Balance Efficiency Gains – Resource vs. Flow efficiency

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An essential element of lean sales is which efficiency focus to put first. Classic sales organizations optimize for resource efficiency. Leans sales shift your focus towards flow efficiency. And the challenge is to get the balance between the two efficiency measures right.

Resource efficiency
The sales OpEx required to reach a certain sales is a common measure for resource efficiency. The more sales we can generate per sales resource the better. Distribute the required sales OpEx is over many contributors. In a simple and stable business each if the contributing units can be resource efficiency optimized.

But as B2B sales pursuits become more complex in nature, this model gets challenged. Even if each unit is operating at high efficiency, the totality can be struggling. The increasing complexity in the sales opportunities is the trigger for rethinking optimizations. Resource optimizations within all contributing “silos” do not secure an optimal holistic approach.

Flow efficiency
In lean sales the efficiency emphasis is on flows. The goal is to reduce the cycle times for all customer facing flows of the sales activities. A sales flow is a chain of activities, triggered by a customer request. How well we link activities to each other defines the total value of the buying experience.

When all activities in a flow are defined, the focus shifts to reducing time for hand overs between activities. As the idle sectors in the flow are reduced, the lead times go down. There will always be bottlenecks in a sales organization. When optimizing for flow efficiency your team increase the ability to respond/deliver faster.

Balance resource and flow efficiency
The use of resources remains a central measure even as we focus on flow efficiency. We will continue to look for resource optimization potential. A good structure for on-, near- and off-shoring of sales activities is a good starting point.

Optimizing all flows for maximum flow efficiency is a great aspiration but hard to achieve. When multiple flows are in play you are better of focusing on the essentials. Focus on the flows delivering the highest valued to customers. Your second priority is to reduce the largest idle sectors in the flows.

Questions for you and your team
1. How do your organization deals with flows today – expect to see a wide span of different viewpoints here.
2. How would you describe your current balance between resource and flow efficiency – an honest articulation of your starting point is vital for success.
3. What is the expected cost for focusing on flow efficiency – lean will reduce resource needs long term but can create shirt term spikes.

Additional reading
How to increase flow efficiency in sales processes [THESIS PROJECT] – by Ina Bergqvist and Lisa Gronbald
Five ways to increase the efficiency of your sales pipeline in 2014 [BLOGPOST] – by Pipeline CRM blog
Cutting sales costs, not revenues [ARTICLE] – by McKinsey

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