Distributors are constantly talking about the need to transform their businesses from commodity-oriented organizations to marketing and communication service specialists. It’s a common and worthwhile goal, but there’s no roadmap (or even a starting point) to help most companies move forward along the path toward transformation.
McKinsey & Company took this issue to heart in 2015 when it analyzed 100 business transformations and surveyed about 2,300 executives. The consultancy then published an article that outlined six best-practice steps for business transformation. As the article points out, more than two-thirds of transformations fail, and consistently beating the market “takes superior internal capabilities, most notably commercial capabilities in marketing and sales.”
So, how can your company upgrade its marketing and sales activities to drive revenue and margin improvements? One overall key, McKinsey says, is to focus on people and processes rather than products.
If you aim to transform your sales and marketing efforts this year, the consultancy recommends these six steps:
1. Know where you are and where you’re going.
Success with any firm starts at the top, and it’s important to establish clear timelines for achieving goals. Owners and senior managers should articulate two or three key target markets or strategic initiatives their organizations should be focused on, how they’re going to meet the needs of these target markets and how they’re going to translate their actions into business impact.
2. Create a focused transformation team.
Change takes commitment. According to McKinsey, “The next stage requires the creation of a resilient transformation team.” This team must comprise the business owner, the head of operations and sales professionals. These people need to keep the entire organization focused during every step of the journey and track relevant metrics.
3. Score quick wins and build on success.
Transformations need to focus on initiatives that will have a quick impact. It builds the case for change. If you’re offering a new service (Web-to-print technologies, website design, warehousing and fulfillment, etc.), see if one of your loyal customers will test a new program with your firm. If you’re entering a new market, identify a company that will work with you on a shared risk/reward basis. Monitor the programs closely and share initial “wins” internally and externally. McKinsey elaborates, “This will show the skeptics that transforming into a customer-driven solutions organization is worth pursuing as well as achievable.” Sales and marketing staff members need success stories to share with customers.
4. Activate the organization.
Regardless of the size of the organization, commitment to change is critical. New habits need to be established at all levels, from the equipment operator to the vice president of sales. Top management executives must share the vision by communicating succinctly internally and externally. McKinsey says: “Imaginative communications are necessary so that everyone continues to sit up, take notice and act. Communication efforts should involve a wide variety of tactics, including internal and external advertising campaigns, social media and town hall meetings.”
5. Commit to coaching.
The McKinsey article points out that coaching involves more than tagging along for a sales call or conducting a sales pitch while someone watches. It’s about making a commitment to providing constructive feedback. Sales managers should act as coaches for salespeople, but the reality is that print providers rarely equip sales managers with the skills to be effective coaches. Sales managers have typically risen through the ranks because they’re capable of selling a lot of print, not because they’re good coaches. McKinsey recommends training sales managers so they can have difficult conversations and truly mentor their sales teams. Structured coaching programs with weekly contact between the coach and the salesperson are critical to changing behavior.
6. Hardwire a performance culture.
People tend to be much more effective if they know how they’re progressing against pre-established goals and targets. The best organizations will visibly track progress and share performance against established goals. Although financial metrics should be included, other areas should be evaluated as well. These areas include the number of new customers, growth in revenue from existing customers, the effectiveness of marketing programs in driving leads and customer satisfaction levels.
Putting the Steps into Practice
The print and marketing services industry is undergoing a variety of transformations, and the six steps McKinsey outlines are a relatable way to start the journey toward change within your own organization.
Making a commitment to change involves developing a strategic vision, building a team that’s committed to following through, identifying some quick successes, activating the organization, coaching and measuring performance.
Where are you on your journey, and are you taking the right steps to ensure successful change?