The Hair Shop blog

What a blast

To all my classmates that have shared this learning experience with me I say thank you. Each of you have added to my knowledge of marketing and made this adventure an exciting one.

Shannon I know this is the only Marketing class I have had you in, but I think you have what it takes to make it a carreer if you choose. You are extremely intelligent.

Jerome it has been fun, you truly should consider teaching. Your well thought out comments and arguments have impressed me from day one.

Connie you are an inspiration, if you do not believe it just ask your daughter who is now following in your footsteps to acquire her degree.

PJ I can see it inside of you just waiting to bust out. The talent is amazing and I think when it happens it will surprise no one except you. Because we have all seen it from the beginning.

Mrs. Vargas, thank you for everything. You teach with such passion that it is impossible not to get excited about what we are learning. Your knowledge of the subject is without question and you treat us all as equals. I can see it in your eyes when we finally comprehend what you are trying to teach us, you get as excited as we do for finally understanding it. That is a sign of a professor that truly cares about her students and the subject they are teaching. It also has been a tremendous pleasure watching you grow as a teacher. After having you in your initial class to know and to see you grow right along with us was remarkable. Thank you for the experience, thank you for the knowledge and thank you for helping me change and grow.

Well this to is my last class in the Marketing cycle; therefore the blog will be a thing of the past. Or will it?

If I can ever get the funding for my business I think I will keep this blog and turn it into an start up entrepreneur blog on the trials and tribulations. Then maybe (if I can figure out how connect it and make it The Hair Shop’s blog by maybe talking to my stylist contractors and posting the questions they get and the answers to them for discussion.

See Mrs. Vargas you are turning me into an old techno geek.

Who to service

When you back is against the wall and you orders are so high that the short term and mid term out look is bleak as far as servicing all of you customers, who do you service.

Well this is a question that a supplier of ours faced and we were on the short end of the proverbial stick. With all the natural disasters that befell the US over the last few years the building industry was going through the roof, and all the manufactures of building supplies were scrambling to add capacity to meet the demand. Well our tube supplier was not able to react so they were in the position that they could supply 70% of their customers and they would have to tell the remaining that they were on allocation and what they got was all they had to give. This basically put the 30% in a position that if they wanted to supply their customers they would have to switch suppliers.

How did they make this decision, well it was not based off of the fact that we were their largest or at least one of the top two. Also not base on the fact that we had plans to expand and increase orders by 12% the following year. No it was based of the fact that they made the lowest margin off of us VS all the other companies. So they made a very short-term decision and did not consider the long-term effects. Yes the made more money with what they had in the moment, but now that the market is down the smaller companies are going out of business and they are knocking on our door wanting back in because they do not have enough volume to run their plant effectively. Will we let them back in, well the person that makes the decision to let them in would probably get fired after what they did to us by just flat hanging us out to dry with no warning. So the answer is no, will we let them keep bidding for our business. Why yes we will, they are shooting very low prices at us and in a competitive E auction (online bid to become our new supplier) they are proving to be very beneficial.

The person that made the decision on who to drop made a very near sighted decision and did not consider the long term value of the account or the long term consequences of losing an account this large. Some times making the decision based off of quick cash is the wrong thing to do, you must always remember that maket spikes come and go and the long term market out look is a key to making good decisions.

Caraustar

Sonoco

Fischbach USA

Who do you hire

There is a question posed on page 293 in the textbook, and that question is.

Do you select leaders based on A) their willingness and ability to teach and learn? B) The degree to which they credit the work of others and obtain satisfaction from the development and success of others?

Interesting question, too which I reply both A and B if at all possible. A good leader must be willing to continue to learn and expand but at the same time they need to teach and grow their staff. This is how a company takes a talented workforce and continues to grow what they have. But the leader must be willing to give credit where credit is due and be proud of the fact that their team came up with the idea or plan. After all it was done under your tutelage and guidance so a team member with a great idea or plan only reflects positively upon you and your skills.

I see many managers who come in to meetings and talk about this great plan that they have and all the while we know that it was one of their employees ideas, but they never mention the employees name. This shines a terrible light upon the manager in my opinion and causes decent amongst that managers employees. We are such a small plant that when a project or a change is made we inform all employees of what it is and we post it. This is terrible for moral and promoting team work, while most people will do without a raise they want their name recognized and feel slighted (which they should) when they are not given credit for something that they did.

I personally worked on a cost out project with another manager in our plant that reduced our raw material inventory by 1.5 million dollars and saved the company over 700 thousand dollars in warehousing and transportation fees. When the WOW award came down it was given to my plant manager and another plant manager. Now I know and my fellow manager know that we did the work and really we were not upset that we did not get our share of the $3000 bonus. We were upset that our name was not mentioned and we did not have the achievement placed in our file.

Which part would you have been upset with?

Giving credit

3 C's

Tragedy of the Commons and Blogging

A common is any resource used as though it belongs to all, so anyone can used a shared resouce simply because one has the want or the need to. A good example is give by John Hanson on the website

"In 1944, 29 reindeer were moved to St. Matthew Island. The reindeer thrived by "exploiting" (making the best use of) their rich "commons".

The island had no natural predators to keep the reindeer population in check, so the population swelled to 6,000 animals during the next 19 years. Suddenly the commons was depleted and the population crashed until only 42 animals remained alive! The reindeer could have avoided the crash by keeping the population within the carrying capacity of the island, but reindeer politics couldn't manage it, so naturally the population crashed."

In the book An Army of Davids chapter 5 it talks about whether the blog-o-sphere will fall to the tragedy of the commons. This is a very good point since there are many new blogs being published daily one might think that we will run out of space and people interested and it will crash. But the issue is most blogs are there because people want to put their opinion out there for others to see. Since most of these are not money making endeavors how will it crash, the tragedy of the commons suffers when the resouces are used up. I am not sure that peoples opinions will ever be used up and as long as someone has an opinion there will always be a person that either agrees or disagrees with them. With billions of people in the world that have not accessed the computer yet to see what others are thinking or to give there opinion or tell their story, I say blogging is just getting started.

For those ran as a business they will be guided by the invisible hand just as the rest of the economy should be. If they are original and are seen to provide value to the readers then they will thrive. Those who do not will be eliminated.

Playing the PDG

The Prisoneer Dilemma Game, a game that is similar to tic tac toe in that it is a win lose game. It is a Non-zero sum game which allows fo cooperation, because there are moves that benifit both players. An emample given on the Princenton link below is that you and Albert were picked up by the police and interrogated in seperate cells without a chance to talk with one another. Whether you are guilty or not does not matter in the game.

You are both told the same thing,

If you both confess, you will both get four years in prison.

If neither of you confesses, the police will be able to pin part of the crime on you, and you'll both get two years.

If one of you confesses but the other doesn't, the confessor will make a deal with the police and will go free while the other one goes to jail for five years.

The irony is that it seems that you are better off confessing, but the fact is that if both refuse to confess and work together then you will be much better off. It is usefull in demonstrating the evolution of co-operative behavior.

As a society we are all better off if we work together by cooperating, but there are some advantages of working to improve your situation and ingnoring the situations of others.

There are several different sites that you can go to and play against a computer.

PDG in a card game form

PDG site

Another PDG site

Princeton

Believe

In order to get anyone to buy in to your idea of change, whether it is your employees or your managers, you must do one thing and that is Believe. Believe in what you are promoting, and believe that what you feel needs done will work. If you show that you are unsure others will be unsure. If you show you have doubts others will have doubts. If you stand up and state clearly that your belief is this change is what needs to be done then others will follow and support you. When you talk about the change you feel is needed you should express how much you believe in it. There should be no doubt in anyone persons mind that you whole heartedly support the idea, and you believe it is what needs to be done.

Now when you are tasked to make important decisions your job and future with that company could be dependant on these changes, so always insure you did the research and have the data to support your stance. But once you have it and you feel this is what needs to be done leave no doubt as to where you stand on the issue.

People who follow others are called the believers for a reason, but the biggest believer should always be the person leading.

Believe Quotes

Believe Quotes II

6 Sigma not an Enigma

Working for GE did have one advantage, generally when they made a change there was plenty of data to back it up. When talking about promoting change and how do you get buy in, supplying good hard numbers generally does the trick every time, and with 6 Sigma you get these numbers. The good thing about the 6 Sigma process is when it is done correctly drives down to the root of the problem, which enables you to make changes that have a higher impact. Executives love to here that you used this process or any process when looking to make improvements, and will be more likely to support your suggestions because of this.

Green belt training all though very difficult was very enlightening for me. It made you really think about what the cause of a problem was and not jump to conclusions, and has been very beneficial to our facility. We have saved a lot of money over the last seven years using the process of 6 Sigma, and we continue to use it today even though we are no longer with the company.

One project in particular stands out in my mind. Everyone believed we had major issues with our case erector and on the surface looked as if we were going to have to spend an about $200,000 on a new one. Once we used the process we found that the case erector although the tolerances were very tight was not the issue, it was a $275 part on the filler itself that was causing all the issues. Upon replacing that $275 piece we not only eliminated 70% of the down time on the case packer but we also eliminated 90% of the scrap. Examples like this is why executives and managers listen more intently when you use the process, this is why they back your project instead of the next managers, and using tools like this is how you can promote and drive change in your business.

Remember nothing gets the investment boards attention faster than good old fashion data.

GE 6 Sigma

Six-Sigma Experts

Nine block means Tenth manager out

Employee turnover, something we all are told we need to control in order to control, because if you have low turn over you have a happy work force. Not necessarily, you could just have a high paid unhappy work force. I like when the book talks about the efficiency loss because most people only think about the cost running the ad, interviewing and training, and they never consider the cost of a person that is not experience and will product less than the person that just left. Assigning a trainer to them is inefficient, double-checking their work is inefficient and fixing their mistakes is inefficient. All of these go directly to the bottom like and can be very costly to a company, and for those with tremendously high turnover you can never reach your true potential because you are always in the training mode.

So does this mean that all large successful companies focus on hiring and keeping good talent. Yes and No. As the example of GE

goes they expect and want to turn over 10% of their management every year. They do this for several reasons, first to insure that they always infuse the company with new talent and ideas, always have what they rate at the best employees in the chain and to eliminate low performers. Now I do not totally agree with the system but it has worked for them for a very long time and they do make billions every year. But as I was an insider there is a flaw in the system that does not seem to cause total failure but does cause the loss of good personal which is not its intended purpose. The Nine Block system is what they use, a three by three grid with the left axis (1 thru 3) being performance and the base axis (A thru C) being environmental and safety. So for and example a manager with a 1/A rating would be the highest, a 2/B would be average and any manager with a 3 or a C in the rating would be put on a 90 day improvement plan. Now if you have a 3/C your will be out of the plant within 30 days of notification of your score.

The issue lies in the forced ranking of the managers, because your whole future is reliant on your manager being aggressive, well spoken and tough enough to speak his mind and hold his own in the war room type setting were everyone is trying to talk up and support their own direct reports. If he or she is not then you and the other managers their team are in trouble, because this interaction is what your raises are based off as well as your future promotions and employment status. I have done this with my boss and other managers in our plant when ranking our hourly employees and it is a tough situation and there are several managers that do not have the gift of arguing a point that some people I know do and their employees suffer as a result.

Download nine_block.doc

CRM

When dealing with your customers do not waste their time, there are way to many sales people that need to learn that lesson. You are not managing your accounts you are creating and hopefully growing a positive relationship with a customer that will generate loyalty, helpful feed back, stabilizing your client base and increasing sales. So do not go in to a meeting without basic information that any client would need or want. I had a salesman come in last week to talk about our business and any potential new chemicals we might be looking into from and R&D stand point. When I asked about several of our chemicals and a current price list he did not have it. When I asked about a list of containers that his company showed we had on sight that I could use as a cross reference (a list I have been asking about for over a month) he did not have it. When asked if he had a current catalog or a chemical list of items his company distributed he did not have it. Now I would like to say this was a new salesman but he has been on the job for well over two years at least. This did not do very much for watering the garden and growing our relationship, and it did nothing in the way of growing his business. As a matter of fact I hate to say it but I was like the Soup Nazi in that Seinfeld episode when I basically told him “No order for you, get out”.

Well I did a little more than that, since I have know him for over two years I came straight out and told him that I have never seen a sales person that had no product list for the company, no price list of current items a customer buys and take over a month to get a simple list that is on a weekly print out (his own words) that he sees every Wednesday. Then he had the never to ask what price I was quoted and paying for a particular product from one of his competitors. At which time I questioned his mental capacity and told him that would be unethical and he needed to leave.

What a way to ruin a customer relationship, and now after a call to the regional director which was my previous sales rep from this company I have to talk with this gentleman’s replacement next week.

CIO.com on CMR

Customer Relationship Management Association

Suggestions generate value

On page 57 at the top of figure 3.2 you see suggestions for improvement. No I have never been asked to provide my suggestions for improvement, other than the standard survey that everyone gets.

For Mocrosoft they say that when the service packs come out that customer feed back on what they would like drives it, and the items are added or modified. Not sure who requested that the system locks up at least three times a day but that is one they could have left off in my opinion. But this system is very customer driven and helps them keep their customers happy and cost down. While the customer gets what they want or feel they need, the company only provides what is desired and saves time and money on not providing and updating programs people do use or they feel are unimportant to them. This is a great example of streamlining a product to meet your customer’s needs and how that knowledge can add to your bottom line as a company

I have a friend whose father has never driven anything but a Ford, and in return he has always had at least one Ford in his drive was as well. Being the loyal customer that his father is, Ford has asked him several times to preview new production versions of their trucks. He happily attended every invite at which viewed, test drove and provided feed on the new versions. He was very excited when the new models rolled off the line to see if any of his suggestions were taken and made a reality. Now they did use one of his, he was probably one of many that had the same idea, like or dislike. But when the truck rolls out he and he sees there had been a change it makes him feel that his input was very important, and the talk leading up to the roll out is non stop.

Both of these are great examples of using customers to improve your service and product that they use while reducing.

We had a distributor summit at which we had users of our product talk with distributor about why the liked our product some much. At which there was a gentleman who was a fire fighter in Key West and when the hurricanes hit he used our silicone to seal up every window and door in his house because of the potential flooding, he even used it on his truck doors and windows on the vehicles he could not get out in time. Well he made a tremendous impact on our distributors when he talked about the 5-foot deep floods from the tidal surge and how his house was the only one that had no interior water damage at all. Also his truck interior was perfect with no damage, as a matter of fact it was so perfect that the insurance company refused to pay for repairs to the motor due to flood because they did not believe him.

Great impact on or distributors and generated a lot of talk as well as sales about our product going forward.

Microsoft info