An international company with UK operations wanted to quickly establish a significant market position in a UK vertical market to increase services revenues, mitigating falling product margins.
The business unit operating in the vertical market was not even in the top 100 suppliers to that market, and had little knowledge and understanding of what existing and potential customers really valued. The business unit was dependant on a Sales Team from a separate and independent part of the parent company to provide Sales and Marketing resources.
A comprehensive programme of activities was designed to transform the capabilities of the business unit, with the target of getting into the top 10 suppliers to the vertical market within 5 years. The programme covered all aspects of people, processes and systems, with the aim to transform customer satisfaction, market share, operational delivery and profitability.
A small and confidential change organisation was created to design the transformation programme and engage appropriate stakeholders within the parent organisation of the business unit. Strong ties were forged with the Sales Team and the vision for the vertical market was sold into the Sales Team and their stakeholders. The programme was redesigned to incorporate transformation of the Sales Team. Sales targets were agreed on a year-by-year basis (due to the culture of the parent company.) The targets aligned to the revenue targets that would likely achieve top-10 supplier status in year 5. Investments were made in educating and training both the business unit and the Sales Team in vertical market knowledge and what customers valued. A few new people with specific vertical market knowledge were recruited and they spread best practice. Vertical market knowledge was used to craft and market customer-specific offerings that customers recognised addressed their business drivers, using customer language in addition to supplier language. A strong campaign of customer investments established trusted advisor status with a wide range of vertical market stakeholders. Investments were made in both internal and external communication. Processes were established to ensure all new business opportunities were qualified against appropriate criteria before Sales resources were committed; inappropriate business was not pursued. Reward mechanisms were redesigned to encourage new behaviours. The vertical business unit developed and enacted an internal stakeholder engagement process.
- Won top-10 supplier ranking in year 4, evidenced by independent industry survey.
- Achieved market-leading customer satisfaction, measured by external independent survey.
- Won and successfully implemented over 80 contracts with a total contract value that trebled services revenues in 4 years.
- Set and consistently exceeded stretching growth and P&L targets, delivering 15-30% additional annual revenue over contracted value each year.
- When designing a complex transformation programme, engage all the stakeholders in an appropriate way. In this case organisational sensitivities with regards to the Sales Team were crucial and it was important to play a “long game” to build rapport and understanding over time, rather than moving brashly and rapidly at the start of the programme.
- Foster a strong sense of ownership and engagement by involving as many as possible of the stakeholders in the design of the programme as practical. When engaging more stakeholders later in the programme, allow them to contribute to pragmatic redesign if that will improve the chance of programme success.
- Establish an organisation to manage the programmes, with clear “roles of change” and sufficient education, support and coaching. Make sure there is sufficient capability within the organisation to support the operational and the transformational activities concurrently. In this case, the achievement of monthly operational metrics was of paramount importance and was given more attention than 5-year goals that were equally important to the vertical market business unit.
- Be sensitive to natural resistance to change. Publicly acknowledge and reward behaviours consistent with the future you are creating. Address inappropriate behaviours sensitively, recognising that such behaviours may have previously been considered appropriate. Help people to identify what they are moving towards and what they are moving away from. Give them the knowledge and coaching support to enable them to make the culture and behavioural changes needed to succeed.
- Communicate, communicate, communicate! Make sure that your communication is two-way. A strong ethos of “tell it as it is” encourages openness.
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