By: Carlos Fernando Ledgard
Today, many B2B companies around the world are trying to adapt their model to the situation, moving a large part of their business cycle to remote work, given that it is impossible to carry it out in person due to the pandemic. In almost all the cases to which I have had access since the beginning of the crisis, the commercial leaders have accepted quite penalized results, there are even some cases in which it was simply decided not to project any commercial results, putting the commercial operation in go mode with the flow. The truth is that the B2B business units, the subject of this article, have been below their break-even point in the last 5 months, and those that have not fallen, have achieved it at the cost of reducing their commercial team and the elimination of its business units with negative contribution margin (perhaps temporary), assuming the future impact of these decisions. The latter is an understandable decision, by the way, given the little predictability that the political and economic environment of almost any country gives.
The situation described leads us to formulate a first question: in adapting the sales team to remote work, what variables were taken into account? And I ask this because, as many know, there are two types of KPIs (key performance indicators), management KPIs and results KPIs. The management KPI’s are those that measure the results of the activities that the collaborator or team must carry out to achieve a certain objective, and the result KPI’s are those that measure the result of the team versus the specific objective that is sought to be achieved with the defined strategy. If the company only modified its result KPI’s, it means that the change in situation was not accompanied by a change in strategy, and that this change in turn required a new work methodology for the sales team, and therefore this should have brought with it the control and evaluation of it through the implementation of management KPI’s. In short, a new strategy was not proposed for the new situation, only the expected results were adjusted downwards. A second key question derived from the situation described is:
Are the results obtained purely a product of the pandemic and the government’s harsh control measures, or did it also have a negative impact that the strategy and work methodology essentially did not change, and it was simply decided that most of the activities of the commercial process had to be remote?
The situation under analysis merits the following two reflections:
- Whether the organization’s business strategy and methodology are correct or need to change, and
- If the way to reach the market, the same one that could be limiting the results of the organization, is going to be maintained once the “new normal” is recovered.
Having already explored the first reflection in the first part of this article, we will focus on the second.
If the companies are hit and their direct sales teams are producing low numbers, it is not difficult to empathize with the serious situation that their distributors are suffering today, those who, for the most part, at least in Latin America, are small companies where, in much of cases, they are cash-generating businesses but not profitable ones. It is therefore an urgent time to rethink how to reach the market, through what means or channels (digital, telephone, face-to-face, call center, among others) and the contractual relationship (direct or indirect) that allows us to make a better deployment of our strategy. Always putting into perspective the efforts to implement each of the decisions and their possibility of escalation in the future. For example, in the case of business partners, the plan should include the additional value that is required for a possible rescue that keeps it out of the risk zone; this for the good of the business system to which both parent and partner belong.
It is time for prudence and for well thought out changes. Concentrate on generating robustness in the present, so that when the panorama becomes clearer we can take better advantage of it, and it does not become, at the time, a scenario that we cannot control.