How to untangle the conflicting pressures of sales and operations
I have a client who is building a business. Let’s call her Jodie.
Jodie has done fantastically well. First, she developed a brand new type of organic juice for the beverage market. She raised funds and started to sell batches online. She began to approach retailers directly and some are now selling her juice in-store.
I have written previously about the importance of not being your own CEO. Jodie was! But she understood that she needed to delegate operations and sales. So she recruited two very capable colleagues, Sam and Anita to take-on those roles.
Like any young company, growth has been choppy. Juice sales in store dropped during the pandemic. But online sales grew. This required new processes and a better delivery platform.
COO Sam saw this coming. He lobbied for investment in online infrastructure and in a better-equipped warehouse team. He also wanted to build a better client management system, including a dashboard to help make quicker decisions as demand shifted online. Understandably, he wanted the business’ operations to be ahead of the game to ensure that as sales grew the company would be able to stretch with them.
Anita felt differently. As Head of Sales, she measured success on turnover. She understood that Jodie didn’t have limitless funds to invest, but she felt that in a pandemic, with the globe focused on its health, those funds should be spent on advertising. On getting the brand known and pushing sales at the expense of everything else.
Jodie’s weekly Zoom call between them grew increasingly fractious. Sam and Anita both wanted what was best for the business. But they became increasingly entrenched in their views on how to get there.
This was the stage at which Jodie and I started to discuss how she took the business forward. And here are some of the most productive themes from those conversations:
- People think that conflict in a business is a bad thing. I’d suggest the opposite. Strong views and a passion to succeed are good for an organization. They mean you have a team that cares.
- Sales and operations aren’t enemies. They are interlinked. One without the other doesn’t leave you with a business. The two have to develop in tandem or sales will never be fulfilled.
- Ultimately, if you have to make a choice, sales have to come first. It’s not ideal to be struggling to create a positive customer experience, but it’s better than having a perfect infrastructure with no customers. That’s pragmatism.
- The key to getting the balance right is to push your sales team for transparent information about their pipeline. Many sales teams fall into one of two traps:
a) Under-forecasting their pipeline to deliberately exceed expectations.
b) Over-forecasting their pipeline to create a buzz of optimism.
It’s crucial that you develop an environment based on realism! Your operations team will be happy building their capability on the back of future sales and your sales team will appreciate leading the drive forward.
- Data matters. The more you collect, the more accurate your forecasts can be and the more targeted your investment.
In summary, the conflict between sales and ops is nothing new. Nor is it bad for business. But the argument will never be resolved if it takes place in real time. It’s too late to give yesterday’s customer a better experience. Your most important decisions will be based on tomorrow’s sales and tomorrow’s logistics.
Running my own business, I jump on our sales team for data first. I want to know how many new opportunities are entering the pipeline and over what period of time, where these new opportunities are coming from, whether they are sourced inbound or outbound, where customers last saw us and what prompted them to call. This doesn’t just empower me as a CEO, it also gives our ops team huge insight into why and how they should re-focus. It also enables me to hire according to where we should be next year. There’s nothing much trickier than trying to build a team based on a wish.
Ultimately, like so many areas of life, we are faced with a fine balance. Better data will generate better sales. It will also facilitate improved client satisfaction. Culturally, we can’t decide to be purely about one thing or another. Great cultures have ‘trust’ at the heart of their DNA and that means maintaining an open, transparent relationship with customers. In our business, I push our team to collect monthly Net Promoter (NPS) Scores and narrative alongside those scores. We’re not just about selling to new customers or servicing existing ones. We strive to be a trusted advisor, and that requires the entire business to be aligned.
Finally, you may have chosen to be your own CEO, but I’d warn against trying to run ops and sales personally. Not least because it’s much harder to harness internal conflict when you are arguing with yourself!