When revenue stalls in a multi-million-dollar company, it produces a unique form of stress for the C-suite. It’s the confusion, worry, and frustration of the success-turned-stall-story. Why do companies with the wherewithal to build themselves to such a size suddenly run out of gas? And where is their restart?
Matthew Olson, Derek van Bever, and Seth Verry’s analysis of revenue stalls in Fortune 100 sized companies is illuminating on this front. They discovered that 87% of factors leading to a revenue stall are within management’s control. Only 13% are due to external forces like market changes.
And that’s ultimately good news for the C-suite.
It’s about strategy and organizational design choices
Olson, van Bever, and Verry’s findings are consistent with what we see in organizations with stalled revenue. As these researchers put it: “the vast majority of stall factors result from a choice about strategy or organizational design. They are, in other words, controllable by management.”
But you can’t control what you can’t see. And in our experience, that’s a huge part of the trouble: not truly being able to see what goes wrong and why under that maddening line of visibility. It’s one thing to know your organization’s structure, systems, or processes—in a simple word, its “design”—is probably causing your stall. But it’s another thing entirely to be able to actually see exactly where the cracks have formed—and how you can plug the leaks.
Four reasons your revenue has stalled
Our findings—which align with Olson, van Bever, and Verry’s—are that specific aspects of an organization’s design creates cracks that revenue leaks through. It’s as if the company’s revenue generating system has a cracked gas tank. No matter how much fuel in the form of, for example, new leads funnels into it, it’s stalled out.
These are the revenue leaks we see, time and time again.
1. Manual Processes
Your teams use time-wasting and error-prone manual processes that stop deals in their tracks. Qualified leads are lost in spreadsheets. Entire pipelines are (mis)-managed by spreadsheet. There’s no clarity about when follow-ups should happen, and connections that were expensive to make wither from neglect.
2. Disjointed Tech
The layers of technology that your company acquired to manage success just don’t work optimally together. These tools should be sending the data that could drive growth faithfully across your revenue generating functions, but far too much falls through the cracks. You have data silos that aren’t driving anything valuable in the company.
3. Siloed Teams
The teams responsible for different stages of revenue generation aren’t aligned. They’re not utilizing the same tech stack and they aren’t set up to communicate well.
4. Poor Quality Data
Of all the leaks, this is the most serious. The data that you need to make timely strategic choices and coach better performance is missing in action. What data does make its way to you is unreliable, full of holes. To put it succinctly, it’s poor-quality, which is to say, fundamentally unactionable for growth. In fact, properly addressing your data problem will enable you to plug the other leaks. Your stall isn’t driven by a lack of leads or problems in the sales function. The root issue is data.
Diagnosing your stall
Need a quick way to diagnose your stall, and determine whether poor quality data is, indeed, the culprit? Just ask a simple question: “Do I know exactly how my company generates qualified opportunities and how long they take to become customers?”
If you had the right data for driving revenue and increasing productivity, you’d be able to answer this question easily. In fact, the right data for growth answers these questions as well:
GOALS : How do I set my revenue targets?
VOLUME : How many leads and opportunities do I need to hit my goals?
SPEED : Which opportunities lead to revenue in the shortest amount of time?
MONEY : How much do I need to spend to generate qualified opportunities?
TIME : How long does each stage of the customer lifecycle take?
PEOPLE : How many team members do I need?
ACTIVITIES : Which ones are the most important for driving revenue?
When you have the answers to all of these questions, you can tell the complete story of revenue generation in your company. So, if you can’t easily answer these questions, or track in real-time how the answers might be changing, then yes, your stall is driven by a data problem. Your data simply isn’t equipping you to lead the way you need to.
The restart is within reach
No one could argue that the success-turned-stall-story isn’t demoralizing. But the good news is that it’s entirely possible for you to re-author it. 87% of this stall is within your control; what an empowered position this actually is.
Restarting revenue starts with recognizing the central importance of data. Poor quality data is truly the major crack in your previously speedy revenue generation vehicle. It’s the reason why growth has grinded to a halt on the expressway. The other leaks we have listed are all linked to this core issue.
The extremely good news is that tackling your data problem is a profound game-changer. How profound? By getting the right data for growth and plugging their revenue leaks, our clients have doubled their revenues. As one client, Titan Environmental put it, “We now understand exactly which key activities across departments help us drive high revenue -generating deals -- and have eliminated costly revenue leaks. We are on track for significant growth.”
Just remember, it all just starts with a simple question: “Do I know exactly how my company generates qualified opportunities and how long they take to become customers?”
If this question isn’t easy to answer, it’s time to figure out how to get the data you need. It’s within your reach.
Still have questions about revenue stalls? We wrote about them in more detail in our complimentary guide for leaders planning their next phase of growth. You can download it here:
About Digital Magenta Inc., The Growth Data People™
Digital Magenta is the first consultancy to specialize in unlocking the right data for revenue and productivity acceleration. Their Growth Data™ platform sets an unprecedented standard for how data can specifically drive revenue. It identifies cross-functional revenue-driving activities, visualizes real-time data targeted for growth decisions, and allows companies to scale through automation. This program has enabled companies to break through plateaus, double their revenues, and exceed revenue goals even during a severe economic downturn.
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