Revenue is down. Sales are slowing. The CEO looks up from the business plan and realizes that the company won’t meet analysts’ expectations. Focusing on the organization’s sales leader, the stage is set for sacrificing a scapegoat.
Upon who else should the axe fall when the sales organization misses revenue targets? After all, aren’t sales and revenue the responsibility of the sales leader? The answer may be as easily forgotten as it is obvious.
To one degree or another everyone in an organization impacts the revenue generating process. The strategic plan of the board of directors and the CEO provides the overall strategy for revenue generation. The marketing department provides crucial demographic and psychographic customer or client information on which the sales department relies in formulating industry and account strategies. Manufacturing, finance, legal, customer service and all other departments facilitate or constrain the process of generating revenue, each in their own peculiar way.
The sales organization’s influence in enterprise revenue generation is con-centrated in the sales pipeline. Identifying bona fide sales opportunities, managing those opportunities through the sales pipeline until they produce revenue, and then managing customer or client relationships are the primary responsibilities of the sales and sales management teams. Rarely, if ever, does the sales organization control the resources of manufacturing, marketing, finance, legal and customer service.
The picture most companies present to the world show the sales organization “out there,” in front of customers and clients and in front of the rest of the company’s departments. Even marketing, the first cousin of sales, is more often than not as disconnected from sales as are the other departments. The sales group leads the company charge, and the other departments take up rear support positions, providing tangible and intangible support.
Revenue generation is a cross functional, company-wide process that involves every department and all employees in the organization. The CEO and the Board of Directors set corporate strategy and everyone else in the organization executes that strategy. We have never observed a situation where the sales organization is in disarray while all the other business segments are humming along with little or no friction. In those rare cases where the failure or underperformance of an enterprise’s revenue generation process lies within the sales organization, the appropriate sales executives, managers and sales professionals should be held accountable and should suffer the requisite consequences. Before CEO’s shoot their sales teams, however, they might want to take a critical look at the entire revenue generation process and how each business segment contributes to or detracts from the success of the process. Like America’s favorite psychologist, Dr. Phil, would advise: Every department in an organization either contributes to the company’s revenue generation process or contaminates it.