Advisory #17 - Sales vs Strategy - The Missed Opportunity

Are you a small to medium-sized business relying on sales tactics for growth because you haven't been able to put together a strategic plan?

Thought so.

But it's likely that this focus on short-term sales means you're missing out on the opportunity to grow your business significantly and sustainably for the long term.

Don't worry.

You're not alone.

80% of all the meetings we conducted in 2015 were with clients who did not have a clear strategy on how to grow their business.  More generally, of those that have a plan, according to Harvard Business Review, 86% fail to implement it effectively.

Let's be clear, when we talk about your strategic plan, we're not talking about a multi-page spreadsheet filled with comprehensive analytics and the ROI on market entry, nor are we talking about the extensive corporate presentation designed to appease the board and shareholders ... you know, the one that you work on for days, trying to work out what they want to hear and then never refer to it again after the presentation.

It doesn't have to be so hard to reach the next stage of your growth vision.

When we talk about strategy we are talking about an understanding of what your business stands for today, what you want it to achieve in the long-term and building a series of clear practical steps towards achieving that vision within your own capabilities.

Simple.

Our clients have no shortage of vision, there is always a clear idea of what success represents:

• to become market leader
• to expand into new markets
• to double the size of the business
• to take advantage of market conditions by developing new products & services
• to become leaner and more profitable

But, in most cases,  there is no straightforward step by step strategic plan to achieve that vision.

Our experience has revealed a consistent issue especially with our clients in creative services and broadcast media; that they have a tendency to adopt a short term focus on tactics to achieve revenue with little strategic or operational plan to support their long term business goals.

This is fine for us as it represents the starting point in assisting our clients to grow.  We help them understand their potential, assess any limitations or blockages to growth and provide practical steps to take their business forward to new levels of success.

In all cases, we assist our clients to develop a strategic approach that still delivers on their short term needs but introduces a framework that allows them to develop their potential for the long-term.

Here's an example:

We met a client that was seeking to enter a $30M per annum market with a disruptive product.  By looking at their business, we could see that they were fully equipped to successfully address this market immediately with their existing product set.  There was very little risk.  However, they had not fully understood the size of the opportunity in front of them and did not want to invest in additional resource.  So instead, they set their focus on a "safe and easy" $200k per annum subset of that market.   To address this, they took a tactical approach aiming to win a series of accounts through the networking skills of their existing sales team.

They will be successful in this but look at the missed opportunity; a lack of strategy and planning is sacrificing the multi-million dollar opportunity in favour of a best attempt at a share of $200k.

Which would you rather have?

Vision without strategy is just fantasy.  Your business vision can't be achieved solely by a tactical sales approach.

Of course, it's easy to be distracted by the day-to-day demands of our operations and lose focus on the long term strategy of the business.  This is exactly where it's possible to develop a 'blind spot' that limits the ability to see the opportunities in front of us.

So, where do you start to shift the focus from tactical to strategic without it all being too hard?

Answer this ...

• What is the true state of the growth opportunities in front of your business?
• What is the current operational health of your business? 
• What level of profitability do you need to maintain?
• What adjustments need to be made to your operations to support your growth plans?
• How will you bridge the gap between the capabilities of your business and the unique needs of your clients?

Once you can answer these questions, you are immediately focused on the long term health of your organisation and your short term goals will take care of themselves, packaged neatly within a sustainable strategic framework.

So, just as you don't become famous by making more friends, you don't make your business grow exponentially by focusing solely on short-term account wins.

We help our clients build a strategy for continents not just countries and provide practical steps towards long-term strategic growth so that success for you is not just about struggling to reach a quarterly budget.

Don't sell yourself short.

Once you can support your business vision with the substance of a strategic plan and know the steps you need to take to achieve it, you are no longer short sighted... the result is scalable, sustainable growth, achieved faster.

The Advisory Partnership assists its broadcast and creative services clients with operational strategy, 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

Sales vs Ops - Whatever happened to the operational review?
International Growth Cheatsheet
Case Notes: APAC Centre of Excellence

TAP Case Notes 4 - Latin America Operational Review

Client               A Global Advertising Technology Business
Service            Operational Review & Remediation
Result              300% Revenue Growth

Background

The client was a technology business that supports the advertising industry with distribution and asset management services.  The centre of their Latin American operations was in Miami with sales driven from their satellite offices in São Paulo, Brazil and Buenos Aires, Argentina.   

The Miami regional office had been a successful start-up, managing international TV delivery throughout Latin America and servicing the Hispanic market in the USA.  

Our client's strategy had been to roll out local distribution operations progressively to each of the countries in South America each of which were emerging markets for their services.  However, after a strong start, the business had faltered and lacked sustained growth and profitability.

Challenge

The client's head office in London sought our advice on their geographic expansion and our recommendations into why performance had slowed.  They wanted to know whether the business should be expanded, maintained or wound down. 

The Miami office had not delivered on its target of 25% year-on-year growth. The P&L was showing a loss of $200k per month and operationally the office was failing in its service commitments.  The business needed a plan to secure continued geographic expansion whilst containing the costs of any new operations.  

Approach

Our approach was to place ourselves on site to develop insights into the day-to-day operations in Miami and how it was serving the existing satellite offices in Brazil and Argentina.  We exposed ourselves to every aspect of the sales, customer service and support processes and analysed team productivity.  

We discovered that the problem was partly the operational structure and partly that the business was still effectively operating in start-up mode and had not been equipped to service the business it had delivered.  

Our solution was to review and revise the processes and operational structure with only a moderate increase in investment.  Our recommendation was to fully equip the business for the next stage in its growth and indeed to expand it as a regional 'Centre of Excellence' for the Americas.

Result

Our review of the P&L solved a discrepancy where the costs associated with the South American sales offices were being applied to Miami but the revenue was reported locally.  This resolved the reporting discrepancy proving that the business was much healthier than the client had assumed.

We uncovered 10% in annual revenue leakage which we solved by developing new processes to ensure that all services and products were billed accurately. Our implementation of these processes revealed that Miami could operate at 20% EBITDA. 

Our strategic review revealed that the client had failed to tailor an implementation strategy for the individual markets within South America.  

We outlined cultural and operational differences across the region and built a roll out plan that prioritised each market by value.  This provided our client with a framework to invest in their South American business development appropriately and to minimize risk by linking new expenses with secured sales. This 'secure' revenue would be sourced from pan-regional clients already held by the business.

Our structural review revealed a need to revise the operational structure.  The business was still being managed as a start-up and needed the processes of a more mature business. We proposed a new structure within an expanded business that would act as a regional 'centre of excellence' for the Americas. This met the client's growth objectives while negating the need to set up costly operations in each country state.

The Miami office now operates as our client's model for their regional operations globally.  Miami now services all their requirements within the USA, Canada and Latin America.  It has doubled its staff and tripled its revenue with planned growth to support an ambitious new USA business case of $30M per annum by 2016.

Post by James Douglas

www.theadvisorypartnership.com

What we have learned developing global operations in India, SE Asia and Europe are captured in more detail the following articles:

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

TAP Case Notes 3 - Global Ops Strategy

Client            Advertising Distribution Company

Service         Global Strategy Review - London UK

Result           70% Cost Reduction in Regional Offices

Background

Our client was a technology business supporting the advertising industry with distribution and asset management services.  Following a period of significant expansion, they understood that the strategy to roll out their broadcast services globally was neither scalable nor financially viable. 

The challenge of business development in the Americas, Middle East and Latin America could only be achieved through a different strategic and operational model.

Challenge

We were appointed to manage a diagnostic review of global operations and to prepare an international expansion plan that would provide a strong operating profit while removing the requirement to build new offices in each market.  

Specifically our client needed help in understanding the priority for geographic expansion as the lack of a clear regional strategy had created inefficient local operations with high costs and much duplication of resource.  They needed a solution where the costs would scale with the opportunity.

Approach

Our approach was to clarify the business strategy with senior management and test it against operational realities.  We produced departmental audits of Traffic, Broadcast and TV Production discovering that market expansion did not match the sales opportunity nor was there visibility of the expense to service international markets remotely.  

Additionally, poor market research and inaccurate data had produced a flawed business case.  This led to poor results from new markets and a reduction in support from the Board for further expansion.  Our approach provided the support for a cost effective operational model and a strategy to prioritise and manage global expansion.

Results

The regional strategy that we developed, organized the client's 30 offices to report into three ‘centres of excellence’ aligned by operational similarities.  These offices were given extra financial support, allowing their ‘satellites' to be maintained at 70% lower cost.  Regional functions were standardised, ensuring that global decision-making was faster and more collaborative.  This allowed faster and more efficient business planning while reducing overall headcount.  

Our review of the operational cost to service specific countries produced a model allowing the country-by-country rollout to be prioritised on existing business, confirmed prospects and existing outsource costs. 

Our strategic recommendations have delivered on the global expansion imperative and kept operational costs to scale with revenue growth.  Finally, we proposed a structured business case process that is now required before financial commitments to new markets are agreed.  This safety net has avoided further investments in unprofitable markets.

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

Sales vs Ops - Whatever happened to the operational review?
International Growth Cheat-sheet
Over Promise, Under Deliver
Partner Smarter, Grow Faster
International Strategy - How to Get an A in Geography