TOM will do it!
Transforming an automotive supplier's global sales organization by incorporating a target operating model
At first glance, it appeared all the prerequisites for successful sales work had been created: a new organization with business units (BUs) clearly aligned to customer segments and corresponding sales roles,a comprehensive sales control for channel and product management, and detailed target processes within a process structure framework. At the same time, change managers were also set up as contact partners in the area who would accompany the change.
The new organization got off to a largely smooth start. The only problem, however, was that the expected increase in performance failed to materialize because the central goals of the reorganization were not achieved. These included more exchange on successful negotiation strategies between the key account holders, a proactive approach to possible sales opportunities outside the BU, early risk reporting, further development of the portfolio to include attractive, high-margin products. All in all, despite all the formal changes that had occurred, employees and managers continued to operate in the same way as they did in the previous organization.
In our experience, this is not a surprising result: During transformations, it is vital to communicate very clearly about what the new organization should achieve in the future as well as what is expected of each individual. Without this clarity, structural and systemic changes alone are largely ineffective. In collaboration with the CEO, we created precisely this clarity and codified it in a simple, comprehensible and, in particular, attractive target operating model (TOM).
The core elements:
- Overarching goals of the future orientation
- Basic logic of the new sales control system
- Core lever for performance improvement
- Most important (high-level) teamwork processes
- Central responsibilities and committees
- Illustration based on use cases with concrete application fields
The decisive factor was to gradually develop this target model in an agile procedure from the work on concrete sales initiatives (rather than spending a lot of time on conceptual detailing yet again). In this way, we ensured rapid impact together and, at the same time, practical development that maps the various BUs and sales roles.
Key points of the agile development approach were:
- The co-development of the most important guardrails for the TOM in a cross-BU and cross-functional team across several management levels.
- Iterative-incremental specification of the model using BU as an example with step-by-step expansion of the functional scope.
- Closely timed sprint logic to develop concrete results in "hackathons" (weekly day workshops) and regular reviews with decision makers.
As a result, a feasible and field-proven version of the TOM was quickly at hand. In the following implementation, we paid attention to a good balance of top-down and bottom-up elements to create not only sufficient orientation, but also the degrees of freedom needed for sales employees to take their own initiative. This included:
- Convincing presentation of the TOM key points by credible executives at a central event (Reason-Why, explaining advantages and use cases for all roles).
- Setting minimum uniform action guidelines and standards for a few core processes, as well as clear, decentralized degrees of freedom.
- Accompanying the establishment of a corresponding implementation process involving dovetailing review meetings at the board level with an explicit delegation of responsibility to the operational level (e.g. full transparency over price limits with increased degrees of freedom for KAMs).
Sustainable anchoring of transformation requires understanding actual change and clear implications on two levels:
- Ensuring behavioral change through leadership role modeling – if managers act convincingly, work clearly within the framework of the new operating model and, when in doubt, also draw personnel consequences, the organization follows. Further elements to strengthen behavioral change are training and peer coaching to remove possible professional hurdles for the sales team.
- Providing adapted systems and frameworks. The required tools must be user-friendly and easily accessible to ensure they are accepted. Inkey areas, however, they must simply be unavoidable. The organization can only achieve the overall and individual positive effect through consistent use. Often this means shutting down special processes. This also applies to the newly created formats of cooperation and routines, which require equally clear consistency in implementation and compliance.
Through the co-development of a clear target image, the optimal balance of push and pull in implementation and simultaneously addressing systemic and behavioral levers, we were able to achieve a significant increase in sales performance – thus exceeding the budgeted turnover by more than 20% and at the same time increasing the margin through a clear focus on more profitable products and attractive customer segments. And all this was achieved with lean consulting support focused on the decisive phases, in which functional sales and change competence was interlocked with the implementation-oriented, hands-on skills of the organization.
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