chaos posts

The Cost of Chaos – Part III

Imagine that you have a huge digital billboard in your office. It’s something like the national debt clock, and it’s tracking something that is just as critical to your company’s future. It’s the money your organization wastes while trying to generate revenue: the cost of failed products, excess sales salaries, sales support, ads, promotions, campaigns, demos, travel, unhappy customers, re-makes, lost deals, incorrect pricing, channel support, training, and more.

We have a name for these losses — the Cost of Chaos — and your new “chaos meter” would track every minute and dollar lost from uncontrolled revenue generation. And while nothing can match the national debt clock, we can guarantee that you won’t like the numbers you see on the version that hangs in your office.

This topic is so important that we’ve covered it in a three-part series. Today we’re providing examples of specific actions you can take to reduce these costs.

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The Cost of Chaos – Part II

Maintaining a healthy weight isn’t a mystery. We know what to do and we know what we shouldn’t do. And even with all the science and evidence to the contrary, we keep trying the latest fads, buying the books and pills and programs that promise the silver bullet.

The same concept applies to fixing what we call the Cost of Chaos — the penalty for not aligning a principle-based revenue strategy throughout your organization. Companies try this new marketing program. Hire that hotshot sales rep. Add a new twist to the customer offer. Design a new logo and attend the big name trade show. In other words, companies are constantly searching for a silver bullet and, while conducting that search, pour money down the drain at an alarming rate.

This is such a critical concept in the generation of revenue that we’ve divided this article into three sections.

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You know the saying about assumptions. Why are you still making them?

Assumption testing has always been important in organizations. Right now, however, it’s more critical than ever. Markets are evolving so fast that the wrong assumptions can be fatal.

Worse yet, an organization’s inability to routinely identify and test assumptions is a cultural defect that can be very difficult to correct.

Rick and I often see this problem when we participate in leadership meetings held by our clients. During these meetings, we frequently hear executives mistakenly state assumptions as if they were facts.

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The Cost of Chaos

During the first week of the new year, when we tend to gaze optimistically at the road ahead, a headline from the Associated Press announced “Americans’ job satisfaction lowest in 22 years.”

The article then went on to say “That is the lowest level ever recorded by the Conference Board research group in over 22 years of studying the issue. If the job satisfaction trend is not reversed, economists say, it could stifle innovation and hurt America’s competitiveness and productivity. It also could make unhappy older workers less inclined to take the time to share their knowledge and skills with younger workers.”

Well, that got my attention! Of course there are many reasons for the decline, including the worst recession since the 1930s and the fact that downsizing has created more work and more demands on the workers who’ve survived the cuts. That doesn’t change the fact, however, that such a decline has somber implications for businesses, and executive teams need to address this issue in their organizations.

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Have the Courage to Create a Brand!

Branding is a tricky subject to discuss with small to mid-size companies. It’s a concept that’s more easily associated with consumer products, packaged goods, or the Fortune 500. Branding books use examples like Starbucks, Apple or Dell – examples that don’t resonate with midsize service companies, B2B companies, or industrial product companies.

Many of these types of businesses think of a brand their logo, the look & feel of their web site, or their slogan. Unfortunately, a brand is none of those things. Instead, we define a brand as the combination of what you sell, how you sell it, and to whom. The result is an experience that your customers trust, and it can create substantial value because the right customers will be willing to pay a premium for that experience.

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“I’m lying awake worrying about sales!”

As you’re well aware, a CEO is constantly juggling a myriad of challenges. But when it comes to sleep deprivation, the top culprit is typically revenue-related … burning questions such as

Is my sales manager doing a good job?
Is my star salesperson going to quit?
Why does one salesperson excel while others struggle?
This stress frequently stems from two beliefs:

That consistent revenue generation depends on the talents of a few select individuals
That those individuals operate in a world lacking both structure and predictability.
Good news: You can eliminate this chaos! Revenue generation is a science similar to other disciplines inside your organization. And there are three keys to your success.

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