Most companies fall short of their revenue potential, not because of bad revenue strategies, but because of a failure to successfully implement good ones.
High growth companies demonstrate better “alignment” than most companies. However, simply locking your VP Marketing and VP Sales in a conference room until they figure out how to better align the Marketing and Sales groups may not be the best answer.
The Real Barrier To Becoming A High Growth Company
If you want to become a high growth company, focusing on internal organizational alignment may be a red herring. It is a symptom, not the root cause, of your revenue growth problem.
The root cause for lackluster growth is insufficient external alignment with your target market.
Most company executives will claim that they are already aligned with their target markets. However, while your target market may be the same as it was five or ten years ago, if you dig a bit deeper, you’ll discover that the buyers within those markets have dramatically changed their purchasing process.
Thanks to rapid changes in internet, social and mobile, the buyer’s team has access to all the information they need to determine their short list of possible vendors to evaluate, without ever calling any Sales organization.
Each of your revenue functions have responded to it by different degrees, causing alignment issues between functions as a result. However, none of the functions have fundamentally changed their go-to-market plans in response to the target buyer changes, resulting in company alignment issues with your customer.
Aligning Your Company To Its Target Market Customers
Regardless of company size, you cannot have a high performance revenue team if each of the team members are executing outdated or different strategies.
You need to give your strategy implementation a “tune up”, not a complete overhaul. Your goal should be to identify 2 or 3 major roadblocks that need to be tweaked to get the company revenue growth going in the right direction. You want to start by ensuring there is sufficient alignment within the company on strategy.
1/ Aligning The Functions To Company Revenue Strategy
Each of the functional revenue-generation strategies must dovetail into the company revenue strategy.
- Company Revenue Strategy. All revenue generating functions maintain cross-functional alignment to corporate target markets. Do the functional strategies reflect that most of the buyers’ purchasing process has moved online?
Here is a brief example of how a CEO of a high-growth company might confirm that the revenue functions are aligned with their company’s revenue strategy.
- Sales Strategy demonstrates an increased focus on online selling skills and leverage of lower-cost sales channels such as inside sales (plus, an increased reliance on more high quality Marketing- generated leads and more compelling products from Product Management).
- Marketing Strategy demonstrates a substantially increased focus on digital lead generation and Sales enablement (plus, an increased reliance on responsive lead management support by Sales and more compelling products from Product Management).
- Product Strategy demonstrates an increased focus on delivering compelling business value to the target market buyers (plus, an increased reliance on cost-effective product leads from Marketing and proactive product launch Sales focus).
When you are comfortable that all the strategies are sufficiently aligned to the target market buyer and the company revenue strategy, then the next step is to review the revenue generation processes.
2/ Aligning The Functions To Company Revenue Process
Each of the functional revenue-generation processes must dovetail into the company revenue process.
- Company Revenue Process: The revenue functions will apply the most cost effective sales, marketing, and product launch techniques in an integrated process that increases revenue and profitability. Have the functions developed the processes needed to effectively implement their new strategies?
Here is a brief example of how a CEO of a high-growth company might look at their revenue process alignment:
- Sales Process includes a more accurate forecasting process that is better aligned to the buyer team members and their purchasing stages, etc. etc. (plus, a well-managed process to manage the service level agreements (SLAs) with Marketing regarding lead generation and with Product Management regarding new product launch.)
- Marketing Process includes a cost effective lead generation process that attracts new customers, moves them through their purchasing process, and delivers a high volume of quality leads for Sales to close, etc., etc. (plus, a well-managed process to manage the SLAs with Sales regarding lead generation and with Product Management regarding new product launch).
- Product Management Process includes a target market requirements process that identifies the compelling business need and decision criteria of the target market buying team members, etc. etc.(plus, a well-managed process to manage the product launch SLAs with Sales regarding product sales and Marketing regarding product leads).
However, functional managers and their staff will always prioritize their functional goals ahead of any cross-functional objectives, unless and until, the CEO directly ties their cross-functional performance to their compensation.
A shared executive goal of “Revenue” might reward individuals collectively when the company is successful, but since all boats rise with the tide, it does not necessarily drive the right individual behavior that’s needed to achieve important team goals.
This is the area where the CEO, as cross-functional leader, must get personally involved if the company is going to get on the right track for accelerated revenue growth.
Incentive compensation, if done “right”, can turn individuals from various functions and silos into high performance revenue teams. Getting incentive compensation “right”, however, is part art and part science. More on leveraging incentive compensation for revenue growth will be discussed in a separate post.
3/ Aligning The Functions To Company Revenue System
In most cases, there is no company revenue system!
Sales has a CRM system that they constantly complain about, Marketing has their shiny new Marketing Automation system, and Product Management is just starting to use some product management specific applications.
The company needs to move towards a cross-functional revenue system that allows you to effectively manage the performance of your cross-functional revenue strategy implementation.
This is another key area where the CEO must get personally involved to achieve a balance between the corporate desire to have an “all in one” system (that can’t keep pace with rapidly changing market conditions) and the functional desire to have tactical point products (that don’t fit into any corporate technology system strategy). More on aligning revenue generation technology for revenue growth will discussed in a separate post.
Achieve Accelerated Revenue Growth
You cannot become a high-growth company without achieving and maintaining company alignment with your target customers. Sales can no longer carry the company’s revenue burden alone. Nor can you continue to rely on Sales forecasts to be the primary measure of your company’s revenue strategy health. A more detailed discussion and CEO Action Plan for successfully turning your revenue strategy in accelerated revenue growth with profitability can be found here.
As CEO, you must lead this cross-functional effort, particularly if you want to see accelerated revenue growth within the next year. You may need to bring in a “change agent” (employee or revenue growth consultant) who can be your lieutenant to give the current revenue strategy implementation a quick tune-up.
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