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SPIF Tip #39: How Deming's Foundational Principles Will Make Your Sales Funnel Flow Faster

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In the work-a-day world of

hustling to find new customers, what good is a management philosophy used in manufacturing?

If you’ve wondered about this, prepare to be surprised. Because your sales success today (and in the future) is strongly influenced by these simple, deceptively powerful ideas.

Consider the state of most sales and marketing organizations:

  • They face a more complex and challenging marketplace every year.
  • They recruit the best, brightest people, and get them to work very hard.
  • Resources are stretched to the limit.
  • Results are often just a game of chance.

In many companies, sales and marketing is a kind of ramshackle affair, invented over the years. Salespeople are managed as though they were individual contributors, like basket weavers, despite the fact that the Internet has drastically changed the landscape. Rarely has anyone had the time (or expertise) to step back and figure out a better way. The company becomes an obstacle even the best salespeople cannot overcome.

Believe it or not, manufacturing plants sixty or seventy years ago shared many of these traits. Employees worked as hard as they could, but the quality and cost of the product (whether it was engines, boxes of cereal, toasters, or something else) was often inconsistent and unpredictable.

These things don’t happen because individuals in manufacturing or sales are dumb. Instead, their intelligence is usually hampered by two things:

  1. Inconsistent assumptions about how work should be done across the business. This leads to all sorts of wasteful mistakes, like misfit parts, misfiled information, misaligned resources, and more.
  2. Workers don’t know much about each other’s assumptions. That happens when managers hold a philosophy of command and control (Taylorism), which basically ignores what workers think.

When people working together do not understand each other’s context, inefficiency, frustration, and short-sighted behaviors are inevitable.

Deming’s breakthrough is the recognition that how employees think is just as important as the raw materials and machinery the business employs. He called it a “System of Profound Knowledge.” It is the conceptual framework that enables individuals working together to learn and improve themselves and their work.

Consider the fact that every achievement of our modern civilization is the product of someone’s reasoning mind. Each discovery requires individuals to learn from their mistakes. This requires self-awareness and a kind of humble willingness to change one’s own mind based on evidence.

Business leaders who to adopt this attitude enable their employees to think and communicate more clearly (and honestly) about their work. The increased mindfulness this creates makes mistakes, as well as successes, become more visible. Here are some examples of how Deming’s four interrelated principles apply directly to sales and marketing:

 

Understanding Variation

One of the foundational principles of science is that no data is meaningful outside of its context. Context is established by means of language. The words and concepts we use explain variation in the world around us, as long as they have “operational definitions.” For Deming, with definitions as the context, understanding variation meant statistical variation.

Sales and marketing people are faced with incredible variation across their prospects and customers. Unfortunately, the definitions of critical terms various people hold, like “customer,” and “qualified prospect” are usually inconsistent. Or, the company accepts some sales training company’s bromide as a definition. This is a huge mistake. That's because such terms “float” when they are not regularly tied to the nuances your team is observing.

Showing your sales team how to operationally define their qualification criteria gives your firm an invaluable competitive advantage. It is a scientific way of identifying data about prospects. That data can tell you in advance which prospects are likely to buy, and which are not (leading to far more accurate forecasts). It enables sales teams to systematically, and measurably improve productivity.

However, this presumes the organization recognizes the power of information from across an organization to learn about causes and effects, which is the point of the second of Deming’s principles.

 

Systems Thinking

Unfortunately, sales teams are often managed if they are independent contributors, like basket weavers. Not only that, the goals of marketing, sales, and service departments are often only loosely related.

When this happens, optimizing the performance of individual departments hinders the business as a whole. For example, a marketing department might maximize the quantity of leads, most of which are a waste of time for the sales force. As another example, many sales departments are increasingly frustrated as prospects look for information in places their salespeople cannot go (various locations on the Internet).

Your customers see your firm as a single entity, not as separate departments. This means, like it or not, your business is a sales production system. It works to the extent that your company links to its customers in a useful way at each stage of their customer journey. Otherwise, customers will experience your firm as inconsistent and disconnected. This is a huge disadvantage.

Production systems have feedback loops indicating what needs improving, which is the subject of the next principle.

 

Method for Learning

Most sales leaders unwittingly run their sales organizations in Taylorist, command-and-control style. Sales training, CRM systems, and even sales processes are implemented “open-loop” fashion (also called "The Numbers Game"). “The more spaghetti you throw on the wall, the more likely something will stick.” The productivity of work cannot be improved without feedback mechanisms telling you what is working/not working. For example:

  • The president of an HVAC company learned it was possible to measure ROI on leads he had been purchasing for his distribution channel. He was amazed at the improvement created when he simply began to ask for feedback.
  • Sales processes are usually seen as a “discipline” issue. Salespeople are expected to follow (or at least give lip service) to the process they are given. Feedback such as that it may not apply to all prospects, or that it involves extra work they don’t have time for is ignored.
  • CRM systems are not designed to track the yields of sales work through the stages. This prevents managers from learning where bottlenecks are. They about "flying blind!"

Every year, B2B companies spend billions on the Usual Fixes, all of which lack feedback loops. Under such circumstances, is there any wonder that B2B sales productivity never improves, sales forecasts are notoriously useless, and sales turnover remains stubbornly around 40% annually?

Deming addressed this issue with his management cycle, which is scalable from what a salesperson needs to do between their own ears on every sales call, to what giant corporations require to achieve decades of growth.

The biggest problem companies who are aware of this approach have is getting their people to use it. Why? Because the executives (and therefore their company culture) doesn't recognize the fourth, and final principle.

 

Respect for people

Rather than treating people like cogs in a machine, Deming’s philosophy is concerned with developing people. It respects the intelligence of everyone involved, by placing responsibility for doing the work and generating the improvement on the worker. The manager is a facilitator who coaches and moves roadblocks out of the way when he can. The best managers are not the centers of attention. They achieve their objectives by developing their team's abilities to do the work themselves.

The method for learning, described above, gets employees to identify what they think will create improvement, rather than treating them like independent basket weavers. It asks individuals to identify how they will know when improvement takes place, which ties everyone’s mind to the real world of evidence and data. Learning takes place through small experiments, rather than “bet-the-farm” investments in expensive sales training, CRM systems, or risky product developments. Inherently, marketers, sellers, and servicers collaborate to help customers buy.

 

Conclusion

Deming’s philosophy enables everyone in a business to see and learn from a massive increase in their awareness of what employees and customers want.

2 Responses to “SPIF Tip #39: How Deming's Foundational Principles Will Make Your Sales Funnel Flow Faster”

  1. Herb Hughes says:

    Excellent! Thanks!!

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