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 firstname.lastname@example.org. 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: