(PRWEB) December 3, 2004
Type into Google, MSN or any other search engine, the words ÂSarbanes Oxley and salesÂ and you are more likely to be faced with a lot hot air and negativity about the Act, which came into force in 2002. It is likely to even have an impact on European companies too. Costs are associated with even the most positive aspects of life, so why focus on them?
Good corporate governance is good for your business. If you are adding value to your business and to all of your stakeholders, including customers, then whatever you do to make sure that you run your business ethically and effectively can only in the long run assist you in increasing sales. There are too many large businesses, many of whom are even household names, who focus on costs alone, and yet they donÂt quite so often mention how good corporate governance can help you or even themselves to boost sales.
Terry Kendrick, from the School of Management at the University of East Anglia explains why the Act can and should be seen more as an opportunity than a business threat or an expensive and an additional administrative hurdle:
ÂGood corporate governance is an opportunity to show investors that the future is secure and that their money is safe. With increased openness and transparency a company can show that its customer-base is not at significant risk, and that where risks do exist these are being managed well. Risk-aware sales and marketing processes would seem to be an important element in managing potentially uncertain income streams, providing early warnings to trigger contingency plans. A well managed income stream is a source of comfort to investors!Â
ÂPoor corporate governance is a source of reputational risk which can directly affect your brand which, in turn, is a clear source of company value. This risk to your brand from poor corporate governance is to be found amongst all stakeholder groups, not just market analysts and investors. Would you, for instance, as a partner in a strategic alliance feel comfortable having your brand potentially contaminated by a partnerÂs poor corporate governance record or by a journalist exposing non-compliance with acceptable business practices?Â
What is the primary function of a business? The goal is to make money, yet this cannot be achieved without adding value through a joined-up sales and marketing process. Marketing leads the charge, but it is up to the salesforce to deliver the appropriate message in the right way, to increase sales and value. In the public sector, the augmentation of sales is not as important, but these organisations must still deliver according to public policy requirements. With taxpayers being increasingly seen as customers in their own right, one could argue that the same principles still apply: targets must be met and value must be created.
ÂWithout sales, organisations cannot surviveÂ, argues Andrew Dugdale Â director of Intellectual Capital Development Ltd (ICDL) and a member of the Marketing and SalesÂ Standards Setting Body (MSSSB). He adds: ÂSales should not therefore be viewed simply as a necessary business function, alongside marketing, operations, finance and other departments. It is fundamental to the delivery of the corporate mission and must therefore inform every other area of the business.Â
Beth Rogers, Research Director at the Institute of Sales and Marketing Management and a lecturer at Portsmouth Business School, adds: ÂSales has not been known for thought-leadership, but as the frontline in meeting customer reaction to the company's products and services, sales should contribute to corporate thinking. Sales managers need to be standard bearers for sales as a profession, by reflecting on and promoting what the salesÂ function contributes to the long-term growth of the company as well as short-term revenue.Â
While IÂve also heard complaints about the costs associated with SOX compliance, thereÂs another false belief or negativity that needs to be tackled. Some consultants say that value is just a buzzword, and so it is meaningless. Rogers explains:
ÂValue is one of those wonderfully vague English words that can accommodate all kinds of perceptions, including "cheap"! I normally describe it in B2B sales as reducing hassle for the customer. If a purchasing decision-maker receives a proposal from a supplier that would relieve them from some irritation or stress in their job, then they will probably perceive value. The vast majority of purchasers I have interviewed over the years prefer suppliers who make things easy - usually by following a process excellence and innovation.Â
The Âthought-leadersÂ at ICDL, like Dugdale, argue that value should be more recognised as the founding concept behind any business. ÂWhere no value exists, no trade can take place and no businesses can existÂ, he says. His argument is as follows:
All value is perceived value; it is derived from combinations of effort, scarcity and desirability. Morgan cars are valuable because they take a lot of effort to build, there are not many available and they are highly sought after by certain groups of car buyers.
- The role of sales is to enhance the desirability aspects of value. Where all products are priced the same and are equally available, desirability is the only effective differentiator. Sales people must be able to demonstrate that their products or services provide greater value than a competitorÂs offerings. This type of Value is the source of competitive advantage.
- The only proposition that has value to a business is one that enables it to demonstrate higher value to its own customers, thereby giving it Competitive Advantage.
So how do you create value? By a process of alignment, says Dugdale; ÂA business that can help a customer build sales to its own customers has achieved a high level of alignment between its capabilities and the needs of the customer. This alignment is the point at which value is created.Â Furthermore by gaining more control over your salesÂ process, perhaps using ICDLÂs tools, you can attain a high level of alignment between customer needs and business offerings. Linked to an audit trail, this will enable you to prevent relationship and brand-damaging fraud, and the mis-selling of your products and services.
Alignment and the adoption or the creation of audit trails, on the other hand, lead to more sustainable and profitable relationships. As a manager you would be in a positive to establish best practices, more effective benchmarks for good corporate governance with the evidence to back up any claims about your own activities and those of your salespeople.
If you are based in Europe, or even in the rest of the world, you might wonder why you need to be Sarbanes-Oxley compliant. Well, the US economy is the driving force behind what happens to the rest of us, particularly subsidiaries or the suppliers of U.S companies based around the world.
By being a thought-leader you can create more value and a competitive advantage. As a result of you changing your thinking, others - including your competitors - will look at your company as one that is potentially establishing a new industry benchmark. So what is a though-leader? Rogers explains:
ÂThought leadership is being ahead of the market - thinking and talking now about what we will all be doing in 3-5 years. It is natural to assume that companies who are thought-leaders are also going to be first in developing products and services to deliver competitive advantage to their customers. Innovation is not just about new products, it involves new ways of doing business, reducing costs, improving quality of the work environment and more. A company that encourages the expression and circulation of ideas will generate the intellectual property to claim thought-leadership.Â
ICDL, she says, are thought-leaders because they Âhave identified the importance of corporate governance and developed a way of helping their customers to be compliant. Not all companies are currently aware of the implications of Sarbanes-Oxley, so ICDL is leading thought on this.Â In parallel to ICDL, Portsmouth Business School, the Institute of Sales and Marketing Management, and the University of East AngliaÂs forthcoming Centre for Marketing and Risk are developing programmes to cover the management of corporate governance and risk.
By managing risks and preventing the mismanagement of your company and its business processes, you will be able to increase your sales and your Return on Assets Employed. Corporate governance provides your customers with more transparency and therefore creates a new behavioural pattern that can only prove beneficial to all of those concerned. Costs? Yes they may increase in the short-term, but in the long-term these may seem negligible against the benefits of managing your business more effectively and more efficiently, with the potential for lowering costs over time. The professionalism of your company and staff will enable you to keep your SOX by increasing your sales. So are you a thought-leader? With good corporate governance, you could be and envied for it.
CDL stands for Intellectual Capital Development Limited. It is a name that reflects directly upon our two principal activities. The first is the application of fresh thinking to our clients' sales and marketing strategies. The second is the translation of our ideas into practical, flexible tools that can be applied by our clients to their own unique business challenges.
Our tools and development programmes have been adopted by global organisations, such as BT Syntegra and Carillion. They are ideally suited to the delivery of the audit trailing and management accountability specified by rulings on corporate responsibility, such as the Sarbanes-Oxley ERM Draft Legislation in the USA. In addition, they can serve as practical replacements for sales training and they can even link to customer relationship management solutions such as Oracle, Onyx and ACT.
ICDL was established in 2000 to build tools, processes and events that drive forward sales productivity. Andrew Dugdale whose career spans 22 years in global sales established the company. He is Vice Chairman of the Royal Counties branch of the Chartered Institute of Marketing and sits on the MSSSB (Marketing and Sales Standards Setting Body) a government-sponsored steering group, looking at setting future standards for excellence in sales and marketing.
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About Terry Kendrick
Terry Kendrick has been a business consultant since 1987, initially in information sources and management and subsequently in marketing planning. Since 1987 he has worked on marketing planning and CRM projects for over fifty organisations in a wide range of manufacturing, consumer and services marketplaces in seventeen different countries
Terry has published business-to-business and academic papers on customer relationship management and risk management in marketing. Other publications include an executive briefing for Gee/ Sweet & Maxwell on strategic marketing planning and risk. He has contributed lectures on strategic risk management, consultancy skills, organisational change and research methods as part of the MBA programme at the University of East Anglia. He has also presented sessions for Cranfield School of Management, the University of Strathclyde and the Mediterranean Institute of Management in Cyprus. in addition to general strategic marketing planning and research expertise Terry has a particular interest in competitive intelligence (CI) and risk management. He has written for the worldwide Society of Competitive Intelligence Professionals (SCIP) and runs CI and risk management workshops for companies and other organisations. He is currently researching the application of risk management tools and techniques to strategic marketing planning.
About the ISMM
The Institute of Sales & Marketing Management (ISMM) is the UK's only professional body for salespeople. Founded in 1966 to promote standards of excellence in sales and sales management and to enhance the status and profile of sales as a profession, the ISMM has been the authoritative voice of selling and the custodian of sales standards, ethics and best practice for over 35 years.
The ISMM is also responsible for establishing benchmarks of professionalism in sales and is the only membership body accredited by the Qualifications & Curriculum Authority (QCA) to award nationally-recognised qualifications in selling and sales management.
ISMM members are drawn from every sector of industry and commerce. From those just embarking upon a sales career through to senior and experienced sales managers and directors, they share a commitment to upholding the standards of professionalism and integrity that are the hallmarks of sales success.
About Beth Rogers
Beth Rogers BA MBA DipM FInstSMM FCIM is Programme Manager of the MA Sales Management at Portsmouth Business School and Research Director of the Institute of Sales and Marketing Management. Beth is a popular speaker and writer on KAM. She is co-author of ÂKey Customers Â how to manage them profitablyÂ and ÂKey Account Management Â learning from supplier and customer perspectives.Â More recently, she has authored several articles on sales management, key account management and customer relationship management.
BethÂs early career was spent with IBM, where she undertook a variety of roles, including managing IBMÂs relationships with Business Partners in the manufacturing sector, and designing the Annual Software Growth Offering for key accounts. She was then a consultant and Visiting Fellow at Cranfield, where she pioneered the first key account management research project at the School of Management and ran successful programmes for clients including Alcan and Adtranz.
She is a member of the sales steering group of the Marketing and Sales Standards Setting Body of the U.K and serves on the Ethical Committee of Standard Life.
CIMTech is a voluntary organisation, which exists to promote the adoption of marketing technologies by business, and best practice in the commercialisation of technology companies. The monthly Newsletter aims to be an inspirational and informative conduit for communication from experts over a range of relevant topics so practising Marketers from all backgrounds can learn, save time and make money on a continual basis facilitated by a trusted source. For info visit our website.
Andrew Dugdale, who is featured in the above article, will be a panellist at the 3-day conference (22nd-24th February 2005, entitled: ÂManaging Total Marketing.Â The conference will debate about how technology is best used in commercial environments with marketing taking the lead. A number of the issues raised in this article are likely to be raised, including the role of good corporate governance as a driver to added value and create more innovative and joined-up thinking. Please see: http://www.idmf.co.uk/CIMTechregistration10.
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