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Opinions of Sunday, 16 January 2022

Columnist: Brian Reuben

Bridging the strategy and sales gap

File photo to illustrate the story File photo to illustrate the story

Statistics available from Magna indicate that US$710 billion adverts spend in 2021—representing the highest growth rate ever recorded. That's a lot of money. This spending only represents a part of what companies spend on their sales effort.

Borrowing from the words of Mark Twain, 'if you put all your eggs in one basket, then watch that basket. That means if you are going to spend that much money on sales, then you better take your sales very seriously. Unfortunately, business executives don't seem to do this.

Research indicates that sales are, by far, the most expensive part of strategy execution in many companies. Yet, on average, companies deliver only 50% to 60% of the financial performance that their strategies and sales forecasts have promised.

And more than half of senior executives (56%) say that their biggest challenge is ensuring that their daily decisions about strategy and resource allocation are in alignment with their companies’ strategies. That’s a lot of wasted money and effort. This limits growth impedes superior performance and therefore a case of serious concern.

What this means is that the decisions, behaviors, allocation of time, and other resources at many companies cannot enable them to follow in the strategic direction they have determined. So even though a company may have committed resources to the development of a strategy, it cannot translate into superior performance. The reason for this is not difficult to find.

Strategy is still generally misunderstood by many executives. Of those that understand, misconceptions about strategy shut them out of strategic effectiveness. For example, an assessment by GrowthPlay, a sales-focused consulting firm among senior executives and sales professionals indicate the problem stems from gaps between the perceptions, attitudes, and information flows between executives and sales reps.

The results from the assessment show that executives have a high level of understanding of their companies’ strategic priorities, while sales professionals usually not involved in the crafting of their company strategy did not demonstrate the same understanding.

Senior leaders have a better relative understanding of the company’s direction than sales reps but are concerned that they lack the right sales processes and people to executive the strategy.

On their own, sales professionals are confident in their abilities to produce results but admit they have little understanding of the strategic direction and its implications for their behavior. When sales professionals lack the understanding of their companies strategic direction, they are more efficient at their routines, even when these same routines keep the firm, and its top team, from gaining experience with procedures more relevant to changing market conditions.

Why does this happen? Why are the front-line sales professionals and senior executives in such misalignment even at the expense of superior performance?
Well, to begin with, many companies don't even have a strategy even though think they do. They have mission statements, they have shared values, they have particular intentions they want to pursue like internationalizing but for them, any of these might be the strategy.

Unfortunately, none of that constitutes a strategy. If there is no strategy how can senior executives communicate something that does not exist? Strategy is a company's unique approach to competition and the competitive advantages on which it will be based. It's not a particular action, it's holistic and cuts across all the functions.

Another issue and it's a pretty one is that most senior executives are scared that communicating their strategy will expose them to strategy theft. But come to think about it, such executives should understand that they stand a more serious problem than strategy theft.

You see strategy is useless without execution. Preserving your strategy so that your competitors don't know about it and at the same time shutting your people out means it will not be executed and that means you will at best play along with others as a corporate mediocre.

How often have you read about the strategy of Google, Apple, Burberry, and Nike? For example, it took US car manufacturers many years to get good Toyota's lean manufacturing methods, even though Toyota willingly gave factory tours to its rival executives. More recently, traditional companies continue to struggle to adopt the digitally powered methods of online leaders like Amazon.com and Google, although the outlines of these methods are well known.

What does it show? Communicating your strategy doesn't compromise your position if you really have a strategy (read my article on 'Nigerian companies rarely have a. strategy').

In a world with a global infrastructure of consulting firms and others paid to disseminate corporate information, confidentiality as a reason for not communicating strategy is myopic and a pathway to failure. Your people cannot execute what they don't understand. This gap is the reason most companies only struggle along.