Why you should run your business process like a refinery

Regardless of your position on fossil fuels, the sheer scale, complexity, and ferocity of a refinery will strike you with awe. At a refinery, as with any other process manufacturing facility, the best days are the boring days–ideally without any “unplanned pressure releases” similar to those experienced in the rocket industry. The cost of mistakes, in terms of operating income without considering the employee or environmental risk, can easily reach millions of dollars per day.

So, as we examine our own careers in search of fresh ideas and inspiration, an important performance metric from the process manufacturing industry called OEE can help.

OEE stands for Overall Equipment Effectiveness and is measured on a scale from 0% to 100%. While I will avoid an extended discussion of how to establish the 100% level, understand that OEE is the product of three terms: availability, utilization, and yield. Let’s explore how any business process owner can benefit from getting these three terms as close to 100% as possible, typically in that order.

Availability: when I push the green button, does it go?

Availability measures what percentage of total time a process or asset is ready to run when called upon. Avoiding the nuances of this calculation, let’s look at why availability matters in a business setting. Perhaps you are responsible for an email marketing system, or a database, or even human assets like a sales team. How much downtime does this asset experience? How often do the emails fail to send? How often is the database offline? How often does a sales rep call out sick or no-show for meetings? Clearly to make any significant improvement in overall performance, the availability of an asset or process needs to reach a moderately high and sustained level. Furthermore, the people responsible for the asset or process won’t gain the trust of the rest of the organization or have the credibility to advise on more complex issues until they get their availability in order. So, for most leaders, improving availability is a critical first step.

Utilization: when it’s available, is it running?

Utilization measures the percent of available time that a process or asset is operating. Any time spent idle, either waiting for inputs from an upstream process or waiting for a downstream process to take away its outputs will penalize both utilization and OEE. If availability is about solving maintenance and reliability issues, then utilization is about planning, scheduling, and load balancing across assets and between departments. Your database job schedule might need a closer look, or your lead flow process might need tweaks to keep a steady pace of calls and meetings in front of your sales team. Step back from an individual asset or process to look for gains in utilization at your “bottleneck” in order to reap the largest overall results.

Yield: when it’s running, is there zero waste?

Disciples of the Lean movement will readily rattle off the seven flavors of muda, or waste. Generally, yield losses occur when running at less than 100% speed and/or producing less than 100% first level quality output. Whether comparing the results of your asset/process to an external benchmark, an internal best, or a design capability, you will likely find yield opportunities easily. Typically yield optimization is the most interesting type of problem to solve because it requires delving into the unknown. For high availability systems, it is also the most frequent problem to solve–if it ain’t running, you can’t work on yield! So whether you are looking for a higher email conversion rate, lower error rates on database jobs, or higher win rates on sales opportunities, yield optimization is likely a well-trodden path for your team, and the harder you look, the more you will find.

Where to start? Follow the money

An optimist will see a low OEE system as a playground full of valuable and interesting opportunities. When looking across the areas of availability, utilization, and yield, it’s likely that different people will have different opinions on where to start. A straightforward and non-confrontational approach is to value each opportunity with a common metric, like $. With a straightforward spreadsheet you will be able to value what a 1% improvement in availability, utilization, and yield–above the current baseline values and holding the other two constant–will be worth on a per day or per year basis. This should not prevent your team from making improvements in all areas, instead it should inform prioritization in a resource-restricted world.

So whether you are a database administrator, marketer, or sales manager, take a page from the refining world and think about how to maximize your OEE. And you won’t even have to put on fireproof coveralls to do it.

Grow your business faster with fewer “slow nos” in your sales pipeline

Sales conversations obviously boil down to a yes or a no answer from each prospect. But whether you get to that ultimate answer slowly or quickly makes a big difference to your revenue growth, margin, and sales team productivity.

yes no maybe 1000Sales people are a unique species (see Philip Delves Broughton’s The Art of the Sale), often blessed with inextinguishable optimism. In many situations, this can lead to slow moving or low probability opportunities hanging around in the pipeline for too long, consuming time and attention along the way. Sales and marketing teams should not be afraid of getting to “no” quickly — that’s why lead nurturing programs, such as the one designed by Marketo, or Hubspot, or OpenView, exist.


Here are two improvements to your sales and marketing systems that can prevent “slow nos” from getting into your opportunity pipeline in the first place:

Better lead qualification: How rigorously does your team score leads before they are treated as opportunities? How consistently are the definitions understood and applied across your teams? Generally, the more complex an organization–splitting sales and marketing organizations by region or product, for example–the greater the risk that “slow nos” are getting introduced into the pipeline. There are a number of different acronyms to define lead qualification criteria: BANT, CHAMP, FAINT, ANUM…besides awkwardness, all of these share elements of purchasing authority, pain or need, and urgency. Viewed through the eyes of the buyer, these components are obvious prerequisites to a purchase decision. The reason for applying rigor to lead qualification with these criteria is to filter out optimism with objectivity.

A better content marketing system: to allow prospects to direct themselves through the path to purchase. Typically buyers follow a progression through four phases: awareness, engagement, research, purchase. More and more commonly today, both B2C and B2B buyers take initiative to move themselves through the path to purchase phases, doing their own comparative research, checking their own references, and assessing value on their own. The role of the sales team shifts to enablement and advocacy (one style on the more aggressive end of the spectrum is The Challenger). Again, seen through the eyes of the modern buyer using Amazon, Yelp, or Glassdoor, this is obvious. Your organization can modernize its content marketing system by applying the best practices defined by OpenView or CEM. Success here will be measured by increased yield on outbound sales and higher inbound activity. Please note that getting a content marketing system right is really hard, and takes lots of hard work by a coordinated team of people. MarketingSherpa has tons of great case studies and other resources, including this B2B software example.

No matter what your business sells, and no matter who your customers are, you can grow revenue and margin faster by keeping the “slow nos” out of your pipeline with the best practices above. Have a success story to share? Struggling to put these theories into practice? Leave a comment and start the conversation!

original artwork by Juliette Hale.

If you can’t answer these three questions, you won’t increase revenue

In the words of Peter Drucker, patron saint of business leaders everywhere, “there is only one valid definition of business purpose: to create a customer.” Many professionals in private practice, such as designers, health care providers, architects, etc., rely on the quality of their work to sustain the growth of their business. At some point, repeat business and word-of-mouth referrals become insufficient to supply revenue required to grow (or sustain) a business. Larger companies often face the same challenge, but this post is directed more towards small businesses run by professional service providers.


Whether you have just set up your own professional service business, or are looking for more “tech savvy” ways to grow revenue, invest time in understanding the answers to the three questions below and you will see the payback very quickly.

  1. Who are my contacts, leads, and customers? Customer Relationship Management (CRM) has evolved several generations since the Rolodex. A web-based CRM database gives you secure, fast, permanent access to the contact details and history of interactions with everyone who’s paid you, and everyone who hasn’t – yet. Ideally, your CRM system will be integrated with marketing and content management tools (see below) to work more efficiently.
  2. Is my most engaging content reaching my most valuable customers? Brand reputation is maintained by the quality of the products and services their companies provide. But at any given moment, a very small percentage of the customers who are aware of a brand is actually purchasing from the company. The rest are either recent buyers (potential repeat customers at risk of buyer’s remorse) and future buyers looking to learn more about a company’s capabilities and form an emotional connection (because all commitments, financial and otherwise, are made with the head and the heart). To establish and maintain this connection, a firm first needs to generate great content, and then ensure it reaches key audiences through the channels they use most. This requires content management across multiple channels: web, email, blog, social media, and advertising. A structured approach can prevent spinning wheels and slipping down rabbit holes: here’s a very pragmatic checklist for creating a blog from Build.
    • Which tools? Squarespace and Jetstrap are powerful and intuitive website building tools, WordPress is a leading blog management site that can easily add more functionality, Verticalresponse makes managing email marketing with analytics very straightforward, and a presence on LinkedIn, Twitter and Facebook are table stakes for any business these days.
  3. Which lead channels are producing the most profitable sales? Don’t forget, you’re doing all this to make more money…so the last step is to check that all your contacts are reading all your content and actually buying more of your stuff. To do this, make sure the tools you choose provide the data–or even better, a button to click that gives you the answer–about which lead channels are producing the most profitable revenue streams. Should you increase your advertising budget, block out more time for in-person events, encourage more personal referrals, or nurture more repeat business?
    • Which tools? The CRM tools referenced in #1 above will all provide a sales funnel and lead analysis package. Of course this can be done with good old fashioned spreadsheets, too: feel free to contact me if you need help getting started.