The topic here is the “six sigma” continuous process improvement methodology essentially invented at Motorola, made famous by GE and the subject of many books and articles. Let’s end the suspense right now. Any sales rep or team that can achieve zero sigma performance will be immediately entered into the Sales Hall of Fame. Consider the sales funnel below…
The numbers for any given rep in any given company may well be different, but we have found that what is represented here is fairly typical. In this example, the rep has $250 million worth of opportunity in the “Identification” stage of the sales process. On average in this organization, 25% of these opportunities move on to the next stage in about 45 days. This results in $62.5 million in the “Attention” phase, etc.
The end result is $1.9 million in sales in 125 days. That means 0.75% of the “suspects” from the Identification stage ultimately turn into orders. Viewed from a six sigma perspective, that is a -0.93 sigma performance.
Yes, it’s a negative number!
For a bit more perspective, take a look at the following table. It shows the percentage yield associated with each sigma level.
- 6σ is 99.99966% yield (3.4 errors per million)
- 5σ is 99.977% yield (233 errors per million)
- 4σ is 99.38% yield (6,210 errors per million)
- 3σ is 93.4% yield (67K errors per million)
- 2σ is 69% yield (309K errors per million)
- 1σ is 31% yield (691K errors per million)
- 0σ is 6.7% yield (933K errors per million)
- -0.5σ is 2% yield (988K errors per million)
The next table puts things in a more familiar context. Note that each is an example of five sigma performance:
- 1 hour of unsafe drinking water per month
- 2 unsafe landings per day at O’Hare
- 16,000 pieces of lost mail per hour
- 500 incorrect surgical operations per week
- 50 newborns dropped by doctors per day
- 22,000 checks deducted from the wrong account per hour
Finally, take a look at what the same sales funnel shown above can yield:
- -0.93σ yields $ 1.9 million revenue
- -0.5σ yields $ 5.8 million
- 0σ yields $16.8 million
Strive to be a zero, get there, and you wind up selling almost nine times as much!!!
As a sales executive, manager or professional, does it make sense to learn a bit more about this six sigma stuff??? Well, yes and no. Clearly the magnitude of the potential improvement is gigantic. The problem is, it takes a statistician’s mind set, followed by months and months of training to become proficient.
Now the good news. From a six sigma perspective, the typical sales process is so vastly, wildly out of control that just a little bit can go a long way.
Consider Michelangelo and his Pieta, hailed by many to be one of history’s finest accomplishments in sculpture. To capture the eerily life-like expressions, he used a fine, soft cloth to “carve” his final touches. Now think about day one of his project. Work started with huge block of solid marble (i.e., a big hunk of stone!!!) and a sledge hammer.
The sales process is still at the sledge hammer stage. There is no need to study and learn the “fine, soft cloth” nuances of six sigma to make really significant progress. Anyone who has gotten this far through this book already knows enough to get started. Sales Process Engineering as I practice it is grounded in six sigma. It follows the “DMAIC” outline: Define – Measure – Analyze – Improve – Control…
- Define – Clearly map out the process to be improved. (The Methodical Sales Process along with the core Sales Practices provide the starting point.)
- Measure – Identify the key measure of effectiveness and efficiency. (See the examples in the “MSP” section of this book.)
- Analyze – Determine the causes of problem(s). (A spreadsheet program has much more than enough number-crunching power.)
- Improve – Enhance the performance of the process. (You do get to use your creativity after all!)
- Control – Ensure that the improvement is sustained over time.
With this DMAIC philosophy in mind, use the SPE concepts contained in this book to Sell More Faster with Sales Process Engineering.
Now…
