Can you grow the business in a stagnant economy
The recent political wrangling in Washington, D.C., has shown how posturing without substance — a “no compromise” position and a re-election-only mindset — get you a dysfunctional body. Is the current business climate purely a function of politics or is there a similar intractable mentality running businesses these days?
One accusation toward our politicians is, “They are out of touch with day-to-day reality,” and they can’t or won’t look down the road to see the impact of their decisions. The same can be said for some business owners. Often an owner or manager gets so close to the business that they become overly focused on next quarter’s stock price or disconnected from the day-to-day reality. Steve Jobs at Apple may be a good example. He is undoubtedly the focus and image of the company, almost a personality cult. Stepping down will have great market impact. The direct impact of his leaving Apple could have been avoided by raising the profile of other key contributors in the business while he was still in charge.
In Washington, sharing the limelight seems to overshadow getting results. Social issues and political fall-out make the decisions hard, but raising taxes for revenue or cutting expenses or a combination of both should be the only options — not shifting the blame. In business, you have similar choices. But the balancing act and outcomes are a lot less certain.
In business, there are generally four main areas to look at: product (or services), supply chain, process and personnel.
The easiest place to start is the process, which contains many tangible issues and generally is controlled internally. Personnel-related matters come in a close second. Aligning processes and personnel with company objectives can have great benefits, if you take the time to do a thorough business analysis. However, we find a more common strategy these days is the “slash and burn” approach (lay off, sell off, pull back, retrench) couched as “making hard decisions.” Investment in the company doesn’t seem to come into the picture.
A thorough business analysis entails evaluating the existing product line to determine if it is still relevant or where improvements and upgrades may be required. Once determined, you then must examine your supply chain. Options here include renegotiating contracts with your existing vendors and/or finding new resources.
For most organizations, revamping the product/services offerings is a complex and time-consuming effort. As changes in this area occur, personnel also will be affected. Questions that need to be answered here include: Do you have the right people in place to develop and push the product? Do you have the processes in place that attract, support and retain the qualified staff?
Asking these questions leads to a need to evaluate additional aspects of the business. Are there well-defined job descriptions? Is the employee handbook up to date? Does the company have an effective pay and benefit plan in place that creates a culture focused on achieving the stated mission and supports the strategic or business plan?
Analysis of operating processes to assure that functions interface smoothly, with effective communication to meet customer expectations related to the delivery of quality products, combined with the proper pricing structure are critical to success. So often, organizations take a shotgun approach to the entire organization. I am suggesting instead that you use a sniper strategy. Chances are it will be a lot less costly and much quicker with less fallout. The question then becomes: Where to aim?
Let me suggest starting closest to the problem. You cannot have growth without sales. That means looking at who and how sales are generated. Knowing what goes on in the sales process, then getting a grasp on what should go on is essential. Once you understand the sales dynamics in the business, you can begin to work with those who are expected to utilize the defined processes.
If the organization has the right people in place, and the process and support tools are there, the sales team should be successful. If not, move back up the operating line and look for areas of disconnect. Chances are there are things still amiss in the sales arena.
Compensation is rarely evaluated and updated unless someone complains. Evaluating the compensation plan for such things as unintended consequences could reveal a need for change. Asking the sales team for help can pay big dividends, as well.
Sales team training
Does the sales team have up-to-date product knowledge? Product knowledge is only valuable if it is used as a solution that matches customer expectations. Have they been trained to position the product with the client’s needs? Are they motivated to win the deal? Do you know what motivates your team as individuals? Have you engaged the marketing department to provide the tools necessary for success? Are sales and marketing working together to get the message right and consistent?
Business networking includes both social (online) and intrapersonal (face-to-face). Has all the staff been trained in the right way to do it? Is there budget set aside? And that’s not just for training, but for implementation, too.
Training tells the sales team that they are an integral part of the organization and key to turning things around. The return on investment will become obvious. It also will retain the good people. However, do not be afraid to address those individuals who do not fit with your sales plans. Don’t be like Congress and kick the can down the road.
Can business grow in this climate? The answer is a resounding yes, if businesses are willing to invest in their team and not pull back.
Gary Ball is an associate with P3HR Consulting & Services LLC.