Why Corporate Revenue Plans Fail — and how not to


  • The revenue plan supports the company growth strategy. The two are integrated and symbiotic. The growth strategy defines WHAT to do. The growth plan defines HOW to do it.
  • The revenue plan is needed to organize the company's resources toward an overarching goal. It's essential that everyone rally around a shared goal and agreed upon path to achievement. Without a plan, resources pursue the paths of least resistance in an uncoordinated and disjointed expedition.
  • The most cited reason for a failed revenue plan is poor execution. While that's true it's also so broad that it's not helpful. A more definitive diagnosis is necessary.
Johnny Grow Revenue Growth Consulting

Revenue Plans Gone Wrong

There are lots of reasons companies don't achieve their revenue goals. But when you drill down it stems from either a poor growth strategy or poor execution. I've previously shared why business growth strategies fail so want to use this post to share the top reasons growth plans fail. When you know why growth plans fail you have the information to apply risk mitigation and preempt those causes.

A growth or revenue plan defines the revenue target, aligns the actions (e.g., resources, investments, methods, technology) needed to make it happen and implements real-time measurement to verify progress or facilitate swift course corrections.

But growth plans are always challenged. By recognizing those challenges in advance or upon occurrence, you can preempt or respond to events that would otherwise create chaos. Here are the top 5 causes of failed revenue growth plans.


No Plan

Many small and midsize businesses just don't have a growth plan. Sometimes they substitute a budget for a plan. Other times they put something referred to as a plan on a PowerPoint slide. However, both scenarios lack assigned actions, sequenced progression, accountable resources and concrete measurements so they are really more of an aspirational goal.

Without a prescriptive plan, achieving a revenue target is like trying to get to a destination without a final address. You may eventually get there but you will incur some wrong turns and most certainly take the long way.

A good revenue plan defines the shortest route to the goal.

Not traveling along a defined path to success prevents the team from knowing their progress, understanding what's working and making adjustments to get back on track. When you don't know where you are pursuant to a growth goal you also don't know when to alter course.


Failure to Separate Strategy and Tactics

Many revenue plans fail because they confuse strategies and tactics.

Understanding the differences between business strategy and tactics, and bridging that divide is key to revenue plan execution.

Strategic planning is an analytical exercise to uncover the company's ideal destination (i.e., it finds the dots) where strategic management creates execution (i.e., it connects the dots.)

Tactics are the actions that produce the results to achieve the strategy. That's why tactics are organized in a revenue growth plan that drives execution with sequence, progress and measurement.

Strategy is focused on doing the right things. Tactics are focused on doing those things right.

Strategy and Tactics

Poor Focus

Revenue plans require precision. Precision requires focus. Distractions and competing priorities are the enemies of focus.

It's a lot easier to try a little of everything than go deep on one thing. But taking the easy route veers from what will get you to the finish line the fastest.

Focus also means you need to decide what to stop doing. Every minute spent on something other than the plan is a minute not advancing what was determined to be the most direct path to the biggest upside.

Business focus

Some executives have pet projects that they rationalize as tasks that don't consume much time. Others keep sacred cows or skunkworks efforts below the radar. And some have a way of duplicating efforts as a source of contingency or something to fall back on just in case.

Those backup strategies have a way of becoming self-fulfilling prophecies. If diversification tactics are needed then work them into the plan and scheduling. Otherwise it's time to burn the ships and be all-in on what is determined to be the best path.

Stop doing things that do not directly and measurably advance the growth strategy. There are lots of things that add value but not as much value as what’s prescribed in the revenue plan. Engaging in indirect or immaterial activities delays and dilutes the accomplishment of the growth plan.

Focus also requires prioritization. As Jack Canfield wisely advised "If you are trying to focus on more than 3 things at a time you are not actually focusing on anything."


Lack of Executive Sponsorship

Business leaders that create strategy, delegate to management and then step back create an execution vacuum.

Managers will judge the strategy less by its words and more by the executive team's commitment and persistence. Staff take their cues from leadership. If leaders deliver the strategy as an announcement and then walk away, many staff will proceed with indifference. If there is a history of lofty starts that later fizzle out, many staff will take a wait and see approach.

What's needed is visible and vocal executive sponsorship.

What's needed are executives that advise everyone of a strategic window of opportunity in the marketplace. That window has a limited duration so the opportunity must be achieved before the window closes.

Executives must paint a clear vision of the opportunity, of both the upside potential and challenges that lie ahead. They should also commit to knock down those challenges as a team.

They should demonstrate urgency and explain why it is so important to seize the opportunity now. They must pursue the opportunity with unyielding enthusiasm and recruit staff at all levels of the company to join them.

Executives mobilize, motivate and unite a group of people to create a better future. They may pull upon past successes. They may even reignite the entrepreneurial spirit that gave the company its start. During the journey they inspire and recognize success. They don't deny reality. When progress falls short, they deliver truth but follow-up with even more energy and excitement.


Poor Adoption

Lack of enterprise-wide participation will delay or stop a plan in its tracks. Growth plans only work if everybody's pulling in the same direction. What's needed is company-wide adoption, and that's driven by communication, collaboration and ownership.

Communication is not achieved with a growth plan proclamation. What's needed is a shift from informing to communicating. When communication moves from a one-way monologue to a two-way dialogue it creates interest, engagement and action.

Collaboration avoids the common problem of strategies developed in isolation. Without collaboration you may get cooperation but that's not the same thing. Collaboration pulls in more skills, experiences and ideas and garners much more buy-in.

Every person and department must understand how they contribute to the plan and what they are accountable for. While shared and distributed ownership is essential, be clear that there can only be one owner of any task.

Staff generally do what they are compensated to do. When there is confusion or inconsistency between plan tasks and overall performance measurement, the plan becomes critically compromised. Compensation management plans that are based in part of the growth plan reinforce ownership and prevent a common problem.

If adoption becomes a continued challenge, you may want to consider a change management program.

See why revenue plans fail, and how to apply a risk management approach to identify, preempt and avoid the causes of failure.

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