Archive for category Leadership
We have a problem in this PCB industry of ours.
We are so focused on beating the other guy, that we don’t spend much time working on how we can make our own companies better. In fact, we are always so focused on disrespecting our competitors that we would rather see them fail than succeed. I have noticed that there is usually some satisfaction when we hear that another shop has gone out of business.
Think about this. Should we be happy if one of the few shops left in this country goes out of business…really? We are already feeling the negative results of the steadily diminishing number of shops in our part of the world. The numbers are up for debate but from what I can estimate there were once at least twelve hundred shops in North American in the early eighties and now there are only around two hundred, and that’s individual locations not companies. If you consolidate all the TTM locations under just the name TTM you get even fewer.
This is what has happened while we were cheering the loss of our competitors:
- We have lost our leadership position in the PCB industry
- We are no longer the technology leaders we once were (Yes, it’s time to quit telling ourselves that all the technology is developed here in this country because it is no longer true)
- We no longer have the strong vendor base we once had to the point where if you have a shop in the Southwest or the Northwest you are no longer seeing vendors as often (if at all) as you once did.
- Which means that we have also lost the technical support we once relied on with having a strong vendor base.
- Our customers especially the defense contractors are so worried about the sparsity of qualified American vendors to handle their defense and aerospace PCB needs that they are petitioning the DOD to allow them to go offshore, or at least to work through American contract manufacturers who buy their boards from “qualified” offshore sources.
None of this bodes well for those companies that are left. We have two choices, we can keep beating the crap out on one another until there is no one left or we can figure out how to work together and become strong partners instead of weak and weakening enemies. Think about it, maybe it’s time for the remaining companies to circle their wagons and figure out a way to start working together and in a cooperative effort to stand together and make the American Board industry as strong as possible.
Collaborating with one another is the only way to go if we want to make the future ours, heck if we even want to have a future. PCB companies need to find ways to come together and present a stronger front to their customer base.
Instead of cheering for the demise of our competitors we should be making them partners in these ways:
- Communications: Start talking to each other. Find out what your competitor can do that you can’t and work out an agreement.
- Share technology research work on new innovations together.
- Share capabilities: One shop might have via-fill equipment while another has plasma etch by working closing together and doing some bartering both shops will be able to offer both capabilities.
- Combine your buyer power. Remember the old granges where farmers got together to buy seed and equipment and get a better deal from their vendors? That’s the idea. If four board shops get together to buy four drills from one equipment vendor, they are going to get a much better price than if each buys their own. And they will also have more influence when it comes to having that equipment serviced.
These are just a few of the things that shops could be working together on. If they choose. They say that if you don’t define your future someone else will. Aren’t you tired of someone else determining your future? Don’t you think it’s time you did something about it? It’s only common sense
We are all so busy running our businesses that we seldom have time to do what really needs to be done to move our businesses forward, to take them from “good to great” to use that old but true cliché.
I know that all of my friends who own board shops are always so occupied keeping their heads above water that they seldom have time to do the things that would make their companies thrive, the things that could put them head and shoulders over the competition.
Look, I know we are all busy, I know that running a board shop or any business for that matter is much more difficult today than it has ever been, but please take the time to not only read these five things we should be doing them but try to make it a point to spend some designated time doing them. And if you do that, if you make it a regular practice to spend time working on these five things you will in the end become the outstanding company you truly deserve to be.
- Be an entrepreneur, spend time thinking about how you can change your company to better serve your customers. If you are a bare board shop then add design services, if you are a contract manufacturer add bare board services and offer the entire package. Just think how powerful it would be if you could take a project from schematic to assembly in one event, just think how much more powerful it would be if you could do it in less than a week! Think about that and figure out how to get it done. But that’s only one idea, there are many more out there. Spend some time thinking this way, explore the possibilities, and learn to say “yes” to them.
- Super customer service. I don’t just mean the normal reactive customer service that we all practice. I mean setting aside some time every single week to sit with your team and brain storm looking for ways to service your customers better than they have ever been serviced before, better than you ever have and better than your competition ever has. Be the LL Bean of the industry.
- Sparking your sales team. I mean really get them excited. Lately sales people have been the whipping boys of our industry. They are often the ones being blamed for lack of business. Let me ask you what is the point of that? You want your sales people out there feeling like super men and super women, you want them feeling invincible. Come up with ways to get the very best you can from them. Remember that a great manager is one who leads his team to greatness.
- Spend time with your insides sales/customer service people. These people are the face of your company. In the end, they are the final force determining what your customers think of your company. Spend time with them. Work with them to find ways to help them be the best they can be because in the end, your company is only as good as your customer service people. Find ways to get them excited about coming to work every day. Empower them, give them some financial parameters to use to satisfy your customers. Help them to be the customer service giants that you want them to be. Hell, make them want to be the customer service giants that you want them to be.
- Look to the future. That’s right, lift your head up, get your nose away from that grindstone long enough to take a cold clear look towards the future. Do all that you can to define the future and most importantly your place in that future. As the old saying goes if “you don’t determine your future someone else will”. Study the future, read everything you can from the trendsetters, listen to your customers and you sales people let them help you put an educated and informed ear to the ground to determine to the best of your ability what the future will be like. The develop your company’s strategy that will best take advantage of that future. Yes, it’s a great time to start thinking about tomorrow.
And one more thing, remember under promise and over deliver, and that is innovate, lead your people to think like innovators. Hold regular sessions where you study everything you do and work on making it better. Look at the way everyone in your industry does things and strive to do it better. I guarantee that if you and your team spend just one hour a week working on how you can do things better, you will in the end do things better.
I know there are only so many hours in the work day. And I know that we are all busy. But spending time doing these six things with the right attitude and dedication will take your company a long way up that road to perfection. It’s only common sense.
Laurene Powell Jobs was once quoted as saying that her husband Steve and legendary Apple designer Jony Ive would spend hours discussing corners, yes that’s right corners. I also read that Apple had an entire Quality department dedicated to boxes including a device that would check how those boxes would open and close. How many of us have a collection of empty I-Phone and I-Pod boxes just hanging around because they are too well designed to throw away? I don’t know about you, but I hate, hate, hate packaging that I have to destroy to open. There is a certain inelegance with having to tear and rip and destroy the box to get to my HP printer cartridge! Nobody is saving those boxes!
Jony Ive had this to say about design, “In some way by caring, we’re actually serving humanity. People might think it’s a stupid belief, but it’s a goal-it’s a contribution that we hope we can make, in some small way, to culture.”
“Apple’s great design secret may be avoiding insult. Their thoughtfulness is a sign of respect. Elegance in in objects is everybody’s right, and it shouldn’t cost more than ugliness. So much of our manufacturing environment testifies to carelessness.” Paola Antonelli, MOMA
Wow! Where am I going with this? Why am I talking about Apple and design and even quoting a curator at the MOMA? I bet that is the first time that MOMA has ever been mentioned in any article at any time, having to do with printed circuit board technology. You think?
Okay, here is my point. To be a great PCB fabricator, to be a great assembly company, or any manufacturing company, for that matter to be successful you have to pay attention to the customer. Not only pay attention to the customer but find ways to elate and delight that customer.
Just like Jobs and Ivy would talk about corners for hours on end, we have to spend time thinking about our customers and how we can find ways…elegant ways to delight them.
No, no don’t tell me that a PCB company is a job shop or that an assembly company is just putting someone else’s product together for them. No, don’t say that because when you do you are self-commoditizing. You are bringing your product down to the “anybody can do this” level and you and I both know this is not only untrue, but it also diminishes our companies and your products as well.
Ask yourself these questions:
- How many times have you purposely sat down with your team to discuss customer connections from the first call from your sales person to the final shipment of the product?
- How many times have you envisioned your customer receiving your product, and experiencing opening your packaging?
- Or better yet when was the last time you visited a customer’s receiving department to see what they do when they open your packages, so you’ll know exactly what that feels like?
- How many times have you extended your vision beyond what you are building to where your product is going to end up. To envision what your product what your product is going into and how not only that end product will change the world but how your own product will contribute to that change?
- Or going to the other side of the spectrum. How many times have you insulted the customer with your product? You did not send the right paperwork, or the coupons or the C of C’s or when the quantity in the box did not match the quantity on the invoice? These mistakes are not only a gross inconvenience to the customer who cannot clear your product out of receiving and onto the manufacturing floor, it is also an insult to that customer, sending him the message that you did not care enough to send the very best. Not to mention an indication of carelessness and sloppiness on your part as well.
The old adage take care of the little things and the big things will follow has never been truer than it is today. Yes, our customers are demanding, yes, they want more from us than ever before. But that is because they are getting the same high demands from their customers. They are trying to thrill their own customers and want you to thrill them in return.
Great craftsmen have been known to say that they leave a little piece of themselves, a little bit of their heart in every product they produce. They spend hours producing the best art, writing, sculptures, landscapes, quilts, and furniture so that they can share their passion with the receivers of their works. Why should it be different for us? Go ahead, sit down with your team once a week and talk to them about how your company can produce products that will delight and thrill your customers, products that will have the best of everyone in your company within them. It’s only common sense.
I view business like this: If you are not growing, you are dying. If you are not constantly trying to find ways to make your company more attractive to your customers, you will die.
I personally know of some companies who have shrunk themselves out of business. They have literally cut costs to the point where there was just nothing left. In fact, they actually celebrated when the vice president of sales and marketing left because they were not going to have his expense any longer!
They did not even consider their circumstances. They did not even take a moment to think that their biggest challenge was not having enough sales, and that now with their top sales guy gone they did not have a chance in hell to survive. And the guy had left because he was tired of fighting with them, trying to get them to do the right thing. He was tired of asking them to consider at least trying to deliver their product on time…at least once in a while. The owners were just relieved that they would not have to argue with him any longer. Now they could do things their way, which was to ship boards when they finally finished them, not when they were actually due.
It should come as no surprise that that company is no longer with us.
I knew of another company that never met a pay cut they didn’t love. Every time there was the slightest dip in sales, bang, they went right for that payroll! When I mentioned to them that with yields of less than 60% they were in fact throwing out more dollars each month in scrap than their entire monthly payroll was worth, they did not want to hear it. The owner just shrugged his shoulders and said there was nothing they could do about that. He also said that the scrap was due to the people on the floor, so they were getting their just deserts by having their pay cut. Now that was a happy environment!
They are no longer with us either.
Then there was the company that spent so much time trying to save money that they went broke. Yes, they went Chapter 11 in the end. Once again it was a sad case of being penny wise and pound foolish. They would not do any preventative maintenance to keep their machines running, so of course their equipment was always breaking down. They never paid for service agreements on the equipment either, so when the equipment went down, the equipment stayed that way for days. They also hated paying their vendors on time, so you can just imagine the kind of service they got from them.
Are you depressed yet? You know, as I write these stories (and all of them true, though I wish they weren’t), I can’t help thinking what a joke it is that these are the same companies who rant and rave about China eating their lunch and the US government doing nothing about it. These are the same guys who complain about their competitors under pricing them to the point where they are losing most of their business. And, yes, they are the same guys who go out of business and learn exactly nothing from the entire experience; they take nothing away except bitterness about how the market is unfair, the industry is unfair, the US government is unfair and the world is certainly not fair, all the while adhering to their old philosophy of cutting costs at all costs.
Are you ready to use your exhaust pipe as a straw yet? No? Well, maybe this one will put you in the mood: I know of one company who was actually so unacquainted with customer service that after two better than usual months of sales (I’m not sure how that miracle happened), they decided to get back at the customers they did not like by firing them.
Yes, this is true. They sent out a letter to the customers they did not like, particularly the low-end, lower-volume customers, and gave them the old heave-ho. They told them they were sorry but they were just so busy with their good customers (yes, they said that) that they no longer wanted their business. This was a few years ago, so they also told these customers to come and get their artwork within five days or they would go in the dumpster out back.
Of course, things went to hell in a hand basket for them and in three months they were desperate to get that business back. So they sent their remaining sales guy out to bring back those spurned customers as soon as possible. What kind of reception do you think he got out there? Terrible, of course, and he was not able to find a single customer who was willing to return. The owners told him that if he was any kind of sales person he could have brought those customers back and fired him. They were out of business a few months later.
So in the end, remember this, if you don’t remember anything else:
You cannot cut your way out of trouble, and you cannot tell your problem customers to take a hike when you have a couple of good months. It’s only common sense.
No matter what happens in the world, success is up to you
There are about 230 boards shops left in North America and out of those about 175 of them are at $10 Million or less and out of those about a 100 are at $5 Million or less and out of those 25 are at $1 Million or less. For those who want to do the math, that leaves only about 55 that are doing $25 Million and over.
So, most of the board shops left in North America today are $10 million and under and the majority of those smaller, much smaller than that.
Now, the Global PCB market is just shy of $60 Billion dollars. Considering that the North American market is about $12 Billion dollars with about $4 Billion of that being built here in North American, there is still plenty of business to go around especially for those shops that are under $10 million.
Our North American market still has about $4Billion being built domestically. Which means that those smaller board shops have very little of their success and failure relying on what the rest of the world is doing. Oh, sure there is the trickle-down effect, that cannot be denied but on the same token if you are the sales manager of a $6 Million dollar a year American board shop, stop complaining about China your success is in your hands
If you run a $6 million dollar a year board shop and you are doing defense and aerospace work you are in even better shape because your business cannot be imported thus you are in even better shape than your commercial board shop counterparts who have no protected business.
So, what is my point? Where am, I going with this? It’s simply that the success or failure of most board shops in this country is completely in their own control. The real factors they should be concerned with are simple business factors.
If you find yourself in this space here is what you should to be concerned about:
1. Quality: Is your Quality in the upper 90th percentile? Like 98 or 99%? Are you customer returns minimal somewhere between next and nothing? Because if your Quality is less than that you are throwing your money away faster than you can make it. I can also safely assume that you are burning through customers as well. In this high-performance age, if your company is not performing at peak then your customers are not going to stick around. As Ford likes to say Quality is number one.
2. Delivery: Yes, delivery. Companies, you customers, need their boards on time…all the time and if you can’t do that consistently then you are going to lose customers at an alarming rate.
3. Price: Sorry but we need to talk about price. I know that is tough to hear but the price of something is based on what the market is willing to pay for it. It is not based on anything else. Our job as business owners is to provide a price that is competitive and most importantly marketable. By the way if your Quality and delivery are not where they should be neither will your price. To compete in the world today you have to be as efficient as you can possibly be, that means there is no room for poor performance.
4. Service: Customers are going with vendors who are easy to work with. So much can be overcome by great customer service including the competition. Ours is an industry whose customer service is down around the service level of the department of motor vehicles so it would not take much effort to out-service the competition!
5. And yes of course sales and marketing. You have to tell someone who you are and what you do and you have to have a clear and focused sales strategy.
Think about these five things. There is nothing difficult here. There is nothing extraordinary here. Everything mentioned above will only benefit your business as well as make sure that your company thrives in this economy,
And guess what? If everything mentioned above is working you will not have to worry about the Chinese or your competitors or your demanding customers, you will be ahead of the game and running your own race to success.
It has become too easy to blame outside elements for the difficulties we face but going back to the beginning of this column, if you have a board shop that is currently doing $ 6 Million and you want to get to $7 Million a year it is entirely up to you and based on how well you run your business. Putting things in perspective you are trying to get one more million a year in revenue and that translates to a little over $ 83,000 per month. In a global market place that is $60 Billion a year, in a North American marketplace that is about $4 Billion a year, your one-million-dollar growth is entirely in your hands. It doesn’t matter what the Chinese do, it doesn’t matter what your competition does and sure doesn’t matter what goes on Washington all that matters if what you do, how you perform and how you price and yes, how easy you are to deal with. It’s only common sense
I’ve been concentrating on listening lately. I mean really listening, not doing what I usually do, which is to wait for the person I’m talking with to finish talking so that I can tell him all the great thoughts I was formulating, while he was talking. It’s not easy to listen, we are all so in love with the sound of our own voices, that we barely take the time to really listen, and really hear, what the other person is saying.
Entrepreneur, Richard Branson, claims that he practices what he calls “aggressive listening” He says that most of us view the act of listening as a passive act, when, it should be an active action. He goes on to say that “listening is 100 percent about engaging; it is in fact the most emotionally intense of human activities.
Tom Peters says in his new book, The Excellence Dividend “I firmly believe that if, after a half-hour conversation, you are not exhausted, you were not seriously/fiercely/aggressively attentive.”
Once again from Peter’s book: The Good Listener’s Rules
- A good listener exists totally for the given conversation. There is nothing else on earth of any importance to me for the time I am listening.
- A good listener keeps his/her mouth shut
- A good listener gives the other person time to stumble toward clarity without interruption. No matter how long the pause (keep quiet) when someone is thinking before talking is not an invitation to interrupt.
- A good listener never finishes
- A good listener becomes INVISIBLE; makes the respondent the centerpiece
And to quote the great humorist Will Rogers, “Never miss a chance to shut up.”
Okay, why am I going on about this listening thing? Why do I bring up this subject two or three times a year? Simple, because I am a sales consultant and I am a total failure when it comes to getting people to listen. Oh, I don’t mean listening to me. No not at all, I mean listening to their customers. Every sales person I have ever come in contact with is a terrible listener. You put a bunch of sales people in a room like say, at a sales meeting, and all you’ll hear is chattering, you will never see everyone listening as one person speaks. I dare say, it is the single most challenging problem facing sales people today. They just don’t get the fact that no one ever learned anything while talking.
And their worst fear, I mean what gives most sales people nightmares, is silence. Silence is the great enemy of listening. There has never been a sales person who could stand silence. They feel it is their duty to make sure there are never any silences, in any room they are in. And the fact that silence makes them uncomfortable, is the reason that so many sales people fail.
What about you? Can you handle the silence? Are you a good listener? Here are a few questions to ask yourself:
- When you prep for a sales call, do you focus on what you are going to tell the customer? Or, do you focus on what you are going to ask the customer?
- When the customer tells you that he is seriously considering giving you the order. Do you remain quiet, and wait for what she is going to say next? Or do you just keep talking, piling on the reasons why buying from you be the best choice?
- When your customer is angry and wants to tell you what he does not like about your performance, do you keep quiet, giving him plenty of time to get the complaints out…to vent? Or do you keep interrupting him, so you can give him the excuses for why you messed up?
- When a customer is telling you an interesting story, say about meeting a famous person, do you listen quietly and appreciate not only the story, but the enjoyment she is getting from telling it? Or, do you only half listen because you cannot wait for her to finish so you can tell her about an even more famous person you’ve met?
I think by now you get the point. In each of these examples there was a proper way to have a conversation, and a wrong way, which way did you go? If you were only thinking about what you were going to tell that customer; or kept piling on the reasons, he should buy from you; or if you kept making excuses while your customer was balling you out; or if you have a tendency to play “can you top this” with the person who is telling you about the famous person she met, then you need to go to listening school, You need to take the art of listening seriously enough to read Richard Branson’s recent book, The Virgin Way: How to Listen, Learn, Laugh, and Lead. And start listening for a change. It’s only common sense
So the year has started badly. You thought all that start of year pent up demand would have you rocking.
But sales are thin and the funnel is pretty darn dry.
You’re beating on your outside sales team and they are doing everything they can with their customer base. Or worse yet you don’t even have an outside sales team…don’t laugh many companies don’t. They rely only on word of mouth. They feel that good enough has been good enough so far and that things will come around, just like every other time in the past they have come around. But alas, this time it’s different; this slump has been going on for months and now you are entering the panic mode and you have to do something!
The problem is you have to do it now. If something doesn’t change soon you are going to have to close up shop and that is something you just don’t want to face.
You are really behind the eight ball because most well-organized sales initiatives take about 90 days to get going and at least 120 days before you start seeing results. You should have started this months ago, hell you should have been doing it all along, But that’s another story…I’ll save that lecture for another day.
So now you have to do something, to make something happen…not rocket science that. But it is a fact. Do something and do it now!
If you’re going to do something at least have some sort of plan that will stand a chance of getting some sales in the house before it closes.
Here is that plan
Here is an emergency plan for increasing sales right away.
The most important thing you can do at this time is to try to get sales as quickly as possible. Create a sense of urgency…not panic but urgency. Let your team know that their jobs depend in getting sales into the house now!
For this you will need to get all hands on deck. You will have to push the inside sales people you do have and then recruit from other departments. Put anyone who can handle a phone on the phone and do it now!
Part One: Using the current database/ how good is our data base at this time?
- Try to contact as many customers and potential customers as possible.
- Current customers
- You need to go through and evaluate this list immediately.
- If they are nearby they need to be visited to see what they have going and to see if we can do anything for them.
- If they have not ordered in a while ask them why not? Ask them if there is something you can do to get going with some orders again
- You need to discuss with them how they are doing
- Go over the orders you have in house and ask them if they have anything else you can work on
- Review your finished goods list with you and try to sell their boards which you have in stock.
- Work with them to help you help them.
- And sell them on buying from you right now. Tell them you are willing to make a deal they cannot refuse,
Part Two: Orphans: Customers we used to do business with.
- They are the next group to contact.
- Why did they leave?
- Do they have business now?
- Make a priority list of these and start contacting them immediately.
- This group is very important. They know you and they once did business with you. They need to be contacted. This is what we call the “low hanging fruit”
Part Three: New potential customers:
These have to be customers where you feel you are close to getting something from them. Of course you also have to work on the long term, but for the sake of this plan you need to go after customers who may want to send you business in the near, very near future.
Part Four: Measure your way to success: This is important: you need to keep track of all the sales calls you make. You need to put together some sort of plan with goals like how many customers do you want to talk to in a day? You should be measuring the following:
- number of calls a day
- What they said
- Any actions required
- What is the next step?
This is best done using an excel spread sheet. Review it every o day to make sure that things are happening and progress is being made. This is hard work, but it works. You have to make something happen.
Part Five: Do some guerilla marketing:
- Create a pitch: A reason why customers would want to come to you. Free tooling, great price whatever, and just some kind of promotion.
- Permission marketing: Take a good look at your data base, sort it out and then from there you can develop a permission marketing plan. You can choose from one or some or all of these methods of reaching out to customers:
- Postcards (yes believe it or not that are back and they work in this e-mail world)
- Fax (when is the last time you tried this? Imagine getting a fax sales offer today!)
- Direct letters (who can resist opening a letter. Especially if the address is hand written. No labels please0
You need to be sending these out every two weeks, like clockwork. The most important thing is to get in touch with as many possible in the shortest amount of time.
Now come closer….here is the real secret about increasing you sales…if you do something, something will happen. Like I said this is not rocket science but it is only common sens