Lean Sales and Marketing thru Service Design Thinking

Is forecasting the pull for a Lean Supply Chain?

business901 — Thu, 31 May 2012 19:26:00 PDT

Paul Myerson, author of Lean Supply Chain and Logistics Management is my guest next week on the Business901 podcast. Paul claims to have written a practical guide and from this excerpt I think you can tell. He takes the most complex subjects and makes them simple. I re-read many parts of the book not because I did not understand but because I wanted to understand more. This is an excerpt of the podcast:

Joe: When we think about lean, we always think about pull. Is forecasting the pull for a supply chain?

Paul: Customer demand is the pull. That’s another thing you talk about. What’s the supply chain? It’s really, to me, more like a supply web. Also, some people break it out ? there’s really a demand chain, which is really part of the supply chain, but at the front end between you and the customer. It is pull, but a lot of these days, and I got involved in this in the early ’90′s, with what they call “quick response.” Now, they refer to it as CPFR, collaborative planning forecasting replenishment , basically, working with your customers to develop accurate forecasts by getting to actual point of sales, and using that information to have a much improved forecast. My thinking is, if you can get your top 20 customers going through some kind of quick response CPFR programming, you’re at least collaborating on the forecast, if not managing your inventory for them and placing orders for them.

That top 20 customers could be 80 percent of your forecast. You could then minimize what they call the “bullwhip effect,” where things get magnified along the supply chain disruption. You can help to get closer to actual demand and build that into your forecast and have a much more accurate forecast. That’s one major step to becoming leaner because we know inventory is used to cover a lot of things, one of them being variability and demand and lead time.

Joe: You’re saying the secret to good supply chain is getting deeper with your customers?

Paul: Right. One of the secrets and with technology today, it’s a lot easier. These days, you hear a lot of the terms, “visibility,” “collaboration.” It’s critical to have visibility downstream in your supply chain towards the customer. Maybe it’s not a secret anymore because a lot of people are doing it, but I think some people look at it as more of a, “Well, our customer wants us to collaborate or work with them on forecasts or manage or place their orders for them.” You have to look at it as a competitive advantage, a strategic choice to go that route to improve not just your process with your customer and make them happy, but to improve your process and also your suppliers’ processes.

About: Paul Myerson has been a successful change catalyst for clients and organizations of all sizes. He has more than 25 years of experience in supply chain strategies, systems, and operations that have resulted in bottom-line improvements for companies such as General Electric, Unilever, and Church and Dwight. He is currently Managing Partner at Logistics Planning Associates, LLC, a supply chain planning software and consulting business (www.psjplanner.com).

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Using Desired Effects to find Root Cause

business901 — Wed, 30 May 2012 12:24:00 PDT

Since being introduced to Appreciative Inquiry by Ankit Patel principal partner with The Lean Way Consulting, I have used it quite extensively. Starting with visioning positive outcomes and working backwards to find a way to achieve these many times uncovers root causes of existing problems. I find conflicting viewpoints of this process with many Lean and Six Sigma practitioners but I could safely say the majority are very skeptical.

In a recent podcast with Matt Wrye, Developing a Learning A3 I uncovered that he was a a certified Shainin Red X Journeyman. If you are not familiar with Shainan, don’t feel alone. Shainin is probably one of the least known structured problem solving methodology. It has always intrigued me because of its approach of focusing on the Effect to find the Cause (Y to X) versus the traditional X to Y. The traditional way of problem solving (X to Y) list potential causes or variables (Xs or CTQs) through brainstorming and engineering judgment then test to see if the Xs have an effect on the Y.

From Wikipedia:

Dorian Shainin’s development of the “Red X” concept originated from his association with Joseph Juran. In the 1940s Juran coined and popularized the notion of “the vital few and trivial many,” also known as “The Pareto Principle. Shainin recognized that the Pareto principle could be applied effectively to the solving of variation problems. Shainin concluded that, amongst the thousands of variables that could cause a change in the value of an output, one cause-effect relationship had to be stronger than the others. Shainin called this primary cause the “Big Red X”.

Shainin asserted that his application of statistical methods was more cost-effective and simpler than Taguchi methods. In order to determine the "Red X," Shainin would swap pairs of parts between functional and faulty equipment until the one part responsible for the failure is discovered. Shainin would claim that he could often find the primary defective part within a dozen paired swaps.

Shainin’s policy of "talking to the parts" was the primary distinguishing factor that set his methods apart from Taguchi’s. In classical or Taguchi DOE (Design of Experiments), engineers would brainstorm to form hypotheses regarding possible causes of a problem. Shainin’s methods postpone this theoretical step, requiring first the diagnosis of causes via one or more of four clue generation techniques designed to determine, through the empirical testing of the actual parts in question, the root cause, or "Red X".

Matt offered me a brief overview of Shainin in this interview;

Download Podcast: Click and choose options: Download Here or go to the Business901 iTunes Store.

Matt Wrye can be found at his blog Beyond Lean.

I find the Shainin approach very closely resembling an Appreciative Inquiry approach. However, it is backed with a much stronger statistical analysis that may be better suited for some. Shainin’s approach offers the bridge needed in the rapid changing world we live in. Shainin’s policy of "talking to the parts” could be the statistical alternative needed for Lean Sales and Marketing. “playing in the customer’s playground.”

P.S. In Shainin DOE, it is said: “We talk to the parts. The parts and process are smarter than the engineers.” In Lean Sales and Marketing via SD-Logic (The Service-Dominant Logic of Marketing by Stephen Vargo and Robert Lusch); we must co-create value with a customer through use. There is no value from our product or service till they are used.

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Uncommon Thoughts about Service

business901 — Tue, 29 May 2012 19:34:00 PDT

In the podcast An Uncommon Way of Thinking about Service Design, Anne Morriss discusses the four universal truths outlined in her book, Uncommon Service. The four truths are:

You can’t be good at everything.
Someone has to pay for it.
It’s not your employees’ fault.
You must manage your customers.

This is a transcription of the podcast:

The book’s website is an excellent resource and I encourage you to take the survey and utilize the Service Design Tool located there. This is a very challenging perspective for most of us. However, I think you will find the information to be well researched and presented in a compelling fashion.

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Behind every Decision to Buy..

business901 — Mon, 28 May 2012 19:32:00 PDT

Behind every decision to buy–whether the item is a service or a product, an argument or an idea–is an unspoken emotional motivation. This is the hidden agenda.

Says Kevin Allen, author of the book called The Hidden Agenda: A Proven Way to Win Business and Create a Following. Kevin was my guest on the Business901 podcast and I believe you will find the master storyteller entertaining and a wealth of information.

Kevin worked with the McCann World Group, the Interpublic Group, and Lowe Worldwide, where he helped gain Ad Age’s recognition as "Turnaround Agency of the Year" in 2009. He has spent 25 years in advertising and was a key developer of the now iconic Priceless campaign for MasterCard.

Download Podcast: Click and choose options: Download Here or go to the Business901 iTunes Store.

An excerpt of the podcast can be found on a recent Business901 blog post, Can you name your target audience in two words?

Kevin can be found on the web at Kevin Allen Partners.

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Are you Marketing Consumption or Participation?

business901 — Sun, 27 May 2012 19:45:00 PDT

Take away all the fluff in sales and marketing today and I believe the single most important aspect that will determine your long term success and sustainability in the marketplace is your role in participating in your customer’s playground.

When I say this, most people think of experimentation, prototyping or even call it a specific playground term like sandboxing. These are necessary functions and on the road to customer development but are they on the road to vendor development? Are we really viewing things from the customer’s viewpoint? How a customer views a vendor?

I believe a few of the components that makes Lean Sales and Marketing so special are:

A training system on how to define knowledge gaps and close them.
Different perspective on knowledge transfer. It is not the perspective of educating the customer; it is from the perspective of learning from the customer, understanding how your customer uses and benefits from your product or service.
Leave your customer be the professor, the Sensei, who will take you through a certain number of exercises (their decision making steps), the customer leads.

Dan Jones, chairman of the Lean Enterprise Academy www.leanuk.org in the UK pointed out in a Business901 podcast that:

Sales and marketing traditionally was there to get rid of stuff that was already made a long time ago in a forecast?driven, long lead time supply chain. So it was about getting rid of stuff.

We are in an era in which customers are part of the supply chain and we can really have a dialogue with customers not just about what they think they’d like, but what they actually would put their money in.

In many ways we are getting real use data back from customer as well as preference data. And the next step is of course to get plan ahead data with customers. Because customers can and do have some knowledge of what they want in the future. But they have no incentive to share it with us in this adversarial consumption mode.

I think there is a great deal happening at that interface and the web is going to change every customer interface in a very positive way, one that empowers customers rather than empowers the providers.

Later in the podcast he mentioned a presentation at the Lean Summit Alan Mitchell, co founder of Mydex and Crtl-Shift that I highlighted in the blog post, Has Lean Thinking fallen short on the Demand Side?. In this presentation Alan discusses the empowerment of the customer and how they will be taking greater control of their personal data. A new book on this subject, The Intention Economy: When Customers Take Charge. author Doc Searls describes how customers will be enabled (from the book jacket):

Control the flow and use of personal data
Build their own Loyalty Programs
Dictate their own terms of service
Tell whole markets what they want, how they want it, where and when they should be able to get it and how much should it cost.

Sounds like reverse thinking to Lean Solutions: How Companies and Customers Can Create Value and Wealth Together. This book was written several years ago expanding the principles of Lean to consumption. The authors, Womack and Jones detailed a Lean roadmap and ask companies to start providing the goods and services consumers actually want, when and where they wanted them and without burden to the consumer.

The role of a vendor/supplier relationship is changing. It is not about consumption, it is about participation and value co-creation, a basic principle of SD-Logic (The Service-Dominant Logic of Marketing by Stephen Vargo and Robert Lusch). My blog posts, The End of Best in Market and Path to Participation discuss this view in more detail.

In the Ted Video, Tim Brown says the design profession is preoccupied with creating nifty, fashionable objects — even as pressing questions like clean water access show it has a bigger role to play. He calls for a shift to local, collaborative, participatory “design thinking.” There are many lessons that can be learned from this video as we move from consumption to participation. See how IDEO does it.

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The Future of Schools, maybe even Work

business901 — Sun, 27 May 2012 03:18:00 PDT

A few months back, I interviewed author, Joe Pine where we discussed the digital frontier and augmented reality. Joe, along with co-author Korn provide a new tool The Multiverse™ that helps your organization to search the Infinite Possibility of value creation that lies on the digital frontier. Several examples of this magic are shown below.

Using sleight-of-hand techniques and charming storytelling, illusionist Marco Tempest brings a jaunty stick figure to life onstage at TEDGlobal.

Just imagine this kind of technology being used in schools.

Why don’t we take education and even work into this of world of fun and interaction.

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Standard Work as your Whirlwind–Manage it!

business901 — Sat, 26 May 2012 04:08:00 PDT

I am an advocate of Standard Work. My approach is that it encompasses so much of our time that we should become proficient at it just to ensure we make other things possible. The amount of Standard Work that you have differs from organization to organization and from person to person but we all have some. My thoughts about Standard Work:

Standard Work should only encompass part of your time.
Every person wants some form of standard work. Most enjoy doing tasks that they are comfortable with and it gives them a sense of accomplishment when completed.
Standard Work is what provides line of sight for your team. It enables support and provides opportunity for managers to serve you.
Standardizing your work makes it easier for customers to go deeper into your organization for knowledge sharing. This provides a flood of new ideas for innovation and co-creation opportunities. More importantly, it secures a vendor-customer relationship or partnership that is difficult for others to replicate.
Standard Work does not need to be boring: Is Zappos the Next Toyota?

I could go on and on and I have in detail in the blog posts below but you get my drift.

I have been a long time fan and practitioner of Franklin Covey’s, The 4 Disciplines of Execution. In 4DEx, they use the term the “Whirlwind” in the same manner as I think about Standard Work. As they describe operating outside the whirlwind(SDCA) think of that as PDCA or EDCA depending on if you are looking for incremental or breakthrough type improvement.

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Can you name your target audience in two words?

business901 — Fri, 25 May 2012 06:29:00 PDT

Next week’s podcast is with Kevin Allen, author of a very unique book called The Hidden Agenda: A Proven Way to Win Business and Create a Following. Kevin comes across initially as someone from the Mad Men era. He worked with the McCann World Group, the Interpublic Group, and Lowe Worldwide, where he helped gain Ad Age’s recognition as "Turnaround Agency of the Year" in 2009. Kevin has spent 25 years in advertising and was a key developer of the now iconic Priceless campaign for MasterCard.

Kevin may have spent some time in the Mad Men arena but he has created a space of his own. In the podcast he takes some of the most celebrated idea of advertising such as the word “pitch” and transforms it into today’s vocabulary. An excerpt from the podcast.

Joe: If you find your target audience, a pitch is effective, you connect, you know that right away. How do you find that target audience to pitch to?

Kevin: That’s a great question. I think that over the years, a number of ways that we would define our targets. Still today, I work with a number of companies who still look at functional and descriptive measures to describe the people they’re talking to, sort of women, 25 to 54, in certain counties with certain incomes and so on. But the fact is that community formation, now more than ever, not only say within the U.S. but around the world, community formation is on the basis of belief and value system. It pushes us further to try to figure out a way to develop a definition of our target audience that runs more deeply.

In a way, if you remember from the book, I take a page out of politics, whereby the notion of the conceptual target is a way by which you can develop a powerful emotional definition of your audience. Soccer Mom, for example, was a great one.

In the pursuit of the Marriott business, no matter whether the person was staying at the JW, their topflight property, and spending several hundred dollars a night, or they were staying at Fairfield, the emotional composition of that audience were called Road Warriors, people who are out there selling for their companies.

It’s a terrific way because at the end of the day people come together because of what they believe and how they feel.

Joe: When you’re talking, it seems that you attach a nice conceptual name, that name that just grabs you right away, soccer mom. You identify and you know exactly who that is, who your target audience is, in two words.

Kevin: Well a company that I work with, a dear friend of mine actually, it’s a fantastic company that she runs. She was trying to figure out, "How do I better define the kind of companies that I work with," says this friend of mine. After a weekend of work, we realized that the one of the things that’s common to the people that they really can help are Frustrated Visionaries. That was the term, because they are brilliant at being able to crystallize the pathway for someone with a vision.

You can see that no matter whether their prospect was a small company or a Fortune 500 CEO, they were able to define their audience in an emotional need state term and then connect their product, what they do, to that need state. It’s terrific.

This is a podcast that is, should I say, “Priceless”.

Kevin Allen can be found at KevinAllenPartners.com – The Bookshelf on the website is a very clever idea.

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Individual Lean Transcription

business901 — Thu, 24 May 2012 07:25:40 PDT

In the Business901 podcast Individual Lean, the Root Cause of Success?, Dan Markovitz, founder and owner of Time Back Management discussed applying the principle of Lean to everyday life. These principles are the basis for his new book, A Factory of One: Applying Lean Principles to Banish Waste and Improve Your Personal Performance.

This is a transcription of the podcast.

More about Dan: TimeBack Management is a consultancy specializing in improving individual and organizational performance through the application of lean concepts. He’s a faculty member of the Lean Enterprise Institute, and teaches classes at the Ohio State University’s Fisher School of Business.

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An Uncommon Way of Thinking about Service Design

business901 — Wed, 23 May 2012 06:10:00 PDT

Service Design Thinking: Anne Morriss, the best selling co-author of Uncommon Service says,

We live in a world where lots of organizations want to deliver great service. We work with managers all the time, who are committed to it. Customers, as we know, are hungry for it, and yet, our service experiences are still overwhelmingly negative. In pursuing this question, what became clear is that past excellence is not necessarily intuitive. It’s not about trying harder, deciding the customer is always right. It’s more about making careful design choices and very deliberate trade?offs. There are some surprising rules and pitfalls along the way. We wanted to get some of those insights out in the world because we think, basically, the world is ready for it.

This is an excerpt from the Business901 podcast with Anne. We discuss the four universal truths outlined in the book for delivering uncommon service:

You can’t be good at everything.
Someone has to pay for it.
It’s not your employees’ fault.
You must manage your customers

Download Podcast: Click and choose options: Download Here or go to the Business901 iTunes Store.

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Creating Lead Measures with Kanban

business901 — Tue, 22 May 2012 07:18:00 PDT

In the post about #LSSC12 Turning your Conference Learning into Action, it was used as a starting point for turning a conference experience into actionable items. The post assisted you in picking one or two objectives that you would like to implement within your organization. The objectives should make an improvement that will reflect in a meaningful contribution to your organization. Set your goal with a measurement and a time. I recommend stating them by the current state to the desired future state (the goal) by a certain date. A weight loss program is the most frequent example. My current weight is 175 lbs. and my future state is 165 lbs. by July 1^st(4 weeks away). This is a lag measure – an outcome.

We have a tendency to rely on lag measure. The problem with lag measures is that they are just that lagging. They give you little information to determine whether you are on the way or off track in achieving your goal. You need leading measures. More importantly, you need leading measures that you or your team has control over.

We typically start breaking down our problem into intervals:

Does this tell us enough? Would we need a daily reminder to achieve these outcomes?

Does this do anything for us except make the lag measures more current. How are we going to achieve this? What happens when we don’t lose the weight?

We have only addressed the When and What with leading measures (the Why was addressed when this was tied to an existing Strategic Initiative of the organization). We must also address the How and that is where Leading Measures come into play. Leading measures are not easy to create. Many times they are only known by the people doing the work. Another way to think about this is that leading measures are at the level of individual or the team’s process, the activity that they do.

What would be a leading activity for weight loss? Calories burned and consumed are the first two that I think of. But how do we control that? Stopping short of a book on weight loss what we can see from this exercise is that we need a more compelling scorecard for us to measure ourselves against. Even when we take it down to the next level such as in a given day we need to burn 1800 calories and consume 1200 calories (believing this will give us a needed weight loss of 0.5 pounds a day) does not give us enough information to achieve our goal.

We can divide up a Kanban board with 2 swim lanes: Calories Consumed and burned. These are labeled with a description of our activities and the food we intend to eat for the day. If the Consume cards and Burn Cards are labeled with calories, you pull as needed till we total our day’s consumption or burn.

These are the types of lead process indicators that are needed; visual, easy to understand and leading. We can recognize problems almost immediately. What happens if we do this for several days and no weight loss occurs? We may have to consume less or burn more (I know this is an over simplification). But the message is that we are working in the Now versus waiting to see results at the end of the day or week.

Why go through this elaborate explanation? Most organizations do not leave the team or individual take the responsibility for the How. This exercise demonstrates the importance of having control of the How at the process level. Having this control at the process level, creates ownership and the ability to make the needed adjustments in the NOW zone. It is Leadership responsibility to provide strategic direction and the Why. It is the process owner’s responsibility to move that strategic direction with the How. It is also the process owner’s responsibility to report the outcomes at the desired intervals to leadership and work with leadership if the outcomes are not being achieved. This way if more resources are needed like that “exercise machine” or a coach, it can be approved and allocated. Leadership should not dictate the How but has the right and responsibility to “veto” your How if it does not agree with the overall goals of the company.

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Developing a Learning A3

business901 — Mon, 21 May 2012 07:33:00 PDT

Matt Wrye is a Lean Implementer that has a passion for continuous learning on all subjects related to business and lean. He is the author of the popular blog “Beyond Lean,” which centers on evolving leadership and changing business.

Our discussion center on his development of a Learning A3. From his blog post Learning A3:

A3s are used for solving problems, developing proposals and everything else. Why not for laying out a plan to show what people are expected to learn during a project or coaching session. Layout a standard or plan so expectations and progress becomes visible.

Podcast Powered By Podbean

Download Podcast: Click and choose options: Download Here or go to the Business901 iTunes Store.

Below are several formats for your use. I recommend viewing one before or during the listening of the podcast.

Learning A3 Example PDF

Learning A3 Blank Template PDF

Learning A3 Blank Excel Template

About Matt: Matt has a Bachelor of Science degree from Purdue University in Industrial Engineering. Among his other accomplishments are Lean Principles and Kaizen Certification from Lean Learning Center, Lean Coach/Mentor, Proficient in Lean tools and concepts, Shainin Red X Certified Journey and Master Candidate, and a ProModel Simulation Software expert. He is proud to have played a large and significant role in starting the Smith County Lean Consortium in Tyler, TX.

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Turning your Conference Learning into Action

business901 — Sun, 20 May 2012 19:27:44 PDT

I attended an outstanding conference (#LSSC12), The Lean Software & Systems Conference 2012 held in Boston, MA. In addition to the conference there was 2 days of tutorials, Lean Camp (Open Space), Interactive Cooking, Living Room, Lightning Talks, and Lean Coffee. It was an excellent agenda and well-hosted by the Lean-Kanban University. Every attendee that I had a chance to ask, echoed my assessment.

A question that permeated throughout the conference was how do I take what I learned and implement it in my organization. Most of us know that if you do not start immediately a great deal of information will be lost and eventually little if any will be implemented. My efforts this week will be to assist to make this great learning experience turn into actionable items. If we can do this, you certainly will be assured of coming back next year and I might even get another speaking opportunity.

The problem most people face when coming back from a conference is that they soon get inundated with all their regular work again. It’s not that we don’t want to introduce what we learned but there is so much to do and so little time. As part of my presentation, I discussed the aspect of Standard Work. Standard Work can be simply stated as an outline on the way you do things. It is very similar to determining a budget. A budget does not save you money it just allows you to see where the money is going. It allows you to make choices. Standard Work does the same thing. It allows you to make choices. So, the first step is to accept that we will continue to do our Standard Work but have the ability to make choices to implement something new and to allocate time and a budget if necessary to the initiative.

My preferred method of learning is utilizing an A3. If you missed Claude Perrone, the Agile Sensei talk on A3s, I have included a link to a blog post that discusses A3s, Why A3, Why Now in Lean Thinking? Utilizing an A3 will give a structured format for putting your thoughts together and outlining a course of action. Download an outline of a Problem Solving A3.

The work on the A3 should have started before you went to the conference with an outline of the purpose for going and the expectations from both a personal and an organizational perspective. If you did not do that, you can do it in retrospective.

Next determine what you learned from the conference. If you went as a group, I would encourage the entire group to be present for this step. Outline all the different thoughts and how they may apply to you organization.

Can any of these thoughts be completed simply by the stroke of a pen, something that does not require a change in culture? They may be items that are can be taken care of by a simple budget allocation, a new piece of equipment, etc. Separate these thoughts and evaluate them in your next strategic meeting or in the conference overview meeting.

Let’s get back to that cultural part, the difficult part. You have all heard the saying that “Cultural eats Strategy for Lunch.” The first thing you must realize is that you may have come back from the conference with great ideas and breakthrough thoughts. However, there is an existing culture that is going to eat all of them in one big gulp. You may even be the person that swallows the whole thing as you get tied up in all your Standard Work once again. So don’t try to change the org structure or how management thinks. Create a few wins first.

Do you have one takeaway from the conference that you are passionate about? Can you take that passion and demonstrated to the rest of the team? This should be a team exercise, try it out and see what others think.

It is best to take one initiative; one thought (not necessarily the easiest) and focus on this. Ideally, the initiative should be tied to the current strategic direction of the organization. It is your responsibility to clearly define the Why to Leadership. If you cannot, you may want to rethink and choose another initiative. The important thing is to get agreement on one single item. After doing this, set your goal with a measurement and a time. State the current state and the goal (future state) by a certain time.

In addition, you should have the power to spearhead or at a minimum be a significant participant of the implementation. Stay away from discussing the How. The how should be the responsibility of the implementers or the team. Leadership has the power to veto the how. If you are familiar with the Lean term, Catchball, this a good time to play.

I am going to focus my blog on the subject of “Turning your Conference Learning into Action” for the balance of the week. This is an outline of this week’s discussion.

Conference Learning

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Kids like Fun and Social Activities, do you?

business901 — Sat, 19 May 2012 19:23:00 PDT

If games are so engaging, why can’t work be that way? Great examples of how this is happening in Gabe Zichermann, CEO of Gamification.co and Dopamine, keynote at TNW2012 conference this year. Gabe is an author, highly rated public speaker and entrepreneur whose book, Gamification by Design: Implementing Game Mechanics in Web and Mobile Apps looks at the technical and architectural considerations for designing engagement using games concepts.

For a starting point, review this mind map, on Gamification before watching video. The mindmap is explained in this blog post, Core Concepts of Gamification.

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