Advisory #16 - Sales vs Ops - Whatever happened to the operational review?

Bring in the sales and the business will look after itself. 

Because it's all about the top line. Right?

But ... are you properly equipped to grow in line with your business plan? 

Are you confident you're creating the best operational environment to retain the business you've already won?  

Certainly in a fixed cost business, once your overheads are covered, then a sales focus will ensure that the bulk of revenue moves straight to the bottom line.  

But that's only half the story.  

Are your costs really fixed?  Can your operation be structured differently, delivering a better overall result?

Most managers, whatever their role, spend countless hours in sales meetings.  The year is punctuated with sales budgets, forecasts, re-forecasts and customer trends analyses. 

Every week there is a forensic review of sales performance.  

But the actions from these meetings are often tactical and rarely address the fact that the business is an ecosystem that needs its operation to function effectively to realise these sales targets.

We find our clients spend significantly less time spent on operational strategy than they spend reviewing sales results but it's vital to remember that any growth is dependent on a functional and effective operation to support it.

We believe that fine-tuning your operation will often be the smartest contribution you can make towards your overall business performance.  There is little point in winning business if you can't retain it through a stable and sustainable service operation.

So, below are the areas we believe you should review regularly to ensure that you create the optimum environment to support continued sales success.

Strategy vs Operations

Are you regularly testing your strategy against the practical realities of the market place to ensure that your focus is in the right place?

Do your projects and revenue initiatives align with your long term strategy or have you developed them organically?

We often see businesses polarised by those who have developed the strategy and don't know how to implement it and those who have an intimate understanding of the operation but aren't briefed on the company vision.  

The result is inconsistency on where to apply the most effort and a disparity across the business on what can be achieved and how.  

The solution is working with both sides to illuminate each of the contrasting viewpoints. 

Realigning the focus here can be liberating.  The solution is often to remove time-consuming projects that are proving difficult to implement which, in turn, frees up resource to concentrate on projects that will align with the strategy and deliver a greater benefit for the business as a whole.

Reporting

How do you measure your operational efficiency and effectiveness? 

Is your reporting relevant to what you want to achieve and are you sure that it is accurate?  

Reports can be interesting but not relevant.  They can be creative but not instructive.  

We once attended a 'party' that celebrated significant sales growth but their reporting had neglected to account for an earlier price rise.  In reality, their market share was falling, their drop in volume was hidden. They would only have discovered this once they'd had the full year effect of the price rise.  Perhaps too late.

If your business development plans include interstate and international markets, beware of transferring reporting data from one operational model to the next.  Even within the same industry, operational requirements are likely to be different from market to market and it may take more resources and costs to handle the same type of customer.

We always recommend a dynamic reporting model that takes into account any variables that may impact the performance of the business and the operational support it will require.   These reports both support and substantiate the ability to be nimble when changing market conditions require fast action and they make the best job of creating an environment where there are no surprises.

Structure

Is your structure working for you?  Have you ever completed an assessment of your departments to determine their effectiveness? Are you wasting money on staff that are no longer required?  Importantly, are you undermining your strategic goals with a lack of staff in critical operational roles?

A successful business can outgrow its structure at least every six months and a successful structure can expire and become limiting for a business very quickly.  

No one needs frequent upheaval but fine tuning of your structure is necessary on a regular basis.  

The team and structure that got you where you are today, is unlikely to get you through to the next ten market share points.  You need to be careful that your structure can scale to match your ambitions and doesn't simply meet this year's budget.  

A regular structural review, if handled well, will future-proof your business in the face of rapid market change, motivate your team and give you good news stories to communicate to the market.

Resellers & Partners

You may have a network of resellers to represent your brand in regional or international markets but are they representing your brand appropriately and most effectively?  

They may be meeting your minimum budget expectations but can they do better? 

We find that the remoteness of some resellers can lead to our clients underestimating the full opportunity that they represent. 

Most businesses do not visit their partners regularly enough to test their performance and ensure that they are taking full advantage of every opportunity.  

It's vital to check regularly that the deal that you originally struck is still valid. Perhaps market conditions have changed and you need to reassess the best partner for your business in remote markets.  Furthermore, it's in your own interest to monitor your partners, ensuring that they adopt approaches that are consistent with your own operational best practice. 

Products and Services

Do you consult regularly with your customers to find out what they think about your products and services?  Do you do this formally and independently ... or anecdotally? 

If you invite feedback, how do you retain this information and process it into your operational plans and product development strategies?

Never be complacent that your products and services are still relevant to the market requirements today however unique they were when you launched.   Wherever you are on your growth curve, you need to continually build on that success and ensure that you remain relevant.  

We find that uncovering small pieces of customer feedback and implementing practical remedies can remove some of the limitations a business is experiencing in performance and can often deliver significant change for the business on the revenue side.  

Sometimes the solution is as simple as ensuring that the delivery matches the 'pitch' and that everyone in the organisation is aware of the business strategy and that the whole organisation is communicating consistently with the market.

Competitive Review

A confident business will have a clear strategy that is focused on the future development of the business. You lose focus if you spend too much time looking over your shoulder at the competition but remember your competition exists because it's doing something interesting in the market place; things that may challenge you in time. 

You need to be aware of the strengths and weaknesses of your competition and compare it honestly against your own business to be able to compete effectively. 

This means at least an annual review of your competitors is essential.  The review requires you to to be brutally honest with yourself, developing an external perspective on your business and focusing on what's genuinely good about your competition.  Why do their clients buy from them in preference to you?  It's not always about price.  Often an independent review will help you develop these insights with most clarity.

Conclusion

In an established operation, it's important to challenge thoroughly all your existing operational processes to ensure you remain competitive and relevant.  It's equally necessary during periods of change that you continually fine-tune your operation to ensure that it will fully support your organisation as it develops. 

Operations should never be defined as separate from sales, it is simply the other side of the same coin. Your business is a single ecosystem.

So whilst it's right to be focused on revenue, it's vital to understand that it's only through a well managed and effective operation that you can hope to achieve sustainable sales growth.

The Advisory Partnership assists its broadcast and creative services clients with operational strategy and review, delivering outputs that are sustainable and scalable to meet the challenges of technological change and international growth.

Post by James Douglas

www.theadvisorypartnership.com

More from us:

International Growth Cheat-sheet
Over Promise, Under Deliver
Partner Smarter, Grow Faster
International Strategy - How to Get an A in Geography

TAP Case Notes 1 – APAC Centre of Excellence

Client      Global Advertising Technology Business 

Service    International Strategic Development

Result     Creation of APAC Centre of Excellence  

Date          2014

Background

Our client was a technology business that supports the advertising industry with TV distribution and asset management services.  Following our strategic and operational review of their existing operations in APAC, the client accepted our recommendation to create a joint venture with an existing Asian partner to service the region. This business already had a long standing relationship with our client; it serviced their print advertising distribution and had an operational footprint in Malaysia, Singapore and Hong Kong. 

The project was firstly to relocate the client’s APAC operations from Hong Kong and secondly to form a regional ‘centre of excellence’ in Malaysia to allow for expansion throughout the region.

Challenge

Once the regional office was established, we were appointed to provide the framework for the client to roll out their service to 17 Asian markets generating USD $23M at 48% EBITDA within 3 years.  Our role was to ensure that the Asian operation was fit for purpose both as a regional head office and as a ‘centre of excellence’, able to lead the direction of the business in the region.  We were required to implement the best of the client’s international experience while ensuring each Asian market's unique processes were fully understood.  

At the same time each of the 17 markets were transitioning from analogue to digital TV services so, with an industry in flux, we were required to include strategies for change across a number of markets with diverse, cultures, languages and processes.

Approach

We had already proposed the client’s global and regional models and had completed the transition of the Hong Kong office from a regional to a satellite sales office so we understood the task. 

To build the centre of excellence, and to meet the growth challenge, we appointed a ‘SWAT Team’ sourced from the client’s most successful operators worldwide.  This team was important to help with the digital change required within the region and to quickly instill values consistent with the rest of the the client's business.  We then focused on hiring an experienced local leadership team to build credibility and deliver the skills to quickly deliver transactional revenue.  We ensured that the model we prepared was scaleable and easy to replicate on a market-by-market basis throughout Asia.

Results

The relocation of the regional office from Hong Kong to Malaysia created a strong regional centre through which the client could direct its regional growth.  Despite obvious disruption, no customer was lost in the transition of the operation from Hong Kong and within 6 months, the Pan-Asian operation was servicing markets in Vietnam, China, Singapore, Thailand and Hong Kong.  

Asian business sourced from the client’s global client network could now be managed through Malaysia, and each of the client’s country operations can now sell Asian broadcast services to their local clients.  This was a significant win for the client who could add Asia to their many international proposals and tender requests a potential revenue lift of 20%.

Initial revenue was not however as budgeted. This was due to the TV product having limitations in dealing with local business issues specific to Asian markets.  However, we prepared a product review and business case for interface changes that is scheduled for completion in 2015.   Revenue is forecast to meet expectations by June 2015.

The Advisory Partnership assists its clients with operational strategy and structural change, delivering outputs that are scalable to meet the challenges of technological change and international growth.

Post by James Douglas

www.theadvisorypartnership.com

Other Posts by The Advisory Partnership

Upscale your International Growth
Over Promise, Under Deliver
Partner Smarter, Grow Faster
International Strategy - How to Get an A in Geography

Advisory No 13: Going "Glocal"

The Advisory Partnership reports on how to get the balance right when your global strategy meets local reality. http://bit.ly/TAP-APAC13

Glocalisation is the ugliest of buzzwords. It’s neither easy to say nor easy to implement but it’s an important concept to be aware of for any business that is planning geographic expansion. 

We understand globalization as a modern reality and we have affection for localisation as something personal, more intimate and somehow just a little more right.

Not surprisingly, the process of glocalisation is a hybrid of the two where a global product or service is transformed to meet the needs of local consumers. In simple terms, it’s where that international supermarket chain comfortably becomes our corner shop.

The trick in a successful implementation of a glocal strategy is the transformation process and how much attention is really paid to the 'local' part.

The glocal approach is often criticized for its long-term ineffectiveness. Bloomberg Business Week highlighted the weakness of a system that allows for the flow of innovation in only one direction; from the headquarters of multinational corporations out into the world. They said that whilst glocalisation suggests an understanding of local conditions, in reality, glocalised goods often have little local relevance and overlook the specialized behaviours and cultural specifics of local markets.  

They are right.

Research shows that whilst there may be an initial surge in sales for newly adapted products, in time, local markets lose interest due to poor adaptation and come to see it as just a cynical gesture towards the local market.

Glocalisation will always fail if it forgets the concept of local when rolling out a service that has worked well in a different region for a unique population. 

Glocalisation is however an economic reality and a necessary part of today's global expansion strategies. So, for us, it will only be successful when we take the best of both worlds: trading on our international success whilst truly understanding and respecting the uniqueness of local markets.

Rather than take a top down approach from multinational to local, we’re best to use our international skills and experience to fully understand the needs and requirements of the local markets first.

So be careful to focus on the end-user customer first and then restructure your product or service back till it meets the core. 

As a key part of your strategic plan, be sure to get out of your office headquarters and experience the local markets as fully as you can. This way you will achieve the best of both worlds: a global product enhanced with regional input and a local product reinforced with international experience.

Aligning our strategy this way, creates both sustainable reach for international products and services without the need for insensitive commercial colonisation.

 The Advisory Partnership assists its clients with business development strategy, delivering outputs that are scaleable to meet the challenges of technological change and International growth.

Post by James Douglas
www.theadvisorypartnership.com

Related Posts by The Advisory Partnership 

International Growth CheatsheetOver Promise, Under DeliverPartner Smarter, Grow FasterInternational Strategy - How to Get an A in GeographyThe Traditional Office is an Endangered Species

Advisory No 12 - The Traditional Office is an Endangered Species

You’ll notice a common theme if you stroll the central business districts of many of the world’s larger cities.  There are increasing numbers of premium office spaces being turned into luxury apartments.  

Of course there are practical considerations here, both technological change and the cultural change that favours renovated warehouses as workplaces can mean that many of our eighties-style office blocks are now redundant and are preferred for housing over business.

This change may however be the development of a major shift in business culture to us working remotely or "teleworking".  Indeed it’s entirely possible that the office of the future is not an office at all and is likely, for many of us, to be a place where we meet, exchange ideas and tasks, and then complete our working day at home.  

The end of the traditional office could well occur during the course of our careers and we have to be ready to adapt our operational systems and processes accordingly.

In the USA in 2012, 2.6% (3.3 Million people) considered "home" their primary place of work. (Source: Global Analytics.com).  This figure had grown by 80% from 2005 and continued growing even when the workforce declined in 2011-2012.

In 2013 the Australian Bureau of Statistics concluded that 24% of Australian workers spent at least part of their time working from home.

In that same year the Australian Public Service Commission Employee Survey found that 80% said working from home ‘increased work and life balance’ with 69% saying they were ‘more productive’.  

Interestingly, these Australian teleworkers had higher employee engagement, worked longer hours and had fewer sick leaves.  This is not at all surprising considering they get to give up the daily commute and put some extra quality hours back into their working day.  The Australian Government now has a target to double the formal teleworking workforce by 2020. (telework.gov.au)

So, teleworking should be embraced because what any manager wants is a fully engaged productive workforce who are happy and committed in their roles.

Technology has enabled this flexible work practice and the widespread availability of mobile and cloud technologies now has most of us connected to our workplace 24/7.  It's practical then that only way to make the 24/7 work culture sustainable for us personally and professionally is to have the tools to take some time back for ourselves while still operating in the reality of modern business.  Teleworking is part of the solution for this.

Teleworking is both empowering for the individual and productive for our businesses.  

As managers and business owners we have to be ready for this inevitable change in our operations and ensure that we have adapted our processes accordingly.  

We need a management structure that recognises our increasingly fluid teams and, at the same time, we need to ensure that there is increased formality and accountability around roles and responsibilities.  We need to keep our project management tight and our meetings formal, structured and action orientated. 

By recognising this change and working with it,  we win all of the benefits of an engaged motivated team and less of the risk around lack of accountability with a mobile workforce. 

The Advisory Partnership assists its clients with operational strategy, delivering outputs that are scaleable to meet the challenges of technological change and International growth.

Post by James Douglas
www.theadvisorypartnership.com

Advisory No 10 - Business Development - Partner Smarter Grow Faster

A growing international business needs new staff and lots of them.  

It needs to have tried-and-tested suppliers to provide the products and services that it can’t deliver itself and it needs them fast.  

And it needs strategic partners to help extend its geographic reach and to build a network of customers that will deliver on the business plan.

What these three categories have in common is that every growing business is reliant on people and partners to deliver its growth plans.  

For start-ups and developing businesses, having the right team around us is critical to our growth success and it’s definitely not the time to cut corners.

As managers it is likely that we are busier than our peers of 10 or 20 years ago and the speed at which we are required to make important business decisions is accelerating. When we are working in start-ups, this pressure can be ten-fold.

However busy we are, it is essential is that we appoint any new relationships with care whether they are our staff, suppliers or strategic partners.  This is because our own success is ultimately reliant on the partners that we choose to represent us. 

Our partners success is our success and their failure is ours to own.

It’s tempting, but we should never make our decisions based solely on the candidate that we know well or is closest to hand.  In the rush to start-up and grow our businesses we often quickly grab our former colleagues and partners as a short cut to establishing a new team. 

Remember that we don't achieve something different for our business simply by replicating an old model so it’s important that our new partnership appointments are still given due-diligence and tested against alternatives in the market.

No decision is a valid decision until it can be compared against alternatives. A choice of one is not a choice at all.

It's always wise to properly review alternatives as the sanity test to your preferred partnership choice and it's is time worth investing as it provides clarity, validates your final decision and supports your position for any future conflict.  Most importantly, you develop a balanced approach as you are forced to consider the negatives as well as the positives of your preferred partnership choice.

The pressures of establishing and growing your business are tremendous but be careful not to blindly choose old partners for your new business development.

Be open minded to change. 

When we take the time to fully review and make informed decisions on our business partners there’s every chance that growth will come stronger and faster than if we select solely from our inner circle.

The Advisory Partnership supports broadcast media and advertising businesses with their strategic and operational expansion into new markets. 

Post by James Douglas

www.theadvisorypartnership.com