DMAIC :: Lean Sales and Marketing thru Service Design Thinking

Archive for DMAIC

Aug

Lean or Six Sigma which fork in the road do you take?

Posted by: business901 | Comments (4)

People will see my comments floating around the Internet on the subject of Lean Six Sigma. I am not an expert and probably take too much liberty in the application of them to even proceed but it was important to me to basically post my view.

There will always be a strong debate between Lean and Six Sigma people about using the 2 terms jointly. I am not positive of the lineage of it but I believe Michael George at the time of the George Group (later to be Accenture) coined the term. I assume he viewed the two methodologies as compatible and more effective in conjunction with each other versus separately. I am not even sure that many (Case in point being that many of today’s “Lean” consultants were trained as Lean Six Sigma Black Belts) disagreed at the time except for the very traditional Lean stalwarts.

Dr. Mikel Harry, credited as one of the founders of Six Sigma states that Six Sigma is not a culture and was developed as a quality tool to gain breakthrough performance for an organization. I adhere to that statement and think Six Sigma offers great opportunities for an organization and provides a very precise and workable structure in achieving this. I am not against the hierarchy of belts and the formalities of DMAIC, DFSS, etc. Many organizations need this type of structure to be successful. I am avid defender of Six Sigma in the Lean circles many times to the chagrin of others.

Lean was developed by the MIT group under Dr. James Womack from a study of automotive companies and more specifically the Toyota Production System. Its approach is based on continuous improvement with a direct correlation to PDCA and Dr. Deming’s philosophies. Lean made its first inroads in many companies and gains in popularities (IMHO) because of the ease of entry into the methodology. Removing waste and improving flow was Lean’s mantra in the 90’s and the tools of 5s and Value Stream Mapping soared in popularity. However, as Lean continued developing tools of A3, Hoshin and Standard Work became common place. But even more so, the culture of PDCA and the spirit of Kaizen started to take hold.

Six Sigma was the methodology of choice for many manufacturers as a result of the significant strides that GE and Motorola had made. Later, Lean seemed to gain and Six Sigma wane in popularity. Lean became the path to a customer as an enabler of some quick wins. You could then take the deep dive with Six Sigma when you wanted to get “serious”. As Lean continued to steamroll and Six Sigma still continued with somewhat lackluster performance many organizations and consultants dropped the attachment to Six Sigma and became “Lean”. Popularity does create a crowd. This may not be an entirely accurate description but it serves as a basis for my views and the following comments.

What makes Lean Six Sigma work? When you first start using any methodology, you are typically introduced through the tools. Using Lean initially versus Six Sigma makes perfect sense, it is an easier introduction. And why reduce variability on non-value activities? But sooner or later you get to the fork in the road. One path says Six Sigma and the other path is this thing they call culture (Lean). So do you want to take the deep dive with a breakthrough structured approach (still has a steep incline) or do you want to try and instill a culture of empowerment. There is not a right or wrong answer. You can take either. Where I disagree, is that you can take both.

Six Sigma has always been about structure and tools. It is very, very good and does an outstanding job when applied properly. In Six Sigma thinking, you can use Lean tools initially and get to 95%. To finish the job, you use Six Sigma. And as a result, Lean Six Sigma was developed. If your organization grew out of the Motorola and G.E. world it seems like a perfect fit.

If you adopt the Lean mentality and the spirit of Kaizen (continuous improvement is not an event) you become immersed in the culture of Lean, as Dr. Balle wonderfully described in the Zen Story about the mountain. Summed up in the blog post: Lean Tools and Culture as it Relates to Zen

Have you ever played yourself in a game? On a basketball court or even a simple game of checkers, sooner or later you have to pick a side to win. It is inevitable. This is the ultimate wedge between the two methodologies and can simply be stated. Six Sigma is a structured methodology and Lean is a cultural driven by a learn by doing approach. That is not to say that Six Sigma does not have its prototyping options and that Lean is not without statistical control (it did evolve from Deming). But it is saying that both are two completely different paths that you must choose between.

If you take the path of and see Lean as Lean, Six Sigma does not make sense and is not a compatible technology. There is a significant culture difference and approach. If you take the path of Six Sigma, you view Lean as only a set of tools nothing more and why not, Lean has a great toolbox. If you take the path of Lean you still can be just as efficient and just as effective as Six Sigma, you just do it differently.

I make no qualms about stating that I believe and follow a Lean philosophy. Lean works in my world much better. PDCA which is basically form a hypothesis, test it and adjust is what sales and marketing is all about.

I support the ideas of Lean and Six Sigma without hesitation. What I have trouble understanding is how you can be philosophically aligned in Lean thinking and practice Six Sigma. So I believe you must ask yourself; Which fork in the road do you take?

Six Sigma Marketing uses a modified DMAIC

Posted by: business901 | Comments (2)

I have been discussing Six Sigma Marketing with Eric Reidenbach of the Six Sigma Marketing Institute and find his approach to the combination of Six Sigma and Marketing quite impressive. He differs from the traditional approach of most organizations when applying Six Sigma to Marketing activities. That approach typically deals with highly structured people and processes entering a world of highly creative and intuitive people. Eric instead blends a world of data driven and fact-based approach to growing market share by providing targeted product/markets with superior value. It combines the discipline approach of Six Sigma for more efficient use of the abundance of marketing data. This allows marketing to be more effective and provide the data to demonstrate it. The elements of Six Sigma Marketing(SSM):

Customer value is the driving metric
SSM has a unique set of value tools
SSM uses a modified DMAIC approach
Focuses on more efficient and effective marketing results – achieving sales goals at lowest cost
Important goal is defect reduction – reducing lost customers
Expands traditional view of marketing to 5Ps, adding processes to the marketing mix

The Six Sigma Marketing Institute uses a modified DMAIC Approach that I outline below:

Define: Identify and prioritize specific product/markets

Principal tools are the Market Opportunity Analysis which identifies key markets based upon attractiveness of market and ability to compete within that market and the Product/Market Matrix which identifies and prioritizes product/markets based upon greatest economic and strategic returns

Measure: For each Product Market define value

Principal tool is the Competitive Value Model which identifies the CTQs and the price/quality tradeoff. It is a market based model that captures the VOM (Voice of the Market). It is the information platform for Six Sigma Marketing.

Analyze: Understand the organization’s value proposition

Principal tools are the Competitive Value Matrix which identifies the organization’s competitive value proposition relative to their competition (The focus is on value gaps) and the Customer Loyalty Matrix which identifies the loyalty of the organization’s customer base and the bases of that loyalty.

Improve: Focus on People, Product and Process Issues

Principal tools are the Cause & Effect Matrix which links specific CTQs to processes and identifies improvement opportunities driven by the voice of the market. (The purpose is to close or open value gaps) and Value Stream Mapping which maps value streams and processes as they exist. The C&E Matrix links to the map to identify where and how to change the existing situation.

Control: Monitor changes in Value proposition and customer events:

Principal tools are the Value performance monitoring which monitors the competitive value proposition of the organization on a periodic basis and the Customer event monitor which monitors quality of specific customer interactions with the organization on an ongoing basis. Identifies defects and the means to improve and change them.

Eric has taken this a step further in a soon to be released program called the 5 C’s of Driving Market Share that is well suited to both Six Sigma Black Belts and Chief Marketing Officers. His recent eBook Best in Market can also be found on my website which will further outlined this approach to marketing. You can find Eric at www.6sigmarketing.com.

Value Stream Marketing and the Indirect Marketing Concept

Posted by: business901 | Comments (10)

The Indirect Marketing depicted in the light blue section of the Value Stream Marketing layout incorporates a wide array of marketing tools. This can be similar to the top of someone’s marketing funnel but it also to the concept of flipping the funnel(see book below) and re-using your existing customer stream that you have in place.(Book on the subject: Flip the Funnel: How to Use Existing Customers to Gain New Ones)

There are numerous marketing systems and methodologies in the marketplace but what makes all of them work is your involvement with your customer or prospect. I believe to a certain extent all systems will work or won’t work based on the level of involvement. What most systems will do is help you develop certain touch points that will identify and link your product or services to your customer base. How well you can make this authentic and even transparent can be very important. Point in case is social media. It is OK to schedule tweets and blog post to become more efficient but without some actual real-time conversation it is soon recognized by your followers that this is indeed just a platform for you to blast out your message.

I have included a description of the first two stages of the Value Stream Marketing process:

The Define(Involvement) Stage: The Define stage typically asks us to start with a problem statement. In the marketing sense, can you define the problem that you solve for your customers clearly? Where the problem statement describes the pain, the next statement should describe the relief that is to be expected. After that, we go into a process that is typically defined as Voice of the Customer. There are typically two major categories that are required; Output requirements and Service Requirements. The output requirements relate to the final product or service that is delivered to the customer. The service requirements relate to how the customer would like to be treated and served during the process. The final step in the Define stage is to document the process. Typically, this is done with a high level process map. Don’t worry about it being completely correct as we will use it and develop it further in the remaining processes. More on this Subject: The Marketing Funnel using Six Sigma DMAIC – Define stage

The Measure(Influence) Stage: In the DMAIC methodology we use tools such as Critical to Quality and other tools to determine what is important to a prospect. Instead of thinking about this step from an internal point of view step back and consider what the prospect would use to measure your product or service and make the decision to move through the funnel. Developing measures with customer input will certainly help a prospect move though the funnel. At this stage, do you know how a prospect is measuring you? What is the most Critical to quality standard that influences your product or service? What is more critical than others? The old saying is that people perform by how they are measured? If your company is based on how they are being measured, do you have measurements in places that influence your performance? More on this Subject: The Marketing Funnel using the Six Sigma DMAIC Methodology – Measure stage

These are a couple of the DMAIC principles that you can use to guide someone through your marketing stages. But what are the marketing concepts that you are using in these stages? These concepts are many of the building blocks in the Lean Marketing House Foundation and are the basic marketing tools that you are familiar with when evaluating your marketing. From the general terms such as; Advertising, PR, Social Media and Referrals to the more specific tools that you use such as; Public Speaking, E-zines, Blogging and White Papers.

A Value Stream Marketing Concept: The one concept that many fail to consider is the In direct marketing of “Staying in Touch” with your customer base. Many times your customers are just folded back into the above mentioned terms or with your regular prospects. I would like to challenge your thinking on how you can become involved in your customer’s communities. Becoming active in these areas will not only increase your involvement with your customers and other prospects but there is nothing more effective in making your marketing more efficient. Understanding their needs, what they are looking for, where they are being undeserved is the single greatest marketing concept that I know of. So, if I ask this question: Where are your customers being undeserved? Can you answer it? And/Or, is that a market you have the ability to take care of or build a future alliance from? (Related Book Seeing What’s Next: Using Theories of Innovation to Predict Industry Change)