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We have witnessed many executives who are efficient (doing things right), but few executives are effective (doing the right things). We believe this is misguided and aim to remedy the shortfall with executives.
The Effective Executive – Episode 43 – Small Scale Will Save You
Small Scale is Your Savior from Competing Aims
[00:00:00] This is the 43rd episode of the effective executive podcast and video and. This week, I wanted to talk about how I doing things on a small scale can really save you as an executive, and I started my career with an industrial distributor. I was in sales and then I moved on after I got my masters to the home office of a family owned industrial distributor about, I’m going to say, around 200 employees or so and had eight locations around a couple of states.
[00:00:52] And the setup was basically you had the owner was the chief executive, if you will, and his son was the vice president of marketing and. You know what? The things I was put in charge of when I kind of my first foray into management was inventory being the inventory or purchasing manager. And one thing that I learned very quickly was that the inventory manager and the marketing person did not share, at least in this case, the same aim. We weren’t rewarded on the same things. We weren’t, you know, our our aims were completely different the way that things were set up.
[00:01:51] And I remember constantly the the the son of the owner, the vice president of marketing, coming to me and saying, you know, if we’re going to be in the business, you know, of industrial distribution, we have to have Dyce breaks. And I remember that was one of the early ones. So, you know, you went out and you spent probably today’s dollars about, I don’t know, five or 10 grand and put in a bunch of dice springs, assorted sizes and colors and things of that sort.
[00:02:30] No big deal. Then we put in the vice president of marketing came in and said, hey, we need this paintt system and I’m going to say we spend anywhere from 60 to in today’s dollars 60 to 100 grand on this patent system. And that was the one that kind of got me suspicious about what was going on, because what I found was, first of all, I went back and looked at the data. I was, you know, 26 years old and found that the dye springs that we had ordered had not we hadn’t had any orders for them. And so I thought, OK, well, why are we having these dice springs? They’re. Then with the paint, it was a lot more expensive and so 60 to 80 grand. I kind of started tracking it and saw that the paint was was not selling. The salespeople thought it was a bad idea. And there were a couple maybe salespeople in there that were advocates of it, but not many. And then the. The need and this is it gets very hard, I know some of you probably have or maybe even currently working in a family owned business, it’s hard to go up against the owner’s son or daughter in a particular business. But he he wanted to purchase about two hundred fifty thousand dollars worth of braces. So now I’m getting into a little bit more of the detail of these abrasives that he wanted to purchase. And I said, well, how did you come up with this list of all these ones you want to buy? And he said, well, those are the ones that are sold all over the country.
[00:04:34] And, you know, we want to buy all of these different types. I said, but do we have any, you know, demand here for them? And as I started to look through, most of them were things that none of our customers used. So. So I kind of I started to push back because I remember as a purchasing manager, inventory manager, my job was to make sure that we had the right inventory there and we didn’t have unlimited money. It was still a relatively small, medium sized business. And so I pushed back on it. We didn’t we didn’t get all of the abrasives that they wanted off of this particular order. But you have restocking fees for some of this stuff. You know you know, the dye springs, the paint. You know, if you have to send them back to the vendor, it would cost you a certain amount of money to to just send them back. So the next thing that came to me was at the time, a company called Toyia as Measuring Tools was backed up and orders and what was being sold to me by the vice president of marketing, the son and the vendor, was that, you know, you need to buy five hundred thousand dollars worth of tools because they will only ship out of Japan 10 percent of that number. And I’m sitting here thinking, but I still have a hundred thousand dollar in today’s dollars order that’s going out there. So this obviously created a lot of friction associated with this adversarial relationship between the vice president marketing and myself.
[00:06:26] I could talk about this in terms of an aim and having a shared aim to. But I’m not going to go here there for for this thing, but. One of the things that I would learn later was that any time you make a change as an executive, if you want to try a new product, a new service, what software development, organizational design data, whatever it is, that you should do it on a small scale and this will save you both money and politically in this case, that, you know, if we were to try some of these things out or thought through it, we could try these things out, do something on a small scale, see if we get any traction on them before we start to spend large sums of money on anything. And I found this. I was taught to me through the work of W. Edwards Deming. And, you know, it makes perfect sense, and I’m sure other people were were were probably doing it, but anyway, it became a staple of every thing I did pretty much after that whole experience. So if you want to save yourself a lot of heartache and money within your organization, when somebody has an idea, you know, don’t dismiss it because that that will kill creativity, too, within your organization. You know, put it down. You may not it may not be one of your top ten, but but but keep it because that person or our group of people thought it was a good idea.
[00:08:25] And by virtue of hanging onto the idea, might it might be a good one, but it may not. It may be number 10 on the list of things that you want to do that you think would be successful within the organization. But you can do these things for the most part on a small scale. You don’t have to go out and, you know, blow up a whole system. You can begin to learn whether it’s something that your market wants, if it’s a new product or service. You see this actually you see this all the time on Shark Tank. You know, people go, oh, I have this great idea. And then. What’s your sales? We don’t have any. I would say it’s hard to invest in something that has zero sales and, you know, these are things that happen within organizations on a consistent basis. I’ve seen millions, tens of millions of dollars wasted in large organizations where, you know, the salespeople come back and said, oh, well, we need this new platform, you know, for our software system. And in half, the executives go, OK, well, do that. And they build the system and nobody buys it. So there are ways to go about things. You just have to think through them, figure out how you can do it on a small scale. So that’s why I wanted to communicate this week. I’ve mentioned this before, but I wanted to devote an episode to that’s thinking in terms of doing things on a small scale because it will save you in the long run.