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23rd International Conference of the
TOC Practitioners Alliance - TOCPA
www.tocpractice.com 21-22 March, 201, Tennessee, !"A
Exploiting Market Constraints
(For those who use salespeople)
Henry Fitzhugh Camp, TOC Equity Partners, USA
March, 2016
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Your logo
Henry Fitzhugh Camp
Henry is an entrepreneur
who started a private equityfund specifically to earn
extraordinary returns using
TOC. His goal is to endcyclical recessions and
depressions worldwide.
(Who knows what the weird orange lines mean?)Contact info:
[email protected](502) 551-2359
Place for the photo of the
presenter
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Your logoMarket constraints
Most companies have the capacity they need to grow sales
And, if it seems they don’t, a dose of TOC expands their
capacity to the point that they can sell more
So, the real issue for most companies is:
How to exploit a market constraint?
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Your logoGoing to market
Some companies sell:
• through Retail Stores
• across the Web
• by Word of Mouth
• using Brokers
• by Catalog
• via TV
• by Direct Marketing
• through Referrals
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Your logoGoing to market
Some companies sell:
• through Retail Stores
• across the Web
• by Word of Mouth
• using Brokers
This presentation is for companies who have answered the
question “How to exploit a market constraint?”
By deploying a Direct Salesforce!
• by Catalog
• via TV
• by Direct Marketing
• through Referrals
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Your logoInertia
Even a great salesforce isn’t perfect.
You sense there is a better way to exploit your marketconstraint.
But, you aren’t changing
And, you can’t tell me why succinctly
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Your logoThe normal process
If your experience is like mine, everything seems fine at first.
1. You want more sales
2. Hire a salesperson
3. The salesperson gets some rudimentary training
4. The salesperson starts doing things that appear to beassociated with making sales
5. You move on to other initiatives
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Your logoWhat’s the problem
First branch:
The sales person doesn’t sell The sales person sells
• Train some more
• Ride with other sales people
• Other stuff you can think of
• Fire salesperson or they quit
This happens 2/3 of the time
• You offer praise
• Congratulate yourself
• Focus on other issues
This happens 1/3 of the time
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Your logoWhat’s the problem
Later branch:
The sales person stalls low The sales person stalls high
• You ride their butt
• You coach them
• Focus on other issues
This happens 1/2 of the time
• You offer praise
• Congratulate yourself
• Focus on other issues
This happens 1/2 of the time
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Your logoWhat’s the problem
#CAT$%O
&'
(AM$)
#CAT$%O
&'
(AM$)
#CAT$%O
&'
(AM$)
Salespeople
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Your logoWhat’s the problem
Example Assumptions:
• Distribution Company
• Salespeople get commission which is of 30% of T
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Your logoWhat’s the problem
Example Assumptions:
• You want to grow so …• You don’t give new salespeople many existing accounts
• Beginning commissions are not enough to live on
• A draw against future commissions makes take-home pay reasonable
• The requirement to repay draws increases the incentive to sell fast
• When paying back draws, the salesperson keeps ½ of any overage
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Your logoWhat’s the problem
Example Assumptions:
• Since the salesperson is paid like a profit center, they must:• Do their own planning, marketing, prospecting, appointment setting,
travel, presentations, proposals, quotations, sourcing, problem-
solving, customer service, relationship building and, when necessary,
even collections
The lucky 13
Like a chain, only as strong as the weakest link
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Your logoWhat’s the problem
Good Salesperson:1,000s
Year Comment # of Cust Sales T T/Sales Comm Draw Pay
1 Good growth tempered y ha!"ng to learn the products $ %$00 %1&0 '( %&) %' %*$
Great growth + h"gh conf"dence not totally warranted- *$ %1,100 %.$ $( %& %'- %..
& Good growth focus on "gger opportun"t"es $$ %1,'00 %*00 $( %10 %0 %10
* ocus on "gger opportun"t"es '0 %,000 %*'0 &( %1& %0 %1&
$ ocus on "gger opportun"t"es '* %,&00 %$0' ( %1$ %0 %1$
' ocus on "gger opportun"t"es '. %,$00 %$$0 ( %1'$ %0 %1'$
. Some ga"ns some losses + sl"ght growth ') %,'00 %$. ( %1. %0 %1.
2alance sh"fts from open"ng new accts to ma"nta"n"ng .0 %,.00 %$)* ( %1. %0 %1.
) Prolems "ncrease fear of loss ' %,'00 %$*' 1( %1'* %0 %1'*
10 Totally stagnant ') %,'00 %$*' 1( %1'* %0 %1'*
11 3ost a few of accounts '' %,$00 %$$ 1( %1$ %0 %1$
1 4or5ed l"5e dog to reu"ld .* %,.00 %$*0 0( %1' %0 %1'
1& Too many customer prolems to prospect much . %,'00 %$0 0( %1$' %0 %1$'
1* Too often "n the off"ce runn"ng "ssues down .0 %,$00 %$00 0( %1$0 %0 %1$0
1$ 3os"ng more than w"nn"ng, e!en though d"scount"ng '$ %,&00 %*&. 1)( %1&1 %0 %1&1
1' 3ast resort pr"ce "ncreases appear to help '* %,.00 %$'. 1( %1.0 %0 %1.0
1. 6ore losses and pr"ce decreases to sa!e them '1 %,$00 %$00 0( %1$0 %0 %1$0
1 3ower pr"ces and refocus on "g accounts '& %,'00 %*)* 1)( %1* %0 %1*
1) 3ost a "g account on pr"ce ' %,*00 %*$' 1)( %1&. %0 %1&.
0 7edoule efforts to replace "g account '* %,$00 %*.$ 1)( %1*& %0 %1*&
1 7edoule efforts to replace "g account ' %,'00 %*)* 1)( %1* %0 %1*
7edoule efforts to replace "g account .1 %,.00 %$1& 1)( %1$* %0 %1$*
& Good economy .& %,.00 %$1& 1)( %1$* %0 %1$*
* Good economy .. %,00 %$'0 0( %1' %0 %1'
$ Good economy .) %,00 %$'0 0( %1' %0 %1'
' 7ecess"on 0 %,$00 %*.$ 1)( %1*& %0 %1*&
. 7ecess"on * %,'00 %*)* 1)( %1* %0 %1*
2ad mut"tas5"ng a ma8or "ssue ) %,$00 %*.$ 1)( %1*& %0 %1*&
) 2ad mut"tas5"ng a "gger "ssue )& %,*00 %*$' 1)( %1&. %0 %1&.
&0 2ad mut"tas5"ng the "ggest "nh""tor of progress ). %,*00 %*$' 1)( %1&. %0 %1&.
&1 2ad mut"tas5"ng the "ggest "nh""tor of progress 100 %,&00 %*&. 1)( %1&1 %0 %1&1
& 2ad mut"tas5"ng the "ggest "nh""tor of progress ) %,*00 %*$' 1)( %1&. %0 %1&.
9 de!eloped a :story;
for a good not great-
salesperson o!er a &
yearlong career,
ased on my &$ years
of d"rect e
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
Your logoWhat’s the problem
Good Salesperson:1,000s
Year Comment # of Cust Sales T T/Sales Comm Draw Pay
1 Good growth tempered y ha!"ng to learn the products $ %$00 %1&0 '( %&) %' %*$
Great growth + h"gh conf"dence not totally warranted- *$ %1,100 %.$ $( %& %'- %..
& Good growth focus on "gger opportun"t"es $$ %1,'00 %*00 $( %10 %0 %10
* ocus on "gger opportun"t"es '0 %,000 %*'0 &( %1& %0 %1&
$ ocus on "gger opportun"t"es '* %,&00 %$0' ( %1$ %0 %1$
' ocus on "gger opportun"t"es '. %,$00 %$$0 ( %1'$ %0 %1'$
. Some ga"ns some losses + sl"ght growth ') %,'00 %$. ( %1. %0 %1.
2alance sh"fts from open"ng new accts to ma"nta"n"ng .0 %,.00 %$)* ( %1. %0 %1.
) Prolems "ncrease fear of loss ' %,'00 %$*' 1( %1'* %0 %1'*
10 Totally stagnant ') %,'00 %$*' 1( %1'* %0 %1'*
11 3ost a few of accounts '' %,$00 %$$ 1( %1$ %0 %1$
1 4or5ed l"5e dog to reu"ld .* %,.00 %$*0 0( %1' %0 %1'
1& Too many customer prolems to prospect much . %,'00 %$0 0( %1$' %0 %1$'
1* Too often "n the off"ce runn"ng "ssues down .0 %,$00 %$00 0( %1$0 %0 %1$0
1$ 3os"ng more than w"nn"ng, e!en though d"scount"ng '$ %,&00 %*&. 1)( %1&1 %0 %1&1
1' 3ast resort pr"ce "ncreases appear to help '* %,.00 %$'. 1( %1.0 %0 %1.0
1. 6ore losses and pr"ce decreases to sa!e them '1 %,$00 %$00 0( %1$0 %0 %1$0
1 3ower pr"ces and refocus on "g accounts '& %,'00 %*)* 1)( %1* %0 %1*
1) 3ost a "g account on pr"ce ' %,*00 %*$' 1)( %1&. %0 %1&.
0 7edoule efforts to replace "g account '* %,$00 %*.$ 1)( %1*& %0 %1*&
1 7edoule efforts to replace "g account ' %,'00 %*)* 1)( %1* %0 %1*
7edoule efforts to replace "g account .1 %,.00 %$1& 1)( %1$* %0 %1$*
& Good economy .& %,.00 %$1& 1)( %1$* %0 %1$*
* Good economy .. %,00 %$'0 0( %1' %0 %1'
$ Good economy .) %,00 %$'0 0( %1' %0 %1'
' 7ecess"on 0 %,$00 %*.$ 1)( %1*& %0 %1*&
. 7ecess"on * %,'00 %*)* 1)( %1* %0 %1*
2ad mut"tas5"ng a ma8or "ssue ) %,$00 %*.$ 1)( %1*& %0 %1*&
) 2ad mut"tas5"ng a "gger "ssue )& %,*00 %*$' 1)( %1&. %0 %1&.
&0 2ad mut"tas5"ng the "ggest "nh""tor of progress ). %,*00 %*$' 1)( %1&. %0 %1&.
&1 2ad mut"tas5"ng the "ggest "nh""tor of progress 100 %,&00 %*&. 1)( %1&1 %0 %1&1
& 2ad mut"tas5"ng the "ggest "nh""tor of progress ) %,*00 %*$' 1)( %1&. %0 %1&.
6y data loo5s l"5e th"s=
0
0
*0
'0
0
100
10
1*0
1'0
%0
%100
%00
%&00
%*00
%$00
%'00
%.00
1 & $ . ) 11 1& 1$ 1. 1) 1 & $ . ) &1
Years on the 8o
Good Salesperson
T # of Cust
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
Your logoWhat’s the problem
Average Salesperson:
9 d"d the same for an
a!erage salesperson
1,000s
Year Comment # of Cust Sales T T/Sales Comm Draw Pay
1 Good growth tempered y ha!"ng to learn the products 1$ %&00 %. '( %& % %*$
7eally good growth + st"ll a few th"ngs to learn *0 %00 %1) *( %$ %.- %$1
& Good growth + pretty good conf"dence '0 %1,000 %&0 &( %') %1- %$.
* ocus on "gger opportun"t"es '$ %1,*00 %&0 ( %) %&- %)
$ 2alance sh"fts from open"ng new accts to ma"nta"n"ng . %1,'00 %&&' 1( %101 %0 %101
' Prolems "ncrease fear of loss .. %1,.00 %&*0 0( %10 %0 %10
. Some ga"ns some losses + sl"ght growth )0 %1,.00 %&*0 0( %10 %0 %10
Some ga"ns some losses + sl"ght growth 110 %1,.00 %&*0 0( %10 %0 %10
) Some ga"ns some losses + sl"ght growth 1$ %1,.00 %&*0 0( %10 %0 %10
10 Totally stagnant 1&* %,000 %&0 1)( %11* %0 %11*
11 3ost a couple of accounts and one "g account 1&1 %1,.00 %&& 1)( %). %0 %).
1 4or5ed l"5e dog to reu"ld 1$0 %1,)00 %&* 1( %10& %0 %10&
1& Too many customer prolems to prospect much 1$ %1,)00 %&* 1( %10& %0 %10&
1* >lways "n the off"ce runn"ng "ssues down 1*. %1,$0 %&&& 1( %100 %0 %100
1$ 3os"ng more than w"nn"ng, e!en though d"scount"ng 1& %1,.00 %) 1.( %. %0 %.
1' Pan"cy pr"ce "ncreases appear to help 10 %1,'00 %&0* 1)( %)1 %0 %)1
1. 6ore losses and pr"ce decreases to sa!e them 11$ %1,$00 %.0 1( %1 %0 %1
1 6ore losses and pr"ce decreases to sa!e them 11 %1,*00 %& 1.( %.1 %0 %.1
1) Some ga"ns some losses + sl"ght growth 11$ %1,$00 %.0 1( %1 %0 %1
0 Some ga"ns some losses + no growth 11 %1,$00 %$$ 1.( %.. %0 %..
1 Some ga"ns some losses + sl"ght growth 10 %1,'00 % 1( %' %0 %'
2"g new customer 11 %,100 %&$. 1.( %10. %0 %10.
& 7ela
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Your logoWhat’s the problem
Average Salesperson:1,000s
Year Comment # of Cust Sales T T/Sales Comm Draw Pay
1 Good growth tempered y ha!"ng to learn the products 1$ %&00 %. '( %& % %*$
7eally good growth + st"ll a few th"ngs to learn *0 %00 %1) *( %$ %.- %$1
& Good growth + pretty good conf"dence '0 %1,000 %&0 &( %') %1- %$.
* ocus on "gger opportun"t"es '$ %1,*00 %&0 ( %) %&- %)
$ 2alance sh"fts from open"ng new accts to ma"nta"n"ng . %1,'00 %&&' 1( %101 %0 %101
' Prolems "ncrease fear of loss .. %1,.00 %&*0 0( %10 %0 %10
. Some ga"ns some losses + sl"ght growth )0 %1,.00 %&*0 0( %10 %0 %10
Some ga"ns some losses + sl"ght growth 110 %1,.00 %&*0 0( %10 %0 %10
) Some ga"ns some losses + sl"ght growth 1$ %1,.00 %&*0 0( %10 %0 %10
10 Totally stagnant 1&* %,000 %&0 1)( %11* %0 %11*
11 3ost a couple of accounts and one "g account 1&1 %1,.00 %&& 1)( %). %0 %).
1 4or5ed l"5e dog to reu"ld 1$0 %1,)00 %&* 1( %10& %0 %10&
1& Too many customer prolems to prospect much 1$ %1,)00 %&* 1( %10& %0 %10&
1* >lways "n the off"ce runn"ng "ssues down 1*. %1,$0 %&&& 1( %100 %0 %100
1$ 3os"ng more than w"nn"ng, e!en though d"scount"ng 1& %1,.00 %) 1.( %. %0 %.
1' Pan"cy pr"ce "ncreases appear to help 10 %1,'00 %&0* 1)( %)1 %0 %)1
1. 6ore losses and pr"ce decreases to sa!e them 11$ %1,$00 %.0 1( %1 %0 %1
1 6ore losses and pr"ce decreases to sa!e them 11 %1,*00 %& 1.( %.1 %0 %.1
1) Some ga"ns some losses + sl"ght growth 11$ %1,$00 %.0 1( %1 %0 %1
0 Some ga"ns some losses + no growth 11 %1,$00 %$$ 1.( %.. %0 %..
1 Some ga"ns some losses + sl"ght growth 10 %1,'00 % 1( %' %0 %'
2"g new customer 11 %,100 %&$. 1.( %10. %0 %10.
& 7ela
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
Your logoWhat’s the problem
Bad Salesperson:
Th"s t"me the person
@u"ts or gets f"red ut
"t doesnAt happen r"ght
awayB > total washout
m"ght complete four
years uchB
1,000s
Year Comment # of Cust Sales T T/Sales Comm Draw Pay
1 a"r start troule learn"ng product l"nes 1 %00 %* *( %1* %&1 %*$
Good growth + many th"ngs st"ll to learn 0 %$00 %11$ &( %&$ %10 %*$
& Good growth + pretty good conf"dence &0 %.00 %1'1 &( %* %- %*.
* a"r growth d"s"ncented y ow"ng %&.B$5 "n ac5 draw *0 %00 %1.' ( %$& %*- %*)
$ Eu"ts doesn?t th"n5 pay"ng ac5 draw "s fa"r
'
.
)
10
11
1
1&
1*
1$
1'
1.
1
1)
0
1
&
*
$
'
.
)
&0
&1
&
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
Your logoWhat’s the problem
Bad Salesperson:1,000s
Year Comment # of Cust Sales T T/Sales Comm Draw Pay
1 a"r start troule learn"ng product l"nes 1 %00 %* *( %1* %&1 %*$
Good growth + many th"ngs st"ll to learn 0 %$00 %11$ &( %&$ %10 %*$
& Good growth + pretty good conf"dence &0 %.00 %1'1 &( %* %- %*.
* a"r growth d"s"ncented y ow"ng %&.B$5 "n ac5 draw *0 %00 %1.' ( %$& %*- %*)
$ Eu"ts doesn?t th"n5 pay"ng ac5 draw "s fa"r
'
.
)
10
11
1
1&
1*
1$
1'
1.
1
1)
0
1
&
*
$
'
.
)
&0
&1
&
0
0
*0
'0
0
100
10
1*0
1'0
%0
%100
%00
%&00
%*00
%$00
%'00
%.00
1 & $ . ) 11 1& 1$ 1. 1) 1 & $ . ) &1
Years on the 8o
2ad Salesperson
T # of Cust
The prolem "s often the
same salesperson whonegot"ated for a draw
aga"nst future earned
comm"ss"ons to ga"n a
reasonale start"ng
"ncome feels d"s"ncentedand :underpa"d; wh"le
repay"ng these
accumulated draws
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Your logoWhat’s the problem
Comparison of Good and Average Salesperson:
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Your logoWhat’s the problem
Analysis:
• As the salesperson exhausts his or her capacity, their
production of T tails off and even declines.
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Your logoWhat’s the problem
Analysis:
• As the salesperson exhausts his or her capacity, their
production of T tails off and even declines.
• Why would a salesperson’s capacity be exhausted?
• They must do some work for which they are ill suited
• They switch between 13 different jobs due to changes in priority• Customers change a salesperson’s priorities
• Coworkers change a salesperson’s priorities
• Bosses change a salesperson’s priorities
• Suppliers change a salesperson’s priorities
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Your logoWhat’s the problem
Analysis:
• As the salesperson exhausts his or her capacity, their
production of T tails off and even declines.• Why would a salesperson’s capacity be exhausted?
• They must do some work for which they are ill suited
• They switch between 13 different jobs due to changes in priority• Customers change a salesperson’s priorities
• Coworkers change a salesperson’s priorities
• Bosses change a salesperson’s priorities
• Suppliers change a salesperson’s priorities
• Salespeople suffer enormously from Bad Multitasking
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Your logoWhat’s the problem
Holistic analysis:
I built a model from the above assumptions by rolling dice
Roll Outcome
1. Bad salesperson
2. Bad salesperson
3. Bad salesperson
4. Bad salesperson
5. Average salesperson
6. Good salesperson
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Your logoWhat’s the problem
Holistic analysis:
I began with a start-up deploying 3 salespeople
Complement Result Odds
1. Bad + Bad + Ave Company failed 7%
2. Bad + Good + Bad Company failed 7%
3. Bad + Bad + Bad Company failed 30%
4. Ave + Ave + Bad Company failed 2%
5. Good + Bad + Bad Company failed 7%
6. Bad + Bad + Bad Company failed 30%
7. Good + Ave + Bad Company survived! 2%
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Your logoWhat’s the problem
Holistic analysis:
As profits accumulated, I added salespeople
Complement Result Odds
7. Good + Ave + Bad Company survived! 2%
• In year 2, I added another salesperson
Good! 17%
• In year 4, I added another salesperson
Good! 17%
This was unbelievably lucky
no wonder so many startups fail
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Your logo
Holistic analysis:
Early Results:
What’s the problem
*OE = Budgeted in years one through three. 13% of sales in years four through
six, plus a random variation of 0% to % of sales
4hole Company
Year
Total
Sales TAput Sales Pay F GP (GP
1 %1,.00 %$0 %1** %$0* %* 0B#(
# %#,)00 %.'0 %##& %')$ %'$ #B#(
& %*,100 %)& %#0 %&1 %1$# &B.(
* %$,.00 %1,&$# %&# %1,##1 %1&1 #B&(
$ %',$0 %1,'.# %&)& %1,&1) %&$& $B#(
' %.,&$0 %1,'$* %*.0 %1,$0' %1* #B0(
1,000s
H
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Your logoWhat’s the problem
Holistic Analysis:
• I took the simulations out 50 years:• I added salespeople when I thought it financially prudent
• Recalculating the spreadsheet gives different results depending on
the random fluctuations of OE, 0% to 2% above that year’s base
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Your logoWhat’s the problem
Holistic Analysis:
• This calls into question the title of the last 25 slides• What the heck is the problem with this?
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
Your logo
Assumptions:
• Since the salesperson is paid like a profit center, they must:• Do their own planning, marketing, prospecting, appointment setting,
travel, presentations, proposals, quotations, sourcing, problem-
solving, customer service, relationship building and, when necessary,
even collections
!irection "or #olution
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
Your logo!irection "or #olution
Assumptions:
• Since the salesperson is paid like a profit center, they must:• Do their own planning, marketing, prospecting, appointment setting,
travel, presentations, proposals, quotations, sourcing, problem-
solving, customer service, relationship building and, when necessary,
even collections
13 separate jobs. Why imagine anybody could be suitable for all?
Creat"!e
>nalyt"cal
9nformal
F
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
Your logo!irection "or #olution
Assumptions:
• Since the salesperson is paid like a profit center, they must:• Do their own planning, marketing, prospecting, appointment setting,
travel, presentations, proposals, quotations, sourcing, problem-
solving, customer service, relationship building and, when necessary,
even collections
13 separate jobs. Why imagine anybody could be suitable for all?
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
Your logo!irection "or #olution
the salesperson is paid like a profit centerWHY?
• Because my dad and his dad did it that-a-way?• Because unlimited potential pay attracts the best?
• Because it wouldn’t be fair to pay them so much unless
they self-manage?• Because it gives them the incentive to grow Throughput?
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
Your logo!irection "or #olution
the salesperson is paid like a profit centerWHY?
• Because my dad and his dad did it that-a-way?• Because unlimited potential pay attracts the best?
• Because it wouldn’t be fair to pay them so much unless
they self-manage?• Because it gives them the incentive to grow Throughput?
IummJ
8/18/2019 17 - Henry Camp_TOCPA_USA_21-22 March 2016
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
Your logo!irection "or #olution
the salesperson is paid like a profit centerWHY?
• Because my dad and his dad did it that-a-way?• Because unlimited potential pay attracts the best?
• Because it wouldn’t be fair to pay them so much unless
they self-manage?• Because it gives them the incentive to grow Throughput?
IummJ
ecessary
ecause the
8o "s so
d"ff"cult
8/18/2019 17 - Henry Camp_TOCPA_USA_21-22 March 2016
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
Your logo!irection "or #olution
the salesperson is paid like a profit centerWHY?
• Because my dad and his dad did it that-a-way?• Because unlimited potential pay attracts the best?
• Because it wouldn’t be fair to pay them so much unless
they self-manage?• Because it gives them the incentive to grow Throughput?
IummJ
ecessary
ecause the
8o "s so
d"ff"cult
9s selfmanagement al"gned hol"st"callyJ
l
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
Your logo!irection "or #olution
the salesperson is paid like a profit centerWHY?
• Because my dad and his dad did it that-a-way?• Because unlimited potential pay attracts the best?
• Because it wouldn’t be fair to pay them so much unless
they self-manage?• Because it gives them the incentive to grow Throughput?
IummJ
ecessary
ecause the
8o "s so
d"ff"cult
Then, why to they
all stall outJ
9s selfmanagement al"gned hol"st"callyJ
Y l
8/18/2019 17 - Henry Camp_TOCPA_USA_21-22 March 2016
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
Your logo#olution
the salesperson is paid like a profit centerNot only should salespeople not be paid as profit centers,
companies should evolve away from salespeople!
WHY?
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Your logo
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
Your logo#olution
Does this mean fire the salespeople?
• No• Segregate jobs based on skill sets not functionality
• Find people whose personalities fit the jobs (not vice versa)
and apply people along their strengths
Your logo
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
Your logo#olution
Lets start with a conventional start-up company,
restructure it,
work forwards again in time and
see if it works better
Your logo
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
Your logo#olution
Conventional Starting Point Year 1
Sales %1,.00 Sales %#,)00 Sales %*,100
T %$0 T %.'0 T %)&
Sales F
/7 Cler5
Your logo
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
Your logo#olution
Division of Labor Company Year 3
9n year & th"s company earns more than
the con!ent"onal one d"d "n all & years
Sales %#$0 Sales %1,1' Sales %',0*0
T %'0 T %#0 T %1,*$0
Sales F
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
Your logo#olution
Comparison after 17 years
Your logoManaging $ithout using %
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
g
This is a serious challenge that needs its own presentation
1. Build Trust (listen and act on what you heard)2. Enjoying the Job
3. Autonomy (align authority with responsibility)
4. Mastery (allow people to become true experts)5. Purpose (help employees know how they contribute to the
global picture)
6. Pay fairly (plus a little bit more, when you can afford it)
Managing $ithout using %To bribe employees
Your logoManaging $ithout using %
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
g
Material to investigate:
Managing $ithout using %To bribe employees
Your logoManaging $ithout using %
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23rd International Conference of the TOC Practitioners Alliance - TOCPAwww.tocpractice.com
Material to investigate:
Managing $ithout using %To bribe employees