First something about scalability. Scalable organizations are:

• End-to-end aligned: Streamline your value chain by having coherent bundled responsibilities. Written processes are kept to a minimum to keep the organisation adaptable and agile. This will help to make individual contributions to the goal clear to everyone. The increased involvement and insights will enable people to be creative and to contribute to the result in the most effective way. Doing the right things instead of doing things right. The best bundled responsibilities are those allowing you to quickly find new people on the job market because you take available combined competencies into consideration.
• Dynamic organizations: Endorsing a culture of facing the brutal facts, where people and not the processes are central. Ensuring that people focus on their contribution and not on their career (plan). Learning from and celebrating successes but also learning from mistakes being made. Being convinced that uncertainty is the only certainty in life.
• Thought leaders in their field: They strive to be different not better. They educate the market based on their differentiation so that prospects seek their leadership. Lead nurturing based on valuable content for the prospect is their way of promotion. Improving the value proposition for each of their served segments is what drives product development.
• Customer focused: The customer and the market are central in everything they say and do. The front-line organisation is based on buying readiness of individual involved people in the decision making process rather then an automated nexst step sales approach.
• above all Vision and DNA based: All of above is impossible to execute in case of DNA dilution. Don’t keep people on your staff whom are not DNA compliant not even if you consider their contribution or importance indispensable for the organization. This is where the blindness to future problems commence. Managment will end up managing people instead of their business.

The biggest advantage of  ‘design for scalability” is that it works both in periods of growth and during recessions. Scalable organizations can more quickly adapt to their environment in both good and bad days. Every crisis forcing you to reduce headcount or reorganize the company is a unique moment of choice to increase your scalability. This means also having the courage to leave trodden paths.  This implies not to:

• reduce your headcount by letting go of people with the cheapest severance package;
• cancel the simplest costs and investments such as training and educating people, change processes necessary for the long term, sales and marketing spending etc…
• put your best people on the biggest problem rather than on the largest opportunity;
• deviate from the long-term strategy thereby losing focus. Losing clarity throughout the entire organisation will be a consequence. Thus increasing the uncertainty resulting in paralysis;
• acquire companies when the market is on its top and everyone is bidding as if the sky is the limit.

but on the contrary:

• Cut inefficiencies grown over time;
• Continuously adapt to the changing circumstances without undermining the long term vision. Being vision focused;
• Transparent and timely communication;
• Putting DNA, people and competencies central in your organisation to avoid bureaucracy and maximize involvement.

Leaders and managers will no longer have an excuse to take resolute decisions improving the scalability of their organization once the economy is picking up.

This is the only way to maximize your potential!

Trying to create certainty by extrapolating a known past into a bright future has definitely proofed to create an illusion of predictability. Spreadsheet management as a way to do business planning has been a common practice for too long in too many companies.  Optimal functioning and productivity of people has long been linked to the wrong assumption that people need certainty. The difficulty to break the ’status quo’ within companies, and definitely the political world, has supported this way of thinking. People prefer the known discomfort over the unknown future.

Seneca once wrote: “The greatest loss of time is delay and expectation, which depend upon the future. We let go the present, which we have in our power, and look forward to that which depends upon chance, and so relinquish a certainty for an uncertainty.” Yet uncertainty is the only certainty.

It is my conviction and experience that people are not afraid of change but are afraid of the unknown personal impact of the change. Too many leaders and managers are trying to sell certainty to overcome this. Yet many studies have proven over and over again that people need a certain level of discomfort to to stimulate creativity, productivity and focus.

The reason for all of this is the fact that their is no such thing as rational decision making. Dan Ariely (author of Predictably irrational) wrote the following in a recent Harvard business review: ‘Your company has been operating on the premise that people (customers, employees, managers) make logical decisions. It’s time to abandon this assumption”

Creating an environment of  ‘balanced uncertainty’ is therefore the biggest challenge moving forward.

The following is key to success:

• Transparent communication whereas the truth can be said, problems and mistakes surfaced and discussed as soon as possible. Jim Collins already referred to this as facing the brutal facts;
• Building trust, thus building an environment where openness gets rewarded
• Avoid or get rid of a diluted corporate DNA
• Offering a realistic challenge in order to stimulate motivation, creativity and innovation
• and above all walk the talk 

Are you ready to maximize the potential of your people?

• too much leadership creating a superior vision and taking decisions whilst losing the necessary sense of reality. Dragging people and companies unnoticed into trouble.
• too little leadership because leadership is too often linked to charismatic leaders. The CEO as the captain under which leadership the organisation is led to unrivaled performance.
• too little management who should be capable of managing the execution.

And where does entrepreneurship fit in all of this?

A lot has been written and discussed ranging from charismatic leadership, Level 5 leadership, transformational leadership,…. The characteristics of the so called must have leadership profile is a long list that is impossible to find in a single mortal human being. Marc Buelens (Vlerick Leuven Ghent management school) wrote in a recent column:  ”Leaders need to combine the charm of Kennedy with the vision of Branson, the stubbornness of  Thatcher and able to speech like Obama”

I suppose that most of us agree that the world and business in itself has become too complex to be mastered by a single individual. A lot of people tend to think that the CEO can make the difference. A comparison with soccer is in place since many analysis have shown that changing the coach during the season never contributed to major result improvements.  I’m pretty confident that the future will show the same in the vast amount of cases where the CEO had to leave the scene as being responsible for bad results. CEOs at the same time should better think twice before contributing superior company results to their mastery.

Even management teams are no longer able to provide all the answers in the same way as sales has converted into a team-sport. I’m seeing over and over again how management teams are trying to come up with all the answers themselves. As a result expecting people to change and behave differently without a need to change themselves.

I’m therefore convinced that the whole debate is besides the point. since everything starts with an undiluted DNA. The following picture shows the logical levels needed in order to release the full human potential within your organisation. 

What we need is management innovation which includes getting ride of industrial age practices. Typical to those ideas are central and formalized processes trying to influence human behavior. Converting people into machines leaving their brain at the door when coming to work. Resulting in managers fighting battles ad hoc, rarely solving the underlying causes. Fighting symptoms, they’re unable to create a scalable value chain and properly utilize the human potential of the entire team. This need to change in order to realise your companies growth potential.
Leadership must be attuned to the information age, where progress is stimulated and jobs are managed – not people.

When will managers accept that they can’t control nor own the knowledge inside peoples head. We talk about the knowledge worker age but managers typically behave inversely.

 You must be the change you wish to see in the world.”Gandhi”

Corporate DNA can be compared with human DNA in the sense that it’s unique and can’t be altered.  Corporate DNA is the sum of all  ‘unchangeable’ elements of a company which combined describe its identity and uniqueness at the same time.  It is all what remains fixed while the business strategies and tactics endlessly adapt to an ever changing environment. The corporate DNA consists of  3 components:

• First of all the ‘real’ core values of the company
  • Core values are the operating philosophies or principles that guide an organization’s internal conduct as well as its relationship with the external world. Real core values are the common denominator of the employee’s core values. Hence the importance of identifying them by studying and interviewing people in the organization in contradiction to most exercises whereas top management is defining their so called core values based on the strategy and whom they’re willing to be. An example  (Nemetschek SCIA) of ‘real’ core vales is:
    • The continuous pursuit for new ideas and innovation
    • Commitment and our involvement for the well being of our company
    • Loyal long-term relationship with all stakeholders
    • Hardworking yet forward thinking people
    • Our commitment to take full responsibility and living up to made commitments
• The core Purpose
  • The core purpose is the organization’s fundamental reason for being. In other words a written statement that identifies why the organization will exist for the next 10 to 30 years. It makes abstraction of the product/service offering. Some examples are:
    • Inspire people to move limits  (Nemetschek SCIA)
    • To solve unsolved problems innovatively (3M)
    • To make people happy (Walt Disney)
• Your Value Discipline (Treacy and Wiersema):
  • The value discipline are our behaviours and actions which ensure the delivery of our value proposition. Value proposition being the mix of products, services, price and payment terms we offer to customers. The value discipline is either Product Leadership, Operational Excellence or Customer Intimacy. One has to be the best at one of them whilst making sure to keep on delivering the ‘Olympic minimum’ on the 2 other disciplines. A good example in the automotive industry is to compare BMW to Toyota.  Another good example is Colruyt (Belgian based retailer) for operational excellence.  Trying to outperform the competition on more then 1 of the disciplines is unaffordable and always unsuccessful in the long run because it takes too long and costs too much money. Your value discipline is part of your DNA and should be in line with your core values.

It is of the utmost importance to know, track and communicate on your DNA. A diluted DNA is probably the number one reason for stalled growth and/or declining profits in a growth scenario.  Their are plenty good reasons to make sure your DNA doesn’t get diluted:

• A lot easier to grow your business because of the ease to get people aligned;
• Sharp value perception leading to more successful lead generation;
• People are self-motivated;
• No need for a lot of written down policies such as travel rules, work schedules, meeting behavior, email policies,….. because people are behaving  in a coherent way;
• Improved performance due to focus. i.e. people will not waste time and resources on improvements or idea’s to lower the cost of delivery if you’re  in product leadership and your price/performance is at an acceptable level from the market’s point of view. These resources should be spend in becoming even stronger in product leadership;
• …

Typical symptoms of a diluted DNA are:

• Managers managing people instead of the business;
• an increasing level of rules and bureaucracy;
• A lot of emphasis on motivation and programs supporting it;
• HR policies which put job experience above DNA compliance in hiring and retention;
• Spontaneous idea’s and improvement propositions which are totally random;
• …

Better results and less people issues resulting in less stress as a manager will be your personal advantage if you avoid DNA dilution.

Trap 2 – neglecting training and development:
Dirk Verhaeghe told me that his first sales manager once told him: ‘If you think training is expensive, try ignorance’. Many managers tend to think of training as very expensive in money and time (keeping sales people away from customers);

Tip: However, I look at training as an investment; an investment with both short term and long term ROI. Appreciation for the  investment in their development. Motivation of your staff. Long term, training & development will make them better performers. Nobody is born a top performer, not in any discipline in life be it sports, business or art. We all need to exercise and train to become better. Sales people need to be continuously trained on:
• Skills (right skills to talk to decision makers)
• The customers environment
• The value proposition and your solution portfolio (pains, capabilities, ROI, enablers, differentiation and benefits)

Must do: Make sure you have an experience sharing platform where best practices are created and kept up to date, experiences are shared, etc…

Trap 3 – quick revenue panic:
When under pressure, a lot of managers tend to turn to tactical stand-alone actions to bring in quick revenue and squeeze their pipeline. Needless to say, that lot’s of stand-alone actions creates de-focus, lowers people engagement and will cause more pain than gain. 

Tip:

• Narrow your focus;
• Dominate your market;
• Choose your battles;
• Have a balanced pipeline;
• Support your people.

Trap 4 – Specialists are the best managers for specialists:
A mistake often made is to promote the best performing account manager into the role of sales managers. This is never the best way to maximizing your potential. It takes a different skill-set to be a good manager.

Tip: Promote an account manager choosing or ready for a managerial role in another department to take on a first management experience rather than promoting them to sales manager.

Trap 5 – hiring a sales person to do a marketing job and much more:
In many companies sales are asked to:

• Seek the right prospect;
• Build the right pitch;
• Know the market
• Know the competition
• Know the full product portfolio
• Be experts in called calling
• Draft their own proposals
• Close deals
• Keep a long term relation

Obviously very few people are capable of doing all these things.
Tip: Create a marketing function and a support environment build upon best practices and have sales focus on developing qualified leads, closing deals and/or develop existing accounts.

In other words build a scalable organisation!

People that work(ed) with me know and experience my passion to find ways to maximize the market potential of an organization at any given moment in time. But always taking the human factor into account and knowing that innovation and an entrepreneurial spirit are key to success.

Challenges such as:

• The right business model
• Aligning the whole value chain and not only sales and marketing
• Understanding customer needs
• Selling value not price
• Aligning the product road-map to market readiness
• Organizational change and structure
• Creating continued competitive differentiation
• And many more

are all part of the day to day life of people working in B2B environments.

The common denominator is the fact that each of above mentioned challenges has a tremendous impact on the business results, profit and the company growth. This both in terms of top-line and bottom-line results.

The fact that I summarize all these business and commercial aspects as “scalability” issues is far from surprising if you know my ICT background where scalable solutions, databases etc are part of the day to day vocabulary. That’s how the concept of “design for scalability” was born as a foundation for the methodology which I co-developed.

Underneath is a picture representing the ”design for scalability” concept.

Wikipedia is also referring to commercial scalability in above described way.

Feel free to start discussing how we can make companies more scalable in a pro-active way.

“One of the core challenges of turnaround leadership is how much to share the bad news. On one hand, you want people to understand the depth of the challenges and the need for dramatic action. If you share too little information, you risk creating a vicious cycle in which people cling to overly optimistic views, and so do too little too late. Then, as hopes repeatedly get dashed, the credibility of the leader can be rapidly and irretrievably damaged.
On the other hand, confidence is itself in a variable in the turnaround equation. If you tell people the full truth as you believe it to be, you risk generating a panic or an equally dangerous dynamic of denial. Either way, it can lead people to take actions that can easily reinforce the downward cycle. In business, for example, perceptions that the ship is going down unsurprisingly tend to trigger the departure of the best people.
So in many ways you are damned if you do and damned if you don’t.
Welcome to the situation current facing our new President.”

This of course, is a far more serious situation then the one I described in my post. Yet I could conclude, based on the parallel, that it’s best to share the full truth on rather “operational” challenges.  It will stimulate change and create some kind of a burning platform that will fuel motivation and team spirit leading to focused actions.

• A surprising 75% responded to be happy with their  sales quota and found their quota realistic.
• 70% said to be happy with their sales manager
• 64% felt adequately recognized for their achievements

The survey also revealed some job dissatisfaction issues as well:

• 58% considers the sales job to be high stress
• 55% do not feel they are supplied with enough leads
• 52% of salespeople feel they do not receive sufficient training.

“The survey findings suggest that most salespeople feel good about their chosen career despite the high stress levels,” said Michael Dalton Johnson, founder and publisher of SalesDog.com. “Considering that lack of recognition is a common complaint of many employees in all types of jobs, we were surprised to learn the large number of salespeople who feel adequately recognized for their work.”

While much of the stressful sales process is beyond a salesperson’s control, the high producing reps are experiencing less stress partly because they focus on what they can control. Learning how to qualify and disqualify prospects, execute the right actions at the right time, have a balanced pipeline at all time and taking personal responsibility for their on-going sales training and personal development.

While many successful sales reps actively seek ways to sharpen the saw, dissatisfaction could come from companies failing to provide an environment that promotes personal growth and experiencing sharing  as well as the right ongoing training and coaching.

Interesting as well is the fact that 83% would recommend a career in sales despite the high stress and all other issues revealed by the survey.

I’m intuitively inclined to support the findings when thinking about interactions I’ve had with sales people over the last year.

Other idea’s to share on this subject?

No matter what happens in 2009, we will still have to meet expectations and try to maximize our potential. Conventional wisdom suggests that you have to play it safe and stick to what worked.

Yet Tom Peters quoted it as follows:

“If you do what you always did, you will get what you always got”

A couple of ideas to break the rules:

• Engagement has proven to be a ‘virus’ according to a recent study by Prof. Peggy De Prins (UAMS Antwerp). The result shows an important correlation between the engagement of the leaders and the quality of work and retention.   Therefor leaders can make the difference by truly ‘walk the talk’.
• Today is a real opportunity to streamline your DNA. DNA dilution has proven to be one of the key reasons why companies don’t optimize their growth potential. Hiring people who are not completely compatible with your DNA is what happens a lot during times of high growth and a shortage on the job market. The importance of DNA was also found in the research by Jerry Porras and Jim Collins covered in their book ‘Build to last’.
• Focus on segments with the highest perceived differentiation that show ‘real ROI’. In other words focus your efforts on markets and prospects who seek your leadership.
• Get subjectivity out of your forecast allowing people to do the right things at the right time. It will decrease your cost of sales and increase your hit-rate at the same time.  You will have have up to 45% more active deals in your pipeline in any given moment in time.
• Keep on investing in your people in order to proof the forward looking mindset of management and your commitment to them as well.

READERS: I’m looking forward to any other ways to break the rules and excel in 2009!