Growth and Value: Partners in Success
Growth can happen as long as there's clear vision among the company's leaders and managers.
- By Ken Thoreson
- May 01, 2006
Building your business requires both leadership and management, and the
first step in that journey is understanding the difference betweeen the
two. Leadership is the ability to make things happen by encouraging and
channeling others' contributions, addressing important issues and acting
as a catalyst for change and continuous improvement. Management is the
skill of attaining predefined objectives with others' cooperation and
The best Microsoft partner companies, like other successful organizations,
are led by individuals who have clear vision -- and the ability to establish
specific objectives for working toward their organizational goals. Executives
at partner companies that have leveled off, stalled or are struggling
to break even may lack both vision and objectives.
An executive vision should address the following questions:
- What does your organization look like now? What will it look like
in three years in terms of revenues, number of employees and specialty
- How do you define success? What will the company's net worth be in
three years? What are its profit goals?
- How do you want to be known by your clients, your competitors, the
business community -- and by Microsoft?
- What's your ultimate goal? Do you have an exit strategy that calls
for acquiring other companies or being acquired yourself? Or do you
want to build a long-term corporate organization?
Answering these questions will help you fine-tune your vision, focus
your efforts and inspire your employees. They'll also help you and your
managers set the objectives to spur your company's growth.
Among other considerations, sales-related objectives might include:
- Revenue growth objectives by dollars or percentage
- Gross margin dollars generated by practice
- Percentage and dollars by practice area generated by new or current
- Revenue per employee
- Percentage of service dollars vs. products generated
- Managed services dollars vs. total revenue
- Number of net new clients added each quarter
- Percentage of won/lost accounts per proposal generation
Managers can use predefined objectives to create sales and marketing
programs and dashboards to measure effectiveness. Leaders can use these
objectives to judge management performance and promote the organization's
continuous improvement. The results: Employee performance and morale will
improve, customer satisfaction will increase, revenue and margin goals
will be exceeded -- and your organization will begin to build value.
Improving your organization's value is critical in our maturing industry.
Certainly, you can define value as retained earnings, recurring revenue
values and balance sheet results, but it's also important to evaluate
sales factors such as customer retention, net new client acquisition ratios
or client penetration rates and lifetime value ratios. Your intellectual
property, patents, employee non-compete agreements, brand recognition
and even employee retention percentages are also important components
to consider in building your organization's long-term value.
One last word: As a professional -- no matter what your level
of responsibility -- you must also focus on personal growth. What's your
plan for increasing your individual value this year? Moving forward requires
all of us to manage personal development as well as our companies' growth
Ken Thoreson is managing director of the Acumen Management Group Ltd., a North American consulting organization focused on improving sales management functions within growing and transitional organizations. You can reach him at [email protected].