Category Archives: Structure

Make Your Customer’s Business Simple

Sometimes it is hard to think of business as simple. Perhaps as we have evolved from a production oriented society to more of a consumer and service oriented society we have evolved the notion that business is complex. Maybe it is because of our dependency on the tools and technology now required to conduct business has evolved as has the perceived complexity of the infrastructures that we must have to support them. Think about the power that we now have on our desk tops and in the palms of our hands. Despite all of this, I think that business is only complex if we decide to allow it to be complex, or worse yet, make it complex of our own accord.

Technology has effectively removed time and distance from the business equation. Anyone, anywhere at any time can access a global marketplace where they can “do business” with just about anyone else that they wish. It has also made everyone smarter, in that the only reason for anyone to make an uninformed purchase decision is because they chose not to get informed by using their aforementioned powerful desk top or hand held tools.

But if business is really not all that different why do companies continue to insist on changing and continue to invest in developing and creating new and better products? Why do companies still have sales teams and operations groups and all the other corporate functions that have been the mainstays of business organizations for hundreds of years? If business is really changing then why are so many things about it still remaining the same? When business’s reorganize, they invariably “shuffle the cards” associated with their organizations, but they are still the same cards.

I think it may be in that in its simplest form business is about delivering value. The value can be in the form of a product that can be as simple as a clay pot or as technically complex as a cloud based data storage system, or in the form of a service such as simple as a freshly mowed yard or the complex capability to operate and maintain that cloud based data storage system. The quantification of the value provided is determined by the amount of currency that will be exchanged for the clay pot, mowed yard or cloud based storage system.

There you have it. This is still pretty simple. Business is about exchanging money for something of value. I guess that is actually the definition of commerce, but in this case it is also business.

com•merce/ˈkämərs/ The activity of buying and selling, especially on a large scale.

It seems that it is from this point that we have decided to add complexity to the business formula.

Since business cannot fundamentally change the simplicity of exchanging money for something of value, it tends to change how it goes about pursuing this exchange. It organizes itself to simplify the pursuit. Then it reorganizes. It changes in response to a perceived competitive threat. It centralizes. It decentralizes, distributes and diversifies.

In short organizations drift into an internally focused approach to commerce and business. Since it is so difficult to change a customer, organizations tend to focus on changing themselves. It seems as though that there is a belief that if an organization can convince itself that it is changing in order to make itself easier to do business with, an organization can become that much better at doing business. This is an almost purely internally focused concept. Unfortunately business and commerce must usually be done with the external world.

This is an approach that invariable runs out of momentum. Organizations seem to believe that by endlessly trying to make themselves easier to business with, it makes it easier for the customer to do business. This is a key point. Just because an organization has tried to make itself easier to do business with does not mean that the organization has made it easier for the customer to do business. I guess a good example of this would be making it easier for the horse and buggy driver to buy buggy whips does not necessarily help him sell more buggy rides around Central Park.

It is a debatable trade-off of how much value is associated with the complexity a company can introduce into their systems and processes in an effort to reduce a customer’s complexity in dealing with them. Increased complexity comes at a cost or in this instance a price to the customer. An internally focused business confuses the value of removing customer complexity in dealing with a vendor, with the actual removal of complexity from a customer’s business.

This is a rather circuitous way of saying that the focus should not be on making it easy for a customer to do business with you. That must be a given. The focus should be on how you make it easier for your customer to do business with their customers. That is where the true value of commerce is.

There is a certain amount of value that a customer will recognize in an organization that makes itself easy to do business with. There is far more value that a customer with recognize in an organization that makes it easy for the customer to do their business.

This is where we get back to concept of “simple” in business. How do you make it easier for your customer to do business? How do you help them remove the complexity associated with their customer commerce? How do you reduce their risk? How do you help them increase the perceived value of the good or service that they are offering to their market?

It is no longer good enough to just make it easier for your customer to buy your good or service. Everybody has just about mined out this opportunity with the law of decreasing returns starting to take greater and greater affect versus the input required to affect the change. The better approach now needs to be how do you make it easier for your customer to sell their good or service. What expertise can you contribute to their success? Remember it seems to be the tools and technology that is complex, not the business.

Expertise has been and still is a product. But as I noted earlier, as products that make up our tools, and the infrastructures to support them have evolved and become more complex, it seems that expertise associated with operating these tools and infrastructures continues to be somewhat overlooked.

Organizations continue to try to restructure themselves to make it simpler for their customers to do business with them. They also try to restructure to make themselves more efficient at conducting their business. I think the next logical step in the evolution is to no longer think about how you can restructure yourself to conduct your business, but how you can help your customer restructure themselves to make their business easier to conduct.

I think the question for the future is no longer how can I be easier to business with, but more how can I make you easier for your customers to do business with? What customer complexity can you remove from their organization? It should no longer be what device can you sell them that is more efficient, but what can you do for them to make them more efficient.

In an internally focused, product driven world this sounds complex. It is easy to believe that because it is different than they way organizations have been thinking, but when you think about it, it should be pretty simple.

Sales, Operations and Support

Sales and Operations. It seems pretty simple to me. One group is responsible for selling the product or service, and the other group is responsible for delivering and implementing it. Again, it seems pretty black and white. Dogs and cats, men and women, etc. etc. If you are not one, then you should be the other.

I have often said that there are two types of people in the world. Those that divide people into two types, and those that don’t. However, I have digressed a little here.

What I am getting at here is that in business, in today’s world, you need to look at your role and understand on which side of the Sales and Operations divide you are on. You need to understand if your focus is on the top line – Sales, or on the bottom line – Operations.

I suppose that this division can be extended into the support functions as well. Financial teams can be keeping score of the sales and the gross margins associated with those sales, or they can be keeping score of the costs of the product, delivery and implementation, and the earnings that are generated. Marketing is primarily a Sales related function since its primary role is to position and enable sales to customers. I think you can look at just about every role within an organization and understand where it sits within the Sales and Operations split.

A major difference between Sales and Operations is that at least part of the Sales team’s compensation is based on how much they sell. This is called commission. (They also usually have a base salary, which will again be dependent on the type products, services and customers they are serving.) The Sales team has sales targets (quotas) and can quantifiably demonstrate how they have performed. Again, it is a step function. They either sold something, or they didn’t. The more they sell, the more commission they get, and the greater their total compensation.

Operations on the other hand are not compensated based on “how much” they deliver or implement. Operations job is to deliver and implement all that Sales sells. This is a given. Operations may have incentives and bonuses based on “how well” they deliver and implement. How well operations delivers is also quantifiable and can be measured in several ways, including time (is it implemented on time or early), financially (is it implemented on or under budget) or the most important metric, was the customer satisfied when the implementation was complete. Again we have some fairly quantifiable metrics here. Time, budgets and customers satisfaction can all be measured.

My purpose in attempting to pre-define in simple terms the Sales and Operations roles is to point out and think about all the other roles that seem to have evolved, or devolved in companies from these two required business functions. It appears that many businesses have created or acquired roles that can best be described as either “Sales Support” of “Operations Support”. That means these roles are associated with either the Sales or Operations functions, but do not have either the responsibility or control to accomplish the tasks of selling or implementing. It also seems that by not having the direct responsibility of the line function, that these groups also do not have the direct risk associated with the defined business performance that is required. When a Sales person does not make quota, or an Operations person does not implement the project on time, which specific support person has responsibility for those failures?

I understand the ideas of team and how people as an organized group are more powerful than that as individuals, but where can the line be drawn here? Personally I look in a couple of specific areas. In Sales I like to look at how many people get compensated or commission for each individual sales success. How many commissions are being paid for each single sale? How many different forecasts and how many different sales reports is it showing up in? If individuals or groups are truly in or associated with the sales function, then their expenses should be associated with the sales function, they should carry quotas (remember, the more people in the sales group, the greater the quota that the group will need to carry in order to sustain the headcount) and their compensation should reflect a commission oriented structure.

In Operations I like to look at how many times each Delivery / Implementation opportunity must be presented for review, and to which audiences. I have been in roles where it was not uncommon to present the same information four to five times including “Dry Run” preparation, so that when you actually did present the information to the policy and decision senior management, it had the proper format and appearance. Operations are about efficiency, accuracy and speed. Do the job once, get it right and move on to the next one. The number of programs for efficiency and process improvement currently in vogue today would lead us to believe that it was amazing that any company was ever profitable or efficient in their operation.

Please do not get me wrong. I am fully in favor of providing any desired support to both Sales and Operations. I believe that the decision for requesting that support, and paying for that support should rest with the Sales and Operations teams. If Sales feels that it needs more sales support, then that support needs to be funded by sales in the form of increased sales targets and quotas. Most sales teams have a Sales per Staff metric. If Sales feels it needs more staff, then they need to generate more sales to support them. If Sales feels it can accomplish its goals with fewer staff, then they should be more richly compensated and commissioned for that as well. Sales is a Risk-Return role. If they are willing to take the risk associated with not attaining their goals, then they should also receive the associated and promised compensation when they achieve them.

On the other side of the divide, if operations feels that it needs more operations support, then that support needs to be funded by operations in the form of increased efficiencies and improved earnings associated with deliveries and implementations. If Operations is looking at an operating profit per staff metric, then more staff would need to generate greater efficiencies that would in turn generate better operating profits. If Operations feels it can accomplish its goals with fewer staff, then they too should be incited and provided bonuses for that as well.

It appears that as time has passed many of these supporting and enabling positions have migrated outside the control of the business function they were created to serve and have taken on lives and purposes of their own. Roles that were once viewed as specific ways to specific means seem to have become a means all unto their own.

It has been said that “When you are a hammer, everything looks like a nail.” I guess the business equivalent is that when you are in support, everything looks like it needs support.

Too many times the “support” decision seems to have been removed from the business line functions of Sales and Operations and put in the hands of some other management function. With this type of structure in place the support team loses its responsibility relationship with the line organization and becomes more of a corporate tax on those line organizations for programs that they may or may not agree with or support. How can the value of the support be quantified when it is no longer within the purview of the line function being supported.

If there is work that needs to be done within the business, but is outside the line functions of Sales and Operations, that is understandable. Don’t try and put it within those structures. Leave it within the management “support” structure where it too can be visible, monitored and hopefully quantified. Leave the support of both Sales and Operations to those functions where they can decide and implement the levels and types of support structures, if any, that they desire or need. By assuring that those functions have clear objectives, financial and otherwise, you can be reasonably assured that any support that they request and fund will be valuable to the business.

Cloud Computing – Yes, Cloud Management – No

As the use of cloud computing proliferates, the ability to access applications via the network without having a defined path or structure to them, we also seem to be proliferating “Cloud Management”. Cloud management is the creation of a matrix structured organization where both responsibilities and reporting structures are overlapped.


Cloud management can occur when Sales reports via a geographic structure, Operations, Marketing and Support report into functional structures and customers are organized by vertical market alignments. The cloud gets worse when none of these reporting structures converge until the very senior most levels in the organization.


The net result is that usually each reporting structure begins to duplicate aspects of the other functions due to the number and difficulty of management hand-offs and the lack of overall alignment. Sales will create operations and support “like” groups, operations will create sales and support “like” groups,etc. to make sure that their needs are looked after.


When multiple groups have similar responsibilities, it ends up that no group has final responsibility.One group will always think another has the responsibility, and can point somewhere else when the goal is not achieved. The matrix organization structure can be very elegant in theory, but very difficult to implement and work well. Organizations where reporting structures, responsibilities and objectives are clear, simple and defined reduce functional overlap and clear up the business confusion that the “Cloud”can create.