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KPI Dynamics Newsletter
www.kpidynamics.com       858.566.3072        April 2009
Create a Corporate Revenue Growth Culture
by 
Using Sales Scorecards
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Is your business growing revenue
according to your business plan ?

 
JVC
 

Achieving  revenue goals and profitability, requires premeditated sales and marketing planning and processes. 

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Most CEO's and Senior Managers assign responsibility to their direct reports for the creation of individual department performance goals and they are often not focused on revenue capture and growth.  While the intention is to provide sound managerial oversight, this is a mistake!  Growth oriented companies realize that company revenue growth is the responsibility of each department. CEOs at these companies, understand that they must link each department's goals to the over all corporate revenue growth plan.
 
Create a Corporate Revenue Growth Culture !!  Use Sales Scorecards.
 
Traditional management historically has relied upon individual department heads setting goals and objectives and they are often unrelated or non aligned with the corporate revenue plan.  Yes, there are goals, objectives and metrics, but they all too often focus on performance within the narrow scope of their own departments and they miss the direct impact on the overall corporate revenue objective.
 
Consider a different approach for a moment, one where each department has specific quantifiable, and thus measurable, performance goals that tie directly to business results. A measurement in the form of increased revenue, decreased cost/expense or minimized business risk is a way to met the test.
 
Examine the following scenario that aligns the objectives of SALES, OPERATIONS, FINANCE, PRODUCT DEVELOPMENT & MARKETING.  Now, let's assign a sample revenue target of $1,000,000 in sales this month.   Each department should set a number of goals that, by month's end directly contribute to the company goal of $1,000,000 in revenue. Using a table, create a scorecard that can be reviewed at a weekly department head meeting.  Using a color code, green for completed, yellow for in progress and red for not complete, you can easily and visually see the performance.  Let's utilize some very simple and basic goals as an example. 
 
 
 
 

SALES DEPT

WK 1

WK 2

WK 3

WK 4

100 calls / rep

 

 

 

 

10 presentations / rep

 

 

 

 

1 closed deal / rep

 

 

 

 

2 new hires

 

 

 

 

$250K rev/week

 

 

 

 


  
Next, repeat the process for each of your departments using the same  scoring system.
 
For example,  you should task each of your major department heads with 2 to 3 goals that have a high impact on revenue generation, cash flow, receivables, billing, expense control and cost center management.
 
Operations
Complete customer installations
Produce product manual
Ship all fillable orders on schedule
 
Finance
Pay Expense reports
Collect A/R past 30 days
Select new raw material suppliers to reduce cost
 
Product Development
Approve new product packaging
Approve manuals
Set product training for sales
 
Marketing
Generate 100 new leads/week
Complete and roll out new product promo
Complete press release announcing new product
 
You can format the scorecard based upon your company organization charge.
 
You begin to see the point.   By assigning " to do's with by whens" that directly affect the ability of the company to produce products, sell products and collect revenue, each department has a direct impact upon financial performance. 
 
Too often, objectives are set that ambiguously measure some goal that may or may not be tied to revenue.  By using a sales scorecard, each department is connected to each other in the pursuit of revenue.  Each department head needs to manage efficiency and productivity to ensure positive ROI on department budget dollars.  The scorecard method helps in creating a revenue capture centric culture. 
  
If your company is to meet its financial performance objectives, it must align each department's objectives to maximize revenue capture. It is no longer a best practice to manage simply by objectives or key performance indicators.  There must be processes that align each department's behavior and performance into one, integrated outbound revenue capture program.
 
Hunt now............or be eaten later !!!!
  
 
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