Best Practices: Want profitable growth? Find the missing link between sales, operations
1 Jan, 2009 By: Bruce Wilson Landscape ManagementGrowth is important to most business owners, but profitable growth is even more important. Profitable growth is possible when you link sales and operations.
The linking of sales and operations must be a company-wide discipline. Often, sales and operations departments exist in separate silos within a company. The sales department's core objective is to sell new work; the operations department's core objective is to execute the work and maintain client relationships. A common misconception is that sales departments sell work and operations departments perform work.
How do you link sales and operations, and what are you trying to accomplish?
Profit's the goal
To grow profitably, companies need to:
- Sell projects that operations can produce profitably;
- Bring in business that improves your operation's density model, thereby reducing travel;
- Land new projects that lead to profitable enhancement work,
- Sell to customers who have multiple properties meeting the above criteria;
- Operate efficiently to maintain a competitive edge;
- Engineer operations to meet customer types and project types being sold; and
- Leverage service lines (maintenance, irrigation service, tree care, plant health care) and cross sell.
Cautions to heed
To grow profitably, companies must resist the temptation to:
- Take only the low-hanging fruit (easy sales);
- Match low prices;
- Drive sales by referrals, which is easy but not necessarily profitably linked to operations; and
- Grow solely for the sake of growth.
Back to basics
Organizationally, companies must:
- Align sales to operations and vice versa;
- Strategically plan growth;
- Strategically build operations;
- Foster communication opportunities that keep sales and operations aligned; and
- Relentlessly control overhead costs to maintain their competitive edge.
Owners, by nature, have either an operational or a sales focus. They build their companies around their personal strengths, at least initially. Eventually, to succeed, they must link sales and operations.
Keep the concept of linking sales and operations at the forefront of planning and strategy sessions for this to remain part of the company culture. It's not easy, but the payoff in profitable growth is worth the effort and discipline.
Bruce Wilson is a partner with the Wilson-Oyler Group consultancy. Visit www.wilson-oyler.com.
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