6 Steps For CMOs To Transform Their Businesses
While CMOs and others in the C-suite are under pressure to deliver their best to the company, a recent McKinsey study shockingly reveals that more than two-thirds of sales and marketing efforts fail. The company examined over 100 commercial transformations in the past five years, in order to derive results from a survey of 2,300 executives
The authors state that very few organizations invest in areas such as organizational culture and health which in turn will help in driving those projects. Employees seldom have a clear picture of the company’s commercial transformation – and this is where they falter.
The study recommends organization leaders to follow six components for success in the process.
1. Know where you are and where you’re going
Successful companies often create the compelling case for change. “Define what problem the organization is trying to solve and why the current status is not good enough. Your clear vision should be based on insights from data rather than on hunches,” say the authors.
However, they point out that companies typically don’t have a strong sense of their commercial capabilities. The best companies are deliberate about identifying their strengths and weaknesses against all capabilities and then mapping them against their goals so they understand which capabilities to prioritize. The onus in the C-suite can articulate what two to three commercial capabilities their organization is focused should not be only on the CMO but the entire C-suite on discussing transformational goals, and then translating into impact.
2. Create a transformation team built on trust
The focus should be on creating a resilient commercial-transformation team. While it is typically led by the CEO, the head of sales, the chief marketing officer, or even the chief operating officer, it should include marketing, sales, operations, and business-unit leaders, says the report.
“Since commercial transformations are long processes and involve taking risks, the team must invest in building deep levels of trust to keep morale high over time,” it says quoting from the research that 63 percent of successful commercial transformations balance team health with performance. What matters is that the team members understand their own motivations and those of their colleagues as they embark on a transformational journey that involves new experiences and risks.
3. Score quick wins
Transformations don’t succeed unless they deliver substantive wins within a year. That’s why big companies build momentum by focusing first on initiatives that have early impact—and help fund the transformation—then on building a case for further change efforts. The study stats that in the longer term, this quick win moved customer insights to the heart of everything the company did because it showed skeptics that transforming into a customer-solutions organization was both worth pursuing and achievable.
4. Activate the organization
The transformation team has to devise a plan for pushing change throughout the organization. That requires a clear vision for building new habits at every level. For the C-suite, it’s about shifting mind-sets and developing new leadership and change-management skills. For managers, the focus needs to be on coaching, product knowledge, and problem solving. Frontline sales reps need specific skills in areas such as consultative selling and pricing analytics.
The study shows around 60 percent of our survey respondents said that having committed change leaders across the organization was “extremely important” to the transformation. Imaginative communications are also necessary so that everyone continues to sit up, take notice, and act. These may involve internal or even external advertising campaigns, social media, town-hall meetings, and a raft of other communication efforts.
5. Commit to coaching
Coaching is critical for success, note the authors. Good coaching is much more than going on a ride-along with your buddies or doing a sales pitch while someone watches. It’s about a real commitment to improving your people by providing constructive feedback, empathizing, helping them work through issues, and reinforcing their strengths—at the right cadence. It’s also about role modeling new behaviors, something that rarely happens in practice.
One way is a weekly contact between coach and sales rep is vital to changing how people work. For example, a consumer-services company mandates that sales managers conduct daily 15-minute check-in calls with all reps who fail to hit their monthly targets. Reps who make their targets get weekly one-on-one sessions, and reps who exceed their targets get a ten-minute praise call every week. The company also requires managers to join each rep for a day every month.
6. Hardwire a performance culture
Change is constant. Hardwiring a high-performance culture into a company’s DNA is the only way to assure growth above the market year after year. This requires putting in place the right metrics to track and adjust performance. The best-performing companies develop dashboards to track progress. They include basic financial-performance metrics, of course, but they also track indicators of changes in behavior, such as understanding how marketing is helping the sales force sell, which tools helped close sales, and how often collaboration meetings occurred. These companies also actively track capability metrics, such as training courses employees have taken, whether they passed or failed, and how that correlates with performance in the field. They then use those calculations to adjust their capability-building efforts and zero in on performers who need more or different training.
McKinsey notes that companies that effect a successful transformation go one step further by adding surveys and in-person interviews with their people to provide an even more comprehensive picture of commercial performance. They also develop customer-satisfaction measures—using sales, business units, and pricing as the “customers” of marketing.
“A strong leader needs to ensure that the enthusiasm, energy, and momentum is sustained throughout the process. It’s likely to be one of the most challenging things a company undertakes—but it has the potential to be the most rewarding, both for your people and for achieving above-market growth,” conclude the authors.
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