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The Central Ideas Behind Value Acceleration
Achieving competitive advantage by Value Acceleration is accomplished by embracing three central, powerful ideas:
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Adopted as a group, these ideas can provide a way to exploit the last unexplored frontier in management: applying process principles to the central function of the firm, namely marketing.
1. The crucial need for process management in marketing
The first of Value Acceleration's central ideas is that the validity of corporate processes has come under a great deal
of criticism in recent years. "There's just no time to do things in the old-fashioned, step-at-a-time way in a NetSpeed
economy," the argument runs, "Instead of 'ready, aim, fire' ... or even Tom's Peter's famous, "ready, fire, aim" ... there's
no time to aim. It's come down to 'fire, change, and fire again.'"
With this mentality, any attention to process seems irrelevant and passé. For many, the very word process brings to mind
the lumbering, slothful bureaucracies that are dead or dying in the 21st Century.
We beg to differ: process is not a synonym for bureaucracy, In fact, we believe that effective corporate processes remain
essential ... and more so the faster the rate of change.
What is a process?
A process is a defined and ordered set of activities. Whether it is defined in terms of sequential outcomes or specific
actions to be performed (a distinction to be discussed later) is not important. The relevant point is that a process
assigns roles and responsibilities to people or units and defines the information flows between them. A process ensures
that everyone knows what they are expected to do and how what they do integrates with what others do. The alternative to
having a defined process is to have no means by which to differentiate essential activities from non-essential ones.
Without processes, activities are done chaotically and randomly. Clearly, this is not productive, nor is it what the
opponents of corporate process are arguing for.
Among all corporate functions, marketing alone has the distinction of not usually operating by a well-defined process.
Well-established systems, methods, tools and procedures drive manufacturing; finance, sales, and HR. Modern accounting
processes for finance were developed centuries ago. Even product development — previously a notorious habitat of freewheeling
"un-structure" — now has a set of well-ordered processes by which it can be effectively managed. But not marketing.
Why is there no well-accepted marketing process today?
The first, answer is obvious: There is not even a consistent answer to the basic question "What is marketing?" Ask 100
practitioners or managers of marketing to define marketing and you'll get 150 different answers. How can there be a
commonly accepted process for performing a function when there isn't even a commonly agreed upon definition of that
function!
The second answer is significant: Marketing has never been viewed, managed or taught as a process. It has always been
viewed, managed and taught in pieces; and, in practice, it has been treated as an art form for which, at best, a company
can provide a suitable climate for gifted people. This fragmentation of a discipline that is inherently a process forestalls
great strides in its progress.
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2. The first comprehensive and hierarchical process model of the entire marketing function.
The second of Value Acceleration's central ideas addresses the fact that marketing suffers from two common misconceptions.
The first is the almost ubiquitous confusion of marketing with promotion. Promotion — advertising, publicity, branding,
sales support, and so on — is but one area of marketing. Promotion is the "back-end" task of the larger marketing function
... the one that is done last in a product's development and introduction cycle. Promotion is a part of marketing, not
all of it.
The second universal misconception about marketing is that it's not a science — and therefore doesn't lend itself to an
organized, structured approach. It is wrongly regarded as an art — as something that is solely dependent on the insight
and talent of naturally gifted people for its success.
We conceive of marketing/sales as a system that integrates four main elements:
Environmental Influences are those factors that occur in the external world that you can monitor, analyze and
predict - but not control. These monitored and analyzed factors include the usual market segmentation, market size and
growth rates, customer demographics, competitor information, political, regulatory, and social influences, and, those
aspects of your own company that are beyond your control. This data is not only gathered by your market research function,
but by everyone in the firm who interacts with the customer or knows anything about them.
Value Specification is the process of understanding and agreeing upon Who buys and What they are buying from you ...
or what they want to buy from you that they can't buy from others. This function is the strategic part of marketing that
fully integrates with the firm's corporate strategy function.
Solution Development is composed of the set of marketing activities that focus on actually creating the completed solution
you bring to market. In Solution Development, your marketing department works closely with your product development function
throughout the product/service development cycle. The Solution Development element is explicitly designed to work with the
type of structured Product Development process that many effectively-managed companies are currently adopting.
Customer Development is the customer-facing side of marketing/sales. It consists of creating demand for your
product and fulfilling that demand. In Customer Development, you set strategy for sales, promotion, channels and every
other aspect of the company that touches the prospect or customer. You define all of the various audiences that you must
reach and develop the right message for each of them. You design your selling process to accurately mirror your customer's
buying process. And you then implement these plans. Customer Development encompasses all of promotion, branding, positioning,
and so on-as well as the entire Sales function. It usually owns a very large piece of the marketing budget, but it is
important to remember that it is merely one of four necessary elements in a true marketing process.
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3. Managing by Time-Proven Principles
The last of Value Acceleration's central ideas is that, from a management point of view, the operative word in marketing
process is process. Thus, there is every reason why the time proven techniques of process management apply to marketing
as well as any other process. Specifically, there are three time-proven process management principles that can be applied
to marketing/sales. Those principles are:
- Constraint Analysis
- Lean Thinking
- Continuous Improvement
Constraint Analysis is the technique of identifying the single greatest barrier to your marketing goal-whether that's
sales, profit, growth, or whatever. Working on any other aspect of your marketing process won't relieve your most constrained
activity and will do little if anything to achieve your goal. Because of that, constraint analysis requires that you look
at the entire process of marketing/sales in order to determine where the real limitation lies in your ability to produce sales.
Lean Thinking refers to techniques used to eliminate waste and non-value-added steps throughout your marketing/sales
process. Lean Thinking is the action corollary to the truism: "Don't confuse activity with progress." Each step of your
marketing/sales process must be assessed to determine the activities that contribute to the effectiveness of your marketing
process and identify non-value-added steps. Non value-added steps are either irrelevant or will actually slow down the system.
Continuous Improvement is the on-going, pervasive and systematic methodology by which quality, at each step in the process,
is specified; and by which out-of-spec and sub-optimal performance is removed from the system. The techniques most commonly
employed in Continuous Improvement are pattern analysis, quality control, and training.
These three powerful and proven management principles have been successfully applied to improve the product manufacturing
process, and they apply equally well — if not in exactly the same way — to a marketing process.
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