What Got Your Business Here Won’t Get You There – Part 2
Last time we explored how companies at different stages have differing needs. As a reminder, here are some sample challenges across several functions:
|Function||Startup Challenge||Growth Challenge||Mature Challenge|
|Sales and Marketing||Get Revenue||Accelerate Revenue||Protect Revenue|
|Product Development||MVP Launch||Grow Market Share||Optimize Portfolio|
|Implementation Services||Get first customer up and running||Scale to meet demand while maintaining quality||Optimize Margin|
|Customer Support and Success||Keep first customer happy||Keep all customers satisfied||Keep all customers that matter satisfied|
It’s relatively simple to know which trajectory your company is on by looking at its financials. What becomes more difficult is in knowing if you are ready to meet functional challenges. How do you know if something is missing?
One of the benefits of working with sharp people at TechCXO is the knowledge and information sharing that we do. A while back Mike Allred and I were discussing ideas on a call and a comment he made reminded me of something I had built years ago – a maturity model for enterprise software. I immediately thought of its applications towards Intentional Revenue™.
What is a maturity model? It’s a process or tool that helps companies assess how effective they are and also provides a guide as to what to do next.
If you don’t know where you are, how do you know where you’re going? And how do you get there?
In IT, one of the grandfathers of maturity models is Software CMM, dating back to the 1980’s and created by Carnegie Mellon University. It’s now called CMMI and is owned by ISACA. It’s extremely thorough and comprehensive.
But there’s a challenge in implementing maturity models. Often, it’s a laborious process and I’ve found that the effort to adhere to it often doesn’t fit smaller companies. Why should a startup waste valuable resources in this way?
The answer is by having a guide as to what to do next. A simple start is often “just enough” to set up a good framework to build on later. Without this framework companies may not know where they have gaps as they grow, which can lead to problems. It also helps smaller companies know what skills and experience they need to acquire as they add new team members.
Since that call I’ve created an Intentional Revenue™ Maturity Model, the basics of which I will share with you here.
Like many models, this one has five levels:
Technically, there is also a Level 0 which corresponds to “unknown”, so consider that for a moment. The initial step for any company – startup to mature – is to know where they stand by first getting assessed. Then you can determine what areas need to be addressed.
If you’re a startup, you’d probably want to ensure you have the basics down pat across the board.
If you’re heading into a growth stage, you probably want to scale up your maturity along with your revenue.
As you become mature, you want to optimize what you have. But these are general rules.
One difference between the Intentional Revenue™ Maturity Model and many others is that you can achieve a high maturity level at ANY stage of growth. The scoring questions use process and qualitative criteria as opposed to specific tasks to perform or quantitative targets.
As an example, defining sales success could start with “hit your target (pass/fail)” which indicates low maturity. A single booking or revenue number defines if a salesperson or territory is successful or not. Obviously, it’s better than not knowing anything at all, but it’s very basic.
This progresses through “consistent measurement aligned with customer success” which indicates a high level of maturity. There is no longer a single metric used but more detailed criteria, measurement, performance management and alignment with how successful a customer is.
The actual measurement process isn’t critical here. The fact that it is consistent and aligned is. So, for a startup, this task could be done in a spreadsheet by a single person. In a mature organization it might require a dedicated team with a more detailed process and reporting requirements.
The outcome and the level of consistency is what determines maturity, not the work to do it.
This is important, and why many maturity models fail to gain traction in smaller companies. They are often too time-consuming and difficult.
No matter what you implement, you need to right-size it to the current stage of the company.
One final thing to consider: capabilities are assessed across multiple domains. In the case of Intentional Revenue™ this is across Sales & Marketing, Product Development, Implementation Services and Customer Support and Success.
A company can score well in several areas and lower in others, which yields a final maturity score that is the lowest common denominator. It’s perfectly fine to not achieve the highest level of maturity in all areas. Effort expended needs to align with expected returns.
Part of any report would also provide recommendations on next steps to proceed to the next level. A reassessment should be done in 12-18 months to show improvement.
I’ll finish off this blog series about the concept of maturity models and Intentional Revenue™ in the next blog entry. Stay tuned for Part 3 in the coming weeks. I can be reached at email@example.com or at (404) 777-4774.