Free Advice

Take a hint from current events (again)

As many of you know, I like to notice things in current events and draw business lessons from them. I've been fascinated what's happened in Iraq. Just before the war I wrote a column for a local newspaper on the possible war, I wrote a newsletter on the news coverage and now I see things in the ongoing process of "rebuilding" the country.

This is an apolitical essay. I'm not taking sides on the war, what's happened since the fall of the regime or anything else.

See the whole picture

There was an incredible war plan. Iraq collapsed quickly. In fact, a spokesman for one of the terrorist groups said it happened so fast that they didn't have time to send their people to Iraq to help fight the coalition. The troops covered incredible distances in record time, saw no serious resistance, no serious supply line disruptions and saw a lot of people happy to see them. 

And then came the after-the-fighting part. As one correspondent (Newsweek) said, it's not as if there's a Plan B to fall back on as there doesn't seem to even be a Plan A. Now we have military people complaining because the soldier's are doing police work that they are not trained for, more troops are needed, etc. There wasn't (and isn't) a plan for quick success.

Plan for all options

Quick action doesn't take much of a plan. You produce widgets, you need to sell more, you call your customers and enough of them buy more widgets so you don't have to layoff any production people.

What happens if all the customers you call or write buy more? And want them delivered at the same time, say next month. It's similar to the dilemma small and medium sized firms face when calling on Costco or Wal-Mart. Wow, we just sold a million units. Double wow, we now have to make a million more units and keep the quality high. And be able to finance the materials, labor and shipping until they pay us (a few months after delivery).

The tough part of any plan is covering all the options. Whether those options are good news, bad news, no news.

Where does it start

It starts with the sales and marketing process. You must have a plan, a system and/or a process to manage the sales process. To make sure that you and your salespeople are constantly keeping your pipeline full. That you're reporting progress on larger, slower sales and estimating what the chances are those sales will happen and when they will happen.

The problem often is that the closer you are to it, the harder it is to see. A company I met a while back had these kind of problems. Part of it was the fact that they didn't hire the best salespeople. They didn't have the proper sales management and the president tended to "lose his cool" over any deviation.

The solution was to change the whole sales paradigm. They hired great people, changed the department structure and modified the compensation program. There was now true incentive to earn more money. And, unlike before, the company was profitable on the salespeople before they hit bonus or commission.

It also meant a different management style. It's a lot tougher to manage good people after you've managed mediocre people. They expect more and expect it at an elevated level.

Coordination

Just as with the post-war effort, coordination is king. In business, this means coordination between sales and marketing, production and operations and finance. I've recently been working with a company that has severe cash problems. Because of previous mistakes, they have limited cash resources, are on COD with most vendors and are very cautious of any cash outflows.

It's more than making a sale. It's making a sale without any unusual costs involved (no specialty items, limited new product design, etc.). They have to manage their sales to accommodate their labor and equipment resources, their vendor relationships and cash flow.

What it has done is caused them to pay attention to sales in a way they never did before. It's forcing them to focus on what they sell and to whom they sell it. In the long run, when they get over this speed bump, they will be a stronger company. They will have a plan for sales and a system or process for managing the sales activity. They will understand that it's not just about making a sale, but making the right sale, managing the business and being profitable.

© Copyright John Martinka 2003. All rights reserved.