Profound knowledge for Lean Marketing

This past Thanksgiving, I had the pleasure of reviewing the Four Days with Dr. Deming Videos for the first time. Not sure, I would recommend watching it. Deming is not Steve Jobs by any stretch of the imagination. However, he does end up growing on you and his dry sense of human becomes rather enjoyable after about the third video. At times when he says certain things, I am not sure he even knows why the audience laughs. I would recommend the book, Four Days with Dr. Deming: A Strategy for Modern Methods of Management, which I found a very enjoyable read of those four days.

In my quest to assist in bringing Lean to sales and marketing, I find some very basic questions that Dr. Deming used to warn us about the upcoming crisis quite interesting. He says we have been living on the wealth from natural resources and simply warned that it could not continue. An excerpt from the book,

Without a change we will not make it. We need to look at new ways to understand our system. If we understand the theory of variation we know that it is futile to ask for something outside the system’s capability.

One of my friends is the Chief Executive Officer of a small company. The performance of the Chicago Region was poor. For three years running this region produced only 7.5 million dollars of sales per year. My friend needed 10 million dollars to make keeping the office open a viable matter. “A fact of life.” as Dr. Deming says. The chart showed a steady state, flat sales. From what I learned today, sales is a system. If the system is stable, then man-
agers must apply leadership to change to a new level of performance. For the past three years my friend simply raised the sales quotas and gave pep talks. He must make a basic change. I am beginning to catch on to the theory of variation and psychology.

How true Deming was when you apply his thoughts to sales and marketing. Our natural resource was that demand always exceeded supply. Sure, it was not handed to us on a silver platter and not all of us were successful. But for the most part, there was a demand. That demands has diminished or cease to exist in many markets. We are competing in a state where there is excess supply. There is a scarcity of sales and marketing’s natural resource, customers!

How many companies are still giving pep talks? How many companies still do not understand sales and marketing as a stable system? You can tamper and cause special cause variation (yesterday’s post as an example: Lean Marketing: Sales Quotas lead to Waste) but the bottom line is that sales and marketing has changed and that it must be managed as a system in the future.

Most serious practitioners that understand sales and marketing as a process have begun to emphasize three core principles in their teachings:

Continuous improvement of sales and marketing is a necessity
Metrics are required to judge the rate and degree of improvement
A sales and marketing process is needed for determining metrics

There are many marketing “systems” in the world. When you think about a system it is just a series of functions or activities within an organization that work together for the aim or the organization. However, most of them have relatively little value towards improvement or optimization as a whole. Dr. Deming’s system of profound knowledge offers the best way for sales and marketing to succeed in the future.

Deming believes that the journey continuous improvement requires the understanding of systems which is emphasized in his own system of Profound Knowledge. Profound Knowledge is made up of four interrelated components:

Appreciation of a system
Theory of knowledge
The psychology of change
Knowledge about variation

This is fundamentally Lean thinking.