A Value Problem with Lean Marketing

A few days ago, Joel Standwood posed this question on the Lean Edge. Why has the Lean movement largely failed to capture the imagination of the sales team? The Lean Edge is where invited Lean Experts are posed a question and respond with advice about it. I am thrilled to see Lean Sales and Marketing conversations starting to take place.

A recap and my interpretation of what was said is below and indented. These are not quotes; I encourage you to read the entire thread. I would like to mention that the people in this thread know more about Lean in their little finger than I do in my entire body. However, their comments I think accurately points out why Lean has not captured the heart and soul of the sales and marketing community.

In Joel’s comment, he accurately points out that “the most alluring promise of Lean is to boost sales, delivering ever higher variable contribution margins while delighting customers and winning in the marketplace. Yet, the language of Lean to unlock the growth engine of the company rarely enters the sales vernacular, and in general, sales professionals are far less likely to have participated in Kaizen.”

Orry Fiume responded with “Get field sales people to participate in shop floor kaizens!” He mentioned at Wiremold they insisted that all field sales people had to participate in shop floor kaizens. In this way, they could see the disruption that they caused by encouraging customers to order in big batches while at the same time they began to recognize how shorter lead times (from weeks to days) would enhance their ability to meet customers’ needs.”

Pascal Dennis emphasis similar thoughts but brings out the point that we focus too much on the making and not enough on the selling. He compliments the Wiremold successes.

Art Byrne answered the question from a CEO perspective, that is what he was and a damned good one, I might add. He said is it is a lack of understanding Lean as a business system. He correctly states it is simply about providing more value than your competitor.

I agree with Jean Cunnigham more than anyone else on the thread, scary thought for Jean. She says the fault is not with the sales team, but in our ability to translate lean concepts to the core of the sales process.

Jeff Liker accurately states that Lean should be most often started in operations where there is a template for success. He discusses delivery of product and services.

This is traditional Lean thinking that leads us to focus our efforts of continuous improvement internally versus externally. We are constantly trying to improve internal processes making them more and more efficient. What I believe the comments are missing is that there has been a significant shift in the marketplace and at the moment the customer is in control. Supply exceeds demands. However, Lean seems to be still on the wrong side of the fulcrum, the internal processes. Very often we can assist sales and marketing by providing Lean concepts to make their task more effective and efficient. There is no question about it. However, at the heart of the process that Lean experts never address is DEMAND in an economy of excess supply. They still believe that you can drive demand through operational efficiency. Businesses can no longer sell and market with a mindset that demand exceeds supply. In this day and age, for the vast majority of products and services supply exceeds demand. As a result, the supply-side thinking of better, faster, cheaper in the market place is a fallacy. If it is still true in your market, hold on to your seat because it is changing and at a pace that only through the iterative process such as PDCA will we compete (aka: Lean startup, Design Thinking, Service Design, Agile). The Lean mindset is simply stuck in product (Goods) dominant thinking or GD-Logic. Additional information is available on this page, Service Dominant Logic (SD-Logic). There are a few notable exceptions that I believe understand this view (not saying they agree with my thoughts) to include Dan Jones, Stephen Parry and Steve Bell, but it is rare to find SD-Logic thinking within the Lean community. Most people look at the sales and marketing process through an internal lens (GD-Logic). They focus on delivery. Instead, you must focus on how the customer uses your product, as described so often in Clayton M. Christensen Jobs to be done approach (Do You Know the Right Job For Your Products?). You may have to take a step further than that to find demand. Demand is found on the edges where opportunities exist. Most of us believe that means taking our products and spreading our marketing funnel horizontally or from a process point of view, becoming more effective and efficient within the funnel. Instead, we should be in the customer’s environment (playground) and finding the edges there. Those are the unexplored areas that create demand. Apple’s demand has not increased because of more features and benefits. It has increased because of more ways to use the product, apps for example. Amazon has not grown and prospered because of more features and benefits but through customer use of their core services. 37 signals did not grow and prosper because of Ruby on the Rails rather through the proliferation of simple highly focused cloud products that facilitated at first only software developers. Rolls Royce did not capture market share by building better, faster, cheaper aircraft engines. They did it through developing a leasing and service system for those engines. It was on the edges of the customer’s playground that demand was developed. I often use the original Toyota Supplier hierarchy depicted by Liker and Meier in The Toyota Way Fieldbook in explaining the application of Lean in the sales and marketing process. This 7 step hierarchy is where I first saw the opportunity to apply Lean to sales and marketing. If I was marketing to Toyota (The 7 step Lean Process of Marketing to Toyota), I would be seeking to climb the supply chain as a vendor. I have written a great deal on this but what it comes down to is improving my value proposition with my customer and the marketplace. At a micro-level the value proposition is nothing more than a promise that I make in every sales conversation. The conversation may start with check (CAPD) described in my post, Looking and Listening first is not all that Bad of an Idea, Eventually it just turns into PDCA or Kaizen with the customer. It is this knowledge building exercise, this learning cycle that sales people need to be trained in. This PDCA cycle is what creates the pull. Our customer becomes our Sensei. With product-dominant thinking companies (GD-Logic), we do not think that way. It is in service dominant thinking companies such as Amazon, Rolls-Royce and Apple. Without going into a flown blown discussion about SD-Logic, it is the mindset that you co-create value with your customer. Your product/service are only enablers of the use of product. Many of us in the internal world of Lean think we understand value. In the world of Customer Relationship Management, User Experience and Customer Experience they view Lean as process methodology that has a very limited scope in understanding value. As Michael Balle once told me, "Toyota did not become number one in the world by building better cars. They became number one by building cars people wanted." The conversation on the Lean Edge missed the heart and soul of the sales and marketing process. They never stated what people wanted, how to create demand. The pull in Lean at the macro-level is knowledge and understanding of the markets our customers participate in. It is not enough to listen to the voice of the customer or even voice of market. It is the ability to co-create value through PDCA or continuous improvement with the customer. At the micro level it is the conversation. It is building that understanding on what the customer needs (Sales and Service Planning with PDCA). At the Macro or Micro levels, you are not looking to deliver latent knowledge, what you're doing is looking to develop knowledge, and that new developed knowledge, that new learned knowledge, from the act of PDCA is really the pull. This is the highest level a vendor can achieve with Toyota according to Dr. Liker. Lean captured the heart and soul of operations by reducing waste. The heart soul of sales and marketing is creating demand. To look at Lean as an enterprise we must capture the heart and soul of the sales and marketing community. The only way to do that is to address demand and a better understanding of customer value. It is no longer a product dominant world. SD-Logic allows for us to address the value proposition on the demand side. What it lacks is the processes and the rest of the enterprise’s understanding to get this accomplished. Lean offers SD-Logic the gateway to the enterprise. SD-Logic offers Lean the gateway to sales and marketing and the understanding of customer value. It is through the use of the product/service that demand is created. Lean is the best methodology to explore these opportunities through learning PDCA cycles with customers, the 7th step in the Toyota Supplier Hierarchy. What step are you at with your customer? Picture derived from the The Toyota Way Fieldbook.