Is your sales strategy and projected sales growth built on a house of cards?

For many start-ups this is the case.  Their initial sales growth often comes off the back of an entrepreneur’s ideas and the hard work of a dedicated few who pitch in, take on multiple roles and tasks all the while promoting and selling the idea to more and more people.  This works well in the early days where the team is small, communication channels are direct, everyone knows what is going on and is committed to the fledgling business’ success.

There’s lots of activity, lots of fun, lots of sleepless nights and a growing sales pipeline.  The business has a life of its own until one day the owners/ directors realise  that if they are to grow further they need more people, except no one in the business was charged with keeping track of, introducing or mapping the business’ processes, systems and frameworks so that they can be transferred and taught to others.  There comes a point in time when the fun of running a business turns into frustration.

In our haste to ‘make it’ the early pioneers of many new businesses often do not know they need to introduce articulated processes, frameworks and systems to leverage their future growth on stable foundations.  These processes, systems and frameworks, including clearly articulated job roles, like the foundations of a house, are necessary if you want to build and grow sustainable business.  If businesses try to grow beyond this point without the foundations in place one of two things will happen: 1) the business will remain static at its current level of turnover or 2) come crashing down like a house of cards.

Recognising when you arrive at this cross road is critical and doing the work yourself is not always easy.  More often than not you are likely to need the services of an independent person(s) who can help you see the wood for the trees.  Selecting the right person(s) to help you replace your house of cards for a more robust structure is key.  Following is a case study which outlines one such situation and how this company was able to get the right kind of support to move forward in a planned and purposeful manner.

Case Study

Over the last eight months I have had the opportunity to work with an emerging and highly successful business to review and develop its sales capability.  The business is profitable, wants to continue to grow and expand, and really make its mark in this evolving marketplace.  The parent company is made up of four separate businesses.  It has so much potential and is lead by a very clever entrepreneur and talented young general manager.  As I entered the business I soon came to realise that despite its sales and financial success there was no clear strategy for any of the businesses moving forward, no clear delineation between roles, everyone was busy with lots of duplication of effort. Everything seemed to merge into each other creating confusion and stifling future growth.   In its current format it was like a knotty ball of wool that needed unraveling and was not offering a stable platform on which to grow and expand sales.

This is when I introduced a colleague of mine who specialises in strategic alignment. Achieving strategic alignment means that all the correct  frameworks, systems and processes support the vision, mission, values and strategic direction of the business. My client’s business was lacking of strategic alignment.

What are the signs of strategic misalignment?

No company is perfect, but as misalignment increases, motivation, productivity and employee satisfaction “gaps“ begin to appear.  Customer response and experience is varied.  Pronounced symptoms could be lack of team focus, unresponsiveness to management direction, ”them and us” attitudes, diversions, frustration, complaints about salaries, high staff turnover, empire building, higher than acceptable absenteeism and turnover, and management not receiving the feedback it needs.  From top management’s perspective, as misalignment increases, the company can become harder to run and it becomes more of a struggle to achieve sustained results.

Not all of these issues were relevant to my client’s business however a few were.  These were fleshed out in a methodical, evidenced based manner culminating in stepped out plan which has identified key areas which need to be addressed.  It shows them what they need to do and how to do it.  It has given my client a stable platform on which to operate and a clear pathway to the future to grow sales.

Replacing your house of cards for a more robust structure is key.  Recognising when you arrive at this cross road is critical, however being able to articulate what you need may not be easy.  More often than not you are likely to need the services of an independent person(s) who can help you see the wood for the trees.  Selecting the right person(s) to help you can also be a challenge.

Word of caution when relying on ‘experts’

Make sure you use people who are truly experts in their field is key and know how their expertise fits in with and supports all the key components of running a business.  Make sure they can back up their expertise with relevant research, data, and facts including reliable processes, systems and frameworks.   You may be surprised at how many ‘expert’ consultants do not know how their piece integrates with the whole and how many try to pretend they can do things they can’t do just to hold onto you as a client.  This usually leads to disaster for all concerned.  Instead find those experts who are connected to other specialist i.e. Strategy, PR, Branding, Marketing, Procurement, Finance, Production, HR, Sales, etc.  In short, each of us should bring in the processes, frameworks and systems needed for future success in our area of expertise and we should know how they link together to make a better whole.  Like building a house, you do not rely on one person to have all the skills needed to run a business. As experts consultants we should all know where we fit and how we support our clients in concert with their needs.  As stated my colleague specialises in strategic alignment and I specialise in sales culture and performance, w e can’t work without the other.

In summary, high performing organisations, small or large, anchor all tactical activity, decision making and effort to carefully considered and clearly understood strategic objectives which include clearly articulated processes, frameworks, systems, and job roles.  Whether done in-house or with the support of consultants, achieving strategic alignment is the aim and this occurs when management, staff and customers are all operating in resonance supported by a stable foundation and not a house of cards.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

With information comes choice and without proper guidelines and filters in place, too much information and too many choices can lead to indecision.  Indecision can then lead to paralysis making us unhappy, unproductive, and at worst, ineffective.  In sales careers, or any role for that matter, too much information and the subsequent indecision is a real killer – in fact, making no decision is far worse than making the wrong decision.

Barry Schwartz, professor of social theory at Swarthmore College in the US and author of The Paradox of Choice states “too much choice is paralysing us and making us miserable”.   I can’t help but agree.  At times I feel I am drowning in a tsunami of information and feel increasingly confused as I try to work out what to focus on and what to discard.  I am not alone in these feelings; many people I speak to are also reporting feeling overwhelmed and anxious by all the ‘noise’.  Some are even checking out of mainstream information and news sources and choosing to dramatically reduce their diet of information.

In our haste to keep up, be on top of things, be seen as the one with all the answers, and be ahead of the pack, are we inadvertently creating a climate of confusion, indecision, and unnecessary distress by exposing ourselves and our teams to too much information?  I suggest the answer is ‘Yes’.

For instance, there is a learned behavioural syndrome called ‘Overpreparer’ which can account for 40%+ drop in sales productivity for sales people with Overpreparer tendencies.  It is often caused by  organisations placing undue importance on the need to be overly prepared and knowledgeable. Being prepared takes precedence over getting out and selling.  For instance, in banking and finance where compliance is important, Overpreparing is often systemic creating a culture of indecision and paralysis by analysis where sales people use it as an excuse to not prospect and sell.

Despite feeling out of control we can regain control over how we process, use and manage information.  Having a clear head and removing clutter from our lives is critical if we want to be productive and effective.  As promised in Noise Reduction part 1, here we will explore some strategies that may help us reduce the ‘noise’ and recalibrate our signal-to-ratio (SNR).  So in the spirit of less is more, here are some simple principles we can follow as a guide to effective noise reduction and decision making:

Step 1: Set clear goals

• Clear goals help you determine what to focus on and what information you need to have at hand to help you achieve your goals.
• Clear goals help you prioritise your thinking and actions, assisting you in planning each step of the way.

Step 2: Determine what you need to know

• Put in place filters that will help you determine what information you want to focus on: Does this information help you get closer to the goals that are important to you?
• Work out what is ‘essential’, ‘desirable’ and ‘nice-to-have’, and prioritise in that order.
• Cultivate a scientific mindset – scientists begin by defining a hypothesis then look specifically for data or information that either corroborates or refutes that hypothesis.
• Determine what information and networks your business and your sales people need to be aware of in order to make good decisions (i.e. market trends, competitors, product innovations, changes in legislation, etc.)
• Find out what your clients are interested in reading and hearing.
• Find sites and networks that keep you up to date with the latest trends and are quick and easy to read.
• Make sure your CRM is collecting useful client and market information that is aligned to your goals and can be applied in a meaningful manner (i.e. creating client buying patterns report, etc.), then ignore the rest.

Step 3: Determine effectiveness

• What information (blogs/references/forums/publications/social media sites/networks, etc.) are proving to be useful to you (your customers, your business and your communities)? Why?
• Check why you originally chose this information or network sources and ask if they are still relevant.
• Determine how often you use these information sources.
• Check how you apply these information sources in your job or in your communication with each other and clients/suppliers (tangible outcomes, practical solutions, etc.)
• Verify what is ‘fact’ and what is not.  Is it evidenced based?  Is it supplied by a reputable source that can be validated and checked?
• Check how quickly it takes you to gain a quick and concise understanding of the content.

Step 4: Prioritise and don’t be afraid to limit your options

• Count how many subscriptions you currently have or networks you belong to; check for duplications (i.e. similar blogs, sites or networks offering the same information) and irrelevant sites or networks (not aligned to your goals) then cull.
• Reduce your ‘daily’ alerts to ‘weekly’ alerts.
• Don’t check your emails every time they arrive, make time to check every 15-30 minutes or so.
• Create a new email address exclusively for your subscriptions so your working email is not cluttered up with low priority data.
• Synchronise your bookmarks.
• Create a filing system that allows you to reference your information quickly and easily.
• Link new information to what you already know.  Drawing concept maps is one such way that helps you to build knowledge over time and draw links between ideas and knowledge sources.
• Allocate specific time twice or three times per week to review your subscription information sources rather than being constantly interrupted by incoming alerts.
• If you need to surf the web, make time to do so when it doesn’t interfere with your work priorities.

Step 5: Find some quiet time

• Allow your mind and your senses to rest and switch off.  Being overly anxious narrows your focus and limits your ability to sort through and process information effectively.
• As strange and boring as this may sound, find time to do mundane tasks that do not require you to process complex information.
• Do some regular exercise like yoga or go for a run to get in touch with your body, breath, heart and nature.
• Meditation requires effort to achieve single pointed focus, however the daily practice of meditation quiets the busy mind and gives you the space you need to recharge and recover from information overload.

As you can see, even discussing reducing noise creates noise, and the signal-to-ratio spiral continues… Without running away to live in a cave, my best suggestion is to take on board a couple of things; stop reading about reducing noise and get out there and sell.  By staying focused on a few keys things and taking action we might just find that the noise fades into a faint, background murmur and we are happier and more productive as a result.

Remember, everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

Noise Reduction was voted by you as the number 5 Sales Trend for 2010.  About 20 years ago I was told that information was doubling every 5 years; 5 years ago it was every 18 months; 1 year ago  it was every 9 minutes, so who knows how fast information is doubling now?

Many business leaders, sales people and many more are reporting information overload.  Selecting what to take on board and what to leave behind will be critical for sales and business success in 2010 and beyond.  It will also be critical for our own wellbeing.

There is so much to read and process, and so little time to do it well.  Many people report feeling that their brains are ‘bursting’ as a result of so much information and wonder how they can process, log, link and manage the information they are exposed to and then use it wisely and purposefully.  According to Alvaro Fernandez from SharpBrains over 1,000,000 new books are published every year and more than 100,000,000 scientific papers are released, this coupled with the billions of websites at our googletips.

With all this good information on tap, I am increasingly finding myself feeling incredibly frustrated with the amount of rubbish information I have to wade through every day as well.  There seems to be so much ‘noise’ out there competing with the good data.

Not only do businesses have to keep on top of what is the latest market trend, product, or competitor strategy, we are also dealing with the merging of personal information with business information.  It appears email remains a major source of information overload, as people struggle to keep up with the rate of incoming messages especially, the filtering out of unsolicited messages such as spam, and ever growing tsunami of personal information keeping us distracted and often disturbed.  There is even a syndrome to describe people who give out too much information about themselves.  It’s called TMI syndrome (too much information) and it’s coming at us with unprecedented speed via Facebook, Twitter, and especially email.

With this increase in noise we need to assess our Signal-to-noise ratio (SNR).  SNR is a measure used in science and engineering to quantify how much a signal has been corrupted by noise.  In less technical terms, signal-to-noise ratio compares the level of a desired signal (such as music) to the level of background noise.  The higher the ratio, the less obtrusive the background noise is.  “Signal-to-noise ratio” is sometimes used informally to refer to the ratio of useful information to false or irrelevant data in a conversation or exchange.  For example, in online discussion forums and other online communities, off-topic and spam are regarded as “noise” that interferes with the “signal” of appropriate discussion.  For instance, a recent Microsoft security report has said that 97% of all email sent over the Internet is spam and MessageLabs said 81% of all emails sent are unwanted, either way that’s a lot of noise.

The general causes of information overload include:

• A rapidly increasing rate of new information being produced
• The ease of duplication and transmission of data across the Internet
• An increase in the available channels of incoming information (e.g. telephone, email, instant messaging, RSS, etc.)
• Large amounts of historical information to dig through
• Contradictions and inaccuracies in available information
• A low signal-to-noise ratio
• Lack of a method for comparing and processing different kinds of information
• The pieces of information are unrelated or do not have any overall structure to reveal their relationships

At no other time in history have we had access to so much information however, it poses some interesting questions:

1. How do we verify what is fact and what is not?
2. What should we be paying attention to?
3. What is useful to us, our customers, our businesses and our communities?
4. How should we process, log, link and manage information to make it work for us?

To cope with this increase in noise some are trying to shut it out while many others are distracted by simply trying to keep on top of it, which is keeping them from doing other important activities.  Either way, many are reporting feelings of anxiety at being overwhelmed by and unable to process so much information.

In Noise Reduction part 2, I will explore some strategies we can adopt to help us reduce the ‘noise’.  The key will be finding reputable online sites, blogs, references and publications that provide access to information that is backed by evidence and research and is free from sensationalism.  2010 will be about filtering information through your core vision, intention and strategy.

So be prepared to question assumptions.  This will help you to make decisions about what to take on board and what to leave behind.  Remember, too much information and indecision will paralyse.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

Many of us actively recoil when we see the words ‘Psychometric Assessments’. This may be due to fear of the unknown, seeing them as ‘tests’ or just tedious questionnaires. While you would not be alone in this, we on the other hand are advocates (of the right Assessments). At Barrett, we spend much of our time demystifying what Assessments actually are and how businesses can benefit from using them. So even if you have been brave enough to use Assessments, most people do not know how to get the most out of them. Often the Assessment process is seen as an isolated event with the final report being put on the shelf or in a draw out of sight and out of mind. The fault does not lie with the recipients of these Assessments; rather it lies with the accepted ‘report and feedback’ model which has been around for years. The sad thing is that many people are not given the opportunity to explore the rich veins of personal information, insight and awareness that Assessments can provide.

Still feeling a little uncomfortable with Assessments? Perhaps a brief overview of what they are will help. In the workplace context, there are many different types of Psychometric Assessments that can be used for both selection and development. They are usually designed by psychologists and provide additional information that helps the employer to form an overall profile of candidates or employees. This can be used to predict how they will function in their workplace or highlight areas for development and potential job preferences.

Our view on Assessments is that they should be meaningful for both the employer and the employee. In order to make the most of any Assessment we need to link the information to something meaningful and purposeful: links to key goals and objectives, role profile, business culture, and so on. As an individual we can integrate learnings into our career path and personal journey to continue our evolution. Without these links has the Assessment been worthwhile?

As you may have guessed I have taken my fair share of Assessments. I was most fortunate to have my first experience with Psychometric Assessments when I was 16 years old. My parents had the foresight to provide this opportunity to help me understand my potential and career preferences. I recently found the report which provided feedback on my aptitudes and abilities, personality style, personal preferences, and motives and values. Some 30+ years later this information still rings true, however I did notice that there was no action plan, specific guidelines, or suggestions. So the report rema ined simply that, a report that had been gathering dust.

In 1988 I had a very different experience when I completed another Assessment focusing on my sales attitudes, behaviours, and fears. When I received this report it was accompanied by a development program and plan– a life and career changing moment for me. Finally something I could action and use to make fundamental changes. I will always remember that experience as it greatly influenced my career path and where I am today. Of course at that moment, I didn’t realise that I would become an experienced and knowledgeable user of that very Sales Assessment.

Testament to our passion and experience, over the past 15 years Barrett has processed over 60,000 Assessments (personality, values and motives, sales behaviours, leadership derailers, leadership styles, aptitudes, and abilities). These Assessments have been used for a variety of purposes including recruitment and selection, individual awareness, insight and development, and the mapping of team dynamics, culture, and values. This has kept us busy with over 4,000 Assessments processed every year!

Our aim is for people and businesses to get the most out of their Assessment experiences. Assessments can support you in making better choices and decisions with career, life, and business. We have carefully selected Assessments that you can use across your business for selection and development, ensuring that you find the right people and once they are in the role they do the right things.

Making the link from selection to development is where Assessments can really shine. Some examples of how we work with businesses to make the most out of Assessments are:

• Create personal action and development plans
• Support Managers with coaching guides and resources
• Find the right people with matched behavioural interview guides and questions
• Team profiling and benchmarking top performers
• Motives and values mapping
• Training recommendations and workshops
• Re-testing sales fitness (SPQ*GOLD) 1-year on to get a ‘before and after shot’

If you started out unsure about Assessments, hopefully you are more comfortable now and, perhaps, even wondering how Assessments might benefit you or the business. If we are preaching to converted, but you would like to know how to get the most out of your Assessments speak to us about the various applications from selection through to development.

And, remember everybody lives by selling something..

Author: Sue Barrett, www.barrett.com.au

How much do you actually sell? How profitable are your sales? How accurately can you forecast your sales results? How many ‘returns’ do you receive? How often do you need to discount? How often are you left with old stock? What are your sales cycles? Are your sales people rewarded on volume only or on margin, account growth, account retention, and customer satisfaction?

The answers to these and other key questions will tell you just how effective a sales force is functioning, how they measure their effectiveness, how they think about their business, their customers, their careers, and how likely they are to deliver profitable, sustainable sales results.

Through our observations quite a few companies still only measure their sales results by revenue not what they get back by way of product returns, faulty product recalls, lost business, margins,  length of sales cycle, etc.  This singular measurement approach doesn’t take into account the real cost of sale or the true sales results that the business is experiencing.  This is a common mistake often made by start-ups and new businesses and if left unchecked can lead to unprofitable and unproductive behaviours and compromised relationships with business who take advantage of your situation.

When it really becomes really problematic is when it becomes Channel Stuffing. The following excerpt I found on Wikipedia under Ethically Disputed Business Practices gives a very good explanation of this issue:

“Channel stuffing” is the business practice where a company, or a sales within a company, inflates its sales figures by forcing more products through a distribution channel than the channel  is capable of selling to the world at large.  Also known as “trade loading”, this can be the result of a company attempting to inflate its sales figures. Alternatively, it can be a consequence of a poorly managed sales force attempting to meet short term objectives and quotas in a way that is detrimental to the company in the long term.

Channel stuffing has a number of long-term consequences for the company. Firstly, distributors will often return any unsold goods to the company, incurring a carrying cost and also developing a backlog of product inventory. Wildly fluctuating demand, combined with this excess inventory, leads to costly overtimes and factory shutdowns. Even mild channel stuffing can spiral out of control as sales works to make up for prior over-selling. Discounts used to drive trade loading can greatly affect profits, and even help establish gray market channels as salesmen no longer adequately qualify their prospects.

Occasionally, distribution channels such as large retailers have been known to identify the practice of channel stuffing in their suppliers, and use the phenomenon to their advantage. This is done by holding back on orders until the end of the suppliers’ quota period. The supplier’s sales force then panics, and sells a large amount of the product under more favorable terms than they would under ordinary circumstances. At the beginning of the next period, no new orders are placed, and, barring any action, the cycle is then repeated. This has an impact on customers, with gluts and shortages as buyers turn to competing products.

Corporations have been known to engage in channel stuffing and hide such activities from their investors. In the United States, the U.S. Securities and Exchange Commission has in some cases litigated against such corporations.”

Although not illegal, the challenges this business practice sets up can have catastrophic effects on business performance.   How a business measures its sales results and how sales people are rewarded can have a dramatic impact on channel stuffing behaviours.  For instance, if sales people are only rewarded on the volume of sales they send into the market, are tied to unrealistic sales quotas that do not match market expectations combined with no accountability for margins, returns, accurate forecasting, account maintenance and retention, then the ideal conditions for a channel stuffing are in play and we are in real trouble.

To avoid falling into this trap, you may like to analyse the following amongst other things:

• True cost of sale
• Margins and volume discounting arrangements
• Returns policy
• Product recall conditions
• Trading terms and conditions
• Sales incentive schemes
• Sales performance expectations
• Customer service policy
• Length of sales cycle

With you and your sales people being very clear about what is expected and checking for any competing motivations which may create undesirable behaviors will help you from falling foul of the channel stuffing nightmare.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au