Mar 16

A Mindset for Double Digit Sales Growth

Heinz Landau
Heinz Landau is a seasoned business leader who has gained valuable working and leadership experience on three different continents.

In my previous company, we achieved under my leadership in 16 years 13 times profitable double digit sales growth. We were able to outperform the Thai GDP – growth year by year by a clear margin. The huge majority was organic sales growth. We achieved this during the period from 1993 -2008. This period even comprised the Asian crisis that had started in Thailand in 1997 and lasted for several years. The Asian crisis had an even stronger impact on the Thai economy than the recent global economic crisis.

How were we able to deliver these outstanding results?

I am a strong believer that growth starts in the head of the leader. If he is able to develop a challenging goal, align his leadership team behind it, who will then cascade it down in the organization, then the first major step is done. The leader must be optimistic and build up confidence throughout the company.

Most companies and most leaders are seeing only barriers to growth. They like to use the (poor) economic situation as an excuse for failing to deliver sales growth.

I am always telling  my colleagues: “In every economic situation, no matter whether the economy is booming or whether the economy is shrinking, there are always companies who win market share and companies who lose market share. And we aim to be and will be among the ones that are winning market share.”

You have to keep negativity out of people’s heads.I personally hardly ever use the word crisis.

I was happy when the consulting firm A.T. Kearney came out a few years ago with a study that growth is possible in every life cycle of the economy, since this was exactly what I had told our employees since many years. Growth starts in the head of the leaders.

A.T. Kearney also found out that even very bad external factors have only an influence of maximum 10 – 15% on the sales growth of top performing companies. Only average and below average performing companies are depending in their success by 45% on external factors.

Also Michael Treacy concluded in his book “Double Digit Growth – How Great Companies Achieve It – No Matter What” that the challenge of growth isn’t in the market; it’s in the leadership team. The management capacity determines the growth results.

Another two big mistakes that you should avoid, if you aim at outstanding sales growth are the following:

a) Emphasis on profit growth rather than sales growth target

b) Preference for cost reduction activities rather than sales growth activities

If you want to achieve double digit sales growth year by year, you need to have a rigorous focus on the top line. I have observed it again and again when managers made the mistake to try to optimize their top line (sales) and their bottom line (profit)  at the same time. This is impossible! You have to make up your mind: it is either focus on sales optimization or focus on profit optimization, but not both.

In my previous company, we were able to develop a double digit sales growth mindset among all employees. Everyone in the company, from the managing director to the warehouse worker, knew what the three letters DDG stood for. DDG became a firm part of our company’s culture.

That helped us a lot in our goal setting process. The moment we started the budget discussion for the coming year, everyone involved (from the sales representative to the business unit director) had a DDG mindset, thinking how DDG can be achieved. We usually developed stretch goals. I often work with famous quotations. One of our favourites was one from Les Brown:

” Shoot for the moon. Even if you miss, you will land among the stars!”

We launched our main goals for the coming year during our companywide annual take-off meeting where all employees participated. In line with our strategic 4 stakeholders – approach, we developed goals not only for sales and profit, but also defined goals regarding employee satisfaction, customer satisfaction and social contribution.

After generating employee commitment and buy-in, we started executing our strategy. We reinforced the DDG awareness among our staff through several events throughout the year, keeping everyone informed about the progress that we made towards reaching our goals.

And then, when we had achieved our goals, we celebrated our success and rewarded our staff adequately. We had developed a long term incentive plan where our employees were able to earn extra financial rewards, as long as the company was able to achieve double digit sales and profit growth.

We even went to the extent that, in particularly successful years, we took all our employees (about 180, rewarding the whole team, from the managing director to the warehouse worker) on a four or five days trip to Australia, Japan, Korea and Hongkong. I think you will agree that such rewards are seldomly heard of, since most companies would take only the sales and marketing team or the business unit along, but not all staff of the company, including the ones from the supporting functions. Our approach fostered a great team spirit and had a high impact on employee engagement.

When I sometimes discussed our approach with colleagues or friends outside our company, they commented that we are so profitable despite these costly overseas trips. However, I would argue and prefer to say that one of the reason for our tremendous success was, because of our caring and rewarding approach towards our staff, including the costly overseas trips. An extraordinary performance deserves an extraordinary reward!

While working at my previous company, I was privileged to be surrounded by an outstanding leadership team as well as highly engaged and talented staff. Caring leadership, in the sense of caring for people, but also caring for results, enabled us to deliver double digit growth year by year. And it demonstrates that, even in a tough economic environment, a soft leadership approach can lead to great achievements and hard results.

This entry was posted on Tuesday, March 16th, 2010 at 19:47 and is filed under Leadership, Management. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

Print This Post
Email This Post
  • Facebook
  • Twitter
  • MySpace
  • LinkedIn
  • Digg
  • Google Bookmarks
  • Technorati
  • MisterWong

Leave a comment

  1. Dear Khun Landua

    The article is an excellent source of food for thought. I wish I could circulate this article among our OMEGAWORLDCLASS learners. FIrst I will refer this blog to Khun Pichaya who is deputy editor of NATION- ‘Management & Innovation”, or he may have known it already.



  2. pichaya says:

    Hello khun Kittiwat,

    thank you very much for introducing me this blog. so far i’ve scrolled through k.landua’s articles which i think they are quite interesting.
    perhaps, if possible, we would love to have k.landua writing articles for us.