How to transform your businesses into an order factory.: Martin Hurych (#194)
- Martin Hurych
- 27. 5.
- Minut čtení: 12
Most companies do not produce orders. They improvise. And they pay for it.
Time, margin, growth and people energy.
Over the years, I've spoken to dozens of CEOs and founders of engineering, technology and manufacturing companies. Smart, capable people, often with technical or engineering backgrounds. But when you ask them about business, they'll often look you in the eye and say, "That's such magic, as long as they sell something."
Magic. Not the process. And that's where the dog is buried. Because unless your business is run like a system, you won't grow predictably. You'll wait. Hope. And nervously watch the pipeline "somehow" come to fruition. Trader after trader goes their own way. Some have it in their head, some have it in their notes, some have it in their CRM. But you don't know what works. Where it stalls. And what scales.
This episode is different. It's not about inspiration, it's about structure. It's about how to turn a business into a factory for new clients and contracts. Because if you understand manufacturing, project management or coding, you'll understand business - if you stop looking at it as magic and start running it as a system.
In this solo episode of Ignition, you'll learn:
But if you're serious about your growth, if you don't want to depend on chance, this could be the episode that rewrites your business model.
"Think about what you want to achieve as a company. Who are your ideal customers. What does your current business process look like. Where it has its flies. Then implement changes step by step. And remember... What you don't measure, you don't manage."
Martin Hurych | Founder @ Business Accelerator s.r.o.
Why turn a business into a custom factory?
(transcript)
Today's topic is how to turn your business into a factory for new clients and new business. This topic occasionally flashes through my communications, whether it's on social media, my website, or we've mentioned it in passing in some of the past episodes of Ignition. But today I'd like to look at it in a little more detail. Because what I observe is that a lot of the owners and directors in my bubble didn't grow up as business people, most of us are former techies and we often see business as a necessity. What we enjoy is not doing business, but inventing new things, getting involved in manufacturing, coding new apps, and so on. This mind-set often leads us to see business as some kind of magic that we want to get rid of and don't want to worry too much about. So we lock salespeople and sales departments into offices that we think have something going on that we don't understand, hoping that the black magic that goes on in those offices and in the heads of the salespeople will bring us enough interesting and profitable business. But then we are disappointed when it doesn't.
I'd like to point out here that what I'm going to say today is not good to outsource to anyone in the company, it's the responsibility of you as owners, directors, CEOs and heads of business. The advantage, on the other hand, can be that we are engineers and we can imagine, so whether we're talking about a physical factory or an IT studio, how to really build a production line to new customers. In fact, if you really imagine the shop as a production line, a lot of things become clearer to us. Production lines are built to make production predictable, to make it efficient, to make it scalable, to make it fast, and I'm convinced that we need to start approaching the business in exactly the same way. This is especially true in the current times when orders in a lot of segments are not exactly plentiful. There are an awful lot of good traders in the market and we need to take a fresher and more modern approach to trading.
When to reflect on this approach?
How do you know when it's a good time to think about what I'm about to tell you? A lot of times I see companies, and they come to my business analysis that I have for free on my website, that say they don't have a CRM. Fortunately, those are the minimum at the moment, but at the same time, they say they don't have a formal business process and when they do, it's only theoretically at the management level, but the salespeople either don't know it or don't follow it. Each trader gets orders as they see fit, now through references, now through their own eloquence. These things are not transferable from person to person, you can't pick out the things that work, you can't get a consistent picture of how each individual trader is doing, other than what results they have at the end of the month. The moment you want to even automate the whole sales process or put artificial intelligence into it, you don't know what's going on in that sales department. So I think those are compelling arguments to look at how modern companies are building their sales teams today.
Why is business complex inside and outside the company?
For me, business is a business machine and I have long said that business is a complex business. I used to pull it down a lot mainly to the customers out there, where buying decisions are now made by somewhere around 5-12 companies even in medium and family businesses, often much more in the corporate world. But more and more, I'm seeing that business is a complex thing even within a company. It is not good to look at the store as a sales department, today I say that anyone who interacts with the customer, from assistants and receptionists to the last logistics person, interferes with the store. If you realise that each of these roles can excite the customer or put them off buying, it's good to look at the sales process really in its entirety. While you may not see it as broad in CRM then, it's good to think of it that way and ask where is what function, where is what role, what should be done at what stage and what should be measured within those stages. Because as Lord Kelvin said, what you don't measure you don't manage.
What is very visible within, for example, IT companies, is the division between a sales person who is in charge of the business people on the customer side and someone who is more technically oriented. We might call it presales or technical support or a consultant who is in charge of the more technical people on the customer side. It turns out that this is a good first step, but often it's not enough. It's a good idea nowadays to chop those teams into many more parts and ask who is good at what, where am I going to use their natural talents, and who can I replace with someone else who, ironically, is often cheaper than the salesperson themselves. It's good to remember that salespeople are one of the most expensive assets we have in companies today. Often we don't set up the shop as a factory and let the salespeople deal with the administration here, or even manage the orders to delivery to the customer.
According to foreign surveys, we let them trade somewhere around 30% of their time and pay them as administrative staff or project managers for the other 70%. To me, that's a very bad and very untapped asset and it's good to break that business process down into a lot more phases than we used to. I personally suggest the phases today are somewhere around 9-12 depending on what type of business it is and what and how we want to maybe automate or track within that business. During those 9-12 phases, it could be that there could be as many as 4-5 people that step in and interact with the customer company, and the counterparty actually welcomes that. Because at any given moment, we can deliver the value that is expected at that moment.
What are the positive impacts on the people in the team?
I have already spoken here about the positive effects on those people who are involved in the business process. The main one is that the vast majority of them will start to enjoy it, become interested and engaged in things that they have a talent for. Where they weren't enjoying it, they'll leave it to someone else, who in turn is happy there. At the same time, because those people enjoy it, the whole business process comes off much more agile and proactive because people enjoy it by definition. By connecting different people at different stages to different people on the other side at the client, you also make it much easier to differentiate the communication and tell the other side what they want to hear at that stage. You know, I talk a lot in my articles and posts about personalized and perceived added value, this is exactly it. Telling everyone on the other side what they value, what they want to hear and saying it ideally in a way that the person enjoys and speaks the language of their tribe.
How to link the phases of the business process?
What is terribly important, so that this relatively complex approach does not become chaotic, is to link the different phases with checklists, where at the end of each phase it is given exactly what is the output of that phase and what, if any, one department or one person passes on to another department or colleague. It's also a good idea to think about common KPIs at these interfaces. This is for the sake of measuring performance and possibly conversion metrics on those individual interfaces so that I know where I'm going wrong and where to possibly start to heal or train my process or people. At the same time, I can use those KPIs to reward and if they're the same for the two departments that are communicating some information to each other, that also helps to positively provoke communication between those two departments. Because if I, as the one taking over, don't take something over because it's in a bad state, I'm also saying that I'm theoretically denying myself the fulfilment of my KPIs. But if I take over something that is in poor condition, I may be helping my colleague with his KPI, but I'm making mine worse because I've taken over something that I'll potentially have to work harder on. If you build the business process this way and accompany it with KPIs, I guarantee you that the rate of complaints about who is responsible for what will decrease dramatically in your company.
What are the key elements of the business process?
Another thing that is definitely good to remember are the key elements of such a business factory. Each person needs to know clearly where their responsibility and liability for a given phase extends from. That means you have to have very well described roles and you have to have very well described phases of that business process. You should build the business process not just on what you want and what people you have in the company, you should build the business process primarily on what the decision-making process of your potential ideal customer is. It should also be with an eye to what you want that potential customer to experience with you for an experience during that purchase. So if you want to sell very quickly, that sales process will probably be simpler and shorter, if you want to take the customer through something more sophisticated that will impress them, then the stages will correspond to that.
For this to work, I need to prepare what I will say to whom, what the argumentation will be in what part of the phase and to whom I will say what information. I often say that it is not worth telling the CFO anything about the IT backend, and it is probably not worth telling the users of the application how much money the company will save thanks to it. This is information that they have already heard somewhere, but basically they don't care much.
At the same time, it is good to remember that it is good to release this information in bits and pieces exactly as the party expects it. Even though the buyers will tell you otherwise, it's a good idea to try to guide that counterparty through that purchase in a consultative way and always give them enough arguments to make their decision and not overwhelm them with information, which as engineers we like to do very often.
What is the relationship between business and corporate strategy?
One very important thing you should take away from this episode at the very least, this is all done with a lot of focus and relationship to the company's strategy. A lot of times I see that a company's strategy is somewhere, it's going somewhere, but because of poor communication of that strategy down into the company, maybe the business process is created by the habits and experience of the most senior salesperson. Then there is great frustration when that business process doesn't quite lead to achieving the goals that the strategy intends or requires. It sounds very logical and very simple, but the practice I observe is quite different. So the right cycle is to realise and validate the company strategy, what I want, and only then, with respect to the purchasing processes, to build the business process, its phases, and to involve those adequate roles, functions and people.
Why doesn't the shop still work like a factory?
It might seem that a business factory or a custom factory is something that is standard, because obviously this is not an approach that we know from real production, from project management, from application coding, and so on. Unfortunately, at least in my bubble, it often doesn't work, as evidenced by the numbers I've been collecting for over 3 years now in the business analytics that I have for free on the site. You can see that just creating business strategy, creating the business process and coordinating salespeople is one of the most common pain points for engineering, technology and manufacturing companies. I'll reiterate my thesis that it's because of our reluctance as owners, founders and directors to engage with the business because we don't understand it. So we delegate the entire sales process to either the salesperson themselves or to someone who is the head of sales in that company. It's good to remember that if I let the salesperson build the process, they will build it to suit themselves, not to suit the company or to suit the customer. What the sales process looks like is a purely strategic decision that you as owners, directors should at least have control over.
At the same time, you then need to offer or deliver strategic guidance and mentoring to those marketers in fulfilling what you as a board or C-level firm have envisioned.
How do you do that?
If I were to conclude with just a few how-to points, I would personally reflect on what I want to achieve as a company, who my ideal customers are, where I am and what my informal business process looks like at the moment. I'd describe that starting point, then I'd branch off from there and start to define that process as what it should ideally look like for you. So as not to overwhelm those salespeople with a whole new process, I would take a step-by-step approach from the beginning. I'd establish the first step that I'm going to control, that I'm going to iterate, that I'm going to imprint on that sales team. If I teach the salespeople that part, then I can consider moving on. Of course, you can build that sales process all greenfield and get it up and running, then it's good to give yourself at least a quarter to do some rounding, some learning, before you get all those changes into the sales team's blood. Again, what I don't measure, I don't manage, I would set some baselines right at the beginning that I would track. While I may not get it completely right at the beginning, I can change them, so it's definitely a good idea to see if there's anything snagging on the belt right from the start. I need to see if I have a continuous flow of material to that production line and if at the end of that production line lines also drop some products, in this case new customers. If you are comfortable with this approach, I'd be happy to try it out within your company or if we can get together and discuss these practices more specifically at your company. As a business owner, if you want to grow, you need a predictable business and if you want a predictable business, you need a business system and a business system leads to a contract factory.
If I've motivated, excited, or maybe annoyed and prodded you with anything today, this episode had a purpose. If that's the case, I'll ask you to like it, share it, maybe comment on it, so that it can get through the social media algorithms to other business owners and directors who are struggling with their business and who would appreciate this episode. I'll reiterate my invitation to join the My Notebook newsletter, which at this point has more than 1,400 owners and directors just like you subscribed. I have no choice but to keep my fingers crossed for you and wish you success not only in trading and building your business machine, thank you..
