Ditch short-termism for robust sales strategies that drive more and better sales, now and in the future
Monday, March 26, 2018/
“If you don’t know where you’re going, every road will lead you nowhere”. This famous quote is usually attributed to the master strategist and politician, Winston Churchill.
Why have I led with this quote? Sadly, in today’s busy, noisy and complex world, this quote represents a common state of affairs for many organisations’ chief executives, executive leadership teams, sales leaders and their sales teams who are struggling to make sales, retain their relevance with clients, and generate profit.
Instead, many are finding themselves in a race-to-the-bottom price war, which is not a strategy for success. Instead it’s a reaction to short-termism, which only leads to one’s demise if not addressed.
I have lost count of the number of chief executives and sales leaders across industries we have met who do not have an articulated, focused sales strategy and sales operating system in place that directs, guides and supports the sales team’s efforts in the marketplace they want to focus on, and informs the rest of the business of how they will service and support the customers’ buying journey and engagement experience.
It doesn’t matter if you are a multibillion-dollar public company, a medium sized privately run business or a small startup, to drive more and better sales you need an articulated, focused sales strategy and sales operating system that delivers the right action in the right markets now, while playing the longer game.
The fatal effects of short-termism
Yet, many of these businesses are addicted to short-termism, living quarter by quarter only focusing on immediate results; like a cocaine of ice addict, they cannot seem to stop.
What is becoming evident is that maximising resources for short-term gain has harmful consequences for the future on every level. The McKinsey Global Institute2 study found that while short-termism is rising, it damages corporate performance and it costs millions of jobs. It also creates excessive burnout in people and we see this over and over again in sales teams who are highly stressed and often compromised in trying to meet these quarterly targets.
The battle between short-termism and long-term business operations is one of the biggest challenges facing humans today. The McKinsey Global Institute2 study concluded that long-term focused companies deliver higher levels of economic profit than short-term ones, and they delivered superior financial performance over time.
Our own findings
Let’s take a look closer to home. Barrett’s Sales Strategy and Operations Benchmark Findings Report for 2015-2017 shows the effects of short-termism and lack of sales strategies across 25 medium to large organisations from a range of industries in Australia, with many averaging just over 50% across 17 key sales markers on their initial audits when running their sales operations and delivering sales strategies.
Areas such as organisational knowledge, market knowledge and sales mission scored highest, averaging between 65-67%. However, areas such as sales metrics, sales force development, market segmentation and pipeline management ranked the lowest, scoring less than 50%. Some businesses had scores in the 20s. Everything else, including sales technology and governance, sales management, sales processes and qualifying buyers ranked just above 50%.
This didn’t come as such a shock to these businesses. They knew things needed to change. With their audits came clarity. With clarity came informed decisions and focus. Once these businesses were able to determine what to address and where to focus their efforts, the changes have been quite remarkable with business after business reporting that they now feel in control and clear about what they need to do moving forward to drive more and better sales.
Several organisations, having implemented their sales strategy and sales operating systems action plans from the original audit, are now in the re-audit phase and have seen positive improvement in benchmark results, which is clearly evidenced in the field and on the sales scoreboards.
However, many chief executives and sales leaders in other organisations across industries are still fixated on trying to address their sales issues by tinkering with incentive programs and sales force restructures. This will not address their sales issues in the 21st century.
Given the breadth and depth of industries benchmarked and the poor state of results in the initial audit phase, this shows that lack of sales strategy and longer term focus is a general business problem not limited to particular industries. Sales strategy is still poorly understood or ignored completely much to the peril of many businesses.
Short-termism is not a long-term strategy, it’s an addictive reaction.
By contrast, Churchill was an exemplar of defining: why you are doing what you do (purpose); what message you want to send (value proposition); where you want to go (markets); and what you need to do (tactics and actions) before setting foot out in the real world and executing a sound and reasoned strategy.
Sun Tzu’s Art of War is all about long-term planning and strategies. So it should come as no surprise to find that the current regime in China has a 30+ year global and economic strategy for its place in the world, while the current US administration has none. Interesting times indeed.
Smart businesses are now realising that short-termism and profits alone are not the bar to be measured against, as they offer no indication of future performance in a 21st century world. Smart organisations are building out a long-term business strategy, which can be anything from three to five to 30-plus years, and they are underpinned by an on-the-ground tactical sales strategy, which is adaptive and focused on an 18-24 month horizon.
Sales strategies take into account the many variables that make up a sales operating system and, like sailing, allow us to tack our way to the bigger business strategy goals.
Selling better operating system
We know from deep experience that implementing a selling better operating system and developing a robust sale strategy is the key to selling more and selling better.
Selling better is about planning for our medium and long-term futures, not just reacting to each quarter or putting in silver bullet solutions, which is the key to a successful and profitable future.
Developing and executing effective sales strategies and sales operating systems that are applied over the long-term is the missing link in many businesses sales success.
Remember everybody lives by selling something.