Chapter 16 Mustard Repeats! Step Eight: Repeat the First Seven Steps If at first you don't succeed, try, try again. --Anonymous This chapter further develops ways in which to create economic relationships between organizations and their customers, employees, suppliers, partners, shareholders, and the communities in which they operate to produce a much more effective and affluent environment for all these stakeholders. In this chapter, we see how repetition of the process described at the beginning of Part Two builds a powerful new habit that is the foundation for a continually expanding level of exponential success. "Practice makes perfect." We learned to walk by taking more and more steps each time before we fell. We learned how to write by copying each letter many, many times. So we learn by doing. Achieving twenty times progress also requires repetition. Through the eight-step stallbusting process you will uncover new and better ideas with each repetition of the fundamental process. The first success will generate more success again and again. Outcomes will occur: Earnings will grow, cash flow will be higher, the company will be able to raise more money and move into more kinds of opportunities. Over time, the process gets easier, more productive, and faster. It will become a part of your corporate culture. You will develop lasting good habits. As new opportunities open up, you will be automatically pursuing them. You will have your 2,000 percent solution to improving your organization. If we were all to learn to use this process, then everyone would be far more effective in working with each other. The potential to multiply progress in your organization will leap forward in an exponential way. The Grey Poupon Odyssey: He Really Cuts the Mustard! When the executives began working on the problems of Grey Poupon mustard for Heublein, a leading consumer products and service company in the early 1970s, there wasn't much mustard to cut. Grey's was a premium brand doing only $100,000 a year in sales. Some corner newsstands do more business. When the company looked at where it should be spending its time, Heublein, which had sales of hundreds of millions of dollars a year, decided the company had to either grow this tiny business by orders of magnitude or bail out. The situation truly called for a 2,000 percent solution. It's interesting to see how they applied the process we have been talking about in the previous chapters. As you can well imagine, the issue of having tiny sales was altered as the executives worked it, like clay in a sculptor's hands. When Heublein reviewed the market, it asked consumers to compare a number of mustards for taste. Good news! Mustard-eaters liked Grey Poupon mustard best. They would buy it, if available. But with only $100,000 coming in, Heublein couldn't afford to spend much on advertising, promotion to supermarkets, or free samples so people could try it and taste how good it was. So Heublein adopted a plan to sell the product to intermediaries who would then make it available to consumers. In this way, many people could sample the product at little cost to Heublein. Heublein's research indicated that current and potential Grey Poupon customers mostly had college educations. They also traveled a lot. Heublein was already packaging small bottles of liquor, which were sold on commercial airlines. The airlines that flew those jets could possibly be persuaded to buy the mustard in individual packets and distribute them to passengers along with sandwiches and some main courses. But there was a problem. Mustard contains vinegar. It is acidic. The Grey Poupon vinegar ate through the packaging. Eventually Heublein found the proper multilayered packaging materials to hold their mustard, and the mustard packages took to the air. Soon thereafter sales in stores rose smartly as Grey Poupon-smitten eaters sought to continue enjoying this taste treat. Heublein was also forced to alter the formula. Grey Poupon was a lot spicier right out of the vat than it was after sitting on the shelf for weeks. In fact, it would make people's eyes water, and they would eat less. By the time it was put on the plane, the small quantity had mellowed significantly. In the jar, Grey Poupon retained its high level of spiciness for many days until it aged properly. Heublein needed a recipe and a manufacturing process that offered the same spiciness over time. The problem solvers at the factory changed the process for more consistent spice levels and reformulated the mustard to make it consistently more mellow to appeal to a broader customer base. Meantime, Heublein's financial people had realized that even if sales grew tenfold, the company still wouldn't make much money selling Grey Poupon at retail. Grey Poupon bottles were quite small--to emphasize value by keeping the price per bottle low, a perfumer's trick. But the cost of the packaging accounted for most of the wholesale price. People wouldn't pay much more money for the small quantity of mustard the small bottle offered. The cost per ounce was enormous. So Heublein put Grey Poupon in a much bigger container (the current small-sized jar), so the package itself represented a modest fraction of the former cost per ounce to the retail customer. In doing so, the price that consumers paid per ounce for the mustard could also be dropped significantly. (Eventually it would be sold in jars fifteen times larger than the original standard.) Also, the perfume-bottle version of Grey Poupon had been sold in that special section in the supermarket where imported and very expensive condiments are displayed. Few shoppers went there, and fewer purchased in those days. So after adopting the new size jar, Heublein's marketers persuaded the supermarkets to put Grey Poupon in the section where all the best-selling mustards were sold. This is where the mustard buyers were usually making their decisions about which brand to purchase. Often, Grey Poupon turned out to be the one high-priced alternative to the cheaper, plain yellow mustards on the shelf. After this fourth change in the business, supermarket sales were growing at a rapid rate. On the next pass, Heublein's marketers focused on overcoming the hurdle that many people simply didn't know about Grey Poupon. Heublein had to find a way to tell them effectively and inexpensively. Some corporate planning people attended a Heublein presentation for Smirnoff Vodka, one of Heublein's most successful and profitable brands, and talked to the people there. The vodka marketers said people like a product with a heritage. Smirnoff used medals and artifacts from the nineteenth century that were associated with Smirnoff. One result: The public paid more for Smirnoff than many other brands and made it the number one vodka in the United States. The corporate planning people shared this concept with the mustard marketers who then wondered if Heublein could sell more mustard if they created a heritage-based image for Grey Poupon. They turned to Madison Avenue. Some bright copywriters studied the heritage game plan and eventually created the famous ad with two snooty guys in Rolls Royces rolling down their windows so one could ask the other for some Grey Poupon (Exhibit 16-1). Sales blossomed, and once sales were burgeoning, Heublein budgeted money to invest in national advertising campaigns. Sales grew even more. Grey Poupon was a pioneer in this evolving process to come closer and closer to the theoretical best practice of profiting from a small food brand. The executives continually recycled through the first seven steps, each time finding at least one more new breakthrough idea to implement. The executives went through the repeat process like someone on a rowing machine, building muscle along the way. In all, the various initial steps to implement what emerged from the eight-step process took about twenty months from 1973 to 1975. Grey Poupon has since become the best-selling mustard in the United States as measured by dollar volume, and by far the most profitable. Today, the brand continues its spicy success under the excellent leadership of Nabisco Holdings, which years earlier acquired Heublein's food businesses. Repeating the process is, for example, something that you can adapt to your own life--say, cooking. How might repetition of a process that leads you in new directions affect your cooking? Let's say you do want to be a better cook. As a first step, you prepare a rice recipe from a cookbook, no changes. The rice seems a bit bland. As a second step of improvement in your cooking, you add onion, some Grey Poupon, or some curry powder ý la Jacques Pepin, the sardonic master chef who appears on public television with his daughter. As follow-up steps, you experiment even more after getting ideas from watching the Food Channel, taking a course at the Cordon Bleu, or simply cooking, tasting, and experimenting. To implement what you have learned, you buy new pots and a food processor and learn the microwave way to prepare quick meals. Eventually you are ready for the big leagues. You go to dirty rice (pork-fried) and are making turduckqualen, ý la Emeril Lagasse, the famed New Orleans chef. You stuff your boned quail with the pork-fried dirty rice. Now you're cooking with gas, Cajun style. The quail is pushed into a boned duck stuffed with onion and seedless raisins. The duck, in turn, is thrust into a chicken stuffed, perhaps, with bread and piÒole. The chicken is stuffed into a turkey that already contains your traditional Christmas dressing. Your turduckqualen is now ready for the oven. When you start this process, you think you have only one bird to bone, but in fact, you are dealing with turduckqualen, multiple issues, lots of meat to chew. Even using the same recipe, you find you can improve the process. You learn to debone each bird better, doing it over and over again, and putting the entire fowl thing together faster. The more times you perform the process overall, the better you get at it and the better chef you become. Every Day in Every Way, I'm Getting Better and Better As you pursue the eight-step process in your own business or organization, you'll find that the people who work on the problem-solving process learn and their ideas change repeatedly as they get to know more and more. You stretch people each time you go through the process. You also have a different mix of people because workers leave, and you want fresh people on the implementation teams. If one employee is good at product differentiation, involve him or her in one of the product cycles. You go through the process again to find, say, that you are lacking some manufacturing knowledge you need to improve the performance of your various products. You need to go out and hire someone who is good at your type of manufacturing, maybe a consultant or engineer, to be part of your team. Each time you repeat the process, you are not necessarily answering the same question. Let's say you have just discovered the theoretical-best-practice limits and are trying to see how close you can get to them. One reason for repeating the process is to get answers to different questions. In many fast-changing areas today, it is necessary to repeat the process again and again. In fields such as semiconductors or software development in which there are major advances in knowledge literally every two weeks, if it takes weeks to do the exercise, you need to repeat the process continually just to stay up with what is the potential to be best in the field. That potential is constantly in flux. Obviously, you don't usually repeat that process monthly. By contrast, microprocessor chip speeds have been doubling in less than two years' time. If you are a microprocessor manufacturer, you can't wait for a doubling of speed before you refine that process. If chips are working at a 400 megahertz rate, start trying to come much closer to theoretical best practice by aiming ahead of the regular development time frame by a wide margin. Find a way to jump from 400 megahertz to 1,600 megahertz during the normal eighteen-month improvement cycle, in effect, doubling the effectiveness and speed of the normal cycle. You can be working on this improvement even as the 400-megahertz chip is still being developed. In fact, the theoretical-best-practice opportunity may be to increase by four- or eightfold the rate of improvements in microprocessor chips in each eighteen-month cycle. Thus we now have two reasons to repeat the process: (1) You get new ideas each time through, as with the Grey Poupon story, and (2) it helps you to identify new and faster ways to grow, as with microprocessor chips in which you should aim to dramatically shrink development time. There's a third reason: Like any process that requires thinking, the more you do it, the more skill you develop. You'll find yourself getting better at identifying the right questions to ask, while improving at how well you answer the questions. You'll get better at identifying theoretical best practice, a hard concept for some people to learn. You'll be better at implementing the solution that gets you closer to theoretical best practice. The Balanchine Practice The theoretical best practice can be, and has been, applied in many walks of life. For example, let's consider the late George Balanchine. This genius master of dance might have invented theoretical best practice by continually pushing for better and better results. He used every element at his disposal in his implacable search for the best. He picked the finest young ballerinas and pushed them to new limits of achievement with their bodies through the choreography he created to take advantage of their skills. In so doing, he moved dance into a new era. In choreographing The Nutcracker (a perennial holiday favorite around the world), he had to train and recruit lots of child dancers and get them to repeat, repeat, repeat until the lessons became as familiar as tying their shoes. The company became a unit, with the dancers synchronized with each other despite the vast differences in maturity and skill. The dancers learned and practiced the various techniques, the many leaps and pirouettes separately and together, until a Balanchine culture emerged. The Balanchine culture was institutionalized, not only the dance movements, but the emotion and the expectation for the future quality of the Balanchine ballet. Younger dancers were brought along to learn the basics and then echo the steps of the mature dancers to give the company staying power. Balanchine is gone now, but the culture he established, now in the hands of successor dance masters, continues to advance the state of dance art, pushing ever forward toward theoretical best practice as Balanchine did in his time. In this way, the process continues to repeat to the delight of all who love the exciting world of dance that we have inherited as a result of his initiatives. You, too, should seek to use repetition to create and reinforce this wonderful improvement process as part of your organization's current and future culture. More Stately Mansions: Build a Culture of Change For greatest effectiveness, this eight-step process should become part of your organizational culture, related to an organizational value of seeking the maximum possible rate of improvement. By using this process, you can create a common language, thought process, culture, and capability that will be strengthened by the fact that you focus on approaching theoretical-best-practice limits. People will say that your organization is serious about improvements because everyone operates in the same way. From the CEO down, this process can be used to hurdle over stalls to make faster progress. As more people use this process, it becomes institutionalized. The CEO must create the expectation by setting the example and telling everyone that the 2,000 percent solution process is the new standard. These words become thoughts throughout the organization. The thoughts become ideas. The ideas become actions. The actions become new habits. The new habits are reinforced and improved by learning, experience, and success. The habits remake the culture. Repetition strengthens, deepens, and widens the impacts of each of these reinforcing mechanisms. 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