Time for a change: Consequences for SAM
One of the triggers for changing your organisation is time. Whether you realise it or not, when you design your organisation you build it to suit a timescale. The timescale for many organisations is the month. Every month you report sales, margins and profits. Doesn’t everybody?
Let’s look at how time affects your organisation design. Organisation design can be complex. However, a simple way to look at organisation design is to look at the star model. The star model comprises five things: strategy, structure, processes, people and rewards. These five need to reinforce each other to produce good financial performance. Once we decide the timescale for the businesses is monthly, then processes, people and rewards need be designed to deliver results monthly.
Processes What meetings and reports do we use?
People What people do we employ and what skills do they have?
Rewards What do we measure and over what period do we measure?
What does this mean in practice? Processes means meetings and reports. Typically, in some mature businesses, to deliver a monthly sales budget we may have one monthly sales meeting. In more mature businesses in more competitive markets, we may have weekly sales meetings -- four sales meetings a month. So, between one and four sales meetings a month. Similarly, you normally produce sales reports monthly. You may printout the report month to date, but you are working against a monthly budget. Not a daily or weekly budget.
To deliver results monthly you employ people with the skills and attitude who perform behaviours that will deliver results each month. You reward these people for delivering the results (or close to them) in successive months. After 12 months you may give them a financial bonus. But every month you will reward them with praise or punishment for their results.
Now we understand how time affects design, let’s consider what happens when we need to change the timescale for the business. Say for example, we want to make more sales on the web instead of our normal face-to-face sales. Here the timescale is at the most a day. In some markets, minutes. So, what does this mean?
Well let’s look at processes first. With a timescale of a day, can we manage sales by having weekly meetings? Given the intense competition for sales on the web, no, we can’t. The least we could accept is daily sales meetings because the market changes so quickly. (For example, is our Google Adwords campaign delivering results?). Now we need to see at least daily sales reports, maybe in some businesses, hourly reports.
Now look at the people, what we now need are fast moving dynamic people who can adapt to the changes we see today, not next month. They need skills to see trends in daily data. And then rewards, we need to measure differently, reward differently and more often. Daily, maybe weekly at most.
In summary we see for different timescales we need to design our organisation for different processes, different people and different rewards. So how does time apply to Strategic Account management (SAM)?
Well for SAM, the timescale is different to the normal monthly. For SAM the timescale for results is beyond this financial year. Depending on the market it may be beyond the next financial year. What this means is the design of the organisation needs different processes, different people and different rewards.
Processes Quarterly account review meetings, not monthly
People People who are credible with executives
People with high influence skills. They can influence internal departments as well as external customer departments when they have no authority.
Long term operators and thinkers, not just focusing on this month or next month's results. Thinking and acting for results next financial year
Rewards Measures and rewards which encourage behaviours that develop next year’s sales, not just this year’s sales.
Measures and rewards building executive relationships.
Most organisations that start on the SAM journey don’t understand the consequences of implementing SAM. When you start implementing SAM, you are measuring results in years, not months. So, it’s time for a change. If it’s time for change in your organisation why not check out SAM at UTS and start your journey.