by Rick Erling
The Harvard Business Review recently published a brutal fact: 70 percent of all change initiatives fail. Kaplan and Norton, originators of the Balanced Scorecard, further back this up: 90 percent of organizations failed to execute their strategies successfully.
Strategy without execution is wasted thought.
Great ideas are everywhere, but how often are these opportunities implemented for profit and success?
Many corporate business units have a decentralized revenue capture process because departments are not linked to a common goal or aligned symbiotically to each other. It’s not that corporate management teams are consciously trying to build barriers of cooperation between departments; rather, it occurs due to individual corporate goals, compensation plans and the team member’s inability to understand the other department’s functional operational attributes.
This lack of operational interdepartmental knowledge and lack of alignment forces departments, even with good intentions, to work as business silos.
Four Truths Companies Shouldn’t Ignore
1) Corporate strategy is based on research of what prospects will buy, not what the firm wants to sell. Just because leadership bought a company, marketing created a new offering, or engineering spent $10 million on development to create the greatest widget in the world, does not mean there is a market to buy it.
Buyers only care about themselves and their firm’s needs.
2) The marketing department’s primary goal is to help generate qualified leads for the sales team . . . that’s it. Branding, third-party analysis research and beautiful trade show booths are important, but they are just tools to ultimately increase revenue.
Marketing must have ROI or it is a wasted investment.
3) The sales department must generate new business. Yes, selling existing customers is important but to grow top line revenue, firms must not be dependent on their existing customer’s ability to buy. Sales people need to hunt for new business with a premeditated step by step approach teaching them how to lead with their firms business value.
Hunt for new business now or be eaten later!
4) The four pillars of strategy, marketing, sales and financials must be linked by key performance indicators (KPI’s). If corporate business units or departments are not aligned together by goals, KPI’s, compensation plans and parallel knowledge of the operational tasks of the other departments, the firm has a decentralized revenue capture process.
Revenue capture is a company responsibility.
Success in today’s economy requires a planned revenue capture strategy focusing on execution. Aligning the departments of sales, marketing, strategy and finance into a pro-active revenue capture strategy is a key business driver needed to create a scalable business growth model in today’s changing economic environment. Without a dedicated effort in this direction, company revenue growth becomes a decentralized process where departments operate as silos without best practice measurement or action step leadership.
If revenue and profits are down or current market growth is not hitting projections, it is the company’s responsibility . . . not just the sales team’s responsibility.
Rick Erling is a Consultant at Business Growth U.S. executing business strategies to increase revenue and profits. http://www.businessgrowth.us
April 24 in Houston: Vistage - Create and Implement Breakthrough Strategies