A Sales Turnaround Strategy for Swift Revenue Uplift
- Sales turnarounds are elusive. They most often fail because they are shortsighted and underpowered. Rather than strike declining revenue with bold strategies and relentless execution, they more often pursue business as usual but with some incremental advancements. That's generally too little too late.
- Sales turnarounds don't succeed by enhancing the status quo. They succeed when they disrupt it. Time is not your friend and gradual results are unlikely to change direction.
- Research and over three decades of firsthand experience show turnarounds succeed when they apply a proven and repeatable framework that includes a synergistic combination of sales strategy, evidence-based best practices and real-time performance measurements. It takes each these factors to shift from repeated revenue shortfalls to sustained revenue growth.
According to research from Boston Consulting Group, at any given time 1 in 3 companies require a revenue turnaround. The research also reveals that 75% of companies in need of that business recovery will fail and cease to exist in their current form.
Lifespans of both public and private companies are in decline. As illustrated in the graph below, research from Yale Professor Richard Foster shows the trend of shorter lifespans is accelerating for companies of all sizes.
You might think repeated revenue shortfalls would trigger a come to Jesus awakening followed by a hair on fire reaction. Surprisingly, that's not the case. About three quarters of these underperformers will take a more casual approach and stumble along until they are acquired, liquidated or cease to exist.
Here's what makes the other one-quarter different.
- They fully acknowledge their reality and the danger of not acting swiftly. That's in contrast to the larger group who more often choose to discount or downplay their revenue decline. These naysayers have plenty of excuses but little foresight. They often choose not to acknowledge the advanced warnings. Some naively believe that circumstances will change or working harder will remedy the situation. However, research and experience shows the opposite is more likely. The longer they take to confront the issue with bold action the more likely the decline will intensify and deepen. Eventually, the decline will become unrecoverable.
- The minority are quick to disrupt business as usual. They know maintaining the status quo will exacerbate the decline. They know they must act differently to change their trajectory.
- They know time is not on their side. Stumbling through unfounded ideas, unproven techniques or trial and error remediation is more likely to exhaust their remaining funds and resources than return to revenue growth.
The bottom line is that to effectuate a revenue turnaround the company must act quickly, decisively and differently.
That's best done with a proven and repeatable framework. You need a foundation of building blocks to achieve progressive growth. Otherwise, you will forever take one step forward to only later take one step back.
The Johnny Grow Sales Turnaround Strategy was born from turnaround research and first hand experience. It has been refined for more than two decades. It's called SWIFT and it's a replicable 3-component program.
Here's how it works.
Start with a Sales Turnaround Strategy
A sales turnaround strategy must do 3 things.
- Identify the top revenue objectives. Time is short so the objectives must be prioritized, often by a combination of required investment, cash flow impact and payback. The objectives must be calculable to support operational execution and daily measurement.
If you are unsure how to develop the most important and highest impact objectives, consider a one-day Design Thinking workshop.
- Plot the most direct path to success. There are many potential pathways to your goals. So, this step is to find the most direct route that can be accomplished in the least time and cost and with the least risk. The ideal pathway must be predictable and based on data. The best technique here is to apply a pro forma revenue model that shows how lower levels of execution will roll up to financial results and achieve the revenue objectives.
Systemic revenue growth is a process, not an event. So, to visualize that process we use a proprietary model we call the Predictive Pyramid. It's a bottom-to-top roll-up that shows how lower-level execution drives higher level revenue results.
It's also an interactive model. The linkage from activities to slated outcomes enables managers to perform dynamic modeling and What-If scenarios, and thereby engineer financial outcomes. The activities and tactics are not random events or unsupported wishful thinking but repeatable methods and best practices that calculate conversions based on company data and industry benchmarks.
The pyramid is needed because no revenue program, tactic or best practice lives in isolation. Each has cascading effects that impact many areas and those impacts must be considered when making tradeoffs. This visualization is extremely helpful in determining where to invest your limited time and money to achieve the biggest financial uplift.
- Determine the best methods to achieve your goals. Many companies launch revenue growth plans with much fanfare but little substance. You cannot just tell staff to work harder and expect improved results. You should not expect them to achieve improved results without improved methods to make it happen.
Instead, you need to show them improved methods for improved results. The best technique here is what we refer to as a Strategic Blueprint.
It's a one-page data-driven value chain model. It starts with a headline goal and identifies the best practices to support the chosen strategies. Using best practices produces the outcomes that most matter and avoids wasting time with activities that don't. It also creates focus and makes it clear what staff need to start doing, stop doing or do differently.
Some Sales Turnaround Strategy Advice
From leading business recovery projects for over three decades, there are three strategy related points I want to emphasize.
First, a successful recovery starts with leaders that confront the unfortunate reality head on, recognize there are no silver bullets, and shift the salesforce from trying to do things better to doing things differently.
Performance improvement efforts should first focus on doing the right things and then doing those things right. The order here is important. Doing the right things drives effectiveness. Doing them right creates efficiency. Being efficient without being effective is a losing proposition. Or as better said by the legendary Peter Drucker, "Doing the right thing is more important than doing the thing right."
Second, when new strategies are clearly communicated, they identify what's important and where the company will invest its time and money. That also means anything that doesn't directly contribute to the strategy is a distraction. A good sales turnaround strategy is equally valuable in showing what not to do.
Third, some people bypass the strategy because it consumes valuable up-front time. That's short sighted as effective planning is often a relatively short exercise that will deliver order of magnitude time savings.
The hours invested to plan the optimal route to much needed revenue growth will save weeks or months in execution time. When I'm building a sales turnaround strategy, I'm reminded of Abe Lincoln's quote, "If I had six hours to chop down a tree, I'd spend the first four hours sharpening the axe."
Other people avoid strategies because they end with up with broad or esoteric documents that don't lend themselves to planned and measured execution. These are the strategies that seem to believe value increases with word count. These are also the strategies that get a once-over and are then filed away.
A sales turnaround strategy must be practical not theoretical. What's needed is prescriptive guidance that shows how to achieve specific and measurable goals in short order.
Each of the three artifacts described above is data-driven and not particularly verbose. In fact, in our experience, each can be accomplished on a single page. And when done well, the strategic plan will drive both clarity and simplicity.
Design your Go to Market Execution
Trying to do what you do but better is unlikely to change course. Instead, consider the three most influential sales execution techniques to drive improved results.
- Start with Best Practices
Revenue improvement recommendations without supporting data are just opinions.
A better approach is to apply evidence-based best practices that are validated by research, include prescriptive guidance, have purpose-built measurement systems (i.e., metrics and dashboards) and leverage technology automation.
But which best practices?
There's a virtually unlimited number of tactics to choose from. And their selection will either drive, delay or deviate the strategy through action.
A recurring pattern among lower performing companies is that they don't know what methods or best practices are available or deliver the biggest financial returns in the shortest time. So, they pursue what they know or what is easiest instead of most effective.
Fortunately, research published in the Sales Excellence Report shows that the top performers implemented a mix of 9 evidence-based best practices to achieve the highest revenue growth rates.
A single sales best practice will deliver incremental revenue growth. A collection of best practices will deliver exponentially more.
Certain best practices have overlap, so doing them together will reduce time and increase the impact for both. And completing some best practices will provide a jump start to others. So, logically sequencing them can further decrease time and investment and accelerate results.
And because they are data driven, best practices can be modeled to show investment, cash flow impact and payback.
- Apply Change Management
A successful change in direction requires leaders with no affinity for business as usual and not satisfied to do things because that's the way they have always been done.
These leaders are change agents who challenge norms, do not protect sacred cows and often upset the status quo. They motivate others to stop defending the past and build for the future. They show how to separate activity from progress and not confuse the urgent with the important.
However, for many companies, embracing clear eyed change is not the norm and is a difficult journey. So, leaders apply a change management program to systemically shift the staff from a current state to a defined future state while mitigating productivity loss during the transition, creating an environment for sustained change and realizing the benefits of change more quickly.
Some inexperienced management teams bypass change management to their own peril.
Even when not disclosed or acknowledged by management, staff at all levels know when the company is in distress. The worst management decision is to ignore or belittle the decline. Most staff will believe management is clueless or simply lying to them. That will begin a slow but steady loss of the best employees.
Turnaround specialists don't panic but they also don't sugar coat the situation. They communicate a two-fold plan of acknowledging the real situation and a real plan to remedy the situation.
They apply a change management communication plan that advances messaging along a continuum from awareness to interest to understanding to engagement. That sequenced messaging goes a long way in giving people confidence in management and themselves.
- Develop your Go-to-Market Roadmap
As the great Yogi Berra once said, "if you don't know where you're going, you will end up someplace else". So, once the sales turnaround strategy identifies the most direct path to the top goals, you need a roadmap to show how to navigate that path with sequenced actions.
It should calculate, schedule and manage the investments, resources, best practices and actions needed to succeed. And it must do it in a way to minimize cash flow impact and maximize top and bottom-line finances.
It's a step-by-step approach with milestones and stage gates. Below is a high level example.
Use Analytics for Real-Time Reporting
The thing about turnaround plans is they seldom go according to plan. That's why analytics are needed to display real-time variances that need quick remediation.
Your CRM system probably has the needed data and tools to get the most essential real-time performance metrics. However, depending upon your CRM maturity, you may need to start by first configuring a closed loop reporting system that links data, insights, actions and outcomes. Establishing this sequential connection is a prerequisite to advancing from information visibility to information predictability.
Performance dashboards are the top delivery tool to get the right information to the right person at the right time. However, to be effective the dashboards must shift information from being merely interesting to inducing action.
Power is created from action, not visibility. Simply displaying key performance indicators (KPIs) in a dashboard falls short of inducing action. However, when revenue KPIs are aligned with objectives, compared to benchmarks, linked to playbooks, or integrated with next-best-actions, the information drives action.
The dashboard KPI is not the goal. It's a recommendation for action. Action is the goal.
The above dashboard is an example that quickly shows what's working and what's not. It highlights variances and provides links to actions, in this case links to a sales playbook and best practices.
It uses alerts to surface deviations and notify the right person in real-time. These alerts may include things like resolving revenue leakage, such as leads not being followed-up or sale opportunities not being followed-through. Or they may surface business process breakdowns such as a quoting or order entry problem. Or they may recognize that a high value customer is dissatisfied and at risk of churn. Swift course corrections prevent the loss of short-term revenue and long-term profit.
The most important thing for dashboards is to display problems that need intervention and induce action. If your information reporting is not causing continuous course corrections and shifting tactics, you're doing it wrong.
Use More of What You Have
Most companies in revenue decline underutilize sales technologies. It's a two-fold dilemma as they have fewer technologies and underuse the technologies they have. Research shows that 84% of companies in revenue decline use CRM software, but on average, they utilize 21% of the application's capabilities.
They use CRM for reporting. Essentially to track sale opportunities and run the pipeline report. They omit sales productivity capabilities such as guided selling, push-based notifications and workflow automation. They have to take advantage of sales enablement tools and assets such as content, coaching and interactive dashboards.
The upside here is that you can use more of what you already have. These capabilities exist in most CRM systems, they just need to be correctly implemented.
Lets Get Growing
A sales turnaround strategy is a lot of effort, but it need not be a daunting task. In working with clients, we start with a quick gap analysis and typically find some of the framework components are in place, some need minor refinement and some need reinvention.
The most important thing is to get started and make continuous improvements. As said by Mark Twain, the secret of getting ahead is getting started. The secret of getting started is breaking your complex, overwhelming tasks into small manageable tasks and then starting on the first one.