Recently in one of Justin Roff-Marsh’s SPE Practitioner Tips (which you can subscribe to here), he asserted that salespeople and their managers spend too much time trying to forecast sales revenue. Most sales groups forecast revenue by adding the value of all opportunities and then adjusting them for risk. To make the adjustment, they assign […]
Why Time and Materials Billing Is Not the Way to Grow Your Company
Justin Roff-Marsh once wrote about the inefficiencies and value-destruction of time-and-materials billing. He recommends that companies avoid pricing their product based on a calculation of minutes worked. Instead, he proposes that we price according the value we deliver to the customer. Companies that use time-and-materials billing will find this argument difficult to accept, so let’s […]
How Can Your Organization Learn to Challenge Assumptions?
“Be patient toward all that is unsolved in your heart and to try to love the questions themselves like locked rooms and like books that are written in a very foreign tongue.” Rainer Maria Rilke, 1903 Successful use of process improvement tools requires that we be open to learning. We can’t challenge our assumptions if […]
First, Define the System, Its Purpose, and Its Measurements
For many years, Lisa Scheinkopf has been teaching, coaching, and implementing improvement projects using the theory of constraints. She has identified two critical prerequisites to process improvement projects. In some projects these prerequisites are obvious and people intuitively understand their importance. But in other projects they are not so clear and they are easily ignored. Ignoring […]
How to Identify and Fix Process Constraints
The Theory of Constraints says that the path to improvement in an organization is not to make improvements everywhere. Instead, TOC says to find the constraint in your process and focus your improvements on that step in the process. Once you have improved throughput for that step, then find the next constraint. By working on […]
What Happens When Your Production Rate Exceeds Market Demand?
The concept of a system in the Theory of Constraints is analogous to a chain with one weakest link. If you pull from both ends of the chain, one link, and one link only, will eventually snap. In the chain, the weakest link that snapped was the constraint. If you can strengthen the weakest link in […]
Knowledge of Constraints Holds the Key to Process Improvement
When we think of constraints in a system, the first image that usually pops into our mind is a physical constraint, like a machine that holds up the workflow. But this isn’t the only kind of constraint. And physical constraints are not usually what cause problems in a sales organization. So let’s learn more about […]
How to Improve the Throughput (Sales) of Your Organization
What is your organization trying to accomplish? What is its goal? In a business, the financial goal will typically be to make more money, now and in the future. Of course, organizations have additional goals:to hire and retain the best people, to be competitive in their industry, and to bring innovative products to market. But operationally, the […]
Which Problems Are the Most Important to Fix?
Imagine I am a new employee at your company and you want to show me around. You would likely take me on a walking tour, first through reception then to the different departments: sales, customer service, legal, engineering, accounting, and production. On this tour you would show me the different functions in your company. Now […]
Building a Scalable Business Machine
Recently Justin Roff-Marsh interviewed Doug Voss, one of his clients, about the projects they have done together. Doug is a vice-president and founder at Sayfa Systems in Melbourne, Australia. Sayfa manufactures and distributes height safety and fault management systems for people who work on the roofs of buildings. Sayfa went through a sharp growth period […]