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Executive quick take: A guide to implementing marketing-and-sales transformations that unlock sustainable growth

| Article
By Ralph Breuer, Kedar Naik, Bogdan Toma, and Martina Yanni
Above-market growth in today’s competitive environment means becoming more flexible and agile and adopting multiple marketing strategies.

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The companies that are most successful at driving growth pursue multiple strategies at the same time. Developing this level of corporate dexterity, however, requires significant changes to how most companies run their marketing and sales functions today. Given the complex forces at work (see sidebar) and the challenges specific to a commercial transformation—from the need to bridge multiple functions across the organization to rapidly changing customer expectations—implementing change at scale has become increasingly difficult.

Sidebar

Unique challenges of a marketing-and-sales transformation

The year-two impact

Many growth initiatives can deliver impact quickly by allocating funds to double down on growth winners or by optimizing commercial functions. However, some of these depend heavily on organizational agility and the will to change ways of working. Furthermore, such drastic change can generate negative bottom-line impact in year one before delivering positive results in year two. This can lead to skepticism in the broader organization.

Organizational readiness

A successful marketing-and-sales transformation depends on each company’s initial flexibility and readiness to make change. Delivering on growth initiatives at the desired pace will require new capabilities and talent, such as expanded digital marketing or new agency relationships, as well as upgrades to existing systems. It is also hard to tie these initiatives to a single function. Understanding this, and adapting a traditional transformation process, is meaningful.

External factors

The competitive landscape, particularly competitors’ capacity to adapt faster and/or to grasp new opportunities, is also key. Speed wins, and while some companies perfect their offering, others have already released products or services and have earned sales and market shares. Therefore, a successful transformation should incorporate agile marketing principles.

The role of technology

Technology plays a core role in customer’s lives. Ideally, therefore, marketing and technology should work together and be integrated into the business. It is crucial to insource talent and capabilities as a mid- and long-term objective. However, since this might take time to achieve, marketing-and-sales transformations often require short-term partnering with marketing-technology companies such as Google or Facebook and other vendors.

People and teams

Commercial transformations, especially sales transformations, have a large human component. Sales teams need to align on the new strategy and the new way of doing things, which can be challenging when teams are spread across regions and countries.

In fact, some 67 percent of respondents to a recent survey 1 agreed that implementation is more important today than it was three years ago. And fewer than 37 percent said they had successfully improved and sustained performance throughout the implementation phase.

We have identified ten essential elements of execution and change management that differentiate successful marketing-and-sales transformations from the rest (see exhibit). What follows is an overview of how six of the most important elements work.

Exhibit

Set the direction

Once a company’s strengths and challenges are clearly understood, leadership can better define realistic goals and commit to a strategy for meeting them.

Commit to full potential

Elements of implementation

Aligning leadership around transformation goals is one of the most crucial steps of a marketing-and-sales transformation. Key elements of achieving that include:

  • Define clearly the “future state” of your marketing-and-sales function and how to get there, but also ensure you clarify how it connects to the strategic business vision and performance goals.
  • Ensure a common understanding by stating explicitly which capabilities, skills, and talent are currently available, the state of the organization’s overall health, how it is run, and what critical mind-set and behavioral shifts need to be prioritized to drive change.
  • Articulate and communicate a compelling change story to inspire both leaders and team members with a call to action, whether your transformation is about gaining market leadership, creating a distinctive brand image, or developing a new customer base.

Example: Service-company industry leader

Context

  • Strong reduction of growth rate
  • M&A activity among competitors

Actions

  • Discussed objectives, baseline, and the current status of the organization with full management up to N-2 level and of teams
  • Identified reasons for loss of competitiveness; agreed on strategic objective (regain market leadership); articulated plan for value proposition, efficiency and effectiveness, leadership, team behavior, and culture
  • Articulated a bottom-up plan based on strengths and potential of clear growth objectives and key pillars, such as acquisition of new customers, retention of current customer base, and increased customer spending
  • Broke down growth objectives into detailed initiatives with operational key performance indicators (KPIs)—for example, improve upsell ratio to specific segment of customers, increase monthly retention and reactivation rate, boost cross-sell rate across product lines—and a forecast of earnings before interest and taxes (EBIT) impact

What made the difference

  • Creation process allowed the cross-functional leadership team to clarify objectives and priorities and to monitor progress during regular performance reviews (with a focus on what was most relevant to specific departments)
  • Holistic transformation, including marketing and sales achieving 70 percent of the total forecast impact

Drive execution

Successful companies act aggressively in pursuit of change. Crucial to their efforts are the right talent, cross-functional collaboration, and agile ways of working.

Lock in change

Elements of implementation

Designing, launching, and implementing pragmatic initiatives must remain a reliable yet evolving process, empowering teams to test, track impact, and adjust as needed.

Example: Retail- and wholesale-apparel company

Context

  • Goal of customer-experience transformation to expand direct-to-consumer (DTC) sales from 1 to 30 percent in five years
  • Objective included developing a customer-centric mind-set and quickly implementing pragmatic initiatives developed by agile teams as a minimum viable product. In the long term, seamlessly integrated e-commerce into a forward-facing omnichannel journey to maintain a distinct customer experience online

Actions

  • Moved from traditional B2B behavior to a customer-centric mind-set, focusing on seamless customer experience across touchpoints from brand awareness to final sale
  • Built new e-commerce platforms by recruiting and developing digital talent and setting up agile ways of working
  • Launched a minimum viable product (MVP) e-commerce site within six weeks, followed by full launch in several countries after only six months

What made the difference

  • Close collaboration between design, development, and digital marketing in conducting qualitative and quantitative tests with customers in closed-loop cycles
  • Regular, open feedback; bringing together experts from various fields, while still empowering the team to make the main decisions
  • Fundamental changes, including talent development and hiring, as well as changes to the way innovative teams interacted with the rest of the organization

Activate the organization

Once initial strategies have been tested and fine-tuned, success depends on mobilizing support for the transformation from the C-suite to the front lines.

(Re)deploy talent

Elements of implementation

There are four layers involved in linking talent to value.

  • Understand the organization’s value agenda and break it down across business units and functions so that everyone understands their role in meeting the aspiration.
  • Identify the most important roles. This means, for example, creating a rank-ordered list of 25 to 40 roles that have disproportionate impact on the value of the transformation and clearly defining the critical jobs to be done by each.
  • Assign the right talent to each role, either by hiring it externally or identifying it internally, to drive the transformation at the required pace and quality. This is particularly critical in a commercial transformation, due to the length of execution.
  • Create a process for managing roles in real time and aligning talent systems in service to the transformation’s value agenda.

Example: Global entertainment company

Context

  • Goal: Large-scale, cross-functional transformation, including specialized marketing-technology talent

Actions

  • Analyzed the skills required, reallocated developers from the internal technology team
  • Hired managers with high-level marketing-technology stack experience who could also explain use cases to be addressed

What made the difference

  • Combination of internal/external approaches to creating a structured marketing-technology road map
  • Implementing quick wins with high value, such as a customer-data platform and an attribution model

(Re)invest in capabilities

Elements of implementation

Whether you are implementing a transformation focused on digital marketing, sales, or customer experience, building essential capabilities will make the change “future-proof” by:

  • bridging the “analytics and digital gap” with capabilities, tools, processes, incremental targets, and performance measures
  • tailoring individual learning journeys to the skills and knowledge needed for the learner’s specific job and performance outcomes over time

Example: Global telecommunications company

Context

  • Recently developed advanced analytics capability was not meeting expectations of value
  • Marketing department could make accurate customer predictions but was unable to gauge or capture the value

Actions

  • Implemented an agile marketing discipline for a pilot team
  • Developed a capability to capture value quickly, in two-week sprint cycles with defined customer segments, clear hypotheses, and KPIs to measure success

What made the difference

  • Building this capability as a pilot, which allowed for immediate results, and generating positive feedback for the team responsible for it. Team then became ambassadors of change within the organization

Activate influencers

Elements of implementation

Identify local change agents to inspire the necessary change, especially where the culture is collaborative and the organization decentralized. These people use their influence and success to bring the rest of the organization along with them:

  • Support your change agents’ development and transformation aims in a structured approach, such as one-to-one coaching programs, business succession plans, senior-leadership exposure.
  • Inspire the business by using best practices from inside and outside the organization, and provide forums where change agents can challenge and learn from each other.

Example: Global advanced-industries company, a leading power-generation-equipment manufacturer

Context

  • Sales department had recently implemented a new go-to-market model and wanted to focus on sales effectiveness
  • Goal: Company-wide transformation to drive growth and profitability; following improvements in the cost base and availability in operations, the company prioritized annual targets of 10 percent sales growth and 10 percent return on sales

Actions

  • One-to-one individual coaching program for every sales manager to observe and provide feedback on huddles
  • Introduced automotive-industry best practice of peer learning sessions to embed a culture of continuous improvement and empower sales managers
  • Created course content to build learning journeys for sales representatives, managers, and leadership

What made the difference

  • More than 240 hours of coaching gave each participant the chance to put into practice new methods with one-to-one support. Helped to increase opportunities actively managed by each sales representative every week by ~$4.5M

Reward individuals

Elements of implementation

To maintain momentum, commitment, and motivation over time, key leaders and change agents need both mid- and long-term incentives, including:

  • turning the transformation objectives into smaller segments of deliverable value, correlated with key employees’ quarterly and yearly targets
  • rewarding transformation champions early on, ensuring long-term value capture

Example: Online service company

Context

  • Two-year marketing-and-sales transformation
  • Lack of engagement from key employees during kickoff of the transformation program

Actions

  • Created a transformation-related objective for all directors in the CEO’s performance objectives for the following year. This created opportunities to—and rewards for—over-delivering on targets. Individuals also held accountable for the transformation’s success

What made the difference

  • Rewarding key leaders helped turn them into change agents. This led to a proactive mind-set, helping to sustain the effort for more than two years and successfully delivering >150 individual initiatives

About the author(s)

Ralph Breuer is a partner in McKinsey’s Cologne office, Kedar Naik is a partner in the Brussels office, Bogdan Toma is an associate partner in the London office, and Martina Yanni is a consultant in the Frankfurt office.

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