This podcast discusses John Hunter's new book "Management Matters" which focuses on building enterprise capability through systems thinking and continuous improvement. The discussion touches on key figures that influenced systems thinking like Deming, Senge, Ackhoff and Ohno. While their views complemented each other, Deming emphasized the Plan-Do-Study-Act cycle while Senge focused more on formal systems diagrams. Current leaders highlighted for practicing good principles include Christensen, Bezos, and leaders in agile software development.
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Implementing Lean Marketing Systems
John Hunter on Management
Guest was John Hunter
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John Hunter combines technology with
management expertise to improve the
performance of organizations. He has
served as an information technology
program manager for the American
Society for Engineering Education, the
Office of Secretary of Defense Quality
Management Office and the White House
Military Office.
He has authored the Curious Cat Management Improvement Blog
for years. He is the author of new blog for the W. Edwards
Deming Institute. John has facilitated seminars for the Deming
Institute, spoken at the annual Deming Institute conference and
lectured at the Deming Scholars program at Fordham University,
as well as presenting at conferences on management
improvement topics.
John got early start learning about variation, quality and
Deming's management ideas from his father: Bill Hunter. Bill's
work with the City of Madison was included in Deming's book:
Out of the Crisis, as the first known example of applying the ideas
in government. Peter Scholtes was involved in that effort (as a
city employee). Peter later went on to write the Team Handbook
and Leader's Handbook and teaches with Deming at his 2 day
seminars. John created and maintained (and still maintains)
Peter's web site.
John is the founder and CEO of curiouscat.com, managing over
30 web sites on management, software development, investing,
engineering, travel and other topics.
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Transcription of Podcast
Joe: Welcome everyone. This is Joe Dager, the host of the
Business 901 podcast. With me today is John Hunter.
He combines technology with management expertise to
improve the performance of organizations. He has
served as an information technology program manager
for the American Society for Engineering Education, the
Office of Secretarial Defense Quality Office, and the
Whitehouse Military Office. He's the author of the
"Curious Cat Management Improvement" and the W.
Edward Deming Institute blogs. John has facilitated
seminars for the Deming Institute Blog, spoken at the
annual Deming Institute conference and lectured at the
Deming Scholars Program at Fordham University, as
well as having presented at conferences on
management improvement topics. John, I would like to
welcome you back to the Business 901 podcast, as you
were the star of 2012. I'm honored that you came back
to tell us about your new book, Management Matters.
John: Thank you. I'm excited to be back. Hopefully, it can go
as well as last time.
Joe: Well, you start your book out discussing system
thinking. Can you put some context to how you use
that in your book?
John: The key when you're looking at this from a Deming
perspective or my perspective is it's in viewing the
organization as a system and process thinking. There's
the discipline of systems thinking and that comes from
the appreciation for a system in my context. But it is
that within the management system that is the focus.
It is about understanding interactions and constraints,
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leverage points, friction that is caused by the system,
support that the system has to make processes work
better, things like mistake proofing, those kinds of
effects that the system can have on results.
Understanding things like optimizing subsystem is not
automatically optimizing the overall system.
Understanding, the importance of managing
interactions within the system, not just the individual
PROCESSES within the system and failing to
understand all of those interactions and the byproducts
of those interactions.
Joe: When you talk about system thinking, it's like stepping
down and making a change but then taking that step
back and looking at the total picture when you make
them small changes?
John: Like, formally you can do that with a PDSA cycle and
you make the change; you make a prediction about
what will happen based upon your theory of how things
are working. You assess the results then based on
those results you either adjust and go through the
cycle again or figure out that this is really good and try
to adapt it on a wider scale.
One of the things that I believe more than most people
I've talked to and read is the idea of taking things like
the PDSA cycle and integrating that understanding in
how you operate. So that you use that PDSA thinking
even when you don't normally go through the PDSA
cycle, but exactly what you said. You try things. You
then assess the results, which is often never done.
Based on that, you decide to move forward. You decide
this change didn't really work. We need to make a
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different change.
What you said is one part of it, testing to make sure
things work. The other part is that system thinking
affects how you even decide what to try. So, and that’s
a big part of it. The subtitle of the book is "Building
Enterprise Capability" because over the last five or six
years, I came to that as sort of my focus.
When I was trying to decide, well why am I choosing to
do this? Why am I saying this is what we should do
next? It was because it is about improving whatever we
are trying to do today. But it's also about building the
organization, so we are more capable next week and
next month and next year to do these things.
While I'm working on this project and using a control
chart to understand that the system is within control,
you're using special cause analysis isn't really going to
help. You build that capability so that [people a month
from now six months from now a year from now will
have a better understanding of everything that they do.
It's based on that sort of systems thinking, the idea
that building enterprise capability makes sense. The
idea that I understand the way this whole system
works, it's very critical for people to have an
understanding, to trust the leaders are going to respect
all the employees if we find solutions that save five-
man years of effort, they're not going to lay off five
people. They're going to maybe free up those five
people to do something else in the organization. But
they're not going to lay those people off, because if
they do, why is anyone going to offer suggestions in
the future? So, looking at that system to figure what I
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need to do next is the other, I think, big key.
Joe: we're mentioned before the podcast, I just got done
rereading the Fifth discipline by Senge, one of the
things that struck me, there is that Dr. Deming is
always closely related to system thinking and then lean
involved, of course from Toyota. And Senge kind of
took over that system thinking baton, but there's a
distinct difference between the two. Could you define
that for me?
John: What I see is Senge and Deming knew each other and
liked each other and thought each other's ideas were
great, but I think Senge was a little more focused on,
and is, a little more focused on formal systems
thinking. He, I believe, totally understands where
Deming was coming from, totally sees how what he's
doing relates to what Deming is doing. When Senge
says systems thinking, I think it's a lot more on the
formal systems thinking. So, drawing these systems
loops and reinforcing loops.
Joe: A cool analogy between the two is PDSA in one
direction, and the other direction is a systems
archetype.
John: One thing that I think is powerful is you use both.
Deming was more focused on the PDSA stuff. But for
me when I'm thinking about the systems in an
organization, understanding where Senge and people
like him comes from and their diagrams is helpful. I'm
not an expert in that level of systems thinking, but
having a decent idea about what they're talking about
is very useful. But when all this stuff was going on with
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Deming, people talked about for systems thinking were
Senge and Ackhoff. So the Deming people, that's who
they looked at.
Joe: You believe that we need to learn from great leaders.
You mention that in your book. You mention of course
Dr. Deming, also Ackhoff and Ohno and Scholtes, did
all these views complement each other or did they
differ in some way?
John: I think basically they all complement each other. Some
of this can be based on the perspective of that person
making that judgment, like me. And my mentality is in
general to look for useful ideas where I can find them
and use them. That was sort of Deming's idea. If you
look through Deming's talk and books, you'll see he's
constantly referring to where he got this idea from,
where he got that idea from. The number of people
that he brings in as influences and brings ideas from
that he specifically mentions has to be over 100 in his
books and the videos.
For me, looking at people, I'm looking for things that
will help and be useful. So, like you had Joyce Orsini
and Kevin Cahill on recently talk about Deming and
Drucker and Deming and Drucker talking to each other
and having ideas. One of the things a lot of Deming
followers know is that Deming didn't like MBO and had
problems with it. When I look at Drucker's work and
even when he's talking about MBO, when you read
what Drucker said about MBA, most of that, almost all
of that, I think is really good. The problem had Deming
criticized as I see it was mainly the application of MBO.
Now there were a bit of disagreements about the
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structure of MBO having some problems given the
nature of organizations and the fact that if you try to
do this in an organization, there's likely to be these
problems.
So Deming had that view. Drucker's view was more
there are problems, do it this way and it will be good. I
think Deming's opinion was trying to do it that way
sounds good on paper but won't really work. But when
I look at what Drucker said about MBO, I can take lots
of good ideas from what he was trying to do. But I do
agree with Deming that trying to use these goals when
we understand how systems work; we understand how
psychology works for people trying to get these goals
and what they're going to do especially when the
systems have bonuses attached to meeting to goals
and there are promotions attached to meeting goals,
it's going to end up distorting the system and causing
problems. Some people can look at that disagreement
and say there's huge conflict between these two. I look
at it and say there's some conflict, but overall I find
both useful. That's one of the biggest differences I see
when I look at those other people, I really see almost
no differences at all between Scholtes and Ohno and
Ackhoff and Deming.
Joe: What leaders are out there currently, that you admire
and follow and have some of these principles that we
talk about that are good leaders for us to watch to see
what their organizations are doing?
John: Well, the first thing I would say is, I still learn more
from Deming and Scholtes and Ohno and Ackhoff and
Joyner and George Bach and people like that than from
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anyone else. So I still think going back to those people
today makes a huge amount of sense and continuing to
reread them. I even mention that in the book right at
the beginning. What I find is most of the stuff that
comes out now is either bad but throw that out, which
is a lot. Then you have some stuff that's really good
and the stuff that's really good I think mainly does a
really good job of providing useful new implementation
ideas on how to do a general concept that already
Deming and Ackhoff and others have sort of talked
about in a big way. That stuff's great.
One of the very few things that I see as totally new
thinking and it’s actually getting sort of old now is
Clayton Christianson. He's someone who I have
continually recommended if managers haven't read his
stuff, you have to read at least one of his books. His
stuff is on disruptive innovation, essentially. It's great
stuff. It's not something I see automatically springing
from the work before it but it can fit in completely with
understanding the organization as a system, long-term
thinking, and customer focus. All of his stuff is
wonderful. When I look at other people nowadays that I
really like; there are tons of them. They're people like
David Lankford, Womack, Jeff Liker, Gypsy Ranning;
she's another Deming person. Roger Hurl and Rod
Sneed are two of the people that I really like for Six
Sigma. I think Six Sigma has some really good stuff in
it. When you read and listen like to people like those
two, you'll see people who don't have a Six Sigma
concept that can't be used by people that an
understanding of Deming and lean thinking and
everything else. I think that Six Sigma has more
problematic applications in leaders than others.
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Another person is, like, Jeff Bezos at Amazon. He
occasionally has interviews that are great stuff, but also
seeing what's actually happening at Amazon and then
reading some of his articles, some of his interviews
provide some really great insight.
Alphie Cone is another person I really like. Ken
Sandrine is a person I really like. And Boson, he's
probably the least well known, but he has some great
stuff. He worked with Ackhoff a fair amount. There's a
bunch of people related to agile software development
and lean software. I think I might see newer stuff from
that group of people than anywhere else. But again, I
see most of it as really good new ideas on how to use
concepts in a new arena. So, something like minimal
viable product is a thing in agile software development
of figuring out the least features you can have in a
software release, releasing that, seeing how users react
to it and then adjusting, instead of taking a year to
build your product and push it out.
Well, that is really PDSA. That is really piloting on a
small-scale and adjusting and iterating over and over
and over; and then making change that way. But it's a
little different and it's a new idea and the Internet
especially makes that a very powerful way, especially
for software to go. You can use it for other things. You
can use it for hardware things. So there's a lot of stuff
there. And one of the great things today is all the
blogs. There's just tons of blogs that are really good.
You have John Miller; I really like. Kevin Myer. Mark
Graban.
All sorts of people with really great stuff, it does point
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to one of the things that I find funny and I think it does
relate to one of the issues with Six Sigma. You will find
almost nothing on the internet on Six Sigma that's any
good. There's just almost nothing there. If you search
for jobs in Six Sigma and Lean manufacturing, there
are probably more jobs open in Six Sigma stuff. If you
look for a good Six Sigma blog or good Six Sigma
content online, there's very little in my opinion, and
I've searched around a lot for it. The absolute best Six
Sigma stuff is really stuff by Lean Six Sigma people
that have way more Lean stuff they're talking about
than Six Sigma.
Joe: How do we influence others? Let's say we want to take
an idea and influence others, is there a way in your
book you describe how to do that?
John: It isn't so much force, that plan or anything, but when
you understand a lot of these impacts on the system,
you understand psychology; you understand that when
I'm going to influence this one person, there might be
some psychology that's either going to help or hurt me,
when I understand the culture of evidence based
decision making in the organization, that might help or
hurt me. So if I know that our organization essentially
doesn't' have evidence based decision making.
Essentially it comes down to whoever has the most
authority in the meeting will decide based upon
whatever whim they have. Well, if you know that, then
the way that you have to go after influence is much
different than if it's an evidence-based culture. But you
understand that going in. In that situation, if I thought,
I could convince that person offline, I'd try to convince
that person offline. If in the meeting, I thought I could
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convince that person I might do that. Often it might be;
they have these three big allies and for technology
stuff, they really rely on Mary, so I'm going to go talk
to Mary, explain why this is a good thing and get her to
tell a decision maker that this is a good idea. How you
try to influence will be dependent on the system you're
within, where you have the ability to influence and
you're going to figure out which levers need to be
changed to make that happen.
Now one of the things I talk about a little bit in the
book, but I think is a powerful idea to get across that I
haven't really seen elsewhere, is the idea that circle of
influence is defined today, not it's defined, there are
limits upon it today. But that definition varies over
time. This is one of the ideas that came when I was
coming up with the idea of building enterprise
capability, is over time I grow my circle of influence.
And I build that enterprise capability. I build my
capability to influence. So I happen to believe that
evidence-based management is very useful and very
good. I also happen to believe when I'm trying to make
my case it's best if I can make that case based on
evidence instead of trying to figure out internal political
games to play in order to push something forward.
I have a vested interest in building my circle of
influence by building the capacity in the organization to
understand data, build the way that we understand
variation in making our decision so in a year from now I
might be able to make a presentation and say, "Look,
we are arguing about a supposed trend that is not a
trend. It is statistical noise. So let's not waste our time
coming up with counter measures to something we all
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see that it's graphed out is statistical noise."
Today it's very likely that might not work at all. But if I
can build through time the capacity of the organization
to understand statistics and understand data more
effectively, then a year from now I can use that to have
a greater influence. I can also build trust with people.
When you start to work at an organization, you figure
out what people really care about, what things are very
important for them to see improve, you see what's
going to make a difference to the bottom line, what's
going to cause a change to the people who are going to
decide, and you try to come up with projects to work
on today that will solve real problems today, will give
value to customers today but also will build the
influence in the organization of people who are trying
to build organization capacity and build the skills in
those people over time. But also let them see that if I
have some issues that I want to see improve, the
project that I worked on with John a year ago had a
good result, the one I worked on nine months ago had
a good result, the one I worked on six months had
good results.
Now it might be now it might be on all three of those I
had to convince the person and drag them along and
convince the supervisor to let this project go.
Eventually, what happens is people that have these
problems, they're sick of getting yelled at by the
customer because a year after people have installed
this software it just sort of becomes an issue over time,
and they're tired of dealing with it. They bring the
problem to me and we talk about how we can attack
this problem. How can we come up with a way of fixing
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it? My influence has grown even beyond me having to
go and extend the olive branch and try to convince
things to be done. But ideas are coming to me for
where we can go. Now I understand, too, when I say
that coming to me would maybe cause people some
problem. People should be able to go off and do this on
their own. That's true and that's good and that's
wonderful. But I'm talking about if you have people
who are doing things locally. Hopefully, after a year,
they are able to take on projects themselves and fix
things. But even if that's the case, they'll run into stuff
where okay I tried to deal with this issue and we did a
PDSA and it didn't work; we did another one and it
didn't work. Can you help figure out how to make this
better?
Joe: It's a lot of understanding people. It's a lot of
psychology. Which Dr. Deming included is one of his
components, but you don't learn in a psychology
course, do you? That's not the answer. How can I take
this and prove it in a more practical application in
management?
John: I think you're right and it's sort of like what we were
talking about earlier with systems thinking. This
psychology within the Deming context is dealing with
people in an organization and how those people will
respond understanding some of this stuff comes from
essentially a psychologist would understand it and
know it. So you have things like confirmation bias,
which is the belief that when I have a certain belief, I
will see evidence come by me. When that evidence
supports my belief, I will remember it and say, "Yeah,
good. My belief is right. Here's some more confirmation
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of this wonderful belief I have." And when the evidence
seems to disprove or question my belief, I will tend to
ignore that evidence. This is a well-known psychological
state. It's how we basically are. Now one of the things
that I have done is I understand that, I know, that is
how I will react and how other people will react.
I question myself to understand whether I am doing
that. I still won't be perfect, but I can improve a bit and
reduce the amount of confirmation bias that I have, so
I will be more willing to accept evidence that draws into
question my beliefs. I will try to integrate that to
understand to figure out and adjust my belief so now
my belief is better because I have adjusted this
evidence that shows in this way, it's a little weak. I can
use that when I'm dealing with other people too
because I understand what they're going to do and I
understand; it's one of the confirmation bias is one of
the things that helps me understand why change can
take a while. At first, when I would do this stuff and I
would show people understanding variation is just
obvious statistics. This is what it means. Those
numbers are meaningless. You see a trend and there's
no statistical trend there. You now know so you
shouldn't have this false notion anymore. But that
doesn't happen. People hold on to their old ideas.
There are lots of pieces of information that you can
drive. Our brains are hardwired for pattern matching.
We're very good at matching patterns to what we see
in the world. We want to take pride in what we do.
When you're managing people, it's important to know
and understand and believe these things. We'll have
good days and we'll have bad days. It's not very useful
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in trying to design the most effective organization to
expect everyone to be on their best behavior every day
and not have a bad day. If your system is designed in
such a way that if someone has a bad day and is sort of
upset, bad things happen to the customer, you can yell
at the employee and tell the employee they should
always be happy and never be upset. But that isn't
very effective. It's better to design systems that will
tolerate employees having good and bad days.
There are many of these things. Our understanding of
variation is very poor. We think there is much less
variation in the world than there really is. When you tie
that to our pattern matching, what happens is there're
a lot of variations in the world. We think there's very
little. When we see a variation, we then have our
pattern-matching ability find patterns to that variation
and we then assign causes to that because that's the
way our mind generally works. But what's happening is
we're assigning causes to patterns, which are
essentially random noise but our brains are very good
at making patterns out of it. So, it results in problems.
As a manager, it's both knowing these things for
yourself and knowing these for others so you need to
be coaching people to understand that. We all learn in
different ways so when you're trying to help a number
of employees learn about better ways to manage the
organization; they will learn in different ways. Some,
you can just show them the math and explain that yes,
you use a control chart here. Boom, it shows you. And
that will tell you if there's any special cause. And they
get that right away. They might not know how to
calculate it, but who cares? It's simple, but it doesn't
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really matter. If you can just see the control chart and
see there's a special cause you can, then take the
appropriate action based upon what the chart is telling
you without knowing how to calculate it. Some people
will see that, accept it, and go on. Many people won't.
You'll need to explain it to them in many ways. You'll
need to do different things.
You'll need to reinforce it with real examples. One of
the things I really try to focus on is with my focus on
building enterprise capability over the long term. When
I know I'm trying to do something like build an
understanding of variation, when we have a project
that we've used that concept to make and improve, if I
know the organization still needs to grow that
understanding, I make sure that we draw that out of
the project. We mention that this is why this was good.
If we use flow charts very effectively, the organization
still isn't using them enough, I'll emphasize that. I'll
show how this flow chart was so helpful.
So while you're getting results on a project, the same
time you're assessing a result, you're also building
learning; because a lot of people are going to be much
more focused on when we got this improvement, why
we got it? And if it's just you telling them flow charts
are great, you can find [inaudible 30:04] and eliminate
them, they don't care. But if you show them two
projects in a row that this process that used to drive
them crazy is now much better and the reason why it's
much better are you used flow charts to figure this out
and find problems in the process and then improve the
process, then when they're on their third project and
they get stumped. A lot of times it's hard to do this on
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your own, so they're stumped. You can say, "Why don't
we try to draw a flow chart of this process?" That is
where they'll accept the learning of flow charts than in
some classroom all by itself. I think it is a lot of those
kinds of things. Some principles that are important
knowing about things like people want to care about
the work they do, they want to feel like the work,
they're doing is valuable and you need to build that into
the organization. It's often hard. Often our
organizations have created people that they want to
feel that what they're doing is valuable. They've been
here for five years and they don't have that feeling at
all. So, they've blocked themselves off from even that
desire because if they maintained that desire of feeling
what they're doing is valuable, they'd be disappointed
day after day after day after day.
So, they try to block it out. It's one of the things,
again, that makes change difficult. I believe truly that
people have a wish and it's important for them to feel
that what they're spending their lives on is valuable, is
useful, and is providing value to the world. But they
aren't going to turn on a dime after they've had to
convince themselves that they have to isolate that
desire because otherwise, they'll be disappointed day
after day. Just because we start to let that process
seep through, they're not going to change overnight.
It's going to take time, but I've seen it repeatedly.
After a year, two years, three years, these people have
an entirely different outlook on work. It's not that
coming in to work every single day is wonderful. Some
days are not that wonderful. But they feel pride in what
they do. And that is completely different than the way
many people are every single day they go into work.
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Those kinds of things are very important but hard to
appreciate; I think, for most people.
Joe: What you've explained through this whole podcast is it
really comes down to continuous improvement, PDSA
and the tools of PDSA. And even managing by that
philosophy. Can I make it that basic?
John: You can try. I think there is some sense in that. But
when you do that, there's a lot of hidden importance
that is still there that isn't as visible. What I've come
down to for myself in thinking about it was the building
enterprise capability which is very similar to continuous
improvement. It's a little; I would to me, there's a little
hint of some different focus. But, even with that, it is,
obviously, because such a short little thing, a big over
simplification, with continuous improvement, I think
you can build it that way. But for someone like me, for
continuous improvement, you need to decide that the
organization has an amazing ability to deal with and
understand day to day, which is rare, but there are
some organizations where that's true. Or to
continuously improve, I need to build up that ability to
understand data. So, it's not just that I need to make
whatever improvements today based on the capability
our organization has, I need to build some stronger and
new capabilities. Now, to my way of thinking that's
continuous improvement.
You can't improve over the long term without being
able to assess the effects of these improvements and
whether they actually are improvements and document
them and put them down. You need to document
processes so that you have standard, repeatable
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20. Business901 Podcast Transcription
Implementing Lean Marketing Systems
results. You need to respect people and maintain long
term understanding in the organization. So as all these
things that would come along with my understanding of
continual improvement. But I think if someone else had
the idea "Oh, what I need to do is focus on continual
improvement" they could be like "well; I don't need to
understand variation. That's not continued
improvement. I don't need to understand respect for
people; that's not..." For me; it would be you're limiting
your potential ability to continually improve greatly by
not doing this list of 15 other things, which support it.
Joe: Where can I get the book? And how could someone
contact you directly?
John: Through Lean Pub which is a very nice publisher, which
uses lean thinking. So it's
leanpub.com/managementmatters all one word but
basically, you could search for me or go on my blog.
The best way through my blog, that's what I would like
is to generate some more talk and discussion on the
blog. If not that, either through Google +, which you
can do a search for me, or through johnhunter.com.
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Implementing Lean Marketing Systems
Joseph T. Dager
Business901
Phone: 260-918-0438
Skype: Biz901
Fax: 260-818-2022
Email: jtdager@business901.com
Website: http://www.business901.com
Twitter: @business901
Joe Dager is president of Business901, a firm specializing in bringing the
continuous improvement process to the sales and marketing arena. He
takes his process thinking of over thirty years in marketing within a wide
variety of industries and applies it through Lean Marketing and Lean Service
Design.
Visit the Lean Marketing Lab: Being part of this community will allow you to
interact with like-minded individuals and organizations, purchase related
tools, use some free ones and receive feedback from your peers.
Marketing with Lean Book Series included in membership
Lean Sales and Marketing Workshop
Lean Service Design Workshop
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