S03E11: Performance Improvement for Language Service Companies (LSPs)

Richard Brooks

Thank you. Pleasure is all mine.

 

Sultan Ghaznawi

Good to have you again on the podcast. For people listening to you for the first time and who haven’t heard your interview from the last time, can you give them a little bit background about yourself?

 

Richard Brooks

About me? Gosh, OK, me in a nutshell. My name is Richard Brooks. I’m the chief executive of a company in the UK called K International. We’re a LSP. I’m a graduate of Cranfield University in the UK where did my did my masters there in management, since then, which was probably 15, maybe 15, 16, 17 years ago I’ve studied management as best I can and being an evangelist for things like management and strategy and corporate finance and sales management and marketing things like that, all the good stuff. I’m also, I’m on various boards. I’m on the board for Institute for Sales Professionals in the UK. I’m on a board at Cranfield University not the board, but and an Advisory Board there. I also run my own consultancy now, so I run a consultancy. If you go to richard-brooks.com you can book time with me or read some of my blog posts or whatever you like where we have to consult various companies it in and out of our industry or the various sorts of clients, talk about corporate strategy and finance and sales and marketing probably the with things I’m known for and I’m an active investor in a few other ventures outside the industry as well, which keeps me busy.

 

Sultan Ghaznawi

Very exciting, thanks for that introduction. Richard, what keeps you busy these days? I know you’re a very busy man, so and you’ve got a lot of things on the go. Tell us a little bit about that.

 

Richard Brooks

What keeps me busy? My kids, I’ve got two boys, Ethan and Jack six and eleven, obviously they’re crazy, they’re hilarious. Apart from that work wise, we’re running the LSP, that’s I’m very fortunate, that’s in a place now where I t instead runs itself, but it almost runs itself. You know we’ve got the process sorted, a very good management team, very lucky and that frees me up to do other things, so the other things are consultancy, investing, getting involved with business school, but that sort of thing which some weeks can be incredibly busy. And just as I was saying you’ve got to be careful with your time. We only have a certain amount, you know, we only get certain amount of hours in the day, so you’ve got to be careful not to spread it out with your family and your work as well…

 

Sultan Ghaznawi

And I’m guessing you haven’t found a way to stretch the twenty four hours to twenty eight or something.

 

Richard Brooks

I’m still, I’m still working… the only, the only good thing I as I’ve got older, I guess I’m nearly fifty now, so in the last half of my career suppose, as I’ve got older I wake up really early now in the morning talking to friends of the same age they kind of say, I don’t know why, but six o’clock each morning I’m awake. Whereas when I was twenty five it was it was a challenge to get out of bed somewhere and it’s, you know, I just, I could sleep for England, but now I seem to have more time at the start of the day, which has got I think my brains more switched on at the start of the day as well. So if I have a paper to write or to read or, you know, some something cerebral to do should we say I’ll try and do it before everybody else is up and I can sit here at five or six o’clock and get working quite, you know, quite quickly.

 

Sultan Ghaznawi

Of course that helps a lot, early in the day, if you, you know, get things going you can concentrate better. But let’s talk about the industry today before we jump into our topic. How do you find the state of things in the light of the economics and socio-political situations happening around us? How do, how would you define the translation and localization industry, Richard?

 

Richard Brooks

Now we’ve, we’ve been saying for years it’s going to consolidate one day. I can remember saying this sort of twenty years ago, it’s ripe for consolidation, but maybe so we’d say in five years time it’s going to be different and now it’s happening, so we’re seeing a lot of a lot of VC like lot of venture capital money, a lot of money flowing into industry has given a lot of people a lot of money to spend and finally they can do the projects that they want to. I think margins are still all very attractive in the industry we saw that obviously attracts external investors. God forbid should we have a slowdown in the world economy, which we kind of starting to see obviously. I don’t know about Canada, but you know the price of everything has gone up in the UK. A pint of beer is now six pounds fifty which is an absolute daylight robbery, but there yeah, so the price of everything is lifted. One hundred and fifty dollars to fill your car up, you know, electricity bills are through the roof et cetera, et cetera. But the margins seem good in our industry.

 

We’re seeing, you know, obviously exceptions to the rule book people seem busy with, there’s work still happening. There’s things still going on with money flowing in. So, yeah, I never want to use the word recession proof book. As an industry we’ve grown since, well, since the year dot really aren’t we here, we’ve been continuously growing and we sort of thought we plateaued at the great financial crisis, but that just lasted a couple of months. Then we, then we, then we started to grow again. It’s so yeah, you look at the revenues and profits, so certainly the larger companies as they’ve got larger and larger and larger and can demand more, more economies of scale and scope and things like that, then yeah it’s a healthy place to be I think and it’s obviously been helped. You know COVID is sped up the work from home we get a get A1 Gigabit internet connection into your garage and then you can work from home. It’s what we’ve done, right. That sped up, which means your teams can be anywhere in the world, so you can put your teams… if it’s better to put a project management team in one particular region or time zone and that that’s relatively straightforward and that’s sped up, so what the pandemic has done is sped up that process or rather help people to do that and obviously things like API and VRI and those sort of solutions which are delivered via the Internet, that’s got rid of a lot of the older their ways of doing things. So it’s I guess it’s improved, so I think margins have improved with the work, the aggregate work seems to have gone up.

 

I mean, I’m yeah, I’m painting a broad brush now. And people seem to be doing well. What’s that’s nice now is people are starting to go back to conferences. So we just had, we just had ELIA’s conference which was probably 3 months ago, something like that. That was starts this year since start of summer twenty two. And it was nice. It’s lovely to see people again in real life, you know. I can’t wait to see you for a bit obviously we’ve got Vegas coming up for the ALC that’s coming up soon so you know that’s that I booked it this morning actually that’s all everybody getting excited about that and it’s that you know we love we love doing a bit of a bit of work from home but it’s great to actually get face to face and get that face-time with people again. So we’ll see that they will only…

 

Sultan Ghaznawi

Well, thanks for sharing that perspective.

 

Richard Brooks

It’s all right. And the only limiting factor is cost with that is next time see that the cost of flights is ridiculous now and obviously hotels will go up and so on and hopefully the money is in the industry to power or you know…

 

Sultan Ghaznawi

Absolutely! Richard, that’s a relief probably for a lot of folks in our industry, if especially if it’s coming from you because people are a little bit freaking out right now. They’re panicking as to what’s happening because these are unprecedented, uncharted waters. You know, we haven’t dealt with these types of environmental factors before, so that kind of I want to segue into our topic of our conversation today, which is to improve performance, obviously to do things better than before so we can continue to be successful and thrive. And for that I wanted to bring you here so we can discuss what performance improvement for the LSP community or language services provider community looks like. As an expert in management, can you please share what does performance improvement actually mean for a translation company or a language company?

 

Richard Brooks

Yeah, yeah. No, I have a bit of [unintelligible], a slight [unintelligible] about it, about this, I think because if you’re going to improve a business, there’s different ways to do it. You can obviously you can cut it so you can get, you can get your red pan out and you can go through the P&L and you can cut out as much, as many costs as you want. But there’s only a hundred cents in the dollar. There’s only a hundred pennies in a pound and that’s it. There’s no more. So it’s almost a finite amount of things that we can cook. So yes, we need to be lean, yes, we need to be efficient, but we can’t rely on that. We also need to add values to our customers, especially when we’re in a global marketplace and it seems to be growing and there’s more and more people in the world and more people want to buy stuff from different markets and it carries on. So I think we need to, yes, we need to be lean, but I think at the same time if this is the paradoxical, but I think at the same time we need to concentrate and add value to our customers and make sure that we are actually giving customers what they want and not just what we what we think they want i.e. cheap service because always of somebody will do it cheaper.

 

Sultan Ghaznawi

In the context of a language services provider, let’s say LSP means translation services. Because there is also interpreting service, what activities in encompass performance and what activities can be left out of performance?

 

Richard Brooks

Well, I think, so there’s, there’s different measures here. I mean I I think as senior managers in in any business, any business at all especially in LSP we’ve got three jobs so we have to run today’s business which is looking at the P&L, making sure enough money in the bank, you know the kind of the boring sort of thing. Predominantly I think there will be financial sort of measures. And then we have to improve today’s business. Now that’s about staff morale and making sure everyone is on the right page and motivation and are we as lean and possibly you know as good as we possibly can be in terms of process. And then there’s about preparing for tomorrow’s business like the more senior you get in an organization.

 

I would suggest that the third of these drivers becomes more important, so as you get to C-Suite or managing director tight level, you’re going to be looking more at tomorrow more the two year plan, ten year plan in the family business you know, but you’re gonna be looking onto the third horizon with as management gurus call it. So you will be looking into the distance, into the future and try and bring that back to the day. You can’t do that, if you’re focused on the P&L or if you’re focused on cutting costs or if you focused on today here and now, you know these sort of targets now. So there’s lots of businesses in our vertical are family businesses and multi generational, we’re on the third generation now that we like those companies. Good luck to him. It’s it’s wonderful. And as you have this long term view of business, yeah, that’s something I talked about like a twenty year view of the business.

 

 

Well, if you’re doing that then your metrics in your guide needs to be about, well, what’s coming that was coming in twenty years, how we look right into the future and prepare a business for that. It’s not an easy thing to do, but the opposite of that almost is worrying too much about today. So I’d say if we’re looking at today’s, invariably everybody got paid. So you know, the majority of metrics will be financial if you improve in today’s business. That’s about how lean we aren’t improving the business that we’re in. And in a service business, that’s going to be driven by the people. So we have to make sure that the people are engaged and motivated and, you know, switched on. Now I’ve got a name drop now, right, there’s a there’s a quote about metrics about what gets measured can get improved. Kind of, you know, kind of changed it a little bit is it’s basically that that was said by Tom Peters in the eighties. I had a conversation with Tom Peters.

 

 

He’s a quality TQM management tiger, I had a conversation with him last week about employee engagement. So I’m totally name dropping, but I’m like, you know what? Why not? And he was telling me that only seventeen percent of employees are actually engaged at work. So the challenge is obviously Tom, Tom’s an old guy like me and likes to go into the office, right? But the challenge is how do we get this hybrid global workforce engaged in our organization and not just playing, playing lip service to the to the company. So we need them engaged and switched on and that’s what improves today’s business. That’s what makes it better. It’s more form, which means we’re all moving in the same direction. If the culture is right, that by nature is going to improve the business. So to measure that we can look at the, you know the, the softer side of things like you know, if we’re looking at customers, we look at a thing called net promoter score.

 

So how likely is a customer to recommend your service to but when they’re you know in in their peer group or their even their competitors but are they likely to compare you to, to recommend you which gives you an idea of the level of advocacy so that then we can sort of break that back and say what are we, are we engaged with the customer? Is the customer like us? Are we doing the right thing for them? You know that sort of thing. And that’s it. And then obviously because I’ve sat on the boards of various organisations in our industry, I’d say preparing for tomorrow is as much about getting involved in the industry and going to conferences and talking to people and trying to benchmark your own business against your friendly competitors and sharing knowledge and then all, all growing, all growing together. It’s ELIA, we say get together to grow together. We should be on things that… are new line for that which is that, I mean obviously, so as chief exec that there are your three jobs.

 

Sultan Ghaznawi

You just mentioned that you know if you can’t measure something, you cannot improve it and you know you’ve probably heard this. You’ve even spoken with the person who actually coined this term. Let’s talk about how to measure performance or the most important aspects of performance in a language company or translation company. Where should an LSP start?

 

Richard Brooks

Right. Well, that that’s, yeah, so again, it’s different. I think there’s different layers to this. So initially, if we’re looking at today’s business, we have to make a profit, right? It’s horrible. Sounds serious and uncomfortable as is, we’re in business to make a profit. That’s the reason the company exists. Without entrepreneurs profit nothing would happen, Adam Smith said in sixteen hundred and something we need land, labor, machines and a French economist, came along twenty years later, and so we also need entrepreneurs’ profit. Without those four things or business just won’t, won’t exist. So entrepreneurs’ profit is as important as the land, labor and machines. You can take from that which I totally agree with, we live in a capitalist world and yeah, it’s great.

 

So what do we measure? We need to measure the financials, so your accountant will prepare these for you. So obviously you know revenue. I get, I think our industry is focused a bit too much on revenue because it’s not, it’s not what you make, it’s what you keep. We’ve got to be careful about reading, reading the profit loss accounting wrong. So yes, revenue is important and you know we want to get to ten million, a hundred million, whatever these targets are we set ourselves, but basically just so we can show off in a conference. I think the most important line in the PR now is the third line. So revenue, cost of sales, what will it cost you to deliver that service then the third line gross profit. So I always talk to my senior managers about the third line. That’s our top line, always has been, in all of my businesses, because I’m not that bothered about what it costs to do something.

 

You know, if we sold something, how much money are we going to keep, so if we’ve done a million pound deal with somebody, right? Well, first thing I say what’s the, what’s the contribution, right, you know, so we’ll look at that straight away, straight off the bat. So not, I’m not bothered about revenue, but I’m more interested in how much money we can put back into the business to power it to drive it forward. And then we look at all the financial measures you would look at that, I mean how, how efficient the company is running the, you know, the return on equity and return on capital and you know what assets we’d have really as an industry but return on assets as well, we’re not, we know a coal mine or a steel plant. You know, we haven’t got like huge assets that produce, and money, we’re a service industry and we run off people.

 

So we’re looking at returns like return on capital employed and the old EBITDA, if you’re about to sell your firm, you know you, sort of get you, you’ve got a multiple of that again, I think wrongly, but and that’s it, quickly litmus, really quick… yeah, quick finger in the air way to to value a firm… I’ll give you three and half times EBITDA, seems to be a popular conversation for me and but yeah but then again you can massage that number and measure it, depends what you want to do, which is linked to your strategy obviously if your strategy is just to make some money, take a dividend, run it for twenty years and then whatever, you know, that’s a different strategy. If you’re about to float on the NASDAQ, or you want to sell it to a big VC or attract some venture capital into business, so these are slightly different things. So I I’d say even on today’s business, have a think about the strategy, think about what you’re trying to do and then that can then dictate the measures and what type of things you should be measuring…

 

Sultan Ghaznawi

From what I’m hearing here, what you’re saying is that your financial objectives should guide your performance objectives as to, for example, if you want to sell this much, then which is the dollar value, then you have to produce this much of work. Is that what you’re trying to say here?

 

Richard Brooks

I would, and I always tell this to kids start their career, I say look, I tease this a bit on the MBAs as well, so look the profit is like a sausage. It’s really tasty until you find out what goes into making it. And it’s that because we have to make a profit, a business has to make a profit. So if you want to grow or even exist, you have to, the profit must drop out at the end of it, and you can’t not make a profit. And then that, yeah, the amount of capital you have will dictate your strategy whether you want to be a global player or just stay in your county, you know, and because if you’re going to grow that takes capital and that ties up capital from somewhere else so and if you’re just starting out, it’s quite hard, you know, you can either sell your house and chuck it all in the pot or you know you, it’s a lot easier to keep the money that customers give you. I think you have to give it back if you take it from the bank or venture capitalist, so ultimately have to give it back so uh yeah, look at that that’ll dictate strategy. What Peter did say though, he said anything that can get measures can get improved.

 

But again, funny I was talking to him like I said, I disagree with that because that insinuates to me that everything can be improved because we can measure everything, so I don’t think everything can be improved through the weeds, right? But so it’s a we’ve got to be careful thinking, well, if we just measure it, it will automatically be improved. We have to make sure that the management on the culture and how we run our businesses and so we want to I don’t know increase gross profits to fifty two percent next year, right? Well, that’s if that’s the guiding light, if that’s the thing that we’re doing, then that’s everything has to be sort of focused on that. We’ll say is that wherever also… wherever you focus your senior team, that’s where the company will perform. So if you, if you focus your team on I don’t know, improving profits or penetrating new markets or developing a new service, see, resources are finite so wherever we focus those people, that’s where, that’s where the business will perform. So that’s why it’s important to get that right from a from a strategic point of view.

 

Sultan Ghaznawi

Most of us in the translation industry, we’ve created our companies and the majority of us, we have to admit, are not professional managers or had formal education in management or administration. Is there a template or some sort of you know an agreed upon convention for mapping out activities in a language company and creating KPIs or key performance indicators from those?

 

Richard Brooks

That’s a good question, I think I’m gonna back that back to you and say most of the most intelligent people I’ve ever met work in this industry. They’re incredible and they, it’s just that some people wouldn’t consider that they’re a good salesperson and they’re absolutely amazing, and I think some people not considering the good managers, whereas, you know, I know people that run multi-million businesses and they just do it naturally. So somebody like me has to read about it, and we still do it just to try and emulate this natural ability, you know, it’s so all of my heroes are just like people that just they just wake up in the morning and do it and so a template, Gosh, I wish I could give you one. Then I wish I could just say go to richard-brook.com and download what but I mean, apart from the obvious, you know what, what do we need to measure, the trouble is with metrics we can measure.

 

So I think one we can make this assumption that whatever we measure will get improved. And then we start to measure absolutely everything. And the trouble there is, it just becomes a massive spreadsheet that we’re just creating metrics for the sake of metrics. Somebody said to me a couple weeks ago about improving the business, they said they have one metric, the one they sort of called it the Northern Star, so they say we just when we are talking in the senior management team or when we’re together or then, you know, just me, I’m doing something this is literally if I have something come across my desk, I think will this improve this metric that one overriding metric would be although improved gross profit of fifty percent next year, so something all includes some big sort of thing… it seem to be called BHAGs as well, so it’s presented at the the ALC years ago in DC, right? Randy Morgan, one my heroes presented, BHAG or big hairy ugly goals, he called it and you can read about this and Google it, be a thousand articles will pop up, but that’s about having instead of having vision statements, mission statements and lots of KPIs, which, yeah, you kind of need, but you have one thing that you want to do, and you can define that and everybody in the business can say it to each other.

 

We all know what the thing that it is that we’re trying to do is, then that thing is much more likely to be achieved than if we have a hundred metrics on profitability and you know, we’ll try and move this and move that, change this…that can be that can be quite dangerous. So do I have a template? No. Does anybody else have a template I think they’d be pulling your leg if they said they would, they’d be trying to sell you some consultancy. So, I think you need to work out what you’re trying to do, I think you need to make it as straightforward as possible, you need to be able to explain it to your grandma, right? You need to explain it, to get someone new in the business and Mr. Smith, this is what we’re doing here. And he or she can say yes I understand that. I I get what you’re trying to do. It’s fairly straightforward. Show it to your accountant. Your accountant prepared with financial metrics, yes, it’s really important you need management accounts every month. That’s vital. You must have that. If not, you can get into all sorts of trouble. You need to know how to read them. Go on a financial course, it will cost you three hundred dollars. Go to local business school. There are hundreds of these things you can probably do it free on YouTube now anyway. But in order to drive the business forward, I think the clarity and just having one really big hairy audacious goal is, is wonderful.

 

Sultan Ghaznawi

So you mentioned that KPIs are important and so are other ways of, you know, performing and keeping track of performance. How do we establish these performance goals and how do we get the buy-in from stakeholders in the organization because people have to agree to what you want them to do?

 

Richard Brooks

Yeah, they do. They do. So common, common problem for entrepreneurs, you know, they, they win a project and I’d say to where I senior team, right this week I want you to go to Barcelona and you’re going to make me an absolute fortune. That’s not gonna motivate you, isn’t it? It is going to motivate you but it’s not about motivated team. So it’s about breaking that, breaking that down and making it relevant for them so. How do we make KPI is relevant for senior managers? Well, you know, so we may have an overriding goal that would then break down to… so let’s say we’re going to improve, great… let’s pick on that. We will improve growth profit to fifty five percent next year. Great. What does that mean to marketing? What does that mean to sales, what does that mean to operations, what does it mean to finance, etc.

 

So we have these core functions in the business and it’s up to us to break that down to make that relevant for them so they then understand exactly what it is they’re hoping to achieve. You tie all that to a golden thread. If you tie all that together, you imagine in your in your mind’s eye, paint your org chart out the right thing. Obviously you’re, you’re at the top where you’re on the C-Suite at the top and then that breaks down to what we what the different lines are going to do. We can tie this golden thread together right up to the big hairy auditions goal at the top, we can see if we need to increase gross profit to fifty five percent next year then obviously there’s financial metrics from that list, sales metrics and so on. We can tie all these things together and make them relevant. I think it’s the C-Suite’s job to make them coherent and relevant and all tied together. If not, people end up doing their own thing and you can pull in different directions.

 

 

Sultan Ghaznawi

So let’s talk about monitoring these activities or goals for performance improvement. How do you suggest this should be done? Where do you start with monitoring or tracking? Is there an industry approved process for this?

 

Richard Brooks

So there’s different things for different departments. Obviously if you’re monitoring financials us you know that’s going to be an Excel, it is now, it’s gonna be relatively straight, you forward them to your accountant or you will prepare them yourself or your accounting software will spit out your management accounts each month for quarter or whatever. They shouldn’t be audited once a year, so then we’ll be ordered to review audited accounts. In terms of sales, you can measure that through, so you were going to increase sales then you don’t have to increase sales activity. Again, it’s dangerous, just assuming that more activity equals more sales, but you can measure the activity of salespeople through any decent CRM, not real name ’cause there there’s loads and you go on your own journey depending on what you want to do. Any decent CRM nowadays we’ll be able to measure, Salesforce can take it and spit right out.

 

In terms of marketing, so if we’re talking about marketing for lead generation or creating interest in the business and understanding the customer, well, again there’s marketing metrics like literally how much interest are we generating, where’s it coming from, and that might be multi-channel, but where is it, where is it coming from, what’s that route into the, into the, into the company, what’s the customer journey looks like in order to find you in to start, start using your service or other conversation with sales team so we can do that.

 

In terms of operations, well, that all needs time tying together in terms of strategy, so you might be wanting to be strong in a particular region or a particular language pair or particular vertical. So you need also need to increase resource in that area. So you can manage, you can measure capacity and then and you have the capacity to, I don’t know, translate a million words a month then you know what’s the capacity utilization of that but one popular metric in, you know, operations environment. So if you had a use a different example from a different industry, if you had a hotel, you’d be talking all the time about room utilization. So how many rooms have been utilized each week and when and you’d be measuring that so if you can see any patterns dropping out of that and then can you improve that as it works through and so on. But the key thing is it’s tying all these things together. So it’s relevant. You’ve got that golden thread that flows right through the business. So the vendor manager understands what he or she is doing and the sales director knows and et cetera, et cetera. But it all comes back to this. I like this this chap called the Northern Star. For me the guiding light, the BHAG, the one thing, that we’re all following, we are all running in the same direction.

 

 

Sultan Ghaznawi

Right. So if we, again, take a, you know, a look at a higher level or if we zoom out and still stay within the context of our KPIs and performance, there are several industry standards such as Six Sigma that organizations apply to their performance measurement and improvement or further improvement, is there one that is suitable for our industry that you would suggest?

 

Richard Brooks

Right, so again, a big fan of Six Sigma, but we have to be careful that these I think we need to think about what we’re doing before we find the tool, if I said that the right way. So yes, Six Sigma is amazing. It helps you to, so Six Sigma is about the amount of defects that happen per million opportunities for defects and I get this slightly wrong. But there is something like in your production process, if you’re making pen lids or car engines or, you know, whatever that thing is you want to make as few errors in the process as possible. So you measure the output of the process and you make sure it’s this within tolerances. So if you’re making nuts and bolts, there’ll be a specification from your custom about the thread size and the length of the bolts and probably the weight and the, you know, the walkway over the diameter et cetera, et cetera. You’ll measure all that. You’ll do some statistical process control, so that’s measure every hundreds nuts or bolts. Plot that on a chart and see where you perform.

 

Now Six Sigma. So one sigma is one standard deviation, as you know any sort of process or average of averages, you get this curve, this bell curve that happens right in the middle, the middle point. Then we’ve got three sigmas one side, three sigmas the other that, that the six sigmas there captures but it’s something crazy like ninety nine point nine seven percent. So it’s three or I can’t remember the exact number. I think it’s three opportunities per million things produced to make an error. So your production process would be so good that it would only make an error three or four or five times per million, and then you would say you was Six Sigma compliant. Can you apply it to translation? Well, maybe you could, maybe you could translate one million words and then measure each word and see how many errors you made that.

 

But It’s kind of subjective, isn’t it? So you know, you you get this feedback all the time. You have made a meeting tomorrow. Your translation is rubbish. OK, thanks for that great feedback. Can we try and really get under this? What do you mean by rubbish? Let’s define that word ’cause it’s someone can speak German or French or whatever in their office and they think it’s not good or not right for right for markets. Then you have a conversation and so on. Can Six Sigma be applied to the translation industry? We can debate this for hours, I think, I think probably not in its purest form, but we can take the philosophy of improving process and producing so as entrepreneurs, it’s that rich dad, poor dad, right? It’s our job to create a process that makes a business that delivers a product. So it’s our job to create that process in our businesses that delivers translation and then say quality. But I feel a bit sick for saying it’s to the right quality of translation or translations is suitable given the specification that we have.

So six signals a bit of a fad. Does it work for services? Uh, again, somebody we’ll probably try and tell you that it does, I don’t think it does. I think it obviously works best if you’re working at Toyota and you’re trying to make whatever Toyota is using, you know, with absolutely no defects, because that’s where the waste is and it gets better over time, so yeah, there’s no such things like lean as well. You see lean and agile and all these sort of buzzwords. So lean is about creating something that’s literally lean, so there’s no waste in the process. So we look at how do things flow through as smooth as possible. There’s a quote. I’m going to get his name totally wrong as a as a quote from Japanese management guru. I believe he worked at Toyota in the eighties. I might be wrong. Uhm, Karu Ishikawa. I’ve got it wrong. I apologize to the Japanese speakers, but he says quite famously as much as ninety five percent of quality related problems in the factory can be solved with seven fundamental tools. So they would look at constantly, continuously improving the process in order so it made less and less defects.

 

Six Sigma will continuously improving the process so it was faster and less wasted, so it run at speed which is lean. So they’ll be looking at simple measurement tools. So his seven tools are, I’ll read them out so forgive me. They are check sheets, histogram, pareto diagram or pareto analysis, cause and effect diagram, scatter diagram, control chart and line chart. So, what can we learn those entrepreneurs? Well, there are tools and things in the, you know, advanced manufacturing world. Read about, read the Toyota Way, which is a book, which is all about how Toyota made incredible motorcars in the nineties and took on America, you know so… so the Americans had their own cars sort of thing. Made the best cars in the world and they did that in a limited budget, with a limited natural resources and limited people and so on. So they did that by improving process and developing these tools to help them, so we can take the philosophies of those tools… Lean, Agile, Six Sigma, etc. and use them in our business. Is there, uh, you know when we can download in a tick sheet that I don’t think there is.

 

Yeah, it’s not simple. It’s not well, we used to say it. So I’m a I’m a scholar of key account management. I’ve been studying key account management for forever. And it’s about studying how our businesses sell to other businesses. And it’s from the big, well, so it’s about how Rolls Royce sells jet engines to British Airways for instance in that process, not very many at the moment now, but it’s about, it’s about that place and it from that I can take the key for obviously we’re not Rolls Royce, we’re a tiny, tiny company in in comparison. But we can take the philosophies about understanding the customer and thinking about, well, if I’m producing something, it’s going to be used in a in a supply chain that’s ultimately going to serve the consumer. So it’s thinking about these philosophies, which is slightly different from just working within specification. So it’s the same with these quality tools. We can use the philosophies and the thought process behind it to help us develop better, but we’re better businesses and businesses which are more efficient.

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Sultan Ghaznawi

Richard, you spoke about something very interesting. You said that you know in other industries these things will apply, but it might not be directly relevant or applicable in our industry and we have to modify that, but with that in mind for an organization or a language translation company that’s interested in implementing a performance monitoring and improvement system. Would you recommend that they DIY it or do it themselves, or should they bring professional help in the form of consultants to execute such a program, first of all to define what they want and then, you know, create tactical action items from that?

 

Richard Brooks

That’s a good question. So there’s a lot in that question, uh. So I think it depends on the size of your company. It depends where you are in the customer growth journey, I think there’s various stages as a customer develops, see Greiner’s Curve, Larry Greiner… nineteen seventy nine, I think. But he basically said that companies grow really steadily, then they hit a period turbulence where things change then they might get through that period, they might not. If it does, there’s a period of steady growth and then it goes crazy again. So this tells us that business growth isn’t linear and it’s not, it might seem, you might study Facebook and Google and Uber and so on, it’s easy to just develope a platform and off they go, right? Well, at each stage of their growth there’s been huge turbulence, like we are seeing in the tech sector at the moment, but there’s huge turbulence in their businesses, in their business development. They might change the management or you know ’cause you think it’s a very different management style from starting a business to those managing a business to it is employing the senior management team, and motivating them to deliver your business. And then the team has got to develop teams and as this gets more and more complicated, perhaps there’s different skill sets and therefore different people are more suited at the top at different stages.

 

So in terms of that, I think it’s different where you sit. I think as entrepreneurs we would fly by the seat of our pants, which is what the what the film is at the start, right? And as a business develops, I think it’s well worth getting some external help and talking to people who have either done it before, a good place to go is to any conference and have a beer with a few people and see what their stories are or get involved with social media in our industry. It is very, very friendly active industry, people will share their stories and lots, lots of people out there again, there are many that are in the third generation with their family firms. And now there are also lots of people there, they have done it, been there, bought the T-shirt, you know, they they’d happily tell you exactly what it is they measure. The danger is I’d approach this with caution, because the danger is if you buy someone else’s strategy, you might by someone else in strategy, which may not be right for your particular business at this particular time. So those things I used to do ten years ago, twenty years ago, that are no longer relevant in today’s world. So we have to be careful that when other measures and metrics and management etc. put in is relevant. So I’m looking at the third horizon, preparing for tomorrow’s business. So we’re trying to prepare that and put that in.

 

It’s obviously very easy to say well, in mind it’s not Monty Python sketch, right? We used to… be glad over… you know that me and the kids used to do that. But we’ve got to be careful that looking back with rosie spectacles, you know, rosie lenses on and thinking it was easier in my day, we used to do this thing. It’s always difficult or whatever. So do we bring in consultants? Yeah, we can do. It’s the the key, the key piece of advice I would give anybody, it’s about having one big goal at the top that we can all see exactly what it is we doing. You know, we’re going to put a man on the moon in nine years or whatever, yeah, whatever, JFK said. So great. We’ll know what we’re doing from that there’s going to be a golden thread that flows through the business to help us help us pull that in. If you’re looking to sell your business in the next few years, then obviously that’s going to taint your financial metrics, you might be selling on the multiple, we might be selling on you know a contract win or something like that, so you have to get ready for that or prepare that. But obviously, the best time to prepare your business for sale is not when you want to sell it. Paradoxically, you know when things are doing well, you can start to start to have that conversation with people. There’s lots of people in our industry and there’s lots, lots in the world that can help you, help you get ready for that.

 

So it’s, I’ve not really answered it, but it’s dependent, the answer is… ’cause I think the answer is it’s dependent on where you are on that journey. So there’s like, there’s like a there’s a road map from Slator which I saw so couple months ago. It lays out but our Greiner’s Curve, but for our industry and it lays out with different challenges that will happen on average in an LSP as it develops and so quick advert for those guys, but that can give you a rough idea of thinking right. Well, I’m at ten million dollars, have I thought about going international? I am at twenty million dollars. Have a thought about bringing external financing etc.? At least have these milestones were and that can help you with your operational thinking.

 

Sultan Ghaznawi

So going back to the core of defining, tracking and mission of performance improvement, let’s say we were talking about production activities in an LSP. Is there a specific tool such as Microsoft Excel at the basic level that you would recommend using? Oh, or what is the standard format for tracking performance and production?

 

Richard Brooks

Well, I think any, any decent workflow that’s in our industry will have this in that that will come out-of-the-box. So, well, those guys will sell, sell this to run that function that we run the key functions, they’ll sell you. You’ll be able to track it. We have to see exactly who’s doing what and when and efficiency and number of tasks per project manager per month or, you know, things, things like that. Can you use Excel? Yeah, I think there’s nothing, you know, there’s nothing wrong with a good a good post-it note on a on a wall chart. You know if you can, if you can plan it out, I think it starts there, you know and certainly when your business starts it’s Excel gets used for all sorts of things, isn’t it? I mean, even translation memory glossary lists and things like that even. I’ve even seen operations guides written in in in Excel. It’s bizarre but we’ve I’ve never doing doing the DTP once I wanted, but it’s crazy, Excel gets used for everything, yes, I think.

 

Use whatever works and get it working and then go shopping because the danger is the other way around. You go shopping first you by someone else is process which will buy for sales guys. So of course, everything is perfect and then you get into business and it’s like, I didn’t really understand what that meant and what I was doing. So if you want to track, I don’t know if you want to track your project managers about a number of activities. Fair hour or some, you know, some crazy metric like that, then, yeah, you can start to do that. You can see what’s going on with them. Decent half decent CRM will do it for you as well, but any workflow solution in our in our space all the ones are like I’ve seen, I’m sure there’s nuances and you know X is better than Y if you’re going towards them, but that that will do essentially the same thing. Please don’t shoot me. But you know, in terms of tracking and showing your activity and loading capacity and all these sorts of things, but it’s got to be right for you and for your business.

 

Because even in our, even in our business we are, but we’re a tiny company in in England and, so we can have two different accounts. One account would have literally thousands of requests per month. So if you’re looking at on a request per, you know, sort of a task per day project manager Mr. Smith is incredibly busy, but these, these you know a lot of us also making it flows through whereas of other accounts which are huge projects but it might be winter quarter. Or once a year like a call off agreement. We just sort of work in and out of a particular project. So how do I measure those two people? How do I know which one is more efficient? I can’t really, I can’t measure them on the same metric I need to define, right? For this account, this is what it’s going to cost. This is my cost structure, this is how I approach it. Therefore I need to make sure that my process is within those tolerances, within those assumptions that I’ve made. And then also if we think about if somebody you know simply shirking or working.

 

One of my friends said that’s a funny phrase… so somebody working or they swing in the leads. You know, well, that’s dancing management and line management and you’re gonna, you’re gonna get that,you gonna pick up if somebody busy or not. I think most most people are making this industry, you know, project managers are incredibly busy, stressed out, amazing people. So they’re, you know, they’re busy people anyway.

 

Sultan Ghaznawi

Right. So, Richard, in a translation company or language company, you mentioned earlier that we have core functions like project management which forms you know the fundamental part of what we do. We have vendor management and for obvious reasons and then sales without which we will not be existing. And we always have been monitoring activities in these functions in one way or the other to increase sales or to produce more words, translated or to find more people to do the work, and that’s in a traditional sense and does that count in terms of in the performance improvement that it was not formal, but now we can formalize it and just create a system off of that?

 

Richard Brooks

Yeah, we can. We, we can, right. I think we so, certainly in sales we have to be careful that activity won’t necessarily link to sales or it won’t link to financial output. We need to be careful with that and I think we need to measure, remeasure it. So if we have a, so if I was your sales guy, you should measure it, you should measure my pipeline and you should measure the amount of opportunities I have been given. You should measure the movement in that pipeline, so and I mean from it’s you know basic thing, we have here. Here is people that are interested in our service. Here’s people that have got a project, there’s people that we’ve given a proposal to. Here’s some actual work, he says a purchase order… we’ve got paper and so on.

 

I know that’s, I know it’s more complicated than that. Again, don’t add me on that, but there’s, there’s a process to that in order for me as your sales director to deliver your sales each month, in order for me to meet our target. As well as that, there’s retention and there’s advocacy and there’s all this other stuff that we have to think about. So we have to be careful to assume that because lots of people will assume that products lead to profits. So again another little chip on the shoulder about this that it’s not necessarily products that lead to product profits, it’s the customers that that get there. So the customers will deliver the profits in our organization, so we need to measure how happy they are. What’s the likelihood of them coming back is obviously much easier to sell to somebody who bought from you before. So from a sales metric point of view we need to be looking at. Are they likely to recommend us? Will they advocate our service? Where are they on the ladder of loyalty?

 

You know, these types of questions, which are almost more sort of marketing-ee. That’s the right word. They’re more marketing type questions that we ask about the customer. To try and gauge their happiness and how well our operations deliver, deliver their service for them. So yeah, it’s, it’s tricky, you know it’s tricky. Just to get one, wish I could pull a book off the shelf and say you go read this and all your all your questions will be answered but it’s yeah, it’s not necessarily that easy to do.

 

Sultan Ghaznawi

Richard, as we see our industry is moving towards agility and rapid change, and we see a lot of small tasks coming towards us and it’s not always consistent. How would such a system adapt in a rapidly evolving language services market?

 

Richard Brooks

Yeah, man, yeah. Crikey, right? And so again, I think we’re taking, we’re taking a philosophy like agile from a different industry and bringing it back to our industry. And quite right too came from the the software world, right? We, we broken that back and we’re thinking about or what’s the, what’s the key philosophies of that, of that management idea now can we apply that to our business? It’s about being dynamic and it’s about being able to change quickly and so on. If it’s an agile organization that that to me kind of goes against the old traditional I would call it waterfall method only, but the old traditional method of management where we we, we develop the project plan, then we tick off against that. It wouldn’t really change and it would be, you know, fairly static and we know who’s doing what and when. If it’s agile and it’s, you know, it’s dynamic and it happens, it happens there and then it comes out the scrums on a Monday morning and it it can change. It can be all over the place kind of thing, which is much more and much more exciting. But in terms of terms of KPI is falling out of that, I mean, I think that’s more agile is more focused on the customer. And which we do as our world falls more focused on, on the process, on the methodology which isn’t quite the right thing to do anymore and I think depends on your customers, isn’t it? And it depends, depends who’s doing it, depends what you’re trying to produce. If obviously if you’re working in the software world then your customer will work on our jobs, therefore your localization. Your project managers will be because they’re ultimately their customers. So we’ll have to learn about it and you’ll have to go to deliver.

 

Sultan Ghaznawi

And how long the Richard, do you think an average LSP… well, let’s say, assuming there are three project managers and one vendor management manager, how long can they expect to see the results of implementing the performance management initiative? I mean, obviously it’s not all night, right?

 

Richard Brooks

Yeah, yeah, it’s not overnight, but I mean I don’t know how you’d run a business without one, I think, if you were, if it was just, if it was just you as an entrepreneur then… there’s so much… some entrepreneurs I know that just literally have got no idea how much money they’re making. It’s just, it’s just a surprise each month, it is that oh I made a profit, oh I did not make a profit, that, that’s… I would lose sleep over that for them. That that keeps keeps me up at night, let alone them. I don’t know how they run their, how they run their business, I think as soon as you get… as soon as you start to employ people, because invariably you’ll you won’t employ entrepreneurs, you’ll employ, you know, project managers or sales guy. You’ll employ people, that are more structured I think when they launch prayer now they have the structures. They don’t need to know what boundaries and tolerances they work within, which is about, you know, that’s their KPI. You’ll need to do things like doing their appraisal every year and every crazy HR stuff that you never had to do when it was just you. So in order to do that, you need to know what to measure, you need to know how to measure them. I think it has to go in really quickly. So yeah, just does it get to three people? Depends how fast you growing, doesn’t it? And I guess it could do if you were if you’re an entrepreneur and you’d want to run a million dollar account somewhere then had to take on a team of people to help you to deliver. I think as well though, it’s very easy now to outsource these core functions of your business. So now we’ve had the old COVID thing, we can put, you know, parts of our business in different regions, different time zones and we can run it from that. So that takes away to some extent, you know this, this outsourced company will give you the give you the KPI’s you won’t have the headache of employing people and and, you know, doing HR stuff and appraisals and so on. So you you can do that where we can all link together relatively easy now you know hybrid type or even remote type organization like a virtual organization but so…

 

Sultan Ghaznawi

Yeah, what I was going to say is that you know a what you’re trying to say is that it comes down to your structure too as to what you’re trying to accomplish, right?

 

Richard Brooks

Yeah, I think it does. I think it does. I think it’s, it’s quite hard to say, you know, when you get five people, it’s this. When you get fifty, it’s this. When you get… because yes, there’s some sort of guidance there and I think you need to have… you need to have KPIs in the business? Yes. In order to motivate people, you need to have some sort of goal, some sort of target where you’re heading towards or you won’t get employee engagement and it’ll just, it’ll just be crazy, just go round and round in circles. You’ll be like thinking, why don’t these people understand what I’m trying to do? Well, you have to be a good communicator, so you know, an easy thing to do is to and easy thing to do is to develop a BHAG, or a northern star, or guiding light, or you know, a target or whatever you wanna call it, but it’s one decent objective that you want to achieve. Put a man on moon in ten years. Yeah, that, that sort of thing. And then break it down from that event, because without that I don’t know how you’d run or motivate people. But then the paradox of that is true, if you have too many, then it could just be a tick sheet and just be a management by numbers, right? You know? It’s just numbers on a spreadsheet and that’s not how you manage people and motivate people. So we may need to do a bit of it, but not too much, which is a complete non answer to your question, I know.

 

Sultan Ghaznawi

No problem. Richard, what does success at the end of the day looks like for someone who has implemented a formal performance improvement system?

 

Richard Brooks

I think ultimately it means you can sell the business, if I’m going to be frank with you, because you will sell a process, so if insert large LSP name here, come along and knock on the door, you know they might want certain capabilities that you possess, but if you have a process and you can retire, the biggest danger is if you’re meddling in the operations all the times as an entrepreneur because you are bored let’s be honest. That means the value of your enterprise when we take you out of it isn’t worth very much. It’s worth probably the asset list, and that’s, you know, with a little bit of brand, a little bit of goodwill, that’s about it. But if it’s a process that runs at speed on its own while you’re doing other things then that can be that, that can be your exit strategy. And so I think, what does good look like? I think if you can have, you know, if you can travel around France for three months in the summer, when the business runs itself, I think we can take our box.

 

Sultan Ghaznawi

OK. And you mentioned about the leadership earlier that you need to define that the central objective that everyone needs to look at and work towards. But what is the role of leadership and making sure this performance improvement system becomes adopted and wholly implemented across the organization?

 

Richard Brooks

So I think people are really I mean, again, I’ve been doing management thirty years I think now, but people are amazing. They’ll, if you can explain it to and they’ll do it, they’ll, they’ll pull in the same direction. I think a strong strategy and one that links together and I, you know, we all know what we’re going to do. We know the vision of the businesses we know we’re trying to achieve. And we know what, how that affects our staff and team and stakeholders, et cetera. I think that’s the difference between having an unengaged workforce or having, you know what, one in five people are actually engaged to having more than half engaged, you know, we need to get the majority of our guys or girls engaged in the business and motivated in in order to do that, we need to define a strategy and then from that break that down the next level and define that golden thread to make sure links together and that helps them to see the bigger picture and they think you’re not really doing what they you know what each day involves and so on.

 

And I think more importantly, it’s not Simon, was it Simon Sinek talks about the why and the three, the three circles things. I can’t do it how he does it, but it’s the why isn’t it? It’s the why we bother when, why get out of bed on a Monday morning when it’s thirty five degrees, not go to the beach well, there’s a why there, isn’t there? And it’s that’s it, to me, I think that’s about employee engagement, which is about defining where we want to go, making it fun.

 

Sultan Ghaznawi

It makes sense. Yeah, absolutely. Speaking of which, I mean, there are some really good managers or exactly executives in our industry. They’ve they’ve accomplished a lot. But in your opinion, do you think that there are success stories in the translation localization industry where performance improvement one officially or formally implemented had a significant impact and people followed that story?

 

Richard Brooks

You know. Our industry. Oh man, you’re not going to put me on the spot. How could I name somebody? I would stand by the comment I made earlier where the… my heroes in this industry are the people who have just done it, especially the people that have done this and raised the family at the same time, then [unintelligible] this answer. You know there’s then hundreds of people like that, wonderful, completely multilingual, trilingual people, incredible brains the size of planets. And they’ve done it there. There aren’t any, some of the bigger guys, I think some of them have embarrassed themselves as their careers moved on, I’m not going to name them, but you know if you if you Google it you’ll guess what I’m talking about. That’s the danger I think is, you know, these businesses growing bring a lot of power and a lot of temptation. I think it’s probably the right word, and that can be, yeah, that can be a bit scary for some people.

 

Not everybody can handle it. I think as entrepreneurs we need to know when we need to leave the party. You know, it’s better to leave five minutes too early than five minutes too late, and I think it’s the people. So the people I really respect, my friends, right? I think that they are the people who got this stuff for me I think it’s about we sort of start that, you know, work life balance and thinking, yeah, it’s really important, but it’s not the most important thing in the world. You know, if we can develop a process that delivers happy days and I think as well part of it for the entrepreneur, it’s difficult because it’s about letting go of the ego, you know, it’s about developing a process. Let it run, managing it. Somebody can come along and manage it better than you, then bloody retire, you know you’re done. That’s it, Let someone else get on with it. And it that is a difficult conversation for entrepreneur because it can be about ego specially she took the thirty years to build it and it’s your baby…

 

Sultan Ghaznawi

Richard, we’ve not spoken about the role of customers in this whole conversation. So what do… since we do everything for the customer or the client, what is their role in improving performance in a language services company?

 

Richard Brooks

So the customer should be at the center of it, right? The customer is the thing. Profits don’t come from products, profits come from customers. Henry Ford said, though, he said if I asked the customer what they wanted, they would have said faster horses. Kind of a misquote, but he sort of meant trouble is, so that means he needs to understand what the customer is trying to achieve. They don’t want to buy a drill they want a quarter inch hole, [unintelligible], so we need to think about what’s the customer trying to do. Invariably seller, sell a product in a new region. OK, so great. So then there’s a consumer, there is a customer’s customer, there is a supply chain. There’s all these slightly different things that we need to consider which we can, we can learn about that, we can consider that in our operations and deliver a service that fits, that’s straightforward. So customer is the most… I mean I’m from from the world of key account management, account sales… so customer is the most important thing in this conversation, I think. More, I think, more importantly, I would suggest the customer’s customer because not so much about the customer, it’s about the consumers, it’s about ultimately this language, this, you know, piece of creativity is going to be consumed by somebody that’s then going to generate all the value for that supply chain, that value when somebody buys the car or the iPhone or the book or the magazine or whatever it is with localized, all that value at that point flows back through the supply chain,t pays everybody wages. We forget about that, then we forget about a lot of things and we, I think we can robotic almost in the process.

 

Sultan Ghaznawi

Makes sense. Yeah, absolutely. Richard, as we reach the end of this conversation, what is your one piece of advice for LSP executives that want to create a culture of performance improvement?

 

Richard Brooks

I would say, Christ, one piece of advice, I would say create a BHAG, that is understandable to your grandma. So if you can, explain it to your grandma or your six year old and make him understand.Yes, Daddy, I kind of get what you’re talking about, so keep it nice and straightforward we have to use big fancy language and please don’t use management nonsense in it, integrity, shareholder value, about what’s the point of saying that? Everybody says it’s all the same, it doesn’t mean anything. Think about what you want to do with your business. Create a BHAG, big goal that we want to achieve and then you can motivate your team based on the golden threads from that guiding light at the top of your business.

 

Sultan Ghaznawi

What a fascinating and interesting conversation. I learned quite a lot, literally, and I’m sure people listening also found a few items that they can take away with them and apply to their businesses and prove how they do things and on a larger scale, professionalize our industry. So I hope we can meet again, Richard, to cover another interesting topic for industry. You are a treasure in terms of management knowledge.

 

Richard Brooks

I might see you in person soon.

 

Sultan Ghaznawi

I hope so too. With that, I want to thank you for your time today.

 

Richard Brooks

No problem. Thank you. The pleasure is all mine. I will see you soon.

 

Sultan Ghaznawi

Thank you very much.

 

Performance improvement is a fancy way of saying doing things better. We do this in our lives and even in our businesses on a daily basis. We try to make things better and see better results. If we were to put this effort in a formal framework, we would call it performance. How we do that is up to each of us individually as business leaders. But once we define what we want to improve, how we want to do that and what constitutes incremental success, we will then be able to monitor and track these objectives. As Richard pointed out, it is extremely important to have an overarching objective that guides the efforts in every part of your organization. Maybe it is time for you to think about what your objective is in your company and how to improve it. Create a plan around that and measure it over time.

 

That wraps up my conversation with Richard Brooks today on the subject of performance improvement for language services companies.

 

Feel free to send your thoughts and comments to improve this podcast as the goal is to deliver relevant industry related executive education and information. Without your feedback, it will be hard improve the performance of this podcast, no pun intended.

 

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