Extended exposure of the night sky with Polaris, the North Star, in the center of the star trails.

Principles are the essence of our work. They don’t change with time or place, technology or tactics, conditions or context. They are a constant reference point to guide us.

Lean and Six Sigma are two well-established initiatives that organizations use to improve how they do their work. Making a process Lean improves its productivity, and Six Sigma is used to improve quality.

All Lean and Six Sigma initiatives are built upon the same set of core principles. These principles can be applied to Sales and Marketing as well as to any process in an organization. Sales and Marketing groups that hew to these principles will deliver more customers, bigger deals, and more profitable revenue to their company.

Marketing and Sales: advancing the buyer’s journey

The process of Sales and Marketing revolves around the buying cycle. Sales and Marketing creates value that motivates buyers to move from stage to stage in their journey.

The Buyer's Journey

Buyers don’t start out thinking “Hmm, of the products that solve this problem, which one should I buy?” No, they start out unaware that the problem even exists. They then proceed through a series of stages from becoming aware, to looking for solutions, and to making a decision. The job of Sales and Marketing is to help your buyers move smoothly through those stages.

Lean: removing friction to increase customer flow

The goal of making a process more Lean is to remove unnecessary actions (waste) from the system and to cause the process to flow more smoothly. Lean methods have their origin in the production system at Toyota, a story that James Womack and Daniel Jones tell well in The Machine that Changed the World and elaborate in Lean Thinking.

The principles of Lean are:

• Specify value – Value is defined by the customer. In Sales and Marketing, value is what meets the specific needs of the buyer at each stage of the Buying Cycle. Value is what buyers are willing to take action to obtain to answer their questions and solve their problems at each stage. This action could be to read a white paper, to visit your website, to see a demo or to review a proposal.
• Identify the value stream – For each type of buyer at each company, the value stream is the sequence of value creation steps that support the customer’s buying cycle.
• Flow – Make the value stream flow faster by removing obstacles that create friction for the buyer. Increase the motivation of the buyer to move forward in the Buying Cycle by showing the alignment of the buyer’s goals and your goals.
• Pull – Once your value stream flows, then it is easier to let the customers pull value from you as they need it.
• Perfection – Work towards perfection through endless steps. Perfection of what, you might ask? Perfection in what you do to create value for the customer at each stage of the buying cycle.

Six Sigma: fact-based management

Once you have made your Sales and Marketing process Lean by creating a series of value-creating steps that flow, then you can focus on improving the quality of the value you create. Here is how Mike Webb describes the core principles of Six Sigma for Sales and Marketing.

1. Create Value for Customers: A company exists to create and sell something of value to customers; that’s the North Star that must guide all our activities.
2. Manage Data and Facts: We need measurements, data, and facts on what we’re doing and the results we’re getting before we make decisions; otherwise, we’re operating from opinion and politics.
3. Analyze Cause-and-Effect: A problem occurs for a reason; if we find the cause of a problem and eliminate it, then we’ve solved the problem.
4. Minimize Waste, Errors, and Defects: Like a watch or a car, a business process should have all the parts it requires, and do everything it’s supposed to do and nothing else; if we rid the process of useless activities and eliminate or at least minimize mistakes, the process will run correctly and produce the intended results.
5. Create Collaboration: All process improvement methods recognize that business activities and functions are interconnected and that they all have to work together for any of them to succeed.

Regardless of your size, your industry, or your customer, the principles of Lean and Six Sigma enable companies to improve the speed with which buyers move through the pipeline and the quality of buyers that become customers.

My last post was a brief summary of the principles of lean thinking. How lean thinking is a concentrated focus on core processes. How it starts by understanding the way the process creates value for the customer, continues by identifying the steps in the value stream, making the value stream flow, letting the customer pull from you, and constantly improving the process with the goal of achieving perfection.

It’s easier to imagine applying these principles to marketing and sales if you start by thinking about just one buyer. And by visualizing the buyer’s journey (see below).

Specify value – Every step in the marketing and sales process should create value for the customer. After each interaction, customers should feel that they received value. Any action that doesn’t create value for the buyer is waste (muda).

An advertisement that interrupts the buyer with an irrelevant message? Waste. A delay in getting a quote or a question answered? Waste.

Identify the value stream – The buyer encounters different value streams at each stage of the buying process.

At the early research stage it may simply be a sequence of events starting with a query to a search engine, clicking on your entry on the search engine response page, reading some pages on your website and downloading a white paper.

At a later stage it might be requesting a quote, a series of meetings with a sales rep, placing an order, and receiving your product.

Flow – Once you have mapped the value stream for a particular marketing or sales process (and eliminated obvious areas of waste), you can start to make the process flow. In the first example above, it might mean watching your analytics closely and modifying your website to make it easier for buyers to find the information they want.

In the second example, it could mean examining and improving the steps in your quoting and ordering process.

Pull – In a manufacturing environment, pull is when a customer makes a purchase and initiates an order. In marketing, sales and customer service, pull occurs when the buyer or customer initiates a series of actions that satisfy the need for information at that stage of the buying process.

An important question to ask is “What is the circumstance in which a buyer would want to pull information from my company?” This is a different way of looking at marketing. But it’s a way of forcing ourselves to look at it from the buyer’s point of view.

Perfection – There is no end to the process of making it easier and faster for buyers to solve their problems using the capabilities you have to offer. Understand the buyer better. Make it easier for customers to get the information they need at each stage of the buying process. Continuously improve.

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Manufacturing companies have not only gained significant improvements in productivity, by creating more value for their customers they have also grown their business simply by focusing on making their processes more lean.

Can we do this in marketing and sales also?

First, some history
In the 1980′s two researchers went to Japan to try to understand why Japanese industry was doing so well in the global marketplace. When James Womack and Daniel Jones looked at Toyota, they realized that it was doing many things differently from companies in the U.S., Europe, and even Japan.

According to Womack and Jones:

“Toyota’s success lay in brilliant management of its core processes: the series of actions conducted properly in the correct sequence at the right time to create value for customers.”

“It’s not brilliant product innovations or culture or a weak currency or strong government support that makes this company stand out in global competition. It’s the brilliant focus on core processes.”

They documented Toyota’s methods in The Machine that Changed the World. The book explained that it was the combination of processes in product development, supplier management, customer support and manufacturing that collectively comprised the Toyota “machine” that made the company successful.

In a later book, Lean Thinking, Womack and Jones extracted the general principles of lean production so that other companies could apply them to their own processes. Applying these principles is how lean organizations constantly look for ways to remove wasteful practices from their processes. What is waste (muda) in lean thinking? Anything that doesn’t produce value for the customer.

Five principles of lean thinking
The principles of lean are value, the value stream, flow, pull, and perfection.

Specify value – The starting point of lean thinking is to understand how the organization creates value. Not value as defined by the producer, but value from the point of view of the customer.

Value is expressed as a “specific product (a good or a service, and often both at once) which meets the customer’s needs at a specific price at a specific time.”

The way to define value is through dialogue with specific customers about what they need and are willing to pay for.

Identify the value stream – The value stream is the sequence of events that are necessary for the company to put a finished product in the hands of the customer.

Mapping the value stream from raw materials to finished product is the next step in lean thinking. This mapping process usually reveals large amounts of waste in the value stream – work-in-process inventory, long setup times, rework – waste that wasn’t visible until each step in the entire process was mapped.

Flow – Once you have defined value and mapped the value stream (and removed obvious wasteful steps in the value stream), the next step in lean thinking is to make the series of actions in the value stream flow.

Flow is the opposite of our intuition that the best way to organize work is with using a “batch and queue” method. With batch and queue you make each stage in the process as efficient as possible. Make many units of a part, setup the machine for a different part, repeat. Each batch produces many more parts than are needed at the time (waste) and makes the machine unavailable to produce anything else until the batch is done.

Pull – When you convert from a batch and queue method to flow, it significantly reduces the time to deliver products into the hands of the customer.

This reduction in time let’s you shift from scheduling and producing in advance of customer demand to letting the customer pull from you. It’s made-to-order in the extreme.

Instead of forecasting demand, making lots of product that you may not be able to sell, and then using pricing discounts to get rid of it, you throw out the forecast and let the customer pull product from the enterprise.

Perfection – Once you have defined value, mapped the value stream, made the steps in the value stream flow continuously, and have let customers pull value from your organization, then companies begin to see that these four principle interact in a virtuous circle.

“Getting value to flow faster always exposes hidden muda (waste) in the value stream. And the harder you pull, the more the impediments to flow are revealed so they can be removed. Dedicated product teams in direct dialogue with customers always find ways to specify value more accurately and often learn of ways to enhance flow and pull as well.”

This virtuous circle leads to the final principle in lean thinking, perfection. Each process improvement not only improves productivity for the company and value for the customer, it reveals new sources of waste that could be removed from the process.

Marketing and Sales is a process
Womack and Jones have documented in company after company that lean thinking made it possible to significantly reduce the time to make and deliver a product (or service), lower costs, and increase the quality and value of what these companies deliver to their customers.

In fact, Womack and Jones confidently state that “if you can’t quickly take throughput times down by half in product development, 75 percent in order processing , and 90 percent in physical production, your are doing something wrong.”

Can Lean Thinking be applied to marketing and sales? After all, marketing and sales is a process too.

And more importantly, can marketing and sales see the same kind of process improvement that Womack and Jones have documented in production environments?

That will be the subject of my next post.

Collaboration is the fifth principle in Michael Webb’s book on applying lean thinking to marketing and sales. Collaboration is necessary in order for the other principles to be put into practice – adding value to the customer, managing on data and facts, analyzing cause and effect, and minimizing waste.

Process improvement methods are based on the idea that the elements in a business are interconnected. To improve the results in one area, you have to make changes in other areas as well. Collaboration is how people work together to make these changes.

If I want to improve the close rate of my sales person, I have to provide better leads. And if I want to generate better leads, I need to provide a more compelling experience on my website. And if I … well, you get the idea.

But while collaboration is something that we agree is a good thing in principle, we often resist it in fact.

Why?

Because power is distributed unevenly in organizations. Because individuals and groups are in competition with each other. Because we aren’t given enough reason to trust each other.

What are some methods that organizations have found to be successful in improving collaboration?

• Management has to lead the charge. The higher in the organization the better. If senior management talks about and models collaborative approaches to work and process improvement, then others will follow.
• Change the process before asking people to improve their performance. Simply flogging people to do more faster without changing how they do their work will not succeed.
• Give people more information to make decisions and to take action to implement their decisions. Show the linkage between events. This information also provides feedback to people and to management to see the results of the changes.
• Start where people are receptive to a change. Find people or groups who are willing to be early adopters. Focus on places where it’s easiest to implement or where people have the most to gain.

And finally, managers must let individuals and groups take credit for the improvements. Remember the words of that ancient management consultant, Lao Tzu:

A leader is best when people barely know that you exist, not so good when people obey and acclaim you, worst when they despise you. Fail to honor people, they fail to honor you. But of a good leader, who talks little, when the work is done, the aims fulfilled, they will all say, “We did this ourselves.”

The purpose of marketing and sales is to find, win and keep customers. It does this by adding value to the buyer throughout the buyer’s journey. Anything that does not add value to the customer during the marketing and sales process is unnecessary.

Michael Webb explains: “…in process improvement, waste is any activity or result that doesn’t add value for the customer. Errors and defects are unwanted results.”�

Examples of waste include:

• Swiping the cards of visitors to a trade show booth and handing them off to sales as “leads”�. Sales staff then contact a few of these leads, find out they are not qualified, and ignore the rest. This activity creates no value for the customer. The time spent by marketing to collect and collate is a waste. The time spent by sales calling them is a waste. Worse, it creates resentment between the two groups.
• Sending unsolicited “press releases”� via email to a list of reporters and editors. If the company or the public relations agency has no relationship with the reporter, the email will be ignored. This is a waste and adds no value to the customer. In fact, it creates a negative value. Witness the flap over Chris Anderson’s decision to treat these emails as spam and publish the addresses of the senders.
• Preparing a proposal for a sales prospect before achieving alignment with the decision-makers about the project. The proposal will be rejected. Not enough value has been added to the customer to allow for a consensus decision. This wastes the time of both the customer and the sales team.

The causes of waste can be discovered by managing on data and facts and by analyzing cause and effect. And these causes can be removed.

But removing waste is not the hard part. Webb points out that what’s hard is seeing waste in the first place.

Why?

Partly because we are too close to the problem. We’re too accustomed to our current pattern of doing things. And it’s hard to believe that dramatic results are possible.

The best way to start seeing waste is to come back to the question: “Does this activity add value to the customer?” If the answer is yes, please continue doing the activity in the same way. But if not, it’s time to take a closer look.