Strategy Is All About Revenue

This statement sounds obvious.

When you think about your respective corporate strategy, the choices you make are about driving sustainable revenue growth. For most corporations [large and small], the concept of strategic planning tends to feel more like the annual budget process. Correspondingly, budgets project revenues, but by their nature are more cost centric.It is strategy that compels customers to give you their money and it is your cost and operating structure that determines whether you will do it profitably.

What if your strategic choice is to be the low price player in your markets? Your strategic choice is still about the path to revenue. In this scenario, you need both advantages and effectiveness on the cost side of the model to achieve profitability. Volume and economies of scale tend to be key factors that impact both revenue and cost of the equation. Strategy is about choice, about what to do, but as importantly what not to do given everyone’s limited resources.

We get the opportunity to talk strategy, growth and revenue with hundreds of executives annually. The conversation inevitably ends up referencing the effectiveness of the sales organization and the impact on the three previous points. I always ask executives to rank [scale of 1-10] the current effectiveness of their sales organization. With a sample size of a few hundred, the average is 6. The root issues vary, but the themes are common.

There is a direct path between Strategy-Revenue Growth-Sales Effectiveness. We call this strategic flow. With the perspective that Sales Effectiveness is a large opportunity area, the first step begins with an acknowledgement that we can no longer live with the status quo. That is the starting point for change and the beginning of transformation.

The term Sales Transformation may sound daunting. We tend to view it more as a journey that begins with a thorough understanding of the current state. If you know where you are and have benchmarks of what “good” looks like, then developing the path to where you would like to be becomes a more sequential journey. We recommend making a series of small bets that build upon each other to both limit risk and create momentum through quicker wins.