Understanding we all had some "pause" when this crisis broke in March, but now revenue leaders need to reset their strategic plans and growth strategies.
Things to Consider Prior to Building a Longer Term Strategic Plan
Building a plan in a highly fluid environment is a challenge. However, the concept of fluid markets and building a plan that reflects the changes in order to guide the business is not a unique undertaking. Planning is foundational; it should be done annually and iterated on throughout the year. Heading into this planning cycle, dynamics are different, and there has been a significant change. Before writing the long term plan, consider some fundamental principles:
Customer demand drivers have changed drastically
Market messaging and content strategy will need to evolve
Historically strong markets may be facing suppressed or lost demand
Revised coverage models are required to align to acquisition costs
Metrics and KPIs require revision
Planning needs to be agile
Change in Customer Demand Drivers
What caused a customer to demand a product historically may be different today. The price of a product or service may now matter less than safety. Predicted rises in Nationalism may emphasize where a product is manufactured. Soliciting input from customers will be imperative to navigate the change.
Change in Messaging and Content
The market messaging of yesterday may have changed. Not only may the trigger events causing a prospect to engage in a demand cycle be different, but also the use cases, personas, approval cycles, as well as customer touchpoints and the communication cadence have all changed dramatically. What worked yesterday may be obsolete today. For instance, a current M Allen. client focused on the bankruptcy and foreclosure space has identified an entirely new market opportunity based on auditing payment change notices. Within weeks, they repositioned their market messaging and content to be audit focused instead of attorney focused.
Market and Account Prioritization
One of the bigger discussion topics over the past two months is what industries and markets will be impacted either positively or negatively by the pandemic. In the matter of a business that is highly dependent on Travel and Hospitality within Southern Europe, now may be a good time to reprioritize other markets and customers. A key consideration of a 3-year plan needs to have a clear understanding of what customers and prospects are likely to spend for service. Chances are the list has changed.
Alignment of Resources to Customer Acquisition Cost
One of the first things to happen for the majority of B2B sales organizations is that all field sellers have now become virtual sellers. One of the next dynamics was a clear understanding that the Customer Success function would be the critical component of growth. Both of these factors are direct inputs in Customer Acquisition Costs and Lifetime Value. The most costly GTM resources have traditionally been the field sales force. With a new emphasis on virtual selling and customer retention in the current environment, the market coverage construct has changed. The CAC to LTV relationship will need to be optimized. These are core computations for building out the longer-term plan.
Tracking the Right KPIs
Yesterday’s data is meaningless. Closure rates, pipeline weightings, and trend analysis have become obsolete. What happened yesterday has little impact on the new normal. Get organized on the key metrics that make sense to monitor going forward.
Be Agile
A core component our growth model is having an iterative planning process. How often is the executive team coming together to discuss and pivot? One clear lesson from the past 60 days is that things can change quickly. Consider the interlock and communication cadence as core principles in the 3-year plan.
The Process Framework:
This strategic planning process should be approached within the context of the Year-in-the-life-of the executive leadership team. Market leaders are starting to approach the strategic plan with these layers in mind. This results in alignment with both the market and across the internal functional teams. The following example of strategic alignment assumes a company is on a calendar fiscal year beginning in January and ending in December.
STEP 1
Market leaders begin by validating their market research and corporate strategy in Q3. With this validation, they seek to understand changes in the market, industry, buyer, user, and competitor landscapes. They also use this as an opportunity to compare how well their corporate strategy is performing against a set of productivity measures relative to investor or board expectations. The purpose of this work is to update the baseline and account for emerging trends that will impact the upcoming year.
STEP 2
Following the validation in Q3, Q4 is the time for defining the product, marketing, sales and talent functional strategies. The purpose of the functional strategies is to define how the organization is going to address changes in the marketplace while enabling the company as a whole to achieve its corporate strategy. Once drafted, each strategy is reviewed with the other strategy owners. What emerges is a priority list of three to five key integration points. These integration points become the KPIs that get measured going forward. Without alignment, the teams will not be working well together. With alignment, a revenue growth plan will be in place that will optimize the investments.
STEP 3
Starting in Q1 when the new strategies are put into action, a weekly/monthly/quarterly operating cadence is launched. This ensures execution of the strategies happens and the teams stay in alignment.
On a weekly basis, functional leaders meet one-on-one to look for areas of misalignment. The agenda for the call looks something like:
· Review status of action items from the prior week
· Discuss execution issues from each strategy
· Prioritize what each function owes the other function
· Share new market intelligence and its implications
· Set action items for the coming week
The monthly calls are a chance to review the KPIs as a team and ensure the organization as a whole is on pace to achieve the objectives. Larger scale alignment issues that are unable to be addressed in the weekly meetings are addressed here. The agenda for a monthly review looks something like:
· Review progress against each strategy’s objectives and KPIs summarized on a stoplight report. Green areas are celebrated, yellow areas investigated for emerging issues, and red areas addressed in terms of changes to the execution plan and/or expectations.
· Share new market intelligence and assess the implications.
· Work on one or two big issues that threaten alignment and/or execution.
The Quarterly Business Review (QBR) starts in Q2 and continues through the rest of the quarters. Typically, this occurs at the beginning of each new quarter – January, April, July and October. The QBR is a way to review strategic assumptions and determine if they played out as expected during the quarter. This is also a time to review and update strategies to adjust to dynamic market conditions and address bigger alignment issues that were not addressed throughout the quarter.
The agenda for the QBR looks something like:
· Review financial performance
· Review the stoplight report
· Review market intelligence trends from the quarter
· Review/update the corporate strategy as needed for the coming quarter
· Review/update the product strategy as needed for the coming quarter
· Review/update the marketing strategy as needed for the coming quarter
· Review/update the sales strategy as needed for the coming quarter
· Review/update the talent strategy as needed for the coming quarter
· The process repeats itself starting the following Q3.
Things Are Different Today’s world is undeniably different than yesterday’s. Following yesterday’s process will not work. That includes how planning is handled, and the questions asked entering a planning cycle. Invest time now into how demand has changed and how customers want to interact with your business. For more information, contact M. Allen's Principal, Matt Slonaker, via mslonaker@mattallendevelopment.com to build an iterative go-forward plan.
