Don't Wait to Change
How many times have you asked yourself, “I wish I had acted sooner”? Unfortunately, far too often, especially when things are going our way, we choose to merely ride that wave even though inevitably, we know that wave will go flat and our fortunes will wane (perhaps sharply).
Instead, the time to prepare for change is BEFORE it’s absolutely necessary; after the fact, our changes are too reactive and less effective. So how do you know when the time is right for transformative change?
If your average sales cycles are 6-9 months in duration, then it should be obvious six months in advance of the revenue flattening that adjustments are going to be needed soon. Unfortunately, companies are often in denial about a flattening revenue trajectory, instead blaming the broader economy or other nebulous reasons for the ARR shortfall.
There are many reasons why revenue curves flatten, and most of them are due to flawed internal sales and sales forecast processes. Deals "slipping" when they were actually misforecast is a primary reason, as companies often cling to certain large deals in the forecast quarter after quarter, when, in actuality, those deals should never have been committed on the forecast. Too often, we want to sell to our customer when it’s convenient for us (e.g., the end of a given quarter), instead of when the customer’s compelling event drives the customer to buy.
Instead, we need to let the data tell us when we need to make adjustments. Do this in advance of the typical two bad quarters of denial, when our BOD forces change on us. It’s easy to make changes after the business collapses, but difficult to make transformational changes when we are seemingly hitting on all cylinders.
So, how do we effectively change our tires while driving and not get into a collision? Again, the data should tell us, well in advance, that change is needed. For example, if the economy is weakening, then we know we need to go “upmarket” faster, as the enterprise accounts will be focused on improved profitability, while mid-market accounts will be reluctant to invest in their businesses. But, does your sales process work well upmarket? Is it ROI-driven and predicted based on a customer’s compelling event?
There are many other possible reasons (some of which may be product related) that make transformational change difficult; however, if you wait until things are desperate, recovery will take much longer. I strongly encourage you to objectively think ahead — strategically and proactively adjust your plan, and resist the temptation to ride the wave. If you don’t, that splash you hear may be the sound of you crashing into the wave you thought you were successfully riding.
If you need help determining the timing and approach to transformative sales processes, please reach out to me at dave@moicpartners.com.
