As chair of the new CompTIA IT Business Growth Professionals Community, I am proud to introduce the group mission and its value as a resource for the entire association’s membership. The tag line describes our focus: Delivering expertise and guidance to impact solution provider success." Our members accomplish this by providing coaching, consulting, products and services to the partner, distributor and vendor organizations that make up the IT industry.
Our goal is to provide quality content from our community members on a monthly basis; all designed to help you grow your organization, your channel and your market share. I’d like to start out by sharing my thoughts on “Growth and Value.”
Building your business requires both leadership and management, and the first step in that journey is learning the difference between the two. Leadership is the ability to make things happen by encouraging and channeling others' contributions, addressing important issues, and acting as a catalyst for change and continuous improvement. Management requires the skill of attaining predefined objectives with the cooperation and effort of others.
The best partner companies, like other successful organizations, are led by individuals who have clear vision—and the ability to establish specific objectives that allow them to work toward their organizational goals. Executives of businesses that have leveled off, stalled, or struggle to break even may lack both vision and objectives. Without vision or stated objectives employees emotional commitment lessens, energy is drained and negativity seeps into the organization.
An executive vision should address the following questions:
- What does your organization look like now?
- What will it look like in three years in terms of revenues, number of employees and specialty areas?
- How do you define success?
- What will the company's net worth be in three years?
- What are its profit goals?
- How do you want to be known as by your clients, your competitors, the business community, and by your vendors?
- What's your ultimate personal goal? (This should not be shared with employees)
- Do you have an exit strategy that calls for acquiring other companies or being acquired yourself, or do you want to build a long-term corporate organization?
Answering these questions will help you fine-tune your company’s vision, focus efforts, and inspire employees. They'll also help you and your managers set the objectives required to spur your company's growth.
Among other considerations, sales-related goals might include:
- Revenue growth by dollars or percentage
- Gross margin dollars generated by each practice
- Percentage and dollars generated by new or current
customers for each practice - Revenue per employee
- Percentage of service dollars vs. products generated
- Managed services dollars vs. total revenue
- Number of net new clients added each quarter
- Percentage of won/lost accounts per proposal
Managers can use predefined objectives to create sales and marketing programs and dashboards to measure their effectiveness. Leaders can use these goals to judge management performance and promote the organization's continuous improvement. The results: employee performance and morale will improve, customer satisfaction will increase, revenue and margin goals will be exceeded—and your organization will begin to build value.
Improving your company’s value is critical in our maturing industry. Certainly, you can define value as retained earnings, recurring revenue and balance sheet results.But it's also important to evaluate sales factors such as customer retention, net new client acquisition ratios or client penetration rates and lifetime value ratios. Your intellectual property, patents, employee non-compete agreements, brand recognition and even employee retention percentages are also important components to consider when building your organization's long-term value.
One last word: As a professional—no matter what your level of responsibility—you must also focus on your personal growth. What's your plan for increasing your individual value this year? Moving forward requires all of us to manage personal development as well as our companies' growth plans.
Ken Thoreson is the president of the Acumen Management Group Ltd., a North American consulting organization focused on improving strategic business and sales leadership functions within growing and transitional organizations. You can reach him at ken@acumenmgmt.com. www.AcumenManagement.com. BLOG; www.YourSalesManagementGuru.com
