Our Decisions Need to be Co-created

When we approach sales we typically think of how we will address the customer’s problem. What needs we need to address and how we will do this in an engaging way? We are in The Experience Economy says authors Pine and Gilmore. Though many of us dwell on the Experience Economy, I think we are moving past that at an accelerated rate. This movement has its foundation in Service Dominant Logic, where the fundamental belief is that value is co-created with customers. The value is in the use of the product or service. This type of thinking is awkward to many organizations. In my latest book CAP-Do: Connecting Demand to the Lean Supply Chain, I begin the journey discussing sales and marketing from a perspective of being systemic, emergent, and participatory.

My latest thinking has been a result of spending time with stakeholder and customer journey maps and building user personas. These processes have assisted me moving from inside-out thinking to an outside –in perspective. It also helped my clients build better customer experiences. What I realized working with customers was that many of common problems they encountered became rather standard to deal with and many even automated. When we addressed sales issues we found a striking number as either straight-forward or responding to “opportunities” we had little chance of winning. If you would like more information on my sales perspective, read the blog post, Lean Salespeople are Challengers, not Problem Solvers.

The world of sales is on the edge of a collaborative way of selling. We no longer can just sell to a customer; we have to understand our customers’ business and our customers’ customer’s business. This can be done through scenario planning and from a perspective of being systemic, emergent, and participatory or The Cap-Do process.

From the book ' target=_blank>' target=_blank>' target=_blank>' target=_blank>Solving Tough Problems, author Adam Kahane classifies problems. His definitions: 

• A problem has low dynamic complexity if cause and effect are close together in space and time.
• A problem has high dynamic complexity if cause and effect are far apart in space and time.

 

• A problem has low generative complexity if its future is familiar and predictable.
• A problem has high generative complexity if its future is unfamiliar and unpredictable.

 

• A problem has low social complexity if the people who are part of the problem have common assumptions, values, rationales, and objectives.
• A problem has high social complexity if the people involved look at things differently.

When any of the problems exist that are coded in red, they are fairly simple problems to address and most organizations know the answers and their preferred vendors. They may make a decision with preferred vendors or research other vendors just to confirm their decision (The dreaded request for proposal we often receive).

The other set of problems, not in red, we struggle with as organizations. They are often described as messy or wicked problems.  The latest inbound marketing programs that are “social” in nature fail to deliver. They are simply built from our old thinking of a marketing funnel, responders, and workflows. We guide and manipulate the customer down some arbitrary path to arrive at the correct (our) decision.

As Kahane says,

Simple problems, with low complexity, can be solved perfectly well—efficiency and effectively—using processes that are piecemeal, backward looking, and authoritarian. By contrast, highly complex problems can only be solved using processes that are systemic, emergent, and participatory.

We as an organization do not have solutions to problems of high generative complexity. They cannot be calculated in advance, in a journey map, based on our past thinking, but have to be worked out as the situation unfolds. Seldom are they miraculously worked out by “single experts” but rather by a team of highly involved people. A coalition or a team made up of customer(s) and vendor(s)  must accept the fact that there is not one right answer. It must emerge from doing or working towards the problem. Just as value is co-created in use our decisions need to be co-created.

We always equated the experience economy to a theater with actors being the customer facing people, the back stage the supporting cast and the audience the customer. I think that is a broken metaphor. A better metaphor may be a race team where the product/service is the car, and the driver (customer) is using it. The pit crew (vendor) is in constant communication and in support of its use. There is no backstage, we are completely transparent and, in fact, the customer’s own support might be part of the pit crew.

Do you have an analogy that might work?

The Starting Point for Lean Sales and Marketing

My best approach has been to simply start with developing a culture of PDCA and teamwork through a mini - Hoshin Kanri type plan or the use of the The 4 Disciplines of Execution. I have included a step by step guide called, My First PDCA Cycle. This guide can  be used by one leader with multiple teams, multiple leaders with their own teams, etc. Following 4DExectution strategies, you want this effort to encompass only around 10% of anyone’s time. The remaining 90% should be spent on doing what they normally do. However, people must be held accountable for this 10% and it cannot be only done when there is time. A recent blog post describes the methodology,  4 Disciplines of Execution – Lean Simplified 

I caution you not to jump into the fray with immediate thoughts of waste reduction, data collections efforts and rigid procedures such as scripts and standard work. You first must bridge the gap between operations (supply side thinking) to the sales and marketing side (demand side thinking). It is not the same.

Start with an isolated segment as a prototype. That segment can be a particular value stream, a geographic area or one specific goal (this may include to many people) that has been decided on from your annual Hoshin. The successful ingredient in this equation is that we address specifically one or two goals that can be addressed in the next 90 to 120 days. I recommend not addressing problems but rather aspirations; using the Appreciative Inquiry method of Discovery, Dream, Design and Destiny. When you are dealing with Sales and Marketing, it is important not to be problem solving initially and trying to achieve buy-in but rather taking a positive spin and looking at how to stretch goals and/or increase market share or revenue. This is the language of Sales and Marketing.

Are you ready  to get your Sales and Marketing team off and running?  

Related Information:
The Uniqueness of Hoshin Kanri
Mastering Positive Change eBook
Lean Marketers concentrate on SOAR vs. SWOT
When Standard Work and Customer Focus come together

Time Based Thinking limits Lean Sales and Marketing

Lean has an infatuation with time, just look: Lead Time, Takt Time, Cycle Time, Machine Time, Process Time, Value Add Time, etc. With all this time-based thinking what it the first thing we try to do when applying Lean to Sales and Marketing?

The first step involves mapping our sales cycle looking for waste and improving the total time from the beginning to the end of the entire stream. This is great stuff! The power of the Value Stream Mapping process is that it enables the team to see the entire picture. We know waste in marketing is not as readily identified as in other areas. But one example of sales and marketing waste that can be identified is sales cycle time. We can even get agreement that the longer a customer/prospect stays in one of the process stages of the value stream or in the queue waiting to go from one stage to the next, the greater the chance of losing the customer.

We know enough to look at how to optimize the entire process instead of just a particular stage. Therefore, our first step would be to evaluate the total time spent, not resources allocated or used. Moving through the value stream quicker is many times just a matter of evaluating the internal delays that occur in the process. By removing them, we enable the customer to make faster and better decisions. We also create more credibility with our customer for ourselves as the “go to guy (organization)” and as an organization that has done this before.

It makes sense, the perfect application to apply Lean to Sales and Marketing. You try to find the one best path – the value stream. It is easy; we have already created a marketing funnel to allow us to readily identify the process. We just need to use a few Lean Tools to bring the process under control.

Houston, we have a problem! Organizations can no longer feed products to customers, as I described in the blog post, Kill the Sales and Marketing Funnel and in a few other posts that you can find on this blog under the Marketing Funnel Category.

In the process of interviewing Mary and Tom Poppendieck for an upcoming Business901 podcast, I got off the subject and discussed project versus product management. Afterwards, they sent me an excerpt from their second book, Implementing Lean Software Development: From Concept to Cash. In the excerpt (which I have paraphrased and shorten) they gave the typical description of projects; they are funded and have a beginning and an end. Success is than measured based on whether or not the cost, schedule and scope commitments are met.

This mimics many of our traditional thoughts in sales and marketing. When we try to apply Lean to Sales and marketing it is re-emphasized. Project thinking is basically closing a sale in the shortest amount of time.

What if we treaded our sales cycles more like a product than a project? What if we treated scope (what we will do) with an expectation that it will evolve as knowledge is gained (My book, Marketing with PDCA discusses that Lean Sales and Marketing is built upon the philosophy that there has been a subtle shift to knowledge as the way to engage, develop and retain your customer base). What if we viewed success on engagement and dollars (lifetime preferably) per customer? Or increase in market share? Or even rewards based on number of long term customers? What if funding occurred not on monthly budgets but incrementally on engagement?

The overwhelming theme that has evolved is that engagement has replaced time as a defining metric in sales and marketing. An example is one of the defining metrics at a retail store, time spent. We have always viewed that the more time spent in the store, the more purchased. If we take this thinking and put an interactive component to it and rather than view time spent in the store but the experience and level of engagement created with the customer at the store and online, time becomes relatively in material. It is the experience.

How does Lean apply? Forrester Research identifies four measures of increasing engagement as Influence (Plan), Interaction (Do), Intimacy (Check), and Influence (Act). As you may notice, I assign the PDCA cycle to these measures of engagement as a way of combining Lean Thinking to the Engagement cycle. Demonstrating a shared outcome with your customers should be the ultimate strategy of your organization and your PDCA improvement cycles. Many organizations still view improving capabilities of internal processes in sales and marketing as an effective strategy; such as the reduction of cycle time. The strategies that we need for improvement must be on the demand side. We must simply focus on the customer, not internally. We do not live in a world of excess demand. As a result, our planning cannot be isolated. It is only validated through customer engagement, not a time-based derivative.

Related Information:
PDCA Cycle of Zingerman’s Deli
In love with your products more than your customers?
PDCA for Lean Marketing, Knowledge Creation
Lean Marketing Creates Knowledge for the Customer

Lean Marketers concentrate on SOAR vs. SWOT

How many resources do you have? Should you be using them on your weaknesses or your strength? In a recent post Looking for a Game Changer, Start Underperforming!, I discussed not looking for areas of deficiencies and improvement but to expand on the areas we do well in. You cannot be everything to everyone and so you have to limit your resources. So why not use them on what you do well?

In the typical SWOT Analysis (SWOT analysis examines the Strengths, Weaknesses, Opportunities and Threats of different strategies), I believe most of us have a tendency to focus on our weaknesses and threats more than our strengths. Just doing the math SWOT/WT, we spend 50% of out time doing just that.  

In the Appreciative Inquiry  field, there has been a movement to use a SOAR (Strengths, Opportunities, Aspirations, Results) analysis in lieu of SWOT. SOAR is a great method to use for expanding on the positive areas of an organization. It normally is much easier to gain buy-in from stakeholders with this approach versus others.

In the book The Thin Book of SOAR; Building Strengths-Based Strategy, the authors state:

People tend to look for problems and focus on weaknesses and threats before searching for possibilities. For example, one participant of a SWOT process described this tendency as follows: "Having used SWOT analysis for the previous fifteen years, I had experienced that it could be draining as people often got stuck in the weaknesses and threats conversations. The analysis became a descending spiral of energy." Or, as another described his experience of a planning process deeply rooted in a SWOT analysis, "[the SWOT approach] gave us a plan, but took our spirit. From our experience, drained energy and loss of spirit can negatively impact momentum and achieving results.

In SOAR, we focus on our strengths and opportunities, so that we can align and expand them until they lessen or manage our weaknesses and threats. Weaknesses and threats are not ignored. They are refrained and given the appropriate focus within the Opportunities and Results conversation. Ultimately, it becomes a question of balance. Why not spend as much time or more on what you do well and how7 you can do more of that? What gives you more energy to take action? What gives you confidence to set a stretch goal?

When I engage with a customer, I find the initial sequence of steps used to create a Lean Marketing System must ensure we carefully think through what outcomes we want to create, what supports and barriers we need to plan for, and who we have to involve within your organization to guarantee success. Our starting point looks like this:

1. (Definition) What are you presently doing and how do your clients and organization feel about them?
2. (Discovery) What is your present value proposition for retaining customers? What is your present value proposition for acquiring customers?
3. (Dream)What are your targets? How will we measure success?
4. (Design) Do you understand your customer’s decision making process? For each product/market segment?
5. (Destiny) What’s your investment strategy – not only in media, but in time and events?

The SOAR framework is the beginning step in the Defining stage and is a natural lead in to the others.

• Strengths: Internal to organization; What is our core
• Opportunities: External to organization; What might be
• Aspirations: Internal to organization; What should be
• Results : External to organization; What will be

The first steps of any Lean process is identify value and create a current state. When working on the demand side of the equation, why should we identify the process through Non-Value Activities defined as waste (Weaknesses and Threats) versus the Value Added activities of SOAR?

Related Information:
Accentuate the Positive, Eliminate the Negative
Getting Resistance to Appreciative Inquiry?
Lean Engagement Team Book Released
Appreciative Inquiry instead of Problem Solving

The Difference In Lean Problem Solving for Sales and Marketing

The transformation of Lean into Sales and Marketing has a few subtleties and one of them is the way you go about solving problems. The typical Lean Thinker goes about solving a problem very systematically using a variety of processes such as A3s, PDCA, 8D or DMAIC, etc. They are all based on the scientific method and the steps are:

• Define a Problem
• Do Background Research
• Construct a Hypothesis
• Test Your Hypothesis by Doing an Experiment
• Analyze Your Data and Draw a Conclusion
• Communicate Your Results

In contrast, Sales and Marketing people have a tendency to make an initial exploration which I phrase EDCA or Explore-Do-Check-Act versus the scientific method of PDCA or Plan-Do-Check-Act. I prefer to use the word Adjust over Act. This initial step seems relatively the same but the real difference comes in the framing of the context. The engineer or scientist views it as a problem-solve analysis. Sales and Marketing solve from a solution-focused synthesis.

Paraphrased from Nigel Cross’s book, Engineering Design Methods: Strategies for Product Design:

Designers tend to use conjectures about solution concepts as the means of developing their understanding of the problem. Designers impose a primary generator and generate early solution concepts. This is used to base a tightly restricted set of constraints or solution possibilities. The problem cannot be fully understood in isolation from the solution, so solution conjectures should be used as a means to understand and explore the problem formulation. As the architect, Richard MacCormac has said, “What you need to know about the problem only becomes apparent as you’re trying to solve it.”

Solution-focused strategies are perhaps the best way of tackling sales and marketing problems which are by nature ill-defined problems. The major hindrance to this type of thinking is found in becoming fixated on a particular early solution concept and an unwillingness to discard the concept. Instead the make minor improvements rather than discard the work and stat with a  fresh idea.  Another problem is going too much in depth versus staying at a minimum level to continue the process. You should look to having a “reflective conversation with the situation,” so wonderfully said by Schon.

Cross added these steps for the solution focused process:

• Clarify requirements by asking sets of related questions which focus on problem structure.
• Actively searched for information and critically check given requirements.
• Summarize information on the problem formulation into requirement and partially prioritize them.
• Do not suppress first solution ideas, hold on to them and return to them to clarify the problem rather than pursuing them in depth.
• Detach themselves during conceptual design stages from fixation on early solution concepts.
• Produce variants but limited the production and overview periodically assessing and evaluating in order to reduce the number of possible variants.

Another part of the process, especially used by designers and architects is the act of sketching. They have a tendency through sketching to handle different levels of detail shifting from overall concept to detailed aspect practically simultaneously. Sketching permits tentative solutions to be explored and investigated and the typical hierarchy steps of problem-solving analysis are prevented.

In marketing, think of exploring a customer journey map allowing for multiple paths to be explored. For example think of a user scenario that might help you identify multiple paths. A few ideas on constructing one:

• Practice being a user. A good exercise is to use de Bono’s Six Thinking Hats and apply that thinking taking different user points of views.
• Observe users in action. Insure you are watching both novices and experience people.
• Question users about their experience. You can use a variety of methods that are formal, unstructured and even focused groups.
• Create user personas and scenarios. A persona is about a well-defined but hypothetical user and a scenario is a storyline about the use of a product or service.

In Sales and Marketing evolving to an answer though customer interaction is one of the best methods of problem solving. You may have to accept a solution that may not be the best in your mind. But an idea that can be implemented is much better than one that cannot be.

Related Information:
Lean Canvas for Lean EDCA-PDCA-SDCA
Lean Engagement Team Book Released
Appreciative Inquiry and Organizational Change
My Engagement Strategy – Appreciative Inquiry

Lean Marketing House in Paperback

A few reasons to consider the Lean Marketing House book:

Is there a reason to use Lean in Sales and Marketing?
Do you have to be practicing Lean in the rest of the company?
Is Lean Marketing the same as Agile Marketing?
How does A3 problem solving relate to Marketing?
Why is Social Media so Lean?
Can your company ever complete a Lean Transformation without Sales on board?
What does Knowledge Creation have to do with Lean?
What are the Lean Marketing Tools?
How would you create a Lean Transformation?
Develop stronger partnerships with your customers?
Provide a methodology to become more precise in your sales and marketing?
Begin a continuous improvement program in your sales and marketing?

I have just received the shipment of Lean Marketing House book in perfect paperback form. That means I no longer have to create the ring-bound version. in celebration of this, the first 100 purchases will include the following:

1. Lean Marketing House Paperback Book
2. Lean Marketing House book on CD (Direct access to the Links Provided)
3. Marketing with A3 Book on CD ((Direct access to the Links Provided)
4. Best in Market by Dr. Eric Reidenbach on CD
5. Membership on the Marketing with A3 website
6. Related audio recordings and eBooks on subject.
7. 10% Discount Code to the Lean Sales and Marketing Summit. (30 day limit)
8. 50% Discount code to Driving Market Share Program (30 day limit).
9. 30 minute free coaching session on Lean Implementation (must be scheduled).
10. All items will be shipped to you (No Downloads).

Book Description: When you first hear the terms Lean and Value Stream most of our minds think about manufacturing processes and waste. Putting the words marketing behind both of them is hardly creative. Whether Marketing meets Lean under this name or another it will be very close to the Lean methodologies develop in software primarily under the Agile connotation. This book is about bridging that gap. It may not bring all the pieces in place, but it is a starting point for creating true iterative marketing cycles based on not only Lean principles but more importantly Customer Value.

It is not about being in a cozy facility or going to Gemba on the factory floor. It is about starting with collaboration with your customer and not ending there. It is about creating Sales Teams that are made up of different departments not other sales people. It is about using PDCA (Plan-Do-Check-Act) through-out the marketing cycle with constant feedback from customers that can only occur if they are part of the process. It is about creating value in your marketing that a customer needs to enable him to make a better decision.

It is about managing a Value Stream Process. This is going to require re-thinking about the way you do business and the way you think about your markets. More importantly the way you think about Value. Value in terms of how your market defines it. Stop thinking about product or even product benefits. Your marketing systems must support the delivery of value to your customer at a much higher rate than your competitor. Targeting that Value proposition through the methods described in this book will increase your ability to deliver quicker and more accurately than your competitor. It is a moving target and the principles of Lean and PDCA facilitates the journey to Customer Value.

This is the only Link that will be provided for this offer.

  Lean Marketing House Perfect Paperback

Related Information;
5 Cs of Driving Market Share
Best in Market
Marketing with A3
Lean Sales and Marketing Summit

Can Six Sigma and Marketing Co-exist

In my journey over the past few years to bring a Continuous Improvement philosophy to marketing, I have primarily focused on Lean and identifying the individual Value Streams though segmentation. Lean was a much easier methodology to implement and utilize. As I continued with a customer, I found the Six Sigma toolbox provided me a stronger set of analytical tools that was needed in handling the vast amount of data. In any case, I practice a mixture of Lean and Six Sigma. Transferring this philosophy to other marketers and Lean/Six Sigma Practitioners has been very difficult with each side very skeptical of the other.

Working the past several months with Dr. Eric Reidenbach of Six Sigma Marketing Institute to develop the program the 5Csof Driving Market Share has provided a much clearer path or the bridge between the two methodologies. In the program, we challenge the way both the Six Sigma community and the marketing area think about business and the way they currently do business. It does so by providing a detailed and structured approach one that is entirely data driven to unleash the power of Six Sigma on the crucial need of Customer Value for revenue growth. An outline of that bridge between Marketing and Six Sigma is provide in the table below.

Related Posts:
Lean your Marketing by Dominating with Customer Value
Value Stream Mapping differs in Lean Marketing
Can Voice of Customer deliver?
Unclear Customer Value leads to Failure

Can Voice of Customer deliver?

In Dr. Reidenbach’s book, Listening to the Voice of the Market: How to Increase Market Share and Satisfy Current Customers, he makes a strong case that obtaining the Voice of Customer is just not good enough, it must be Voice of Market. He maintains that you cannot focus solely on your organization’s customer but on the market as a whole including your competitors’ customers. It is imperative that understand how the market evaluates competitive offerings, their strengths and weaknesses and the value gaps that exist whether positive and negative.

He goes onto to discuss, which I paraphrase below:

Many companies are still embracing a Product Orientation and others have only recently discovered the perceived benefits of a sales orientation. And because change takes place grudgingly and haltingly, many claim to the tenets of the production orientation with its emphasis on low-cost and its lack of focus on the customer. Others, who embrace a Selling Philosophy focus simply on selling the organization’s products and utilize sales and advertising to promote the product versus centering on customer needs. The Customer Focus model was a shift on what the company could sell to what the customer wanted. Their commercial organization existed solely to satisfy what the customer wanted or needed. Companies began to understand the importance and power of the Voice of the Customer. This orientation generated the key metric, or measure, of customer satisfaction and increasingly gave credit that a satisfied customer is a profitable customer.

The Voice of Market is a simple concept that expands on the Voice of Customer so that you're not listening just to your organization’s customer but also listening to your competitors’ customer. Taken together, your organization's customers and your major competitors’ customers constitute the market, or a good approximation of it.

Market-share is a function of both of retaining your own customers and adding new ones. These new customers come from two basic sources, new entrants into the market and your competitors’ customer base. Your competitors’ customers aren't your customers for reasons. Assuming that your customers speak for the market is a major error. What they consider important is not necessarily what the market considers important. If your strategic focus is on cementing the loyalty of your own customer base, the Voice of Customer is essential. If however your strategic emphasis is on growing market share, including both retention and acquisition, the Voice of Customer is insufficient.

A second important reason to embrace the Voice of Market is that you need to understand what your competitors are doing. What successful general engages an enemy without first understanding the disposition of the opponents’ troops, their strengths, and weaknesses? Yet many a company plan is drafted the confines of an office without customer intelligence, resolving the process he calls strategic guessing. Many organizations that engage in strategic guessing think that they know what the market wants and needs, when they really don't. Do you know who your competitors are? Are new ones emerging beneath the radar? Do you know how strong they are? Only by listening to the Voice of Market can you answer these questions with any validity a singular focus on your own customer base cannot and will not give you this information.

Voice of Market is essential and at the core of your marketing process. I have always promoted that it is imperative to manage your Work in Process (WIP) or your pipeline effectively and efficiently. This being the quickest way to increase revenue and decrease cost. This includes customer retention as part of the process. The next extension is acquiring new customers (It is also where we spend our most money). To do this, you must have knowledge of non-existing customers. For example, when you read a survey, do you learn more from a customer or a non-customer? Does both columns in a win-loss analysis look the same? .

Voice of Market information goes much deeper than this. It unlocks the mystery surrounding value. Value is such an abstract term for most companies because it is difficult to measure and can be somewhat subjective. However, the value gap between you and your competitors is not. It is real and can be quantified. These gaps whether positive or negative enables you to address real criteria in your marketing efforts. This is a great eye opener for most companies

Most companies have a tendency to look at additional markets in a recession (I think many of us believe that the grass is greener on the other side). However, seldom are they offering breakthrough products to this new market. Determining Voice of Market information and deciding the most attractive market(s) to pursue is imperative in a down economy. You cannot afford to enter markets that you have little chance of winning.

Understanding the key metrics certainly helps your marketing efforts but just think for a moment what it does for your innovation efforts. It opens up tremendous opportunities from a fact driven methodology versus a hunch or maybe a limited view of an existing customer. Voice of Market is a key strategy in driving market share and is imperative to understand in a down economy.

Disclosure: At this time there is a ongoing business relationship with Six Sigma Marketing Institute founded by Dr. Reidenbach.

Related Posts:
Be part of the first Webinar Series on the 5Cs of Driving Market Share
Unclear Customer Value leads to Failure
Evaluate your Customer Needs
Value Stream Mapping for Marketing

If Nothing Bad Happens, You Must Be Doing Something Right?

You have been struggling for a while and now the recession is really hitting hard. you are starting to wonder… Where have my customers gone? Are my competitors just buying jobs? How can I cut expenses? Do I have to many people on board? How did I get here? That is precisely how a mental model could work: if nothing bad happens, you must be doing something right. So as time moved on, bad practices became part of our business model.

Despite signs of trouble, we adjust our mental models to accommodate larger deviations from the norm. Without a mechanism for reframing our behavior or redefining our group, the effects are ignored, as they were at NASA, until a catastrophe happens.

As the investigating board put it, both Columbia and Challenger were lost also because of the failure of NASA’s organizational system: both actions were failures of foresight in which history played a prominent role.

So influential board NASA’s models and scripts, and so delusional self-confidence bred group is, that even after Columbia broke up, killing all on board, the space program manager told the press that he was comfortable with his previous assessments of risk and didn’t think the foam debris could cause the accident. But remember that a key feature of this system is that, taken one small step at a time, each decision always seems correct.

In a culture that involved at NASA, each returned from a successful mission was another moon landing. NASA was silly. Applause that was, by the time of Columbia, more than 30 years old. So instead of appearing more deeply into the problem, they gradually revise your models until they were literally interpreting failure as success. The final report of the commission said:

Engineers and managers Inc. worsening anomalies into the engineering experience base, which functioned as an elastic waistband, expanding the hold larger deviations from the original design. Anomalies that did not lead to catastrophic failures were treated as a source of valid engineering data to justify further flights.

This example is taken from a Laurence Gonzales book Everyday Survival: Why Smart People Do Stupid Things should make it obvious why you must not only have a systematic process in place for continuous improvement but also outside eyes observing your practices mindful not to leave your organization slip into doing; STUPID THINGS!

Rant: So many times our acceptance of our culture allows us to get sloppy in our practices. Good enough is a common word. When I discuss Lean in marketing it is typically met with resistance. When I use the words Six Sigma Marketing; alarms, bells, whistles and even fireworks seem to take place as a result of the connotation of “Six Sigma”. I seldom ever get full understanding that you should look at Six Sigma as a methodology rather than what the strict mathematical definition of Six Sigma. It is the mental model that is in place.

Having a systematic process in place allows us to deal more effectively with the problems and even the future. Our choices of how we do things and what we see (data) have significantly multiplied. Decisions have become increasingly more difficult. Having a proven process such as the Six Sigma tool of DMAIC will result in better informed and more accurate decisions. I use Six Sigma as an example. There are many methodologies and tools out there to solve problems. However, even these processes can become “intuitionalized” and allow good enough to creep in. Keep striving for perfection and always keep asking Why!

Related Posts:
Bootstrapping business Survival
Businesses that Die, Die of confusion
Could a CMO increase their tenure by using Six Sigma?
Overcoming Resistance and Backsliding
Transforming Healthcare thru Lean
Use Intuition or Six Sigma for your Marketing Data?
Can you Master Continuous Improvement?

Six Sigma a great companion to marketing

Received an excellent response on my post yesterday (Measuring The Customer Experience) on Twitter from a @pricingright that said; “With all due respect, it is far too simplistic to use customer advocacy as a measure of customer experience & it is wrong to draw causations. Correlations they speak about are from cross-sectional studies. Interesting but rife with selection, survivorship and other bias.”

I posted the Forrester video because I felt the point being made about keeping measurements simple were important. What needs to be simplistic in measurement is the collection of data. Without simplicity or automation in handling these tasks seldom will they be sustained or not manipulated to get the numbers in! 

Do I believe that Customer Advocacy is to simplistic as @pricingright points out? You Betcha! I am from the school of Six Sigma, we don’t make anything that simple do we? ;) In the soon to be released 5 Cs of Driving Market Share program, I had asked Eric Reidenbach, the founder of Six Sigma Marketing Institute what the Net Promoter Score meant to him. An excerpt from an article he sent me.

What drives the NPS calculation? What is the best predictor of whether a customer is willing to recommend it to a friend? Let’s start with what does not predict NPS.

Most organizations would point out that they do some kind of customer satisfaction work. However, Reichhold correctly points out that “most customer satisfaction surveys aren’t very useful…. Their results don’t correlate tightly with profits or growth…Our research indicates that satisfaction lacks a consistently demonstrable connection to actual customer behavior (recommendation) and growth. ..In general, it is difficult to discern a strong correlation between high customer satisfaction scores and outstanding sales growth.”

What does correlate highly with profitability and sales is loyalty which Reichhold defines as “the willingness of someone – a customer, an employee, a friend to make an investment or personal sacrifice in order to strengthen a relationship. For a customer, that can mean sticking with a supplier who treats him well and gives him good value in the long term even if the supplier does not offer the best price in a particular transaction.”

Value, like the NPS, is specific to a product/market. The factors that define value for a credit card will be different than those factors that define value for mortgages. Similarly, farmers will define value differently when talking about tractors than will golf course maintenance personnel. Value, the best predictor of loyalty and NPS, will vary from product/market to product/market and accordingly, must be managed differently from one product/market to another.

Value is conceptually defined as the relationship between a product’s quality and the price paid for the product. Our research also indicates that the brand and/or corporate image may play a significant role in the value definition.

Simplicity is important to measurement. It is imperative that we make the collection of data to include asking the right questions of the right people to get meaningful data. Numbers can be crunched! Customer Advocacy measurements can be a great tool used properly and/or in context with product/market classifications. Creating the correct data sets and manipulating these numbers is what makes Six Sigma such a great companion to marketing.  

Disclaimer: At the present time, I am working on a project with Six Sigma Marketing Institute

Related Posts:    
Evaluating your Marketing Funnel, Only Seven Levers matter
Determining your Customer Perspective – Who do you want?
Determining your Customer Perspective – Can you satisfy these customer segments?
The Eagles always understood!

Do you know the Value of your Product?

I have been working with Dr. Eric Reidenbach of the Six Sigma Marketing Institute in the development of the 5Cs of Driving Market Share program. In the process, he has developed a Customer Value Assessment Program. You will receive five surveys based 5Cs of Driving Market Share: Customer Identification, Customer Value, Customer Acquisition, Customer Retention and Customer Monitoring.These 5 surveys will expose your weaknesses and strengths in each of the 5 Cs of Driving Market Share. Before receiving, the next survey, you will receive evaluation/assessments sheets that will allow you to evaluate your scores and some actionable steps to improve in this area.

This Assessment program serves as an introduction to the 5Cs of Driving Market Share Program, a comprehensive program that has been deployed in a number of Fortune 100 and Fortune 500 companies and has produced positive market share growth.It is not a project-by-project approach for reducing the costs of marketing activities, but rather an approach that seeks to enhance marketing’s effectiveness and efficiency.

What I like about this program is that it provides a real science to the marketing process. However, there is one premise that you have to accept as a truth(Six Sigma Marketing Institute has data to substantiate it): Value has been shown to be the best leading indicator of market share and top line revenue growth.

Most of us are product focused nor the ability and know-how to access the market for this knowledge. Value is typically limited to the value in the product or product features. Practically every company claims to offer value. But do you really know what value means to your customers? The assessment makes an effort to figure out what value looks like to your customer—the insight may surprise you. The biggest surprise that I had was most companies do not even define value the same within the organization. If that is true, how focused could you be in defining your market?

A good read on this subject is the Best in Market eBook. The eBook was written in response to what the author has experienced working with manufacturers, and is aimed at Quality personnel including Lean and Six Sigma practitioners as well as Marketing professionals.

Related Information:
Value Stream Mapping
Six Sigma Modified DMAIC
Value stream Marketing

Could a CMO increase their tenure by using Six Sigma?

Todd Wasserman at Brand Week reported:

A down economy has meant more stability for chief marketing officers, according to an annual report from Spencer Stuart. The survey found the average tenure for a CMO at a major firm was 34.7 months in 2009, a jump of 6.3 months over the previous year and the longest since the executive search firm began tracking the statistic in 2004.

In a statement, Tom Seclow, who leads Spencer Stuart's marketing officer practice, credited the expanding skills of CMOs. "Since publishing our original CMO tenure study back in 2004, we have continually counseled CMOs to think and act like general managers who just happen to be great marketers," said Seclow. "Today, we're seeing more and more examples of sophisticated and savvy CMOs who truly have influence among their peers in the C-suite. This is undoubtedly contributing to longer CMO tenures in many cases."

The firm also attributed the longer tenure to macroeconomic trends, like reduced spending on marketing initiatives, consolidation in some industries and a lagging job market.
When Spencer Stuart launched the study in 2004, the average tenure was 23.6 months and hit a low of 23.2 months in 2006.

Good news that it has increased, Bad News is 34.7 months Good!
          - CEO’s range from 7 to 10 years.

The demand for accountability and performance is becoming  more important to marketing. However, we are beginning to see the introduction improvement of new systems to meet these objectives. Six Sigma and other initiatives are framing how performance should be reported to recognize key intangibles and drive improvement. New technologies are emerging to present this information in dynamic and accessible fashion. These things can be described as dashboards, scorecards, or key performance indicators; Visual Windows on performance trends and expectations.

As companies seek real-time agility and action they need decision enablement and decision automation capabilities to drive intelligent interaction on the frontline. In researching background information for Six Sigma Marketing Institute’s upcoming 5 Cs of Driving Market Share program, I discovered a 7-step process recommended in the book, High Performance Marketing: Bringing Method to the Madness of Marketing. He recommends these activities be built within the everyday workflow.

1. Acquire: Companies must have processes and systems in place to capture the data that will be used to develop greater understanding of markets and customers.
   
2. Integrate: In the most raw form, customer and market data are rarely very useful. It may lie in various data silos and operational systems. Companies must integrate the data to make it accessible and applicable gaining a more complete picture and understanding of the trend, segment or customer that must be analyzed.
   
3. Analyze: Once information is aggregated and made accessible it then becomes possible to analyze. This is stage which value is added to the information by putting it into a useable context. The key to step is to close analysis gap that lies between the rapidly accumulating base of data and the company's ability to interpret that data in raw ways.
   
4. Decide: Based on the analysis that emerges, marketers and other professionals can make decisions on what markets to target, what customers to assign highest priority, what campaigns to conduct, which offers a generate, and what promising activities in which to invest. Models of analysis will not make decisions for us, but they can in able us to make more intelligent, disciplined, and fact-based decisions.
   
5. Act: Companies too often manage information in a vacuum far removed from the context in which it will be use. As a result of this approach the value of the information is never truly realized. Key aspects of support, such as incentives, training, and resources may be necessary to ensure a valued information is leveraged in the field on the front lines.
   
6. Learn: Analysis must precede and follow action. It is vital to conduct a type of after action review to determine how information has influence real-world performance.
   
7. Adjust: Based on findings in relation to the outcomes the organization must improve and adapt. The process then becomes full circle as it becomes clear what new types of information must be acquired in order to gauge the market and increasingly successful ones.

I guess if I ever became a Chief Marketing Officer, I would want to have an expectation greater than 2 to 3 years on the job. However, if I did not have the data to support the decision who could blame the CEO?

Related Information:
Six Sigma Marketing
Listen to Eric's Description of the 5 Cs of Driving Market Share
Role of Managing Data in Marketing

Should work cells be used in Sales and Marketing?

Cellular manufacturing is one of the most powerful lean tools. It will allow for smaller lot production, quality improvements, and shorter lead times and simplifies the implementation of pull. Typical manufacturing systems had the same machines all grouped together and as a result batch type manufacturing was developed. As manufacturers developed cellular systems, they found quality improved and smaller lot quantities could be efficiently handled. Many of the work cells were rearranged into U-shaped or L-shaped patterns. This allowed one worker to operate several machines which improve productivity. The benefits have been very well documented and applied to many industries.

Related Post with other pertinent links: (Why you should use Kanban in Marketing?)

Followers of my blog have seen how I use DMAIC principles in discussing the marketing funnel. And in reviewing, discussed how adding toll gates for identifying when prospects should move from one stage to the next. Inside the stages, we have different marketing programs that are taking place. But I really never talked about the personnel that were handling these programs. In most sales and marketing applications, you will have marketing assigned by the duties they do and salespeople assigned to certain accounts. I think it might be interesting to consider what we have learned in U-shaped or L-shaped work cells.

 

Instead of the typical arrangement, what would prevent an organization of assigning the personnel and cross-training them within one of the marketing stages. This way they would become experts within the stage and be able to respond to the needs of a prospect better and more efficiently. Since they are handling the tools of the stage that particular area would have a better chance of improving the methods utilized within it.

In recent times quality has suffered in sales and marketing. Many times the customer seems to be more of an expert than the salesperson calling on them. Other times experts have to be brought in and duplication of manpower takes place. Many companies have a sale’s closer; maybe sometimes a sales manager that would come in and have the power to close a prospect when ready. If you were doing that during each stage the likelihood of passing on better qualified and more prospects would occur. Another consideration that someone may find fault with this type of thinking is geographic boundaries. However I believe that excuse is seldom the case.

The key to your thinking should be in flow rather than function. Taking each individual stage and think about creating a work cell by defining the operations that take place within that stage. The number of resources within that stage will have to correlate to the number of prospects within the stage. It must be recognized that numbers don't always work out perfectly or that certain talents may have to be utilized in several different stages. But I believe that the quality of the interaction would increase with the customer.

The goal lean is continuous flow was close to that as possible while eliminating waste of waiting and a waste of overproduction. I believe that this type of arrangement would be in organizations first step in leveling sales volume.

Do you think work cells can work in Sales and Marketing? Are they already?

Related Posts:

Bringing your Storyboard Alive!

A Little more on applying Little’s Law to Lean your Marketing!

Using DMAIC for your A3 Report in the Lean Marketing House

Value Stream Mapping

Technorati Tags: Value stream Mapping,A3 Reporting,DMAIC,Six sigma,Work Cells,Lean,Marketing

Best in Market using Six Sigma in Marketing

Eric Reidenbach author of several books on Six Sigma Marketing, the most recent being Six Sigma Marketing: From Cutting Costs to Growing Market Share, has allowed me to offer my readers a complimentary copy of his newly published book, Best in Market.

I think the book incorporates the overall essence of Six Sigma in marketing today. It takes the DMAIC structure and applies it in a simple easy to read structure that will be beneficial to a Black Belt that may not be all that familiar with marketing and/or to a marketing team that has limited exposure to Six Sigma. It is a readable book that it is not filled with Six Sigma terminology and methodology that typically takes away from the message. So many Six Sigma sales and marketing books seem to labor on the point of making sure that they are what I would call a "methods" book and spend way to much time on Six Sigma versus a learning tool for people to take a practical message away. The points that are made on value and quality through out the book and on how to acquire them through proper techniques provided me some additional insights into my own marketing methods.  

An overview of the book:

Chapter 1 examines the state of U.S. manufacturing – the myths, the realities and most important, the challenges. Much has been written about the challenges from new tax laws to enterprise zones to cost cutting. These are what I call enabling factors that will provide organizations with an environment to excel. Enabling factors alone are insufficient to sustain a leadership position. Value creation and delivery are the sustaining factors – those factors that will enable U.S. manufacturing to achieve this dominance and sustain it.

Chapter 2 examines the old business model and how it must change to accommodate a new set of exigencies that populate a global market place.

Chapter 3 takes an in depth look at the element that calls for a new set of tools that will be required to excel in a global environment. At the heart of these tools is value – an idea that is not new but one that has received new attention because of our ability to measure it and manage it.

Chapter 4 provides the foundation for the new value strategy. Targeting markets will be crucial to any effective strategy in the global environment. Buyers in different countries and even different regions of different countries will define value in different ways. Identifying targeted product/markets and being able to assess their utility to the organization is a critical first step – one that will eliminate much waste and insure greater productivity.

The Voice of the Market (VOM) and how to capture it is the subject of Chapter 5. For each targeted product/market the organization will have to create a value model that identifies and prioritizes the importance of both quality and price and then identifies and prioritizes the importance of the CTQs (critical – to – quality factors) that make up quality. The VOM becomes the information platform that informs all subsequent aspects of SSM.

Understanding your organization‟s competitive value proposition, how the market evaluates your value relative to that of your key competitors is essential. Failing to do so relegates all subsequent activities to guesses and your strategic planning becomes strategic guessing – an all too often occurring activity in many manufacturing organizations. This is the subject of Chapter 6.

Since market share is the focus of this new value strategy, a tool for managing customer loyalty is provided in Chapter 7. Trying to outsell customer defections or running faster to simply stay in place as suggested by the Queen of Hearts in Alice in the Looking Glass is not an option. Customer retention is a crucial component of market share management.

Chapter 8 describes a value tool for identifying where your competition is vulnerable and how to attack that vulnerability. Customer acquisition is another component of market share and in most maturing industries, taking customers from competitors is a capability that must be mastered. Simply waiting for your competition to make a mistake is too passive and relies on serendipity rather than strategy.

Improving the three factors that impact market share gains – people, product and processes is the focus of Chapter 9. Value is delivered through the organization‟s capacity to manage these three value adding elements.

Finally, Chapter 10 offers a model of monitoring changes made to the people, product and process improvements undertaken. To simply assume that the changes are doing what they were intended to do is delusional. They must be monitored to assess their efficiency and effectiveness.

As myself, this is a subject that is near and dear to Eric’s heart and would love to see the idea migrate through the manufacturing and quality world. I encourage you to download the book and take advantage of this offer. Download the book: Best in Market.

If you would like to learn more about Eric or his company visit: 6SigmaMarketing.com

Technorati Tags: 6Sigma Marketing,Six Sigma Marketing,Lean Sigma Marketing,Value Stream

Marketing needs Six Sigma Methodology to Improve

Understanding Variation - The Key to Managing Chaos by Donald Wheeler is a book I recently re-read. I had remembered it and thought it had some good points. Not for the depth of analysis, most Black Belts will not find it too challenging, but for the examples and flavor of the writing. This book was originally published in 1993.

Marketing needs to do a better job of using statistics and especially variation. When I start talking numbers to people, and what they mean, I get looked at like someone that is just trying to complicate a creative process. Improvement is about numbers. Measurement is about numbers. The truth is, marketing is about numbers. So why not employ more of the Six Sigma methodology? I understand that achieving the quality that Six Sigma represents may be difficult but the principles and tools should, nevertheless be utilized.

Your present marketing data more than likely is flawed and ineffective. Comparing one number to another is just ineffective. Comparison is limited because numbers are subject to variation and without variation taken into account the data is distorted.

Don Wheeler starts his book by saying that comparing numbers to specifications will not lead to improvement. Specifications are the Voice of the Customer. The specification approach will not reveal insights into how the process works and as a result will not tell you where you are, how you got there and how or what to improve to get out of it.

Defining this a bit: Voice of the Customer defines what you want. Voice of the Process defines what you will get from the system. Management job is to bring Voice of Customer in alignment with Voice of the Process.

Don uses examples of Control Charts,X-Charts, XmR Charts and a few other graphs. He does a nice job of mixing practical stories and making a statistical book as easy of a read that it can be. He sums up one story by saying:

1. Optimization of the parts does not equal optimization of the whole.
2. Traditional cost accountings can hide or miss the essential figures.
3. Analysis by osmosis is very ineffective.
4. Graphs communicate the data better than the tables.
5. It is dangerous to confuse a target value with the voice of the process.

Can you start using proper data in your marketing process? The book recommends starting tomorrow by:

1. Begin to collect the right data
2. Insist upon interpreting within their context
3. Filter out the noise before considering any value as a potential signal
4. Cease to ask for explanations of noise
5. Understand that no matter how the results may stack up against the specifications, a process which displays statistical control is
   performing as consistently as possible.
6. Always distinguish between Voice of Custom and Voice of Process.
7. Help others take action on assignable causes.

P.S. I typically find that most companies are not ready to start a Six Sigma project because of the lack of measurement in their processes. Having the working knowledge of Black Belt can greatly enhance getting started down the path. It is a journey and depending upon the scope of the project, one not to hastily jump into.

BTW: I recommend reading the book first.

Related Posts:

Another word for Marketing - How about Voice of the Customer?

If you are going to Improve, you have to know your math

Six Sigma Marketing

Technorati Tags: Six Sigma,Methodology,Marketing,Black Belt,Voice of Customer

Duct Tape Marketing with Lean Six Sigma can help eliminate waste!

I published this article practically a year ago in a series of blog posts. I thought with the recent increase in Lean Six Sigma Online Training and how you reduce waste in marketing that it was an opportune time to re-publish.


Lean Six Sigma and Duct Tape Marketing- Original Comparison -

Other Blog Posts on Lean Six Sigma