Are you working with a top down or ground up revenue plan? Or do you just not have the right talent?

It’s late February. The company’s sales producers returned to the office from the high energy (and super expensive) 2019 Sales Kick Off over 3 weeks ago. Confidence was through the roof and opportunity appeared to be within reach. However, a look at February sales results makes you colder than the late February wind chill! How can this be?

 

January’s sales results were weak ….and February’s are even weaker. This is even more terrifying if your sales results are based on an annual recurring revenue plan and over half of your recurring revenue gets booked in the first 4 months of the year due to the rule of 78.

 

But even if that is not the case, this is a 6th of the selling year gone and you are staring down a really serious problem. Is 2019 done already? You clearly have the wrong CEO, the wrong revenue leader, the wrong leadership team and the wrong sales people ….or do you?

 

Download the Ground Up Scoring Results Tool. This tool helps you to know if all contributing factors were considered as you built your plan, to understand the performance conditions you have your talent operating in,  and to understand if you have a true ground up view of your start point.

 

Are You Deal with a True Buttoned up Ground Up?

 

Let’s address directly to the real issue at hand. Is the team delivering THEIR plan or are they delivering YOUR plan?

 

Said another way, did the Portfolio Company executive team very deliberately create a 2019 revenue planning schedule, build territories, define the opportunity in clients, segment the potential, understand and align on non-repeatable events from last year, weigh the negative and positive revenue levers and BUILD the 2019 revenue plan with a defined “go-get” new sales number?

 

Said another way, did they look holistically at their 2018 performance and produce a GROUND UP 2019 revenue plan? Maybe as you think back to August and September you are not entirely sure and there are numerous fingerprints on the plan. Here’s how you know. Use this tool to understand if you are dealing with a best in class ground up revenue plan.

 

This tool is very powerful if you do it in partnership with the executives at the Portfolio Company as part of a monthly operating meeting. If the executives can score the “ground up” process at 40 points or over, you can be confident that they had a heavy hand in the creation of the plan because confidence in each of the questions in the tool demonstrates an input in to a sensible revenue plan. Lower than 40 points and your executive team may not be feeling total ownership of the revenue plan or the revenue plan was not thorough enough in considering all the planning variables.

 

At this point can we define two situations:

 

  1. The revenue plan was 100% ground up. It was created with interlock between the executives at the company and the private equity operating team, all the drivers and variables of organic revenue growth were considered. You have an execution issue related to talent.
  2. The revenue plan was not thorough enough. It didn’t account for the variables and influences in the tool that are a pre-requisite for a strong plan.

     

“It’s Not You Honey, It’s Me”

 

There is a third situation and it is sometimes difficult for operating partners. Said bluntly, maybe the growth thesis for the company was not correct. Maybe the assumptions that were modeled in Due Diligence and post-close value creation didn’t go far enough. Believe it or not, organic revenue growth diligence is not practiced everywhere. It’s still very much growing as a form of diligence .

 

Candidly, some of the very best quantitative analysis I have ever seen was produced by Private Equity firms at the point of acquisition when planning for the future value creation in a Portfolio Company. But I have also seen an acquisition thesis that didn’t include some vital prerequisites to a sound value create plan. Features such as Addressable Market Size & Growth, Competitive Landscape and Positioning, Product/Market Mix, Distribution Strategy, CAC/LTV Analysis, Sales and Marketing Effectiveness, Pipeline and Forecast Accuracy and Cost Structure Analysis are all vital stage gates for the assessment of organic growth and prerequisites for a solid Value Creation Plan.

 

Maybe your issue is down stream of the overall business case for the Portfolio Company? You can even use the same tool or compare to this case study to rate your diligence or post close value creation plan. Did a lack of sales diligence or an incomplete value creation plan became a TOP DOWN revenue plan for your executive team? Is this why you are missing the Q1 number?

 

Prescription with Diagnosis Is Malpractice

 

At the end of the day, Sales Excellence is 50% talent and 50% the performance conditions where you place that talent. If you are sure that the portfolio company created a world class top down revenue plan, review this talent performance tool for next steps on your talent plan.

 

Download the Ground Up Scoring Results Tool. This tool helps you to know if all contributing factors were considered as you built your plan, to understand the performance conditions you have your talent operating in,  and to understand if you have a true ground up view of your start point.

 

 

Additional Content

 

Schedule a working session at SBI’s Studio.

 

Located in Dallas, TX, our facility offers state-of-the-art meeting rooms, lounge, full-service bar, and a studio used to tape our TV shows. SBI provides the location and facilitators, all at a compelling price point.

 

As a guest of The Studio, you’ll get unlimited access to SBI’s CEO, Partners, and a handpicked team of experts.

 

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ABOUT THE AUTHOR

David Aspinall

Dedicated to helping CEOs and Sales Leaders solve the answer to the growth question.

David loves helping CEOs and Sales Leaders solve one big problem: how to grow revenue faster than their industry and competitors.  As a Trusted Advisor, David has been instrumental in helping clients design and execute new growth strategies.  He is passionate about aligning a client’s growth functions – sales, customer success, marketing, product, and pricing.  David is a true business operator with more than 20 years of experience.  He has held officer and executive sales leadership roles in the Fortune 100 and previously had responsibility in Sales, Pricing, Product Management and Marketing.  He is also an active member of Young Presidents Organization.

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