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A matrix here, an overlay there and soon you have a Sales organization

July 17, 2009

On more than one occasion my partner and I have made entries into this blog regarding Sales or the sales process. Each entry has been the result of our meeting with an executive as he/she reflected their views regarding a particular area; in this case Sales and we tried to make heads or tails of their experiences, seeing if they are unique or part of a larger pattern. We recently met a Senior Sales Executive of a well known global software publisher. The conversation went something like this:

Software Executive (SE): So far this year we have been holding our own. Year over year on a year-to-date basis our sales are down about 3% but our profit is down 15%. We can’t figure out why our profit picture isn’t in more decent shape.

Return on Efficiency (RoE): How would you best describe your sales delivery model?

SE: Well, we are a highly matrixed organization and we often have some difficulties internally of how best to distribute revenue and at the same time optimize the client’s spend capabilities.

RoE: Do you feel that your own product quota expectations are too high or too low?

SE: We do a reasonably good job of setting product expectations but often fall short in certain product revenue scenarios.

RoE: Have you streamlined your revenue process before?

SE: No, we had a decent first half until it started to slow down and now we have to quickly take out unnecessary costs and complexity. In fact, we’re meeting soon to brainstorm how this can be done.

RoE: Ok, so the people who have the most to loose by streamlining are thinking about how to streamline?

SE: It sounds contradictory, but that’s how it is right now.

Do you see where this conversation is going? This organization could be its own worst enemy. There is a significant amount of gold one could mine from a matrix heavy organization. The typical matrix has duplicative and compromise written all over it. But more than duplicity; product resources, sales cycle time and management time are often wasted fighting internal battles to gain the upper hand inside the company, worse yet is allowing the battles to be fought in the glare of the customer. Often, a matrix overlay is created when short-term attention is needed on a market or related issue and like most committees, once implemented, an overlay doesn’t seem to go away.  It just becomes ‘it is’.

The matrix really doesn’t work. Oh, it may appear that there is, in an odd way, some sort of check and balance or some rationale that survival depends on who is best at navigating political waters. But at the end of the day and in this economic environment what executive in right mind would want members of his/her team bickering over pennies when significant dollars are wasted arguing.

Just think if the duplicative instances were removed from the scenario above how many more dollars could be gotten from the customer or better yet added to the bottom line. Well thought out Compensation Plans and quota deployment do a far better job and therefore eliminate the need for a matrix. Product overlap, product pricing, and feature applicability to a specific vertical’s needs further advance the ability to quickly remove the duplicity of the matrix. Sales is not just a function of effort.  It’s mostly about time out in the field selling and the more committees eat time, the harder it is for Sales to meet its goals.

Perhaps, it’s not the sales department that’s killing you. It could be all the political masters in the matrix who have an axe to grind for revenue allocation, but have no sales awareness of how to get the job done.  Just how much could you add to the bottom line?

Rich Eichen is a Managing Principal of Return on Efficiency, LLC, who’s website is www.growroe.com and is one of their senior turnaround leaders/CROs, Program and Interim Executives with over 25 years experience reshaping companies, Operations and sales organizations. He can be reached at rich.eichen@growroe.com

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