The Danger of Changing Too Much, Too Soon

The Leadership Test Kitchen is a newsletter where I share the ingredients behind leading and growing successful companies. Some editions feature practical frameworks from CEOs who’ve mastered challenges in strategy, culture, and growth. Others share the lessons I’ve learned firsthand as a CEO, or insights I’ve gained from my work with other executives.

“The buyer’s decision cycle is taking longer.” “Buyers are being choosier.” “The buyer went dark.” 

These are the common statements you will likely hear from your team when you ask about the outlook for Q4 and Q1. I’ve heard some version of them almost every year over the past decade. Sometimes they’re just the usual sales challenges. Other times, they’re early signs that something more fundamental is shifting in the market.

The common trap we all fall into when we hear these statements is to push harder. “Well, let’s work harder.”  “We are going to review the sales pipeline weekly, and you better have answers.” Or, my favorite, “There must be something wrong with our incentives.”

Some even go down the path of firing some of their sales team. 

I’ve gone down plenty of these rabbit holes myself, with limited success. Some of my missteps include:

• Responding too late to a market slowdown.

• Shuffling middle management across client accounts without fully understanding the depth of customer relationships.

• Restructuring my sales team multiple times during a down year.

• Redesigning sales incentives every year.

You can’t simply “will” yourself into alignment with market conditions. And you can’t simply shrug your shoulders and say that it is out of your control.

The challenge is understanding what has changed before deciding what needs to change inside your business.

I had Phillipe Bouissou speak to my Vistage group earlier this year. His book, Aligning the Dots: The New Paradigm to Grow Any Business, introduces a methodology for aligning six elements of a business to accelerate growth. And, guess what, four of those six revolve around the customer: 

• Does your product really solve the client’s pain point? 

• Does the client‘s perception of value match what you are trying to communicate?

• Does the client want to buy the way you want to sell?

• Is the client insanely delighted with the product?

In my experience, the only way through is to get close to your customer. Here are six practices I’ve found useful when market conditions start to shift:

1. Prioritize your client base.

   
   

Prioritize your client base based on their strategic importance and volume. Pressure-test your “strategic clients” against four criteria: Do they view you as a strategic partner? 

Do they have the propensity and ability to spend? Do you have a differentiated relationship with the key executives? And do you have a strong track record with them?

2. Reevaluate where you have your strongest growth talent.

   
   

Even with the potential impact on customer relationships, it is good hygiene to reevaluate where you have your best growth talent. If you have your strongest growth leaders assigned to clients who will be contracting for a long period of time, it might make sense to put them on a “hot hand”.

3. Make Quarterly Business Reviews about the client.

Use Quarterly Business Reviews to check in with your strategic and core clients, but make the meeting about them and not you.

You aren’t going in to pitch, but rather to deepen your understanding of their context and your relationship. What is changing in their business? Where are they feeling pressure? How are their priorities shifting?

These conversations can tell you more about what lies ahead than another internal pipeline review.

4. Seek perspectives outside your organization.

Increase your outreach to industry pundits and competitors. To really get a read on whether the market has changed, you need to get an outside perspective. 

Be the one to offer a competitor an olive branch to compare notes on the market landscape.

The goal is to challenge your assumptions about what you’re seeing, rather than relying entirely on your own team’s interpretation.

5. Get atomic before changing the model.

If the market has changed, get atomic. What I mean by that is that before you make a major change to your operating model, look at the individual elements of your business. In my world, that means the client account. 

Figure out what changes are required at that level to preserve the revenue you can reliably bank on. Which accounts are stable? Which are at risk? Where do you still have an opportunity to grow?

Get that right before you start tinkering with any broader changes to the model.

6. Build joint ownership of key accounts.

For your key accounts, build joint ownership, using financial and non-financial incentives to align, encourage, and advocate for these leaders.

You need them in the boat, working together to protect and grow the relationships that matter most.

The most important thing overall is to keep your feet moving. Keep spinning up more conversations to learn, challenging your assumptions, and making sure you understand what is happening in your key strategic accounts. 

Challenge yourself on whether you’ve got the right people in the right seats and what the ramifications might be if you change the seating.

A Culinary Note

Sometimes, simple is just better.

While I challenge myself each week to add two or three new recipes to my arsenal, here’s what I’ve learned when I get too busy or /too stressed by my day job. Simple recipes do the trick. I’ve got several go-to recipes when the chips are down,  including a chicken soup recipe from my in-laws that I’ve made so many times that I could literally cook with my eyes closed.

It reminds me of the movie Ratatouille, when the food critic takes one bite of a simple dish and is transported back to his childhood. Sometimes the familiar, done really well, is exactly what’s needed.

There’s a lesson in that for leadership. When things get complicated, the temptation is often to change too much at once. Sometimes the better move is to return to what you know works, understand what needs adjusting, and resist the urge to reinvent the entire recipe.

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