Predictable Failure Points – Where it all goes wrong.

Growth strategies always seem destined for success when formulated in the boardroom. And when they later fail, we often hear that they “weren’t properly executed.”  Execution on strategy is one aspect of the five predictable failure points for companies trying to achieve revenue growth:

Pragmatic implementation of strategy by the sales organization is an afterthought.

I’ve asked hundreds of sales professionals about the extent to which they understand the company strategy, and whether or not it has any influence on their actions. Fewer than 25% say yes to both understanding the strategy and acting on it. The sales force needs to understand strategy in practical terms that inform daily decisions about vetting/qualifying prospects matching your ideal client profile, prioritizing opportunities within your target markets, and maximizing the capabilities you’ve invested in to differentiate your offerings. Without a real-world understanding of your strategy and its application, you end up with a sales organization pursuing a strategy of “just sell more”, where any revenue is good revenue.

Many CEOs don’t understand the complexities of contemporary sales.

Even with the ubiquity of solution selling approaches, it is still a common belief among CEOs and other C-suite leaders that selling is kind of an art that is best done by charismatic or extroverted people who are “hungry.” That, as the Wall Street Journal reported about a year ago, “people are either born to do it, or that anyone can do it.” I call this AVOSS, Anachronistic View Of Sales Syndrome.

Depending on which database for Fortune 1000 CEOs you access, the numbers suggest that between 70-80% of CEOs developed their foundation of expertise in operational or finance roles. Of CEOs in the S&P 500, the top 3 career paths are finance, operations and marketing. Sometimes, marketing and sales are lumped together and within certain surveys, 20-25% of CEOs come from those disciplines. I’d assert, based on my experience working with large companies, that only a single-digit percentage of Chief Executives have actually worked in front line sales and sales management as they climbed the corporate ladder to broader leadership roles.

Typical measurements of sales performance and effectiveness are insufficient.

There is a big difference between measuring to prove and measuring to improve. Tracking results for revenue, profit, and other outcomes of sales performance is clearly necessary to report on the results achieved. But measuring sales performance requires more than reporting on the results that have occurred. When I review the metrics that companies pay attention to, their focus is heavily on lagging indicators, the financials and metrics that confirm what happened last month or year. There is little attention given to leading indicators that portend successful results. Things like increased pipeline values from bona fide prospects, and advances or key milestones in a clearly defined sales process.

These indicators of future success are unquestionably harder to pin down on a spreadsheet. But that’s what makes choosing the right metrics to measure so powerful. The purpose of these metrics is not to prove something has already happened, but to improve effectiveness and accelerate future results. All metrics are judgments in disguise.. So, determining the factors or measures throughout the sales cycle that have a significant influence on success, will provide very useful information about progress and better predict results on the horizon. Measuring a few strong leading indicators can provide the insights needed to accelerate sales performance without sacrificing strategy.

Tracking and reporting of results takes priority over improving results.

I learned during my first stint as an EVP of sales that you can’t manage numbers. People can be managed, and they can perform differently and better depending on how they are led. But analyzing and reviewing the sales forecasts does little to improve those forecasts. It keeps leaders very busy and provides a false sense of control and influence, but the truth of the matter is, moving around numbers on spreadsheets to project results has little impact on changing outcomes.

Executives, driven by their desire to achieve growth goals, are often notorious in a sales organization for wanting forecast updates. Data at each level of the business, from front line reps to the EVP of sales, is aggregated throughout the business, making stops at each management level to be adjusted. “Can we get a little more out of this deal?” or “Is there a way we could pull business forward in to this quarter?” are common refrains. On the face of it, there is no problem with tracking this information, and it’s necessary to manage the business. But it usually devolves to a pure inspection effort that produces little value in terms of growth or implementation of strategy for the business. Most importantly, if this exercise is the only hands-on involvement that senior managers and executives have with the sales organization, then strategy will never drive sales.

Inexperienced sales staff are assigned to handle the company’s most important asset: customers.

Because the customer experience is critical to implementing a growth strategy, senior executives have to consider the importance of who gets to interact with clients. This is be done by deliberately shaping and structuring the sales organization to ensure that clients and prospects interact with only your top talent.

I’ve never been able to understand why an organization would assign customer interactions to some of its least experienced people. Many professional services firms understand why this approach doesn’t work and act accordingly. They keep their least experienced team members behind the scenes supporting implementation, while senior staff and partners take responsibility for client management. The reason for this is simple. They understand that the interaction between company and client makes a critical difference in the acquisition and expansion of their business. McKinsey reports that the interaction between buyer and seller represents around 25% of the decision, and I think that figure is low. In a market where competitive options reduce most capabilities and products to a commodity, the customer’s experience during the selling process is THE difference maker. But if a sales staff is too junior to make that process valuable to a potential client through insights, ideas for solutions, and adding new perspectives to the conversation, they have to rely on likeability or assertiveness to the point of being pushy to make the sale. When that happens, the first segment of the customer experience is average at best and counterproductive at worst.

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