McKinsey: 7 Reasons Why It’s Time for Lean Sales
A recent article from McKinsey & Company lists seven ways that companies whose sales are growing faster than their industry peers have more advanced marketing and sales capabilities than their industry peers.
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- Knowing what needs to be fixed
- Targeting the capabilities that matter the most
- Not trying to do too much
- Tailoring the approach to the company’s stage of development
- Thinking institutional capabilities, not just individual skills
- Having an operating model to keep it all running
These conclusions are based on a research study that included 15,000 employees and 140 global businesses, according to McKinsey. It makes a case for incorporating the rigor of lean into sales and marketing organizations.
The lean-manufacturing revolution profoundly altered the business world as companies reinvented how they built things to be more efficient and productive. Click To Tweet
The lean-manufacturing revolution profoundly altered the business world as companies reinvented how they built things to be more efficient and productive. We believe it’s time that companies apply that same level of scrutiny and commitment to marketing and sales. Our research is increasingly clear: companies with better marketing and sales capabilities grow faster.
– McKinsey & Company, March, 2015
While this study establishes worthwhile objectives for organizations to pursue, the article does not describe in detail how companies can progress from where they are to this more ideal state. In this article, I will expand on the ways that organizations can enter on a path to achieving all of these objectives McKinsey lists, through making a “commitment” to the “scrutiny” that the new Lean Selling model provides.
Our findings were clear: revenue growth at companies with more advanced marketing and sales capabilities tended to be 30 percent greater than the average company within their sector.
– McKinseyOur findings were clear: revenue growth at companies with more advanced marketing and sales capabilities tended to be 30 percent greater than the average company within their sector. Click To Tweet
Viewing marketing and sales as an investment, not an expense
Lean in general, and Lean Selling specifically, recommends that companies invest, both money and human capital, in improving their selling processes. It further suggests that we look at the efforts that Sellers make as investment in Buyers, who then become a company asset that is either monetized or wasted.
[I]nvesting to build a carefully chosen group of marketing and sales capabilities can yield a massive return—as much as five or ten times that of an investment in hard assets.
– McKinsey(I)nvesting to build a carefully chosen group of marketing and sales capabilities can yield a massive return Click To Tweet
Knowing what needs to be fixed
Lean Selling suggests that the activities Sellers engage in with Buyers should be viewed as a process. It further asserts that a company’s sales efforts must be considered a process in order for an organization to have the opportunity to improve and optimize selling investment. Viewing sales as a process allows for the applications of lean approaches such as kaizen, or improvement initiatives, which identify the “current state” and the ideal “future state,” identifying key issues that are hindering the process.a company's sales efforts must be considered a process in order for an organization to have the opportunity to improve and optimize selling investment. Click To Tweet
Targeting the capabilities that matter the most
Lean Selling uses lean methodologies such as policy deployment to assess the value and risk of pursuing various improvement initiatives. This helps with prioritization of improvement projects. Investment decisions can be made more quickly by consensus agreement based on presenting the risk / reward relationship in an objective way.
Companies tend to invest in capabilities without thinking through which are likely to have the most impact or are most important to beat the competition.
– McKinseyCompanies tend to invest in capabilities without thinking through which are likely to have the most impact or are most important to beat the competition. Click To Tweet Significant, lasting competitive advantages are the result of many small improvements over time. Click To Tweet
Not trying to do too much
Lean approaches prescribe an incremental approach, similar to a scientific experiment. Significant, lasting competitive advantages are the result of many small improvements over time. Lean Selling similarly emphasizes testing long-held beliefs about the value companies provide for their customers, and the nature of Buyer and Seller relationships, to make sure these assumptions are true before embarking on a grand plan of reengineering the sales organization, based on faulty premises.
Tailoring the approach to the company’s stage of development
Every improvement project undertaken using Lean Selling approaches will be customized to the organization that pursues them. There are no cookbook or “off-the-shelf” solutions that Lean Selling force-fits into an organization. As such, Lean Selling improvement programs naturally consider the capabilities of a company’s sales and other internal functions, including the maturity and tenor of its culture, when making decisions about which improvement initiatives to pursue and how to pursue them.
Thinking institutional capabilities, not just individual skills
Lean Selling is clear that a focus on individual skills to the exclusion of process improvement is one of the artifacts of twentieth-century-industrial thinking. Relying on individual skills instead of the overall capabilities of the group leads to suboptimal performance for the organization and makes it difficult to scale growth.
Individuals leave, but companies need to sustain capabilities over time. Click To Tweet
Having an operating model to keep it all running
Lean Thinking provides an elegant and closed-loop, “operating-system,” a way to help ensure that there is no regression from improvements already made. Emphasizing the twin pillars of creating the infrastructure necessary to monitor key metrics and institutionalizing a culture of continuous improvement, Lean Selling investments and improvements can be part of a self-sustaining “system.” This is because continuous improvement has a “bottom-up” approach that delegates ongoing process improvement to those who execute and benefit from it, as well as empowering these individuals to do so.
About: Robert J. Pryor is a CEO, author, speaker, educator on cutting-edge sales processes, and community builder for Lean Selling. His new book is Lean Selling: How to Slash Your Sales Cycle and Drive Profitable, Predictable Revenue Growth by Giving Buyers What They Really Want. Follow on Twitter @LeanSelling.