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TOCICO 2010 ConferenceTOCICO 2010 ConferenceTOCICO 2010 ConferenceTOCICO 2010 Conference


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© 2010 TOCICO. All rights reserved. 1© 2009 TOCICO. All rights reserved.

The Strategies & Tactics for The Strategies & Tactics for The Strategies & Tactics for The Strategies & Tactics for The Strategies & Tactics for The Strategies & Tactics for The Strategies & Tactics for The Strategies & Tactics for Selling a Decisive Competitive Selling a Decisive Competitive Selling a Decisive Competitive Selling a Decisive Competitive Selling a Decisive Competitive Selling a Decisive Competitive Selling a Decisive Competitive Selling a Decisive Competitive

EdgeEdgeEdgeEdgeEdgeEdgeEdgeEdge

Presented By: Lisa Scheinkopf, Goldratt Consulting Ltd.Presented By: Lisa Scheinkopf, Goldratt Consulting Ltd.

Date:Date: 2121--22 June, 201022 June, 2010


The Goal: The Goal: The Goal: The Goal: The Goal: The Goal: The Goal: The Goal: To Be Ever FlourishingTo Be Ever FlourishingTo Be Ever FlourishingTo Be Ever FlourishingTo Be Ever FlourishingTo Be Ever FlourishingTo Be Ever FlourishingTo Be Ever Flourishing

Continuously and significantly increasing value to stakeholders - employees, clients and shareholders.

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© 2010 TOCICO. All rights reserved.

Per

form

ance

Time


A Hypothetical CompanyA Hypothetical CompanyA Hypothetical CompanyA Hypothetical CompanyA Hypothetical CompanyA Hypothetical CompanyA Hypothetical CompanyA Hypothetical Company

Sales $100m

Totally Variable Costs $50m 50%

Operating Expenses $45m 45%

Profits $5m 5%

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Profits $5m 5%

• The company does an excellent job of implementing TOC in operations.

• What is your estimate of the bottom line impact?


Is TOC Improving the Company?Is TOC Improving the Company?Is TOC Improving the Company?Is TOC Improving the Company?Is TOC Improving the Company?Is TOC Improving the Company?Is TOC Improving the Company?Is TOC Improving the Company?

So your company is making thirty-six percent moremoney from your plant just from installing somerobots? Incredible.

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Jonah, 1984

So your company is making thirty-six percent moremoney from your plant just from implementing sDBR?Incredible.

Lisa, 2010


What Improves?What Improves?What Improves?What Improves?What Improves?What Improves?What Improves?What Improves?

Baseline Operations

Sales $100m

TVC $50m 50%

OE $45m 45%

Sales

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OE $45m 45%

Profits $5m 5%

• Impact on sales?• Impact on TVC?• Impact on OE?• Impact on Profits?


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The MeansThe MeansThe MeansThe MeansThe MeansThe MeansThe MeansThe Means

Build a Decisive Competitive Edge and the capabilitiesto capitalize on it, on big enough markets withoutexhausting the Company's resources and withouttaking real risks.

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A company has a Decisive Competitive Edge (DCE)when it is satisfying a client’s significant need to anextent that no significant competitor can.

Most companies do not have a decisive competitive edge.


Typical Competitive Playing FieldTypical Competitive Playing FieldTypical Competitive Playing FieldTypical Competitive Playing FieldTypical Competitive Playing FieldTypical Competitive Playing FieldTypical Competitive Playing FieldTypical Competitive Playing Field

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8

10Competitive AdvantageBetter than the competition in a particular buying criteria

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0

2

4

Price Quality Features Service

Competitor ACompetitor BCompetitor C


DCE Playing FieldDCE Playing FieldDCE Playing FieldDCE Playing FieldDCE Playing FieldDCE Playing FieldDCE Playing FieldDCE Playing Field

6

8

10Decisive Competitive EdgeSatisfying a significant need to a degree that no significant competitor can

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0

2

4

Price Quality Features Service Signficant Need

Competitor ACompetitor BCompetitor C


Some ExamplesSome ExamplesSome ExamplesSome ExamplesSome ExamplesSome ExamplesSome ExamplesSome Examples

• Availability is a consumer’s significant need.

• When most cash is tied up in inventory and availability is still an issue, improving inventory turns is a client’s significant need.

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turns is a client’s significant need.

• When the due-dates of the suppliers are notoriously bad, and late delivery has major consequences for the client, reliability is a client's significant need.


Snapshot of A Typical S&TSnapshot of A Typical S&TSnapshot of A Typical S&TSnapshot of A Typical S&TSnapshot of A Typical S&TSnapshot of A Typical S&TSnapshot of A Typical S&TSnapshot of A Typical S&T

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A Change is NeededA Change is NeededA Change is NeededA Change is NeededA Change is NeededA Change is NeededA Change is NeededA Change is Needed

DCE = Satisfying a client’s significant need toan extent that no significant competitor can.

• The client has an unsatisfied significant need.

• How is the need typically addressed in the client’s buying process?

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buying process?

• How is the need typically addressed in the supplier’s selling process?


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IIIIFFFF ITITITIT’’’’SSSS NOTNOTNOTNOT THETHETHETHE TTTTIMELINEIMELINEIMELINEIMELINE TTTTANGOANGOANGOANGO, , , , ITITITIT’’’’SSSS THETHETHETHE CCCCHEAPERHEAPERHEAPERHEAPER PPPPRICERICERICERICE CCCCHAHAHAHACCCCHAHAHAHACCCCHAHAHAHA

Humor break…. But then ask, how much of their sales are negotiated as if doing this tango? A business deal sale is different. Especially this business deal, that hinges on the super reliable on time performance! In this business deal, honesty rules, and a trusting win-win relationship is built.


Why Change?Why Change?Why Change?Why Change?Why Change?Why Change?Why Change?Why Change?

• The more significant the need, and

• The longer it has gone unsatisfied,

• The more the client has instituted paradigms and procedures which attempt to protect it from feeling the pain of the unsatisfied need, and

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the pain of the unsatisfied need, and

• The less it is considered in the client’s buying process, and

• The more it is off the radar screen of the suppliers


Conditioned to Set ExpectationsConditioned to Set ExpectationsConditioned to Set ExpectationsConditioned to Set ExpectationsConditioned to Set ExpectationsConditioned to Set ExpectationsConditioned to Set ExpectationsConditioned to Set Expectations

• Necessary Assumption: The client has a set expectation of what a vendor is supposed to present in a sales meeting. Following the set expectation of the client and just presenting the offer (without the supporting logic), guarantees failure.

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• Most salespeople are conditioned to conduct a sales meeting in accordance with the set expectation of the client.


• To successfully sell based on a DCE, a salesperson must change the very nature of what he does and how he does it.

• It is crucial, therefore, that we − Enable each salesperson to fully understand and embrace

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− Enable each salesperson to fully understand and embrace the what’s and why’s of the changes he is asked to make.

− Design the transition so that the salesperson is wildly successful very quickly by using the new approach.


The Necessary ElementsThe Necessary ElementsThe Necessary ElementsThe Necessary ElementsThe Necessary ElementsThe Necessary ElementsThe Necessary ElementsThe Necessary Elements

Conventional sales methods are not effective enough to capitalize on a competitive edge that

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competitive edge that stems from anything other than the product itself.


1 1 1 1 1 1 1 1 -------- Mastering The CoreMastering The CoreMastering The CoreMastering The CoreMastering The CoreMastering The CoreMastering The CoreMastering The Core

The client has a set expectation of what the vendor is supposed to present in the first sales meeting. Following the set expectation of the client and just presenting the offer (without the supporting logic),

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(without the supporting logic), guarantees failure.


The Core Meeting Follows the LayersThe Core Meeting Follows the LayersThe Core Meeting Follows the LayersThe Core Meeting Follows the LayersThe Core Meeting Follows the LayersThe Core Meeting Follows the LayersThe Core Meeting Follows the LayersThe Core Meeting Follows the Layers

• (0) There is no problem• (1) Disagreeing on the problem• (2) The problem is out of my control

What to Change?Disagreement on the

Problem

• (3) Disagreement on the direction for the solutionTo What to Change?

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• (3) Disagreement on the direction for the solution• (4) Disagreement on the details of the solution• (5) Yes, but… the solution has negative

ramification(s)

To What to Change?Disagreement on the

Solution

• (6) Yes, but… we can’t implement the solution• (7) Disagreement on the details of the

implementation• (8) You know the solution holds risk

How to Cause the Change?

Disagreement on the Implementation

Layer 9: “I don’t think so” – Social and Psychological barriers

What if your suppliers What if your suppliers would do what they would do what they

promised promised

GUARANTEED!GUARANTEED!

What if your suppliers What if your suppliers would do what they would do what they

promised promised

GUARANTEED!GUARANTEED!GUARANTEED!GUARANTEED!GUARANTEED!GUARANTEED!

Discussion Topics Discussion Topics

ll IntroductionIntroductionll Problems & impacts on projects Problems & impacts on projects

caused by supplier’s practicescaused by supplier’s practicesll Criteria for any solution Criteria for any solution ll Criteria for any solution Criteria for any solution ll How we will perform differentlyHow we will perform differentlyll Carbis guaranteed reliability programCarbis guaranteed reliability program


2 2 2 2 2 2 2 2 -------- Closing DealsClosing DealsClosing DealsClosing DealsClosing DealsClosing DealsClosing DealsClosing Deals

Conducting a successful core meeting is usually insufficient to close a deal.

Knowing how to conduct core meetings greatly enhances the ability to design and conduct the

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ability to design and conduct the prior steps in the sales process leading to the meetings and the subsequent steps leading from Buy-In to closing a deal.


Not the Sales ProcessNot the Sales ProcessNot the Sales ProcessNot the Sales ProcessNot the Sales ProcessNot the Sales ProcessNot the Sales ProcessNot the Sales Process

• Prospect likes the offer

• Prospect likes the offer • Hopefully • Hopefully

Quote(s)• Which might

turn into • Which might

turn into

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likes the offerlikes the offer

RI Meeting

• Hopefully they will send us quotes

• Hopefully they will send us quotes

turn into ordersturn into orders

Order(s)


How Different are Operations & Sales?How Different are Operations & Sales?How Different are Operations & Sales?How Different are Operations & Sales?How Different are Operations & Sales?How Different are Operations & Sales?How Different are Operations & Sales?How Different are Operations & Sales?

Input Process Output

1. RM 1.Product, Payment• Specialized Resources

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1. RM2. RFQ3. RI Meeting

1.Product, Payment2.Order3.Client

• Specialized Resources• Engineered Activities• Expected Duration &

Yield

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Sales ProcessSales ProcessSales ProcessSales ProcessSales ProcessSales ProcessSales ProcessSales Process

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Turning Customers into ClientsTurning Customers into ClientsTurning Customers into ClientsTurning Customers into ClientsTurning Customers into ClientsTurning Customers into ClientsTurning Customers into ClientsTurning Customers into Clients

• A client awards the Company with the vast majority (>75%) of its orders for products that fit well the Company’s capabilities

• Both the Client and the Company

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• Both the Client and the Company are more profitable as a result of the relationship

• As with any relationship, the strength of the relationship between a Client and the Company is based on the demonstrated trustworthiness of both parties


Four Phases of DCE SellingFour Phases of DCE SellingFour Phases of DCE SellingFour Phases of DCE SellingFour Phases of DCE SellingFour Phases of DCE SellingFour Phases of DCE SellingFour Phases of DCE Selling

• Bring the desired client to realize the significant need. • Bring the desired

Decide• Bring the desired

client to remove the obstacles that • Bring the desired

Place orders

Managing the overall relationship

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significant need.

Realize

• Bring the desired client to decide to buy from the Company

obstacles that otherwise prevent buying from the Company

RemoveObstacles

• Bring the desired client to place (more and more of its) orders with the Company.

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Converting quotes into orders

áá Quote hit rateQuote hit rateáá Share of total client spendShare of total client spend


Changing the ConversationChanging the ConversationChanging the ConversationChanging the ConversationChanging the ConversationChanging the ConversationChanging the ConversationChanging the Conversation

Traditional Selling

Solution(Consultative) Selling DCE Selling

FocusProduct Features & Price

Problems theproduct will solve

Businessproblems the full offer will solve

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ModePresentation(Pure push)

Questions(Pure pull)

Combination(Interaction)

Whose problem is being solved

Supplier’s Customer’sSystem’s (all stakeholders in the chain)

Salespeople must understand

The Product & how it works

Cause-effect of product impact on client business

Cause-effect of supply chain practices on client & company businesses


POOGIPOOGIPOOGIPOOGIPOOGIPOOGIPOOGIPOOGI

An organization that is used to dealing with only a few prospects at a time, is not set to deal with a quantum leap in numbers of opportunities.

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Wasting, due to lack of proper attention, a desired prospect that had already expressed a genuine interest, is a crime.


Rewards of making the shiftRewards of making the shiftRewards of making the shiftRewards of making the shiftRewards of making the shiftRewards of making the shiftRewards of making the shiftRewards of making the shift

• Hit rate moved from ≈ 20% to >60% in less than 1 year.

• …..No problem I really enjoy training and teaching everything I've learned. I hope they found it helpful. I want to be the Stewart Witt of [Company], I told [VP Sales] the other day. I finally after all this time feel like I GOT IT!! I don't sell [product] anymore I sell Reliability and I never thought I would

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[product] anymore I sell Reliability and I never thought I would after all this time. I still remember the story you told me about your first training with Dr. Goldratt and you didn't think you would ever get it and then it started to click. I don't know what clicked but it did! I feel like no one...beside you can sell reliability as well as I can. The confidence is FINALLY there. See ya soon and hope all is well. Again, thanks for all the help and more importantly my new way of thinking and selling!!!


About Lisa ScheinkopfAbout Lisa ScheinkopfAbout Lisa ScheinkopfAbout Lisa ScheinkopfAbout Lisa ScheinkopfAbout Lisa ScheinkopfAbout Lisa ScheinkopfAbout Lisa Scheinkopf

• Director, Goldratt Consulting Ltd.

• Past Chairman and Board Member, TOCICO

• Certified by TOCICO at Implementer Level in all TOC Applications

• Author and Public Speaker

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• Author and Public Speaker

• Thunderbird MBA in International Management

• One of the luckiest people in the world - no shortages of love and joyfulness with family, friends, colleagues, and work

• -

Lisa Scheinkopf is a Director of Goldratt Consulting, and is recognized worldwide as a leading Theory of Constraints (TOC) authority. Lisa worked with Dr. Eliyahu Goldratt in developing the TOC Thinking Processes and is the author of the definitive TOC reference, Thinking for a Change: Putting the TOC Thinking Processes to Use (St. Lucie Press, 1999). Her articles have been published in a variety of industry and professional publications, and she has a long history of public speaking on TOC. With over 25 years management and consulting experience, Lisa is a past Board Member and Chairperson of TOCICO, and has an MBA in International Management from the Thunderbird School of Global Management.

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