Waste and inefficiency are the enemy of growing enterprise value. It isn’t enough to simply have an org chart, budget plan, and strategy laid out. You must match up the right people, with the right resources performing that strategy in order to grow above competitors in your industry.

Imagine turning on Monday Night Football, and watching your favorite team break the first huddle with 3 Quarterbacks, 2 Offensive Linemen, and 6 Wide Receivers.  Besides looking strange, you would immediately recognize this strategy is going to fail before they even snap the ball.  Now imagine a normal looking formation lines up, however the players were all well below average.  You wouldn’t realize anything is wrong until the ball is snapped, and the play becomes a disaster.  The point is, it isn’t always easy to spot something is wrong until you’re already executing.  This is the same challenge faced by many executives when they try to assess if their operating companies have the right resources in place to execute their strategic plans.

 

Download the GTM Resource Ranking Tool to see a framework for categorizing GTM resources, a ranking of where your gaps are in utilizing GTM resources, and for direction for where to invest time into first and prioritize.

 

Waste and Inefficiency Are the Enemy of Growing Enterprise Value

 

It isn’t enough to simply have an org chart, budget plan, and strategy laid out.  You must match up the right people, with the right resources performing that strategy in order to grow above competitors in your industry.  The focus of this article is not how to define the right strategy, it is about allocating all of your go-to-market (GTM) resources efficiently once you have defined your strategic plan.  Are your portfolio companies maximizing the resources they are given today?  How do you start to assess whether or not there are gaps?  We’ll frame this up by examining key GTM resources through these 5 lenses below.  Click here for our tool to help you organize and assess gaps as you read through these sections.

 

  1. Go-To-Market Organizational Design
  2. Leadership Capabilities & Accountabilities Assessment
  3. Executive Talent Search
  4. Go-To-Market Budget Allocation
  5. Customer Acquisition Cost and Customer Lifetime Value by market, segment, product, channel

     

Go-To-Market Organizational Design

 

Simply put, do you have the right design concept that aligns best with your strategy to grow?  There are generally 6 types of models or a hybrid that combines 2 of the 6.  Stratification, Hunter/Farmer, Geography, Persona, Product, or Industry Vertical focused coverage all have their own set of pros and cons.  Understanding which variables are the most critical will help drive what the optimum coverage model is (i.e. if language/culture is critical, than a Geography based model might be required).  Don’t be constraint based when assessing organizational design.  Start with the ideal coverage in mind and work backwards to see where you have gaps with the existing design.  If you do not have the right structure in place up front, you will be compensating for this deficiency in many different ways further down the stack.

 

Leadership Capabilities & Accountabilities Assessment

 

Strategic execution starts with the C-level leadership team.  It isn’t news that the top of the org chart is where you need to have the right people, but how do you assess this objectively?  You need to have a clear list of the specific capabilities required for success in each role for leadership.  Once you have this clear list, then you need to assess how well they exhibit behaviors that represent those capabilities. Knowing what the capabilities are, and how well your leaders exhibit them is only half of the equation.  The other half is the accountabilities, or performance history.  Have they hit their targets over the past 3 years?  These are very specific to each company, but can include total sales, margin performance, growth objectives, new markets entered, customer churn, etc.  Score each of your leaders for how well they exhibit the key competencies and how successful they have been at achieving results.  This will allow you to assess weather or not they are the right resources to implement your strategy.

 

For further reading on a comprehensive talent approach, read this article.

 

Executive Talent Search

 

Do you have the right plan for hiring top level A players?  High level talent is always in demand, and almost every search will be under tight deadlines.  Are you actively nurturing your network and developing a bench of potential leaders that can be recruited?  Are there current succession plans that you need to begin executing search plans for? It’s critical to have a search function lined up well in advance of when you will actually need to use them.

 

Go-To-Market Budget Allocation

 

We’ve all seen the budgeting exercise where multiple spreadsheets are jammed together and result in last year + x%.  This approach doesn’t give you the assurance that you are maximizing the allotted dollars to squeeze as much EBITDA out of them as you can.  Starting with a bottom up capacity and marrying that with the top down market opportunity will highlight what gap exists to solve for.  Put another way, how much revenue can you get vs how much revenue should you get?  It’s critical to ensure you have all of your dollars invested in areas with the highest return.  This is where account segmentation and acquisition cost vs lifetime value come into play.

 

For further reading on budgeting for growth, read this article.

 

Customer Acquisition Cost and Customer Lifetime Value by Market, Segment, Product, Channel

 

How much does it cost to bring on a new customer in a specific segment, and how much revenue do you expect to generate over their lifetime?  Knowing which customers represent the most value is like managing a stock portfolio.  Invest here, not there can be a powerful way of looking at how you allocate resources.  Performing account segmentation is a great start.  Layering in the cost & returns associated with each segment is where you get the most value.  Start by calculating selling, and marketing cost outlaid to acquire new customers over 1 year.  Then analyze how many years an average customer stays with you multiplied by average annual revenue to inform a basic lifetime value.  Calculate this at the market, segment, product, and channel level where applicable.

 

Conclusion

 

There is a very wide universe of areas to investigate when looking at efficiently deploying GTM resources.  It is critical to have the ability to narrow in on the few levers you can pull that will move the needle.  Having the process and cadence in place to review these critical areas with your leaders will ensure you have the right people and dollars aligned to the GTM strategy.

 

Download the GTM Resource Ranking Tool to see a framework for categorizing GTM resources, a ranking of where your gaps are in utilizing GTM resources, and for direction for where to invest time into first and prioritize.

 

 

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ABOUT THE AUTHOR

Garrett Ryan

Combines data-driven analysis with creative solutions ensuring clients make their number.

Prior to joining SBI, Garrett has served in a variety of finance, tax, and accounting leadership roles.  Using a data driven approach, he has developed tools to help organizations measure and grow their revenue.  Working with Marketing leaders, he has built models to help attribute revenue to key initiatives and track progress against previous norms.  Utilizes cutting edge tools to help visualize the success of product launches into new markets.  Areas of expertise include financial modeling, strategy development, concept implementation, risk mitigation, and creative problem solving.  Garrett’s experience allows him to translate complex information into bottom line, actionable insights.

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