How do you align Sales Director objectives with your board colleagues?
Answers – multiple choice as follows;
- Shout louder!
- Give them more objectives than needed …
- Be smarter with the board objectives
Personally, I have seen and experienced all three, but by far the best answer is to have smarter board objectives. And this requires a collaborative approach across peers, and the skilful coordination of the Managing Director. Let me take you through a real life example.
After many years of chasing numbers, this company appointed a new MD and there were two priorities –
- put in place a strong team of functional specialists
- align them with a common goal
In an industry that was highly regulated and extremely competitive, revenue growth was relatively easy to achieve compared to margin – this would be the key to long term success with a short term plan to get the journey started.
A Common Goal
The MD achieved this with setting one common goal for each functional director – EBITDA. Not individual, not functional, but company-wide.
A Common Approach
The MD then set about the task of how, together, the group could achieve this with one single plan. This signified the need for skilful coordination on the part of the MD, but a massively important element of collaboration by the functional directors.
The Sales Approach
The Sales Director was responsible for setting key objectives that set the direction for revenue, distribution points and gross margins. This would be the foundation for establishing the capabilities of the company to supply at a cost to serve that met the overall objective of EBITDA. In this case, the key objective were;
- Share of Distribution Points
- Share of Purchasing per Distribution Point
- Gross Margin per Distribution Point
This was supported with a segmented approach to the customer base, applying the right type of commercial resource to the channels that were served, and those that were strategically better placed to achieve the objectives.
Reward & Recognition
In order to reward the right behaviours to achieve the outcomes, a coordinated reward scheme for the sales roles was introduced that recognised performance totally aligned with the company’s objectives. In this case, reward for new business and customer profitability were key.
This approach would be successful for many years until an industry shifting event happened which required a change of emphasis from Sales to Procurement – however the approach was just as relevant it just required a strategic shift of focus.
So, the big question for you if you are a sales director – are you on your own, or aligned with your colleagues?
Does this sound familiar? Talk to Gary Lunt, FMCG Specialist