Of late, I’ve become aware that too often many businesses are finding themselves out of sync. In a period of economic upheaval such as the current state of affairs, this is no surprise. Yet few possess the ability to make sense of their own internal reported information relative to the external reported economic indicators. It’s not merely a problem of innumeracy, or the reality that buyers are as irrational as sellers. I learned that 90% of American business executives/owners recognize that they need to invest more aggressively into developing meaningful business indicators, yet fewer than 60% have taken actual steps to do so.
This morning Public Radio after sharing the news of Walmart’s stunning ability to reap profits reminding many other business owners of the possible in spite of their own inability to replicate these returns, singled out two key indicators for any American business to monitor.
The attached interview (poor sales hurt jobs numbers) makes a strong case for watching consumer spending, a leading indicator of one of the key drivers of the US economy followed by unemployment.
Well, in a world where increasngly people have no interest in being sold and managers and CEOs are all too familiar with the consequences of falling revenues as they may be the next one to end up in the unemployment line, what should and can a business do?
One thing is to take a look at their own data and try to align the indicators being collected with activities that are associated with creating business value or more directly customer value. Maybe they need to houseclean and stop wasting resources on reporting data that is no longer proving prescient or worse is never even reviewed. Given the current phase of the economic downturn, time may be close to up for embarking on a large planning and review session. The best resources for the task however can always be leveraged quickly. Any business savvy enough to engage its entire organization to constructively offer up their ideas, and realities. This is what James Surowicki characterizes as the Wisdom of the Crowds.
Good news is that no one has to pay to try this. The wide availability of facilitation tools for just such an idea exchange suggest it’s worth trying. There’s plenty of open source software platforms to lead the way, every organization should readily be able to tap at least one person with the necessary experience, after all the tools are pretty ubiquitous these days. Help may be needed in the proper evaluation, and review of the ideas that will surface, creating a process to help prioritize what among existing organizational activities should be continued and for how long. The savings achieved from mobilizing internal talent to quickly retool the business activities may be sufficient to keep the existing workforce employed. I say may because every business is different. But once the firm’s priorities are made clear , including how promises to staff follow you’ll be amazed at how easily folks adjust. Because people would rather be part of the solution rather than part of the problem. Try to avoid backsliding to old decision making habits that are beyond the organization or held closely by the few at the top of the organization. There’s nothing worse than having double standards where a protected class of management repeat the process that ultimately led you into a false sense of security, filled with false projections and failed to help adjust the ship even when they heard the reports of the approaching storm. If this team also makes decisions as to where costs should be cut, you need to think twice. I suggest that the reason consumer spending matters is that in the end we are all consumers and if we understand why we are or are not spending or what makes us buy what we do buy then we might be able to take that insight and apply it to help our own organizations align their processes to better meet and address all of our collective needs.
Last night, I returned to the sales leaders alumni round table at Chicago Booth’s Gleacher Center. The Samurai Business Group presented on a topic that has mystified sales people when confronted with the seemingly illogical failure of a prospect to buy.
What Dan Kreutzer and Bob Lambert have managed to put together in a formidable summary of research findings is so painfully obvious and yet so painfully missed in sales execution. Somewhere in the course of the last several decades, Americans have gotten fed up with being sold. In the age of the internet, with portability and ubiquity of information, we naturally only prefer to buy what we want and we do it in the time and space that we prefer.
There’s no limit on what I can buy and have delivered from my choice of access device. I guess you could trace this back to wider offering and acceptance of credit cards, and the instantaneous authorization and verification of any transaction. I’m not trying to trace the antecedents to the change, but more to reaffirm what Bob and Dan have so very neatly articulated. The passage of power to the buyer certainly has complicated and challenged the sales process.
Relax, buyers still need help . By understanding the circumstances and the information needs they have, a solid sales organization will be more than occupied; and more importantly will keep their organization in business.
Inherent in every executed transaction is the decision-process. Insights into the human decision process have long been studied by decision theorists, probability experts, behavioral economists, cognitive psychologists and even anthropologists and political scientists. These insights have now been introduced into popular culture by Malcolm Gladwell, among others. Blink recounts many tales of the non-linear decision-making process within the human brain. Only some decisions happen actively, while many others fall into the passive or automatic category. What Bob and Dan have elucidated is the requirements for sales organizations to separate their offerings into these categories. Understanding the buyer’s process will go a long way into helping sales and marketers connect to their prospects.
I urge you to check out some of the studies in Sales excellence that Bob and Dan read, but more importantly go read Dan’s book Put the Win back in Your Sales
I’ve been wandering around the web updating myself with today’s headline news on the new green initiatives.
along the way, I came across a little piece on a site that was new to me..chloregy
the content was an interview with a fellow in china who had succeeded in putting together a sustainable fashion business consortium.
I’ve included a few of Pat’s quotable insights:
” A year or two ago, everyone presented new products as eco when it only related to the raw material , but why wasn’t anyone talking about process? You have to work on the whole supply chain”
“The system is the problem – the system is not allowing a sustainable business model – everyone has to play a part to play in changing the system.”
“At first we started out with great ideals, but if you don’t bring on the business case, the ideals get stuck!”
YUP, change doesn’t work if it’s isolated, disconnected or worse retrofitted into a system that is not open to possiblities. This is of course not an easy path. Walmart has made significant inroads by leveraging its market power to force its suppliers to step up. But how successful have they been? I happened to work with a little company who is significant supplier and they had yet to comply with Walmart’s sustainable policy (see their website). They were not sure where to begin, and of course were very concerned about the bearing the burden of additional costs. The economic prospects being what they are, this was clearly not a priority.
I’m not picking on Walmart as much as acknowledging how very hard it is to take a whole systems approach. When it comes down to it, the little company knows its competition well enough to recognize that Walmart doesn’t have another green option to source thier product. Volume commitments are not enough to force change. Perhaps if Walmart were to feature the product once it goes green and transform its stores to separate the green from the yet to go green products….in other words, not everyone is ready to make the transition.
if you have some good examples of well thought out incentives for supply chain transitions, I invite you to share them. let’s see how we can make Pat’s comment a reality!