Most sales reps are more intuitive than strategic. That "sixth sense" is what makes them so successful in dealing with shifting customer needs. Yet too many companies rely on their reps' intuition to drive corporate growth. Despite providing training, competency assessments and sales tools to improve selling tactics and boost the quality of selling, they often fail to think strategically and, consequently, miss opportunities to thrive.

High-performing sales organizations and sales reps who consistently lead their industry in terms of revenue, operating profit and total shareholder return reach beyond tactics and intuition to develop systematic approaches to strategic sales planning, market targeting, channel coverage and performance management. This focus on strategic growth management enables them to build capability for expansion that far exceeds the potential offered by intuition and tactical approaches alone. This article describes Sibson Consulting's Growth-Management System^SM, which can help companies replicate what successful organizations do right.

The Growth-Management System

High-performing organizations help their sales reps by developing a systematic capability to manage how they go to market. Under Sibson Consulting's Growth-Management System, 16 critical disciplines are divided into four areas (see Figure 1 below) that guide how the company should direct, organize, execute and support its sales organization and its customers:

• Direct: Focus sales on key strategic initiatives and customers.
• Organize: Align channels, selling roles and resources cost-effectively.
• Execute: Sustain motivation and commitment to achieve sales goals.
• Support: Deploy tactical tools and processes to reinforce the strategy.

 

Source: Sibson Consulting

Directing the Sales Organization

It all starts with direction — this is where corporate financial objectives and the strategic growth plan intersect to clarify what the sales force must do tactically to achieve profitable sales growth. The capabilities used to direct the sales force are critical to thinking, acting and behaving strategically. In order to produce profitable growth, the sales organization must be able to convert strategic priorities into a sales strategy and link that to an action plan.

The key to "directing" the sales force is developing a clear, actionable strategy that communicates tactical market priorities to each member of the team. This strategy captures the organization's historic capability and lays out plans for retaining revenue. The goals are to increase sales to current customers that have the potential for higher profit and growth and acquire new prospects with the right offering for each target market. Field-level market segmentation and targeting are matched with a complete offering and a compelling sales message.

Organizing the Sales Organization

Once an actionable plan is in place, the next step is to "organize" around attractive market opportunities. Some companies look outward and match their sales channels and sales roles to their competitors', but this can create a chasm between what the company offers and what its customers need. Targeted segments frequently differ from competitor to competitor as do channel decisions. Each company's strategy, offering and positioning is unique and should be supported with differentiated market coverage.

The best organizations match their current and potential customers and their markets to the customers' and markets' buying processes. Mirroring the customer and/or the potential market enables an organization to develop a true market-based coverage model. This can be done using a three-step process:

• Step one: Analyze the decision-makers' buying processes: their decision criteria and buying cycles and the interactions. The sales organization must address these complexities as it organizes.
• Step two: Match the customer data with the seller's current coverage, roles, interactions, processes, workload, close rates and sales time allocation. This will expose the gaps between the current model and optimal customer coverage.
• Step three: Select sales channel partners and internal resources according to their effectiveness at creating customer awareness, gaining customer access, developing the solution and fulfilling demand.

Deploying resources (i.e., sales assets) is another important consideration in the "organize" phase. The key to being successful is to determine the required staffing for each sales and channel management role. Next, decide how best to align the roles to the market, whether it is through direct account assignments, vertical market assignments or geographic territories. To deploy sales resources in an equitable fashion and optimize effective performance, it is important to balance the opportunities in the sales territories by sales potential, current revenue and account base.

Executing the Sales Objective

Once the sales model is planned and organized, the next challenge is to execute against the sales objective. The growth plan, developed as part of the sales strategy, serves as the execution road map.

The sales metrics act as the dashboard that helps the sales organization judge whether it is on track to meet its growth goals. Metrics should include leading indicators that predict the future as well as performance results. A fully functional metrics dashboard typically includes:

• Revenue,
• Sales strategy (indicating whether the company grew through penetration, retention or acquisition),
• Profitability,
• Expense (showing the quality and cost of growth), and
• Productivity metrics (detailing performance statistics at the sales resource level).

Metrics can have a profound value in steering the sales force in the right strategic direction. They do this by linking the incentive compensation plan to the company's objectives and sales resources, motivating and reinforcing the behaviors aimed at attaining the business objectives.

Supporting the Sales Effort

To make sure everything is aligned and functioning, the organization's strategy requires the right support mechanisms. Selling messages, job roles, tools and technology must mirror the go-to-market decisions, tactics and actions. Recruiting, competency modeling and career path management must bolster human capital impact by aligning with the company's sales process, organization structure, performance management and development processes.

Applying Strategy to the Daily Sales Routine

Before it can apply the Growth-Management System, a company needs to determine what it does well and what it needs to develop. Companies that focus on the right disciplines and strengthen those that create a competitive advantage can increase their growth capability, especially in competitive markets.

Research shows that the top sales organizations are not top performers in all growth-management disciplines. Rather they maintain competitive parity in most disciplines and excel in those key areas that give them a material growth advantage. They also minimize any extreme weaknesses, especially those that could have a significant negative financial impact. In this way, they beat their competition and maintain profitability.

The Competitive Impact Framework

One way to strengthen growth capabilities is to use Sibson Consulting's Competitive Impact Framework^SM to audit the current state of each discipline in the Growth-Management System and objectively assess the company's strengths and weaknesses (see Figure 2 below). To help assess the organization's competitive sales position and delineate disadvantages, parity and advantages, profile its top competitors' growth capabilities and then couple this competitive intelligence with the organization's internal analysis.

 

Source: Sibson Consulting

First, look at the weak disciplines, which can be a financial drain. Leaving them unchecked can offset any gains in the "advantage" disciplines. Develop a plan to strengthen any weak areas that are inhibiting effectiveness (see Figure 3 below). For example, one company with "disadvantages" related to channel conflicts and deployment implemented a plan to bring those disciplines at least to the "parity" level.

Next, identify the two to three disciplines, which if strengthened above "parity," would give the organization a growth advantage in its industry (see Figure 3 below). To understand the potential growth impact of each discipline, isolate each one's core components and examine its current and historic effect on growth, profitability and expense. For example, the core components of resource deployment ("organize") may include sales workload, close rates, sales time availability, account level sales potential and optimal territory characteristics. By combining these core components, the organization can test their sensitivity and impact on growth.

 

Source: Sibson Consulting

Final Thoughts

All 16 components within the Growth-Management System are linked and thus need to be assessed together. For example, a breakdown in a company's compensation plan — such as the underpaying of sale resources — may be related to changes in customer buying processes. Fixing the problem may demand new job roles, changes in sales strategy or shifts in territory structures, but not necessarily a new compensation plan.

Continued sales success requires more than intuition and selling tools; it takes strategic thinking and discipline. Leading sales organizations understand the links among the different disciplines and develop a system-based approach to planning and managing the sales organization. They build this around an achievable growth plan and then make adjustments throughout the year to ensure they reach their objectives. These organizations maintain competitive parity in most growth-management disciplines, but excel in a handful, developing a growth advantage over their rivals.

By planning and managing within a larger Growth-Management System, an organization can operate under a strategy that encompasses all critical growth disciplines and charts a clear path to attaining the company's goals. The impact can be huge: A systematic approach to managing growth can provide lasting competitive advantage. Now that's intuitive.

About the author:

Joseph DiMisa is a Senior Vice President in the Atlanta office of Sibson Consulting. He can be reached at 770.403.8006 or jdimisa@sibson.com

Copyright © 2007 by The Segal Group, Inc., the parent of The Segal Company. All rights reserved.