Celebrate What You've Built, Then Blow it Up
The logistics company I own is about to pass 10 years in business. Our anniversary is in September, and we're planning a big blowout party—beer, food, live music, speeches, the whole bit. It's going to be a fantastic celebration of everything we've done over the past decade to grow the company that started in the basement of my house into a $30 million company with offices in two countries.
And right after the party, we're planning to change everything about the company.
Okay, not everything. We're still going to be a freight brokerage, and the foundation of our culture won't change. But everything else will—the way we talk about that culture, how we hire, the composition of our sales team, marketing, all of it. Because what worked 10 years ago isn't working anymore.
For the past three years, our growth has stagnated. We hit $30 million the first time in 2016, and haven't moved the needle since. We've gotten more lean, so our profitability has gone up, but even that has taken a hit this year in a historically tight market for freight. (It's a weird economy right now, people.) We've tinkered around the edges of the company, but haven't had a major overhaul of process or strategy since we radically revised our sales compensation in 2015.
The Same, but More
In the first two years of this stagnation, we thought doing more of the same activities would help. Hiring was really difficult (it's a tight labor market for everyone, but ours is particularly challenging because of local competition for talent) so we raised base salaries and broadened the pool of candidates. We saw more interest, but the quality of candidates didn't really improve.
Once hired, we pushed our recruits to dial the phone more, because the conventional wisdom in our field is that cold calling is the only way to acquire new customers. Call volume requirements went up, but customers closed didn't follow, and customer retention was even worse.
Owing to that conventional wisdom about how to acquire customers, we focused all our marketing efforts on recruiting, not on customer acquisition, growth, or retention. We doubled down on content marketing and dabbled a little in advertising, but not enough to judge the results.
And my business partner and I raged at each other because none of these efforts were growing the business, and we were getting more and more frustrated with results (or the lack thereof.)
The Decision to Change
As so often happens in business, our decision to undertake radical changes in our operation started as a trickle of ideas and soon became a flood. I attended a digital marketing training and realized everything we'd been doing in our marketing department (outside of having a strong voice and sense of identity) was wrong. My partner was given a sales strategy book by his Vistage group that blew both our minds. And my business coach suggested a values/behaviors exercise that, when I facilitated it at our quarterly management team retreat, changed how the entire team thought about the behaviors that make our company successful.
It has been a whirlwind of a month (yes, all that happened in a month), but the path is now becoming clear to us. We need to remodel all our marketing efforts to reflect industry standards and start driving leads to our sales team. We need to blow up and entirely redesign our sales process, including job descriptions, hiring, compensation and the division of labor. And we need to clearly express the behaviors that we expect from every member of the team on a daily basis, and make sure everyone on board is...well...on board.
The Path Forward
If that sounds like a lot, it is. But transformative change is never easy. No company founded 10 years ago can maintain the status quo and expect to stay in business for another ten. The market (and frankly, the world) changes much too quickly, and a successful company has to change with it, or be left behind.
The problem comes, then, in deciding what to change and when. We have had to go through quite a process (and it is still ongoing, honestly), to decide the order in which we'll work on things and where we'll find the resources. If we just walked out and announced all these initiatives at once, everyone would laugh, and then quit. No one wants to work for a company that is in a state of intense turmoil. People don't mind working through change, they just don't want to work through multiple changes all at once. We have to be deliberate, organized, and steady, and we have to communicate really, really well at every point in the process.
Here's how we've decided to approach it:
The first thing we've tackled is culture. After our management team retreat, we divided up the duties of communicating the behaviors we identified to the team, and ingraining them in our day-to-day interactions, so they become part of the fabric of our culture. We've also planned to revise our hiring materials and processes, using these behaviors as a focal point.
We understand that follow-through and consistency are most important here, so a year-long communication schedule has been developed, as well as a firm commitment from my management team to model and enforce these behaviors daily, as well as participate in the roll-out, so it isn't just ownership talking about this.
We were already in the process of revamping our website, so we've added as many best practices as we can to that project, and planned further implementation on a rolling schedule. We want to get minimum viable product to the market right now, and then A/B test other changes once the baseline has been established.
I am also going to seek additional training on digital marketing, and bring in experts to help us implement important changes to our communication, advertising and analytics to make our online marketing presence more powerful, trackable and nimble.
The redesign of our sales team is the single most radical change we'll have undertaken in the life of our business, so we are approaching it with the most deliberation and caution. The behind-the-scenes strategic work begins now, but the roll-out schedule has not even been developed until we have a better understanding of how, what and why we are trying to accomplish.
Changing sales roles and compensation is a bit like releasing a dangerous predator into the wild. You have to plan extensively, expect trouble, and wear plenty of protective gear. If you don't, you'll be eaten alive (metaphorically, in this case.)
What can you learn from this? First, that you can't be afraid of major change. It is sometimes very difficult to murder your darlings and radically change the way you've been doing business. You worked hard on this iteration of your business, but that doesn't mean it's perfect and should never have to change. Second, sometimes all of this change comes in a rush. You start thinking about what needs to be done differently and the answer is...everything. If we changed one piece of this puzzle without changing the others, the picture wouldn't make sense anymore. A new sales team with our old understanding of marketing would fail, and none of it would work without a clearer picture of our culture.
Most important, though, is the realization that change brings excitement. I was feeling incredibly stale in my role, because every day we were dealing with the same issues—falling revenue, stagnant profits, an under-performing sales team, impossible recruiting—and I was finding it very difficult to bring enthusiasm to my daily work. Now, working on three major initiatives at once, I'm certainly not bored, and I'm very exited about what the future will bring for our newly redesigned organization.