It’s planning time again.  Time to build your growth plans for 2021.  Even in the face of uncertainty, the way you plan shouldn’t change.

The number one mistake we see leadership teams make when doing their annual plan, besides the concept of an annual plan, is that they put their revenue future ONLY in the hands of their chief revenue officer (CRO). Here’s how it might go down (with embellishments, of course).

The leadership team goes to the sales guys and asks, “How much can you get me next year?” The sales team says, “The same as this year,” anticipating the comeback. The CFO responds, “That’s not going to work. You’re sandbagging your numbers!” Sales will come back with an “official” arbitrary number based on deals in the drawer and some knowledge of the pipeline. The CFO doesn’t agree but has no other choice. Who else can they turn to? [Hint: It should be the CMO.] They both agree to a growth number. Pick any number; it doesn’t really matter. As a cascading effect, the CRO gives the sales teams a goal of the “agreed” number +10% just to make sure they can “hit” at least the baseline number. The CFO is okay with it because, if they hit the number, he doesn’t have to pay out the commission, and he knows they’ll work hard. That’s a win-win, right? They think so, they present a united front to the CEO, and they’re off to the board meeting. They are aligned and in agreement but fundamentally flawed.

We call this riding the demand curve. It’s a strategy based on hope and insanity. To move away from a strategy of hope, the CEO must get the team aligned on driving growth revenues based on insights and market dynamics to get more than your company’s fair share of the market. If you’re growing at 10% (and happy) and the market is growing at 15%, the bottom line is that you are losing your share. In other words, to gain that real 10% growth, your organization needs to build a plan to grow by at least 25%. What does that look like for your organization? It most likely requires more than just sales. It requires potentially rethinking your value proposition, your go-to marketing strategy, your technology, and the way you’re deploying your talent.

The bottom line is that your organization needs to learn how to shift your demand curve and how to get more than your fair share of the pie. It works when you build systematic market-driven insights with micro-revisions to your go-to-market execution. Once you build the idea into your organizational market approach, it is sustainable and can drive growth, even in the most stagnant markets.

In our view, building your firm’s market-driven strategy should reside within the marketing function. We help organizations learn how to build that muscle.

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