Businessman Watching Profit Drop Off Chart

Increasing Sales is Not Always a Recipe for Increased Profit

We’re in the process of tightening up the sales process with one of our clients. In the past two years the focus has been on increasing sales (new business) and holding the line on retention. Sales Processes have been instilled; there is more accountability, ongoing education and team cross selling, which have all contributed to the attainment of the focus on growing revenue.

On the other hand we’re still weak in how we are processing between estimating and sales. This is where profit is leaking. I hear complaints about who is not doing what and some nagging to others to change, but there has been no commitment to lasting change (a new process).  We keep eating the same pie. We know we can do better but we’ve not taken the time to be clear on the issues and gaps and put the processes in place to improve. It’s time to improve our recipe for profit.

One of my long-time clients and good friends, Mark Dashkewytch, Principal at The Dash Group, says it best, “Businesses are designed perfectly for the results they produce.” In this case the results have been more new sales at a higher upfront and backend cost than is preferred. Just as Mark has articulated, the current process is designed perfectly for these results. We want different results so we need to cook up sales a little differently.

Improving processes between departments isn’t a complicated task but can get derailed, postponed or stalled without someone leading the process. Here’s a simple recipe for process improvement, which should lead to more profit.

What we are baking

Improved and better-defined procedures between sales and estimating

Ingredients

  • A leader who will lead and see the project through to completion
  • Representatives from each department impacted by a new process
  • A purpose defined for the effort and a deliverable to know you have arrived at completion
  • A timeline

Cooking instructions

  1. Schedule a meeting by inviting department representatives.
  2. In this meeting:
    • Inform members of, or agree on a purpose, a deliverable and a timeline
    • Review the current process by outlining it on a whiteboard or reviewing prepared documents with your current process detailed out.
    • Identify gaps or breaks in the process (a gap is something missing that should be included, a break is where the process is not being upheld or is allowed to break or bend). A break or bend sometimes is not a process problem but a person problem. If there is a person problem the manager needs to address it. Other times the person who is allowing the bend just needs a little clearer process defined to those he/she serves to strengthen their ability to hold the process.
  1. List your gaps or breaks and prioritize on how to solve them.
  2. Assign tasks to be completed, due dates and who is responsible as well as the next meeting. (it is okay to define short term tasks and build as some are completed, but be careful to not allow yourself to get derailed with a partial fix by only completing one or two task, keep purpose and deliverable in mind)
  3. Meet as often as needed to monitor progress
  4. When you have completed updates or after major upgrades test the new process out by sharing with other department members that will be affected by the changes. Get their feedback on the changes.
  5. Adjust after feedback and finalize new processes with clear documentation and instruction.
  6. Present the new process – Do not email the process out, have a meeting and present your process and work through questions and answers. Review your purpose, the gaps you found and why you solved them in this new way. Everyone doesn’t have to like the “taste” of the new process but it should be “nutritious.”
  7. Schedule a meeting with the Process Team in the near future to monitor the changes. Adjust if necessary and enjoy.

Caution

If you do have a person problem and do not address it the result is usually an over burdening process for others to compensate for this persons unwillingness to hold up their end of the process. Addressing people problems is essential; being overly nice to one person is being not so nice to many.

See, it’s easy as pie. I can’t stress enough the role of leadership. Without someone committed to the outcome, the details and meetings will fall apart and the project will be scrapped or be completed poorly.

If you stick to it and improve your process, it should result in greater profits, happier employees and happier customers.  If this recipe does not work or your cake goes flat, as always feel free to call and we can discuss.

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