Six Sigma Marketing Begins With a Change in Thinking

Perhaps the most vexing problem facing any organization is the need and ability to handle change. We have all been in situations where someone has “moved our cheese” and our first reaction is to reject the change. We spend countless hours counter-arguing against the change instead of keeping our wits and finding out how we can best adapt to the change and use it to the organization’s advantage. I remember a company that I was working for in Australia that had switched their accounting and management reporting system to SAP. Horrors! We were in the middle of creating a Product/Market Matrix looking for information on market share, costs, margins, etc. “We can no longer get that information because of the new system” we were told. “Horse hockey” I replied. After about two minutes of translating “Horse hockey” into OZ speak and calming everyone down, we got hold of someone who knew what they were doing and got the information.

The point I am trying to make is that change is uncomfortable but certainly survivable. Consider the kind of change that it will take for organizations that are almost terminally product oriented. Their entire focus is on production and costs. When asked about customers they say “Oh yeah, they’re important too.” These organizations will not be able to survive and prosper is a globally competitive market place. They will have to change and adapt to the new contingencies of competition that will place buyers and value at the core of any strategy.

I’ve worked with a number of manufacturers and manufacturing associations trying to get the message about value creation and delivery out to them. In some cases the message has been received, at least at one level. They acknowledge the importance of value and customers but lack the ability to transition their organizations into the value machines that will take them into the next couple of decades.

I am a firm believer in the idea that strategy dictates structure. This is one of the greatest impediments for these organizations. Their extant strategy is one of low cost production. They are structured to accomplish this strategy and have reinforced it with Six Sigma, Lean, TQM and a host of other quality initiatives. To the extent that they have been successful in deploying Six Sigma they tell me that it is as much a cultural issue as a “tool” issue. I couldn’t agree more. And when you ask people in these organizations what is really important to their success and future within the organization they will tell you “efficiency” or some other words that communicate costs reductions and a production focus.  You don’t hear customers, buyers or markets.

The challenge for these organizations is going to be how to transition to a structure that can accommodate, foster and nurture a market orientation – one that puts the buyer and value fore square in their strategic sights. The shift from defect reduction (often referred to as Gen I Six Sigma) to cost reduction (Gen II SS) is but a small step when compared to the leap to a market and value focus (Gen III). In fact, it has been my belief that Six Sigma and other quality initiatives have reinforced a production and cost orientation. Although most of these initiatives espouse the importance of the buyer and the need to create value for the buyer, this is a part of the program that has received the least attention. It is flat out too difficult. Instead, many organizations have been seduced by the potential for cost savings and their impact on the bottom line. This will work in the short run but enterprises that cannot create and deliver value for their targeted product/markets will not succeed.

Becoming best in market will require firms to learn and integrate value measurement and management tools within a culture that supports their use. I have witnessed firsthand, organizations that have tried to learn these tools but have failed to deploy them. To many within the organization this is just another cure de jour that once the consultants leave we can get back to our old way of doing business, even if it isn’t working. While fingers can be pointed in a number of directions, one finger needs to point directly to a management that continues to push and reward the old way of doing things.

Six Sigma Marketing begins with a change in the way people within the organization think. Focus has to shift from the product to the people who buy the product. This is hard since a product focus is significantly less complex than a market focus. Products, as I have said in the past, are non-learning inert systems while markets are complex nontrivial learning machines. They think and they act on this thinking. Six Sigma Marketing has the tools and, equally important, the mindset to deal with markets to provide the mechanism to propel organizations to become best in market.

Let me conclude with a quotation that I came across the other day.  Unfortunately I don not know the proper attribution.  But regardless, its message is essential.

“Every organization has a chance to improve but not all organizations are willing to take chances.”