Chapter 4 - How do I balance investing in sales and controlling costs?

 Sue and Simon discuss Chapter 4 - How do I balance investing in sales and controlling costs? from their book "Every Second Counts: How to Achieve Business Excellence, Transform Operational Productivity, and Deliver Extraordinary Results."
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Balancing Sales Investment and Cost Control

Speaker 1 0:06

Welcome to the Productivity Podcast . Sue is back as we explore Chapter 4 of the book . Every Second Counts , so Chapter 4 , sue . How do I balance investing in sales and controlling costs ?

Speaker 2 0:19

Yes , something lots of people have to do a lot of the time .

Speaker 1 0:23

Yeah , and it feels like it's poignant that we're recording it at this moment in time , as , just returning back from the retail technology show , lots of conversations around or we've done done the easy stuff , we don't know where to go next .

Speaker 2 0:38

Um , give us a kind of the essence of chapter four then the essence of chapter four is that if you're a well-run business , you will always be wanting to make changes , to invest , in kind of whether it's growing your sales , whether it's it's doing uh things differently and finding new revenue . So there's always a balancing act to be done between the absolute costs and then having that ability to free up some resource money , to be able to spend it and invest it where you want to . And the best run businesses will have an ongoing habit of continually reviewing where can we tweak productivity , where can we tighten things up ? And then how do we then use that to really grow sales for the business ?

Speaker 1 1:29

And this chapter talks about habitual processes that don't serve you well anymore and some of the examples we can work through .

Speaker 2 1:38

So , line by line , checking the deliveries from internal warehouses yeah , there's quite a few things in there that are about things that kind of take time and it becomes , when there's things that you've done all the time , it just becomes habit and it's kind of sometimes can be really difficult to stop doing those things . I know we've done studies where line by line checking , for example , has stopped and yet years later there's somebody that still does it because for many years it was drilled into them that this is an essential task . So it seems strange in some ways that things that it's really hard to develop a habit but then it's equally hard to stop the habit . But yeah , they are the sorts of things that actually are they really adding value for the business anymore or is it just taking time ?

Speaker 2 2:28

So when deliveries come from an internal warehouse , it's wooden dollars , because if there is an excess or an over , the excess and the over should balance out between two different places within the same business . So it's different if it's external deliveries , because you probably want to check that your suppliers are supplying you the right amount , although , again , a lot of businesses reach a point with suppliers where they reach agreements that they don't check them off , because if you're then doing a four hours short of three loaves of bread and it costs six pounds . The cost involved in doing all the admin to give you credit for three loaves of bread is kind of much more than the cost of the bread in the first place . So there's lots of businesses now that appreciate checking off line by line is something that takes a lot of time , and if you're going to then do a process to claim for it that's really time consuming and expensive to manage too and somewhere that's built into the margin or the agreement with the supplier anyway .

Speaker 1 3:23

So unless it's , you know the whole delivery didn't turn up and , on similar kind of threads , counting stock over and over again . So yeah , again . I remember my time in diy . One of the things we were painfully forced to do was count and count and count and in hindsight we just ended up counting and yo-yo in the stock file because it's only as accurate as the person counting it at the time cashing up excessively . I think we've talked about that on a number of episodes . Does it need to be done every day or at all , et cetera .

Speaker 2 3:52

We've seen some businesses that cash up every time a colleague changes the register that they use .

Speaker 1 3:58

And that may be the case if there's an inherent risk in that individual store , but it shouldn't be the standard practice . Yeah , audit and compliance checks that seems to have swung back around again . With the lockdown period kind of well behind us , I think people are starting to review those and seeing those checks and balances they put in that they're not quite sure why they still exist . But also because of the rising security incidents . I think there's lots of uh compliance security stuff that's going back in uh with the right intentions but not necessarily the right execution .

Speaker 2 4:30

I think a lot of the time with those , whether it's health and safety checks . There's some that are mandated legal checks you have to check your fridge temperatures and that sort of thing . So obviously they're non-negotiable . But then there'll be a lot that businesses do that perhaps they've put in in response to an incident that happened once , like 10 years ago , has never happened again and they're still doing it . And actually some of the checks I always think they've become kind of a security blanket for the organization , whereas the real opportunity is to think where is the genuine risk ? What opportunities , what things should I do to mitigate that risk ? And then what are the things that we're still doing that actually the risk isn't relevant anymore or it's so low that the cost of doing all the changes it doesn't make it worth it . You know it needs that proper risk review and put your efforts there , but don't do loads of checks thinking we're sorted when you're not really managing risk in the organization I'm referring back to technology .

Speaker 1 5:28

So the chiller checks is a great example where , yeah , the newer chillers are self-recorded yeah , yeah , all the networked ones , that yeah . So that's kind of around the task and process side of where to look . This chapter also talks about looking at kind of customer-facing tasks , which might feel strange , but there's some things that potentially aren't exactly frictionless for customers as well , and we talk about in there , colleagues , searching for orders , when you pick it up yeah um , slow systems and excess data input .

Speaker 1 6:00

It still amazes me , when you're hiring a car or when I check into a hotel , how much information they've had off me before . Yet they seem to waste my life tapping at a keyboard and god knows doing what . I've always amazed to see the screens they go through for no um for no particular benefit to me .

Speaker 2 6:22

standing there and when you get behind the scenes of customer processes , as we do , when we're measuring , I find it amazing how many colleagues are asked to work across multiple systems and that's some of the time why you get the delays for the customer because the colleagues having to juggle multiple things and I know system integration is never quick and easy , but actually it really is difficult for colleagues to do that and you know when it puts in that delay as well . It also has an impact because if you're going to get new recruits in and train them up , if you've got to train them across multiple systems and multiple logons and all the rest of it , it actually takes a lot longer for your colleagues to you know , become fully expert , because you know there's always some new struggle with some system if you're not careful yeah , and I think you know self-checkouts is a good example .

Improving Retail Processes and Systems

Speaker 1 7:10

We've all been there with something that's too light for the scales greeting cards missing barcodes , price reduction tickets that don't work . I mean , I applaud aldi for putting their self checkouts in , but they're just not set up for the way people shop in aldi , which are your trolleys . Yeah , so you next time you're going to an aldi they've got them , just have a , have a watch , because you'll see people pretty much approaching a basket self checkout with a trolley full of stuff and the whole thing just falls apart . Having said that , they're really quick because the Aldi barcodes are great . They're really quick to scan , which is part of their USP .

Speaker 1 7:43

If there's an issue , the guy comes along with a little tab and taps it and it goes away . They're not standing there with bits of printed paper that don't scan or type in codes . But it's not the whole journey and the whole experience . Unfortunately , we've got a couple of case studies in here as well . Around breaking things down , there's some things you'll reference when you read the book fashion , a couple of general retailers , stationary ones , and then , in terms of quick wins , there's the ethos in terms of failing fast and failing early , so not being scared to try or have a go . We've got some bits in there about asking your team .

Speaker 2 8:24

Yeah Well , we know from our time when we're out on site . You know , often we get some really good insights from the teams because they know the stuff that they struggle with . Sometimes people and we talked about habit at the start sometimes get used to the fact that they're having to deal with awful systems or a clunky process . But often there'll be people that say , do you know what I used to work at somewhere that's a , you know a competitor and actually this is really difficult compared to how they used to do it .

Speaker 1 8:54

So those sorts of things are really useful yeah , breaking the breaking the process down into smaller parts in terms of kind of looking at the study , observing , so just spend some time out there . It's great those organisations where they have days out from the head office or centre , where you have to go and work in a shop because by doing it you experience it , clearly , listening to customer feedback . So lots of great programmes out there . Again , at times , is that data really interrogated ? Is it really distributed to the relevant functions to get after and do something with ?

Speaker 2 9:25

And there's a whole thing about all that program design . So what are those programs designed to do and do ?

Speaker 1 9:30

they do it and all the rest of it yeah , or is it kind of just a vanity program that ticks a box and then the checklist ? So who's managing the checklist ? There's some great task management tools out there that can automate that , but actually , if that just becomes the go-to to add another question , checkbox validation point all we've done really is taking the paper away and just created a problem somewhere else and potentially the behavior that it just becomes a checkbox and people aren't actually performing the check or carrying out the action . So again , is it a vanity thing that means yeah , we've digitized it , it's great , or is it actually a true reflection that those actions have happened ?

Speaker 2 10:11

Yeah , and the great thing about implementing task management is it does give you a great opportunity to review those processes . So should I digitize it ? Should we be doing this still or not ? And then , when it is digitised , I think until organisations have done it , they don't realise the benefit of being able to view your audit data centrally . Because whenever you're using paper , the only way anybody can check have those checks handed out as that box been signed is to actually go to the store and look at the piece of paper . The fact that you can see it centrally , you know who's not doing the audits , who's got poor scores , and all that just allows you to focus your efforts where it really matters excellent , so plenty to go out in chapter four .

Halfway Through the Leadership Chapter

Speaker 1 10:56

We'll be back with chapter five , which means we're pretty much halfway through the book . Then Chapter 5 is my leadership structure , right ? So we will return soon with Chapter 5 . Thanks , sue .

Speaker 2 11:09

Thank you .