The appearance of the last mile is a unique picture for every product and service. The term is commonly used to describe utilities and the reach to the end consumer. The power plant produces the electricity but it cannot be sold if the connection to your house does not work. The same is true for manufactured products coming thousands of miles to reach a store shelf; but it is the final mile to your home that results in the sale. An accountant spends hours preparing your tax return but the final step of reviewing and discussing the results builds the relationship that consummates the sale. Each and every product or service has a vital last step that must be completed for a sale to take place, look at the process of your sales channel and focus on the last mile.

Driving sales to the last mile of the sales process is very important and the large focus of many marketing organizations. It is impossible to have sales in the last mile if prospects never start the first steps of the sales process. Intuitively this makes sense so the focus of a large part of marketing efforts is on driving demand, leads, sales calls, brand awareness, etc, all of which push prospects through the sales channel headed for the last mile. Marketing efforts engage potential customers and begin the sales process but if the last mile of the process is not measured and the potential client is not engaged as they were at the beginning of the process, sales will be lost. The visibility into lost sales is apparent in abandoned online shopping carts, empty handed customers leaving retail stores, incomplete mortgage applications, and test drive that did not buy. Enormous efforts are put into getting the prospect to the car dealership lot, viewing an online store, sitting at the lawyer’s office, having a quote for a home repair and yet the sale is not completed. If the sale is never completed then the company never earned the revenue which is the only way to gain profit. Reducing the number of lost sales that occur in the last mile is like picking the low hanging fruit on your way to increasing revenue and profit.

Understanding the pieces and steps that comprise the customer experience during the last mile of your sales process is what will drive your sales. Is the website difficult to navigate, the sales order form to archaic, the salesperson leaves vital questions unanswered, or maybe inventory is inadequate. Become your prospect and feel each element of the experience as they see it to fully understand each bump, turn, and ripple in the pavement of the last mile of your sales process. This will give you great insight to your current sales volume, and ways to increase your sales by closing the lost sales. By managing the customer experience in the last mile, the yield from your existing marketing efforts will increase by closing more prospects that are already in your sales channel.

The success you have improving your last mile to become a more welcoming, customer friendly, experience will be evident in your increased closing rate and increased sales. As your prospects move through your sales channel, your existing marketing efforts will yield higher returns because you have improved the final step when a prospect decides to buy or not to buy. The understanding of the motivators and experience they have moving into this final step will help you close these prospects and turn them into paying clients.

The definition of freak flag from Urban Dictionary:

Freak Flag:

a. A characteristic, mannerism, or appearance of a person, either subtle or overt, which implies unique, eccentric, creative, adventurous or unconventional thinking.

b.  Unrestrained, unorthodox or unconventional in thinking, behavior, manners, etc. One who espouses radical, nonconformist or dissenting views and opinions that are outside the mainstream.

Regardless of how annoying, weird, abrasive, or disruptive to the status quo we find these people they are critically needed to push forward the ideas that lead to real innovation.  They challenge us to think beyond our current mindset for what is acceptable or more importantly for what is possible.   When you choose to dig deep and try to understand why this person is segmenting themselves from the norm you will learn they have a real passion that drives them.   To harness this passion and make it a productive force in your organization is the ultimate challenge.  Be too tight and you will stifle their creativity; Be too loose and it can truly cause havoc in your organization.

The best example of successfully allowing the creative passion of your organizational ‘freaks’ drive innovation was detailed by Gary Hamel in his 2001 HBR article Waking Up IBM: How a Gang of Unlikely Rebels Transformed Big Blue.   Hamel details how David Grossman waved his freak flag by extolling the virtues of this new fangled thing called the internet.  Grossman’s discontent with IBM being passed by on this new technology drove him to wake up the organization and ultimately lead to a makeover of IBM.

How to deal with the Freaks in your organization.

1. Don’t treat their mis-haps has failures, rather learning opportunities.  There will be times that they let the freak flag fly a little too high and push you over the edge.  It is important to remember they are only expressing their passion and maybe got a little too excited trying to achieve the best result possible for the organization.  Any moment can be a learning moment, make it one.

2. Learn and understand what their passion is, what is it that is driving them.   Only by understanding the concrete that this freak flag is planted in will you be able to engage them to drive innovation in your organization.   Of course you will also find out if they only wear green because they believe everyone should eat brussels sprouts for lunch.   Unless you are a produce farmer this may not fit in your organization and you will be able to know this for sure without speculation.

3. Write a manifesto together.  This does not need to be the next great work of the publishing world but five to ten bullet points about what is driving the passion and how it impacts the organization.   Consider this the boundaries or rules you can live with. 
David Grossman’s manifesto:

1. Start simple; grow fast.
2. Trial by fire.
3. Just don’t inhale (the stale air of orthodoxy).
4. Just enough is good enough.
5. Skip the krill (go to the top of the food chain when you’re trying to sell your idea).
6. Wherever you go, there you are (the Net has no bounds).
7. No blinders.
8. Take risks; make mistakes quickly; fix them fast.
9. Don’t get pinned down (to any one way of thinking).

4. Be open to change and adaptability.  This is a grand experiment you are leading and you need to be able to change quickly to new developments, successes and failures.  Don’t over react to any movements good or bad, just keep and open mind.

5. Focus on small, achievable wins.  Your organizational freak will be pushing for big wins which is what gets them excited in the first place.  Focus their energy on small wins so the organization can come around to new ways of thinking.  It is unlikely that just one freak is able to come up with this great idea on their own.  However once they put a few wins on the board you can start to bring others into the process and gain from their creative ideas.  As IBM found you can establish a positive feedback loop rather quickly that will spur some great innovation in your organization.

This incident reminded me of a article by Don Schmincke and Darryl McCormick titled “Is Politeness Killing Your Profits?”  In the article the two argue the point that when we are overly polite we end up avoiding open and honest constructive criticism which then in turns destroys the performance of the organization.  To take this concept further it seems that it is possible for the organization to value ‘politeness’ above all else which will then reward managers for the backhanded complement, and leads to passive aggressiveness behavior.   Ron Ashkenas refers to this as conflict avoidance in his HBR Blog post “Is Your Culture Too Nice?”  Again Ashkenas argues that being too polite is going to stifle creativity and growth of the organization.

The utopian balance sought is to create a culture that is polite, engaging, collaborative, and thrives from conflict.  The conflict though must be rooted in the belief that each party is trying to grow the organization rather than protect a personal insecurity or revenge a prejudice.   Jeff Weiss and Jonathan Hughes engage this thought in their HBR article “Want Collaboration?: Accept—and Actively Manage—Conflict”.  Messrs. Weiss and Hughes advocate building culture around embracing conflict to gain the performance advantage for the entire company.  The crux of achieving this they offer is establishing a common set of standards or protocol for how the organization responds to conflict.  In this way everyone has been trained and indoctrinated into the “right way” of dealing with conflict.  This best practice for conflict that the organization adopts details the approach, when to compromise, and when to estate the conflict higher in the organization where the process will repeat itself.

Theory of Constraints offers a solid framework to establish a culture that embraces conflict.  If every employee has the tools of the conflict cloud in hand they can embrace the conflict with the peer and find a win/win solution.  The conflict cloud starts with a common objective and builds upon the assumptions each party is making.  Together breaking the conflict to find a win/win will drive better solutions in the organization.  The process is very non-confrontational which is why most of us avoid conflict to begin with.  Tthe virtue of ‘polite’ is disarmed by the conflict process and each party is free to disagree and explain why of course without being rude.  It is no longer an attack on the person but a difference in method to achieve the same common objective.  By using the TOC Conflict cloud the conflict is no longer personal and talking about it becomes easy.   Using a tool like the TOC conflict cloud allows everyone in the organization can speak to a common set best practices as Weiss and Hughes suggest and still maintain a cordial, even call it polite interaction with co-workers.  It is only from this universal behavior towards conflict that the organization will grow and flourish.

It will be interesting in the coming months as the events at UBS unfold and become public to see who knew what and when.  Maybe had Kweku’s manager stepped up and had a conflict conversation using a conflict best practice, UBS’s shareholders would be $2.3B better off today.

“How productive are you?” it is a simple question right? It is a question that many managers struggle to answer despite the platitudes given in board rooms and staff meetings about efficiency and being productive.   Most economist will agree that productivity can be defined as the measurement of output per unit of input.   More simply stated productivity is output divided by input.  An organization can easily calculate this equation and easily to determine the level of productivity in the organization.  It is done in most organizations quite frequently and without the explicit statement of a productivity report.  More commonly though it is called an Income Statement.

First we must understand and agree on the purpose of a business before we continue.  The goal of any for-profit business organization is to produce profit.  The common counterpoints are often that the business must provide great products and services, be a great place to work and provide jobs, be a good community member, and the list goes on.  In any event the challenge is to place any other item as the primary goal of the business and ask how it will do it sustainably without profit.  Profit is the goal and through profit these secondary and important items can be accomplished.  The question of “how productive are you?” is really asking “how profitable are you in relation to the inputs (resources) utilized.”

Knowing that we are really measuring profitability of our activities the picture becomes much clearer and easier to calculate.   Our income statement shows us the sales of the organization in the revenue line or total sales (S).   Next we need to find the variable cost of our sales.  How much did it cost to produce one widget (if you are a service business you still sell a widget it might be a billable hour or car washed but it is still a widget).  If the organization sells a product the income statement will also have a cost of goods sold line which may be helpful to determine the variable cost.  In a service business we may have to reorganize some items to find the total variable cost (TVC) but it is still easily calculated.  If we take the total sales (S) minus the total variable cost (TVC) we find the throughput (T) of the organization.  The throughput of the organization is the rate it produces profit.  Some organizations call this the contribution margin or income before general and administrative cost. Next the income statement has the total operating expenses (OE) which do not include total variable cost.  Next we can calculate the productivity of the organization as throughput (T) divided by operating expenses (OE).

The ratio of throughput to the operating expenses shows us how productive we are at utilizing the resources required to produce profit.   If the ratio is less then one the organization by definition would be unprofitable.  Calculating productivity in using this equation forces a manager to think in terms of activities that generate revenue and those activities that do not generate revenue.  As managers we cannot eliminate non-revenue producing functions but we can work to control them and leverage those resources to support revenue producing activities.

Productivity = (T / OE )  where T = (S – TVC)