Interview Tom Foster (Management Skills Blog) – Part 5 of 6

Q5 Dr Lisa: Could you explain about the “felt fair pay” curve for the time span of discretion that is universal across cultures, currencies and continents?

Tom: Felt-Fair-Pay is probably the most controversial, yet scientifically documented finding in the research of Elliott Jaques. Here's the way it works.

Ask someone what they feel is Fair Pay for the work they perform. This question is a little tricky, because, as you might imagine, there are many influences on this response. First, you have to discuss the work. Next, you have to get the person away from their co-workers, away from their spouse and then ask, "What do you feel is Fair Pay for the work you perform?"

When Jaques plotted the points based on Time Span and Fair Pay, they produced a curve that was reproduced in study after study over a period of 12 years in multiple countries under different currencies. Uncanny.

The implication for this finding? If I can determine the Time Span of the role, I can calculate the Felt-Fair-Pay.

..to be continued.

Here's to maximizing YOUR profits!
Dr Lisa Lang
(c)Copyright 2008, Dr Lisa, Inc. All rights reserved.

Are you a Vistage/TEC member who would like your team to hear my speech? Here it is: NEXT Maximizing Profitability Event (no charge): December 1, 2008 in Denver from 1:00 to 5:00 pm at the Science of Business Training Center. More information at http://www.viable-vision.com/. You can register by fax or on-line.

Interview Tom Foster (Management Skills Blog) – Part 3 of 6

Q3 Dr Lisa: As you know we recommend against most incentive or bonus programs. How does the prevailing belief by Western management that incentives are effective relate to the “best efforts” contract?

Tom: Yes, incentives are effective. They are most effective at creating mistrust in the organization. They violate the implicit contract between the employer and employee. Incentives lay the groundwork for counterproductive relationships and sow the seeds for deceit. Incentives pit manager against employee in a game of underperformance, where the carrot rules.

Even worse, managers use incentives to abdicate their responsibility to hold people accountable for performance. Managers throw up their hands and say, "the only way I can hold my people accountable is to withhold part of their pay until they meet the performance standard." If that is the only strategy a manager has to hold people accountable, then I think I need a different manager.

...to be continued.

Here's to maximizing YOUR profits!
Dr Lisa Lang
(c)Copyright 2008, Dr Lisa, Inc. All rights reserved.

Are you a Vistage/TEC member who would like your team to hear my speech? Here it is: NEXT Maximizing Profitability Event (no charge): December 1, 2008 in Denver from 1:00 to 5:00 pm at the Science of Business Training Center. More information at http://www.viable-vision.com/. You can register by fax or on-line.

Next Mafia Offer Boot Camp -- is December 2, 3, 4 2008 in Denver.

A Process Of On-Going Improvement (POOGI) - Part 27

We are continuing our series based on The Goal by Eliyahu M Goldratt and the Theory of Constraints.

The detailed buy-in process is:
1. Agree on the problem(s)
2. Agree on the direction of the solution
3. Agree that the solution solves the problem and brings the benefits
4. Agree on predicted negative side effects and prevent them
5. Agree on implementation obstacles and objectives to overcome them
6. Agree to implement the solution.

The step most often missed in the buy-in process is step one, agreeing on the problem.

Let’s use an example from a machine shop. See if you can apply the process. First, the background story:

This machine shop has sales of about $300,000 per month. Sales and the backlog have been declining slightly over the past three months, although a new large order of about $1 million is expected at any time.

This new order is on top of normal orders, so it represents growth. Morale of the workforce has been low recently, following the end of a quarter when no profit incentive was paid out and a new no-overtime policy was announced. Pay rates for the most skilled workers have been frozen for some time.

Supervisors in the plant are trying to implement a change in the work process to cope with the increased sales without adding additional people and have been getting resistance. In fact, productivity has decreased.

What is the problem?

...to be continued.

Here's to maximizing YOUR profits!

Dr Lisa Lang
(c)Copyright 2008, Dr Lisa, Inc. All rights reserved.

NEXT Group Mafia Offer Boot Camp: September 24, 25, 26 2008 in Denver. More information at http://www.mafiaoffers.com/. There are also PRIVATE and On-line Mafia Offer Boot Camps. The July boot camp SOLD OUT and there is no group boot camp in August. Don't miss September!

Are you a Vistage/TEC member who would like your team to hear my speech? Here it is: NEXT Maximizing Profitability Event (no charge): September 23, 2008 in Denver from 1:00 to 5:00 pm at the Science of Business Training Center. More information at http://www.viable-vision.com/. You can register by fax or on-line.

A Process Of On-Going Improvement (POOGI) - Part 25

We are continuing our series based on The Goal by Eliyahu M Goldratt and the Theory of Constraints.

There is probably at least one step in your sales funnel that is more expensive or uses more highly trained personnel. If so, that step can be managed just like a production constraint. It should not be wasted. In fact, it can become the control point for managing your sales funnel. Work should be released into the sales funnel at the rate the control point can produce. Essentially applying Drum Buffer Rope (DBR) to Sales.

If you are interested in more information about sales funnel management the TOC way, and the significant increase in sales and profits it can bring, we recommend you read “The Cash Machine” by Klapholz and Klarman. It is an easy to read novel that provides a story for the development and improvement of sales funnel management.

Also, read “Reengineering the Sales Process” by Roff-Marsh. This book explains how to apply the Drum-Buffer-Rope production scheduling methodology to managing the sales process and sales people. Both books can be found on our website with links to the lowest cost purchase option.

Please contact either Dr. Lisa or Brad if you're interested in having the co-authors present and discuss TOC and a process of ongoing improvement to increase sales and profitability with your company or one of the groups you belong to.

...to be continued.

Here's to maximizing YOUR profits!
Dr Lisa Lang
(c)Copyright 2008, Dr Lisa, Inc. All rights reserved.

The steps to implement Drum Buffer Rope (DBR) are not that hard to understand or explain. The difficulity lies in applying it to YOUR specific situation. If you don't know how to do that or do it incorreclty, it could lead to the conclusion that -- TOC doesn't work.

We are going to take 5 companies through the process of implementing DBR remotely. We will explain each step and discuss any questions or concerns specific to your situation. This will be a 12 week program with one session per week. Each session is 90 minutes in length. All 5 companies will be on the same call to take advantage of learning from the other companies. During this 12 week program you will learn: to read the rest, click here

NEXT Group Mafia Offer Boot Camp: September 24, 25, 26 2008 in Denver. More information at http://www.mafiaoffers.com/. There are also PRIVATE and On-line Mafia Offer Boot Camps. The July boot camp SOLD OUT and there is no group boot camp in August. Don't miss September!

Are you a Vistage/TEC member who would like your team to hear my speech? Here it is: NEXT Maximizing Profitability Event (no charge): September 23, 2008 in Denver from 1:00 to 5:00 pm at the Science of Business Training Center. More information at http://www.viable-vision.com/. You can register by fax or on-line.

A Process Of On-Going Improvement (POOGI) - Part 24

We are continuing our series based on The Goal by Eliyahu M Goldratt and the Theory of Constraints.

To describe sales as a process, we must define the steps of the process. Of course, these may vary somewhat between industries and companies, and may be described in more or less detail. One such list of steps for a sales process is:




Often not considered are the capacity of the sales process and the flow of work through the sales process. In the example above, the capacity of the organization is greater than where work is (snapshot 1) except in one place: engineering at 20. Is it the case that in your company you may have one or bottlenecks that slows your responsiveness when trying to win new customers? As in the example above, will such a bottleneck serve to further reduce the rate at which you win new business?

In snapshot 2, we’ve assumed we’ve doubled the capacity of engineering. Now the rate of sales through the sales funnel is limited by the capacity of Production prototype at 35.

No, sales funnel management is not rocket science. But few organizations—including machine shops—are managing their sales process.

To manage your sales funnel, you must (1) define the steps in your sales process, (2) determine the capacity of your organization to perform each step in a time period, and (3) measure how many prospects are in each step a particular point in time.


...to be continued.

Here's to maximizing YOUR profits!

Dr Lisa Lang

(c)Copyright 2008, Dr Lisa, Inc. All rights reserved.

The steps to implement Drum Buffer Rope (DBR) are not that hard to understand or explain. The difficulity lies in applying it to YOUR specific situation. If you don't know how to do that or do it incorreclty, it could lead to the conclusion that -- TOC doesn't work.

We are going to take 5 companies through the process of implementing DBR remotely. We will explain each step and discuss any questions or concerns specific to your situation. This will be a 12 week program with one session per week. Each session is 90 minutes in length. All 5 companies will be on the same call to take advantage of learning from the other companies. During this 12 week program you will learn:
to read the rest, click here

NEXT Group Mafia Offer Boot Camp: September 24, 25, 26 2008 in Denver. More information at http://www.mafiaoffers.com/. There are also PRIVATE and On-line Mafia Offer Boot Camps. The July boot camp SOLD OUT and there is no group boot camp in August. Don't miss September!

Are you a Vistage/TEC member who would like your team to hear my speech? Here it is: NEXT Maximizing Profitability Event (no charge): September 23, 2008 in Denver from 1:00 to 5:00 pm at the Science of Business Training Center. More information at http://www.viable-vision.com/. You can register by fax or on-line.