Michael Webb: Some people focus on making sales calls, reaching decision-makers and selling value. Other people focus on finding data, understanding cause and effect, and conducting experiments. This is Michael Webb and this is the Sales Process Excellence podcast where we focus on doing both, to create wealth for everyone.

I'm excited today to have a guest, an unusual person. This is Charles Chen who has followed a career that has had transitions that make him uniquely insightful in our quest here to improve sales processes around the world. He was a mechanical engineer, and then he transitioned to being a Six Sigma Green Belt and an engineering project manager at, I think he worked at Ford and then GE and then a bank and then ultimately became a master Black Belt at Microsoft. And has worked on customer-facing projects in sales and marketing. So Charles, welcome here.

Charles Chen:    Thanks, Michael. It's great to be with you.

Michael Webb: So it would be great, I did a little bit of a thumbnail sketch there of your background. I mean, tell us how you got to where you are and what kind of motivated you along the way. I know that readers would like to hear a little color commentary on why you're here.

Charles Chen:    Oh sure, sure. So my background, you touched the right two points. I started my career a long time ago at Ford Motor Company. Also, an engineer, graduated from University of Michigan with a Masters in Mechanical Engineering. After three years I went to Yale business school. Upon graduation, I started work at GE and this time was not in engineering, it was in sales enablement. So it was there that I earned my Green Belt, but we did a project fundamentally enhanced the productivity of that sales organization.

After two years there, I went to Washington Mutual Bank as a corporate officer. I ran the Black Belt project over there, ran the team as well. Saw that bank was about to tilt a year before it finally did and went to Microsoft. At Microsoft, I've been here for 11 years. This is my fifth role with the company. What's most profound in my career at Microsoft has been when I was in our internal Six Sigma consulting and teaching group and I focused our efforts in sales and marketing. So I personally ran multiple projects at the global scale focused on sales and marketing, improving revenue, either conversion rate or win rate or velocity.

And I personally coached 11 folks on Microsoft to earn their Green Belt, Black Belt certification. Half of them were from sales and marketing as well, even a few from our incentive comp organization. So yeah, that's my background, my last role with ... yeah, that's my background. Thank you.

Michael Webb: So Six Sigma has a reputation for being very doctrinaire, very jargony. Not everybody from a sales background. In fact, a lot of people from sales background get turned off as soon as you say Six Sigma, but there are some very valuable underlying principles that apply in sales. And I don't want to assume that the audience knows the jargon and stuff.

And so I thought I would ask you to tell us on example, two steps here. The first step is, tell us an example of some problems that were taking place when you first started doing Six Sigma work. What were the problems that were taking place in the business that couldn't be solved without taking this Six Sigma approach? So what were they struggling with? Why couldn't they fix it on their own? What did this DMAIC, right? Define, measure ... this Six Sigma. Why was that needed?

Charles Chen:    Yeah. Yeah, totally. Let me use an example from my very first project, even at GE. This division at GE is GE Equipment Services. GE Equipment Services they own a lot of assets. And this division in particular own billions of dollars of tractor and trailers. So Michael, if you're going down the highway, you see a 46-foot or 53-foot tractor going down shipping something, that tractor in the back, a huge percentage of those in North America are owned by General Electric. Pretty profound, right? They built aircraft engines, but they also own assets like that.

One thing very, very fundamental about that sort of asset I think everybody can appreciate is how do you make money on that asset? You make them money, you own the product itself, you own it. The moment it sits on your lot it's depreciating. It's just like an airplane, a commercial airplane. The moment it sits on the tarmac you're losing money. You've got to get that thing flying all the time. The same thing with these tractors and trailers.

So what typically happened when I joined that part of GE is, they have hundreds of thousands of these tractors and trailers, spontaneously, suddenly, a whole fleet of them shows up at the GE site. Then the salespeople are running around with their heads mad, trying to get them out the door again. Some of them sit there for months. Every month is losing money. So that was a fundamental issue. It's like their barely making it and everything was reactive, and how do we know that these things are coming back and make sure they don't come back? Or if they come back as barely a touchpoint and then boom, they're back out with the same customer, or with a different customer, or the best part is they don't even come back in the first place. So that was the fundamental problem they're trying to solve. Yeah. So the project how I got involved. Yeah, go ahead.

Michael Webb: Why couldn't they solve it? I mean I'm sure there was lots of people who could see the problem. Why did you have to do Six Sigma to solve it?

Charles Chen:    Yeah, I think there's a combinations of that. This division of GE was fairly recently acquired. So a lot of the folks in the senior leadership chain came from GE. So they have a Six Sigma background. And in fact, most of them were Black Belts and Master Black Belts. At the same time, you still have the traditional folks on the site who got acquired with the company. So there was a culture change in the first place. How do you get everybody to recognize that we got to solve this problem together and look at it from a different way?

Michael Webb: And as opposed to everybody, you stay in your own lane, I'm doing a good job. Leave me alone.

Charles Chen:    That's right. That's right. As long as I'm making money, as long as I am a seller, I make money, I meet my quota, I'm good. But the cost to the company, which this eludes to, is very real and very material. And to really bring up the margins, you've got to worry about both. And there has always been complaints from the sales team that when they want to get trailers out, they don't have enough trailers. Or they're being bombarded by requests from managers to, hey, I got you to find a way to find homes for 4,000 new trailers. So that added pressure and friction is very real for the company.

Michael Webb: Okay. All right. So that's the problem. And it's pressure and it's not being solved and people aren't cooperating. What does Six Sigma bring?

Charles Chen:    Yeah. So I was ... so Six Sigma, actually approaches in the very traditional DMAIC approach, but let's take a step back and not go into the extreme technical details of that. Fundamentally, as a salesperson, as a senior manager, you want to have a pulse on all your assets, all these expensive assets. You want to know sometime before they have a tendency to come back, you already know about them. You want early warnings, early signals that any one of these trailers could be coming back to the company.

So what I did was I work with the executive management chain and the sales leaders...