Improving Communication - Using the TOC Cloud Thinking Process

Goldratt-TOC Ltd

Improving Communication
Example

The Salesperson and Planner Clash
I don’t know who will win but it won’t be me even if I do!

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Goldratt-TOC Ltd

© John Tripp 1994 - 2009 T 441764679756 www.goldratt-toc.com

Goldratt-TOC Ltd

Improving Communication
The Salesperson and The Planner Clash
Phil is sitting studying the order book when the phone rings. He picks it up and listens as Simon from the Sales department enthusiastically informs him, “I’ve just won a big order. Its important you get it in the plan for me this morning Phil. I’ve promised this customer we will deliver by the end of the month.” Phil hears the energy in Simon’s voice but is troubled. This months plan is already at capacity and then some. Production is stretched to fulfil all the orders already in the book including an order placed several months ago for one of the company’s best customers. “Now, hang on Simon,” Phil says firmly, “That is not going to happen. The book for this month is closed. We are now overloaded for your product area. We are absolutely full.” “No way Phil. I cannot accept that. This is vital,” says Simon urgently. I have already made a commitment to the customer and it makes my numbers for this month.” Phil briefly glances down at the confirmatory figures on the page in front of him before responding, “I’m sorry Simon, but I really do have to consider all our customers and also all the other guys in your department who have already placed orders that we have promised to meet. You will have to go back to the customer and tell him the delivery date will have to be postponed. We probably won’t even have the material needed for what you’ve promised – you know the rules. You should have checked with us before making the commitment.” Simon, incensed and worried that Phil’s response could lose him this big sale, says, “Phil this is rubbish – you know the score. We have a very hard job winning orders as it is. I am going to call Alan, now, and I am sure that when you two speak, you will give him a different answer.” The line goes dead. Phil knows this could get difficult as Alan is the sales director whilst he is only a lowly planner. Simon slams down the phone with every intention of calling Alan. However, on calling Alan’s secretary he learns that Alan is out for the rest of the day. His first response blocked, Simon considers the situation and begins to feel uneasy about the end of the meeting with Phil. If he had succeeded just now in saying what he originally planned to Alan, he might now be regretting it. He had after all broken a rule imposed by Alan. He should never have promised the customer a delivery without talking to Phil first. He was just so keen to win this new customer and if he was honest keen to meet his sales target. On that note Simon realises too that if he wants to meet future sales targets he need Phil’s support. He is not going about securing Phil’s support in a very clever fashion. Simon begins to see he has created quite a storm but he is also aware he needs the new sale in this months plan – he is in between a rock and a hard place. Sitting not decided what to do he recalls a training session he was involved with recently where they presented a process for dealing with disagreements and negotiations. He looks through his desk, finds the hand out he was given, and reads it to see what it has to offer. After a little study Simon feels the process could be worth a try – he has already taken step one of the process which is to stop the discussion.

How To Win Arguments

Tuesday, 20 January 2009 © John Tripp 1994 - 2009

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Goldratt-TOC Ltd Simon thinks to himself, “I suppose slamming the phone down counts as stopping the discussion.” The process described starts off with a remarkable analysis of the situation. It is almost as though the person doing the analysis was in the room with him and Phil. Phil was being obnoxious, illogical and stubborn. Could Phil have been thinking I was obnoxious, illogical and stubborn too? thinks Simon. If the process is to be believed he was. The process goes on to suggest a method of analysing the disagreement that should lead to a better outcome than I or Phil can expect. I just have to answer five questions, which are Question 1: What do I want ? The answer is easy – I want my new order in the plan now. Question 2 : What does Phil want? Well that is easy too. Not to put my new order in the plan now. Question 3 : Why do I want my order in the plan now in other words, what is my need? That is a little more tricky – maybe its to satisfy my new customer? No – I think really I need it to make my sales numbers for this month. Question 4 : What does Phil need - why is he refusing to put my order in the plan now? Well I do remember him saying – there is no room in the plan as all the production slots are full – if he put another order in it would damage the plan – make a lot of the orders difficult to deliver on time – I do not see how one new order can do that but what he must be saying is he needs to produce a realistic plan for production so that existing promises can be achieved. Question 5 : What is our common objective ? Based on that meeting I am not sure that we have one ! Phil was pretty inflexible and seemed to have no interest in me achieving my objective. I have to make my targets so that the company meets its sales budget. That must be very important. And Phil needs to meet his objective, and his objective must be: to enable production to meet the promises we all make to customers. So I think the bet way to express our common goal is using the phrase : to work together to achieve both our targets. So now what does that look like…. Let me just fill in the template with my answers…

3 Achieve my sales target 5 Work together effectively to achieve both our targets

1 Add my new order to the plan now

Create a plan highly likely to meet commitments to customers 4 2

Not to add your new order to the plan now

Simon reviews his analysis. He checks where he is in the process from the notes and sees now he should be looking at the assumptions on his side between boxes B and D. Simon is not happy as it seems that he may have to give up his “want” as he cannot guarantee that Phil will agree to change his side. The process says review the assumptions to check whether any assumptions are incorrect, or whether any assumptions can be changed so that his need B [ achieve my sales target ] is achieved even without D [ adding my new order to the plan now ]. OK what Assumptions?

How To Win Arguments

Tuesday, 20 January 2009 © John Tripp 1994 - 2009

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Goldratt-TOC Ltd It says in the process that each of the boxes in the diagram are linked by the assumptions we make, which are rarely surfaced. It suggests that in order to surface the assumptions I should read each pair of boxes in a particular way. The boxes should be read like this: In order to have the thing in the first box then I must have the thing in the second box and then I should ask the question because? The answer to the question, ‘because?’ will be an assumption. Right! Lets try that with my boxes: In order to Achieve my sales target I must I want my new order added to the plan now because? That reads rather oddly, but the process does say that I might need to reword answers to make them read smoothly. OK so lets try to rewrite this: In order to achieve my sales target my new order must be added to the plan now because? That’s better and it says read it out aloud and then write down what comes as answers to the question. Here goes: “IN ORDER TO ACHIEVE MY SALES TARGET MY NEW ORDER MUST BE ADDED TO THE PLAN NOW BECAUSE?” “I must satisfy commitments to my customer to get future orders.” “I need to make my bonus.” “This order is needed to reach my sales target.” “This order must be added to those I already have to make my target” “This is the only way to satisfy the commitment.” “There is no other way to make the commitment.” “Every order I win should be put in to the plan this month.” Simon decides to review the assumption that states “This order must be added to those I already have to make my target”. Thinking around the problem, Simon concludes that the only way round this assumption would be either to buy in the order if possible, or to move another order back one month. Concerning the buy in, this will cost more and it may be that the external supplier could not deliver in time. So Simon considers the possibility of moving an order into next month. Simon recalls Dina Company one of his customers, holds large stocks of the product which he supplies them with as they have a highly variable demand. We simply deliver to Dina Company on a call off schedule. I should check whether Dina Co would accept a postponement of this months delivery. It would likely have no affect on them nor on us. It will not even affect my bonus as their order is already factored in and does not really add a lot to my sales target anyway. This is a definitely a possibility. But will Phil accept it? He will still have to change the plan and possibly expedite the material for my new order. Simon thinks that if his presentation of the case is good, Phil will accept it. So he looks again at the next step in the process: how to communicate to get a good resolution. There is a logical process here – present Phil’s side, then mine. Then allow Phil to come up with the suggested solutions. My role is just to guide him to the ones I feel are practical. I am going to give this a try. Now I believe I can have my new order delivered this month AND repair the damage to my working relationship with Phil. Simon just notes his idea on the template before calling Phil.

How To Win Arguments

Tuesday, 20 January 2009 © John Tripp 1994 - 2009

page 3 of 5

Goldratt-TOC Ltd

3 Achieve my sales target 5 Work together effectively to achieve both our targets
Co might I think Dina ponement accept post t order. of their nex low my This may al be put new order to for this into the plan month.

1 Add my new order to the plan now

Create a plan highly likely to meet commitments to customers 4 2

Not to add your new order to the plan now

Simon calls Phil to arrange a follow up meeting. At the meeting Simon starts, “Phil, thanks for seeing me. I am sorry I was a bit het up this morning. Can we go over the situation again and see if we can find a new way of sorting out this new order.” Phil jumps in, “Simon, I am sorry but I can’t fit in any new orders for this month.” Simon says “I know - I know - don’t worry. I want to sort things out. I don’t want to force any changes on you. Can we just agree what is important. We need a good working relationship. We must work effectively together to achieve our targets, do you agree ?” Phil replies, warily, “Yes, obviously we must work together.” So Simon goes on, “That’s good. And obviously in order for you to achieve our targets its vital that the plans you produce can be achieved by production so that all existing commitments to customers can be met.” “That’s right “ says Phil. “I wouldn’t state it exactly that way but my plans have to be realistic. I have to take into account our capacity to make orders, the supply of material and the promises that have been made not just to customers but also to other sales people.” “I understand that, Phil. And obviously for you to maintain a realistic plan you can’t add my new order in this month.” Simon restates the need in line with Phil’s modification as instructed in the communication step of the process. “Oh,” says Phil, “I didn’t realise you agreed with me.” “Of course I do. I see the logic and the importance of what you do. Its important to me also that we meet promises to customers. This is why I would like to talk through my side in this situation too. You see in order for us to meet our targets I have to meet my sales target, and I can’t do that unless I can get my new order into the plan this month.” “Now hang on Simon,” Phil starts to object, ”I thought we agreed that no more orders can go into the plan this month.” “Yes, yes, I do agree Phil. Please let’s not start the argument again. Lets focus on what’s important” says Simon again following the process by trying to redirect the discussion away from the conflict and towards the needs. “Your need to have a realistic plan for production and my need to make my sales target is what is important here.”

How To Win Arguments

Tuesday, 20 January 2009 © John Tripp 1994 - 2009

page 4 of 5

Goldratt-TOC Ltd “Lets systematically look at the reasons why in order for me to meet my sales target I have to have this order in the plan and see if we cannot find another way of achieving the need.“ “Simon, let’s be sensible here. For you to meet your target you need more value in the plan this month, the way I understand it. And frankly there is no room for any more orders in the plan, so its not possible. Do you have any orders which you can take out of the plan which are worth less money?” “Phil, Dina Co do not actually need another delivery this month. They have enough stock and they do not add that much to the target either. But their order is already in the plan so there is not much we can do about that is there?” Phil responds, “As long as you have agreement from Dina Company, I could look at moving them back and slotting the new order in” Phil suggests, and goes on “I have to tell you though, it is a lot of extra work for me to change the plan and I am not happy that you made a promise to a customer without checking the plan first.” “Phil, I recognise that. I was out of order and I won’t make any more commitments without checking with you first. So that will be really great if you try to do that for me…” Phil replies, “Just leave it with me and I will make it happen.” Phil feels relieved as Simon leave his office. He did not like arguing with Simon and did not want to have to justify his position to Alan if Simon had involved him. This session was a real eye opener. I never thought a salesperson would go for a win-win solution Phew! thinks Simon. That really worked. Phil seemed OK with just about everything we did. The process seems to work.

Trying to WIN usually results in at best win lose. Often lose - lose.

Click this link to buy a video pod cast lesson on line for this process described in this iPaper. The process you have just seen illustrated was developed by Dr Eli Goldratt and refined by a number of people notably, Oded Cohen, Mike Dinham, John Tripp and others. In addition to teaching the process to customers, I have created a simple tool and self teach processes to enable anyone to use the process as and when needed. To understand the background, logic, or validity of the process, or just to download the simple tool that will enable you to use the process please visit our web site. You can buy an online video pod cast lesson that will teach how to apply the process described here. Click this link to get started now. Thank you for taking the time to read this iPaper. If you have any comments or feedback please use the scribd links.

How To Win Arguments

Tuesday, 20 January 2009 © John Tripp 1994 - 2009

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