You are working to solve a problem. Action steps are being outlined, commitments are being made (by you and for you). Agreement that the problem is correctly identified and understood – is completely glossed over. Your gut tells you that something is not quite right. This feels like you are embarking on a “rabbit hole adventure” that you may have been down before.
My example: some years ago I sat in a meeting with my peers, finalizing a sales forecast in some detail. We sold high-end capital equipment, with price tags that equated to long cycle lead times – both for financial planning on the part of the customers, and production cycles for our manufacturing group. Typical was 1 year, but timing often could stretch to two or more years when a particular product was part of a construction budget. There were several large competitors, and our current market share was in the low teens.
We presented our forecast, it got a brief review (read: the bottom line number was looked at) and we were told to go back and close a significant shortfall gap (somewhere around 15 to 20%)– and get that done in the next 2 hours… with details of how and with what products the gap would be closed!!
I understand the concept of stretch goals, and the need to make forecast adjustments to better fit externally driven needs (upper management, investors, the market). But if the original forecasts were data driven (as ours were) – from a sales process that had been well reviewed, and was proving to have a fairly high degree of predictability and accuracy – then exactly what were we stretching, other than the truth.
The requested process was painful, and de-energizing. We were making stuff up to satisfy a number target – and we had no idea why we were doing it, or what possible value we could be adding.
The problem that had been identified was a forecast shortfall to expected budget. But that was really just the identifiable symptom, not the underlying problem. In healthcare, you don’t treat the symptoms if you expect to get satisfactory results, you treat the disease. Understanding the “disease” can take some time, and the objective answer can be elusive. Or a combination of other elements. But success in the ultimate treatment depends on identifying the cause of the problem – not just the symptoms.
We should have been asking questions like……
- Why were Sales of Products lower than expected or needed?
- based upon what measurable criteria?
- Why was our ASP low relative to list price?
- What was driving acceptance of our competitors’ products?
- Were our territory alignments satisfactory to meet/exceed customer needs.
- Did we have enough sales people to support our forecast (much less the expected sales budget number)?
- Did we need more clinical support personnel?
- Were there identifiable constraints in our sales process that we could look at addressing to improve sales / revenue flow?
- Were there product shortfalls – designs, bundles, positioning – that needed to be addressed?
- Where were we losing business or business opportunities (leakage), and what could we do to help close those leaks?
The new VP of Sales dutifully listed increased sales (units and average sale price) by product line, asked for “more” when we still came up short, and then turned around and asked for verbal commitment from each of us to the new number(s).
And we “missed” the number.
And we never got around to asking the questions we should have been asking in the first place.
Two years later, a new VP of Sales was on the scene, and the story continued. But now with a new group of managers. And the shaking heads of most of the salespeople who remained.