7 Tips To Get Recall Ready

If you sell products – you need to be “Recall Ready”recall

Like it or not Product Recalls are a part of business life.
Are you ready to run your first recall?  

If you are successful at selling physical products – there is a high probability that your business will encounter a recall at some stage. Poor recall implementation can kill your company; done correctly, your recall will be an opportunity to build brand value.

There are a number of reasons we are seeing an increase in the number of recalls being launched. Some of these are the negative side effects of some common and effective business practices including: rapid new product deployment, on-going cost out exercises and the use of Chinese manufacturers.

3 triggers for a recall are:

  1. Manufacturing process failure – a component is manufactured in a non-compliant manner, “breaking” the safety compliance eg incorrect plastic used so that it is not flame resistant and it should be.
  2. User Safety Incidents: end users have used the product in a manner that has resulted in harm to them or property, albeit not how you expected it to be used.
  3. Product Design Failure: resulting in potential harm to users or property

The 7 Tip Recall ready check list:

  1. Risk assess your product portfolio: Early detection of failure is the best way to minimise the impact of failure. Invest more on the Quality Assurance of your products that represent the highest cost of failure to you, including: total sales, cost of goods etc.Remember:   Risk = (likelihood of failure) x (impact of failure)
  1. Minimise the size of a potential recall – Batch code every thing: Use a batch coding system in your manufacturing process. That way if you have a manufacturing failure, you can limit the number of products you need to recall by manufacture date/batch, reducing the expense of the recall.
  2. Include Recall provisions in all Supplier Contracts: Make sure your supplier/manufacturer contracts have explicate clauses covering your recall process. In particular, recovery of the costs of the total recall programme; noting that this will be over and above the purchase price of the goods.
  3. Make it easy/cheap to contact your end users: Regulators are pedantic about ensuring a “reasonable” percentage of the sold product are “remedied” in the recall programme. Your challenge will be to cost effectively notify your customers, especially 2+ years after sale. Where ever possible maintain a database of end-user contact details including email, cell phone, address etc. A social media audience is a great way of contacting customers at recall time. It will be too late to establish social media audiences and channels post recall triggering event.  i.e establish your social media presence now – in the good times.
  4. Identify key suppliers prior to crisis: Initiating a recall is an intense time of activity. Establish some key supplier relationships now, rather than at the time of initiating a recall. Your list of key suppliers should include: Specialist Legal Counsel (that have relationships with your regulators), PR, Web and general IT development (for recall management and reporting systems), a specialist programme manager (if you do not have any one capable on staff).
  5. Assess and decide if recall insurance is appropriate or not: Depending on your business, recall insurance may be affordable or not. At very least review the appropriateness of this for your business.
  6. Document a Recall Process: Prepare ahead of time your recall process. Be clear on how you will execute a recall in your business should the event occur. Pre-think  key decisions, considerations and what functions that will be involved in the recall process.

For example:
– How will you decide what is the appropriate remedy (repair, replace, refund)?
– Understand your legal rights as a supplier and how you can offer an affordable and reasonable solution to your end users and customers.

Break your recall process /project into phases:

1: Initiating eventiStock_000004791880XSmall
2: Regulator notification
3: Activating recall
4; Locking in action plan
5: Pre-Launch activities
6: Go live
7: Monitor
8: Scale back

This is part of a series of blog posts on “Product Recalls” and “Managing Chinese Suppliers”. The content of this new series is based on experiences learned managing: three major home appliance recalls inside 12 months, involving hundreds of thousands of consumer products sold in Australia and NZ.

As a side note if you own one of the great Shark Vacuum cleaners please check it is not affected by the Shark Recall (www.sharkclean.co.nz/nz-recall.html)

 PS: Mark is currently looking for his next General Manager role or a Consulting assignment in NZ or Australia.  Contact him at: Mark@growthmanagement.co.nz 

Avoiding Quality Fade with Chinese Manufacturers

10 Tips on avoiding “Quality Fade”

The China manufacturing machine is a force that can not be ignored. They have it as far as rapid and low cost tooling, volume production and quality output. But like any tool, used incorrectly the results can be disastrous.

For product developers and importers alike using a good Chinese manufacturer can give you great results at great prices, but be warned “Quality Fade” is built into the Chinese manufacturing ethos.

shanghai night 2015-05-09 18.54.20Chinese manufacturers will continually find new ways to lower their costs, they do not appear to do so with malicious intent – rather than, “that is the way it is”. My advice is that you should just treat this as a sport, albeit a extreme sport, you need to master the game to avoid major consequences of losing eg – excessive warranty claims and recalls etc wasting your time, money and eroding your company and product brand value.

10 Tips on Chinese Manufacturing:

  1. Get your own Chinese speaking staff: Everything is lost in translation, particularly in times of crisis. You need both Chinese speaking staff on the ground in china and in your local office. Its amazing what ground you can cover quickly when you hear “the real conversation”.
  2. Have your own people in China: One thing never changes – personal relationships are king. Video conferences, skype calls and email will not replace being there. By all means start with regular visits, but as soon as you can, get your own person resident in market or close by eg Hong Kong.
  3. Proactively monitor for systemic product failure. With out fail every product issue will be meet by your supplier with a comment “you are the only customer with that fault’. If you are getting quality failures, then act. Anything over 1% of product failure from customer returns needs to be treated as urgent, and greater than 3% is a crisis and definitely systemic product fauilure.
  4. QC every shipment: No matter what track record the factory has, QC both in market and at receipt in your market.
  5. Contract with factories not brokers: In market brokers are great at helping you source product, manage relationships and get things done. However, when the shit hits the fan, they typically do not have the reserves to bank roll failure. Yes, include them in the commercial deal, but also have a contract with the factory direct.
  6. Don’t stray from manufacturers specialty: When asked most manufacturers say “yes” we can build that. In reality, most if not all, Chinese manufacturers all specialise in one thing and they seem to congregate in a region. Eg all vacuum cleaner manufactures appear to be within a 100km radius, like wise all blender manufacturers.

china factory DSCN3501

Once you go high volume with any product line the impact of failure increases. At that stage you should step up your QA processes:

  1. Make Notification of ECN’s and factory change mandatory: Make sure you are getting copies of all ECN’s (engineering changes notices) for your supplier. Particularly look for changes in quality of components that may effect EMC compliance or reliability of the product.
  2. Do regular full break down tests: Continually randomly check all aspects of your product build.Check that the  manufacturer has not swapped our a key ingredient or component, particularly ones that you mention in your marketing or affect safety and compliance
  3. Get Compliance Approvals retested in AUS/NZ : By all means use Chinese test lab reports to get you going in market with compliance certification, but if you want to eliminate risk of running foul of in market regulators, retest with Australian or NZ test labs
  4. Do full technical due diligence on all high volume product – be aware in many cases Chinese manufacturers cut corners in product development avoiding some important steps of new product introduction including HALT (Highly accelerated life time testing) and tight supply chain management of critical high risk components eg lithium Ion battery assemblies.

Whether you are a product development company using China for contract manufacturing or just an importer distributing goods made in China, do not skimp on investing in appropriate Product Quality systems to protect yourself and mitigate against product failure risk.

poorly made in china images

A must read for any one contemplating or using China as a tool is “Poorly Made in China” by Paul Midler – the horror stories in this book are all true.

This is the part of a new series of blog posts on “Product Recalls” and “Managing Chinese Suppliers” and other key topics aimed at medium to larger organisations. The content of this new series is based on experiences learned managing: multiple major home appliance recalls inside 12 months, involving hundreds of thousands of consumer products manufactured in China and sold in Australia and NZ.

PS: Mark is currently (Dec 2015) looking for his next full time role or a consulting assignment in NZ or Australia.   You can contact him at: Mark@growthmanagement.co.nz





5 tips to Avoid Strategic Partnership Mishaps

iStock_000009912341Small_LRThe make / buy /partner decision is one of the key decisions in growing your business.  Forming effective strategic partnerships or alliances can be the quickest way to grow your business and reduce risk. Unfortunately “not all that glitters is gold”

By their very nature strategic deals typically have significant upside if executed well and like wise catastrophic side effects if they fail. Some examples of strategic partnerships may be: outsourcing manufacturing, trading equity or market territory in lieu of cash payment or selling compatible products into the same end market.

Strategic Partner Success = Shared Vision + Shared Risk + Optimised Resource Deployment + Shared Rewards + Clear Agreements

5 mistakes to avoid:

  1. They should be a supplier/distributor not a strategic partner In the rush to grow the business you sign up a supplier or distributor as a strategic partner and in doing so agree terms that hinder your business in the long term.  Make sure you pick both the type of partner and actual partner with some fore thought keeping in mind the bigger picture, including your eventual acquirer. Make sure they are bringing competencies and assets to the table that are complementary and not core to your business. The business model canvas can help here.
  2. No written agreement / agreement with no teeth Take the time to document your relationship and commercial terms from the beginning, don’t assume anything. The mandatory first step is a simple Heads Of Agreement (HOA) – you can do this yourself. As the relationship progresses or the magnitude or risk increases, shift to a formal legal agreement.  Make sure you cover: what each partner wants from the relationship, intellectual property, who owns customers, what happens if the partnership is dissolved and of course commercial terms.  Make sure the signatory is the guy who writes the cheques, i.e has the authority to pay the bills.
  3. Missing shared vision – brand / values misaligned Fundamental to a synergistic relationship is that your visions and philosophies are aligned and compatible. Document key drivers for the partnership in the HOA.  Acknowledge power/risk differences as it’s rare it will be a 50/50 relationship.
  4. Partnership management – over dependence on single point of contact
    When dealing with large companies or non owner manager companies make sure you have at least 3 points of contact into their business and vice versa. People move on, personalities get in the way and it is great to ensure your relationship will out live a staff change or spat. Put in place a mechanism to escalate and deal with issues and regularly review the partnership agreement.
  5. No clear KPI’s or Exit path Document how success and failure is measured. Success maybe, profitability, market share, avoiding distraction of non value add services.
    The prenuptial part of your agreement is the most important part, including how you will terminate the agreement, the right to work with / appoint competing parties etc. Do not forget to include in your thinking what happens when you get acquired.

Risk Management  Successful partnerships are all about managing risk. Make sure you spend time to do a risk assessment before jumping in.  My no.1 piece of advise is consult a 3rd party to challenge your business logic before forming or signing anything.

Risk = (Likelihood of an event) x (Impact)

GMC logo

If you would like a hand to review your strategic relationship plans give Growth Management Consulting (GMC) a call.

GMC also facilitate business planning/strategy sessions, prepare companies for investment and develop/coach business pitches

12 Tips for effective customer workshops

Seminars / workshops are a great tool to show thought leadership, promote yourPostit note workshop BD LRx product/service and most importantly engage with potential and existing customers alike.

Here are 12 tips to help you maximise the customer engagement/learning opportunity:

  1. Facilitate don’t Lecture – effective presenters engage conversation and guide the learning process, rather than talk down to audiences. The participants are your best tool, acknowledge them by integrating them & their knowledge into your delivery.
  2. Ask the audience what they expect  – Everyone turns up with different expectations. Do a quick poll around the room as to what people are expecting to get from the day. Make sure you either cover that material or acknowledge up front you will not be covering it.  Write up key themes on a flip chart to ensure you do actually cover the topics requested. At the end go back to list and acknowledge each issue. Also get them to introduce themselves, it helps participants work out who to target and avoid during the breaks.
  3. Don’t over script – Have structure and flow to the content you deliver. Go with the flow of the participant questions and their hot topics. I will use a standard set of slides, but speak differently to them dependant on the audience, using my arsenal of stories/examples to illustrate points, dependant on the audience. You are the subject matter expert, so trust yourself to deliver the magic.
  4. Death by PowerPoint: Never, never read power point slides – your PowerPoint is a supporting actor, you are the main act.  Get a balance between text, diagrams and other graphics on your slides. The worst presentations/ seminars I have attended all either had text only slides or too many low quality images. Remember the power of the message is inversely proportional to the number of words and if a diagram or picture is worth a 1000 words. Use istock.com or the like to get some professional low cost royalty free images and take the time to create powerful diagrams. Also use a good projector and leave lights on and blinds open.
  5. Use attendee examples:  Get people to apply the knowledge on the spot and share back their thoughts  – people will observe flaws in other people well  before themselves. Using examples from the attendees will make it a more personalised & relevant experience.
  6. Use flip charts / white boards: Work out your key messages from the seminar and keep referencing them on a flip chart. Also when answer questions putting some key annotations on a white board will accelerate learning. The vast majority of people prefer visual learning/comprehension over verbal or kinaesthetic.
  7. Manage time: You own the flow and interaction. Shut down persistent know it all’s or major diversions. Likewise poll opinions from quiet participants. If you have multiple speakers use an Master of Ceremonies (MC), it may even pay to get a professional facilitator in. Don’t run overtime.
  8. Put additional reading in hand-out material to pass on to non attendees:  Add a few articles / white papers to the hand out material over and above the power point slides. Make it easy for a non attendee to get an idea of what your core messages are, if they are handed the material post event.
  9. Subtle Selling / stay true to your brand:  95% thought leadership, 5% direct sales. Be clear on what impression you want to leave behind, style, brand positioning etc. The best sales methodology is a subtle thought leadership approach. Do not forget to put your logo and contact details on material and mention what services you offer without over doing it.
  10. Make a stand: as an expert in your field the participants expect you to have an opinion. The events where I have expressed a strong opinion and opened the floor up to debate, have been the most engaging workshops I have run.
  11. Continually develop your material: Constantly tweak your material based on audience feedback and new information that comes to hand.
  12. Entertain & enjoy it:if you have fun so will the audience. Great business is not boring. If your subject matter expert is a boring speaker: coach him, give him a co presenter, don’t leave him on stage for too long

mark cutawayLR

Give us a call if you would like a hand with coaching your team on creating high impact workshop delivery.

Growth Management Consulting also runs in-house workshops on a range of topics including: Business Planning, Pitching, Investment Ready as well as facilitating board/management team off sites and other business events.

7 Tips – Maximise Your Linkedin Profile

Whether you want new customers, a new job, a promotion or just to be found; here are 7 tips to help you build a better profile for yourself using your linkedin profile.

In this digital age, if you cannot be found on the web I personally begin to wonder what you are hiding or do you not want to grow your business?  If you are still holding allegiance to the tribe of anonymity and you have a front line position in a company (sales, marketing or owner) then I would suggest seeking a new profession or shutting your business down. If  you have more customers, opportunities and wealth than you can handle – then by all means operate in stealth and ignore the tips below.

 7 Linkedin Profile Tips   linkedin logo

  1. Add your photo
    Many people are poor at remembering names. Your face is the best form of recognition we still have. Make it visible to everyone. Don’t use logo’s or diagrams. Better still if you can clear cut it (edit the background out).
  2. Load your contact details – Phone, email and website
    If you want to be contacted then put your phone, skype an email address in and make them visible. Linkedin is better than the white or yellow page directories for getting up to date contact details. People who want to connect with other busy people (read successful or great potential clients) publish cell phone no’s.To access someones contact information, click the contact info envelope  at the top of their profile (highlighted below) and it will expand out to show their full contact information.
    MJR linkedin contact info
    The other day my wife and I found a wallet full of credit cards, office access keys and other personal stuff on the street. We then set off in a major social media stalking exercise to find and contact the owner – her hours of anxiety could have been reduced to minutes if she had put her cell phone no or email address in her linkedin profile.
  3. When sending a connection invite – add a relevant comment
    Don’t just send connection requests without at least a simple “this is why I want to connect with you” or “this is how I know you” line. This way you turn your cold call to a warm call.I meet lots of people in my business life, many from speaking gigs – when someone from the audience attempts to connect with me with a little note I generally connect. People with big networks will more than likely accept your request.
  4. Get some recommendations
    Linked in is a great way to build personal credibility – get personal recommendations from people you respect to build your credibility.  Because its in the public its more likely to be authentic.
  5. Put some history
    Make sure you list more than your current role on Linked in. As a general rule cover the last 10 years of your business history.
  6. Use your linked in network for marketing
    You can very easily export your linked in database to a csv file that you can use outside linked in eg starting an email newsletter list. Go to connections page – click settings – its in the panel listed as advance settings.
  7. Delete Duplicate profiles
    If you have duplicate profiles – delete all but one. If you have lost both password and the email account it is linked to contact linked in support. Linked in now have a service that will merge multiple accounts into one.

Simple Business Case Disciplines Can Save You From Yourself.

The “she’ll be right” era is gone; it is no longer good enough to make business decisions based on gut and napkin calculations.

Does your business use formal business cases to make major decisions?

“Just Do It” – Doesn’t cut it any more

In an economic environment of tight margins, rapid change and competition, there has never been a better time to put in place some improved business discipline and robust decision making. Many businesses are actively growing in this climate.

One of the easiest ways to de-risk your business and make better decisions is to business case out all major decisions. This does not have to mean bureaucracy overload. Give yourself the benefit of an independent review panel to critique and provide feedback before progressing on major investments. The process of writing a business case will in itself create a better investment choice.

Future stock market player

A project business case should stand up to robust debate, albeit from your board, bank manager or life partner before expending your time, passion and money.  Some major decisions that warrant a business case are: starting or purchasing a new business venture or product line and rationalising your product offering to improve focus or buying a major asset. Create a business case when failure of the project is going to hurt!

Too many business owners continue to fund projects without calculating true payback and considering long-term implications of their business.  Many of these become “the living dead”, “throwing good money after bad”.

 Ignore the value of money over time at your peril.

 Let’s take an example: your IT manager just approached you with a $100,000 project offering $20,000 savings each year over the next 7 years. Basic maths says YES, spend $100K to save $140K, so “let’s just go for it”. BUT what about the cost of that money over time?  If your opportunity cost of capital is over 13% you are actually going to make a loss on this project.

If you invested $100K for 7 years with compound interest you would expect more than $100K back including interest, so you should with your IT project, or business itself. Check the Internal Rate of Return (IRR) or net Present VALUE (NPV) functions in Excel Help. With a little bit of help, you can use these calculations to automatically calculate for you the “true cost”.

As a business owner, or custodian for the business (Managers), it is your responsibility to create shareholder wealth and protect the long-term sustainability of your business, identifying and eliminating risk to your best ability.

Pre-mortem Reviews

 Many businesses perform post-mortem reviews on projects, analysing what did and didn’t work in projects.  How about having one of these meetings before the project begins? By publishing your project budgets, plans, risks and assumptions in many cases you can actually improve the project by simply asking “what could go wrong?” Given the chance, people will help you avoid disaster before it happens.

Our very enthusiasm for an idea will drive us to success, but equally so unchallenged we can quickly be over consumed with that euphoria to our peril.  Do a basic investment test now.

4 Point investment test?

  1. What evidence (trends & market validation) do you have of the long-term need for your product /service? (Strategic Market Opportunity)
  2. Have you calculated what the “true” return for your investment will be, including the cost of capital (Financial Business Case) i.e. will you make money from it?
  3. Have you clearly communicated to your team what you do and do not do? (business /project plan) i.e.  will your team be able to stay focused on the task ahead?
  4. Do you have a clear and succinct message to engage customers and stakeholders (Your pitch) i.e. can you sell it?

Common mistakes made in businesses cases

 Check that you are not falling into common traps for business owners prior to making business decisions:

  • Not creating a business case or having a 3rd party review it
  • Overly optimistic projections: delivery times, customer acquisition times etc
  • Inadequate budget for sales and marketing – budget at  least 10% revenue
  • Not accounting for the value of money over time – use NPV and IRR calculations
  • No market research / validation to de-risk savings, or projected revenue.
  • Underestimating the impact of competitive response
  • Lack of stakeholder commitment or talent
  • Not dreaming big enough – what could you do with twice the investment?

Don’t think of business cases as just approval mechanism, but more so as a mechanism to reduce investment risk. Business Cases provide an opportunity to clarify thinking, get input and focus for the project delivery team around clear outcome.

New training workshops for 2013:  I am now also delivering workshops under the Auckland Chamber’s Vital Training programme.

If you would like to know more about tool’s and techniques to simplify business decision-making and gain greater clarity in your business, then you should attend my  Auckland Chamber Vital workshops: Business Planning, Business Cases and Pitching More information is on the Vital Training Website   The next Business case workshop is 4th April at the Auckland Chamber – register here

Start With Why – Using PurposeTo Motivate Action

start with whySimon Sinek’s book “Start with why – “How great leaders inspire people to take action” is a must read for all business owners and marketers alike. Be prepared to be inspired and start asking yourself what is your WHY?

His seemingly simple concept of engaging people with your purpose or “cause” (the “Why”), before bombarding them with the how & what (the typical features benefit sale pitch) is so simple, yet powerful. It is easy to see how this can transform your customer engagement, beyond a simple transactional relationship into that Nevada of life time loyal customer.

By purpose he is not talking about making money, which is the result that comes from achieving your purpose. He is talking about the inner connecting thought that gets people engage in what you do. This core motivating purpose, is the same concept that Daniel Pink’s book Drive is all about. You can read more on Daniel Pink’s take on purpose in my blog post – “Forget about incentives for your staff”

Simon’s approach is a great tool for building that instant bond with your target customers , using the common ground of “a matter of principle”, before attempting to bait them into your product value proposition. Simon’s approach is well illustrated by using  Apple as an example. Compare the two sales messages below:

The What / How Sell: (how most companies sell)

  • We make great computers.
  • They’re beautifully designed, simple to use and user-friendly.
  • Wanna buy one?

The Why / How / What  Sell : (how apple sell)

  • Everything we do, we believe in challenging the status quo.
  • We believe in thinking differently.
  • The way we challenge the status quo is by making our products beautifully designed, simple to use and user-friendly.
  • And we happen to make great computers.
  • Wanna buy one?

Watch at least the first 8 mins of Simon Sinek’s 18 min TED Video (below)

Take the time to uncover your “Why” and get your customers appreciating the true value of your offering.

The “Start With Why” methodology is a quick way to qualify potential customers in or out. People who get your purpose, will quickly build powerful relationships with you.

If you do not connect on the “Why” with your customers,  be prepared for the typical transactional relationship that can quickly fall into the death spiral of price haggling.

Simon Sinek’s book is available on kindle and paper, well worth the investment.  You can read more about his methodology on his web site