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in this video we're going to take a look at another application of these same principles in a non-traditional environment we're going to look at a sales process so say at my company i want to generate 14 new customers every day and i'm going to do maybe this is an abbreviated version of this process but again i would observe it if i were at the company first thing i got to do is generate some leads then i do some demos i make some negotiations there's then a payment process that occurs and then there's a setup or a like a deployment team now we're gonna do the same math and take our available shift time this time these processes take a little longer so we're not gonna work in seconds we'll stay with minutes and i say i have 480 minutes of available work time per shift i take that 480 divided by 14. and it's going to say you have attack time of 34 minutes every 34 minutes i need to be a processing a new customer to reach my production goal now is this right not exactly now this original assumption of 480 minutes is is wrong you need to account for cultural activities right i'm referring to things like ping pong or foosball or fun get-togethers and celebrations i'm also referring to a larger portion of what takes away available productive work time which is meetings so if i suck those out that's going to change my assumption quite drastically maybe i only have five hours of productive work time now because three hours of that is meetings or these other activities likely it's meetings that's going to leave me with 300 minutes per shift i now take that 300 divided by 14 and that gives me attack time of 21 minutes every 21 minutes my process this entire process needs to be producing a customer great so if 21 minutes is my goal how many people do i need to support that well to figure that out we need some additional data so here's my process i got my target of 14 customers attack time for 21 minutes and here's what we got to do we got to break this up this isn't a single person that's doing all these jobs right so you might have a lead generation team that's doing one portion you call that lg the second portion might be your sales team this part here is likely finance and you're set up in deployment it's a deployment team they never call them that they usually call them something more fancy like customer specialists and now we need data for each of the steps in this process so let's work backwards it's going to be easier to do it that way you typically start at the end of your process and work back we need 14 all right that's our goal to set up and deploy 14 customers that's going to be the same goal as how many were converting right these might not be the same day but it might be the day after i'm converting the ones that that i payment processed the day before either way those are going to be the same because you can't deploy more than what i have paid negotiation to get 14 customers maybe i have to negotiate with 28 potential clients to convert in 50 of those into 14. to get 28 negotiations in process maybe i need to set up 115 demos that will result in 128 negotiations now how many leads do i need to generate to get 115 demos set up it's probably even higher now i don't know the real numbers these are made up but again the company should definitely have these numbers so here's an example we have all of our numbers here now let's take it a step further now if you recall our entire process here had an attack time of 21 minutes however each of these steps because there's different numbers here each of these are going to have their own tack time and we we need to know that in order to calculate how many people we have and make sure that we're going fast enough so we'll take our 300 minutes divide it by 675 that's how many we need and it's going to equal a little less than half a minute i'm just going to put half minute for our purposes that becomes my tact for my lead folks now let's back into some other math here let's say if i'm if i'm watching that process i learned that oh it takes four minutes for a person to generate a lead that means in a single shift of 300 minutes i can generate 75 leads i can then take that 75 divide it into how many i need to get in a day and that will say okay i need nine people to reach my goal of 675. let's just do a quick gut check if i take my four minutes divided by my nine people i get the exact same number as my tack time so we know that nine people is the right amount now let's go ahead and look at demos and negotiation we'll do the same quick math here if i can do five in a day which probably isn't unrealistic demos take 30 minutes to an hour depending on the software or the product so if i can take five divide it into my 115 right that's this number here that's going to say i need 23 sales people to reach that goal i'm not going to worry too much about negotiations one i'm going to assume that it doesn't take a lot of the sales person's time and i'm also going to assume that they have help from or probably a sales manager so i'm going to assume that's negligible for the time being now let's keep going with finance let's say i i've collected this data over time and i found that one person can process three deals a day i divide three into my 14. a little more than four which gives me five and for customer specialists we'll say the same thing about three a day divide that four plus gives me five people i need there to summarize the number of people now we have nine lead generators 23 sales folk five finance and five customer specialists now this isn't everyone that we need what about managers and the big question on managers is are they working managers if they are working managers we can include them as part of our numbers up here if they are not working managers we should not include them in those 23 and they will increase our head count by however many you need per person on these teams so maybe it's a four to one ratio so i need six managers here it's a five to one ratio on these teams and a five to one ratio on the lead generator team as well all right so suddenly my head count just went up to for my support team these people aren't even part of the process generating new sales now they really just support you'll also have developers again these aren't part of your new customer generation process you have admin assistants you have hr none of which are part of that process but are required for your company to run these ones here are the ones that will help you produce new customers every 21 minutes now if if your processes aren't that repeatable or reliable i would definitely focus on trying to make them such a lot of people because they they don't know how to do that or it really is that unpredictable we'll just add a buffer of folks so yeah i know i need 23 sales folk in the perfect world well in the perfect world where i don't have to work for three hours do productive work for three hours they'll just increase that maybe they'll carry three extra and roll that up as some sort of buffer to make sure that they can hit that 21 minutes they don't realize they're doing this but this is the math behind why they're making these decisions all they're seeing is oh shoot we're not hitting this and it looks like there's a bottleneck on the sales area if they were to time everything and do this math they would realize the reason why they're doing those things as we wrap up i want to visit our process one last time to see how we can make better use of these numbers that we have and i would focus primarily on these three up here playing with these numbers will greatly impact the number of heads i have to carry at my company if i can find a way to convert my leads more effectively into demos to where i only have to generate 500 to turn them into 115 that means the number i have to do per day would drop if i kept my nine people or i could not keep nine people i could drop down to seven or something like that if i wanted to grow sales i would probably keep those nine on generate more than my 500 and generate more demos than what's required to get my 14. doing the same thing with demos to negotiations if i can fine-tune my demo to where customers are really drawn into it maybe i don't need 115 anymore maybe i only need 75 and from negotiations maybe there's a sign-on deal to where it allows you to convert more customers maybe you only need 19 to turn it into those 14. and again i can use that difference now to either drop the number of people i have let natural attrition take its course and not backfill or i can keep these 23 people on and grow my sales focus on that growth now how you achieve this that'll be up to process improvement fine-tuning demos fine-tuning the negotiations what you're trying to do though is play with these numbers to still try to achieve this 14 as efficiently as possible so that's it that is how you can capture how many people you need how fast you have to go in kind of an obscure environment