At this time of year, CEOs are looking carefully at their quarterly or end of financial year results and the writing is on the wall as to the real status of the company. The business results that were planned are not being delivered.
As a CEO, you are always reviewing performance, and this scrutiny is even greater at this time of year. Different people have different reactions when they see results are not being delivered. The gap between forecasted vs. actual revenue being a catalyst to sometimes tedious conversations. As CEO, it is more important than ever that you are aware of what actions must occur to achieve realignment.
For many, the natural tendency is to become more controlling, more directive, and reach down into each and every issue. You want answers, and you have lost some of your confidence in what you have been told in the past. Our experience suggests this is not going to change the outcome now or in the future. You will gain more business results by redefining how the sales organisation is required to perform. Give team members new clarity, potentially new structure, tools, and incentives to pursue the new sales goals. This is far more likely to be effective in getting people to perform.
When business results are failing – the sales organisation needs to be recalibrated.
Behavioural standards in salespeople and their managers may also need to be changed and improved. When numbers are down, sales managers and their teams, have a temptation to take shortcuts. In other words get results, by any means necessary. Those shortcuts often go hand-in-hand with insufficient sales and development of implementation plans in key levers that will contribute to the growth. The team may produce results in the short-term, but do significant long-term damage to the company. The more reliance on big sales, volume discounts and other tactics, the less likely the business will be sustainable.
You need to ensure the sales organisation is aligned to the new sales goals. This includes making wholesale changes to ‘hard’ factors like structure, systems, and processes, and maybe even leadership.
Now more than ever, it is the time to maximise your sales alignment, as companies cannot afford the wasted time, resources, and effort that misalignment creates. The degree of misalignment is directly reflected in the top and bottom lines.
As CEO, you need to install a framework of controls and measures to manage the performance of sales managers of the company. However, making people accountable demands real data and changed reporting. The failing sales organisation is often reliant on historical data and dubious forecast revenue. Although historical data has some relevance, there are more vital points to measure if you are to achieve the level of transparency and measurement required for effective decision making in this critical business unit.
In my view, sales organisations are relying on limited reports that contribute to the reasons most executives make poor decisions and fail to drive growth. There should be some fifteen metrics that are measured, a combination of both leader and lagger reports. A revised way of operation where salespeople become accountable through planning their revenue output. Additionally, sales managers have sufficient levers to manage the changing market demands affecting revenue and margin achievement.
A common denominator I find in underperforming businesses is the lack of required measurement and accountability in the sales organisation. The time-lapse between measurement and the need for effective decision making is out of sync with the business requirements. The sales business is out of sync with modern business practices, further expanding the gap in business results.
Our CEO, Adele Crane is a specialist in assisting companies in business performance improvement related to sales and marketing. Reach out to discuss your specific business challenges and how we can assist you.
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