C Suite 6 Mike Sayre

At C-Level #6: Unprofitable domestic sales, unsuccessful international sales, dwindling opportunities and turning lemons into lemonade

C Suite 6 Mike HardyAt C-Level #6 is the sixth blog of an eight-part series following a first time CEO’s educational journey in a very challenging business environment, and exploring global concepts in leadership theory and practice.

At the end of each blog are reflection questions for readers to consider as they navigate their own leadership journey.

This guest post by Mike Sayre — experienced software, e-commerce and manufacturing services CEO, COO, CFO and Board Director—is based on his first-hand experiences as a fledging CEO. Its intent is to provide additional insight or ideas to those in, close to, aspiring to, or trying to understand the top leadership role in any organization. Mike was also featured in the October 4, 2016 Innovative Leaders Driving Thriving Organizations interview with Maureen Metcalf on VoiceAmerica focusing on the importance of leader trustworthiness in driving organizational change.

At the time I took on my first CEO role, I hadn’t previously had responsibility for sales. Looking back with the experience I have now, I think we were facing some fairly daunting sales challenges, even for very experienced CEOs:

  • Our board and shareholders had demanded growth in sales – and we had increased sales over 400 percent – but had little increased profitability to show for it. We were winning large volume programs with little to no gross profit margin. It was largely domestic commodity service work, that we had to build a large and fairly expensive group of people and infrastructure to support.
  • Our bid opportunities for additional work for our core service business were dwindling because we were doing work for global electronics manufacturers who began requiring operations in both Europe and Asia, while we only had a presence in the U.S.
  • We had started an international sales initiative in Europe and Asia that we had hoped would help, but it was expensive, needed much more time to develop, and we weren’t sure that the margins would be any better (likely not with the Asian cost of labor being so much lower at the time).
  • We had a group of smart salespeople. However, they had come in under a sales leader who left the company simultaneous to my becoming CEO. They had come in under a different set of rules, and now we were changing them. And that does not happen overnight. They were unhappy, our transition was taking too long for them and many left the company before we stabilized.

Remember these tenets from Jim Collin’s Good to Great book written about in At C-Level #1 of this series?

  • The right people in the right seats on the bus make all the difference;
  • Find the truth and act on it by facing the brutal facts of reality while maintaining an unwavering faith that you will succeed; and
  • Greatness comes from sustained commitment to disciplined people, disciplined thinking, and disciplined action that creates breakthrough momentum.

Remember the Strategist Competency model from At C-Level #4? It said that Strategists are unstoppable and unflappable when on a mission.

My point here is that these were the qualities we needed during this challenging time. We were facing urgent issues on several fronts: we needed to identify the “right” people and get them in the right seats on the bus; address the brutal facts about our business strategy that was generating lower profit margins; address the lack of business process in qualifying “good” business for us; and I needed to have the courage to make some tough calls and stick to them when I met resistance. I’ve been told that my reactions were instinctively that of Level 5 and Strategist leaders, but not because I knew what those were and thought that I should emulate them. Rather, it seemed to me to be what we needed at the time, so I just moved in that direction, with the benefit of additional strong leadership and support from the rest of the team.

Here’s how we made lemonade out of the lemons we were handed with these challenges.

  • We did detailed cost analyses of large customer programs we believed might not be profitable as priced. We faced the brutal facts, took action and became a smaller revenue and higher gross margin company, with more discipline around our pricing and analysis of the business we committed to before we committed to it. That allowed us to weather a major economic downturn.
  • We stopped trying to sell internationally because there was plenty of global business that we could win right here in the U.S., if we had operations in Europe and Asia. However, we raised some capital and used relationships that were developed through our sales efforts in both areas to identify and work with partners. Those partners helped us acquire a small operation in Europe and start up an operation with a partner in Asia. Those two additional operations opened up new bidding opportunities for us and we grew annual sales 25 percent in the core part of our business in less than two years.
  • The salespeople who left had been selling business we were consciously now walking away from. They voluntarily helped us cut our sales cost, allowing us to rebuild a sales organization that could sell the new business that we wanted to target.
  • And, we were hit with a huge downturn in the economy that easily could’ve taken us under had we not made all of those changes in our business as early as we did. Unfortunately, we did need to make more cuts in our staffing levels to do that, but utilizing the Golden Rule (referred to in At C-Level #5) in doing so kept a lot of great people in the company that survived – a company that was eventually sold to a global giant in the industry.

Frankly, so far in my career, I have only seen a couple of leaders who exhibited many of these traits I am writing about. Maybe only one or two in CEO roles. So if you see these traits or even inklings of them in your own personal leadership style, I encourage you not to abandon them – instead nurture them! It’s easier to lead people in a style that fits you.

In their book Leadership 2050, Susan Cannon, Michael Morrow-Fox, and Maureen Metcalf, make a compelling case that these are actually the leadership models it will take for us to be successful in the future – relentlessly competitive, collaborative and caring, with a focus on the success of the company, not the leader. Business and leadership is evolving and we need more of these types of leaders to encourage and lead the innovation required for us to increase and maintain our strong competitive status in the world.

Reflection questions:

  • What are the two to three major strategic sales and/or marketing challenges in your business today? What are some of the brutal facts?
  • How is that information shared with your leadership team? Is it?
  • Does your team know the company mission and vision, what the company’s stakeholders want, and do you have a process for coming to terms with those brutal facts with the best collaborative solutions the team can come up with (understanding that you still have and reserve the right to override)?

If you identify with the leadership models I’ve been writing about in these blogs and need either

  • Leadership assessments and development for you and/or your team based on these models, or
  • Executive advisory services on how to implement strategic, financial, operational and/or cultural transformations in order to turnaround and/or grow your company, please contact Metcalf & Associates or me for further information on our services.

In At C-Level #7, Mike writes about operational improvement through consolidations, expansions, agile software development and lean manufacturing.

To become a more innovative leader, please consider our online leader development program. For additional tools, we recommend taking leadership assessments, using the Innovative Leadership Fieldbook and Innovative Leaders Guide to Transforming Organizations, and adding coaching to our online innovative leadership program. We also offer several workshops to help you build these skills.

About the Author

Mike Sayre, executive advisor and organizational transformation practice lead, has been a successful CEO, COO, CFO and board director for multiple organizations in technology (cybersecurity, ecommerce payments processing and engineered computer products) and manufacturing (electronics and steel products). He shares his expertise with client boards and C-Level leaders, and advises, designs, plans, and oversees the implementation of successful strategies for turnarounds, growth, profitability and sustainability.

Mike brings 25+ years of organizational and business leadership and hands-on implementation experience to his clients.  His teams have achieved significant increases in growth, profitability and valuation, as well as shareholder, customer, supplier and employee engagement and satisfaction.

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