not help when the key thing was delivering what “work” was from the point of view of the customer.

Complexity does not create trust, if anything it first makes people wary and then if there is anything at all wrong in what you’re showing, it burns it off entirely.

Trust emerges when a customer believes that you understand their situation and know what they need.

It starts with listening.

Now, the fancy term for this, is qualitative research.

You’re going to listen to your customer, ask questions, take notes, look around their operations, read about them – and gather qualitative data – going beyond the numbers to build a rich appreciation of their situation.

This is not the kind of thing anyone types into a CRM, into a little box that’s meant for a summary of a discussion.

It’s a conversation that’s had between someone who needs work doing and someone who knows how the work is done.

Anybody else in the middle of that conversation, anything else in the middle of that conversation, is in the way.

And boy do people like getting in the way.

As organizations grow, all kinds of people get in between customers and the individuals that do value work – the work that the customer needs doing.

These people slow things down, try to manage from a distance, standardize things that should be left to the discretion of workers and generally complicate the heck out the simple task of working on what needs to be done and creating value.

It’s one of the hazards of growth.

Most companies struggle, not because of the competition, but because they just stop innovating, stop moving forward – they are stopped by the inertia that builds as they get bigger.

But there’s always a way out of the mess – a very simple way to cut through the tangled mess of an organizational wilderness.

Contact your customer or prospect. Get them on a video call. Talk to them. Listen.

And you will learn all you need to learn to build your business.

Cheers,

Karthik Suresh

Thursday, 8.58pm

Sheffield, U.K.

A leader is best when people barely know he exists, when his work is done, his aim fulfilled, they will say: we did it ourselves. – Lao Tzu

What do you think of when you’re asked to imagine a leader?

The chances are that it’s some sort of caricature of what leadership really is like.

There are some leaders who truly believe that mission and vision statements work, that putting a wishful idea on paper somehow makes it come true.

That’s not the case. A bad business will stay bad no matter how many vision statements you write.

A bad business can also survive for a surprisingly long time.

An evolutionary model probably makes more sense. There’s an ecosystem of businesses and some are new, some are old, some are good, some are bad, and some are alive and some die.

It’s a neverending game.

Leader number one, then, is the one on a pedestal, the one that point to where we need to go and takes everyone with them.

I suspect such leaders are discovered if they succeeded. How many great leaders can you name that lost?

Napoleon comes to mind. Is Custer one?

The second kind of leader turns things around – they call themselves servants of their people.

Their job is to support and push their team forward.

I’m a little sceptical about that one as well, especially if they claim to be servants while earning 3,000 times as much as their employees.

The model that I think is relevant for this day and age is a leader who is a colleague.

Probably one that has more experience than you or has taken the risky step to start the business – that’s why they’re in charge.

But they’re there because they know what they’re doing.

And if you’re the person in charge it’s never been easier to work alongside your team members, regardless of where they are in the world.

You can go and see the work being done simply by joining a call and sharing screens.

That kind of leader understands what’s happening at the point where customers interact with the business and tries to shorten the time between first contact and the receipt of money for a completed service.

They do that by understanding the business as a system and working to improve it.

Simple really.

Cheers,

Karthik Suresh

Wednesday, 9.33pm

Sheffield, U.K.

Success is really about expertise. – Steve Young

I’m on the sixth post going through John Seddon’s “Freedom from command and control”. You can find all the posts here.

Seddon has a basic model in his book for any service that has a structure where the customer has something that’s broken and needs it fixing – he calls this a break-fix archetype.

Something has gone wrong so you get a call.

That’s a form of customer demand.

The first assumption is that this is a bad thing. You should prevent customers from getting to you at all costs – you need a dial control system – press 1 to hold forever – and so on.

Or you need to build a call centre to handle all these calls.

Or, these days, use a chatbot. Or an AI answering service. There’s one being promoted now that has a human type voice and can answer millions of calls.

But before you do anything at all you really need to understand why people are calling in the first place.

If things are going well there should be no reason to call at all, should there?

The call is actually a signal – a sign that something is going wrong and needs fixing.

The first thing you should do is start listening to calls and answering them. Try and understand the problem.

And here’s the second mistake people make.

They assume that their most experienced people are too valuable to spend time talking to customers so they get low-paid temps or administrative staff to do that instead.

But these individuals lack the experience needed to really understand and diagnose what’s going on.

So they might spend more time on a call and get things wrong and create more problems than if one of your experts had a five minute chat and worked out what to do.

The second correct step is to get someone who knows what they’re doing to have a chat with the person that has a problem.

Which will then lead naturally to the next step which is to figure out what needs to be done and respond to the customer, ideally resolving the problem.

This is really hard to do – managers have to find something to do with their time so they end up measuring things and trying to find incentives – rather than just paying people and letting them get on with their work.

If you’re just starting a service business this is something worth thinking about – because it’s going to be difficult.

Don’t try and measure and incentivize people in a bid to motivate them.

Let them be motivated by being able to do a good job and make things better for customers.

Pay them a salary, rather than bonuses or commissions or some other fancy stuff.

If you need someone on your team it should be on a salary.

And their job should be to talk to customers and deliver what they need.

As a manager, your job is to help them do that – getting them resources and getting roadblocks out of the way.

Why do this?

Because no one grow a business by focusing on costs.

Focus on delivering value – and doing that will drive out costs.

That’s the way to succeed.

Cheers,

Karthik Suresh

Tuesday, 8.55pm

Sheffield, U.K.

A bad system will beat a good person every time. – W. Edwards Deming

Some people think management is about people and motivation and all around happiness.

It’s not.

People are important, of course. But the system they’re in matters more.

If you’re lucky enough to be born somewhere stable and prosperous then your life chances and outcomes are going to be different from someone with similar personal characteristics but living in a war-torn or unsettled situation.

We can’t blame people, especially if what they’re doing has a success rate equivalent to doing a coin flip.

Let me give you an example.

There are people in the world who trade for a living – they manage financial positions and buy and sell commodities and stocks and all sorts of things.

And they imagine that they’ll make lots of money if they’re smart at what they do – if they buy at the right time and if they sell at the right time.

But simple maths will show you that they’re probably going to lose money.

Let’s say you’re a trader and your job is to buy and sell a commodity, say copper.

Let’s say you call the bottom of the market right most of the time – you’re on the money around 70% of the time.

And let’s also say you call the top of the market right 70% of the time.

So, you buy when it’s cheap 70% of the time and you sell when the market is high 70% of the time – you’re going to make money, right?

Except, you’re doing two things, buying and selling. When you combine the probabilities (0.7 x 0.7) you have less than a 50% chance of making a profit.

You might as well give the money away.

The people that make the money are the ones that do one thing well. Like buying a good stock and holding onto it forever.

Or these days, just buying the whole market and getting on with the rest of your day.

Now, if your business is not a trading one but more of a service business, what should you focus on?

We are, if you remember, carrying on with a series of posts examining John Seddon’s book ‘Freedom from command and control’.

The thing you’ve got to work on is the system – not the people, not targets, not incentives, not motivation – but the system.

Whatever results you’re getting right now from your business are the results that your business system is perfectly designed to produce.

If you want things to change you have to work on the system.

So how do you go about doing that?

Well, if you’re an engineer the approach is pretty clear.

Engineers have to work with things that have to work. If you build a circuit and it doesn’t work then there’s something wrong with the system and you have to dig in and figure out what’s wrong.

You don’t just start pulling wires out – you first need a model to work with, some kind of circuit diagram of your system.

And that diagram can help you figure out where a problem might be – if the smell of a burning capacitor doesn’t alert you – and what you need to replace to fix it.

A business is like that, except the smell of burning might be a customer complaint or stressed staff.

Something is causing a problem in the system.

You need to learn how to talk to people and map out what’s happening and diagnose possible problems.

It takes time and effort and a willingness to spend the time and effort working with your team to figure out what’s not working and try something different.

And that’s all you can do – there is no perfect model – you just need to look at what’s going on, come up with some ideas, do some research, try changing something, see what happens, learn from that and go around the loop again.

We sometimes make things too complicated.

Give your team the freedom to get things done for clients.

Monitor the activity, the voice of the process, and get out of the way if everything is working.

When it’s not, ring the big red bell, stop everything and get involved, work together, and figure out what you can do to fix the problem.

As a manager, you are the only person with the power to change the system.

Therefore, that is the thing that you should focus on the most.

Cheers,

Karthik Suresh

Monday, 9.23pm

Sheffield, U.K.

If you have an important point to make, don’t try to be subtle or clever. Use a pile driver. Hit the point once. Then come back and hit it again. Then hit it a third time – a tremendous whack. – Winston Churchill

The most important people in your organization are the ones that directly serve customers.

And that’s that.

Okay, let’s spend a little more time on this as I continue working through John Seddon’s “Freedom from command and control”.

Imagine an organization chart – one from any business.

At the top is the top management, the CEO, the CFO.

On one branch sit the support services, Finance, HR, IT. They’re supposed to enable business. Sometimes they prevent it.

On the other branch sit managers, from big managers to little managers.

At the bottom are the people that do the work.

And that’s how they are seen, as the lowest on the ladder, the bottom of the food chain.

Now, this may not be reality, things have changed on the ground.

But the pictures in our heads are from a hundred years ago so if you set out now to build your own business it’s possible that your mental models need updating.

When you first start out you serve customers yourself – and as the most experienced person on the staff and the one that cares the most about your customers – they get a brilliant service from you.

But how do you step back and bring in a team that still keeps customers happy – what’s going to stop the lazy buggers from doing as little as possible?

Well, you have to stop thinking of them in that way, to start with.

Your job is to get better at hiring. Finding the people that are going to be part of your team.

That’s not easy. It requires overcoming biases and taking considered decisions.

Hire slowly. Build great training systems. Support your team.

There will be problematic hires. Things won’t always work out. Make tough decisions quickly. It’s better for everyone that way.

Above all, don’t try and manage by targets and timesheets.

It’s going to be tempting, but you will create more problems.

Instead, do exactly what clients need. No less. And no more.

You will find that your operations run more smoothly, your team is happier, and your customers satisfied.

Cheers,

Karthik Suresh

Sunday, 8.40pm

Sheffield, U.K.

Our prime purpose in this life is to help others. And if you can’t help them, at least don’t hurt them. – Dalai Lama

This is the third post in a series looking at key ideas in John Seddon’s ‘Freedom from command and control”.

The ideas in this post are possibly the most important ones to learn if you want to dramatically improve how your business operates and how happy your team are.

Let’s start with a question that comes up all the time.

How many new people do we need?

You’ve got a problem. Things aren’t working very well. Or you see an opportunity. There’s a market you can get into. What’s stopping you?

Your answer, quite possibly, is that we’re too busy already – we need more people.

Everyone is maxed out working on stuff and there is no time left to deal with these issues or go after opportunities.

But hold on, what are your team actually doing now?

Some managers have no idea what the actual work is that their team does.

And that’s a problem, because you need to know – you need to sit with them and learn about what they’re working on.

This is the demand being placed on them.

But what we don’t realise is that there are two kinds of demand: value demand and failure demand.

Value demand is work that clients actually need – this is the outcome that makes them happy, such as the successful payout from their insurance claim, the signing of an important contract, the cash back from an error that you helped to argue.

Failure demand is the work resulting from a mistake – that error that requires rebilling the entire year, the handoff to someone that drops the ball and requires redoing all the interviews, the person who sits on a problem until it is too late and creates a massive PR issue.

Both types of demand look like work but they’re not.

What you’ve got to do is drive out failure demand and increase the time you spend on value demand.

Some people think sales is all about demand – you need a salesperson to get the client to agree to things, right?

Wrong. In most cases a salesperson, Seddon argues, is like one of those players at a fair picking ducks out of a pond.

It’s not their special ability that makes the sale but the fact that the duck is within reach.

It’s the demand that happens to meet you at the right time.

So, to sell more, you need to be awake to value demand and all of your team need to know what that looks like so you can sell more and build your business.

But how do you get that keen eyed, motivated, enthusiastic team?

You do it by getting them focused on the customer and doing good work.

You don’t break them into silos and divisions and have work going from one place to the other.

Instead, you try and get one person to manage the end to end process for a customer, from getting started, to delivering the result.

If that person doesn’t know enough, you don’t hand off the work to someone else.

Instead, you pull expert support and work with the person to get the job done, which means that they will see how to do it and get trained along the way.

Eventually, they’ll do more and more and you’ll have a team of experts all delighting customers with their capabilities.

And, by the way, your team will be happy at work which means they’re less likely to leave.

And that virtuous combination, happy customers, happy team will lead to profits and growth.

Good operations create good businesses that grow.

It seems very simple doesn’t it.

But it’s not easy. You have to unlearn assumptions you’ve had for a while and learn new approaches that are based on tricky things like trust and patience and the ability to deal with uncertainty and complexity.

We’ll talk about some of that later.

Cheers,

Karthik Suresh

Saturday, 9.28pm

Sheffield, U.K.

Life is a series of natural and spontaneous changes. Don’t resist them – that only creates sorrow. Let reality be reality. Let things flow naturally forward in whatever way they like. – Lao Tzu

This is the second post in my study of John Seddon’s ‘Freedom from command and control’.

Before I go through some of the key ideas that will help you create better service businesses, I need to jot down a few notes about representing knowledge.

As you might have noticed I use drawing as a way to structure my thinking, which then helps me to write a post.

My approach is inspired by several approaches to drawing as a way of thinking, including mind mapping, concept mapping, sketchnoting and thinking maps.

A good introduction to diagramming techniques used in systems thinking can be found here.

I recently came across Paul Fernhout’s website from a talk he gave at Libreplanet 2021 and discovered itIBIS – indented text Issue Based Information Systems – based on the work of Werner Kunz and Horst Rittel in the 1960s.

Essentially, this is a way of visualizing complex information using textual or graphical tools.

It’s similar to what I do with notes, and there are overlapping issues of theoretical interest, that I should probably pull out as I carry on with my PhD.

But the point I want to make is that it’s given me some thoughts about how to think my way into a piece of useful writing.

A document that I go back to a few times is Get Writing by M. Batchelor.

One of the suggestions she makes is to work out your outline in a talk.

An outline, as you know, is a structure of what you’re trying to communicate. And it’s a technique I’ve always hated.

I prefer to work out what I want to say by writing it down and seeing what happens.

But that ends up in rambling works like this post, which your well behaved AI tool will never write.

And that’s ok, because what I’m interested in is getting thoughts into your head, not just heaping up content.

So… one way of writing an outline is to use this idea of indented text as a way to examine what you’re reading and thinking about.

The IBIS technique has three key components – questions, comments and pros/cons.

But we’re not limited to just that – for example in the image above I’m using Colin Eden’s bipolar structure of “rather than”, represented by three dots like this “…”.

So the first line should be read as “learn and improve rather than command and control”.

Okay, one last thing.

We tend to think that we use reasoning to think objectively about our options and make balanced decisions.

It turns out that might not be right.

Mercier and Sperber (2011) argue that we use reason to win arguments and that might be a better explanation of what happens in real life.

So, the reason you’re seeing the image above as a mix of text and diagrams is because I’m thinking of experimenting with that as an aid to arguing the points I’m learning about. You can see the points. Maybe the pictures will help. Let’s see, shall we.

The ideas that you need to know to help you create better services come from ideas that were worked out in manufacturing, in particular Toyota.

They figured out that learning about a system and trying to improve it led to better outcomes than trying to boss people around and control them with numbers in spreadsheets.

It was more efficient to only do something when a customer needed you to do it – you started making a car when a customer asked for it, rather than building lots of cars just in case.

We’ve just rewatched the new Karate Kid, so the picture is of the teacher and student connected with bamboo poles. One moves only when the other does. That’s connection.

So how do you build a connection?

Well, by working on the relationship, of course.

You don’t just get there by relying on marketing.

If you spend your time connecting to customer needs then you won’t need as many people pushing paper creating budgets and forecasts and hopes and dreams – you won’t need a management factory.

And if you know what customers need you can create it for them, even if it’s different each time – even if it has variety.

That’s going to shock some people who will argue that only rigid standardization can work.

Ignore them.

The way to create what customers need is to have your team bring their brains to work rather than mindlessly obey your orders.

If your team is engaged, cares about clients and wants to do a good job they will build what is needed.

And your total costs will fall, when viewed from an end to end perspective. It might look like you’re spending too much time with one customer, but what you learn will drive down total costs.

Focusing on customer needs and doing only what needs to be done as effectively as possible means work flows unimpeded through your organisation.

That leads to economies of flow rather than economies of scale.

And these ideas are going to be fundamental as you take the next steps in your business.

Cheers,

Karthik Suresh

Friday, 8.10pm

Sheffield, U.K.

To give real service you must add something which cannot be bought or measured with money, and that is sincerity and integrity. – Douglas Adams

This is the first in a new set of posts that goes through the ideas in John Seddon’s 2003 book “Freedom from Command and Control”.

You will be able to read all the related posts using this link.

Why pick this book to study?

Most businesses operate on thinking that was created a hundred or so years ago.

People like Taylor invented the idea that you could make people act like robots, repeating actions in the most efficient way. Ford worked out that you could arrange them in a factory doing simple things again and again and end up with a complex product like a car, and Sloan figured that managing budgets was the way to make money.

These ideas were new and very successful at the time, particularly in factories.

Now, they just don’t work. But people still try and use them because they haven’t learned any other ways to get the job done.

Juran and Deming did work that transformed how manufacturing is done and how factories are run but service businesses still operate with the old ways of thinking.

Seddon’s book is one that tells us what to do to make things better.

Some of the ideas that we need to think about are shown in the picture above.

Let’s say you’re starting a business tomorrow – how should you think about delivering your services?

Do you think about roles and responsibities? Who’s the boss? Who’s in charge? Who are your subordinates?

That’s a command and control way of thinking – there’s a hierarchy in the office and some people do the thinking and others do the work, and one group boss over the other.

The other way is to think in terms of systems. What are the parts, what connects them, how do they communicate, and what emerges if they all work together?

Systems thinking is a big topic so we’ll come back to that later.

The next thing to think about is where managers spend their time.

I saw a series a while back about a project improving a hospital. The bosses sent in an administrator who spent all their time sat in the office poring over spreadsheets and numbers.

Never once walked the halls, met the staff, or watched the work being done.

Real managers get to where the work is, they get involved in the operations because they alone have the power to improve things.

You cannot wield power effectively sitting in an office – you have to get out there.

Now, what should you work on?

People in organisations quickly adopt roles, and these roles form groups, and those groups fossilize into functions.

Suddenly everyone is busy doing something but no one can explain why they are doing that thing.

You must have come across this – the most common example is that report you do every month that takes six hours that you email and then get no feedback, no questions, but you’re still told that it needs to be done every month.

Instead, real work is what customers need doing. Not what they ask for, but what they need, what makes their situations better.

That’s called customer demand – it’s how you help them. It turns out there’s two kinds of demand – a good one and a bad one, but we’ll talk about that in another post.

If you stop doing stuff that doesn’t need to be done, like that report; stop doing it, or automate it; that’s you removing waste. If you don’t get rid of waste you increase costs – that’s six hours of time where you could have done something else or just put your feet up and relaxed.

In summary

A good service business works when you try and learn and improve so that you can create mopre value for clients.

Focusing on the numbers – the budgets – in a service business is more likely to cause you to cut corners, complicate things, make the service worse, have customers abandon you, and reduce profits.

The money will flow when you do the right things, remove waste, and make customers happy.

More in the next post.

Cheers,

Karthik Suresh