If the Numbers Don't Add Up, They Probably Don't
By Brian Moore, Global Retail Consultant and CEO of EMR-NAMNEWS

Following a global financial crisis that has left governments floundering, business managers have lost confidence in both bankers’ and politicians’ ability to reverse downward spirals in economic performance at country level.  This in turn is causing middle management to have to choose between denial and confusion as they attempt to move the business forward, where many of the numbers no longer appear to count.

Given that denial is obviously no longer a viable option, it remains for NAMs and KAMs to attempt to make workable sense of the unprecedented chaos in the market, as a basis for building customer strategies that have some chance of delivering acceptable returns on investment, while others naively await some guidance from the system… 

A search for certainty?

In this situation, proactive NAMs and KAMs need to create their own certainty by going back to business basics in terms of identifying real Opportunities, acknowledging Threats, playing to Strengths and bypassing Weaknesses, using numbers to evaluate and communicate available options. 

In the first place, this means acknowledging that Opportunities and Threats exist outside the business, are independent of the business and are transient, in that they change over time, so speed and decisiveness are important.  Moreover, a company’s Strengths and Weaknesses have to be combined with these opportunities and threats, and realistically quantified to ensure that the numbers add up, in terms of corporate objectives…   

Opportunities

In other words, suppliers wanting to develop a business have to start in the market place and accept that there are only four ways to grow a business, especially in uncertain times.  These include selling more of our current products to current customers and shoppers, selling new products to those current customers and shoppers, finding new customers and shoppers with similar profiles to our current customers and selling them our current products, on the basis that as they are similar to our existing users, our current offering will probably appeal to them. 

A final but high risk option is to attempt to sell our yet-untried new products to customers and shoppers that do not know us, patently a waste of resource in unprecedented times…

Threats

NAMs and KAMs then need to factor into their strategies those outside threats that might reduce their ability to optimise the above opportunities.  These include: Regulatory/Legal/Political developments, Cultural/Social change, Technological change, Trade concentration/power/internationalisation, and Competition in terms of innovation/ substitution/wealth/risk-policy.

Corporate lawyers and researchers should give general guidance on the timings and extent of these threats, but it remains the responsibility of the account managers to assess the specific impact on the opportunities they have identified with their customers.  Here a series of realistic ‘what ifs’ on each threat can be identified and then quantified in terms of their impact on business with each customer. 

Strengths 

Remembering that a supplier’s strengths are not absolute or independent in themselves, but are relative to opportunities in the market and must be measured against these yardsticks, NAMs and KAMs should make a judgement as to the adequacy of those strengths in terms of ability to meet market need.  In other words, a strength is only a strength if it can be used to exploit opportunities better than other suppliers in the marketplace.

This means systematically evaluating a company’s combination of Brands, Money and financial backing, Marketing Personnel, Sales Personnel, Production facilities, Research & Development, Logistics facilities, Agency network, Back-up systems and tools versus those of the competition in capitalising opportunities within specific customers.  As always, an account manager needs to be able to quantify these strengths, and factor them into their customer strategies, in order to be able to evaluate and communicate the strategies on a like-with-like basis with other customer plans competing for sign-off within the business.

Weaknesses

Finally, a weakness is simply a ‘negative’ strength.  In other words, where a ‘strength’ is deemed to be inadequate in terms of its ability to perform better than the competition, account managers should focus upon attempting to work around these inadequacies, rather than await the creation of the perfect organisation…

In leading-edge management of major customers, the ability to think creatively, and then quantify, evaluate and implement the correct options is vital, especially in these unprecedented times…  Unfortunately the current unique business pressures are in danger of tempting us to revert to a ‘fixing’ mode, jumping prematurely to a ‘solution’, in the interest of speed and survival.  Also, our education, background training and information systems have tended to focus upon the development of numbers-based analytical skills, then choosing between alternative options, forgetting that real creativity depends upon having the correct options to analyse in the first place.

Systematic SWOT analysis can provide those options…

Date published: May 2012