Mason Ginsberg: Hello, audience. I’m Mason Ginsburg, principal of the Alexander Group and one of the leaders within our manufacturing and distribution practice. I also lead our building materials and products sector within that practice. And as many of you know, much of our work at AGI focuses on helping clients meet their aggressive revenue growth goals. Today, we’re here to talk about a real client example of an organization embarking on a significant commercial transformation journey. To do this, I’m joined by my colleague and leader of the specific body of work, Matthew Laredo. He’s a director in the practice and one of our leaders across marketing services and commercial transformations. Matthew, thanks for joining.
Matthew Laredo: Thanks, Mason. Happy to be here.
Mason Ginsberg: Well, to kick us off, Matthew, do you mind sharing some background on the organization and the situation they were facing?
Matthew Laredo: Absolutely. So the organization in question was a multinational manufacturer and distributor of building solutions. And the reason why we’d like to spotlight them today is because, you know, the challenges that led them to requiring a transformation are not unique necessarily to that company. The three main, main pieces that really led to their challenges were their growth strategy, how they pursued inorganic growth, how they leverage that inorganic growth to drive organic growth, and then their data maturity and sophistication as they tried to manage the business holistically. So as we dig into point number one, inorganic growth, they really expanded by acquiring new footprint into new geographies. And while that was a good strategy and one that we see time and time again across the industry, their CEO even acknowledged, we’re really, really good at buying businesses, but we’re really, really bad at ingesting them and making them one. So that then fled into the second point around how do you drive organic growth without a company culture? And one of the big challenges with their organic growth model is they were still stuck in really a geographic or we’ll call it a branch sales model. We see that compared to a functional model where we’re leveraging all the resources and scale of the enterprise at large to drive decisions and customer engagement. Really, they were stuck in an old school mentality of how do we fill the factory? That leads us to the third point of, well, if we’re stuck in a how do I fill the factory mentality, to be able to transcend that, you need insights, information and data to see the entire playing field. Unfortunately, not too dissimilar from a lot of our manufacturing peers, their technical and data capabilities were immature compared to other players in the market, and so it was hard for them to see from the centralized standpoint where they had pockets of growth. One key stat I’ll share with the group today is when we looked at their whole data stack and combined all the different business units and account level data, one of the most important facts we found was that customers that were buying across the entire enterprise were spending nearly 20 times as much as customers only buying one product set or one business unit. And so taking that thesis and applying it, how do we have a mold portfolio offering to serve all the needs of our customers? But I mean, Mason, you’re in this industry, you see this space. I’m sure this isn’t a novel concept to you.
Mason Ginsberg: No, no, it certainly isn’t. And thank you for sharing that. I think the branch-based challenges we see a lot in building products, we see it a lot in even business services. I could probably go on for a further half an hour on this topic, but we actually recorded something a few months back, my colleague Mike Burnett and I, a partner at the Alexander Group. We talked a lot about branch-based models and some of the challenges that do exist across that. And I think, front and center are some of the data integrity, data hygiene type challenges that really if you’re not addressing those head on and understand your overall holistic data landscape and have a single source of truth, it’s going to be really hard to manage anything centrally or even have a center of excellence type model. So what did you do? What were some of the answers you came up with as you as you work with the client here?
Matthew Laredo: We’ll dive into three main areas here. First is, really think of it as a marketing or a rev ops function. How do we understand where the opportunity is in the marketplace? The second is how do we leverage that opportunity mapping to make sure that we’re evolving and investing our sales resources to that flow of opportunity. And then the third piece, I’ll dive into in a moment is really how do we prop marketing up, not just as somebody who’s sending out direct mailers or marketing campaigns, but really as a strategic lever to guide the organization. So maybe double clicking to that first one is now how do we think about the addressable market? Well, we were able to leverage modern data science techniques to again stitch together all of the data assets the company had to drill down at an account level. What do we see as that opportunity both in cross-sell potential and net new whitespace? This helped us to really align across the businesses, what is our segmentation model? And where we landed was a hybrid model where for those top of the stack accounts, those truly enterprise accounts, how do we bring a full company experience to those buyers and invest more heavily into that motion, while being more opportunistic and reactive in our long tail accounts? As we moved into helping professionalize the sales bucket, this was really around how do we get more senior, more capable sellers that can have conversations across our entire vertical integration of products to that single buyer? And then we think about how we continue to sustain our intelligence and our productivity through expanded revenue operations functions. We did this, you know, market sizing and account level opportunity modeling as a point in time. That also created a capability with a model that was dynamic that can be updated. But we needed an owner for that. So making sure that we had the lifeblood in the organization to carry on the work that we started into the future, and that ties us into the third piece is, marketing just as revenue operations, has an equal part of that table as we think about where the opportunity is. So not only mapping, where do we see the growth and so we can focus demand gen efforts there. But how do we also think about the upstream? What about product innovation and commercialization as we bring new product lifecycles into the market. So making sure that we’re connecting all the dots here to have a fully aligned commercial function that’s targeted against those opportunity clusters.
Mason Ginsberg: All really, really great information. And again, thank you for sharing with me and the audience. And looking back, you know, with the benefit of hindsight now, anything that surprised you along the process that you think is notable?
Matthew Laredo: I would say the biggest surprise, pleasant surprise was really, oftentimes we see leadership teams that, in today’s day and age, they love data, they want data. It almost becomes a hindrance because without the perfect proof point, it’s hard to make a decision. I think this leadership team did a really good job of embracing the fuzziness of the data environment that they lived in, and was able to make decisions that helped the business make steps forward. Really embracing AGI, we have a mantra here focus creates results. So they took that mantra, the data we were able to stitch together and made really impactful decisions and carried those through the organization, even though we had to build some of the data capabilities while we were continuing to transform the functions.
Mason Ginsberg: Makes sense. I think that’s an important concept. And, we talk a lot with all of our clients around benchmarking and what are similar organizations doing? I think it’s always important to keep the context of the benchmarks. Understanding that piece should be informative. It shouldn’t dictate the answer. And so using that as a starting point and then talking with clients, talking about what are you specifically trying to drive. How is that different? And really using sometimes just good old common sense in addition to some of the benchmarks to really get to the right solution. Is there anything you would have done differently if you could have?
Matthew Laredo: The biggest piece, and I bring this to all my clients is that a transformation, especially of this effort, takes a long time. I think a lot of leaders get into a situation where we’re coming up at the end of the first half of the year and we need to start the thinking about next year. And again, this isn’t true for every organization, but six months for a transformation of this magnitude is a very, very accelerated pace. A lot of times when I see this, it’s in the 9 to 12 months, as you think about designing that detailed plan and bringing it through the entire organization. If you have a 50 person sales and marketing team, you can move a little bit faster. But as you get into the hundreds of people or thousands of people, don’t undermine or underestimate the effort it takes to really move the entire ship in the right direction. But Mason, curious what you see. You’ve done a number of these transformations yourself.
Mason Ginsberg: Yeah, your intuition connects really, really well here. As far as the kind of bringing the leadership along, it’s really important to have that cascading line of communication. So understanding, working together to create the right solution to understand what the change management initiative was going to look like, but also making sure you understand what other functional involvement you need to make sure those changes stick. And also how do you cascade that down throughout the organization at the right pace, because you want to make sure that the messages are delivered to the right people at the right time, and really just to make sure that the tone is right. This is about improving the organization, making everyone better. And there should be excitement to be generated here. If you’re interested in learning more about commercial transformations or just learning about go to market issues at large, please visit us at AlexanderGroup.com. Reach out to Matthew or myself on LinkedIn. Always happy to chat, but thanks again for joining everyone.
