Executives misfire quite often by putting in ‘what worked where I was before’ and consistently saying that ‘they’re on-track’ because of reasons they may not even know, but it’ll be enough to get through another all-hands, earnings call, etc. Perhaps this may have worked at the previous company, within the organization of their responsibility, or have non-serious shareholders that don’t care. But usually if this is the case, it’s just lots of talk that will show very little progressive results. And yes, it’ll remain this way unless there is data backing up their statements, which is more of what people should ask for.
How often have you heard, ‘we recently launched a great product or products into a growing market, yet growth is slow, stagnated, and reeling. No one can seem to point the finger at one thing, so many excuses are continually made’. Sound familiar? Whether it’s a top down or empowerment management approach, if the company is not achieving its financial goals, something is wrong. Typically, if you have addressed the right growth market with a technology-superior product line, financial growth should be linear and quarter-quarter (Q-Q), as long as the company continues to execute on all fronts. This is the expectation of the investors and the board. Today’s markets are as competitive as they’ve ever been. Template, old-approach management styles will not work in today’s markets. Not meeting this expected linear growth means something is broken in the way things are being managed at the top. Every result of a company is the output of how management puts its plan into motion. That’s where it starts.
Can you describe our product line/technology in some detail?
Do you know the corporate mission and vision?
What’s our company culture?
Do you understand our strategic direction (ie products, markets, customers, competitors, etc.)?
Do you understand the business model (ie go-to-market (GTM), pricing & gross margin strategy, sales model & hierarchy, etc.)?
Does our operational model work correctly with the type of product line we have?
What type of support do we give and does it add to our revenue?
What’s our level of customer satisfaction?
Does the management team work well together and is the chemistry there?
If any one of these questions is a ‘no’ or can’t be answered, then there are distinct fundamental breakdowns that will prevent growth. It may not be obvious, but it just takes one area failing to execute that will prevent your company's overall success. Gone are the days of ‘you need to play your part’ and ‘I’ll play my part’, and if we all ‘play our parts we’ll do very well.' This may be ideal when things are going well, but what happens if the company’s performance declines and in the eyes of management, they’re still playing all their parts? Today’s markets are so complex that it takes every piece of knowledge and brain trust of company’s top people working within each of their specialties (i.e. engineering, marketing, business development, operations/support, sales, etc.), but it must go way beyond just this. For instance, what happens when things are not understood or results aren’t meeting expectations? Is this when you hear, “I didn’t eat it, Mikey ate it”, or leaders just blaming the other departmental areas for the company performance? Does the CEO put new ‘strategic plans’ in place to address the recent dismal results? When this happens, the overall company execution model just collapses and management may not have the answers as to why. Or they may have the answers but no data behind them. Yet, too many times, breakdowns in one area are blamed for the failure of another area, then spiral to another area, then another area, until all areas get covered but never again seeing the positive results. Employees then become disgruntled, productivity and efficiency go down, and results are never met. This immediately turns into a downward spiral effect that ‘make or break’ companies, and it can happen very, very quickly. Everyone from the top management to every employee, is responsible for the success of the company, yet many may not even know this. Just as it took strategic phases and steps of every department to build the success, it will also be unfortunate circumstances and steps of every department that will prevent success.
LCG approaches this by taking many years of different companies' processes, products, cultures, etc. that have consistently been molded into new companies' processes, products, and cultures that have had tremendous success. LGC focuses heavily on execution on all fronts as every pillar of management is key to the success of the company.
This is the crux of every company’s problem and takes the longest to fix. The very first thing that breaks companies, is a lack of chemistry within the management team. It’s critical that the management team work together on all cylinders. It’s very easy to see employees feed off of this, which is why LGC will interview each management team member and ask them questions that would reflect whether chemistry is there or not. You’ll see if they are all on the same page with corporate vision, strategic direction, product portfolio, operational and sales modes, etc. Also, culture plays a huge role in companies, which starts with the CEO. Does that play into the same view of the management team, and will that culture resonant to high employee morale leading to ultimate productivity and success?
If the management team is not together, then LGC will work with each management team member to bring alignment to the corporate vision that will be the key to all the other foundational elements that need to be addressed.
Once the management team is on the same page, LGC will interview key individuals within each organization to understand the essentials for execution of their organizational responsibilities. These areas such as product and roadmap feasibility, market TAM’s, competitive environment, engineering execution (i.e. product release processes), operations model (i.e. manufacturability, inventory management, etc.), GTM overlay into sales models, support and services model, etc. All these areas are the ‘foundation of the company’ and they need to be established properly to execute on all fronts. Think of them as all connecting together. They all have to click together. If they don't, there are breakdowns, and results will not be met. And one big thing to remember, not all past ways may work in a particular company. So if the management team is merely inputting what may have worked in their past company to a new company, a disaster is waiting to happen. This is not creative management, which is why it’s the job of the management team to work together and leverage ideas, thoughts, and mindshare to do what will work for the company. It’s key to make sure these foundation areas are all working together before any movement in the market would be expected.
Once LCG gathers all the necessary information needed, they will go over a detailed proposal with your management team and key stakeholders on necessary paths to take that will put the ultimate foundation in place. It’s a process that could take a day, week, but no more than a month, as three steps are necessary:
This area takes much less time. Once LCG feels that all the foundational areas are properly working together, then LCG will go over with management how to build credibility into a very competitive market. If the products are right, the market is growing, and the executional foundation is in place, gaining credible, referenceable customers is the key to market expansion. Gaining just 4-5 top-notch, credible customers will expand the company’s brand and reputation with product differentiation, thus, addressing the validation, industry reliability, use cases, etc. necessary to achieve initial growth that will expand into more repetitive customers, leading to Q-Q, linear growth.
Here the main area of focus is customer presentations of the product and reasons why they should go with you rather than with a competitor’s product. Since the ‘foundation has been built’, this means there is a product line that should do well. However, getting that message properly to the customer may not translate to wins and revenue.
LCG will ask the key sales personnel, whether in sales, marketing, or engineering, to present the company and product to them. If it can’t be explained in 3 minutes or less, then it’s not going to be effective. The principles of selling are done in three phases:
This is labeled the ‘30-3-30’. It gains the attention (30 seconds), gives the necessary details clearly and crisply (3 minutes), and takes the customer to next steps to get a ‘proof-of-concept or product,’ POC/POP, and the path to close (30 minutes). If not in place, LCG will work with the key stakeholders with putting together the 30-3-30 customer pitch. Think of a Private Equity (PE) or Venture Capitalist (VC). You get ‘one time’ to make an impression with potentially 10-15 competitors coming in right after you. This has to stick-out and make a tremendous impression on the customer. If you cannot explain your company’s value in 30 seconds or less, then it’s a struggle from the beginning. LGC’s experience with putting these together is key to building the credibility the company needs to grow. Customers will see the ‘key necessary fundamentals’ have been put in place as part of this as well, and this is huge to gain market acceptance.
Once this is completed, a ‘real’ pipeline with ‘real’ customer interest should be established that covers the phases of the sales cycle. Doing merely a ‘saleforce.com’-type approach is not sufficient. This allows for errors and non-revenue accounts. A detailed, customer-opportunity list by region and geo needs to be put together that covers every day’s interaction with the customers. This entails daily status of things like account manager, customer contacts, revenue potential, % probability, $$ amount of deal with discounts, POC/POP progress, etc. Accountability plays the biggest part in this, and it’s clear who is responsible for meeting the ‘pipeline’ goals. LGC will formalize this 'Customer Revenue' report in a manner that fits the particular company needs.
Daily or bi-weekly meetings with the key stakeholders who are accountable to the report, and no fewer than that, need to be put in place to key-in on the progress with each account, region, and geo. This places major accountability on the sales cycle from day 1, and hopefully leads to very nice surprises by the end of each quarter for management’s book closings or earnings call.
Once completed with gathering all the necessary information needed to ‘establish credibility’ of the company, LCG will generate these documents and reports.
Similar to the first phase, LGC will generate a detailed proposal and go over this with management, key stakeholders, or other essential participates that the company wants to be involved. This proposal will present all the documents and reports necessary to ‘establish the credibility’ needed to begin growing the business. It’s a shorter process than phase one and should take no more than a month, depending on the particular size of the company and particular needs.
Following this phase two proposal, the company could opt to execute this on their own or have LGC execute the proposal for them. The following will be in place upon completion:
With all the foundational areas executing in sync (ie engineering, operations, support, professional services, etc.) then gaining customer traction will be easy and natural, leading to great credibility, market share, and linear growth.
Hopefully, you understood now that without the 1st two critical phases of building the foundation and establishing credibility being in place, growing a business will be impossible. In reality, without these in place, there is really very little data that would support any revenue linearity on a consistent basis. But with LGC, this is the last and easiest phase.
Now that LGC has implemented the 1st two phases, at this point, the company should be operating on all cylinders and performing to expectations in terms of execution and market credibility. Keeping pace with the revenue and linearity growing it Q-Q is merely sticking to the previous two principals and maintaining those at a very high-bar. GTM should be humming, customer references are in place, roadmap features are being addressed, customer satisfaction is high, company reputation is strong, customer pipeline is real and managed correctly, etc. Communication across the company should be constant and at an 'all-time' high.
For the executives, mainly the CEO, the output of this is a daily, ‘book, ship, collect’ or Shipments Report that is a quick snapshot of the daily business of the company. The CEO, CFO, and Sales Head and/or key stakeholders should all be in sync with this. This is a daily meeting that is run by the CEO. It’s their job to make sure the company’s business is strong every day of the year. This gets harder and harder, quarter by quarter. With each quarter’s passing, growth for the next quarter is key. The bar for decent revenue growth is 7-15%, with 1-3% gross margins leading to strong ‘earnings before interest, taxes, depreciation and amortization' or EBITDA, and net income. This bar is minimal in most good, strong companies and should not be surprising. Meeting this means strong financials and high-value investment returns for all stakeholders of the company.
The Shipments report focuses on every account in every region that the GTM and sales model put in place (ie Americas, EMEA, APAC, etc.). Each account is scrutinized, going over what is needed in terms of engineering support, pricing, discounts, margin deltas, etc. Every account team is accountable. Remember that if the company’s foundation and credibility are good to great, then these are very real and meaningful discussions, and the account team is focused on shipments versus closing. As every single account is gone over, the CEO or key stakeholders need to ‘do what it takes to ‘book the PO, ship the product, and close the margin of each account that brings in the proper revenue for profitable growth’. These should add up to meeting the goals of each quarter’s previous guidance. If done correctly, it will never hold any surprises to the board, employers, shareholders, or key stakeholders. The CFO or key stakeholders will also have a much easier task to close the quarter’s books and work towards the next quarter’s goals, which brings ultimate efficiency to how companies need to be run. Whether the product is tangible or licensable, the only way to know the real numbers is what is shipped and collected. At the end of the day, that’s what matters in making sure the revenue numbers and guidance are met.
LCG will make sure that this Shipment’s Report is accurate, running correctly, and tracking day-to-day operations of the company. Remember, every piece of the infrastructure has to be clicking for this to work right. When LCG is done, this will be working correctly, and we'll merely monitor this as needed when we wrap up the contract.
Following this phase three proposal, the company could opt to execute this on their own or have LGC execute the proposal for them. The following will be in place upon completion:
If done in the correct manner, it’ll be like a ‘car running on all cylinders.’ These very key executive management phases are guaranteed to produce outstanding linear growth within a very short time after implementation. However, it takes knowledge, drive, passion, teamwork, thorough communication, and a firm understanding of what it takes to do these. Experience is key, and LGC has the experience to address any difficult situation and turns them into positive, result-oriented successes.