It is well understood in the modern age of rich data sources and powerful analytical tools, that precision and fine tuning to get the right balance in revenue levers – pricing, promotions, assortment, and trade investment – is a vital company capability in capitalising on revenue growth opportunities.

However, over the past decade, many consumer-packaged-goods companies have mastered the fundamentals, so core Revenue Growth Management (RGM) capabilities have become table stakes: companies can’t operate effectively in the market without them, but they’re no longer a competitive advantage.

To achieve an edge, businesses need to look at how they translate the science on paper into reality by galvanising their organisations, and operationalising the findings.

The numbers are sobering: in research by Bain & Co just one in nine companies achieved sustained revenue growth over 10 years, and 85% of executives blamed that shortfall on internal factors.

At PACH we believe four internal critical success factors are key for delivering real revenue growth:

1. Frontline focus

2. Empowering change

3. Agile and integrated planning

4. Clarity of decisions

Let’s explore these critical success factors a bit more:

1.      Frontline focus

84% of companies that work to improve their customer experience report an increase in their revenue. Yet only 1 in 9 companies excel (Source: DimensionData).

From frontline sales to CEO in the Board Room, at PACH we have worked client side for many years and in many different roles, so we understand how businesses in the real-world operate.  And because selling is part of our company DNA, we understand how key departments need to work together to optimise performance, and help sales deliver on agreed revenue growth targets.

A customer mindset is not a series of well-meaning short-term initiatives to satisfy the needs of important key accounts.

Saying you're a customer focused company and delivering on the promise with real conviction are two different things. At PACH we believe two key ingredients make the difference:

i) Leadership conviction to front-line through actions

A company culture driven by leadership overtly committed to the frontline, and a CEO who is constantly focussed on delivering more through the frontline, has a demonstrable benefit to both top and bottom-line results. According to the Economists Intelligence Unit 64% of companies with a customer-focused CEO are more profitable and deliver better revenue growth than their competitors.

The three key frontline focus leadership traits are:

ii) Interconnected sales process

A common company response, when confronted by weak sales results, is to jump to the conclusion that something is fundamentally flawed with the salesforce. Rather than blaming the sales rep, the more fundamental question should be asked:

'What can the rest of the organisation do to help the sales rep sell effectively?’

At PACH, we answer this by first turning conventional business thinking on its head, and analysing the problem through the lens of a salesforce, and how they engage (and are supported to engage) customers. At the end of the day, a motivated and productive sales person usually equals a successful business.

The sales process should be viewed as a total company responsibility, a multi-functional planning and execution effort, the culmination of which is a set of clearly articulated, manageable and specific objectives for the sales rep to go and action (see earlier article: 6 Golden Rules of a joined-up sales process (Link).

2. Empowering Change

At PACH, we do “Commercial Re-engineering through Empowered Change”.

We strongly believe empowered employees, will deliver better results. This is confirmed by Forbes Global 2000 study, which found during an 11-year period, only 10% of companies met their projected revenue and profit targets. A fairly damning verdict on the ability of CEOs to deliver on their strategic promise. The main reason cited for not delivering on targets was employees not buying in to the direction from leadership or owning the change required to deliver on key strategic initiatives.

Further research by Kotter identified that to benefit fully from a new strategic initiative, buy-in is required from at least 50% of all employees. They are empowered to effect the change because they understand the ‘why and how’, and are motivated to accelerate its execution. The study showed that the difference in economic results for companies that struggled to change quickly, and organisations that were much more capable in that regard, were extraordinary (although surprisingly only 5% of companies achieved this):

Empowering change comes in three parts when we engage clients. Each one is designed to help engineer an organisation that is committed to the change process in the longer term, and is self-sufficient.

i) Delivery through collaboration - Making it happen with your teams

If your people are engaged and motivated the result will be long lasting, so we believe in working alongside your people in teams, to build and deliver workable solutions.

ii) Stakeholder Management - Bringing the whole organisation along for the ride

We aim to deliver an energised and enthusiastic project team that delivers, and manage expectations of senior executives, so that they trust and believe they will

iii) Self-Administered Behavioural Change - by the people for the people

We empower the organisation to own the change themselves. We help them prepare a self-governing behavioural change statement of intent, and rules of engagement to deliver this with shared ownership.  

3. Agile and integrated planning

One of the main obstacles to businesses realising revenue growth is the traditional top-down approach to planning, and the distance that exists between strategy setting and revenue growth initiatives, and connecting with people that have to deliver the strategies to customers. Furthermore, the current crisis is forcing businesses to break this typical planning rhythm, an uncomfortable experience for those used to a systematic and planned way of operating.

At PACH we believe the solution can be found in two parts: improved organisational agility and better integrated planning.

i) Improved organisational agility

The essence of true organizational agility is the ability to be both stable, with certain organizational features that remain the same for long stretches, and dynamic, a rapid innovator, adjusting and readjusting resources quickly. The characteristics shown by these types of companies are:

ii) Integrated Planning

To fully integrate the RGM capability, companies must recognize that it’s the entire company’s mission to deliver value — not only sales reps and key account managers. Everyone is part of the revenue team: sales, marketing, finance, business development, operations and customer service. The entire team should collaborate to make customers successful, and realise the planned revenue growth.

At the heart of this is annual strategic planning process, which assesses past performance, addresses revenue growth challenges, adjusts strategies, and produces an operational plan setting out the direction and initiatives for next year. Each function needs to have a shared ownership of the process and the solutions it drives.

In order for the planning to be agile and integrated the following helps:

• Embrace sales fully in the planning process: give them an equal seat at the table

• Invite the extended teamto the revenue forecast meetings (marketing, finance, business development, sales and customer service). Get alignment with what customers are saying and what the team is seeing on the street

• Invite the revenue team to account plan reviews. Bring the best thinking around the table to remove roadblocks and craft the right solutions. Empower everyone on the team to have a voice

4. Clarity of decisions

In 12 years we have conducted 55 commercial assessments for different clients, with the objective of identifying key barriers holding companies back from achieving consistent levels of performance and revenue growth.  

One of the strong common themes between those companies that are struggling and those succeeding is clarity of decision making. This is supported by research (Bain&Co) which found that decision effectiveness is 95% correlated with financial performance.

Despite this, very few of us keep track of the decisions we make and how they turn out. Think of it: you track sales, you monitor prices, you collect info from field audits. But you don’t track the most important thing you do at work - the decisions you make.

As a result, most organizations are not very good at decision making. It's no surprise that a Forbes study of 500 managers and executives found 98% fail to apply best practices when making decisions.

At the heart of the debate around good revenue growth decision making is the need for good quality data and analytical fire power. But data for data’s sake is a recipe for confusion and inertia.  The real problem is knowing what decisions require which specific data, and who is required to make those decisions. Key revenue growth decisions generally cut across functions and departments, so understanding the different levels of responsibility, and accountabilities will be key to efficiently driving RGM insight in to action.

We have found that more successful companies do six things well with their decision making processes:

1. They articulate and document for each key business process (e.g. annual strategic planning, monthly operational planning, joint business planning), a limited set of decisions which drive the actions of all individuals involved.

2. They avoid duplication of decisions by

   • Developing decision matrices, allocating clear accountability for each decision: one individual makes the decision and one approves it, no more

   • Comparing decision matrices across different business processes, and eliminating any repetition

3. They map data and analytical work against the documented decisions, and anything that doesn't aid the decision is eliminated

4. They review the decisions regularly during meetings to determine if the team are making the decisions as agreed, and are adhering to the decisions that are made

5. They audit the decisions periodically (usually quarterly) to determine if the agreed decisions are driving productivity, and adjust, add or eliminate accordingly

6. They have a set of ground-rules which guide team behaviour towards how decisions are made. Example from one of our clients: