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Karen Martin

Karen Martin: Revenue growth is a key part of lean thinking

By Karen Martin, - Last updated: dimanche, décembre 9, 2012 - Save & Share - Leave a comment

This is an excellent question. I work with sales teams in at least 80% of the improvement work I lead, so it can and must be done. I agree with several of the Lean Edge team that part of the reason why Lean has been slow to capture the imagination of sales teams lies with Lean’s early, erroneous spin as solely a “manufacturing thing ” versus a broad and deep business management strategy that applies to all facets of an organization and to all industries. But I believe there are at least there two additional root causes.

First, the financial focus for Lean has historically been around expense reduction vs. top line growth. We can’t expect to capture the imaginations of revenue-producing beings if revenue production isn’t part of a balanced Lean transformation equation. Echoing Sammy’s point, we have not done a good job selling Lean to this important contingent.

I remember seeing material in the early 2000’s that, in comparing traditional vs. Lean management, explicitly stated that Lean thinking was profit-focused vs. revenue-focused, which was framed as “traditional” thinking. While placing greater weight on expense reduction over revenue growth may be valid, the early communication around this issue may have led some to throwing the baby out with the bathwater.
Another problem has been the misplaced emphasis on waste reduction as an end state versus its role as ONE of the means to achieve the target condition of greater profit. Ideally, companies grow their top line while they reduce expenses, widening the delta between the two. We can’t expect to engage sales people if their world is excluded from the conversation—or worse, looked down upon. Messaging matters.

The second root cause is that many in the Lean community have not asked for nor expected their involvement. Granted, pulling sales people “off the street” for seemingly non-revenue producing activities is a tough sell at first. But persistence and understanding what makes sales people tick pays off. In my experience, once they’ve experienced the direct benefit of their involvement, the sales effort for their future involvement becomes minimal.

To Jean’s point, there may be no more compelling a way to demonstrate Lean’s relevance to sales teams than to lead them through an improvement activity that, for example, results in faster and higher quality onboarding for new sales staff so they can begin generating revenue (and, therefore, commissions) more quickly. Perhaps even more powerful are improvement activities that focus on removing obstacles to closing sales quickly. Lead time reduction is every bit as important in the sales cycle as it is in manufacturing operations. And addressing “what’s in it for me?” is a key factor in converting resistance to an active appetite for improvement.

So the first thing we need to do is to turn this ship around is to help all of those engaged in Lean understand that revenue growth isn’t antithetical to Lean thinking. Next, we need to demonstrate Lean’s tactical value by leading improvement that help sales people be more effective. (By the way, this assumes the company has high quality products that customers actually want!). Third, we need to draw attention to the problem (as this Q&A is doing) to stimulate thinking, conversation, and execution.  Lean Frontiers is also helping on this front. Last year they held a mini-Summit that focused on Sales & Marketing and they’re planning another one in 2013. Together, we can turn the tide on this important issue and integrate sales into Lean as it should have been all along.

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