Everyone wants company growth, but not everyone knows the right way to foster growth.
Lime, one of the major players in the booming scooter startup niche, recently hired former Uber VP David Richter as its chief business officer. This move is the latest in a hiring spree that extends beyond Lime to its competitors, Bird and Motivate, because the race is on to see which company will grow fast enough to dominate the scooter market.
Odds are, at least one of these companies will fail to scale. That’s because growth isn’t just about speed and momentum – it’s about creating a foundation strong enough to support the company to come. Not everyone succeeds in this effort. One case in point is Blue Apron, a company that scaled stratospherically headed into its IPO in 2017, only to see its stock price drop 90 percent once investors realized the company was overextended.
The Dirt On Rapid Growth
Even some of the smartest executives on the planet struggle to grow their businesses effectively. In an episode of “The McKinsey Podcast,” McKinsey partner Mitra Mahdavian spoke about the differences between high-growth companies and their slow-growth peers. She discussed five strategies that emerged in McKinsey’s research as primary drivers of growth, and two stand out as the most important: investment in sales engines and focus on people.
Through a comprehensive survey and interviews, McKinsey found that nearly half of fast-growing companies invest significant funds and time in training sales teams, while only 29% of slow-growing companies do the same. Smart companies know they can only grow as fast as they can sell their products. Smarter companies know that the best way to sell more products is to invest in the people responsible for those sales – which does not just mean hiring more of them.
You also can’t simply throw money at sales teams and wait for the contracts to roll in. The real trick to faster, better growth is to understand what those internal investments should look like. So, if your business is struggling to grow (or if you want to pick up the pace), follow these three proven growth tactics when building your sales team.
1. Look For Team Players
In baseball, it’s not enough to maintain a high batting average: Fielders must also work together on defensive plays so the team doesn’t lose leads. The same principle applies in sales. Companies seeking to scale quickly should build teams of people who work effectively with the whole organization – not people who only look out for No. 1.
“Look for salespeople who can collaborate with other teams to solve problems quickly,” says Martin Stein, founder and managing director of national private equity firm Blackford Capital. “In rapidly growing companies, sales team members who can get answers from other departments tend to outperform their more siloed counterparts.”
The adage “Hire slow, fire fast” is doubly true for sales teams. Don’t wait for a salesperson to put up eight bad quarters before cutting ties. Thoroughly vet each candidate and only hire salespeople who have what it takes to drive growth. If, after appropriate investment, a new hire isn’t working out for the team, it’s probably time to move that person elsewhere.
2. Put The Training Where The Money Is
Few strategies remain effective in every situation, and today’s business is constantly changing, so salespeople have to be adaptable.
To keep your people up-to-date, identify the training activities with the highest returns on investment (ROI), and dedicate the necessary resources to them. According to research from the Sales Management Association (SMA), field coaching and peer learning are the most effective sales training techniques. Of the businesses the SMA studied, 78% reaped high ROI from field coaching, while 73% achieved high ROI through peer learning.
Get creative with training. Sales reps can use role-play to practice new scenarios or meet online each week with presenters to keep their skills fresh. Make learning a priority, and your salespeople will stay at the on top of their game.
McKinsey supplies a success story for this approach: A North American consumer-services company increased rep productivity by 25% in just 18 months when sales managers started leading in-person training sessions, tagging along for some sales calls, and establishing concrete goals for their sales reps.
3. Tune The Team To Technology
Better tools are still only as smart as the people who use them. Educate sales teams on the ins and outs of sales enablement technologies to help them get the most from their arsenals.
Today’s artificial intelligence (AI) software can work with salespeople to create, qualify, and convert more leads and remove a lot of manual work associated with the sales process. McKinsey’s study found that companies with AI-powered sales processes typically increase leads by more than 50% and reduce their costs by 40-60%. More income for less investment is the golden ticket to growth.
The secret to faster growth is no secret: Sell more product. The secret to selling more product, however, is rarely as straightforward as it appears. Improving your sales processes can kickstart growth and establish the sales-centric foundation than will ultimately be able to support a much larger organization.