I see various instances whereby friction exists between Sales Teams and Finance/Accounts Teams. Many times it is because goals are not aligned. CFOs are normally focused on cost and efficiency while Sales leaders give more importance to revenue and growth. They seem to be people from different planets. CFOs are trained skeptics, whereas Sales leaders have to believe the next call will produce a deal. Research also supports the common finding that the relationship between finance and sales is often more confrontational than collaborative. The consequence is that a continuous level of internal friction that wastes energy and that in turn inhibits the achievement of profitable growth that both parties (and everyone else) wants.
So obviously the question is simple: How do we make sure that Sales and Finance goals are aligned within any business?
Really and truly, if ever there was a perfect time to reduce the friction between CFOs and Sales leaders – it’s now. The drastic effect of the COVID-19 induced crises is that CFOs are as hungry for growth as much as their Sales leaders. However to achieve meaningful results, CFOs and Sales leaders should consider the following four strategies.
- Invest in sales training and development. Training salespeople pays off quicker than almost any other expansion activity. Moreover due to disruption brought about by the pandemic, Sales training is especially important now since customer buying behaviours are changing fast. Investment should be directed toward creating a “hybrid” sales force that’s as skilled at virtual selling as it is at face-to-face selling. I meet many CFOs whom seem inclined to do the common mistake of thinking that an increased level of sales is only possible through an increase in the sales force rather than training current sales staff and upgrading CRM software (or investing in CRM software in the first place). If the pandemic has not taught us anything, it should have made everyone realise that Covid restrictions on meetings and travel have hurt the ability of Sales people to meet their targets, which again suggests that upskilling sales people to hybrid sales models and tools, should be a priority, as certain trends and consumer behaviours accelerated by the pandemic are likely to remain.
- Improve forecast accuracy and transparency. This can be achieved by measuring the strength and value of customer relationships through business relationship assessments and CRM tools. Whenever I ask CFOs any data to measure the value of customer relationships – I normally get the same reply – a blank face. Say what? This althrough all the research in the world clearly indicates that strong customer relationships have a significant impact on business, yet very few if any use a formal and consistent process to create, sustain and improve customer relationships. Therefore, my advice to CFOs and Sales Leaders is to use their energies to develop shared measurements of customer relationship value and a process to increase it.
- Focus on key strategic relationships. As a rule, a company’s best customer relationships are also its most profitable accounts. But are businesses sure that are getting all they can really get from their best customers? Research indicates that not the best customer relationships manage to achieve less than 50% of the potential that that relationship could achieve. CFOs and Sales leaders need to identify, measure and support each other in getting more of the potential from these great customers. It could be by just investing more time to have a chat with such clients.
- Developing common data. This is a major and more common pitfall. I get tired being involved in clashes between Sales Leaders and CFOs either because they are using different sets of data or worse still because they are basing their viewpoints on their hunches rather than facts. To close the cultural gap between finance and sales it is extremely important that a common set of data and — more importantly — common goals are identified and agreed upon. Another common mistake is that incentives and targets given to sales teams are only loosely connected (or not connected at all) to the profitability goals that CFOs pursue. Hence the importance of agreeing on shared KPIs and creating common dashboards that would help finance and sales move from finger-pointing to handshaking. This is where introducing, upgrading or replacing CRM systems can help.
It’s important to do all of the above together. Each of the above strategies can help on its own, but each one multiplies the benefits of the others; in particular, the impact of CRM investments will be much greater if accompanied by investments into relationships and sales training. However, the most important strategy to reduce frictions and unlock growth potential is that CFOs and Sales leadesr should focus on their own relationship first before the relationship between the finance and sales functions. Businesses are designed and driven by well-defined organisation charts and processes, but when things go wrong, it’s usually because of people, not processes. Now is the time for any business to spend more time understanding its customers and to re-engage and re-energise business relationships that have been strained by the pandemic….and to do this their needs to be strong collaboration between the CFO and Sales Leaders in any business.