So often when we speak about growth, we do it from a perspective of revenue, volumes or market share. We tend to think of growth as being a good thing but what if scaling up actually decreases profit? Larger businesses cost more to run and taking more effort and resources to control and there can be quite a wait for those ‘economies of scale’ to start kicking in.
This can be the situation we are faced with when growth isn’t matched with maturity. The fruits of your labour might be growing, but they aren’t ripe.
Ai can provide a low-cost and high-impact solution for businesses looking to scale. With an ability to analyse vast quantities of data, computers can help us keep a close finger on the pulse of our business with insights that would almost be impossible for a human to produce and very difficult to ascertain from traditional software.
These strategic insights are critical if you are going to avoid the growth trap. The growth trap is where high revenue, low maturity businesses reach a point where they simply crumble under their own weight.
Building business maturity is about gaining quality, gaining capacity and increasing capability of what you do and how you do it – rather than focussing solely on how much you are doing something or how often.
An excellent model for organisational evolution and capacity building is the Strategic Management Maturity Model (SMMM) also known as the Business Process Maturity Model (See De Bruin & Rosemann, 2005).
The model is normally used to benchmark organisational maturity, however, because real estate salespeople really operate micro-businesses within businesses, it is easy to transpose the model to the real estate sales work practices.
The modelling of business process evolution, with SMMM, is based on five key stages of the transformation of low maturity to high maturity work practices. The five key stages are: the initial state; defined state; repeatable state, managed state; and optimised state.
An individual salesperson’s evolutionary journey from low to high practice maturity might follow the following trajectory. At the initial state, a salesperson’s work practice systems may have the following characteristics:
- Low level of product knowledge – naïve or novice sales and negotiation skills, inconsistent delivery of service and message;
- Reactive – relying largely on outbound marketing (DLs and calls) to generate leads;
- Working on uncoordinated, isolated projects – ad hoc prospecting activities that do not fit into a broader strategy;
- Manual – processes are caused by the efforts of the individual agent and not automated or enhanced by digital capability;
- Low resourcing – not able or not willing to make an investment in marketing, promotion or continued professional development.
At the defined state, a salesperson’s work practice systems may have the following characteristics:
- Basic processes and controls are established to track processes – for example an annual marketing calendar may be in use to gain regularity and frequency of lead generation activities.
- A database and contact management system may be in use to trail tasks relating to individual contacts
- Reliance on rehearsed scripts and dialogues
- Consistent delivery of key messages but lacking depth of knowledge and ease of product/service conversations.
At the repeatable state, a salesperson’s work practice systems may have the following characteristics:
- The processes and communication utilised by the salesperson are integrated into a broader, organisation-wide methodology – unifying business architecture.
- Elements of the wider sales process are capable of being understood by third parties, such as administration team members or between team members of an EBU. Execution of those tasks are not yet capable of being completed autonomously and supervision or management by the sales agent is required.
- Process outputs are measured in financial terms, for example in GCI
- There is an increased comfort with subject matter and the messages and information are capable of being conveyed to consumers with ease
At the managed state, a salesperson’s work practice systems may have the following characteristics:
- Detailed documentation of processes means that process elements are capable of being delegated to third parties who are able to complete the tasks autonomously (for example, fully franchised or equal members of an EBU, essential service administrative support team members, and outsourced workers)
- The processes are intuitively understood as they are part of a broader organisation-wide methodology and control measures are built into the processes with APIs and KPIs assigned to process elements, rather than the cumulative financial KPI of GCI. For example, instead of simply sending emails to contacts, outbound bulk email messages in a managed state will have the technology to determine who has read and engaged with the content so that time spent in follow up is targeted to best-chance prospects who have self-identified the content as relevant by way of their engagement with it.
- Accomplished level of subject matter expertise and ability to communicate information in simple terms at the customer interface without the strict confines of scripts and dialogues.
At the optimised state, a salesperson’s work practice systems may have the following characteristics:
- APIs and KPIs are quantitative metrics that allow feedback from processes
- Continuous Improvement activities and innovations are a primary imperative and can be piloted with quantitative feedback providing an early measure of success or failure. For example, experiments can be made with new technology and there will be clear indicators that can predict its return and effectiveness in comparison to other forms of marketing.
Goals that create growth of volume GCI or even number of sales, must be paired with similar leaps in maturity so that the increase of scale does not, in turn, cause the diminishing value of service delivery at the customer interface – care must be taken in growth to work smarter as well as harder.
If you want to understand how your business is REALLY doing, just ask Rita for a contact analysis. If you don’t know Rita already, you can meet her, here: https://www.getaire.com.au/meet-rita/