The Jamison Group

The symptoms include a broad-based, defocused sales and marketing effort that never says "no" to a prospective large deal, and a development effort that is continually whipsawed from one top priority to another, with resources spread like peanut butter across numerous unrelated efforts and subject to constant reallocation based on the top sales opportunity of the moment. Top management may well defend the fecklessness, believing that breadth is necessary to grow revenues, but the resulting confusion and inefficiency in the development team destroys any hope of profit or of building long-term differentiation.

Counter-intuitively, the failure to put wood behind a single arrow actually impedes sales and marketing by making it hard to create a brand identity or perception of leadership and failing to support an informed sales team that can clearly articulate the organization's value proposition and differentiation for any one segment. Although I have seen some quite profitable ventures mired in this practice of chasing every deal that moves, I have come to think of it as a corporate form of hand-to-mouth behavior - a scramble for revenue irrespective of cost. As corporations around the world batten the hatches in hopes of weathering the current financial storm, there is the risk that tight times will exacerbate this tendency in the name of survival.

Happily, there is hope for organizations suffering from what I have come to think of as "Hand to Mouth Disease." While the challenge is common, it is by no means universal. It can be overcome through disciplined planning processes. While such processes may seem like a luxury in tough times, in fact it is even more crucial that companies streamline and develop ruthless focus on their most strategic market opportunities when times are tight and resources scarce. These days are no time to neglect the advice of Jim Collins in his business blockbuster Good to Great, which advocates that every "to-do list" must be accompanied by a "stop-doing list," and that the "stop-doing list" is in fact the more critical of the two.

"Zero Baseline Budgeting" (ZBB) is a practice many companies use to ensure they have the resources necessary to fully execute their plans. The methodology is simple, although it is by no means easy. The management team creates a list of all proposed programs in one column, and a tally of the resources required to successfully execute the programs in another column. The programs are ranked by priority. Of course that's the hard part, as it requires all disciplines to develop alignment around the organization's longer-term objectives. Programs that fall "below the line" where the resources run out must be discontinued. The list is revisited whenever market conditions change significantly (but not every time a new deal is encountered!). It is also important to note that the objective is NOT to decide how the resources can be "peanut buttered" across every known opportunity, so that an illusion of progress on every front is maintained, but rather to make tough-minded decisions as to which activities will be fully funded to ensure success, and which will be pruned out entirely to make room for them.

If you are responsible for the development effort and your company does not practice disciplined planning processes, you may be feeling very alone. Sales, marketing, and possibly even top management seem to demand each and every product and/or service possible in an effort to increase the top line. If that is your situation, there is a lot you can do to help. Ask the following questions, and demand well researched answers:

                                 • Which of the products we are working on are more profitable for us, and why?
                                 • Which of the customers we are supporting are more profitable for us, and why? (I have                                     seen several cases in which a company enslaves itself to the dictates of a single large                                     customer with deep pockets, without critically evaluating whether the ROI is actually                                     positive on all the custom modifications the customer requires.)
                                 • What are our investment priorities for the future, and why?

Clearly it is not realistic to give the sales team the message that they should go after any deal / customer they can find, expecting that the rest of the organization will somehow address the highly varied product and support requirements that will follow. A disciplined planning process is needed to get top management and all the functional leads aligned on where the company is going to focus. Then sales and marketing efforts must be directed accordingly.

The payoff will be large and will come from many directions. Synergies will increase across the development and support teams, resulting in increased effectiveness. The entire organization will come to understand the customer better, resulting in a crisp definition of key problems those customers experience and ultimately, more compelling solutions. Salespeople will have the ammunition and confidence to engage with higher level buyers, which in turn will result in shorter sales cycles and larger deals. And finally, more focused sales and marketing activities will build stronger momentum at lower cost than is possible with broad-based "shotgun" approaches.

So here is the bottom line: If your organization suffers from "hand to mouth disease," do not despair. The affliction need not be fatal. The cure will require taking some tough-minded decisions and sticking to them, but the results will more than justify the effort.