Execution is the key for growth in asia, says CIMA’S keynote speaker
GROWTH: The key challenge for organisations in Asia is not achieving
top line growth but achieving profitable growth according to Simon J
Littlewood, the President of Asia Now (the Lean Growth Group) and the
keynote speaker at the CIMA Business Leaders’ Summit 2007.
Littlewood, a recognised authority on Asian markets, also stated that
CFOs have a crucial role to play in increasing sales productivity.
Littlewood has 25 years’ experience in consulting and research, mainly
in Asia, and is the architect of Lean Growth which uses proprietary
research and change management tools to enable leading multinational
companies to enter emerging markets and optimise profitable growth.
He drew on this experience during his technical paper presentation
‘From good to great: the CFO as champion of change’ on the second day of
the Business Leaders’ Summit.
The paper underlined the need for CFOs to transform their teams from
the traditionally less value adding transaction support functions to
value adding business partners which can better support their
organisation’s transformation from good to great.
He cited his ‘Lean Growth’ model to illustrate that for many
organisations while sales often met expectations, just as often profits
fell short. Littlewood believes that the CFO, with their particular
blend of skills, can play a crucial role in improving profitability by
positioning ‘growth enablement’ as an effort to reduce non-value added
sales activity.
At the heart of Littlewood’s model is a rigorous planning and
management methodology to improve sales productivity and focus on high
value customer segments.
The key to this, Littlewood believes, lies in understanding where
your future profit will come from and aligning your business to capture
it, while instilling a culture of management and planning discipline and
continuous improvement to ensure that sales targets are met.
This involves analysis of your customer base and segmenting sales and
service activities accordingly, which will both free up sales time and
allow it to be used to best effect, aligning channels and partners,
optimising inventory and reducing receivables accordingly. This will
then facilitate growing revenues and margins, reduce overall cost to
serve and optimise working capital.
Disciplined planning and review is imperative. When planning and
forecasting Littlewood cautions strongly against the unscientific, but
all too prevalent ‘last year plus 10%’ model. Instead, he advises that
organisations focus on activity based analysis and consider future value
when evaluating customers, regularly reviewing your market for changes
and clearly identifying low-earning or marginal business.
The first step, he suggests, is to ensure that your sales function is
aligned to customer value.
In many organisations, executives tend to overestimate the amount of
time their sales force spend on sales, and underestimate how much time
they spend on administration which has a direct negative impact on sales
productivity. The administration and support function, Littlewood
states, could be effectively be undertaken by well trained customer
service staff.
Financial fulfilment performance is also a major sales enabler. Once
the sales force has been realigned, it is important that service
delivery functions such as finance and logistics are streamlined and
have a culture of continuous improvement which ensures optimum service
and cost efficiency.
Littlewood also recognises that productivity programmes, which
necessarily involve changes in often embedded working practices, often
have a high rate of failure.
To avoid failure a structured implementation plan and disciplined
change management process is crucial. Management attention should be
focused on prioritised high value initiatives, risks must be identified,
classified and mitigated and management should ensure that all resources
identified as being necessary within the plan are available. Littlewood
also suggests that organisations should not try to undertake too many
initiatives.
Once again, the role of the CFO is critical to success. To enable
such change the CFO has to have be proactive and positive and have the
leadership skills to optimise the skills of this in a new, value adding
role of business partners while building trust in the business partner
concept throughout his organisation.
The CFO also has a very important role in determining investments, to
ensure that all investment decisions are considered objectively and that
they fit the organisation’s profile and focus.
Littlewood is a graduate of New College, Oxford. After working for
Merrill Lynch in the City of London, he held senior positions in Asia
with A T Kearney and Accenture before founding Asia Now, the leading
Singapore-based advisory group, in 1998.
He has 25 years’ experience in consulting and research, mainly in
Asia, and is the architect of Lean Growth which uses proprietary
research and change management tools to enable leading multinational
companies to enter emerging markets and optimise profitable growth.
He also advises the Economist Business Network, contributes monthly
columns to Asia Finance and Banking and the Singapore Business Review
and comments on Asia for BBC TV and radio.
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