December 21, 2014


















AN OVERVIEW/MANUAL FOR MY YOUTUBE VIDEO CLIPS: “1.0”

As of 11/5/12, I have recorded 338 clips averaging about 4 minutes a clip for total programming of over 22 hours.  There are 8 playlists, which you will find at this link: http://www.youtube.com/channel/UCilcj45mb9P86ch9pA-zIpA/videos?view=1

There is some rationale for skimming through them in their 1 to 8 order. But, 338 is a lot! Which ones are most important (top 10%), good (40%) and least important (bottom 50%)? Although beauty is in the eye of the beholder, this document is an attempt to zero in on what might be most valuable to you.

A pesky problem is that most clips will have two numbers: a big one in the upper left hand corner of the video (use that one); and numbers that you will see on my slides on the right-hand side (ignore those). If I refer to 5:10, then I’m referring to the 10th slide in Playlist #5.  

Playlist One : “GETTING PAID FOR SERVICE VALUE” (1:1-30)

Generally, the first 1 to 3 clips in most playlists are introductory info which will help all viewers. Clips  (1:1-2) also introduce this entire project which is meant to support two main groups of consumers:

a.     Attendees of an all-day seminar entitled, “Getting Paid for Service Value”, which I do annually at the University of Industrial Distribution (next scheduled session on 3/12/13 in Indianapolis; sign up for it at:  http://www.univid.org/aws/AEA/pt/sp/uid_home).

b.     AND, all of the clients of Waypoint Analytics’ line-item, net-profit analytics service. The tools from Waypoint (www.waypointanalytics.info) reveal such powerful, new, strategic insights that most clients (and prospects) have trouble understanding the potential of what they are seeing. New world view changes aren’t easy.  Most reps do not, for example, easily transform from product-pushing, price-quoting agendas into service-value-chain math sellers and demand-replenishment-system consultants.

Rethinking selling objectives and skills is, in fact, the bulk of this first playlist. After introductory stuff, Module clips 1:10-30 are all meant to be watched and discussed as many times as necessary to help sales reps sell total supply-chain economics rather than quote prices for commodities. If you have ever:

a.     Lost business at a big account that switched to an “integrated supply contract”

b.     Had accounts in which the “VP of Purchasing” is now called “VP/Supply Chain”

c.     Or, generally wondered if the 24-year old life cycle of “supply chain buying” is real and might affect your need to do some “supply-chain selling”,

Then, going forward, if a customer asks for a price quote, you should fantasize that any of your reps might turn the opportunity into a: “why stop there conversation about partnering for even better total economics for both parties!” But, all customer facing folks must be fluent with term/concepts like: TPC; up-time economics; on-time economics; next-value-chain step/customer satisfaction/retention economics; and healthy average order sizes for both parties as a byproduct of a well-designed, demand-replenishment system.

Clip 1:29 is a case study solution for a contractor who sends many vans to a distributors counter every day to get job-specific purchases. This “no inventory” guided practice is actually killing both parties on a total economic basis. To get better fluency with “service-value-chain” concepts, I will, in the near future, be posting many more case stories for taking three types of customers – core, targets and super-losers – to a bigger and more profitable level.

PLAYLIST TWO: LIFE-CYCLE THINKING (2:1-22)

Distributors have hugely profitable customers and items that cross-subsidize hugely unprofitable customers and items hiding within the financial averaged numbers: TRUE OF FALSE? Always TRUE, but why do many managers and reps have trouble believing and then acting upon this big insight? What are the unspoken assumptions that underlie our historical, general, data-free, belief systems? Until these belief assumptions are specifically named, carefully examined and consciously modified our minds can’t be open to accepting new, more effective paradigms. PLAYLIST TWO is dedicated to helping distributors and all of their employees overhaul their “mental models”.

2: 1-8 are dedicated to helping distributors free themselves of the paradigms of: “sales agency” and “push-product to any and all customers” for volume to keep suppliers happy and get (non-existent) “economies of scale”.

2: 9 Introduces 6 common objections to confronting small customers and big customers who order way too many small-orders for either parties holistic health.  2:10-14 answers each of the six objections one at a time including the historically most popular one: “the sales force won’t stand for it”.

2:15-22 Review the facts that most distribution channels are quite mature and consolidating. 90% of the sales volume is for commodities that customers want to buy on the lowest, total, supply-chain cost. So, distributors have to: push products less and start (90% of the time) to listen to customers “supply chain buying needs”. And/or, start proactively offering to provide “service-value-chain solutions” to co-create mutually beneficial “demand replenishment systems”.

PLAYLIST THREE: THE NEED FOR “LINE ITEM PROFIT ANALYTICS” (LIPA)- 3:1-39

3:1 is an important clip that explains why most distributor investments in “analytics solutions” have gotten, heretofore, such poor returns.

3:2 Pitches a book (Islands of Profit in a Sea of Red Ink) that explains why product-pushing, volume-seeking businesses –of all kinds – now have big (net-profit and loss) cross-subsidies amongst both customers and products/services and then how to solve the problem.

3:3-5 explain why distributors – using LIPA – will start using much more fruitful “power laws” than the overused and misunderstood 80/20 rule. What is the “root cause”, for example, of why only 5% of your active inventory items generate 500%+ of your peak-internal, net profits?

3: 6-9 cover customer profitability rankings depicted as “whale curve graphs”. We learn that two identical customers with the same sales, margin dollars and margin percentage rates can vary widely in profitability based on their very different buying practices and related “costs-to-serve” (CTS).

3: 10-11 help to deal with the inevitable objections that will arise when you discover that some of your “biggest, best customers” are actually big losers.

3: 12-14 look at item and supplier profitability ranking reports and whale curves.

3:15 is a key clip that discusses the inter-dependency of most (un)profitable customers and items.

3:16-17 explain why a branch turnaround is highly dependent on taking three sets of big customers – core/most-profitable, best targets and biggest losers – to the “next level”. 3:17 introduces the 5-5-5 customer strategy.

3:18 is an important overview clip on the nine steps of a “LIPA-enabled, net-profit improvement JOURNEY”.  The next 18 clips then detail the nine steps of the journey.

3: 19-23 explain why it is smart to at least initially outsource cost-to-serve modeling to a firm like Waypoint. It doesn’t have to be an either/or, in-house reinvention/knock-off OR an outsource decision, but an and/both opportunity is so desired.

3:24 is a key clip, because too many distributors have created their own in-house customer profitability ranking reports and then stopped there for lack of a journey: vision, understanding, conviction and re-educational skills (all  of which these YT clips are trying to help).

3:25-27 are also key clips. The fact that an item or customer is a super winner or loser is a “symptom”. We don’t yet know the underlying root-cause for the extreme profit results. How do you find the root-cause, then what do you do? Watch these clips!

3: 28-29 are key clips too. The root-causes for extreme profits or losses are also “insights” that are the kernels for new guidelines and tactics that will give big returns. BUT, can we re-educate, re-informate and re-compensate managers, reps and eventually all employees to then execute the plays?

3: 30-33 are clips on how to re-educate all employees to be part of the net-profit improvement journey.

3: 34-37 are key clips that deal with the highly emotional subject of both open-book selling and operational management. With new – insights, plays, tracking reports and compensation – capabilities it makes sense to go open-book with both losing customers and all employees in order to dramatically improve the economics of all stakeholder groups. Then, you can go aggressively together after newly-revealed, low-hanging fruit. The results snowball. The company then becomes a strategically profitable wealth machine that provides great benefits to all stakeholder groups.  

3:38-39…a summary clip and a final one promising another playlist of specific, how-to LIPA case studies.

PLAYLIST FOUR: CUSTOMER NICHONOMICS (4:1-57)

4:1 Definitely watch this clip. Most distributors think they are customer-centric, but actually are (on a scale from 1-10) about a 2. Clips 4:2-3 expand on #1.

4:4 Provides an overview of the nichonomics journey which is then detailed in clips 4: 5-26.

4:5-13 are mostly conceptual clip/concepts on how to get into specifically niching your customers by going down the overall customer profitability report and putting the top 50+ in different niche piles, etc.

4:14-26 are steps in a personal, turnaround, distribution case story in which I identified 8 internal service metrics that added up to a “service value equation” for the #1 historical most profitable/important niche. We made “service excellence” happen and double sales and improved ROS by 7% points in one year as we dominated the target niche.

4:16 is a key process clip for finding competitive service advantages that will beat product-volume focused competitors.

4:24-26 are key clips on “fill-rate economics” and the importance of tuning fill-rates higher for the most popular, profitable items bought by a target niche of customers.

4:27-32 are conceptual building blocks for understanding the invisible power of “customer retention economics” within mature, commodity distribution channels.

4:33-36 are guidelines for finding, developing and allocating “extra services” for target niche customers. Whether they are then bundled into (or unbundled for a fee) a “service model” depends on the strata of customer within a niche.

4:37-38 Explain why the role of the outside rep within mature distribution channels is both shrinking (only accounts that generate a minimum of about $20K in sales can support outside reps) AND changing.  Reps must start selling service-value-chain solutions to customers to partner them and capture much bigger share of each customer. No more sharing accounts with competitors and “getting our fair share”. Customers must get best total supply-chain economics with one partner or another.

4:39-43 covers concepts about target account cracking. How to pick them? Who can crack them? How they do the cracking with dome selling and a 9-step selling process? And, what it takes to be a “10”. Every rep who wants to remain relevant within their distribution channel over the next few years must watch all of these!

4:44 Very important clip on “downsizing, upgrading, re-educating, re-directly and re-compensating” (DURRR) your sales force. Also, detailed in article 4.11 at our web site.

4:46-49 Very important, summary-concept clips on why/how to achieve economies of scale within a niche and maximum the value exchange (or profit) margin.

4:50-51 If you can achieve what is covered in 4:46-49, then you can grow all stakeholders’ wealth and be a magnet for best talent and effort from all groups. It’s the ultimate mission dream in business.

4:53-57 are summary slides for nichonomics….a vital way of thinking and operating for all distributors.

PLAYLIST FIVE: ACHIEVING SERVICE VALUE (5:1-86)

5:1-3 Cover introductory concepts about how to build “boundaries” that maximize: autonomy; engagement; learning; total-team alignment; AND, peer-team-based, measurable control and discipline.

5:4-5 Explain “self-organizing” communities of people that maximize motivation and bottom-up, fast, pragmatic problem solving.  Have faith and inject it into your company!

5:6-7 Start explaining the “six boundaries” of my high-performance model with the top or “side one” which is (strategic) “service value concepts”. #7 provides an overview of my “8 elements of service excellence”. The detailed how-to’s for each element are covered in modules 4.1-14 of my DVD training program that is free with a subscription to Waypoint’s service. Or, those modules can be rented for $1.00 each at www.opensesame.com

5:8-11 explain how to co-create balanced scorecards for every individual and team function in the company.

5:12-19 is an insert section from working around my hexagon on “PRAISING STATEMENTS”. What, when, how, and why publishing praising statements are the oxygen for successful continuous learning and change. Very important if you want to turnaround a business or take a company from good to high-performance great.

5:20 is the “financial reporting” boundary which is the most-used in most companies and the least important of my hexagon model. Financial numbers are all ultimate symptoms. They only will get significantly better for all stakeholder groups IF the other 5 boundaries are up and operating.

5:21 is the “what’s in it for me” (WIIM) boundary. This news station has to be playing all of the time with the bigger emphasis on “what’s in it for WE” (WIIW), because we either are all going to make perfect, niche-focused service happen (starting for the 5-5-5 accounts) together and benefit or not.

5:22-73…these 51 clips are all dedicated to the “mastery” boundary.

5:22-27 defines levels of mastery in a general sense and points out (PARENT ALERT) that all of our kids and (front-line service providers) have to “learn-how-to-learn continuously, on their own” if they want the “good jobs” that will exist in the US 5-10 years from now. The schools and Universities are not teaching “learn-how-learn, change and innovate” skills.

5:28 Covers two key learning how learn concepts: the wheel of learning; and making small, smart experiments/bets to “fail forward” (towards some bigger vision/objective).

5:29 Explains why there are NO DEAD END JOBS, JUST DEAD-HEAD MANAGERS.

5:30-37 covers the basic path of mastery and the dysfunctional non-mastery scenarios with an insert on learning through the four stages from “unconscious incompetence to unconscious competence”.

5:38-39 reminds us that we must ground our mastery-by-all expectations in corporate philosophy and strategy.

5:40-52 dives deep into the how-to mechanics of pushing the wheel of learning and designing, smart, small experiments/bets.

5:53 Steps back from the details of “failing forward fast frugally flexibly etc.” to look at 13 guidelines for “Improvisational Wisdom” which must be known, believed, and role modeled IF you want to boost your corporate capacity to change and innovate.

5:54-58 covers the key concept of designing and executing change initiatives with “psychological flow” or “optimum creative tension”.

5:59-60 Remind (PARENT ALERT) us that in all formal learning environments “mastery” should be insisted upon versus one-size, speed, teaching-style serves all curved to a grade of “C” where 10% of the class may have achieved “mastery” while the rest are pushed along without it.

 5:61-62 remind us to make every employee a first-time teacher, because they will pass the rules of 5-7 and 1-10 and learn more than the first time student(s) they are in charge of.

5:63-70 cover why distributors have historically been, on average, very poor educators of their employees and how they might bootstrap their way (via a case study of a “learn-n-earn game”) to being a high-performance educator.

5:71-72 describes two personnel systems to replace dysfunctional top-down, annual job evaluations with bottom-up, monthly, how-are-you-growing-yourself reports and not-enough PRICE intervention system that will weed bad apples with “due process justice” for all to see.

5:73 is a case study on the wonderful side-effects of a top-down public speaking training experiment.

5:74-78 explains how boss-subordinate role playing must be replace with we are all adult partners in this game.

5:79-82 show how the hexagon model does a better job than the “balanced scorecard” and “mission, values, vision, strategy, etc.” pyramid template.

5:83, 84 and 86 explain how formal “corporate culture management” is a key, huge missing topic in the learning and innovating organization. Most firms have a “can’t-do-that-here-or-now” culture.   

PLAYLIST SIX: CHANGE MANAGEMENT (CONCEPTS): 6:1-53

This section is the first of three, inter-related ones, for upgrading the innovative change capacity of your company. Playlist #6 covers memes that will help everyone think about “change” in a big picture way. Playlist #7 gets into specific tools to apply to specific change initiatives. And, #8 looks at the re-tuning the “corporate culture” to make it a more can-do environment. Because:

1.     Most distributors are in mature channels using same, industry-think strategies.

2.     And, they are being run by professional, non-founder management teams.

It is easy for such a company to get into a reactive, fine-tuning management mode, and not really think about how to do bigger, better changes for innovative breakthrough advantages. Playlists 6-8 will help to boost innovation capability.

6:1-6 are important introductory clips. A management team can discuss each one of my assumptions and decide on a scale from 1 to 10 how well the team buys into these assumptions and the company actually tries to live by those assumptions.

6:7 is a key clip. I think all companies should do an annual strategic planning discipline. A best book to guide this discipline which is totally scaled for and tuned to distributors is Brent Grover’s, “The Little Black Book of Strategic Planning for Distributors” (more at www.mdm.com). But, strategic processes don’t yield either the “initial insights” or the ability to execute on any subsequent strategic experimental path that you will need for big results. The insights will emerge from diving deep into the most profitable and unprofitable extremes of your portfolios of customers and products.

6:8-10 ask you to measure your “innovation gap” and your past track record at implementing what type of changes from easy, incremental, reactive ones to ambitious, proactive, forward-looking ones.

6:11-18 cover more abstract ideas of how do we define our current “mental models” or mindsets and then first change them to be able to see best new insight opportunities. Many viewers will find these mentally straining, but what is the alternative? To follow the herd, eat dust and eventually die?   

6:19-21 are models that turn “different types of change” into more concrete examples and charts for you to plot both past and planned changes. Well worth viewing.

6:22 is a simple, but powerful clip on expanding the economic pie for all stakeholders. Most humans struggle getting past zero-sum negotiations to get a bigger share of a static economic pie at the expense of someone else. Buy low; sell high; hire cheap-work hard; tax you, give it to me – none of these are synergistically creating 1 + 1 = 3, 4 or more scenarios. Apply this clip to improving the win-win benefits of re-tuning buy-sell process inefficiencies between your company and your biggest volume customers.

6:23 is an insert, concept slide on why it may seem difficult to lead from the middleman position in a channel. Most distributors are not “channel masters”, but if you think you can or you can’t you are right.

6:24-28 These clips inform distributors on why and how to shift from being product promoters to being customer-centric, service-value chain solution providers. Retune those demand replenishment systems that have grown up unmanaged between you and your biggest (potential) volume customers.

6:29 An insert concept. Stop thinking about getting into new areas for growing sales (new: lines, items, customer niches, territories). Instead, get brilliant at your core business, than consider “adjacencies”.

6:30-39 cover concepts about the psychological, neurological resistance to change and how to minimize the pain of change.

6:40 is an insert clip on thinking about a bottom-up, non-threatening “wellness is the first, best habit” program at your company.

6:41-53 are clips about orchestrating the actual change/transition process itself.

PLAYLIST #7 -LATEST “TOOLS” FOR CHANGE MGT. 7:1-22

Playlist #6 was mostly high-concept clips, #7 is:  change mgt. for dummies” tools. The latest, best book on improving your success at change management initiatives is entitled “Switch” by Heath and Heath.

7:1-8 cover what’s new in business literature on change management and the key concept tools from “Switch” including: “rider; elephant; the path; bright spots; scripts; and rallying the herd”.

7:9 “Scripts” from “Switch” are also very specific plays aimed at leverage “insights” within “bright spots”. Line item profit analytics reveals many “bright spots” and allows for deep-dive investigation to find “insights” that lead to new “scripts”. The Net-Profit Journey has 9 chronological stages to it with “scripts” coming in step 5. This clip covers all 9 stages referring to “Switch” tools.

7:10 Think Big, Act Small (TBAS) is the best of 4 permutations within that phrase. For 51 annotated slides on, see slideshow #22 at www.merrifield.com (along with the 9F’s (failing forward fast…) covered in playlist 5. This clip is a quick overview of TBAS to remove enough fear of change to get traction.

7:11 A review slide on the change management tools that have already been covered earlier in Playlist #5 including:

signing everyone up to be responsible in proportion to the privileges they desire;

the wheel of learning;

smart bets/experiments x 9F’s for designing;

and published praisings.

7:12-19 cover more than most people will want to know about IDEATION: how to generate a lot of good change ideas to then evolve them down to one best, greatest idea for a given branch.

7:20-22 are summary slides. Is your company doing all of these points on a “!0” basis?

PLAYLIST 8: CORPORATE CULTURE MANAGEMENT 8:1-29  

This topic is the most important opportunity that most managers have never thought of before. Culture is like the water that fish are in and don’t even know it. You need a strong, healthy, agile culture to execute on any new insights and get any kind of breakout results. 

8:1-6 will introduce you to why now is the time to define and retune your corporate culture.

8:7 Reviews my “kinetic chain of profit power” with a highlight on “culture management”.

8:8-11 Reviews why “execution” isn’t going to happen without improving four, inter-related factors: leadership; net-profit analytics; core strategy focus; and can-do culture retuning.

8:12 summarizes truisms about culture in a general sense, before we get specific and concrete.

8:13-20 cover some specific suggestions on how to (re)define the key elements of your existing culture.

8:21-22 cover what you want every employee to know about the firm’s culture. If everyone can answer all of these questions well, then you will: have a high-performing company; be adored by all; be having fun; and, getting rich as a by-product.

8:23-28 cover specific culture management topics you and the management team need to address.

8:29 is a summary slide. Start continuously improving and managing your corporate culture NOW.