Articles

Six Sigma as a Solution

Six Sigma Solution

Years ago, a tennis coach told us that the follow-through was just as important as hitting the ball from the racket’s “sweet spot.” He described the follow-through as the swinging of the racket so that the racket ends upward, way above your shoulders. It was much better than hitting the ball and letting your elbows stay close to your body. “Bring that elbow up” he’d scream at awkward players.

In sales, follow-up is just as critical. Not once, not twice, but as many times that it would take until the customer finally says, “okay, book my order.” Sales people are taught to be relentless and persistent without turning off the customer. Books and videos are abundant on the true art of selling and the skills of persuasion. No matter what the law of supply and demand says, sales people should never take the customer for granted. Even in a seller’s market where demand outpaces supply, the buyer-customer remains number 1.

Black Holes

Michael Webb and Tom Gorman analyzed the classical sales and marketing mistakes in their book, Sales and Marketing the Six Sigma Way (Kaplan Publishing, Chicago, 2006). They called one of those mistakes Black Holes.

Black holes are situations where lead generation is carried out at a high cost but no substantial sales are made. They cited the case of a leading heating and air conditioning company that spent thousands of dollars to generate leads, only to commit two fatal errors:

  • the leads were poorly defined
  • no follow up performed. The company sent leads to their distributors but failed to request feedback

If this company had ever heard of Lean Six Sigma and the Toyota Production System (TPS), they could have avoided this expensive blunder.

Spending thousands of dollars to come up with leads that don’t generate the desired outcomes goes against the principle of the Japanese muda – waste. The inability to define those leads – whether quantitative or qualitative – goes against the Motorola Six Sigma concept of definition, the first process of the DMAIC approach (define-measure-analyze-improve-control). Finally, the omission of obtaining feedback and monitoring lead activity goes against the Toyota Way, a principle that puts a premium on value for the customer. At the same time, it also neglects the control aspect of DMAIC.

Six Sigma to the Rescue

It would be unfortunate if companies think of Six Sigma only as a last recourse, an afterthought. For sales and marketing efforts to bear fruit, Six Sigma principles must be at the forefront of any planning or process change.

Years ago, thinkers argued that Six Sigma is best applied in manufacturing. Six Sigma Tools were set in place to define manufacturing objectives, outline the manufacturing processes, and monitor production cycle times. The success that Six Sigma achieved in manufacturing made it popular in the banking and finance sector as well, and eventually in information technology.

Six Sigma has now made its way to transactional activities like sales and marketing. The argument has been raised that it may be a little harder to implement.  Manufacturing and finance imply a set of well-defined processes; in sales and marketing, we need to take into account things such as culture and the human element. What customer orientation does a company hold sacred? What’s their idea of delighting customers? How does a company sales force negotiate with customers?

In manufacturing, activities are automated once they are defined and selected, in sales and marketing, we can’t automate most of the human-driven activities like negotiating and communicating. These are also harder to measure.

“Harder” however does not correlate with impossible. There have been case studies showing that companies can increase their growth rates and profitability levels by adopting all or part of Six Sigma. One way is to identify and define problems and then solve them.

When we worked for a semiconductor distribution company, one complaint often heard from sales people was the lack of total visibility to inventory screens.  They moaned about not being able to tell their customers immediately about allocation and availability. First they had to find out from product marketing, and then went back to the customer a second time. Some customers don’t mind waiting. Others won’t wait even half an hour. Book now or never was how they liked to do their semiconductor business. Sales people blamed lack of visibility for not meeting sales quotas.

Applying Six Sigma in this case would entail improving or enhancing visibility – a change process – and then measuring to see if increased visibility translated to increased sales. If not, then a Six Sigma Black Belt would continue to look for the root cause of the problem. He would investigate if it was truly a lack of visibility to the screen that would explain sluggish sales.

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