Scaling the Customer Decision Making Process

In yesterday’s blog post, I made a statement that I find a striking resemblance in the Toyota Supplier hierarchy (on left) depicted by Liker and Meier (The Toyota Way Fieldbook) and the Economic Pyramid model (on right) of Pines and Gilmore (The Experience Economy). It deserves a better description.

If we were to view the stages such as described in the blog post, The 7 step Lean Process of Marketing to Toyota we would see a natural progression through the stages of the supplier. A supplier starts working with Toyota at the stage of developing Mutual Understanding. They base this on the key elements of Trust, Mutual prosperity, Respect for People and Genchi gembutsu (actual part, actual place). It ultimately ends in Kaizen (Continuous Improvement) and Learning through PDCA. I am leaving out a significant portion of development in the five other steps but it suffices to say that there is a continued progression through the stages based on an increase of knowledge and sharing between the two parties.

In the The Experience Economy: Work Is Theater & Every Business a Stage, Pine and Gilmore discussed the Progressions of Economic Value and corresponding to a level of Progression of Value Intelligence which I have combined in the above diagram. They so masterfully compared it with the statements:

• If you charge for stuff (noise), then you are in the commodity business.
• If you charge for tangible (data) things, then you are in the goods business.
• If you charge for the activities (service) you execute, then you are in the service business.
• If you charge for the time (experience) customers spend with you, then you are in the experience business.
• If you charge for the demonstrated outcome (wisdom) the customer achieves, then and only then are you in the transformation business

When you hear discussion in Lean Marketing about mirroring the Customer Decision process it is sometimes difficult to see how it will scale to larger companies. These examples are the basis for such activity. It is sales and marketing responsibility to define them and to close the knowledge gaps that exist from one stage to the next. These gaps are readily apparent between each stage and typically well-defined. Review the blog posts, The 7 step Lean Process of Marketing to Toyota and Profiling the customer by knowledge gaps.

How to close the gaps is not readily defined in most companies. Sales and Marketing have seldom viewed their efforts from a perspective of knowledge gaps and with the ultimate goal of developing open innovation and co-creation platforms. As the New Economy unfolds whether Economy is prefaced by Experience, Transformation, User-Centric or Customer Centric, sales and  marketing’s role will be defined by their ability to learn and share knowledge with the customer.

Related Information:
Why the Lean SALES PDCA Cycle was Created!
The Service-dominant Logic of Marketing: Dialog, Debate, And Directions
If all of us need to be marketers, what’s the framework?
7 Principles of Universal Design & Beyond
The Common Thread of Design Thinking, Service Design and Lean Marketing

Political Campaigning – Strategy Update

In a recent Blog post What political campaigns can teach business, I discussed how using a similar strategy could be one of the most productive methods of creating immediate business. One of the most important processes of getting anything done is always clarity and keeping your organization updated. Turning strategy into tactics into action requires empowerment armed with that clarity. Look how David Plouffe’s campaign manager of President Obama’s 2008 presents a slideshow on the state of the race and the resources needed to win battleground states.

Plouffe’s does an outstanding job of a strategic overview, mapping the process, breaking it down to its simplest structure. His appeal to the emotional side is excellent and a lesson in motivating your constituents to get out the vote and raise more money.

How do your managers address your virtual audience? Would this work to motivate a sales force? Your distributor network? Your referral network?

Related Information:
Is your marketing firm having this conversation with you?
The New Names of Marketing are still PDCA
Will Product Managers embrace Open Innovation?
What political campaigns can teach business
Lean Six Sigma for Government

Summary of the 6-part blog Series using DDMRP

This is part of my blog series on using the principles of Demand Drive MRP and its five primary components and applying it to marketing. This particular blog is the summary of the series.

These five components work together to dampen, if not eliminate, the unnecessary nervousness of traditional MRP systems and the resulting bullwhip effect in complex and challenging environments. In using this approach, planners will no longer have to try to respond to every single message for every single part that is off by even one day. This approach provides real information about those parts that are truly at risk of negatively affecting the planned availability of inventory. Demand-driven MRP sorts the significant few items that require attention from the magnificent many parts that are currently being managed. Under the demand-driven MRP approach, fewer planners can make better decisions more quickly. This means that companies will be better able to leverage their working and human capital as well as the significant investments they have made in information technology.

The above is from the Orlicky’s Material Requirements Planning 3/E. written by my recent podcast (Is Orlicky’s MRP relevant today? Think DDMRP) guest Carol Ptak and Chad Smith of the Demand Driven Institute.

This exercise of taking the 5 components of DDMRP provides an interesting and innate view of the Lean Marketing perspective. I think specifically it assists in explanation of how to scale the Lean Marketing principles. So often in this world of one to one marketing or marketing singularity we forget to view the enterprise foundational need for marketing to our core customer base. There is so much talk about innovation and early adaptors and they certainly have a role in your marketing structure. However, the core customer group of an established customer is that 68% majority found in the middle of the diffusion curve.

Other companies that keep venturing to the extremities of the curve will continue to compete on price and availability. The organizations that align themselves with similar cultures if so desired will give themselves the opportunity to establish that structure that we identified in Profiling the customer by knowledge gaps. Surprisingly when we go to scale, these factor are seldom different. Establishing your presence through increase knowledge transfer will allow you to dig deeper within the structure of any company. It may take you longer to dig the hole but every shovelful will make it that much more for your competition to overcome.

Effective knowledge transfer seldom occurs without effective collaboration and in today’s world having the right tools in place plays a vital role. Dr. Graham Hill addressed this issue in a blog post, CIO view: Ten principles for effective collaboration where he said:

Companies should start to develop their collaboration capabilities before purchasing collaboration technology. This will ensure that the technology really fits the style of collaboration that has already been developed. The pace of business is getting faster and faster. Today’s competitors may not even have existed a few years ago. Improving effective collaboration is one of the few insurance policies that companies have in these hyper-competitive times.

I encourage you to read Dr. Hill’s entire post. It provides an excellent groundwork for the role of tools in collaboration.

The other blog posts in this series on DDMRP:

1. Is Orlicky’s MRP relevant today? Think DDMRP
2. What Sales and Marketing can learn from Demand Driven Manufacturing
3. Positioning your organization to learn from your customers
4. Profiling the customer by knowledge gaps
5. Dynamic Buffer: Think Self-organized Teams
6. Systemizing the transfer of knowledge at the execution level
7. Highly Visible and Collaborative Execution