Your Marketing Machine: March 2011

Thursday, March 31, 2011

Where is the path in Continuous Improvement for Sales and Marketing?

In the sales and marketing process we have always stayed away from a process. Things were just not consistent enough to enable us install a process. Very few people take on the challenge of bringing continuous improvement to sales and marketing and one of the reasons it is so difficult is that sales always has been about relationships and people. And when you are a “people person” you blame errors and faults on people not the processes. You just don’t consider a process at all. I would argue that you cannot improve a system without a process and that sales and marketing does things within the boundaries of a process.

In fact, I am going to paraphrase the Six Best Practices outlined in a book by Daniel Stowell, Sales, Marketing, and Continuous Improvement . And if you would like to know how large of a gap we have to close to bring continuous improvement to Sales and marketing read the one review on this book: “The author couldn't lead a fly to cr*p, and the book is poorly written. Don't waste your money.” Quite a significant gap because I think the author considering it was written in 1997 lays out a good guideline.

The Six Best Practices needed:

Manage for change: Change, whether incremental improvement or radical restructuring, does not just happen. It requires leadership and management based on a foundation of a lasting commitment by everyone in the organization. Of all of the best practices, management commitment stands alone at the top of the priority list.

Listen to Customers: Sales and marketing need input from their current and past customers, prospects, and competitive users on which to have their continuous improvement activities. To be most effective, they need to use several complementary listening methods tailored to their specific customer set. Although listening to customers appears to be easy to do, there are pitfalls and barriers along the way. However, the input from listening will provide the requirements and feedback that they need to implement the other best practices. Without that information, they are just guessing.

Focus on Process: Leading companies have applied all five of these process improvement techniques to sales and marketing processes. As we have seen, when process improvement techniques are focused on the most important processes and used properly, they can make dramatic improvements in an organizations effectiveness and efficiency.

Use Teams: Teams are not appropriate for everyone or in every situation, but virtually every organization can benefit from expanding its use of teams. This is especially true of sales and marketing departments. They can apply teams in almost every combination of scope, size, mission, authority, and duration. These teams build on the synergy of the team members, improve communication and buy-in, increase productivity, raise employee morale, and provide a forum for personal development. To achieve these benefits from sales and marketing teams, organizations must be prepared to address both the critical success factors and the issues unique to teams in sales and marketing. When they do, they have taken another major step toward an open organization culture.

Practice an open Organization Culture: To be effective, all the elements of the open organization culture must be used together. Gathering information by practicing awareness and taking a global view is of no value if the organization does not share the information or take informed action. Reserving action for the top of the business does not support fast response or take advantage of the skills of the people who really get the work done. Taking action without questioning the organization's underlying beliefs and assumptions may lead to repeating mistakes. It is when all the elements of an open culture work together that an organization becomes more effective and efficient, whether that organization is an entire company or a sales or marketing function.

Apply Technology: Of all best practices described in this book, applying technology is today’s most visible. It has reached this status within the past five years and it appears that it will continue to revolutionize the way customers buy and companies sell in the future. That makes it important to stay aware of changing technology, looking for ways to use it to address opportunities and resolve problems. It is the companies that find ways to use technology, frequently ways it was never intended to be used, that will create and maintain their competitive edge. The others will just be playing catch-up.

His book lays out a good foundation for the above practices. Granted it may be dated but it reinforces not so much the ideas that I have been writing about but just how wide of a gap that we have bringing continuous improvement to sales and marketing. To have a chance resides in the power of Deming's concept and its simplicity. The concept of feedback in the Scientific Method is firmly rooted in education and well understood. The tools used in PDCA process are very visual and deceptively simple to start with (as you understand them, they tend to get harder ;)). And for the “people person”, Lean is all about people; training, empowering and respecting.

Wednesday, March 30, 2011

Becoming an Agile Family thru Personal Kanban

Maritza van den Heuvel. a Certified Scrum Master and Certified Product Owner has been part of a software development team changing from waterfall to agile over the last three years, first as lead tester and now as the Product Owner. She is also a mom, with the ongoing challenge of keeping family life organized with her husband – from arranging kids’ activities and school stuff, to planning out financial goals and priorities.

Maritza took that agile work experience where she was introduced to Kanban home one evening and the rest is history. She is one of the most devoted of all Personal Kanban users. Her Becoming An Agile Family blog is excellent and if I have one complaint is that she does not blog often enough. I take great tips away from it to use in a one chair consultant practice.

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Personal Kanban is neither a prescription nor a plan. The book provides a light, actionable, achievable framework for understanding our work and its context. This book describes why students, parents, business leaders, major corporations, and world governments all see immediate results with Personal Kanban.

Tuesday, March 22, 2011

Why does sales and marketing operate to a different quality standard?

After reviewing the new edition of Juran's Quality Handbook: The Complete Guide to Performance Excellence 6/e, I wondered why companies hold the entire company to such a high quality standard but leave Sales and Marketing off the hook. Technological measures of quality has existed on shop floors for many years, but measures of quality have not existed in sales and marketing. It has been difficult for organizations to recognize this need as they lacked the necessary alarm signals. As an increasing number of companies become commoditized and market share dwindles, these alarms are going off all over country. It is simply a lack of demand.

The good news is that the methods, tools and know-how now exist to use quality in your process to drive market share and increase revenue. Sales and Marketing needs to become part of the quality process within your company. not only to improve their own methods but to lead their companies out of this dilemma of surviving in an economy of an overabundance of supply. However, what’s not in place is the culture of continuous improvement and the ability to understand the changing perception of customer value.

In the new Juran Quality Handbook they listed the lessons learned by organizations that were successful in their quality initiatives. Their analysis showed that despite differences among the organizations, there was much commonality. These common strategies included the following:

Customers and quality have top priority. Thus customer satisfaction was the chief operating goal embedded in the vision and strategic plans. This was written into
corporate policies and scorecards.
Create a performance excellence system. All organizations that attained superior results did so with a change program or a systematic model for change. This model enables
organizational breakthroughs to occur.
Do strategic planning for quality. The business plan was opened up to include quality goals and balanced scorecards, year after year.
Benchmark best practices. This approach was adopted to set goals based on superior results already achieved by others.
Engage in continuous innovation and process improvement. The business plan was opened up to include goals for improvement. It was recognized that quality is a moving target; therefore there is no end to improving processes.
Offer training in managing for quality, the methods and tools. Training was extended beyond the quality department to all functions and levels, including upper managers.
Create an organization-wide assurance focus. This focus is on improving and ,ensuring that all goods, services, processes, and functions in an organization are of high quality.
Project by project, create multifunctional teams. Multifunctional teams, adopted to give priority to organization results rather than to functional goals, and later extended to include suppliers and customers, are key to creating breakthroughs in current performance. They focus on the “vital few” opportunities for improvement.
Empower employees. This includes training and empowering the workforce to participate in planning and improvement of the “useful many” opportunities. Motivation was supplied through extending the use of recognition and rewards for responding to the changes demanded by the quality revolution. Measurements were developed to enable upper managers to follow progress toward providing customer satisfaction, meeting competition, improving quality, and so on. Upper managers took charge of managing for quality by recognizing that certain responsibilities were not delegable—they were to be carried out by the upper managers, personally.
Build an adaptable and sustainable organization. Quality is defined by the customers. Customers are driven by societal problems. Quality now includes safety, no harm to the environment, low cost, ease of use, etc. To succeed, all organizations must focus on attaining sustainable organizations.

You may consider your organization is doing many of these things very well. I challenge even the most successful companies to rate their sales and marketing by the same standards. What would you find? Just citing one area, do you measure improvements of processes, or do you compensate people? These ten strategies are possible in sales and marketing. However, quality improvements are seldom obtained without a methodology.

This is why I believe the Future of Marketing is Lean!

Monday, March 21, 2011

ASQ Columbus Spring Conference will host Marketing with Lean

The theme of the ASQ Columbus Spring Conference 2011 is Leadership through Quality. After enjoying morning and after-lunch key-note speakers, attendees will have the opportunity to choose from both morning and afternoon tracks covering more than 14 different topics to include Marketing with Lean and I will be presenting it!

The conference is held at The Columbus State Conference Center, 315 Cleveland Avenue,
Columbus, Ohio 43215. It is a one day event on March 24th with registration beginning at 7:30 AM and the conference from 8:30 AM to 5:00 PM. Additional information and registration can be obtained at http://www.asq-columbus.org.

Joe Dager says of the Marketing with Lean program, "This requires re-thinking about the way you do business and the way you think about your markets. More importantly, the way you think about value. Value in terms of how your market defines it. Stop thinking about product or even product benefits. Your marketing systems must support the delivery of value to your customer at a much higher rate than your competitor’s. It is a moving target and the principles of Lean and PDCA facilitate the journey to customer value. Learn what the terms Agility, Speed and Relevance fit into the marketplace today and in the future."

ASQ is a global community of experts and the leading authority on quality in all fields, organizations, and industries.

* As a professional association, ASQ advances the professional development, credentials, knowledge and information services, membership community, and advocacy on behalf of its more than 85,000 members worldwide.
* As champion of the quality movement, ASQ members are driven by a sense of responsibility to enrich their lives, to improve their workplaces and communities, and to make the world a better place by applying quality tools, techniques, and systems

Sunday, March 20, 2011

Capture Knowledge using A3 Lean Thinking

When using A3s in marketing or for that matter anywhere within the organization has flourished in the last few years and has become one of them most popular Lean Tools. It is being used as reports, proposals but primarily as a problem solving tool. What I think makes the A3 so powerful is that it gives you a way to capture knowledge.

We talk about Knowledge Creation within a company and it seems to be one of those discussions at the 50,000 foot level that is better off left to consultants and authors. It always sounds great but it rarely is something that can be used at a practical level. The problem you typically have is that you do not have a formalize way to document and share the knowledge created. The A3 process allows you to do that. But you must make sharing this knowledge part of your A3 process. If you do this the A3 will remain live and may become the process that is used for knowledge creation within the company

Following are some guidelines to consider when you are getting ready to “close-out” an A3:

Identify the other people to include customers for this knowledge. Who may benefit from the knowledge acquired during this A3 process? You must look at this as a knowledge asset and who may benefit from this now and in the future.
Provide additional clarity to this A3 if needed. What is the scope of your A3 and what specific areas in your organization does it support? What specific areas external to your organization may it provide value?
Organize any existing material upon which you based your A3. Provide additional framework so that people can understand the purpose and relevance of the material. Store the knowledge in a space where it can be accessed by its community. Often this will mean the company intranet. Tip: If you create the document electronically make sure you tag it for people to find it easily.
Identify a community of practice relating to this A3. The community will first be the sources of the knowledge and people who can validate what took place or the interpretations of the document in greater detail. Typically, this will be the A3 team members but including others that were affected especially customers can prove invaluable as the document grows.
Create links to the person’s personal home page and/or e-mail address wherever you mention them in the text.
Initiate a feedback and ownership process. Encourage feedback from users, so that they pick up and eliminate any invalid recommendations. Instill a sense of obligation that “if you use it, then you should add to it". (My Favorite)
The A3s could be a basis of a Wiki on your company intranet which would allow the creation and editing of any number of interlinking pages and notes.

Why A3? An A3 does not work in isolation. It is just as much a team building exercise as it is a problem solving tool. The A3 document facilitates a way for you to share knowledge and solve a problem. When completed it is not something to be filed away and “closed” out. Utilizing your A3s in your organization has tremendous value. The use of one format for problem solving, reports, proposals and knowledge creation allows for others to work on the content, not the document. You will minimize the learning curve substantially. Why not create an A3 to determine how knowledge might be shared in your organization?

Book Reference: Learning to Fly

Thursday, March 17, 2011

PDCA for Lean Marketing, Knowledge Creation

Professor Ikujiro Nonaka in the book, The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation proposed that organizational knowledge is created through a cycle of continuous social interaction of tacit and explicit knowledge involving four modes of knowledge conversion: Socialization, Externalization, Combination and Internalization. The cycle is a spiral one as each pass builds upon the other suggesting that each cycle builds on the previous one therefore accumulating knowledge. He depicts this in the SECI Model shown below.

Explicit Knowledge can be captured in records of the past such as libraries, archives and databases and is assessed on a sequential basis. It can be expressed in words and numbers and shared in the form of data, scientific formulate, specifications, manuals and the like. This kind of knowledge can be readily transmitted between individuals formally and systematically.

Tacit Knowledge is highly personal and hard to formalize, making it difficult to communicate of share with others. Subjective insights, intuitions and hunches fall into this category of knowledge. It is deeply rooted in and individuals’ actions and experience as well as in the ideals, values, or emotions.

Socialization: This mode enables the conversion of tacit knowledge through interaction between individuals. The key to acquiring tacit knowledge is experience. Without some form of shared experience, it will be extremely difficult for people to share each other’s thinking process. The tacit knowledge is exchanged through joint activities rather than through written or verbal instructions. In practice, socialization involves capturing knowledge through physical proximity. The process of acquiring knowledge is largely supported through direct interaction with people.

Externalization requires the expression of tacit knowledge and its translation into comprehensible forms that can be understood by others. In philosophical terms, the individual transcends the inner and outer boundaries of the self. During the externalization stage individual commits to the group and thus becomes one with the group. The sum of the individuals' intentions and ideas fuse and become integrated with the group's mental world. In practice, externalization is supported by two key factors.

Articulation of tacit knowledge—that is, the conversion of tacit into explicit knowledge –involves techniques that help to express one’s ideas’ or images as words, concepts, figurative language (such as metaphors, analogies or narratives) and visuals. Dialogues, "listening and contributing to the benefit of all participants," strongly support externalization.
Translating the tacit knowledge of people into readily understandable forms. This may require deductive/inductive reasoning or creative inference (abduction).

Combination involves the conversion of explicit knowledge into more complex sets of explicit knowledge. In the combination process,justification (the basis for agreement) takes place and allows the organization to take practical concrete steps.

In practice, the combination phase relies on three processes.

Collecting externalized knowledge from inside or outside the company and the combining such data.
Transferring this form of knowledge directly by using presentations or meeting.
Editing or processing of explicit knowledge makes it more usable (e.g. documents such as plans, report, market data).

Knowledge conversion involves the process of social processes to combine different bodies of explicit knowledge held by individuals. The reconfiguring of existing information through the sorting, adding, re-categorizing and re-contextualizing of explicit knowledge can lead to new knowledge. This process of creating explicit knowledge from explicit knowledge is referred to as combination.

Internalization is the conversion of explicit knowledge into the organization's tacit knowledge. This requires the individual to identify the knowledge relevant for one’s self within the organizational knowledge. That again requires finding one’s self in a larger entity. Learning by doing, training and exercises allow the individual to access the knowledge realm of the group and the entire organization. In practice, internalization relies on two dimensions:

Explicit knowledge has to be embodied in action and practice. Thus, the process of internalizing explicit knowledge actualizes concepts or methods about strategy, tactics, innovation or improvement. For example, training programs in larger organizations help the trainees to understand the organization and themselves in the whole.
Embodying the explicit knowledge by using simulations or experiments to trigger learning by doing processes. New concepts or methods can thus be learned in virtual situation.

The information above is paraphrased from the Cyberart Database and from Professor Nanaka’s book, The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation

When you consider continuous improvement for Sales and Marketing many people relate PDCA to the typical manufacturing analogies such as cycle time and waste reduction. The SECI Model, I have found to be useful in transferring the knowledge-creation activities or thoughts to PDCA. Overlaying the PDCA cycle on the SECI Model correlates to what must occur when viewing PDCA as a knowledge creating methodology. I think it adds a much better focus on the problem solving cycle and how it relates to the transfer of knowledge needed. It further defines the types of human interactions required during each part of the cycle.

The importance of this characterization is to move away from the old model of seeing value from a perspective of goods and services to the new model where value is created or even co-created from experiences. We can no longer market to the memory of our customer but must market and become part of their activities.

The framework of the SECI Model is one of a continuous growing spiral increasing in knowledge. When applied to Marketing with PDCA, it can be viewed as a funnel creating a stronger and stronger knowledge of both customer and supplier. This knowledge is not only about benefits and features but values and beliefs. This is about an ever increasing spiral of compatibility.

Tuesday, March 15, 2011

Does Lean Marketing deliver what the customer wants?

Customers do not want more choices. They just want what they want, period. And in an economy that there is less demand than supply, they can get it. Companies in response to this create more features, more options in their products or services. They will take the deep dive into segmenting their markets and through the use of technology may be reaching the ultimate goal of marketing to a single person. Marketing technology exists that allows us to customize mass mailings, e-zines, recordings and other media in an attempt to personalize each and every marketing effort.

Companies have embraced this marketing technology and without anything more than data can provide a very unique message. Their products and services are also provided under the disguise of tailored to your needs while just being a version of a core product line. You do not need to look any further than the universities. Their customized mailings to your children and the breadth of degrees they offer are just phenomenal. It is the manipulation of data that provides this ability and I venture to say does little in swaying a high school student to attend. I believe that decision is reached by the influencers in that person’s network.

This technology is important though. It allows us to capture information about clients in a non-offensive way and in a format that allows us to automate much of the information for distribution. From a product/service standpoint creating the different version of our core product allows us to extend our reach to a greater audience. Case closed?

If it is, we forgot about that influencer thing I mentioned. Trust is difficult to obtain from data. Trust comes from people. Knowing all the influencers and marketing certainly can help but quite unfeasible in most circumstances. The data you obtain must be used to facilitate a learning atmosphere between you and your customer/prospect. You must also be willing to share seats with the customer and leave him teach you versus you being the teacher. The more they teach you the more difficult it becomes for a competitor to take them away.

In the Marketing with PDCA cycles that are utilized in Lean Marketing, we create that collaborative environment where learning and knowledge creation takes place. In the landmark book, The Experience Economy , the authors built a pyramid of “The Progressions of Economic Value and Valuable Intelligence. You can think of your own product stages and how a customer/prospect looks at your product. Each level of economic value corresponds to a level of valuable intelligence (commodities to goods, goods to data, etc.). From the book:

While the economic offering becomes more and more intangible with each step up the next echelon, the value of the offering becomes more and more tangible. Economist often talk about the “line of intangibility” between goods and services – to which we add the line of memorability” before experiences and the “line of sustainability” before transformations. Goods and services remain outside of the individual, while experiences actually reach inside of the individual to the value of the offering.

They go on to say:

Nothing is more important, more abiding, or more wealth-creating than the wisdom required to transform customers. And nothing will command as high a price.

PDCA is looked at most as problem solving methodology. I think it is the core of a Lean Culture. In the beginning stages of developing a Lean Marketing program I distinguish the difference by using Marketing with A3 as the problem solving tool of choice. This enables me to distinguish the difference between the tool A3 and PDCA which is the knowledge creation culture that is the essence of Lean Marketing. The sharing, experience and interaction of knowledge with the customer created through PDCA is what the customer wants. He proves it by the value he assigns to it.

This is why I believe the Future of Marketing is Lean!

Why A3, Why now in Lean thinking eBook

Mike Osterling, the President and Principal Consultant at Osterling Consulting was my guest on the Business901 podcast, Why A3, Why Now in Lean Thinking?. This is a transcription of the podcast.

Why A3, Why Now in Lean Thinking

Osterling Consulting was founded for the purpose of supporting organizations on their continuous improvement journey. Building upon 18 years of internal experience in operations leadership roles, Mike has worked full time for the last 13 years applying the lean concepts in manufacturing and office environments. Mike is also the co-author of The Kaizen Event Planner: Achieving Rapid Improvement in Office, Service and Technical Environments. a practical, how-to guide for planning, executing, and sustaining rapid improvements in office, service, and technical environments

There are A3 examples on the Marketing with A3 Website

Saturday, March 12, 2011

Is your marketing concentrated in area that makes a difference?

Identifying your customer segments is imperative in your future marketing efforts. If you have not identified those segments well, you will be discounting, providing unpaid services and minimizing profits to be competitive in the market place. Customer (Market) Identification is not easy. However, it may be the most important task that marketing has within your company.

First look at how you determine pricing, paraphrased from the The Going Lean Fieldbook:

Do you look at pricing from the standpoint of a cost plus or from the standpoint of what the customer is willing to pay for the value you receive?

Taiichi Ohno felt that most companies set their pricing models incorrectly and said, “When we apply the cost principle selling price = profit + actual cost, we make the customer responsible for every cost. This principle has no place In today’s competitive automobile industry…The Question is whether or not the product is of value to the buyer.”

Toyota shifts the equation around in a way that is mathematically equivalent but creates an entirely different meaning: selling price - actual cost = profit. The company recognizes that customers not the company assess the value of its products. And, like it or not, it is customer perception of value that forms the basis for pricing. Setting a sticker price higher than this will only drive customers to competitors' more reasonably priced products.

As a result profits are not set by the company but they are simply the difference that the customer is willing to pay (their perceived value) and what it takes the company to produce it.

This is a subtle difference but important. As Dr. Reidenbach said in a guest blog post, “Is your price worth it?” Are you adding a perceived value to the product? Many resellers and small shop owners struggle with this and the internet has played a large part of changing the landscape as we see it. All products are commoditized, practically instantly. The difference in price can only be justified by the value your customer places on the service you provide.

If this is the case, would we not be better off trying to concentrate our sales and marketing efforts on growing the areas that our customer values. The Critical to Quality points (CTQs) that are important to our customer. In the diagrams, I try to depict the old model of pricing where we create demand and support material and labor through expenses. At the end of it we determine what profit we want to make and add it. The new model is that the customer determines the value that you add to the product through the price they are willing to pay. If they determine that your services does not warrant the price, they typically have multiple sources to choose from. If you are reseller, they can probably get the exact same product.

When you look at your sales and marketing resources and budget you might be surprised to find it seldom addressing the CTQs. The real reasons a customer buys from you. Many times, I see resellers and retailers marketing products that are carried by numerous others and many of them at perceived lower prices. They actually are advertising for lower profits.

Shameless plug: Dr. Reidenbach and I have put together a program called the 5Cs of Driving Market Share. The first step in the process is Customer Identification. Though the process is based upon the problem solving principles of DMAIC, it was created for anyone to understand and use. It does not require a proficiency in Six Sigma.

You can also listen to a podcast that discusses many of the principles:
Applying Six Sigma Marketing to become Best In Market

Friday, March 11, 2011

Understand Scrum, Understand Implementing PDCA

I had the pleasure interviewing James O. Coplein, author of the Lean Architecture: for Agile Software Development for an upcoming Business901 podcast. I seem to learn so much from the software community and had picked up Jim’s book to help provide a framework for parts of the Lean Marketing House (Marketing with Lean). I was so impressed with the book that I contacted him for a podcast. An excerpt from the book:

A good feedback cycle has the appearance of causing problems. It will cause emergent and latent requirements to surface. That means rework: the value of prototypes is that they push this rework back into analysis, where it has more value. And most important, good end user engagement changes end user expectations. It is only by participating in a feedback loop that’s grounded in reality that customers get the opportunity they need to reflect on what they’re asking for. If your customer changes their expectations in the process, you’ve both learned something. Embracing change doesn’t just mean reacting to it: it means providing the catalysts that accelerate it.

Explanations like this proliferate throughout the book. and he builds a complete framework for building a Lean Culture without ever calling it that. In the podcast, we talked about the evolution and interpretation of Lean and/or Toyota Production System (TPS) and their relationship with Scrum. It is interesting how they complement each other. In one sense, it is interesting how Scrum is hardly more than a PDCA cycle. But on the other hand it really enhances the PDCA cycle in the spirit of teamwork and flow.

In this video, the Father of Scrum, Jeff Sutherland, CEO of Scrum, Inc and Senior Advisor to OpenView Venture Partners discusses the evolution of Scrum. Jeff discusses the roles, the meetings and the reporting process associated with Scrum methodology.

This video provides an understanding of Scrum and provides a basis for how a team can operate in an iterative fashion. I was always taught in project management to always look at what was left to do more than what was completed. This is a basic theory of the burn-down chart.

Related Information:
Jeff Sutherland’s Website: http://scrum.jeffsutherland.com/
James Coplein;s Website: Gertrude and Cope

Monday, March 7, 2011

Future of Marketing is Lean

The sales and marketing structure has drastically changed. The typical structure still used by many is when competition was not as great and technology was not the force that it is today. Most of the time sales and marketing sold solutions without every defining the customers problem. The typical sales forecast was derived on increasing sales a certain percentage. That's changed. In today's business setting many companies are fighting for survival. Competition has never been so keen and the elements of the past are simply not working.

The new wave of marketing has seen an entire new set of tools being used with the components of social media leading the way. No longer do we trust print media, radio, television and other forms of traditional media. The tools have all become a commodity. Some organizations have even questioned the need for a sales force. To make effective marketing decisions, you need a clear understanding of what the customer values and what your company strategy is to support them.

Companies have found that they must listen at higher level than ever before to their customers, focusing on improving processes, and using teams. Companies have to build a culture that supports agility, relevancy and speed. To accomplish this there has to become an open sharing of information that will accelerate creativity and innovation. Value has to be understood that it is delivered at the point of consumption, not when it leaves your hands.

Lean Marketing is about installing a continuous improvement methodology to your sales and marketing process. It’s about constantly improving ever step up the way. In the smaller scheme of things it is about improving a launch, an advertising campaign and even a sales call. However, in the bigger scheme of things it is about building a structure that creates a learning organization based on an ever increasing knowledge of what the customer values.

The Lean practice of PDCA is ideal for learning and creating knowledge activities. Following this process it allows individuals and teams to recognize and take advantage of opportunities, make decisions faster, and be more responsive to customers. As part of the PDCA cycle you get feedback on the action from listening to customers and the companies’ measurement systems. Having information, taking informed action and getting feedback is part of the natural PDCA cycle. Effectiveness comes from when you use and take advantage of all your resources.

This why I believe the Future of Marketing is Lean!

Sunday, March 6, 2011

Does your Value Proposition speak of the Customer Experience?

When most organizations think about their value proposition, they think about the tangible benefits that the organization offers or how much better they are in a certain area versus the competition. It might even include their history, technical expertise, latest technology, commitment to customers, etc.

In the book, Strategy from the Outside In: Profiting from Customer Value the authors describe their variation of a value proposition:

We prefer a third variant that we see in use among customer value leaders. A customer value leader bases its value proposition on a resonating theme – a few elements where the firm is distinctly better than the competition that really to a target market. An effective value proposition offers superior performance, price or relational value and communicates that value in a way that shows that it has a deep appreciation of the customer’s value priorities. The choice of value proposition is also the choice of target customer segment – and vice versa

This variation though more customer centric stops short of describing the experience the customer will have with the company. One of the interesting things about Agile Project Management is that you start with creating a user story. Work is expressed in the backlog as user stories. A team may write its user stories in a number of ways as long as they are written from the perspective of the end user. Put another way, team members are encouraged to think of their work from the perspective of who will use it, hence “user” story.

In building a value proposition, how many times do you start with a customer/prospect telling you how they use or will use the product or service? I know we interview people or perform won/loss analysis, but I wanted to go an additional step. What if we would paint the picture of how a user experiences your product or service? If we would take the time to determine that reaction, would we not create a better value proposition?

I think it might be interesting to define your entire business and your target business through customer experiences. Actually, cataloging the various experiences a customer will have with an organization is a needed exercise to enhance the value of the total experience for its customers.

Interesting Side Note: Joseph B. Pine II and James H. Gilmore, in their book The Experience Economy: Work Is Theater & Every Business a Stage, put forth a interesting statement that creates an interesting value proposition on how a customer may interpret your organization by how you charge for your product or service:

If you charge for Stuff, then you are in the commodity business.
If you charge for tangible things, then you are in the goods business.
If you charge for the activities you execute, then you are in the service business.
If you charge for the time customers spend with you, then you are in the experience business.
If you charge for the demonstrated outcome the customer achieves, then and only then are you in the transformation business

Friday, March 4, 2011

Integrating Value Networks

Some great tips to start visualizing the process of collaborative networks. You don’t have to throw the organization chart away, even though it seems that way sometimes. A key reason to look at this video is for better understanding by sales and marketing on what is taking place in organizations that they must sell too.

Verna Allee describes how to integrate value networks with traditional business approaches such as organizational charts and processes. This video, #2 of 6, is from a series of interviews with Jeff Saperstein, co-author Bust the Silos. Verna Allee is CEO, ValueNetworks.com.

Why you need a structured approach to problem solving

Came across this skit by comedians John Clarke and Bryan Dawe. The conversation is not far removed from meetings that I have participated in. It reminded me of the need for us to have a structured approach to problem solving.

Many organizations lack a systematic and common method of problem solving. There is no magic in A3 Problem Solving other than it is a proven methodology and one that is widely accepted. The advantage of course is that you can access a wealth of knowledge on the subject and find others that can assist you. It prevents this type of dialogue.

Tuesday, March 1, 2011

Software Quality Assurance Podcast with Murali Chemuturi

I took a little different twist this week on the Business901 podcast and interviewed Murali Chemuturi, an information technology and software development subject matter expert, hands-on programmer, author, consultant and trainer. This podcast centered on Software Quality Assurance and what Murali considers best practice. I found his position quite different than the Agile and Kanban Software people I typically interview. I think most people in the IT field will find it interesting.

In 2001, he formed his own IT consulting and software development firm known as Chemuturi Consultants. Chemuturi Consultants help software development organizations achieve their quality and value objectives. The firm provides training in several software engineering and project management topics such as Software Estimation, Test Effort Estimation, Function Point Analysis, and Software Project Management, to name a few. His firm also offers a number of products to aid project managers and software development professionals such as PMPal, a software project management tool; and EstimatorPal, FPAPal & UCPPal, a set of software estimation tools.

J. Ross Publishing has recently published three books authored by Murali Chemuturi:

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