When Growth Stalls". Having seen this issue in a wide spectrum of businesses I felt compelled to share my insights to a problem that brings about panic, regrettable spot decisions and actions, and doors being shuttered. David observed correctly that stalled growth can be attributed to numerous factors. Here are just a few I have personally observed with clients:
(1) Externally caused: new competitors (same product or better
product), market saturation, market disruptors (Uber, for instance), technology shifts, new consumer/business
trends, regulatory changes, new Google search algorithms that push your site to page 20.
(2) Internally caused: excessive spending on non-value activity,
in-effective marketing spend, bad hires, no plan (long or short), loss of largest
client to rival, pursuit of non-core business opportunities, loss of core competency, lack of respect for competition.
The first challenge to overcome stalled growth is to
accurately identify the cause (more likely causes). 12 years of consulting experience says that you, the owner/founder, may not be the best
person to uncover these causes. After all, stalled growth did not happen
in an instant and we humans have a remarkable way of seeing only what we want to see.
There is a great Harvard Business Review study/article titled,
“Evolution and Revolution as Organizations Grow” that has achieved "classic” status because of its long standing relevance. The study
involved thousand of companies from all industry sectors. It concluded that
companies go through five stages of growth. Each stage is
preceded by mini “revolutions”. These revolutions can reveal themselves in dramatic ways such as the loss of a major customer. But they can also be insidiously subtle, a marketing initiative released prematurely or one of your team failing to know pricing changes before talking to a new customer. The author concluded from the data that growth occurs when leadership
recognizes those telltale signs and evolves both management style and
operating practices to address them. The companies that don’t “evolve”
stagnate or die.
Here is an excerpt from the article: “The problems at these companies are rooted more
in past decisions than in present events or market dynamics. Yet
management, in its haste to grow, often overlooks such critical
developmental questions as, Where has our organization been? Where is it
now? and What do the answers to these questions mean for where it is
going? Instead, management fixes its gaze outward on the environment and
toward the future, as if more precise market projections will provide
the organization with a new identity.”
Stalled growth has huge implications. These conditions add weight to the already burdensome challenge of being a business owner. Don't let ego prevent you from welcoming an outsider's perspective to determine the causes. This is not the time for guessing and attacking what you “think”
are the contributing factors. Such an approach can delay recovery at best or accelerate the death spiral.
Want some help to define a new growth path for your metro Atlanta, Georgia business? Let's talk about it over a cup of coffee. Contact me here.
About the author. Mike Gomez is President of Allegro
Consulting, a growth specialty firm helping businesses plan and execute
aggressive growth strategies. He grew his very first client’s business
from $8M to $35M in just two years. Mike is a growth strategy and sales process evangelist,
prolific speaker, writer, three-time marathoner, a former military
officer and pilot of both aircraft and helicopters. He is also an advisor at Atlanta Tech Village and Four Athens Tech Incubator. www.allegroconsultant.com
Thursday, December 18, 2014
Friday, December 12, 2014
I received a call from a salesperson asking for advice as he struggled to meet his quarterly sales quota. I assumed he was calling looking for new sales techniques or particular guidance on moving a client to close. But this was not the case at all. Here is how the dialogue went:
Salesperson says, “I’m selling a product in a market where I have a competitor selling the exact same thing.”
I replied, “Same thing? You mean same features, same everything?”
“Are you more price competitive?”
“No, not really. We offer trade in of older equipment to bring the price down but so does our competitor”
“What about service?”
“Yeah, we do support the customer better than they do.”
”That’s good. But will your customer pay more for this better service?”
“Interesting, so tell me what kind of direction have you received from the owner of the business you work for?”
“What do you mean?”
“Well, given the market realities you’ve outlined, how does your owner expect you to win new business? Is he doing things to separate you from this competitor? For example, specializing in a certain niche (becoming experts and thus the preferred vendor) or using marketing and strong advertising techniques to build brand preference (aka, Colgate vs Crest toothpaste)?”
“No, the only guidance I was given was, “Treat it like it’s your business.”
Even the best salesperson will under-perform or fail under these conditions.
It is not the salesperson's job to identify target customers and invent ways to differentiate.
The role of the owner, President and/or CEO of a business is to equip your sales team with the tools to be successful. At a minimum this includes the following:
- A list of “target customers”
- those inline with the customer mix outlined in your short and long-range growth plan
- who match the profile of those who will value your product, expertise and/or differentiators
- The compelling story to support why clients should buy your product over competitors
- Who are the competitors the sales team can expect to face and what differentiates us from each
- A supportive marketing (lead generating, branding, demo tools, social media, samples, brochures, etc...) strategy
- The right sales tools and support (travel budget, conference attendance, CRM, bid and proposal, quoting, etc...) - tools that actually help the sales team do their job versus those that help the owner monitor the sales force.
In my 12 years of consulting "under-performing sales" has been by far the number one pain point with the blame typically placed squarely on the salesperson or VP of Sales. It is not long into the engagement when humility kicks in as the owner discovers it is their lack of a long-range plan, a clear understanding of what makes them different, a detailed knowledge of their competitors, and an ineffective or non-existent marketing strategy that are the real culprits.
Want to give your sales team the best chance for success? Let's talk about your metro Atlanta business over a cup of coffee. Contact me here.
About the author. Mike Gomez is President of Allegro Consulting, a growth specialty firm helping businesses plan and execute aggressive growth strategies. He grew his very first client’s business from $8M to $35M in just two years. Mike is a growth strategy and sales process evangelist, prolific speaker, writer, three-time marathoner, a former military officer and pilot of both aircraft and helicopters. www.allegroconsultant.com
Wednesday, December 10, 2014
What has always intrigued me about this is when I ask an audience of private business owners to raise their hands if they are at all surprised to find that Coca Cola has a 3-year plan. Or Boeing. Or Target. No one raises their hands. “Of course they do!”, they would say.
Yet when it comes to their own businesses - no plan at all. Remarkably, 90% of private business owners operate without a plan. The success/fail records support this. So, why don’t they plan?
Here are the 8 most common reasons I have heard for this shortsighted behavior.
(1) "I'd rather DO rather than plan." Clients have said they would rather do anything than plan. Fix a machine, support a sales call, talk to a supplier, or review a new website. In doing these things they get immediate gratification of accomplishing something, of solving an immediate problem for the team. After all, they rationalize this is the role of the President and owner, to solve problems, to be an expert on all matters and keep the business humming along. Right?
(2) "It’s just not possible to do any long-term planning for MY business, it’s just too dynamic and unpredictable right now." “Mike, you don’t understand. My business is different.” Then they will site all the chaos they are managing through. Employee performance issues, a customer cutting their order in half, an upcoming conference to prepare for, a new competitor emerging, and the list goes on. “In such an environment, how do you expect me to do any long-term planning?
(3) "Time spent on this is just not worth the effort." Citing reasons (1) and (2) they will rationalize that it just doesn’t make sense to spend precious time on this priority right now. Some will further justify this position by recalling an instance where a plan was produced only to sit on a shelf - never to be referred to again.
(4) "I don’t know how." I have had owners tell me they intended to do this for years. Some even locked themselves away and stopped taking calls for the sole purpose of crafting a strategic plan. They admitted only getting as far as typing ... “2014-2016 Strategic Plan” ...at the top of a blank Word document. They add that despite the fact there are numerous resources on the web for how to do this very important and impactful, cerebral activity “it is hard to have any confidence I am doing this right”. That’s not surprising. Building a quality, viable strategic plan takes experience just like any other discipline required to run a good company.
(5) "What if it’s not the right plan?" Here is the logic behind this excuse. A plan puts our company on certain path. If the plan is wrong the path is wrong and that could spell disaster. “No plan mean I have the maximum flexibility to adjust in real-time based on the real-time dynamics of the business.” I’d like to see a CEO of any public company give this rationale to their Board of Directors or a startup to their principal investors.
(6) "I don’t want to be hand-cuffed on how I run my company." A written plan means accountability. “Publicizing our plan means committing myself (the owner) to accomplishing certain things in certain timeframes, right?” Yes. “Me failing to meet written milestones may give others a reason to justify not accomplishing the tasks I assigned them.” We can’t have that now can we.
(7) "I’ve operated this long without a plan and it seems to be working for me." Why change? This is one of my personal favorites because I invariably find abysmal marketing initiatives, costly bad hires, and expensive, ultimately aborted excursions into new markets that would not have otherwise been pursued had they been operating to a plan.
(8) "I don’t have time." “I know I should but things are just too busy right now for me to do any planning. Maybe later when things slow down.” Hint: they never do.
As this year draws to an end you have an opportunity to reflect on your business and your leadership. What did you learn this year? About your competition? About yourself? About your customer? What did your company do well? Where are the weaknesses that should be addressed? There is no doubt you possess a wealth of quantitative and quantitative data - inside your head. But that jungled mess of important information benefits no one in there. The planning process draws that out and makes it actionable. And much like making a movie, the finished product becomes the actionable script for your business.
Want to build a growth plan for your metro Atlanta business? Let's talk over a cup of coffee. Contact me here.
About the author. Mike Gomez is President and CEO of Allegro Consulting, a growth specialty firm in Atlanta, GA. Allegro has been helping Georgia’s private business owners plan and execute aggressive growth strategies for over12 years. Mike is a strategy and sales process evangelist with a tool chest built on direct experience in sales ($10B) and operations. He is a prolific speaker, writer, guest lecturer at UGA and GaTech, Next Top Entrepreneur judge, and start-up mentor at Atlanta Tech Village.