The Dilemma

Few people will dispute that sales is one of the most important activities in an organization. Sales people across North America are with customers on-line and in board rooms bestowing the features and benefits of their organizations products and services. They are the bread winners for their companies. They receive awards, lucrative sales incentives, car allowances, and accolades from their superiors and receive training to make them even more effective. The American Society of Training and Development (ASTD) report over $20 Billion dollars is spent annually on sales training. Half that money is spent on skills development while the other half is spent on product, company and industry knowledge.  

This highly skilled group within the organization is accountable for the top line growth. This is what CEO's expect to see from their sales forces. So why then are many of them displeased with the overall financial performances of their organizations?

Is this The Big Cover Up?

Sales growth plans are inevitably the underpinning strategy many business owners employ to grow their business. Of course this is necessary to grow the top line. However, are there other opportunities to achieve a greater outcome that will drive growth to increases capacity, provide higher returns and create higher contributions?

One afternoon as I was sitting at my desk, I received a call from a frustrated CEO telling me that he had no idea how the organization was going to meet the promises it had to the shareholders. "Aaron, I am lost and cannot figure out what the problem is?” said the frustrated CEO. I asked him if he heard of the "Lalvani Method". He had not.

The Discovery

There is a cost to each and every sale. The underlying problem is that operating costs are not often aligned to sales and the net margin projections necessary to grow the business. This is what the "Lalvani Method" resizes.

Every activity that occurs in the business adds to the cost of the service or product one provides to customers. The question is which activities will customers pay for and which ones will they not? Those activities that customers won't pay for needs to be the focus of every company. Whether your company is in technology, manufacturing, services, transportation, health care, etc, non- value activities that exist in daily processes will simply add up and erode net margins and will slow your growth plans.

The Frustrated CEO

CEO's don't always have the right information at their disposal from which to make strategic or tactical decisions because that information is fragmented and is being presented from various interest groups within the organization. In meetings information is tossed on the table and many times department heads don't have their KPI's (Key Performance Indicators) in front of them. Most people speak passionately about their activities and on occasion blame another departments for their issues but again, no one is at the board table with specific indicators related to their department performance let alone the alignment of those KPI's to the corporate objectives. So much time is wasted in meeting rooms across North America that many executives probably dread walking into them. More importantly, CEO's need answers and they need them fast. Customers don't want to wait too long for answers or solutions to their problems or buy from companies who don't swiftly address their issues.

Moreover, as companies go through succession planning, shareholders will want to ensure they generate greater returns to enhance multiples and CEO's strategies must align with this plan. CEO's and their management teams must understand the opportunity cost of rationalizing the waste in the organization to generate greater returns and sales is only a part of that equation.

In fact, by improving business processes, improving data analytics and resizing the organizations capabilities, then and only then will sales contribute to explosive growth on the top line and bottom line and customer retention and acquisition will be sustainable.

Most people have heard the expression sales and operations are like oil and water, never shall the two meet. In order to stop the Big Cover Up sales and operations must be aligned. Operations need to be involved in the conversation as it relates to commitments being made to customers. That said, sales and operations need to work collaboratively on issues, new product developments, business processes, customer relationships, etc. The more informed both departments are, the more responsive they can be to customers with accurate information. Even more, as productivity is increased in the organization and valuable capacity is freed up by eliminating wasteful activities, companies will be rewarded with improved cash flow, freed up working capital and improved net margins.

The "Lalvani Method" resizes the organization. The best analogy is that of a tailor. At some point we have all used a tailor to make our apparel fit just right. There are four simple steps to this method. The first is to look in the mirror. Until the leaderships come to the realization that a problem exists, nothing can be tailored or resized. Secondly, current organizational process and decision making needs to be unthreaded. By removing the existing fabric you can see what really is holding things together. Take a look at the analytics and existing KPI's so that any future state modelling can be benchmarked against existing results. If you don't have any KPI's within your business, the mirror might be telling you something! Thirdly, develop a tailored plan for your new future state of operations. Include your teams in this "tailoring" phase. They have the answers. Facilitate and focus their efforts to resized organizations. Then, implement the plans and experience the new fit.

There are four (4) tough questions CEO's need to ask there management teams before they aligning costs, growth and net margins.When these powerful questions are answered in the "Lalvani Method", the results will be a resized and tailored organization that is delighting customers and creating a barrier to entry from competitors. 

Answer these questions.

          1. Are customers happy? If not, explain exactly why not. A survey may be necessary.

          2. Who are the cancer cells in the organization?

          3. What are the 5 corporate KPI's that are shared with management?

          4. How is data used to model current & future state outcomes? Is it accurate?

Although sales are critical to every organizations growth, it must be aligned with the organizations goals that lead it to the next level of success, profitably. That can only be achieved when sales and operations work together with accountability and measurable results.