Continuing our ‘translation’ of Charan’s book, “Profitable Growth is Everyone’s Business” we take a look at his second tool – Hit many singles and doubles and not just home runs – a baseball analogy which suggests looking at many small incremental growth opportunities and not just the big deal opportunities.
An interesting topic, particularly when personally, for the last decade, I have been involved in developing, managing and driving high value solution sales – focused on the home runs in Charan’s phrasing. So his context and analogy is a subject close to my heart as many of the opportunities I was fortunate to work on came from what initially appeared to be small almost insignificant transactions.
The perennial challenge for many sales organizations is the balance between these large deals and the ‘transactional’ business, which at times can be unexciting and mundane, yet this business is important for so many reasons. Charan would call these transactional deals, the singles and double in baseball.
Over the years it’s been made very clear to us that there must be effort spent on getting this balance correct, and what Charan presents is a number of very good examples of how large successful organizations have utilized the simple concept of small incremental growth focused projects which end up driving strong long term profitability and cumulatively great top line results. This is of course not at the exclusion of potential large deals – ‘hitting home runs’ when presented with the opportunity.
What struck me most was an observation, that growth is typically measured against the previous years performance, a normal measure of course. However, all too often, sales growth is budgeted by an accountant or defined by a ‘head-in-the-clouds’ view. The CEO may say “We need 15% growth this year” and off run his reports saying “add 15% to each revenue target”. Sound familiar? What usually then occurs is very little, right? Rarely anything magical that drives the growth over and above last years ‘number’. And why? Because there is rarely any discernible effort made to identify where this incremental growth will come from.
So the year progresses, frustrations ensue, targets are missed or worse bad business is executed to make up the difference. Discounts offered to sign before the end of quarter, for instance.
In our sales context we liken the examples to a number of well known but often under utilized or badly executed growth drivers that provide solid incremental and profitable sales, whilst opening opportunities to large deals. Some of the following might seem obvious and hopefully also familiar.
Understanding the customer.
Not a novel idea, in fact it should be a basic and innate behavior and one that is amazingly and so often so badly executed. Understanding your customer opens the world up to incremental and easier growth. What problem do they have, what do they need to solve that problem and how can we add value by helping solve it? How simple. Yet how often are these questions asked properly and acted upon? Our particular business is thriving because these questions are rarely asked the right way and if asked, the answers are rarely used in a manner that drives profitable sales growth. It’s so much more profitable to sell to existing customers than to new ones (as we all know).
When a proposal or offer is provided, how often will you either cut and paste from something you had or conversely start from scratch? We’d guess, based on experience, one or the other close to 100%. The cut and paste is an excuse used when time is short or staff are lazy. The start from scratch approach is a sign of inefficiency and ineffectiveness. It’s not too difficult to engage within your own organization to understand either projects or sales that may have occurred for a similar problem or similar customer and utilize the learnings from that in the new opportunity. Does it happen, and does it happen as a standard? Unfortunately the answer is – rarely. This is the most efficient way to build good profitable new business as well as extending existing business relationships.
As mentioned, the ‘all-too-often’ missing pieces in growth targets is the ‘how to’ and ‘where from’. An aspect offered by Charan, one I’m a great advocate of, is the short term focused project team or teams. Teams focused on where the incremental growth will come from and how will it be achieved in the short term. Not the big bang one deal option, but the sustainable, repeatable and leverageable business that provides a long term foundation. Make the team accountable and give them flexibility to achieve. Make the team multi disciplinary, not just the sales person. Give them the objectives and let them go. It could be ‘what do we sell?’, ‘who do we sell to?’ or ‘how do we reposition what we sell?’. To start, ask yourself these questions:
- Are your territories too big or too small?
- Do you have too many products?
- Do you understand your market?
- How have you segmented your market and are you approaching each appropriately?
- How well do you understand your customers and their business objectives or ‘their’ growth targets?
All these should be part of your normal business reviews; all offer great opportunities to grow your sales quickly, incrementally and with the potential to provide big deal opportunities.
Overall, as sales leaders we should be looking at how we grow our sales profitably, which means effectively and efficiently, with long term sustainability and customer satisfaction. This requires, amongst many other things, a balance of ‘transactional’ type business, incremental growth business and the big home run deals. Our roles are to manage the complexities of this balancing act, coach our teams and engage and reward our people to search out growth opportunities no matter how big or how small.
Let me finish by referring to a well known story of the Post-it Note. A very small idea, actually an initial failure against the original objective, but through insight, focus and understanding the customer, ultimately a huge profitable and long term success for 3M.
How many Post-It Notes are you missing in your sales growth because you are too busy with that one ‘big deal’ to notice them?
Richard Batka is Managing Director and co-founder of Anthony Alexander Partners, providing accelerated market entry, expansion and transformation for organizations across the Asia Pacific region.