Can Lean Be Easily Applied To Sales?


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I thought I would receive a different answer when I asked Jim Womac, “Well, we’re talking about customer all the time and we talk about feedback and the value for the, but the closest one to the customer in most organizations is the sales and marketing process and that seems to be the one process that’s siloed out there that Lean doesn’t apply to.”

An excerpt from this related podcast and transcription: Lean Stories of Improvement

Dr. Womack:  Well, first off, it absolutely applies. It just hasn’t been applied. By the way, going the other direction, we know a staggering amount about how to do purchasing the right way and it is hardly ever done the right way. So you look downstream, you look upstream, towards sales and toward purchasing, and what you’ll often see is nothing happening that is going to support operating a good process on the production side or on the product development side in the middle, really product development and production.

And customer support. This is quite a step up from sales and marketing, but customer support. Those are really the three easiest to fix core processes of any business. But it’s hard to fix them when you don’t have a companion process stretching upstream and complimentary process going downstream.

And senior management has typically not seen much need to do it. I think partly because it’s just so easy to construct scoreboards that you say to your salespeople, I want you to sell 20% more at an average price of X, and you get an enormous bag of money. And there at senior management, I’ve done my job.

And then you say, well you’re purchasing and you want to save the following amount of my by reducing piece?part?price, and that’s easy to measure. Total cost is really hard to figure out, but piece?part?price, that’s easy. So take piece?part?price down by 10% and I the senior manager, will give you an enormous bag of money.

With no reference to, “Well, how would you do that?” By the way, to actually do that would require changing the supplier’s product development and production process, and probably their purchasing process as well. And to do it with the customer would require changing what we call the provision process which is how you get the product into the hands of the customer and go through the negotiation on price and make delivery and make them happy.

It’s just interesting. Those are treated by most senior managers as things that can be managed with a scoreboard. But what we call management by results rather than management by process. And look, that’s easy. It’s easy.

But to me, it’s like the team owner of some sports team who’s not doing very well so he concludes what’s needed is a bigger scoreboard because perhaps the players can’t see the scoreboard. What the team is saying, “Well, we don’t know how to block and tackle.” Then the owner says, “Gosh, not only do we need a bigger scoreboard. We need more data on the scoreboard. We need lots and lots of metrics on the scoreboard.”

The team is saying, “Well, gee, but we don’t know how to block and tackle.” So then the owner says, “Well, what we need is incentives. I’m going to give you big bags of money if you put points on the board.” The team says, “Gee, we don’t know how to block and tackle.” The owner in exasperation says, “Well, I’m going to give much bigger bags of money to put points on the board.”

So now you have a parody of management by results, except that what you actually see in a lot of organizations. That it’s just sort of magic that if you build a scoreboard with some metrics, and you put money behind the metrics, you will get a good result. That’s an interesting hypothesis, but I believe it has been disproved over and over again. Yet in the organizations it just continues as if there were no evidence that it doesn’t work.

Republished with author's permission from original post.

Joseph Dager
Business901 is a firm specializing in bringing the continuous improvement process to the sales and marketing arena. He has authored the books the Lean Marketing House, Marketing with A3 and Marketing with PDCA. The Business901 Blog and Podcast includes many leading edge thinkers and has been featured numerous times for its contributions to the Bloomberg's Business Week Exchange.


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