Now that 2016 is here, it’s a good time to look back at last year through an honest lens and see what you’d like to improve in your business. One way to get there is to OBLITERATE your obstacles to revenue growth. But doing so requires buy-in, alignment and focus.
Here’s a helpful framework we’ve used with our private equity and other clients to gain alignment around a focused plan. It’s done with what we call a Business Driver Matrix – a simple grid with five columns.
Column 1: The Hypotheses
Specifically, what’s holding back revenue growth? It’s not enough to say “our sales force is struggling” or “our brand isn’t strong enough.” If you’re going to win, you need to focus execution like a laser beam on specific problem areas or big opportunities. And hypotheses about those areas need to actionable.
Here are some hypotheses that are a good start but could use further definition:
- “Sales reps need to be better informed to close more deals”
- “Some reps are inefficient with their time, do things their own way, with no best process across the team.”
- “We can grow sales by doing business with other units of current customers.”
- “We’re not expanding into new growth markets.”
- “Our communications are too promotional.”
Last year, a Chief Revenue Officer asked us to interview some of her top leaders to drill down on specifics in an overall area she thought needed addressing. This helped create focus and gain buy-in on a better sales methodology for hundreds of sales reps at the company. Bottom line, it helps to be thoughtful about the way hypotheses are generated and refined, to ensure buy-in from the organization (and make sure focus is correct). There are processes to make that happen.
Column 2: Data Supporting each Hypothesis
Investment of resources, time and money are best made when you have evidence supporting the need. Hypotheses about revenue growth can be based on gut feelings, personal observations, employee feedback or other areas — but they should be supported with data. The stronger the evidence, the more confident you’ll be about choosing the area of focus. Analysis paralysis should be avoided. Data audits can identify critical knowledge gaps that can be filled with analysis, employee or customer interviews, and/or research.
When doing a turnaround for a client last year, we quickly discovered a hidden but unacceptable lag time between incoming sales calls and the follow-up sales calls. We had a feeling this was the case, and hard data verified it. Fixing this issue (with CRM changes, training and processes) was part of a turnaround that took an underperforming company to double digit revenue gains.
Column 3: Actions needed
Actions to address hypotheses can be corrective (to fix things) or diagnostic (to better understand them and gain focus). Corrective actions are more self explanatory, but need specificity. For example, if sales training is needed, is it sales skills? Product knowledge? Systems or tools? Processes? The big questions are: What exactly? How? Who? When?
Diagnostic actions shed light on key issues, so corrective actions can be better informed. Example:
- Hypothesis: “we’re losing too many deals that we should win.”
- Supporting data: “X% close rate among prospects in Y segment.”
- Action needed: a win/loss analysis to uncover which kinds of deals were won and lost, and why.
Column 4: Scope of impact
How big an impact will each initiative have on your business within the time frame you need? Each person on the team can assign a grade A-D, where “A” is the biggest impact…and discussions on these grades can reveal a lot about a team’s beliefs.
Column 5: Ease of Execution
How easy will it be to execute the initiative? Each person on the team can assign a grade A-D, where “A” is the easiest execution.
When you’ve gone through this exercise, you’ll have a good sense of the assumptions held by your team and how they affect the organization. You’ll also gain confidence that you’re focusing on big drivers for your business.