Will you make your number this month/Quarter? Right Question?

??Asking the question "Can you make your number this month/quarter?” has inherent limitations when it comes to evaluating performance or setting goals within an organization. This question, often prevalent in sales-driven environments, primarily focuses on achieving a specific numerical target without considering the broader context and factors that contribute to success. This question makes me remember the old fashioned ABC sales manager from the well known Glengarry Glen Ross scene. Moreover, nobody can make a number, unless you can print money, and this will not last for long.?It is important to recognize these limitations in order to implement a more comprehensive and effective evaluation framework.

??One of the main limitations of the question is its narrow perspective on a single metric, usually a revenue target. By fixating solely on the lagging indicator, organizations may overlook other critical factors such as customer satisfaction, product quality, market share, or long-term sustainability. This limited view can inadvertently incentivize unethical practices, short-term thinking, and neglect of important aspects that impact overall success.

?? To address these limitations, organizations can utilize a reverse pipeline exercise. The purpose of a reverse pipeline exercise is to shift the focus from the end result to the underlying activities and strategies required to achieve the desired outcome. It involves breaking down the sales or revenue target into specific steps, milestones, and activities along the pipeline.

?? The reverse pipeline exercise emphasizes the importance of understanding the entire process and the interdependencies between different stages of the customer buying journey. It encourages individuals and teams to identify the critical actions and resources necessary to move prospects through the pipeline, convert them into customers, and ultimately achieve the target. This exercise facilitates a more comprehensive evaluation framework that encompasses the entire customer journey and the factors that influence success at each stage.

?? Performing a reverse pipeline exercise typically involves several steps. Here's a general approach that incorporates the use of the Ansoff matrix, a strategic tool for analyzing growth opportunities:

1. Define the target: Start by identifying the desired numerical target or outcome, such as revenue or market share, for a given or multiple time period, eg month, quarter or half year.
2. Analyze the pipeline stages, by identifying how much of your existing known pipeline covers the numerical target, and identify the gap to close.
3. Break down the customer buying journey into distinct stages, such as awareness, consideration, solution design, commitment, and customer impact.
4. Identify critical actions: Within each pipeline stage, determine the key activities and actions that need to be performed to move prospects through the pipeline successfully. For example, in the awareness phase, lead generation might involve activities like content marketing, advertising, or networking.
5. Assess the resources required: Identify the resources, including personnel, technology, and budget, needed to execute each critical action effectively.
6. Evaluate growth opportunities: Utilize the Ansoff matrix, which consists of four growth strategies: market penetration, market development, product development, and diversification. Assess how each growth opportunity aligns with the critical actions in the pipeline stages.
7. Mitigate pitfalls and challenges: Anticipate potential pitfalls and challenges that may hinder progress at each stage of the pipeline. This could include market saturation, competitive pressures, resource constraints, or changes in customer preferences. Develop contingency plans or mitigation strategies to address these potential obstacles.

?? It's essential to be aware of some common pitfalls that can occur during a reverse pipeline exercise. These may include:

1. Overemphasis on numbers: Despite the purpose of a reverse pipeline exercise, there is still a risk of falling back into a numbers-centric approach. It's crucial to maintain focus on the underlying activities and strategies rather than solely fixating on the numerical target.
2. Take the indicated Gap To Close for granted for time periods, there is still enough time and resources to fill that gap.?When the exercise indicates a gap to close for the time period, eg quarters to follow, don’t accept a downgrading of the forecast yet.?Keep the expected results on the level of the target, and identify activities to close the gap.
3. Inadequate consideration of external factors: While a reverse pipeline exercise emphasizes internal actions, it's important to consider external factors such as market conditions, competition, or regulatory changes that can influence success. Ignoring these external variables can lead to unrealistic expectations and ineffective strategies.
4. Insufficient flexibility and adaptability: Markets are dynamic, and strategies need to be adaptable. Failing to incorporate flexibility into the reverse pipeline exercise can hinder the ability to respond to changes and take advantage of emerging opportunities.

By being mindful of these pitfalls and incorporating a comprehensive approach, organizations can maximize the benefits of a reverse pipeline exercise. It enables a more holistic evaluation of performance, encourages collaboration, and helps develop strategies that drive sustainable success.

Are you or your organization performing reverse pipeline exercises, as part of your revenue generating cadence??