All managers want to see their company grow. Their company’s growth comes from one of three sources:
- More labor – you can produce more if you hire more people or if you ask your existing staff to work longer hours.
- More capital – you can seek capital and use it to invest in new equipment, technology, or facilities.
- Productivity improvements – Through better use of your labor and capital. Increased productivity can come from a variety of innovations in your product, your production, and your processes. These innovations can include large improvements (light bulbs, shipping containers, spreadsheets) and the myriad ways that each company finds to improve the way it does its work.
Labor and capital increase your costs and require investments which are limited, so the key to long-term growth is always going to be in the search for productivity improvements.
Although firms in the US made rapid productivity improvements in engineering and production over the last century, that rate of productivity improvement seems to have slowed since 1970.
When it becomes difficult to achieve competitive advantage through productivity improvements in engineering and production, companies struggle to separate themselves from their competitors.
However, many companies have overlooked an important opportunity. They’ve failed to seriously address the need for productivity improvements in the sales function. In fact, about 70% of companies in the U.S. are not able to even sell all their production capacity. And that should be the job of sales, right? To sell all of the company’s capacity to produce?
This untapped opportunity for productivity improvement creates an opportunity for companies that are willing to give some serious attention to improving processes in the sales function.