Kaizens Work for Marketing Plans!
I once was involved with a major transformation of a worldwide logistics organization. At the start of the transformation, they had twenty-six divisions. They had decided to reorganize and needed some basis for the reorganization. I suggested that we first do a marketing plan, which was greeted by disbelief and catcalls. I explained my strategy and said that first we had to find out what our market segments were and agree on that. We did fifty focus groups, deep marketing research and narrowed down our customer segments to six. This was a monumental voice of the customer exercise and we received a good short list of what our customers really valued.
However, the very first thing we did was do an As Is process map of where the organization was in the present state with all the reporting relationships and responsibilities. This was a long hard and complicated process but the Kaizen team discovered that there was much duplication and that 95% of the steps were not really valued by our customers. We then did a To Be process map of the future recommended state of the organization.
What we did next was again look at all twenty-six divisions and try to determine exactly what each did. We then looked at it in terms of which of the six customer segments they served the best, or were most likely to serve the best. Much to our surprise, there were no “in-between” divisions; each division fell within a particular customer segment. All of the division heads agreed with their customer segment alignment. The consensus process was really very readily accepted.
Once we presented this information to the CEO, he immediately suggested that we consolidate twenty-six divisions into six. The Kaizen team had done its homework. Obviously this Kaizen team took more time that a traditional Kaizen but the tools used were practically the same. Each division would now have a customer champion, whose main mission was to meet the needs of that particular customer segment. After much work, job analysis, and feedback from the division heads, we consolidated into six divisions. We eliminated over 600 positions, but we did avoid layoffs with attrition and by offering early retirement.
Over the years, the organization had gotten out of touch with their mission and customer base. Once the reorganization was executed, when we got our customer-service metrics, we were pleasantly surprised to see that they’d improved dramatically. Now the organization’s employees could focus more on actual customers and their needs, instead of defending their organizational silos. Soon other organizations asked how we had accomplished this, and we shared our data with them.