White Space Metric®: A Case Study

In the consistently changing software sector, the ability to adapt and innovate reigns supreme, meaning minimizing cross-organizational friction is paramount. In these cases, senior leadership often addresses challenges only once they create significant issues. Moving from friction to fulfillment from a practical, strategic position can assist organizations in working toward organizational harmony.

The case of an ambitious and developing HCM Full Suite Software Provider provides insights into the complexities that can arise when a company is on the precipice of growth yet finds itself mired in cross-organizational friction threatening to derail its progress.

Accelerating Growth

The organization, a comprehensive solutions provider, including payroll, human resources, benefits, and administration services, had an annual revenue of $75 million. With a growth rate of 1%, the company aimed to increase its revenue growth to 12% within just one year. Its target market was wide-ranging, from small and medium-sized businesses with a headcount ranging from 10 to 150 employees to larger SMBs with anywhere between 150 to 2,000 employees.

To support this, the organization developed and deployed a robust marketing strategy covering the full scope of its target market, including traditional outbound strategies such as email and appropriate social media messaging supplemented by outsourced Business Development Reps (BDR). This approach required a boost of 25% in the marketing budget and 150% in the sales budget and headcount.

With a clear distinction of the sales team into segments, some catering to small businesses while others to larger SMBs, the organization appeared to have done its due diligence in setting itself up for success. Yet, despite this carefully formulated approach, the results were less than expected.

Cross-Organizational Friction Takes Hold

Senior leadership within the organization soon realized a list of issues, long and varied, existed. The increase in sales and marketing expenses had, in fact, not translated into growth as expected. To start, the ratio of MQLs actually picked up by sales was very low. Even more cause for concern was the sales team’s belief that the marketing-generated leads had little value. In other words, the sales team did not value or acknowledge the classification of quality and, hence, the priority of Marketing-Qualified Leads (MQL) in the marketing’s system stack. Further, the sales team struggled to comprehend the requirements and strategy based on market segmentation.

Essentially, a breakdown in alignment and communication had occurred, with many sales being on the backs of an experienced, talented few salespeople instead of the new, larger sales team brought in for the task.

This, coupled with the absence of diligent feedback on sales lead outcomes to Marketing systems, created a void between sales and marketing, leaving senior leadership without a clear understanding of overall efficacies in these departments. This void, known as white space, represents the gap where friction happens due to misalignment. When organizations operate in this area, accountability is avoided, communication and collaboration are minimal, and processes and big-picture thinking have diminished.

The emotional toll was equally severe. Board meetings became contentious, uneasy experiences, with many attempting to avoid the elephant in the room. Most were in a headspace of “protect and defend,” operating in verbal fighting mode while displaying a lack of belief in the explanations given by department heads, ultimately eroding trust. Cross-organizational friction had taken hold.

With the CEO under immense pressure to decide on the right action, the approach was a call for the CMO and CRO to resolve their differences and find a workable solution that benefited everyone. However, the incessant blame game and lack of accountability between the marketing and sales departments created a toxic work culture, leaving employees directionless and unengaged while undermining the organization’s abilities for success. Often, the next step in these all-too-familiar situations is firing people — destroying confidence and careers in the process.

The Cascade Effect: Creating Organizational Harmony

It was at this time that Cascade Clarity’s partners became involved with the organization, bringing with them decades of experience in dealing with organizational silos, a phenomenon often seen in instances like this. The team worked with senior leadership to uncover and chronicle the issues, developing MQL classification models to facilitate the smoother handoff of leads and evaluating the sales team for skills alignment.

Recommendations were made to compensation plans, objective-setting processes, and performance management programs to encourage desired behavior in revised processes. Further, the finance team was brought in to work on metrics, and a divergent analysis was conducted for customer acquisition cost and other sales and marketing performance metrics.

Having set the strategic framework for change and established the need for a refined approach to MQL management, the team turned its attention to sales and marketing alignment, starting with the foundational White Space Metric®, Sales Accepted Lead to Marketing-Qualified Lead or SAL/MQL, using the following approach:

• A deep-dive collaboration with the CMO to better understand where MQLs were captured in the CRM and how they were used.
• Working with the CRO to understand the sales team processes in picking up MQLs from the marketing CRM — a significant pain point as it was discovered people lacked training and perceived time to extract MQLs.
• This experience was further documented to provide a roadmap for organizational harmony, including the synergy between people, technology, process, and alignment, to avoid future bottlenecks.
• A review of the sales team’s prior performance based on the objectives established by the organization, development needs, and the support they received.

• Implemented a Robotic Process Automation (RPA) bot. This bot was programmed to extract MQLs from marketing’s CRM and distribute those in spreadsheet form to each salesperson, considering territories. The spreadsheets were further labeled with timestamp information to facilitate weekly tracking.
• By coordinating with the CRO and sales team, a review process for the MQL spreadsheets was established to document the sales team’s Acceptance of Lead with Reason Codes. The initial meetings led to a Reason Code categorical system that was used consistently moving forward.
• Through the expansion of the sales team’s performance management to performance achievement, the evaluation of results went beyond sales quotas, nurtured the qualifications of leads, and strengthened the feedback loop between sales and marketing.

In addition, the team created a real-time White Space Metric® dashboard to track progress. Below is an excerpt of the modeling used to show the impact on sales results from improving the White Space Metric® over six months.

The impact of moving the White Space Metric® was to improve the annualized sales run rate to $550,000 from $111,000 of contribution or $440,000. This represents $5.32M of annualized revenue, a 60% UPLIFT in sales simply by capturing and distributing more highly ranked MQLs to the sales team.

Another significant effect of an improved SAL/MQL translated into the sales team spending more time closing deals and less time doing lead generation. The SAL/MQL plateau occurred due to the lingering perception of a lack of value in the MQL stream. The team continued its feedback program for lead follow-through to improve MQL ranking and confidence building in the MQL lead stream.

Fulfillment

Organizational friction often indicates a more profound issue requiring a transformative shift in energy and focus. In this case, the shift was necessary for the people, strategies, and organization’s operations. Further, achieving revenue growth should not come at the expense of talent retention. Aligning sales and people strategies is more than just a nice-to-have; it is imperative for the sustained success of any company.

The journey from friction to fulfillment is complex. However, organizations can change to the contrary with the correct interventions and support, a clear understanding of challenges, and a commitment to the process. This, in turn, can achieve growth targets and foster a culture of collaboration, innovation, and mutual respect, resulting in #OrganizationalHarmony.

Cascade Clarity‘s purpose is clear: to create #OrganizationalHarmony. Through a top-down approach, we enable the successful implementation and monitoring of corporate goals as they cascade through organizations. Let’s connect to discuss your needs