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Copyright ©2009 by Global Partners Inc. All rights reserved. 1 Lean Six Sigma for Revenue Growth Driving Revenue and Profit Growth in the New Global Economy - background The current global recession will leave business practices changed fundamentally and enormously. Companies are experiencing reductions in sales of 20% to 60%, with accompanying drops in margins and profits. Most business leaders realize that in the wake of this historic economic downturn they will need to reconsider their sales and profit models – i.e. the fundamental ways in which they grow revenue and profits. We believe that this period of transition offers a unique opportunity to apply Lean Six Sigma to create the same levels of business improvement in sales, marketing and customer service processes as has been realized on the operational and cost side. How Does Lean Six Sigma Drive Revenue and Profits? Among operations and engineering managers as well as senior managers, the concepts and techniques of Lean Six Sigma are well-known as a powerful tool for reducing costs. Legendary success stories abound of permanent cost reductions in the billions of dollars at companies such as GE, Xerox, Bank of America and many more. However, only a handful of companies have systematically and comprehensively applied the breakthrough methodology on the revenue and profit side of their business. Those that have deployed Lean Six Sigma in sales, marketing and customer service have achieved substantial improvements in revenue growth and profitability. Some examples include: Increase in Win Rates on competitive bids Increased retention of long-term customer service contracts Improved pricing effectiveness, resulting in higher average sales price and margins Maximized revenue from new product launches Improved customer experience, resulting in increased customer loyalty In order to be successful, however Lean Six Sigma needs to be adapted for the different conditions that exist in customer and commercial processes. Based on our experience, we have identified 6 strategic levers and 20 sub-topics as described below which represent the major enablers for successful deployment of Lean Six Sigma in sales, marketing and customer service. 6 Strategic Levers for Deploying Lean Six Sigma in Customer and Commercial Processes 1. Changing the orientation of Lean Six Sigma from cost reduction to revenue and profit growth: Gaining understanding and buy-in from sales, marketing and service executives, particularly those who may not be process oriented Mapping the organization’s Profit Drivers to key processes Defining the best-fit deployment of Lean Six Sigma (LSS), i.e. adapting tools and techniques, identifying projects, organizing teams, training and supporting team leaders

Lean Six Sigma for Revenue Growth Six Sigma for Revenue Growth Driving Revenue and Profit Growth in the New Global Economy - background The current global recession will leave business

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Page 1: Lean Six Sigma for Revenue Growth Six Sigma for Revenue Growth Driving Revenue and Profit Growth in the New Global Economy - background The current global recession will leave business

Copyright ©2009 by Global Partners Inc. All rights reserved. 1

Lean Six Sigma for Revenue Growth

Driving Revenue and Profit Growth in the New Global Economy - background

The current global recession will leave business practices changed fundamentally and enormously. Companies are experiencing reductions in sales of 20% to 60%, with accompanying drops in margins and profits. Most business leaders realize that in the wake of this historic economic downturn they will need to reconsider their sales and profit models – i.e. the fundamental ways in which they grow revenue and profits. We believe that this period of transition offers a unique opportunity to apply Lean Six Sigma to create the same levels of business improvement in sales, marketing and customer service processes as has been realized on the operational and cost side.

How Does Lean Six Sigma Drive Revenue and Profits?

Among operations and engineering managers as well as senior managers, the concepts and techniques of Lean Six Sigma are well-known as a powerful tool for reducing costs. Legendary success stories abound of permanent cost reductions in the billions of dollars at companies such as GE, Xerox, Bank of America and many more. However, only a handful of companies have systematically and comprehensively applied the breakthrough methodology on the revenue and profit side of their business. Those that have deployed Lean Six Sigma in sales, marketing and customer service have achieved substantial improvements in revenue growth and profitability. Some examples include:

• Increase in Win Rates on competitive bids

• Increased retention of long-term customer service contracts

• Improved pricing effectiveness, resulting in higher average sales price and margins

• Maximized revenue from new product launches

• Improved customer experience, resulting in increased customer loyalty

In order to be successful, however Lean Six Sigma needs to be adapted for the different conditions that exist in customer and commercial processes. Based on our experience, we have identified 6 strategic levers and 20 sub-topics as described below which represent the major enablers for successful deployment of Lean Six Sigma in sales, marketing and customer service.

6 Strategic Levers for Deploying Lean Six Sigma in Customer and Commercial Processes

1. Changing the orientation of Lean Six Sigma from cost reduction to revenue and profit growth:

• Gaining understanding and buy-in from sales, marketing and service executives, particularly those who may not be process oriented

• Mapping the organization’s Profit Drivers to key processes

• Defining the best-fit deployment of Lean Six Sigma (LSS), i.e. adapting tools and techniques, identifying projects, organizing teams, training and supporting team leaders

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Copyright ©2009 by Global Partners Inc. All rights reserved. 2

• Aligning the deployment in Customer and Commercial processes with the organization’s existing LSS deployment

• Likewise aligning the deployment with existing sales, marketing and service processes

2. Identifying and implementing projects that impact revenue and can be systematically improved through Lean Six Sigma

• Implementing high impact/good-fit projects in sales including: Pricing Process, Leaning the Sales Process, Sales Force Effectiveness, Win Rate Improvement, Lead Development, Strategic Account Management

• In marketing: New product launch, Competitive Positioning, Lead Generation

• In service: Building Customer Loyalty, After-sales Service

3. Engaging the field sales, marketing and service organizations

• Demonstrating how Lean Six Sigma can help sales, marketing and service people to improve their individual and team performance

• Applying LSS to solve difficult/urgent problems (i.e. problems no one has been able to solve)

• Deploying in the field in a ‘digestible’ way, taking into account the realities of working in the field

4. Engaging the customer directly in Lean Six Sigma projects

• Collecting and using quantifiable VOC data beyond customer satisfaction surveys

• Using LSS to improve the Customer Experience and Customer Loyalty

• Applying LSS to improve the customer’s business (At the customer for the customer projects)

5. Using ‘soft’ data and metrics

• Proving cause and effect using hard data (traditional 6 Sigma) vs. ‘reasonable impact’

• Collecting and using anecdotal data, surveys, etc. effectively

6. Adapting and applying Lean Six Sigma tools and techniques in Commercial and Customer processes

• Using Design of Experiments to provide sufficient proof of concept to support implementation of new sales processes

• Controlling and stabilizing the sales process, then systematically increasing process capability

• Creating measurement Scorecards for on-going measurement and improvement

• Using Design For Six Sigma (DFSS) in a sales environment

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Copyright ©2009 by Global Partners Inc. All rights reserved. 3

About the Future Focus Research Project

David Rowlands, PhD – Research Project Leader

Dave Rowlands is a Global Partners Director and leads our Lean Six Sigma Community of Practice. Dave was the Vice President for Lean Six Sigma in Sales, Marketing and Customer Service at Xerox where he was responsible for the successful deployment of nearly 1,000 projects in the commercial and customer areas. Dave is a frequent speaker at conferences sponsored by The Conference Board, iSix Sigma and WCBF and is the author of 2 best-selling books; The Lean Six Sigma Toolbox and What is Lean Six Sigma? Dave is also a member of the Shingo Prize Board of Directors and a prize examiner.

Future Focus Research Project Plan

Our research project plan consists of 3 phases.

Phase 1. Consists of a 1-hour telephone interview with participants to discuss the 6 levers in detail.

Phase 2. We will summarize the findings and ask participants to assess and prioritize the major issues and challenges.

Phase 3. We will facilitate a web-meeting(s) to enable the participants to ‘meet’ each other and discuss the results. During the web meeting the group will identify the high-priority areas that they are interested in working on further.

Required investment and expected return

There is no fee required for participation. The only investment required from participants is 1 hour for the telephone interview and a second hour for the follow-up web meeting.

Participants can expect to gain significant insights from peers regarding how Lean Six Sigma can be successfully applied to drive revenue and profit growth. Participants will discuss practical and specific examples of how other companies have addressed issues; what works and what doesn’t. Participants will also expand their network, through which they can continue information-sharing and discussion forums.