Accelerating Revenue In a Down Economy

revenueAs an interim executive specializing in helping my clients drive revenue, I am often asked how we can expect to help increase revenue when the economy is weak. Reflecting on numerous engagements I’ve had in a variety of industries, I find myself reminded of Pogo’s famous dictum:

“We have met the enemy and he is us!”

Many of the hurdles that slow growth, and arguably most business failures, can be traced to decisions made by the organization, a result of a company’s own actions.

Which is why the barriers to meeting revenue objectives can be found and eliminated, replaced by processes and disciplines that leave a company able to meet their objectives predictably and consistently now and well into the future.

There are some major themes we see often.

Among the most common is presuming that constant improvement will suffice when transformation is required. The failure to anticipate and transform is a critical failure that stunts growth. An example many of us have heard is that if Henry Ford had desired to incrementally improve the transportation system of the day, and if he had simply listened to what his customers asked for, he would’ve bred a faster horse. He didn’t, and the innovation he brought forth transformed transportation as we knew it forever.

A more current example is Hewlett-Packard. It was their study of how children responded to the Web that caused them to re-think their digital and printing businesses. The kids seemed to take “ownership” of a page of data only after they printed it. As long as it was on the web, it was just available data, but not “theirs.” It was this realization that allowed them to connect the dots and the digital camera was invented. It was not as result of photographers asking for a new way to take, store, and transfer photographs.

The market didn’t know what it didn’t know, and therefore couldn’t ask for it. But some innovative minds under the direction of leadership willing to transform the company saw an opportunity that could be exploited.

Who would have dared to bet on an idea that would take on the legendary Kodak — a company that had been dominant for 100 years? But they did, and now a vast percentage of photographs are taken digitally with a cell phone! They transformed the very way we take, store and transfer photos, creating a whole new market that has made earlier technology largely obsolete. In the process, it changed the way we think about taking photographs.

These examples are indicators of the vision it takes to recognize and create a disruptive product, with little help from customers or other sources of traditional input. More importantly, they are examples of transformation. In neither case did management believe they could succeed by making incremental improvements, they needed radical transformation, and they had the courage to attempt it. Most don’t!

A hurdle we also often see that impedes growth is the insistence on maintaining a traditional hierarchical management structure. Copied from the great Roman and Prussian armies, they served us well when we needed structure to facilitate communication and control quality. The ability to successfully replicate processes while driving out cost and scaling the business was a natural for this proven approach.

Technology has now rendered oversight by an immediate manager largely unnecessary. Peers will recognize and correct deficiencies long before a remote manger sees it, and long before personnel department rules can be successfully implemented. Organizations that recognize the systems and technology we now have available allows them to monitor, train, and lead with a much flatter organization structure, will find themselves more responsive, adaptable and successful.

The removal of layers of management serves to reduce cost, and facilitates broader decision making and innovation.

Another weakness is the inability to come to terms with a multi-generational employee base. Those entering the work force and beginning their employment journey are often characterized by their distrust of the corporation. They saw their fathers get laid off and have seen reports of many companies closing. They talk in terms of “authenticity” which they define as honesty and integrity, but it’s deeper than that. They demand and expect a meaningful job. They will not climb the ladder, paying their dues as their fathers and grandfathers did. They want to meaningfully contribute and be heard much earlier in their career.

I recall a recent meeting with a newly hired salesperson and his immediate superior. He commented to me, in all honesty and candor that he would be working for the company and serving our account so long as the product was in demand and he enjoyed his job. When these were both less than his expectations, he would move on to another opportunity. His remarks
were far out of my comfort zone. I was never able to be so candid and forthright in front of my boss. I likely wouldn’t have even thought it! Changing jobs was a big thing for us ”baby boomers.” For my father it was essentially unthinkable. My father’s generation had a respect for authority and rarely challenged senior management. They needed the confidence doing things “thru the proper channels” gave them.

We have entered an era when we are likely to have contributors in thier 20’s thru those in their 60’s and beyond. They bring with them radically different perspectives of life in the company.

The ability to devise a structure that works across these attitudes will be critical to any organizations success. Too many have failed to even contemplate the ramifications.

The Web is another weakness for many. We often see a Web site that is really just an electronic brochure. The web is a powerful tool; it allows us to stretch our market awareness exponentially. But it is also a great leveler of the playing field. Nearly anyone can look substantial and present themselves as a viable competitor.

We’ve allowed the marketing folks to take over the web and celebrate a growing number of “hits” or “friends.” We really need customers, the rest are window shopping.

Investing solely in getting higher visibility is money poorly spent. Visibility doesn’t generate customers in and of itself! There are a host of those “tactical” pains organizations inflict on themselves that present clear and present dangers to their viability.

They often include
• Goals and objectives that are out of sync with job descriptions and expectations

• Compensation plans that don’t reflect the will of the organizations executive leadership

• Management who believes it is their prerogative to manipulate sales compensation plans, change quotas, territories and commission schedules midstream

• Sales automation/CRM systems installed to provide better management reporting with sales productivity as a by product

• Few understand the complicated nature of channels and how to avoid conflict. Even fewer are able to motivate organizations they don’t own. Many businesses just can’t grow organically fast enough. Effective committed channels are a necessity So what can companies to do today?

• We must learn that “hiring for a season” is a reality. We must recognize that a significant percentage of employees will move on within a few years or less. Call it out, confront it, embrace it by designing job descriptions accordingly, eliminating confusion and contention. It requires a bit more thought and planning, but it is worth it.

• Dedicate ourselves to serving our employees and to making them successful, rather than managing them; leading them rather than directing them

• Embrace technology. Many managers are digital immigrants leading digital natives. We resist it and demean technology with comments like “I’ll never text” acting proud of not embracing this pervasive technology. We must immerse ourselves in it, admit our fears and frustrations, and join the ranks of the generation that absorbs technology changes as a matter of course.

• When we implement systems we must think first of the impact on the employee. Too many implement a Sales Force Automation solution as a way to gain insight into the sales funnel. It becomes another time
consuming report to worry about rather than a tool for increased productivity. Wouldn’t it be better to support sales by implementing a CRM to make the sales people more productive, and have management reports as a byproduct? It’s the only way they will embrace it. The result will be higher productivity and the data will be accurate and timely.

• Understand that each person will respond to different management styles. Recognize the issues that are unique to each person and the generational differences that exist.

• Hire scientifically. Success at a previous company is no guarantee of success with the next. It can no longer be acceptable to give an employee 9 months or longer to see if they will succeed. That can be as much as 1/3 of their tenure. They must be positioned to contribute much quicker and with a much higher degree of confidence in their success.

• Build support tools such as a company web site that personalizes the web experience. Create an interactive web experience, allowing the inquirer to truly understand how our products and services can met his/her unique needs. Build web presence that leaves a thumbprint behind so we can turn more and more people into customers. It’s not the number of web hits that counts, it the number of customers that are generated!

• Have a mission that is meaningful. Measure ideas against it, reward innovation, and create opportunities that demand transformation.

These issues can often be masked during a robust economy when selling is easier. A soft economy can be the time these issues will surface with the adverse impact from them more evident, but it’s also the best time to gain market share. It’ll take a non-traditional approach:

• Embrace a win/win mentality as a core culture;

• have a servants heart for employees success;

• recognize that each person is unique and will not necessarily conform to a pre-defined set of processes and expectations;

• accept that each employee really wants to make decisions that serve the company well;

• transparently accept effort and failure These open approaches will serve us well as we work to control our own destiny and build a successful company, even in the face of an unsupportive economy!

If you know of an organization that is failing to meet their revenue objectives, I’d be happy to visit with them with the goal of providing insight that can help them change their revenue trajectory.