Managing Automation - February 2008 - (Page 22) [ COVER STORY ] remove waste from selling and marketing processes and to gain better visibility into the sales pipeline. And that can give lean plants a much better understanding of demand. To be sure, the cultural challenges involved in introducing concepts such as standard work and process metrics into a sales organization can be great. But, says Michael Webb, president of Sales Performance Consultants Inc., the potential benefits are significant. “The potential in applying lean to sales and marketing is greater than in manufacturing,” says Webb, who has written about the application of continuous improvement methods to sales and marketing processes. “If you use lean to improve plant floor efficiency by 30%, you’ve reduced a portion of your operating costs. But if you can use it to increase sales by 30%, that benefit goes right to the bottom line.” First, however, manufacturers attempting to apply lean to sales and marketing need to think differently about it, Webb says. On the plant floor, lean is about removing waste from processes involved in transforming materials into finished products. In sales, he says, it’s about getting more efficient at moving customers or potential customers through a process that ideally ends up in a sale. Though most sales organizations focus on the end results — generating the sale — lean practitioners should focus on understanding and improving the process. In other words, lean organizations should map the sales process to understand the stages that customers pass through on their way to signing a purchase order. Sales leads then can be viewed as the sales organization’s inventory. With a clear understanding of all the steps in the customer’s buying journey and where each lead is on that journey, Webb says, organizations can measure and continuously improve their performance. “Most companies have no ability to managingautomation.com measure or track the conversion of inRELATED ARTICLES: ventory — leads — into sales,” Webb Lean’s Next Step says. “They have no operating definition www.managingautomation.com/lean4 for what a lead is and no clear way to Lean: Shaping Up for Growth qualify or assess leads. For them, a lead is www.managingautomation.com/lean3 anybody who might buy something. You Blocking and Tackling should be able to measure and improve www.managingautomation.com/takeone39 the close ratio of properly qualified lead A Roadmap to Lean Success opportunities.” www.managingautomation.com/lean6 Two years ago, David DeSantis, president of Maquet Inc., decided to give COMPANIES MENTIONED: Webb’s ideas about applying lean to sales i2Technologies, Inc. www.managingautomation.com/i2 and marketing a try. Although Maquet, the sales, service, and marketing unit of E2open, Inc. www.managingautomation.com/E2open medical equipment manufacturer Maquet GmbH & Co., was growing at a maonline healthy clip of more than 20% per year, DeSantis wanted to improve sales efficiency. “We didn’t want to go down the road of adding people in a linear fashion to enable growth,” he says. “So we decided to change the business.” With Webb’s help, Maquet mapped the typical customer’s buying journey, identifying key steps along the way. Maquet also identified the key triggers or conditions that moved leads from stage to stage. With those characteristics of the selling process nailed down, Maquet could assess the quality of each lead in terms of how far along the buying journey it was and how likely it was to go further. Maquet created a standard questionnaire for salespeople to use to assess, qualify, and score all leads. “We were then able to see how the scores added up, and do things like regression analysis based on the number of deals won and lost,” DeSantis says. “We were able to further identify those questions that were most likely to give us insight into whether a deal would be likely to close.” Not surprisingly, not all Maquet salespeople bought into the new methodology. DeSantis tried to head off resistance by not calling the improvement program a lean initiative. “That had connotations of cost-cutting,” he says. Instead, he called the program “evidence-based selling.” Ultimately, however, some sales managers and reps continued to feel threatened by the program; they believed the information they were asked to document was theirs and that sharing it made them more expendable. While most have accepted the program, some who didn’t were replaced, DeSantis says. Through its transition to lean selling, Maquet has continued to enjoy 20%-plus growth. It’s difficult to say whether that can be attributed to the lean approach to selling or to continued strength in the company’s markets, DeSantis says. But he is sure that Maquet and its parent company now have clearer visibility into the quality of the sales pipeline. “Right now we are reducing variation,” he says. “We still haven’t determined if the mean has moved because of the new things we are doing.” If the experiences of Hayward, IBM, Intel, LSI, and Maquet are any indication, there are many potential applications for lean thinking outside of the plant floor, and the potential for significant gains is great. Still, the cultural barriers to lean adoption — particularly in processes such as new product development and sales and marketing — are significant. So it remains to be seen whether the lean movement will have the same impact and longevity outside of the factory that it has had inside. s ma February 22 2008 http://managingautomation.com http://www.managingautomation.com/lean4 http://www.managingautomation.com/lean3 http://www.managingautomation.com/takeone39 http://www.managingautomation.com/lean6 http://www.managingautomation.com/i2 http://www.managingautomation.com/E2open
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