I have felt for a long time that organisations have fallen way behind the ability of their professionals and supporting delivery tools to deliver in the areas of sales and marketing, driven by a fear of major change, legacy functional attitudes and processes - and above all the lack of knowledge of their business, lack of overall functional breadth and short termism of the current breed of CEOs which prevents them from implementing needed change.
They cannot directly relate to all the key aspects of the company and become "dependent on their advisors". Machievelli had a lot to say about such people. Its also no longer "about the business" but about personal reward systems and management by analyst which attracts the get rich quick management working on a far shorter time frame inside the natural period icity of the business - so mismatched to the busines, its market and its employees.
This effect is reinforced by the simultaneously ossifying and destabilising effect of quarterly EBITDA, management by analyst to create stock churn and the reward schemes of most C level managers geared to the market not the business - short term personal gain, a process which effectively asset strips viable businesses before their time - and is avoidable.
Only the strongest most capable management with a total grasp of their business and the financial markets can resist the considerable pressures to do the wrong thing for a quick buck - or to make some factional stakeholder interest happy at the expense of the overall business.
This is about the typical industrial marketing company many of us know, , with the mass of also ran managers, not the better examples of leaders who prove you can get it right over an extended period matching results with long term business position - like Lou Gerstner and Jack Welch.
This effect has damaged business efficiency through boom and bust cycles and also inhibited the progress which has been possible for ten years - and still overhangs the market.
I'd like to expand this discussion, even present it as a challenge at thought leading seminars - if you have one and are interested? I also work on sales and marketing audits and implementing change for individual businesses with colleagues in the consumer and B2B sectors.
======================THE DETAIL============
Tom Peters reportedly said if the systems available for business improvement were fully implemented "....the gutters of corporate America would be running in blood". Good line, and summarising a huge missed opportunity if implemented in full .
Why don't BPR, CRM and other technology based systems improvements realise their full potential for business - and what does Tom Peters mean?
Its a fundamental business problem of people vs. process and technology, but in this case flexible process and technology and inflexible people.
Initiatives to change business to adapt to changing markts - and cyclic positions within them - fail because implementing them fully mandates horizontalising the organisation's resources and power structure to realise the promise of Matrix organisations - by really putting power where its needed when its needed, opening up and redeploying traditional functional silo resources flexibly -
according to customer and business priorities rather than internal functional priorities. This requires moving power from the functions, removes the craft based excuse-creating hand over interfaces between the functions and their internal departments - AND reduces or negates the absolute power of C level barons to allocate head count and budget to products and services as best suites their internal interests, measurements and reward structures.
Until recently there wasn't another easy way to manage, product groups may have had P&L responsibility but had little direct power to affect it, that lay with functional directors. Under this regime most business sold technology to customers and so called marketing supported this, it was product marketing (ex-engineers with cool technology) and sales who were rewarded for persuading customers to buy it, either through indirect or direct sales channels, decided by the sales function.
Marketing was limited to basic marcom - events, collateral, hospitality, customer visits. The classic Sales and Marketing Director with his marcom girls - doing what they are told to support sales. In some cases marketing manages strategic partner and analyst relations, but more often partnering is done by sales and marcom fails to deliver at analyst relations level because the people employed to do this did not have the strategic understanding of the business required to present it properly, neither do the people available to them - often only the CEO has that level of understanding - if there is anyone at all.
Today there are the systems available which allow a business to engage its customers led by what it offers them, delivered as efficiently as possible - rather than presenting its internal structures and corporateego/cleverness to market as a brand proposition.
But the leaders of well entrenched functions currently command the resources and will always resist greater transparency and controls. To overcome this requires a lot of CEO grip and support. Good news is support exists in the professional leaders beneath the C level barons, still keen to realise their potential for the whole business, so its more a question of HOW? and WHEN? than WHETHER? We have seen the enemy, and they are us!
So, onwards to doing it, carefully........
Virtualisation of the business using modular information and organisation is key. By breaking it down into modular components and re-organising modules around core business objectives the functions become more flexible, responsive, transparent, and crucially more measureable and accountable to the business = CEO and Chairman.
Modern enterprise systems create the possibility to establish and measure such joined up management approaches, and dashboards can be created to deliver the information required - as long as they represent real activity and people's daily objectives and rewards it will work. Once created it can quickly be changed to meet new needs. Only the chief executive can deliver this.
No doubt a few smug winners already do this and stay schtum.
By virtualise I mean individual delivery groups - measured by product, service and whatever organisational overlay the data capture schemes can make possible. Custom groupings, standard configurable tools.
Such visibility and control really hurts traditional functional manager's power bases by making their operation transparent and measurable, so has always been resisted. Change needs firm but careful deployment by persuasion - or decisive conquest and assimilation where necessary. While functional heads will resist, again their leading professionals who actually do the work will see the benefit and welcome the change if allowed.
Using this "thinking support" and with a united CEO/Chairman front a CEO or President CAN successfully deploy the full BPR required to realise the substantial business gains possible with modern systems, gradually taking the people who matter with him, changing the culture as he goes, consolidating key information and delivery areas quickly into the new approach to open up and eliminate silos - and removing obstruction if it will not be assimilated, or says YES then obstructs.
My business is in advising and mentoring businesses creating such new opportunities and competitive advantage in changing markets. I focus on the sales and marketing aspects of necessary change and discuss this further below.
In particular this approach works very well for B2B businesses, which traditionally have not had the budgets to create the fully integrated marketing possible and essential in channel dependent retail/consumer markets. A further associated problem is B2B typically employs a direct or semi direct sales force - always forcing the business into hurried short term ad hoc "marketing" = events, new collateral, a Golf tournament and Ad Hoc lead generation. The CEO may also be from this inclination, in this case the problem can only be solved by a Chairman.
In pure channel/distribution based operations - almost all fmcg - the problem immediately vaporises, because marketing pull and brand value is crucial to success.
I have proved in real businesses that merging the resources and activities of sales and marketing improvements can deliver lasting short and long term effect as one of the key benefits of business virtualisation. This is also the best place to show the benefits of the BPR today.
As distinct from other line functions there has been little progress in sales and marketing management approaches and processes, yet there is no real separation between sales and marketing objectives, just the timescales to meet the objective of selling more of what makes a profit, and the difference between marketing acting to benefit the business or marketing group and sales acting for personal gain in enabling and enacting a sale - within a very close knit team.
Hence Smarketing - smart sales and marketing.
I believe this consolidation is the way all successful B2B market engagement will be in the future.
While the same approach can apply between engineering and production, distribution and production, etc.. a lot has already been achieved in procurement, production and distribution using MRP, ERP, SCM, etc. - over many years steady evolution. This has been assisted by infrastructure migration from mainframes to distributed and virtualised IT infrastructures
nb: sorry non-techies - from big iron in a machine room programmed and operated by Morlocks using one off systems for job protection evolving to lots of cheaper powerful computers exchanging information in real time on a high capacity network using packaged commercial software configured to meet business needs - so all parties can work together on closely connected business systems in real time and be re-allocated flexibly as require.
This success has not been realised consistently or fully for CRM etc. in sales and marketing, for the reasons above.
IT already did their bit in the 20th Century, internal functions have deployed systems and adapted organisations well. The opportunity to exploit new processes and organisation to realise similar benefits in sales and marketing isthe next big opportunity.
Its at the customer interface the most work now needs to be done to improve, and its the organisational and management issues that need fixing now that the tools are there, a 21st Century management approach to realise 20th Century Business advances.
Are you ready for it? To be continued (and shortened ?) © Brian Catt 050405
Labels: sales marketing change BPR transformation
