NBC did a story on what was happening at Nashua Corporation, leading to a team from the Ford Motor Company and others traveling to the company’s headquarters in Nashua, New Hampshire.
My dad’s excitement infected me. Over the years I’ve sought to apply Deming’s Scientific Method to sales, marketing, and innovation. This book is my learning to date; however, there is much to be done.
Dr. Deming found that most failures were failures of the system. He estimated that 94 percent of a worker’s performance is determined by the system they work within, and the remaining 6 percent by their individual effort. The conclusion was clear: To measurably improve success rates, we must focus on improving the SYSTEM.
94 percent of failures are caused by the SYSTEM. 6 percent are due to worker error.
Most work on quality has been focused on the factory floor. It’s been focused on the reduction of mistakes. In the revised edition of his last book, The New Economics, Dr. Deming argued that this was just the start. He estimated that improvements in production quality were 3 percent of the potential for improvement. He felt that fully 97 percent of the big gains were waiting in areas such as business strategy, planning, personnel, marketing, sales, etc.
Deming reported that most energy spent on quality had been focused on the factory floor on eliminating defects. And, though this is important, he warned, “Absence of defects does not necessarily build business, does not keep the plant open. Something more is required.”
The “more” he then described is, in my opinion, the JOB OF MARKETING. It’s the job of marketing to lead the development process. It’s up to marketing to provide a vision for the engineers and scientists. Customers don’t invent new products or services. As Deming said,
The customer generates nothing. No customer asked for electric lights. There was gas and gas mantles, which gave good light. No customer asked for photography. No customer asked for the telegraph, nor for a telephone. No customer asked for an automobile. We have horses: What could be better? No customer asked for pneumatic tires. Tires are made of rubber. It is silly to think of riding on air.
It’s marketing’s responsibility to imagine the future. It’s marketing’s job to blend knowledge of customers, consumers, manufacturing, engineering, finance, and even legal, and to boldly, bravely invent BIG IDEAS for revolutionizing their industry.
Deming said that management and leaders must “govern their own future, not be merely victims of circumstance.” He went on to say that preparation for the future includes “constant scanning of the environment (technical, social, economic) to perceive need for innovation, new products, new service, or innovation of method. A company can to some extent govern its own future.”
In recent years, quality efforts, and in particular 6-Sigma efforts by Motorola, GE, and others, have become popular tools for improving competitiveness. Sadly, the sales and marketing departments have resisted involvement. I recall a visit with a senior vice president of marketing at one of the United States’ hundred biggest companies. As we stood near the elevator at their New York City headquarters, I commented on a sign advertising the company’s 6-Sigma program. In response to my question regarding how the quality program was going she replied, “It’s not a marketing thing—it’s for production and operations.”
Wrong! In today’s marketplace, everyone must improve quality. For sales and marketing, quality is measured by the effectiveness and efficiency of marketing and sales programs.
The primary “systems” that are relevant to sales and marketing quality are THINKING SYSTEMS. With continuous improvement in thinking systems, you realize continuous improvement in your marketing response rates, trial rates, and sales success.
When thinking systems are faulty, then no matter how hard you work or how much money you invest, failure is a reproducible certainty. In my thirty years of experience, I’ve concluded that Deming’s observations on quality also apply to marketing:
94 percent of MARKETING Failures are caused by faulty THINKING SYSTEMS. 6 percent are due to worker error
The aim of the Eureka! Ranch is to translate the wisdom of Deming to the world of Sales, Marketing, and Innovation. It’s not easy. The first challenge is finding what metric to measure. With our Innovation efforts, it took us nearly a year to create and validate a system for measuring the quality of ideas on a real-time basis during group brainstorming. This measurement tool has allowed us to transform our system—resulting in a 10X STEP CHANGE IMPROVEMENT in the quantity and quality of ideas we invent. But that’s not the subject of this book—that’s the subject of the upcoming Jump Start Your CREATIVE Brain.
The measurement of marketing effectiveness is just as difficult. Short-term sales increases due to promotional gimmicks are often matched with equivalent declines in sales in the next time period.
Marketing managers commonly confuse coincidence with cause and effect. They get “lucky” once in their career with a strategy or tactic and seek to repeat it. The result is a career of frustration in not being able to relive the “lucky moment.”
The science of statistics provides methods for identifying whether what we are observing is a random event or a statistically reproducible finding. Through disciplined analysis, we can identify scientific principles to guide our everyday thinking and decision-making.
MEANINGFUL MARKETING VS. MINDLESS MARKETING
At the Eureka! Ranch, our “religion” is something we call Meaningful Marketing. Meaningful Marketing is about honest storytelling. It’s about telling with absolute accuracy how your offering will make a meaningful difference in customers’ lives.
Sadly, a quick review of modern advertising finds that Meaningfulness in communications is a rarity. Instead of respecting a customer’s intelligence through communicating real news, most advertising attempts to coerce customers using what we at the Eureka! Ranch call Mindless Marketing.
Mindless Marketing is about using persuasion trickery to sell your offering. It’s about encouraging customers to make a purchase without conscious thought or consideration.
When a celebrity is paid to use a product to persuade gullible youth to buy, that’s Mindless Marketing. When a credit card company offers no interest for 90 days, then raises its rates to loan shark-like levels, that’s Mindless Marketing. When a company pays to have its brand shown in a television show, that’s Mindless Marketing. When a company gives free gifts to consumers to get them to create “buzz” about their product, that’s Mindless Marketing.
The search for “Persuasion Tricks” is nothing new. In 1983 advertising legend David Ogilvy wrote in Ogilvy on Advertising of the never-ending desire of the media and the advertising community to find the latest “hot marketing trend.”
There have always been noisy lunatics on the fringes of the advertising business. Their stock-in-trade includes ethnic humor, eccentric art direction, contempt for research, and their self-proclaimed genius. They are seldom found out, because they gravitate to the kind of clients who, bamboozled by their rhetoric, do not hold them responsible for sales results. Their campaigns find favor at cocktail parties…. In the days when I specialized in posh campaigns for The New Yorker, I was the hero of this coterie, but when I graduated to advertising in mass media and wrote a book which extolled the value of research, I became its devil. I comfort myself with the reflection that I have sold more merchandise than all of them put together.
