Are Conflicting Management Goals Inhibiting Growth?
Are you building barriers to sales growth into your budgets or department goals? Consider the following:
The CEO is concerned that an inordinate amount of company resources and time are committed to developing proposals and the close ratio is low. There are too many meetings and emails among departments on each deal. He is spending far too much of his own time resolving conflicts among departments in the development of proposals.
The sales leader frets that getting all of the departments (operations, technology, scheduling, finance, estimating, client services, legal, etc.) that must be aligned to create a winning proposal is a constant challenge. Internal compromises that are required often result in solutions that lack creativity and do not win.
Building stress into the system is a good thing in developing proposals as the various departments provide checks and balances as well as solutions. However, if every proposal for every sales rep requires senior level interdepartmental input and negotiation, there is a fundamental flaw in the system that left unchecked, will seriously undermine your growth initiative. If sales knows what the necessary elements that are required for a winning proposal are but key departments are not on board, much time will be wasted and good, profitable opportunities will be lost.
The root of the problem often lies at the senior levels of the company and the challenges can get baked into the system during the budget process!
Most senior managers feel they are aligned with the company’s desire to grow. They recognize that that their role as leaders is to aggressively manage their teams to achieve company goals. The challenge appears when the goals of the departments conflict with the growth goals of the company.
Consider an organization that sets the following goals for four departments. Sales is charged to deliver 20% organic growth and enter one new market, operations must reduce overtime by 15%, manufacturing has no new capital budget and finance must increase gross margin by 10%. Other company departments have their own goals but let’s just focus on these interdependent groups. Each of these goals represents sound business objectives. The question is, are they reasonable and achievable goals in the same year at the same time? If the CEO identifies 20% organic growth and entry into one new market as the primary goal and the other three are achievable then you have a winner.
If you find that every deal is an internal battle to develop a solution that wins then you should pay attention to the goals of the interdependent departments. If sales identifies a substantial opportunity with a new customer in a new market it may require some creative thinking and cooperation to win the business. The solution may require overtime and an investment in technology or equipment. Because you are pursuing a new customer in a new market an aggressive pricing package may be required. It is believed by sales that this is a deal worth wining due to the significant upside potential of this prospect and a foothold in a new market.
This is the point where the deal hits the roadblock and the pain of the internal sell appears.
The sales team reports up the chain of command that they can’t get a schedule, investment or pricing that they need for this great opportunity. They don’t understand why the company is not cooperating. The departments are holding fast to their positions because their mandate is to cut overtime, not spend capital or increase margins. Sales leadership gets involved and begins discussions with leadership from the other departments. Either accommodations are reached or the deal lands on the desk of the CEO for resolution.
All of this takes time and detracts from the goal of developing a solution that wins. Your internal competition keeps you from beating your real competition. To further complicate matters, picture that with a functioning sales team this scenario can repeat itself multiple times per week!
So what is the solution? It is critical that senior leadership establish a primary goal for the organization and then insure that departmental goals are aligned and not conflicting. If the primary goal is established at 20% growth then you must insure that overtime, investment gross margin and all other goals are reflective of the market requirements to deliver substantial growth. The ability to compromise and develop winning solutions should be pushed down the chain of command. Focus must be on the solution and not on driving the proposal through the internal system. Removing barriers in advance is critical. Remember that a win for one department (in this case sales) must be a win for all! For this reason, it is best to insure that compensation for the leaders is weighed more heavily to the achievement of the primary company goal and less toward achievement of the department goal.
Planning, forethought and alignment of goals can go a long way to taking undue obstacles out of the system and paving the way to winning profitable new work!