Lean + Marketing = Connected Customers

Insanity is doing the same thing over and over again and expecting DIFFERENT results.  Process is doing the same thing over and over and achieving the SAME result.  As I think more and more about the insane habits that can sink a business, I keep coming back to this point:  a well-defined and in-control process tends to reliably produce the results we want and expect.

Recently, I was introduced to Joe Dager at Business 901.  Joe’s take on Lean and Six Sigma is unlike any I’d ever heard of before.  Joe maintains that Lean principles can be applied to marketing.  And, he’s not crazy.  Think about it – what one thing does your business need more than anything else?  Customers.  So, if there is a process for bringing in new and repeat customers, would you not give your left arm for it?  The process for attracting, growing, and maintaining your customer base may be as unique as your business, but what is fundamental is the methodology you use to develop what Seth Godin calls your TRIBE.  Joe’s Lean Marketing might just be your ticket.

As I think about how Lean thinking can shape marketing strategy, it is starting to make sense to me.  The “value stream” is the path that leads otherwise disconnected buyers to your company in such a way that they become willing, able, and eager to buy your products or services.  Rather than throwing advertising darts and hoping to hit a bullseye, Lean Marketing is a systems-view approach to bonding consumers to products.

As consumers, we follow a sub-conscious path to ultimately accept or reject products and services.  First, we have a need, whether it is known to us or not.  Secondly, we become aware of a product or service by some form of advertisement.  Thirdly, through the avenue of marketing, we begin to connect the dots between our needs and the product or service being presented to us.  Lean marketing tansforms those dots into solid lines – solid, connecting lines that ultimately lead us to purchase.  Finally, effective marketing does not end with the purchase.  The purchase is just the first date in what the producer hopes to be a long and lasting relationship with the consumer.

So, you see, it’s a process.  Since Lean attempts to reduce the time between the beginning and the end of a process, Lean Marketing seeks to shorten, simplify, and interconnect the methods, processes, and touch points between first contact and loyal customer.

If I understand the Business 901 principles, this is Lean Marketing.  Follow Joe Dager on Twitter.  He is a brilliant and charismatic guy with a passion to push the limits of conventional Lean thinking.

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Managing Results – Getting the Most From Your Team

A friend of mine asked me to review his business and look for process improvement opportunities.  I went to his office and he gave me the grand tour, explained his business model, and highlighted the potential for growth.  As we toured the office area, we noticed an employee surfing the net (nothing outlandish, just plain surfing).  I could tell this waste of time frustrated my friend.  I took the opportunity to infuse some perspective into the situation.  From that point, here is how our conversation went:

ME:  “What is he (the internet surfer) supposed to be doing?”

FRIEND:  “He’s in sales.  He is supposed to be selling our services.”

ME:  “Does he do a good job?”

FRIEND:  “Yes.”

ME:  “Does he have an aggressive sales target?”

FRIEND:  “Yes.”

ME:  “Is he hitting the target?”

FRIEND: “Yes.”

ME:  “Would you rather be the kind of boss that gets results or baby sits people?”

FRIEND:  “Good point.”

I’m not trying to imply that web-surfing at work is OK.  Nor am I saying wasting time is OK.  As your business grows, it will become impossible to manage your entire team’s time.  So you will need to find a better approach.  My suggestion is to manage their output instead of trying to manage their time.  Here is how I would propose doing that.

1)     For each employee, determine their individual value stream.  Value stream is the part of the job that creates value for the company.  Every person in the organization should have a job or series of tasks that are vitally important to the success of your company.  What are those tasks?  How do they flow into the overall revenue or quality aspects of your business model? Defining the valuable contribution sets the stage for being able to measure performance.

2)     Determine a few key measures for each employee’s value stream.  If your team knows what is important, work with them to figure out how to measure their success.  You should be able to get a pretty good gage on the status of a value stream using three balanced measures.  As the manager, you will have to decide precisely what and how to measure, but in general a measure of output, quality, and efficiency will tell a compelling story.

3)     Display metrics publicly and transparently.  Public and transparent data tends to challenge the go-getters and motivate stragglers.  This is sometimes explained as the Hawthorne Effect – our behavior changes when we know that we are being watched. This is not a bad thing.  We all like to know what our goals are, whether or not we are hitting them, and if our boss notices our effort.  Transparent and public display of this information accomplishes these things.

4)     Set aggressive, yet achievable targets.  Once the value stream is defined and a measurement system is in place, target-setting is a natural and complementary progression.   I personally like the idea of a threshold (expected target) and a stretch target (exceeds expectations).  By setting targets, a manager is in the early stages of developing an autonomous work team – a team committed to and managing its own success.

5)     Manage only the gaps.  Using steps 1-4, we have defined the job relative to the value it creates, measured and displayed performance, and set targets.  Now, you as the manager can manage the gaps in performance. Gap is not a technical term.  It’s merely the difference between the threshold (expected performance) and the actual performance.  The performance measurement dashboard developed in step 3 highlights very quickly any gaps in employee performance.  It is toward those gaps that the manager should direct his or her efforts.

Generally speaking, only about 20% of the team will struggle to meet the expectation.  Therefore, you, the manager, can concentrate your time on the performance of the few rather than the time utilization of all employees.  At the end of the day, do you really care how your top performers spend every minute of every day?  Are you more interested how they work instead of their contribution to the success of your company?  Instituting a real-time, outcomes-based performance measurement system will free up your time, reduce your frustration, and empower your team to produce greater and more effective results.

What Lean and Six Sigma CAN’T Do

By now, you have probably realized that I am a process innovation nut.  I must have a mutated gene, for I see everything in life as a process – a series of steps marching to a rhythm and flow toward some objective.  Tools such as Lean and Six Sigma serve as lenses through which I view my surroundings.  When I go to a restaurant, I calculate the number of steps taken by the waiter.  Then determine which of those are value-adding and value-robbing.  I spend dinner time trying to figure out a more efficient pattern and route the waiter could take to maximize his or her table turns.

In recent months, I’ve noticed, my experiences do not always fall so neatly into my highly pragmatic internal classification and problem-solving framework.  I battle with questions like – Why are the chicks at Chik-fil-A so freaking friendly?  Why does Apple call their tech support the “Genius Bar” and Best Buy calls theirs “Geek Squad”?  Why is Disney World the “happiest place on earth” and the Denbigh Wal-Mart the eighth level of Hell?

Several months ago, I was introduced to Jake Poore and Integrated Loyalty Systems. Jake preaches a new process gospel – the excellent customer experience.  (I am trying to reconcile his concepts with the Lean and Six Sigma concepts into a nice, neat little philosophical package.)  Jake espouses two tools useful in evaluating the customer experience.  1) The Customer Compass – understanding the Needs, Emotions, Stereotypes, and Wishes of the customer (Get it!?  N-E-S-W, like on a compass).  2) The Touchpoint Map – dissecting the customer experience in light of the customer’s compass.  These add a dimension to process improvement that Lean and Six Sigma totally neglect.  Jake’s system addresses feelings, a topic I am not generally comfortable discussing.  I am, however, learning to place more and more significance, not just on how processes benefit the consumer intellectually, but how those processes make the consumer feel.  And research shows that we make purchases based on how and what we feel.

Lean and Six Sigma guide us in assembling the nuts and bolts of our business.  They identify the operational details, parsing waste from value.  But, they don’t force us to emotionally connect to with our customers.  While we invest a ton of resources in gaining efficiency, how much do we invest in creating relationship-based loyalty?  I would propose that if process innovation, improvement, and control form the foundation of the “house of quality,” then the customer’s experience is the lawn, front door, exterior, furniture, widows, and kitchen sink.