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Jun 13 17

What Sales Can Learn From Lean Manufacturing — Part 5

by David Brock

Whew, we are getting to the end of this series!  Thanks to those of you who have hung in and contributed.  I’ll be packaging this as an eBook, give me a couple of weeks, but email me if you want a copy.

We’ve gone through the philosophies and principles underlying the Toyota Production System, (TPS), in the past 4 posts of this series.  If you haven’t read them, here are the links:  What Sales Can Learn From Lean Manufacturing, Part 2, Part 3, and Part 4.

In this post I’d like to focus on some of the challenges we face in applying these methods in sales and marketing, as well as some of the misleading thinking around the application of these principles.

As you’ve seen, the principles actually have little do to with manufacturing–it’s when you start applying them to particular processes or problems that you start seeing unique applications within a function.  In general, they represent great business principles and practices.

The application of most of the principles is pretty easily understood.  The principles that people struggle with understanding–and which are, in fact, not totally applicable to sales are Principle 3:  Use “pull” systems to avoid overproduction, Principle 4, Level out the workload, and parts of Principle 2: Create continuous process flow to bring problems to the surface.

Some of the overarching goals in applying TPS to manufacturing was the reduction of waste, improving quality, and making the process as efficient as possible.   Overtime, it has also evolved to increase flexibility in the workflow to enable much more effective and efficient use of production capacity.

For example, now, you can go into a manufacturing plant and see different models of cars, each with completely different features being manufactured on the same line.  Technology, logistics systems, and off line processes enable the right part/component be brought to the right station at the right time.

Variability is the challenge:  Variability/variance has always been one of the fundamental challenges in the implementation of TPS.  The more the variability, the greater the potential for defects/bad quality, or problems at some point in the manufacturing process.  Manufacturing people spend a lot of time trying to understand what drive variability and eliminating it.  But in very complex manufacturing processes, sometimes this is very difficult to achieve.  Examples include semiconductor, any kind of foundry/casting, and complex precision assemblies.  AI is already being used to help improve quality, reduce waste, and improve efficiency as variance happens  (if you are curious, I was a cofounder of an AI software company that focused on just this problem, ask me–it’s really intriguing stuff).

To manage variability, you try to do everything you can to create uniformity in the inputs, control the process steps, and the outputs.  For example, if every part is exactly the same and there is never a deviation or change, you can eliminate that part as an element of variance.  If at a particular station I do exactly the same things, with no deviation, I can eliminate that as an element of variance.  (I’ve really simplified this, but you get the point.)

So this is where we struggle with the application of manufacturing techniques to sales and marketing (particularly principles 3, 4, and 2).  By definition, we cannot eliminate variability.  In fact, we have the opposite case–each customer is different–they have different needs, priorities, goals, mindsets, and so forth.  Complicating this, is they change!  They may start with a certain set of needs, but change over time.  Complicating this, in complex selling we are dealing with multiple individuals with differing priorities–and who change when they look at the group priority.  Complicating this, they go at their own pace and cadence—even opting out of our “manufacturing process” whenever they want.  As if this isn’t tough enough, it’s different from enterprise to enterprise, it changes over time, and it is neither logical or rational but often emotional.

So you can see that everything is conspiring against us in our goal to try to reduce and eliminate variability.

There are things we can do.  We can look at simple or transactional processes or decisions that involve only an individual/or very small team.  This helps reduce variability, but only a certain amount.  But we’re still left with the complex buying processes.  Increasingly we can leverage tools (AI shows great promise) to help us adapt our downstream processes to what has already happened (this is one of the things our AI tool did in complex manufacturing).  A very simple example of this is the capability behind IFTTT.  But we still find the limitations of our abilities to “control” variances created by customers requires the ability to be very nimble and adaptable our processes.  It argues against the rigidity and ultra specialization so many promote.

We start seeing the way to address the limitations of addressing variability require new approaches and skill sets including highly nimble and adaptive systems.  Since most of the “system” in sales is people executing these things, it puts different requirements on the skills and capabilities of our sales people.

Complex manufacturing processes have addressed some of these issues with teams, clustered work-cells/groups, increase empowerment and decsionmaking on the floor, as well as tools.  We can learn a lot from these, but manufacturing does not face the situation of near infinite variability.

What goes in doesn’t come out.  In manufacturing, if we achieve the goals of TPS, we have zero waste.  Everything that is started in the manufacturing process ends up in “finished goods” on the way to a customer.  We’ve matched production with demand because we only start production once there is an order.

This doesn’t happen in sales–and it is completely out of our capabilities to control this.  Customers start, stop, disappear, reappear at any time through our process.  Very little of what starts, actually makes it out the end of the process as either a win or loss.  We know the majority of complex deals end in no decision made, not because the customer can’t select a solution, but because they can’t negotiate their own buying process.

We can’t smooth the workflow, we are constantly dealing with starts and stops, so there are limitations that prevent us from applying these principles in the way they are applied in manufacturing.

It all starts with a customer order.  The fundamental of pull is it starts with a customer order/commitment.  Nothing is built until we have that order.  In sales, we are trying to achieve an order.  We might have some “surrogates” that start the process, perhaps a lead or query.  We might drive some predictability on lead flow, but each situation is different.  We cannot be happy if we don’t have enough “orders.”  We cannot wait for the customer to start the process.

Pull is insufficient in maximizing growth and share.  In manufacturing, we start the pull process with the customer order, that stimulates scheduling, parts orders through the supply chain etc.  In theory we don’t start anything until we get that pull.

Waiting for the customer to decide they are interested and reach out (pull), causes us to lose huge opportunities.  We see all the data, customers don’t involve sales until they are 57-90% through their buying process.  Yet at the same time, we know most buying processes blow up when they are 37% through, before they have even created pull!

And what about those customers that are creating pull on a competitor, but not us?  Shouldn’t we be going after them?  Or those that don’t recognize they need to change–but should?

Pull, strictly applied, is a sure path to under performance in the sales organization!

It’s A Complete System!  TPS works because people apply all the philosophies and principles.  As you’ve seen, each of the principles are tightly interrelated.  They impact each other and are influenced by each other.  You don’t get the value that TPS offers by applying selective pieces of it.  In fact, you could do more harm by just applying one principle or a small element of TPS.   Too many people suggesting the application of manufacturing approaches but just focus on a small element of the process.

Having said this, you have to start some place, but realize it’s a journey and you have to constantly think about leveraging all the principles.

It always starts with the customer!  Much of the writing on leveraging manufacturing approaches in sales focuses on maximizing our internal efficiency.  We design our workflows, processes, and develop specialists that make us most efficient.  But TPS always starts their design point around the customer.  The design actually starts from the end at the customer, working backwards with each downstream operation being the customer of the upstream operation.  In doing this, TPS creates the most efficient and effective process in meeting customer requirements.

State differently, however efficient our process is, if it isn’t satisfying the customer, then it is worthless!

Relationships count!  Along with focusing internally on our own efficiency, rather than the customer buying process/experience, many of the advocates for the “mechanization” of selling lose track that relationships count.  People buy from people!  Transferring a person from specialist to specialist may make use more efficient, but what about the buyer experience?  We’ve all been frustrated calling a customer service number, being shifted from one person to another, retelling our story to each person.  Why would anyone think it’s different in sales?

The creators of TPS actually recognized this, the foundations of TPS is a people centric view.

It is all about the people, empowering them, training them, developing them, leading them, and building an aligned culture.  The overwhelming thing about TPS is the people and customer centricity.  As automated as many manufacturing processes are, the “right automation” serves the people working in the process, and the customers.  So many of the pundits seem to accept mediocrity in the sales force as a given, designing processes optimized to a “dumbed down” sales force.

I find this unacceptable and irresponsible.  It does our people, our companies, our customers a disservice.

Conclusion:  For those of you who have hung in, Thank You!  This has been a long series.  It actually deserves much more.  I’ll dive a little deeper in the eBook.  Email me at dabrock@excellence.com.  Try picking up a copy of The Toyota Way Fieldbook.  It’s written about manufacturing, but you will find lots of tools and approaches you can adopt and tweak for sales and marketing.

I’ll be coming back, in the future, to extend the discussion to Agile.  It actually builds on TPS in very powerful ways.

Thanks again for hanging in on this.   Would love your feedback!

 

Afterword:  Jack Malcolm did a great series on these issues.  Here are some of his posts:

  1. http://jackmalcolm.com/2017/02/lean-communication-for-sales-and-the-new-sales-imperative/
  2. http://jackmalcolm.com/2016/08/lean-communication-for-sales/
  3. http://jackmalcolm.com/2016/03/lean-communication-for-sales-talk-less-sell-more/
  4. http://jackmalcolm.com/2016/03/lean-communication-for-sales-value/
  5. http://jackmalcolm.com/2016/03/lean-communication-for-sales-reducing-waste/

 

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Jun 13 17

Compressing The Sales Cycle

by David Brock

There’s an interesting conversation going on in LinkedIn.  It starts with the question, “Is reducing the time between customer meetings the only way to compress the sales cycle?”  This focuses on what we call wall/calendar time (look at the clock or calendar on the wall, reduce time between meetings–shorten sales cycle).

It is a way to reduce sales cycle, but it’s probably the least controllable way to do this.

In reality, I think there are far better ways to reduce sales cycle, while also increasing the probability of winning.

First, you have to chase the right deals!  Nothing increases sales cycle more than a customer that’s not qualified or that doesn’t have a high sense of urgency around changing.  Yet, too often, we do just that.  We invest meeting after meeting, deals seem to stall very early on, so we schedule more meetings trying to get the customer moving forward.  Until the customer has a compelling need to change, regardless how frequently we meet, we won’t move forward.

But we and our customers invest a lot of time in what might be just exploratory conversations.

We need to get first things first.  Focus on helping the customer recognize, “We cannot operate like this any longer, we must change!”

Second, we must design better more impactful meetings with the customer.  Think of this as call planning on steroids.

Most of the time wasted in sales meetings is a lack of purposefulness and preparedness in the meetings.  Our research (admittedly a few years old) shows that sales people make at least 37% more calls than necessary to close deals.  We’ve seen as much as 70% reduction in “meeting time” through more purposefulness in these meetings.

Consider:

  • Are we and the customer aligned in what we want to achieve in the meeting?
  • Are we each prepared to achieve those goals in the meeting?
  • Do we have the right people participating in the meeting?

We need to go beyond sales call planning/preparation, but start thinking of “designing” meetings that are more purposeful and accomplish more.  Not only are we using our time more effectively, but we are creating much more value for the customer.  We are using their time more effectively and helping them accomplish more.

In doing this, we reduce the number of meetings required in the sales cycle.  In one client, it would typically take 15-19 meetings for a very large deal (perhaps over the course of 12-15 months).  Now they accomplish the same thing in 7-9 meetings.  As a result, they accomplish much more in less time invested (think person hours).

If you can do this, as well as compress wall time, you dramatically reduce sales cycle.

But even if you can’t reduce wall time (I’ll get to this), you’ve dramatically improved sales productivity.  Using the example above, we’ve freed up 50% of the client’s time to pursue other deals!

But reducing sales cycle time (wall-time) is really the wrong issue.  It’s, honestly, a selfish issue, focusing more on our productivity than what the customer is trying to achieve.

The real issue is not the sales cycle, but the buying cycle.  Our focus needs to be on helping the customer through their buying cycle.  There is too much data around the number of initiatives resulting in No Decision Made.  Customer struggle with buying/problem solving.   It’s less a vendor selection issue, but more issues around the customer themselves.  “How do they align diverse priorities, agendas?  What should they be looking at in considering solutions?  How do they get everyone in the organization on board?  What are the risk and change management issues? How do they organize themselves to solve the problem, make a selection, and implement a solution?”  In addition, in complex B2B buying/selling, they probably don’t go through this every day or even every month.  They simply don’t know how to buy.

We help the customer increase their urgency by helping them clearly understand the consequences of doing nothing.  But we go further by looking at opportunity and related costs they incur by not moving as quickly as possible.

As sales professionals, we need to help our customers reduce their buying cycle.  We need to help them eliminate the possibility of No Decision Made.  We need to help them realize the benefits they sought as quickly as possible.

The best way to compress our sales cycles are to help the buyer compress their buying cycle!

 

 

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Jun 12 17

3 Questions

by David Brock

I’ve had the good fortune to spend a lot of time with some inspirational leaders.  Over time, I’ve noticed some common patterns in every conversation they have with people in their organization, customers, suppliers, even within their business communities.

While there are variations, I call it the “3 questions.”  The three questions have almost magical power:

  • They have the ability to communicate and reinforce the top priority of the leader.
  • They have the ability to help the leader learn about things that impact their top priority.
  • They have the ability to help the person the leader is speaking with think about how they contribute to that priority.
  • They create an intensity of purposefulness and focus–within the organization, with customers, with the extended business community.
  • They create great clarity for everyone involved–both for the company, and for each individual.
  • They become an anchoring point for driving change.

The three questions have variants in wording–depending on the audience.  How one words them to a group of the company’s sales people is different than the way they might be posed to customers.

They are questions, not statements.  This is the power of the approach, questions engage people in the conversation, the journey, thinking about what it means to them, and buy in.  Statements only share the leader’s ideas.

Defining the three questions are tough.  Coming up with them requires rigorous thinking on the part of the executive/executive team.  What is really important?  What is our focus?  How do I learn about things that impact our ability to achieve/execute?  How do I consistently reinforce this and get everyone to discover their role in contributing to these?

They are tough for top leaders to execute.  They require commitment and consistency over a period of time.  Clearly, if in each conversation, the three questions change, there is no consistency, no commitment.  They lose their power and confuse everyone the leader speaks with.  When leaders come up with their three questions, they have to commit to them over a period of time–months, sometimes years.  Of course, they will change over time, but only when the previous goals have become internalized and are “muscle memory” for others.

This is the second piece of magic (actually the first) that happens with these 3 questions.  The process the executive/executive team must go through to determine the 3 questions requires deep focus, rigorous prioritization, introspection, and commitment.  But once developed they drive such clarity.

It takes courage to develop these, evangelize them.

Do you know your three questions?

 

 

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Jun 11 17

What Sales Can Learn From Lean Manufacturing — Part 4

by David Brock

We’re almost through the 14 principles of lean manufacturing that underlie the Toyota Production System (TPS).  If you haven’t read the three preceding articles, you may find them helpful:  What Sales Can Learn From Lean Manufacturing, Part 2, and Part 3.

So far we’ve looked at the Philosophy of TPS, which provides the foundation for everything.  It’s interesting, while these 4 philosophies are the foundation for the Toyota Production System and lean manufacturing, they have nothing do do with manufacturing.  They are sound business practices.  Supporting the 4 philosophies are the 14 principles.   We’ve completed the first 9, today we’ll wrap up the remaining 5 principles.

Principle 10:  Develop exceptional people and teams who follow your company’s philosophy.  It’s become clear that TPS is a very people focused process.  So often we think of lean manufacturing as representing the ultimate in factory automation and technology utilization.  But the developers of TPS recognized that people are at the core of making any of this work.  Principle 9 focused on the leadership roles.  Principle 10 extends this to the entire team.  It recognizes the importance of several things in driving the highest levels of performance:  You have to get the right people, you have to develop them to achieve the highest levels of performance, and it’s critical they be aligned with the culture and values of the organization.

It’s easy to see how this principle applies directly to building the strongest teams of marketing and sales professionals.  But too often we overlook elements of these–as a result, we aren’t optimizing our ability to market and sell.   We can see, if we don’t execute this principle well, it has adverse impacts on many of the other principles, ultimately creating problems or challenges in achieving our goals.

Principle 11:  Respect your extended network of partners and suppliers by challenging them and helping them to improve.  This is very important for sales and marketing.  If you go back to principles 2 and 3 (create continuous flow, use pull systems), TPS basically linked very complex series of process steps dependent on each other.  The station downstream of your work station was your customer.  You produced your work based on the your customer’s need or pull.  Your goal was to provide a defect free product to them, so they in turn could add their value providing a defect free product to the next station, and so on to the ultimate customer.  Likewise, you are the customer to the station upstream from yours.  Their job was to respond to your demand (pull) and provide a defect free product to you.

You can trace these steps all the way back to the beginning of the manufacturing line.  But it didn’t stop there–where did the inputs come from?  They could have come from outside suppliers, they could have come from other parts of the company.  As a result, to optimize the production systems, there is a huge dependency on the extended network of partners and suppliers to be doing their jobs with the same level of quality, at the same cadence as the production line.  Without close planning and cooperation with this extended network, huge problems or inefficiencies arise.

In Japan, huge, very closely connected supplier networks have been established to help facilitate this tight collaboration.  You may have heard of the Keiretsu.

We face the same in sales and marketing.  In sales, we may have channel partners, downstream of us, working with customers.  If we aren’t working effectively with them, we can never serve the customer effectively.

Likewise, sales, customer services, and other functions within our organizations represent part of the “partner” network.  If we aren’t collaborating and working effectively together, we will fail to achieve our objectives.  There are some interesting words in this principle that are massively important if we really want to make this work.  The principle is based on mutual respect of each other.  It’s based on challenging each other to improve and helping each other to improve.  All to a common goal of serving the end customer.

As we reflect on many of the problems we have with performance, we can trace many of these back to the failure to apply this principles to our work with other organizations–within our company and outside our company.

Principle 12:  Go and see for yourself to thoroughly understand the situation.  I’m envious of this principle.  It was developed by people focused on building fantastic manufacturing capability.  But this principle is fundamental to sales and marketing!

Think about it.  At it’s core, it’s about customer centricity.  If we aren’t spending time with our customers, we can’t possibly understand what they are trying to achieve and how we help them solve their problems (remember from principle 11 they are part of our extended network).

It’s a core leadership principle as well, we can’t manage by sitting behind a desk looking at dashboards or in meetings.  We have to be with our people to understand what they are doing and where they need help.  If you reflect back to the discussion of principle 7, using visual controls, we have dashboards that tell us how things are doing and alerting us to problems.  But when a the line stops and the red light is flashing at a workstation (visual control), managers, experts and others on the line gathered at that workstation to understand what the problem was –where the problem was occurring.

Likewise, if we want to understand the challenges our people have in performing, while our dashboards may alert us to those challenges, the only way we solve this is with our people.

Principle 13:  Make decisions slowly by consensus, thoroughly considering all options.  Implement decisions rapidly.  In the ready, fire, aim culture of sales and marketing, this principle may seem way out of line.  To those of you who have studied agile or are disciples of Eric Ries’ work, this may seem incompatible (it isn’t, but that’s another blog series 😉

But on reflection we can see the value of this–even at individual levels.  For example, if we rush to meet with the customer and we aren’t prepared, we know the problems that are created.  We know the value of planning, researching, and preparing, so we can maximize our impact in each meeting with the customer.

Likewise, when we look at our organizations, too often, we get into panic mode if we aren’t making our numbers.  Frenzies of unfocused activity happen.  We may create edicts around activity levels, “just make more calls, just send more emails, just get more stuff into the pipeline.”  But usually this has a terrible impact on results.

We already know this principle is so critical to everything we do in marketing and sales, yet we struggle to restrain ourselves, taking the time to understand, analyze, prepare before we execute.

Principle 14:  Become a learning organization through relentless reflection and continuous improvement.  In building high performing manufacturing systems, the creators of TPS recognized things were always changing and to be able to respond to those changes, the entire organization needed to continually learn and improve.

In marketing and sales it’s even more visible and more urgent to adopt this principle.  Our customers are constantly changing, they buy differently today than they did a few years ago.  Our competition is changing–both traditional competition, and those new competitors who are disrupting our customers and businesses.

If we aren’t learning and improving, we will be left behind.

 

Conclusion:  We’ve completed the 4 philosophies, and the 14 principles of the Toyota Production System.  As you can see, they are not really about manufacturing, but about developing high performance organizations.  The applications of most of these in sales and marketing are immediately obvious.

What leaps out at me is the disciplined process focused orientation—we know how important that is in sales and marketing.  The visible metrics and problem solving approach.  The dependency on upstream and downstream partners, collaborating to optimize the results we produce.  The focus on learning and improvement.

But more than anything else, it’s the focus on people.  The creators of TPS recognized all of this only works with knowledgeable, empowered people at all levels-all aligned around the company goals and culture.  Leaders are teachers, coaches, developers, and collaborative problem solvers.

In my next and final post on the series, I’ll address what I think are some of the “misunderstandings” of applying lean manufacturing to sales and marketing.  Mostly, it’s people who have focused on only one aspect or element of manufacturing, for example “build to order,” or “specialization.”

As the creators of TPS recognized, it’s the disciplined execution of all the philosophies and principles that drove manufacturing excellence.  Likewise with sales and marketing, it’s the disciplined execution of the same philosophies and principles that enable us to perform at the highest levels.

 

 

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