Teaching Lean: See It, Solve it, Share it

5 Core Sales Concepts of Lean Thinking

When introducing Lean Thinking many of us would start with the five core concepts of Lean depicted in the classic books, The Machine that Changed the World and Lean Thinking by Womack and Jones. The basic thought process goes something like this: As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced. And we begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste.

5 Core Concepts of Lean Thinking:

1. Identify Value
2. Map Value Stream
3. Create Flow
4. Establish Pull
5. Seek Perfection

As a sales guy, I have a hard problem identifying with these concepts. When I am thinking of value…I am thinking of what Theodore Levitt said 50 years ago…he would argue that people don’t want to buy a drill; people want a hole in the wall. When sales guys look at value, they look at how a customer uses the product or the service..the job that needs to be done. When sales people look at value streams we are looking at how a customer arrives at their point of use, their decision process.  When we think of Flow…we are thinking about how easy it is for the customer to buy, get a proposal and the reliability of my company to meet market windows. Pull…..is about agility and being adaptive…is that not the promise of Lean Operations to sales…less WIP, more agile, more flexible? Continuous Learning….the company that can learn from their customer at a faster rate than the competition is the winner today…perfection is constantly delivering value faster than your buddies down the street.

5 Sales Concepts of Lean Thinking

1. Identify Value = Job To Be Done
2. Map Value Stream = Customer Journey thru Use
3. Create Flow = Rhythm
4. Establish Pull = Adaptive, Agility
5. Seek Perfection = Continuous Learning

The value of course depends on context. But if Lean has delivered in your organization… it has created a strategic, competitive advantage, not from the idea of Better, Faster, Cheaper. Instead, Lean should allow us to speculate, experiment, measure and iterate forward. It is a method of learning and adapting faster than your competition.

Many wonder how to put this in practice and for a template I use the five phases of Agile Project Management by Jim Highsmith. I adapted his description to a marketing tone.

Envision. Speculate. Explore. Adapt. Close.

1. Envision: Determine your marketing vision and objectives and constraints, your community, and how your team will work together.
2. Speculate: develop the capability and/or feature based launch to deliver on the vision.
3. Explore: plan and deliver running tested stories in the short iteration, constantly seeking to reduce risk and uncertainty.
4. Adapt: review the delivered results, the current situation, and the team’s performance, and adapt as necessary.
5. Close: conclude the launch, pass along key learning, and celebrate.

Even more important, is this key point; we’re not concentrating on the flow, we are concentrating on the cycle, the rhythm. Continuous short iterations are constantly happening to improve the value of the offering. No longer can we wait for the perfect scenario. We build the scenario as an ongoing process. Customer relationships need to be as collaborative as possible. Customers then can define the capabilities needed to provide value. When that scenario can no longer be adapted or improved upon, the life of that marketing cycle is over or exhausted. This effort enables customers to view the value they need and give the opportunity for both to adapt and iterate forward. Your sales and marketing team must always be in contact with the customer and continuously asking: Is what we are doing providing value in our customer decision making or efforts to complete the job they need done?

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No Steve, Jack or Bill, just The Caterpillar Way

How many companies get Leadership right? Do you always have to have that charismatic leader that makes us think about them before the company? Tomorrow’s podcast is with Craig Bouchard, author of the book, The Caterpillar Way: Lessons in Leadership, Growth, and Shareholder Value. If you know my legacy a bit, you understand the high degree of interest.

An excerpt from the podcast:

Joe: What struck me about the book more than anything else is that there was not a Jack Welch, a Steve Jobs, or a Bill Gates. It was a credit to the entire Cat organization. Was that true? Is that how Cat is?

Craig Bouchard:  I really confess. It's incredibly true. I've been the CEO for a couple of companies. I'm the CEO of Signature Group, a public company right now, in a great company. But in the case of Caterpillar, I've never seen such a large group of people so thoroughly dedicated in increasing their revenues and decreasing their expenses as a team - which is kind of simple - but what I'm trying to say is that it's rare in real experience. That company is really - everybody is on the same page and that's a management feat of course that they've accomplished that.

Joe: Yes it's a huge management feat but not to have that person out there waving the flag just amazes me.

Craig:  Yes and when I look at Cat is and the most remarkable thing going back to the 80's. They had basically six incredibly large complicated decisions to change the company during this past thirty years. Six times, they turned the entire place upside-down strategically requiring such a flexibility of their management and their workforce - it's just really remarkable and each one of those decisions could have turned into a disaster and each one like them have turned into disaster for other companies, and Caterpillar went six-for-six. Basically with four different Chief Executive Officers through that time period responsible for those six decisions. Not only did they go six-for-six in decisions, they managed to get it right who was the right person to implement and come up with an implementation for each of them. This kind of a record is almost unheard of in terms of these types of gigantic decisions were implemented.

Joe: Did the CEOs get picked based on the needed initiative, or because they were good at, or did it happen because they were at that?

Craig:  We talked about that a little bit in the book. How much of it is luck and how much of it is that the board of directors, they had at the time, picked the right guy for the right job in the challenges that existed at that time. Between Donald Fites, Glen Barton, James Owen, Doug Oberhelman and George Schaefer before, these five guys are very different people with different skill sets. In whatever way that it was accomplished with the board of directors at Caterpillar and its succession planning is a very determined and thorough process in the company. To put in place the right person at the right time in those challenges during those thirty years and my conclusion because they got it right five times in a row - it is not luck.

About Craig Brouchard ( http://www.craigbouchard.com): Entrepreneur, writer, art collector, great father and pretty good husband. Crafted the first and only "hostile reverse tender merger" ever successfully completed on Wall St and founded two public companies; Esmark and Shale-Inland.

• 2013 - Founded Cambelle-Inland, named for my daughter Cambelle
• 2010 - Founded Shale-Inland, named for my daughter Shale, now public in the bond markets (A3)
• 2003 - Founded Esmark Inc., the highest appreciating stock on Nasdaq for the full year 2008