A Tale of Two Companies
In 2008 I founded a company that had some lofty goals. We had grown frustrated and tired with the growing costs of software in our organization, and SaaS was becoming an accepted practice. By June of 2008, we already had 8 different subscriptions for various software packages that performed specialized functions like accounting, or publishing marketing videos.
Looking at our budget that month I was confounded about how we were spending so much on various software packages as a small business, and how if things kept trending this way, we would slowly eat away at our profit as we tried to grow. Our company had a simple enough offering. We specialized in providing our own SaaS solution – albeit more robust than most SaaS offerings at the time, and with competitors more like SAP and Epicor.
Over seven years I watched that company swing violently between success and near failure, often for the same repeated reasons, though in different parts of the company. The problem first materialized in the sales department. We found ourselves positioned with a sales manager who was able to attract sales talent who were willing to work for a relatively small base and a generous commission package.
A Sales Driven Enterprise
At first, the new sales manager seemed like an answer to all of our problems. We suddenly had a very active sales team, and within several months about 60% more revenue than we had the previous year by the same month. If only things were that simple. This change created two problems for us that we did not see coming. Fortunately, because are are observant we realized these were problems that could be solved, and these problems became the very foundation on which we built our Four Cornerstones of Business Growth.
The Dry Pipeline Problem
If you have ever ramped a sales team up you learn a few things very quickly. A good salesperson comes with a little black book of customers and potentials they can call on to get their new career off to a positive start. A great salesperson often comes along with a book of business, ready to go. What nearly every business owner finds out, and often more quickly than they would like, is that these resources are finite. It may make for an exciting period, especially if you bring on a mix of good and great sales team members all at once, but it wears thin very quickly.
At our company, it was like dominoes. We had hired a team of amazing professionals who were capable of developing deep relationships with customers – they had demonstrated that by bringing customers they had previously worked with to the table. They were well-versed in how to move a lead through the sales pipeline and execute on a contract, we had the business to prove it. However, fast forward to six months down the road, and suddenly, despite an initial early success, we had a fleet of underpaid and dissatisfied sellers.
What happened? It was slow at first but then picked up steam as more and more of our sales team pushed their way to the end of their Rolodex. Our amazing sales team stopped selling. One by one, they slowly reached the end of their contact list, and at first stood patiently, waiting for our marketing team to provide leads, and as the marketing team came up dry, they revisited their client roster, and tried to upsell or cross-sell other products and services. For a few it delayed the inevitable, but for most when the list was exhausted the train stopped.
What we had not predicted was that our amazing sales team, almost all of them, lacked the skills to prospect their leads. Each of them had come from teams and companies where the pipeline of income leads was like a firehose, more than any salesperson could handle, and so they had been allowed to deeply cultivate their skills of moving leads from cold to hot, and from hot to bought. Nearly everyone on our team had been completely reliant on a marketing engine that brought in prospects to the top of some funnel and filtered them down into something that a great salesperson could recognize as a potential win, and could run with it.
Although we had created a great sales team, filled with very skilled people, we created a perfect storm that was just waiting to explode in our faces. We created a team of people that was destined to starve, because as soon as they ran out of the “usual suspects,” they were going to need us to refill the pipeline. When that didn’t happen, guess what did. Our amazing team all started to jump ship. They took their customer lists, their books of business, and moved onto the next organization, destined to create the same problem all over again, heralded by the common statement we heard – “here we go again…”
Marshmallows in a Microwave
At the end of the day, the increase in revenue should have helped us solve the problem, but it didn’t. It simply created a problem on the other side of the business funnel. Have you ever microwaved a bowl of marshmallows, or a few of them on top of a cup of hot chocolate? If not, try it. fill a bowl or a cup halfway up with those sugary little treats and hit the one-minute button. I will wait. Then I will wait some more so you can clean up the mess.
If you have done it before, you already know the problem. You may have thought you had plenty of room in that bowl or cup, but as the heat cranked up the marshmallows grew, spilled out of the container, and started melting everywhere. Afterwards, you had a worse mess than just not having the capacity that you expected.
Sadly, most people who try to solve the “business growth” problem with sales, discover this same issue. It goes something like this: the eighth sale comes in for the week, but the fulfillment team can only really handle six. Glad to have the extra work. a team member volunteers the time needed to get job number seven done because “this is a quality problem” to have. When job eight comes in, no one is sure what to do. Someone suggests hiring a new team member, but everyone laments over how long it will take to get them up to speed.
At the end of the day, nothing happens. Someone else volunteers to pick up the extra slack. Soon enough – everyone is picking up slack. Delivery quality is going down, morale is going down, errors are going up, and before you know it deliveries are being missed, and everyone is unhappy from sales to service to the customer. How did it all go so wrong so fast?
You already know. You may even know better, but I can promise you there is a very good chance that if you were caught in this situation, you would do the same thing. How do I know? It is because everyone does. 50 out of 50 companies I have consulted with have all faced this problem. You can sit down at a table and talk about it and they all know the answer, but they still wound up right there, marshmallows melted everywhere.
Money is the answer for everything…
Ecclesiastes 10:19 says, “A feast is made for laughter, wine makes life merry, and money is the answer for everything”. It’s from the Bible so it is probably pretty solid advice, right? Well, things are best taken in context. I have heard it said so many ways – money cures all ills for instance. The truth is that money is both the solution and the problem. Take the issue we experienced above. How do you think we TRIED to solve the fulfillment problem? If you guessed by hiring new people, you would be right. Was it wise? No, it was not. By the time they were ready to start helping fulfill deals that had been sold we were already handing out refunds, losing sales people, and generally looking like idiots.
What do you think we tried next? If you guessed automation you are a genius. Did that help? Not a chance. We spent, and when it was done, we didn’t need it. Our ragtag team of diehards that remained had it all covered. The automation would be there if we ever needed it in the future, but when it was completed it was like buying a suburban to cart your family around just after the last kid graduated from college.
The Bible should have said, “Money spent wisely, and with a plan is the answer for everything.” Not that I am advocating a rewrite of the Good Book. There is a deep truth that came from us trying to solve this problem, and the other one, in regards to sales and marketing – when you are desperate, it is already too late. Chances are you will just set your money on fire just trying to see a little further into the darkness.
Finally, A Solution
This is where The Four Cornerstones of Business Growth began its life. In a set of very simple but very frustrating problems. In the four cornerstones of our failing business; marketing, sales, fulfillment, and finances. Without great marketing, our sales were destined to fail. Without great fulfillment, our sales were destined to break our customer’s hearts. Without great financial management, we could never prepare or solve any real problem.
In response to this catastrophic series of failures, and learning from lessons we learned from working with and growing hundreds of businesses we developed The Four Cornerstones of Business Growth. This simple plan relies on 12 important strategies, which we call the 12 Foundations, 12 tactical functions – we call them the 12 Pillars, and 12 things to avoid, or the 12 pitfalls. We have packaged these into a series of lessons, tools, and processes that help us guide companies, grow leadership, coach business leaders, and build our own organizations.
The Same Product Revisited
Several years later, we made a second run at a similar product. We added some new bells and whistles, but I can tell you it was not flash or pomp that caused our second attempt to gross over 2 million per year. No, it was purely and simply a guided approach. We started with marketing. We grew into sales. We aggressively built our fulfillment and made sure it was capable of expanding at whatever pace we needed it to, and we were passionate about controlling our finances.
Fast forward a few more years and we have internally built six companies using this framework, and teaching our leaders these principles, and have achieved success in over $2M+ per year in revenue for six companies. We have helped over 20 other companies and more than 20 leaders with these principles.
That is what we want to do for you. We want to coach you into building a sustainable, repeatable, predictable business that feeds you, helps you grow, and helps you reach the goals you set, no matter how far away they seem. That has become our passion, our mission. We don’t just want to help companies “save money,” or “be more efficient.” There are tools for that. There are tools for what we do as well, we have some great tools that help in this process, but the real tools we bring to the table is experience to share and processes to guide you into finding the right path for you and your company. Our goal is not to tell you how to do it, but instead to show you which choices are the right choices that help you arrive there on your own. When you have that experience you will not need to rely on us forever, you will discover your own path, and we are here to see that happen, and cheer you along the whole way.
Make an appointment today to see how we can help you!