The Tower of Babel

 The value of speaking the same language

DO YOU BELIEVE YOUR SALES FORECAST?

Have you ever wondered why it is so hard for organizations to forecast their business?  Why is it that sales people struggle to forecast IF they are going to close a deal and WHEN it will actually close?  Why is it so difficult to get other functions in the organization to believe what sales is telling them? How much pain (time, money, anxiety) does this cause in YOUR organization?

What if it did not have to be this way. What if sales, sales management, marketing, product management and finance all spoke the same language. What if the entire organization BELIEVED in the sales forecast?  How much time would be saved if the same information used to create the sales forecast was used to create the operational and financial forecast of an enterprise?  What if product management used the sales forecast to better understand the market and competitive landscape?  Would this add value to your organization?

THE INSPIRATION

Over the past 25 years I have worked with 100’s of Business to Business (B2B) technology companies, large and small, local, national and international, and without exception almost all suffer what I call “Tower of Babel Syndrome”. As you may recall from the Old Testament, the tower of babel is a story about man’s hubris and his desire to meet God. To do this, man decides to build a tower which would reach into the heavens. Not pleased with this idea, God deployed an elegant solution to prevent man from being able to build the tower. He simply made them speak different languages. Unable to communicate with each other, the tower was never completed. The work force was divided by language.

Today when people speak and we don’t understand them, we often call it babbling. I find there is a lot of babbling inside many businesses. Especially, B2B technology companies. What if you could eliminate most of the babbling within your organization?  Well you can and the solution is simple.  Create a language that everyone agrees is the ONLY language that will be spoken within your company. What could be more simple than reversing God’s strategy? Why not install a culture and process to speak the same language? You could then build any tower you want.  You would have a sustainable process and culture to drive growth.

ADMIRING THE PROBLEM

One of the greatest opportunities to create value inside a company is for everyone to speak the same language. Sounds simple, but think for a second how many disconnects exist within a typical company – within teams, across different functions, in different countries and time zones. Most organizations speak at least 4 distinct languages (business languages)  to manage their business.  Now think of your organization.  The following are four of the most common languages spoken within most B2B technology companies.

Language #1 : SALES AND SALES MANAGEMENT

Let’s think about sales:  The languages used to provide the status of the business of a sales person, sales manager, and “C” level executive are often very different.  What one sales person believes is an opportunity is often very different than what another sales person believes. Hours a month are invested to get people to speak the same language or merely to understand what we should expect to deliver (sell) in any given month. 

Language #2:  SALES & MARKETING

Why is it that the messages and tools created by marketing are often (86% is the norm) not used by sales?  Why are most leads generated by marketing not followed up on by sales? TRUST. Sales does not believe marketing understands the market. Marketing does not believe sales understands the message. Thus the messages created by marketing are not used, and the leads created by marketing are useless. Marketing is frustrated with sales waste of marketing investment, sales is frustrated with marketing for creating messages and tools that are a waste of their time.

Language #3:  SALES & PRODUCT MANAGEMENT

Without accurate sales data, the product management team completely discounts the pipeline as a source of market  information.  Rarely have I seen a Product Manager who studies the sales pipeline. Instead they rely on their own inputs. Products often get developed with minimal sales input. The sales force then does not believe in the products defined and developed by product management. We now have a sales force that does not believe in the products they are selling and a product team that does not believe in its sales force.

Language # 4: SALES AND FINANCE

With sales, marketing and product management speaking their own languages, the ability for finance to provide an accurate forecast is extremely difficult. Market valuation of an enterprise is greatly dependent on its ability to predict future results.  Consistent misses in guidance result in loss of confidence in management and lower enterprise valuation.   Again, excessive work is required to get numbers that are acceptable to finance and the executive team. Finance ultimately discounts whatever sales gives them and creates their own forecast.

The Rosetta Stone

Over the past 25 years, I have been fortunate to work with some of the best sales, marketing, product management, operations, and finance people in the market. Without exception, I have had to deal with this problem in every company I have ever worked.   Tired of the incessant reviews, weekly forecast updates, and quarterly operating reviews, I created a language and process for the sales force, to ensure everyone spoke the same language.  Once everyone in sales is fluent, we then trained the rest of the organization.   This language is called Smartketing.  If implemented and practiced universally across the enterprise, it will create as much value as any other initiative you can invest in.  I guarantee any sales person that has ever worked for me that if they learn Smartketing they will either make 20% more money or work 20% less time.  They choose; Money or quality of life.   Once you have the sales force bought in the rest is easy.  Smarketing can be any language you want it to be, HOWEVER, the following 8 steps must be implemented:

  1. All Sales people across the entire organization will use the same terms to define IF and WHEN a deal will close.
  2. Sales must also forecast whether they believe they will WIN or LOSE. Yes, asking sales people to forecast whether they will win or lose is essential. Why?  Because every deal has a competitor and best everyone understands a competitors position in the deal as well as ours. After all, no one wins every deal.
  3. Sales management will not “Hedge” the forecast provided by sales. Whatever sales submits to sales management is what sales management submits to marketing, finance and operations etc. Yes it will be wrong for a little while, but it will clean itself quickly.
  4. Marketing will agree with sales on the number/value of qualified leads and the criteria of qualification. Marketing will be fluent on the pipeline at all times and be responsible for assuring there is enough opportunities to be harvested by sales in the future. Marketing must understand they are a critical component in the sales process.
  5. Product marketing will use the sales forecast as one of the main data sources for understanding the size of the market as well as the competitive positioning of it’s products and services. This is another reason for forecasting the competitor’s chances of winning a deal.  Becomes a great asset for product management.
  6. Operations and Finance will use the sales forecast to manage production, delivery and cash flow. Sales ONLY forecasts when a deal will close.  Operations and finance must forecast revenue recognition. This is a critical distinction that must be understood and adhered to. Too often this is confused and sales is EXCLUSIVELY blamed.
  7. Forecast accuracy will be a core component to compensation for the entire organization.  NOT just sales.
  8. Gaps in accuracy will be reviewed weekly by sales and monthly by the rest of the organization to understand the root cause and the agree upon a solution to improve.

Yes, it sounds simple. Something that most leaders believe is already in place.  But it is not simple, and rarely in place.  Invest a few hours and see for yourself how many languages are currently being spoken in your organization.  You may be surprised how much babbling is truly going on.  And if that is the case, you have just found a great opportunity to unlock value.

Kevin Joyce is the Chief Strategy Officer for Piksel.  For the past 25 years he has led sales and marketing organizations around the globe, in organizations from $3M to $8 Billion in revenue across several industries, including Semi-conductor, Printing and Graphic Arts, Television, and Media and Entertainment.  During this time, he attributes Smartketing and speaking the same language as the key to the $2B in incremental enterprise value created within the organization he has worked with.  Mr. Joyce has a Bachelor of Arts degree in History and received his Executive MBA from Harvard.  He is a frequent speaker and writer on leadership and digital transformation.  Kevin Lives in Essex, Connecticut USA.  He can be found on Linkedin, Twitter and Skype.

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