In this follow-up to last week’s, “The Theory of Constraints and Ice Cream” Chris reminds us that all talent problems are wrapped up in lots of politics. And it turns out the key to all of this, whether you're like Corey and Chris and your company provides a discontinuous innovation. Something that naturally could bring change too fast or if you are the leader and something needs to change because it's the constraint and it's time to go after it no matter what. If you fail the finesse test, you fail all the tests. Because then the politics turn on you. And quite rightly, by the way.
Finesse is a very elegant way of describing the search process, reading the signals, reading the tea leaves, and understanding where the constraints are. Understanding that in this discontinuous innovation process, you're going to have of extraneous pipeline that's going to come in very rapidly at a flow rate that you’re not used to. And finesse is, as a way to almost like when you see a bullfighter, they have this big two 3000 pound beast that's bearing down at you and bull bullfighter. And he just finesses his way from one to the next and dances and it's a glorious thing to see in action where internally they may be sweating.
People underestimate the power of finesse and the reason that you need it. We are all machines when we sell, we're a machine that turns a potential opportunity into something that's taking a next step. That's all we do. So the more mathematically you are, that is, if you're listening to this and you're going, yeah, gold red theory of constraints I'm in, I'm in. Right? You probably need to spend more of your life thinking about and exercising the finesse components. Listen to this episode, “The Power of Finesse and the Bullfighter.”
Welcome to another session with the Market Dominance Guys, a program exploring all the high stakes, speed bumps and off-ramps of driving to the top of your market with our host Chris Beall from ConnectAndSell and Corey Frank from Branch 49.
In this follow-up to last week's, “The Theory of Constraints and Ice Cream,” Chris reminds us all that talent problems are wrapped up in lots of politics. It turns out the key to all of this, whether you're like Corey and Chris and your company, provides a discontinuous innovation, something that naturally could bring change too fast, or if you're the leader and something needs to change because it's the constraint and it's time to go after it, no matter what, if you fail the finesse test, you fail all the tests because then the politics turn on you. Quite rightly, by the way, finesse is a very elegant way of describing the search process, reading the signals, reading the T leaves, and understanding where the constraints are. Understanding that in this discontinuous innovation process, you're going to have an extraneous pipeline that's going to come in very rapidly at a flow rate that you're not used to.
Finesses as a way to almost like, it's almost like when you see a bullfighter that has two 3000 pound beast bearing down on them and he just finesses his way from one to the next and dances and it's a glorious thing to see in action where internally they may be sweating. People underestimate the power of finesse and the reason that you need it. We're all machines when we sell, we're a machine that turns a potential opportunity into something that's taking a step. That's all we do. If you're listening to this and you're going, "Yeah, glory, the power of constraints I'm in and I'm in," right? You probably need to spend more of your life thinking about and exercising the finesse components. Listen to this episode, The Power of Finesse and the Bullfighter
Corey Frank (02:01):
Because that reduction in the conversion rate is certainly, as you and I have spoken about and other folks, other guests on this show that are in the business of martech stack tools and weapons is the intent of how the weapon, the tool was used. Well, ultimately, Chris, connected. It's just not doing that well. It's started off really well, but now it's just not doing that well. So tough time really justifying the ROI and instead what I hear you saying is those are signals that we should be understanding, being aware of tracking to addressing that our symptoms of where that constraint lives.
Chris Beall (02:40):
Yes. Yes. The discipline, the intellectual discipline which needs to be turned into a management discipline is actually quite simple. Ignore all ratios, only pay attention to rates. By rates, I mean things like flow rates. So here's a flow rate conversations per hour per rep. Here's a different flow rate. Conversations, same targets, right? Per week or whatever it is. I like weeks because every week has got five days except the recent ones around the holidays. But conversations per week for the company as a whole. So you always want to have two flow rates. You want to have one for the unit of work, the machine, the person, and you want to have one for the system. So it's like when you're building a factory, you have what is my flow rate, my throughput at max, sustainable capacity of this machine. There it is, right? Well, how many machines do I have, and can I run them all the time?
Then I get my throughput for that part of the system as a whole. We can produce so many of x and I need to have a standard for time and my standard for time for a machine like a rep and sorry about ... Your reps out there, the reason I'm calling you a machine is you're playing that role in the factory that we're trying to make called a company that provides value to folks. Right? It produces something. So we are all machines when we sell, we're a machine that turns a potential opportunity into something that's taking a next step. That's all we do. We take this situation that's come to us probably as a company prospective customer associated with it. It has some idea of what we might do for them and what we take some action and mutually we decide to take a next step.
As salespeople, that's a hundred percent of our lives. We're a machine that just does that cycle over and over and over. That's why to be a good salesperson you have to be very disciplined because it could get boring. Right? So look at the flow rate at the individual rep level of the first thing, which is conversations. Then look at the flow rate of the second thing, which is meetings. How many meetings per hour of prospecting for a rep? How many meetings per week for the team? Then go one step beyond that and look at the flow rate. Now we're over onto the side of a new act door, which is the sales rattles, we've gotten out of the world of sales development or business development. It doesn't matter whether the same person's doing both jobs or not. People get hung up on that, that's irrelevant. What's relevant now is in the role of an account executive of a rep who's trying to go from, "Okay, this is really worth working to. We're either going to get to a deal or we're not going to waste too much time not getting to a deal."
I've got the same two things per rep now is it per hour? It's interesting. Sales reps are funny beasts. Their world has got a lot of time management in it. If you set the unit too small, the unit of time too small, they can't do their time management in there. I'll tell you, here's a side story. I used to be the chief technology officer at a company where our rhythm was once a week you turned in your code, your code was checked into the system and on Monday morning at eight o'clock we pushed a button and we built the system. It was a piece of software we sold. The reason we did that was a week consists of five work days, but it actually has this miraculous buffer called a week cap sitting on the end of it.
So if your work which was calibrated at three and a half days, if all went well, if it didn't all go well and you had bugs or you had to fix stuff or you found out concepts were wrong or whatever, you effectively had another half week the other half of the week to fix it. So for years we went along, we released product like this. Every Monday, we had a new release every Monday. Then they got a new guy in and they said, "Chris, you don't know how to do this stuff. You're fine. Very relaxed form of management, we don't like it." So we got a guy in from big co and he said, "Well, you're doing this all wrong. We have to do it by the hour." Well, for a software developer, an hour is not enough time to do meaningful time management trade off within the hour.
So if you have something you have to do every hour, you're going to find yourself with things that didn't get done in the hour. Now those things create chaos because they have to be handled later, but they weren't scheduled for that next hour. Right? So when you're looking at sales reps, your unit goes up from an hour, which is natural for we're having conversations setting [inaudible 00:07:34], you got to go up to something bigger. It's either a week or a month. It can't meaningfully be a quarter unless you just have a handful of huge strategic accounts. But think about it this way, I want to know the flow rate of transactions because now that's the end state in this unit of time that has enough time management flex in it that I can hold the rep and they can hold themselves accountable for managing that time in such a way that the outcomes will occur predictably, right? It's called making quota.
Corey Frank (08:11):
Chris Beall (08:12):
So I do it for the individual and then I do it for the whole team over another time unit that is more externally focused. So it's probably a quarter. That's kind of all you need is flow rates. Conversion rates will delude you because you'll believe that your historical conversion rates were not associated with choices that folks were making in the process that are called quality choices. So if I'm running a machine in a factory and I take every blank that comes in and it goes into the machine, and I hit the button and see what comes out, I get one conversion right. If I allow the machine operator to inspect each blank and compare it to the other ones and file a little bit off and do this and that, then I get another conversion rate. Actually, unless my material cost is high, I don't care. I don't care.
What I care about is the flow rate because downstream I can depend on flow rates at a known quality, but I can't depend on having this, I like this one better than that one process which is highly variant across the processors. So we have to do this when we pick customers. You and I are in peculiar businesses. We're in the business of saying, "So grandma's 15 miles an hour was probably good enough for you because it kept things calm." What do you think of 150 miles an hour? Well, sounds so good, but we actually have to ...
... a little back and we have to flow rate match with the downstream flow because it can only change so fast-
Chris Beall (10:29):
What is our cycle time for minor change, and what's our reliability? Which is with this case quality? What are the odds of us making a minor change and actually achieving the goals of that change? What is the cycle time for major change, and what's our reliability for major change? If you're a young company, you don't have an answer to the second question, right? You don't. The major change was you created your company.
Corey Frank (10:57):
Chris Beall (10:57):
In fact, you're still alive and people sometimes think, "Oh, Chris. You're kind of over-mechanized in this stuff." Well trust me, the world itself is highly mechanized and it operates according to rules. That's like gravity. Right? You don't have to believe in it. It believes in you.
Corey Frank (11:10):
Chris Beall (11:11):
Theory of constraints, you don't have to believe in it. It believes in you.
Corey Frank (11:15):
No, that's fascinating stuff, Chris. Because we certainly talk about that in I think virtually every guest in virtually every episode that we've had over these years, right? Hope spring is eternal and we all unwrap that new gift of whether it be outreach or Zoom or connected cell or branch or PRLs or it doesn't matter what the new flavor of the day is. We all as sales leaders, as executives, we write that check, we get our CFO to pay that man his money, pay that woman their money, they're due cause this is going to be worth it on the backend. Trust me, I believe in that certainty that they have that this is going to help. Right? We do it with bankers. Of all the bankers, I'm going to pay that man his money because he's going to help me take me to the promised land and raise my three and a half million on a 20 million valuation, right?
Chris Beall (12:06):
Corey Frank (12:06):
We believe that. Knowing that, Hey Chris, I went through 50 pitches and I don't have any money yet. What's going on? Are you the right banker for me? Is this the pitch? Is this ... You know what I think it is? Maybe I should choose bank two different jockey. Maybe it's a different horse. So it's so prevalent. But what you've certainly taught me over these 15, 20 years that we've known each other, right? Is just believe in the math. Don't get emotional about the math. The math is just math. But what are you going to do? You can bury your hand in the sand about what the math tells you because it doesn't fit your narrative. It doesn't fit what your confirmation bias as you set out to be and which is certainly another dangerous thing. Right? You and Jerry Hill certainly talk about confirmation bias a lot. We're in the business of disproving confirmation biases, certainly with what it is that we set out to do oftentimes. I think theory constraints is an evil step twin to that theory.
Chris Beall (13:02):
Yeah. Confirmation bias and survivorship bias are both incredibly powerful phenomena and they're very common and we exercise them together ignoring the fact that there's only one constraint is another. It's a version of those things.
Corey Frank (13:18):
Yes, for sure.
Chris Beall (13:20):
Then it gets hard. I mean systems have constraints, but projects they do too. Change is always a project, but it's not a project that has a constraint like a system constraint. A project has a constraint called the critical path. If you don't have practice in understanding the nature of that constraint, you won't do what you need to do. I mean, here's a lesson on projects. Anybody wants to know how to do projects, here's it. Identify the critical path and overfeed the feeders to the critical path early. It feels wasteful, but it's the only way to buy insurance against Murphy's Law. And Murphy's Law is inviolable. So you either do it that way or you deal with delays, but it's kind of your choice. But the constraint isn't going. It is the constraint. Imagine a project without a critical path. It's a nonsense concept. We're a little easier with that, although it's harder to manage. We're a little less comfortable thinking a system has a constraint because the system always has people involved in making the system work. The politics around the constraint is people feel like you're saying they're unimportant.
Corey Frank (14:35):
Chris Beall (14:36):
Because you're not working. You're not investing on their part of the business. What teams need to know is this. If you're managing the stuff and you're the leader, this is kind of a show for leaders today. So if you're the leader, your job is actually to go, "Hey, we're going to identify the constraint, we're going to characterize it, we're going to figure out what's investible. We're going to invest in it, we're going to watch the flow rate increase. We're going to make sure the quality doesn't go down because that's one way to increase the flow rate too. That's the cheaty way to do it is reduce quality. Then we're going to step back and our discipline's going to be to watch the system until it shows us its next constraint." It'll do that by having inventory build up in front of that particular step in the process. It'll be start downstream.
We're going to do this over and over and over and our competition is not going to do it quite as rigorously as us. We will crush them in the end as long as we make a point of not running out of money. That whole episode about that overhead. The racehorse that eats while you sleep. Right? Okay. So great. But wait, the whole business of doing that implies that everybody else keeps doing their job. Right? So Corey is going to fish, we're going across the ocean, we're going to go across the Pacific in a rowboat. But it turns out there's a project every once in a while called get some food for the crew. That project requires that our most skilled fishermen are Sicilian, Corey Frank, go get us some fish. So while Corey is fishing, the rest of us need to keep rowing. It doesn't do any good to say, "I sure wish I were the fishermen." Right?
Corey Frank (16:18):
Chris Beall (16:18):
Now we haven't or we have to row and if we don't keep rowing though, our boat loses way and one boat's lose way, they can't be steered. Then we have a serious problem because Corey can't even fish because he's saying the fisher are over there and we can't steer the-
Corey Frank (16:32):
That's right. That's right.
Chris Beall (16:34):
So this is actually the deepest trick of leadership is in a world where, as a matter of fact, we must address only one thing in our business at a time. We need to establish a culture that says for almost everybody, I'm okay keeping on, keeping on. It'll be my turn someday. That's hard.
Corey Frank (16:56):
It is. Especially if you're a biz dev in an organization who says, "Hey listen, I've listened to Chris's calls, I can do a discovery process as good as he can. I know more about the product that he does and all these guys want me to do is just dial the phone and talk to strangers and ask him for time. I don't even get to ask them for money. I get to ask them for time every day. So I can imagine, especially for those that weren't promoted last year, a lot of managers are probably hearing from their folks or if they showed up at all this week. Sometimes people choose to talk with their feet and maybe they're at a different zip code here coming into the new year just because of that.
Chris Beall (17:33):
Yeah. Shawn McLaren once walked up to a whiteboard. He is our executive chairman, he was CEO founder of the company. He and I were just getting to know each other and I had a kind of niggly problem I was trying to solve. It was a political problem that manifested itself as a wrong personnel doing what needed to be done, the talent problem. But all talent problems are wrapped up in lots of politics because everybody knows each other and they've been around and I'm the new guy I just joined. I was probably, I was a week and a half in and I'm pretty impatient for change. So I'm saying, "Hey, we got to make this change, this change and do this and think about this." I'm kind of ragging on him and he doesn't see a word. He gets up from his desk, walks up to the whiteboard and writes up in large, you have to ... No Shawn, it's pretty fun to watch him do this big block letters. Not the most beautiful handwriting in the world, but very clear and very emphatic.
He had to erase part of the word because he had stuff all over it. One word, it's finesse. It turns out the key to all of this, whether you're like Corey and me and your company provides a discontinuous innovation, something that naturally could bring change too fast or whether you are the leader and you know something needs to change. Because it's the constraint and it's time to go after it. No matter what, if you fail the finesse test, you fail all the tests because then the politics turns on you. Quite rightly, by the way, this isn't complaining about politics. It's like saying, "Gosh, I sure wish there were no people in my company. That's just ridiculous."
Speaker 3 (19:14):
That's right. I love that. Finesse, that's really a very elegant way of describing the search process, reading the signals, reading the T leaves, understanding where the constraints are. Understanding that in this discontinuous innovation process you're going to have of extraneous pipeline that's going to come in very rapidly at a flow rate that I'm not used to. It's first going to become novel and then it's going to become very, very, very stressful. Finesse is really like that term, Chris is a way to almost like when you see a bullfighter, they have this big two, 3000 pound beast that's bearing down at you and a bullfighter isn't sweating. It's just finesses his way from one to the next and dances and it's a glorious thing to see in action where internally they may be sweating. But that bullfighter example of finesse, I think is very appropriate for what you're describing.
Chris Beall (20:14):
It is. I think people underestimate the power of finesse and the reason that you need it. So the more mathematically inclined you are, that is, if you're listening to this and you're going, "Yeah, yeah. Gold breath theory constraints, I'm in, I'm in." Right? You probably need to spend more of your life thinking about and exercising the finesse components.
Corey Frank (20:39):
As a leader I would imagine, right?
Chris Beall (20:40):
Yeah. I mean because you're now going to become part of, become the other problem, which is using the word, "Should." Well, you should or shouldn't care about the fact that I'm ignoring all of you and we're only paying attention to this. Well, when you find yourself using the word, "Should," in business especially about either your employees or your customers, you're making a pretty substantial error, which is you're basically saying, "Well, they should," it's a moral term by the way. It's not an operational term and they aren't therefore they're bad. They are the problem and I am the solution. When you kind of turn that ratchet long enough, you get dysfunctional autocracies that can't solve real problems. Now, every once in a while you'll get somebody who can shoot it out, so to speak, and just rule over everybody by some dint of personality and the fact that they don't care about people or whatever it happens to be.
If you're trying to make a real organization that's robust against a whole bunch of things that are happening, you have to allow people room to make decisions, especially about managing their time. Really, the main thing you're allowing folks to do when you're saying, "My organization is going to be highly functional," is you're saying, "I trust you to manage your time so you can apply your skill." It's not I trust you to apply your skill to the tasks I assigned to you. That's not it at all. It's like, no, within bounds of what we can stomach together of being able to measure some flow rate somewhere that tells us whether it's going or not going, right?
Corey Frank (22:22):
Chris Beall (22:22):
Within that, I'm going to let you manage your time. In fact, I'm not going to interfere with that at all. That's why I'm not a big fan of having lots of regular meetings because they take away from people's ability to manage their time.
Corey Frank (22:34):
Chris Beall (22:35):
You're managing their time for them.
Corey Frank (22:37):
Chris Beall (22:37):
Shawn of Speaking of Sean McLaren, Shawn McLaren is calling me right now. So why don't you wrap up, Corey.
Corey Frank (22:43):
Well, I think it's very appropriate that yes, the executive chairman calls and says, "Hey, what are you doing? Spending all the time on the podcast?" So for the Market Dominance Guys, this is Corey Frank with Chris Beall in a very brief but timely episode of the Theory of Constraints. Chris, until next time...
Chris Beall (23:01):
Thanks, Corey. Loved it. As always.
To leave or reply to comments, please download free Podbean or
To leave or reply to comments, please download free Podbean App.