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5 Steps to Using Hoshin Kanri for Marketing Goal Setting

“Using WHAT?!”  I know, I know.  I lost you with those strange words.  And I also know I risk losing you irretrievably if I tell you that Hoshin Kanri is a Six Sigma strategy tool used to ensure the whole company pushes in the same direction.   But I’ll take the risk, because the start of a new year is a great time to use Hoshin Kanri for marketing goal setting.

As an endurance athlete, I know that results take time.  So, I’m not surprised if my first post on Six Sigma and inbound marketing  hasn’t convinced you of the role Six Sigma can play in improving marketing strategy and execution.  I respect your skepticism.

So PLEASE STOP READING this article UNLESS any of the following challenges apply to you:

  1. Communicating how your team supports the company strategy.
  2. Creating a high performance team.
  3. Ensuring everyone knows where they stand relative to achieving goals.
  4. Holding your team accountable for the achievement of targets.
  5. Fostering innovation at all levels of your team.

Still reading?  That’s what I figured.

Hoshin Kanri Background

Hoshin translates literally to compass
Ho (direction) + shin (needle) = Hoshin (compass)

Hoshin Kanri was developed in Japan as part of the quality effort of the 1950s. Translated literally as “compass management,” it is a process for setting strategic direction that leverages the collective expertise of everyone on a team.

Hoshin Kanri differs from other approaches in two critical ways.  First, in Hoshin Kanri, two way communication is key.  Top management sets the overall direction, but delegates as much as possible to the front line teams to determine HOW best to achieve the goals.  Second, Hoshin Kanri calls for a Plan-Do-Check-Act cycle to regularly measure actual results against the plan, and to take corrective action for root causes.

How to Use Hoshin Kanri for Marketing Goal Setting

Here are five critical steps to using Hoshin Kanri for marketing goal setting.

Step 1:  Build the annual strategy & corporate goals

The executive team builds the annual corporate strategy, including SMART goals for the critical few metrics that define corporate success.   For B2B software companies, these generally include revenue, new customer acquisition, and new product launch.

Step 2:  Cascade the company goals to the departments

waterfall-199204_640Department heads support the corporate strategy by identifying goals for their teams that align directly to the corporate goals.  Some departments coordinate to achieve mutual goals, such as marketing and sales for revenue and customer acquisition targets.  Bi-directional communication among departments and the executive team solidifies goals and inter-dependencies.

In this step, marketing identifies goals for  demand generation, awareness, and sales enablement.   For a B2B software company,  marketing is normally expected to build pipeline for 15-30% of new revenue.   This translates into a goal for number of leads in the marketing funnel, based on average sales price, sales cycle, and historical conversation ratios of marketing programs.

Step 3:  Use the team to identify supporting tactics

Here is where Hoshin Kanri really drives innovation through two way communication.  With so many variables to consider, the entire B2B marketing team is needed to identify the best tactics to support the goals.   Leverage the expertise of those who run the programs, execute SEO and SEM, and build the content and messaging.   When complete, the marketing plan identifies tactics, timeframes, projected costs, and expected results for each element.

Step 4:  Link achievement of metrics to individual performance

The best way to ensure the marketing team remains focused and aligned is to directly tie achievement of the target metrics to individual team members’ performance.  Use the performance management system to tie variable compensation to goal attainment.  A combination of shared goals and specific goals ensures the marketing team works together, while each individual strives to hit the numbers for which she is responsible.

Step 5:  Measure and adjust regularly

vu-meter-70433_640Regular comparison of actual results to plan is a fundamental aspect of Hoshin Kanri.  Frequently measure key marketing metrics to determine whether tactics are working as planned.   The metrics will vary, but should include both inputs and outputs.  Investigate any variance from the plan, and analyze the dependencies between causes and effects.  For example, if a webcast didn’t achieve the target audience, was the problem the content, the promotion, or the outreach?

The Benefits of Using Hoshin Kanri for Marketing

Once you get beyond its name, you can see the benefits of using Hoshin Kanri for marketing goal setting.   Understanding how marketing contributes to the company goals.  Clear focus on achieving targets.  Constant analysis of achievement vs plan.  Employee engagement in building the plan.

Despite its reputation for being cumbersome and overly techie, Six Sigma has much to offer to marketing.   Today’s marketers need to be both creative and analytical.   Hoshin Kanri is one tool that can help achieve this balance.

What do you think?  Have you used this approach?  What was your experience?

 

 

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Six sigma, inbound marketing

Six Sigma and Inbound Marketing – Only When Pigs Fly?

Oh yeah, I know what you’re thinking.   Six Sigma and inbound marketing? Is that a joke?  Six Sigma is for manufacturing.   Old school.  Narrow-minded.  That rigid process analysis run by geeks with thick, black glasses and pocket protectors.  The very antithesis of the creative, fast-moving, collaborative effort required by marketers to drive awareness and demand.

But I’ll bet you’ll think otherwise by the end of this post.  As evidence for my position,  I’ll cite Hubspot, synonymous with inbound marketing.   I have yet to see pigs in the sky, but those thick black glasses, they’ve gotten pretty trendy lately.  Thank you, LeBron!

Inbound Marketing aside, what does Six Sigma have to do with Endurance Sports?

Now, that’s a lay-up!  Six Sigma focuses on defining success, measuring the critical inputs, and finding opportunities for continuous improvement in order to achieve goals.  It’s the same type of mentality with which endurance athletes train.  We’re always looking for ways to get a little more streamlined, a little more power, a bit more energy.  Incremental improvement in inputs, extended over the course of a triathlon or ultra-marathon, can produce massive gains in finishing time.   There is almost no detail too small for an endurance athlete to analyze and optimize.  Take it from a guy who trimmed his watch band to save weight while running the Western States® 100 Mile Endurance Run.

A New Way to Think about Defects

six sigma, defects
Not the way marketers should think about defects

Six Sigma is all about reducing defects.   Don’t think of a defect as that big pile of scrap that sits at the end of an assembly line.   Think more broadly of a defect as a failure to achieve what is acceptable by the customer.   Isn’t inbound marketing all about attracting the right buyer personas, providing them with useful, compelling content in order to move them along the buying cycle?  Think of a defect as a failure to accomplish this goal.

Once you accept this definition of a defect, the association of Six Sigma and inbound marketing begins to flow.  You have to admit that the following examples are defects:

  1. Your target buyer comes to your website, but doesn’t find what she needs.
  2. You write a compelling blog, but don’t have an obvious call to action (CTA).
  3. A reader of your blog follows your CTA, but finds your registration form too onerous, and abandons.
  4. Your inside sales rep gets a lead on the phone but lacks the training to easily qualify the prospect’s need.

5 Steps that Relate Six Sigma and Inbound Marketing

To identify and correct defects, Six Sigma uses a five step DMAIC process – Define, Measure, Analyze, Improve, and Control.  Here are just a few ways this process relates to inbound marketing.

1. Define:  Six Sigma says the “voice of the customer” defines what is acceptable to the customer in order to meet their needs.   For us inbound marketers, this translates to understanding the buyer persona.   This Hubspot example of a non-profit buyer persona goes way beyond just the buyer’s voice to cover her demographics, values, goals, pain points, etc.   The key point common to both Six Sigma and inbound marketing:  focus on the customer, not on your product or service.

Six Sigma practitioners often use a process map in the Define stage to understand the precise steps necessary to deliver a product or a service.   Similarly, inbound marketers must map the customer’s buying process to ensure that they provide useful content to convert an opportunity to a lead and then to a customer.

2. Measure:  The next step is to measure the current state of the process in order to identify opportunities for improvement.   For inbound marketing, this step involves reviewing the website to ensure that it provides compelling content to the buyer personas all along the buying process.   As StoryMETRIX says, it also involves gathering detailed metrics on website traffic by source, conversion ratios, and the effectiveness of sales enablement material.   Creative folks, engage your inner geek, because this step requires a variety of data gathering and basic operational definitions.   For example, marketing and sales must agree on terms like Marketing Qualified Lead and the SLAs for lead follow-up.

3. Analyze:  Here’s where you identify the potential corrective actions to problems.

World famous practitioner of  "The Five Whys"
World famous practitioner of “The Five Whys”

Take a lesson from your three-year old at bed time, and use “The Five Whys.” The idea behind this technique is that you cannot stop the first time you ask “why” a given problem exists.  You have to take the answer you get, and again ask “why.”  If you ask “why” long enough (usually five times suffices), you’ll ultimately uncover the root cause.   See this great example.   Try this with your team the next time your webinar doesn’t get the expected number of attendees.

Oh, and don’t accept “because I said so” as an answer.

4. Improve:  In this phase you implement your changes and measure the results.  A/B testing to determine different subject lines for blog posts or email campaigns.   Different CTAs and registration forms.   Different subject lines for blog posts.   Using video instead of written content to see what works best.   The list goes on.

5. Control:   Here’s where you lock in the gains by documenting best practices and training your team.  No gain is permanent, especially in a changing market, but you have to put in the effort to ensure you propagate your improvement tactics across your team.

A Proof Point from Hubspot

As you read this KISSMetrics article on Hubspot, you’ll clearly identify actions that Hubspot takes that align to each of DMAIC stages.   Creative types, even Hubspot takes an impressively analytical approach to building a scalable sales team.

Convinced yet?  Let me know.   As a marketer, endurance athlete, and Six Sigma Black Belt, I think there’s great opportunity for applying some of these techniques to our jobs.  Just don’t get hung up on outdated impressions of what Six Sigma is all about.

 

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