Commercial Excellence Diagnostic Wheel

Diagnosing Barriers to Commercial Excellence

When business performance falls below expectations, executives are often left scratching their heads. Was our strategy flawed to begin with? Did we fail to execute? The problems that lead to underperformance are not always evident at first glance, as there may be just a few root causes preventing success. These gaps weaken other contingent elements, leading to overall organizational failure. For example, a business might have an elegant growth strategy targeting the right customers, but poor customer engagement limits its effectiveness. Conversely, all the right tools and processes may be in place to drive demand, but a strategy misaligned with market needs precludes strong execution. To identify exactly where these weaknesses lie, a deep-dive diagnostic of your commercial approach is required.

After many years of working with market-leading B2B companies, we have developed a robust diagnostic framework for identifying commercial issues and building best practices. Our Commercial Excellence diagnostic breaks down the interrelated elements of strategy and implementation, allowing for a systematic evaluation. The diagnostic reveals the gaps, the root cause issues, and subsequent opportunities for improvement. The model also identifies which initiatives should be prioritized to generate the fastest return on investment.

Blue Canyon’s Commercial Excellence Framework

The first step in the diagnostic is determining which elements are limiting performance. For each element below, ask whether your business satisfies the conditions required for best-in-class performance.

Strategy

  • Understand the Market Do we have a strong grasp of emerging trends, changing dynamics, and unmet customer needs?
  • Build the Case Does our offering have a clear value proposition targeting priority segments that economically benefit customers ?
  • Set the Strategy Is our go-to-market approach guaranteed to deliver profitable growth?

Implementation

  • Sales & Marketing Planning – Do we have the right plans in place to execute our strategy?
  • Sales & Channel Deployment – Are our sales team and distribution channels capable of acquiring and growing customer accounts?
  • Policies, Tools, & Process – Have we properly equipped and incentivized our team to sell our value efficiently?
  • Measurement & Monitoring – Can we measure success of our commercial initiatives and make key adjustments?

In which elements does your business perform well? Where are there deficiencies? Evaluating each dimension of the framework informs your path forward towards commercial excellence. As we will see in the examples below, a comprehensive assessment can be revealing.

Related reading – Is Your Sales Organization Equipped to Deliver Your Strategy?

Example – Strong Strategy Rendered Impotent

A manufacturer of specialized computer parts was having difficulty acquiring new customers. While the company had a strong offering and a well-informed value proposition, they were unable to build a robust pipeline of new opportunities. After completing the Commercial Excellence Diagnostic, we identified three elements on the implementation side that were preventing new customer acquisition. The first was their sales planning. The organization had no standard customer engagement processes in place, including account or regional planning. The lack of formal processes limited accountability and follow-through on new initiatives and opportunities. Another problem area was their sales deployment. Territory managers spent more of their time handling administrative tasks and dealing with back-office issues than prospecting and selling. Their incentive plan policy was the last major issue. It was overly complex, undifferentiated across performance levels, and did not adequately incentivize securing new accounts.

It should be noted that these three issues were heavily interrelated. In commercial organizations, problems in one area compound problems in another. Because our client’s incentive plan did not encourage customer acquisition activities, territory managers were not motivated to use their time prospecting. Further, since they were performing many administrative tasks, the absence of a support organization didn’t allow for time to prospect with and grow new accounts. Since territory planning processes and account planning processes were not in place to drive proper engagement with customers, any prospecting done was not as effective as it could be otherwise.

Each element of the framework must be in working order, or businesses risk negative second and third order consequences.

Example – Strong Execution of a Weak Strategy

In other cases, commercial issues originate in strategy rather than implementation. We worked with a supplier of PPE and safety equipment that had resources, capabilities, and planning in place to execute successfully. They also had a clearly defined strategy that was meant to drive sales and capture opportunity spurred by the pandemic. However, as we completed the diagnostic, it became clear their strategy was not informed by the market. The organization did not collect voice of customer feedback, which limited their understanding of rapidly changing and newly emerging market trends and needs. As a result, their value proposition was built around their own understanding of their strengths, rather than being substantiated by evidence from customers. It was clear they needed to develop a better understanding of the market before building and executing a successful go-to-market strategy. Hence, growth was limited.

Related reading – Optimize Your Sales Force Design

Next Steps

Flawed strategy and/or faulty execution will undoubtedly undermine the performance of your organization and limit profitable growth potential. Business leaders should periodically evaluate their organization against best-in-class commercial excellence capabilities to identify the specific elements that require renewed focus and improvement. This will ensure your organization reaches and maintains its full potential in driving profitable growth.


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