By
Nick Miller and Charles B. Wendel
Sales productivity has become a major area of focus for bank managers of small business and middle market groups. Many are facing increased growth goals at the same time that they work within constrained budgets. More is expected of a sales staff that is typically the same size or smaller in number than last year’s staff.
While higher performance may be required, all too often the goals and incentives provided to a sales staff lack the support and context of a clear and consistent strategic message. Our experience indicates that sales success depends in large part upon senior management’s development and communication of a clear and consistent sales strategy to internal employees and external customers. Once a consistent strategy is in place, a structured sales process with strong direction and targeted compensation can result in substantially improved performance.
One former employee of an Internet company recounted that when he questioned his senior management about the company’s strategy they answered, “We don’t have time to worry about strategy.” That company has since shifted its marketing focus more than twice and faces at best an uncertain future.
While few banks would dismiss the need for a strategy, we often find that banks have not pushed their thinking to determine precisely why a customer should select them versus other players. Too often, managers rely on overused terms such as “relationship” while failing to define a clear value proposition or determine if their bank can actually deliver on the promise the value proposition makes to customers.
A successful strategic review process affords the opportunity for a bank to reject being all things to all customers. It incorporates making selections about the products/services sold and the target market(s) served; it requires a frank assessment of core strengths, rather than a glossing over of problems or mediocre offerings; and, it leads to trade-offs between different priorities and goals.
Some managers believe this exercise requires an arduous intellectual and analytical process with a payoff that could include an “indictment” of current senior management or, at a minimum, result in significant human resource changes. To some it seems to involve a ‘can of worms’ that they do not want to open. Others express the very practical concern that a major strategic exercise deflects focus from customers to the point that they might feel ignored and drift away.
Our view is that the value of a strategic refocus far outweighs potential negatives: a strong strategy can eliminate wasted marketing efforts, result in clear priorities, create a cohesive team, and provide an important feed into the credit decisioning process.
Strategy does not require a six-month process during which the company sacrifices its forward momentum. An accelerated six-step process over a two-month period can uncover issues that need to be addressed, achieve resolution of open items, assign ongoing responsibilities, and set a growth-oriented direction for a company. In many cases, what will suffice is a relatively short and focused exercise aimed at clarifying what differentiates your company from another provider and why a customer should work with you rather than a competitor.
One: create a small leadership/decision-making team. Several years ago, one of our projects began with the client forming a Steering Committee of twelve people. By the end of the project, that group had expanded to twenty. The group’s size was unwieldy to begin with and counterproductive in the end. In building a strategy, bank management’s tendency to reach out to many employees to achieve consensus should give way to the need for in-depth and knowledgeable discussion and the desire to demonstrate leadership. A group that really wants to make decisions should not exceed three-five members.
Two: agree on key issues to be resolved as part of the tune-up. Once the group is formed, its focus will be an important element to its success. What is the handful of key strategic questions that need to be resolved? Each business area will have issues that are unique to itself, although many of the topics will involve areas such as agreeing on optimal segments to serve, products/services to offer, and how best to manage multiple distribution channels. Quickly narrowing a list of issues into top-priority action items is critical for getting the strategic tune-up off the ground.
Three: determine key quantitative inputs required as well as qualitative inputs from employees and customers. The group should agree upfront on the inputs that it believes are most valuable in making its decisions. For example, what type of competitive analysis about industry best practices does it require? What key metrics require review? What information from the customer, either already in-house or not, needs to be assessed?
Four: agree on initial “answers”. Once the evidence is assembled, analyzed, and discussed, the leadership group needs to agree on its preliminary solutions. In effect, this can be as concise as a statement about the key segments that the group will serve, the value proposition to be offered, and the goals for the business. Behind that summary, however, the team needs to develop its details and rationale for the decisions made.
Five: test internally and externally. While the group ultimately responsible for decisions needs to be small, prior to cementing the strategy it needs to be “tested” with key internal and external audiences. The internal group includes those most involved in executing on the strategy. For example, in the small business world, the group would probably include not only small business personnel but also representatives of the branch system, alternative delivery groups, and human resources, among others.
During this phase, the leadership team’s involvement will be particularly critical to keeping the project on course and ensuring that “pot shots” are kept to a minimum. Again, ultimately, a small group has to make the final strategic decisions.
Six: refine and execute. Strategy is critical but insufficient without well-planned execution. In many cases, we have seen strategies endorsed by senior management and then die on the shelf rather than being implemented. Lack of management willpower and follow-through play a significant role in this failure.
We recommend that on day one of the strategy project, management designate an individual as its implementation czar. That person’s assignment will probably require a full-time commitment for the first few months and then can transition to part-time. The implementer should report directly to the highest levels of the bank to send a clear message concerning the importance of the role. After the high-level strategy development, this individual will work with management from each department to translate the strategy into specific tactical action steps.
Assuming a focused leadership effort, we believe that for most businesses it will take no more than six to eight weeks from the kick-off meeting to initial implementation. Of course, time frames will lengthen depending upon the depth of the analysis required and the extent to which management needs to fundamentally reconsider a strategy.
One key element of strategy implementation involves instituting a sales management system that encourages the field troops to concentrate on achieving the strategy’s goals. Our next column centers on creating and following a Sales Blueprint.
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