Pyramids Are for Dead Pharaohs
Like most startups, we started out undercapitalized. The only “office” we could afford was our laundry room. We had extra space there because we couldn’t afford a washer and a dryer. Our first desk was an old door we supported on two sawhorses. We were scrambling for sales, every day, just to stay in business. There were only two of us, but there was no question in anyone’s mind that without sales we were finished, and then there would be no Barefoot Wine!
As we began to grow we hired people who specialized in production, accounting, marketing and administration. We moved into larger offices and even hired a sales force that worked throughout the country. The salespeople were “outside” while the office and production people were “inside.”
That’s when we began to see our little company slowly but surely succumb to the pyramid corporate structure. Each division established its hegemony. People began to compare themselves to other professionals in other companies in terms of salary and best practices. Before long, our flat two-person company looked like a pyramid. Eventually, the organization chart became a constant status reminder with various levels and impenetrable silos.
That's when sales began to stagnate. People in the office began referring to the salespeople as being “out there,” cut off from the proximity of the office folks. If sales were poor, it was “their fault.” The office folks became isolated and insulated from sales. “Sales is not my job,” they would say.
Sound familiar? It should. Most companies are pyramid structures with the CEO on top, then the division chiefs followed by the department heads, then the teams, groups and units. Somewhere down near the bottom are Sales and Customer Service. Ironically, these are the only two groups that talk to the customer every day. They know what’s working and what’s not. They know the marketplace, the competition and the complaints.
After a very trying year, we decided to take our first real vacation. We left our phones behind and went backpacking in the jungles of Kauai for two weeks. When we returned, sales had not improved. But we had! We had gained a more objective view of our business and what was happening to it. It dawned on us that we needed to get back to that entrepreneurial spirit we had in the laundry room by putting sales back on top.
We looked at our pyramid structure and realized, “How can we say we put the customer on top when we put sales and customer service on the bottom?” We turned it all upside down. We drew a new organization chart with only two divisions: Sales, and Sales Support!
Everyone who was not in Sales or Customer Service was in Sales Support. That included the winemaker, the CEO, the CMO, the CTO, the CFO, all the C’s, the VP, and even the P - the whole alphabet! All in Sales Support. We enforced this new relationship in three ways:
1. Quarterly Bonuses. We matched everybody’s 401K on a sliding scale of how well the company did that quarter based on agreed-upon metrics of sales, growth and profitability.
2. The Money Map. Everyone got a process map that graphically demonstrated the circuitous route the money took starting with our end-user consumer and moving through the retailer, through the distributer, through our company and eventually ending up in their pay checks. It showed the dollars dwindling at every turn as service and supplies costs eroded the initial purchase.
3. Quarterly Sales Meetings. We invited the entire staff once a quarter to listen to the goals, challenges, and opportunities the salespeople faced. We all heard the feedback from the customer service people, and we all helped brainstorm solutions.
Did we get push back? You bet! Our accountant said, “I have nothing to do with sales. I’m an accountant. I get accounting magazines, belong to a professional organization, go to professional conferences. How can I affect sales?” We said, “Don’t worry, you’ll find out!” Two weeks later he got an anxious call at 5 PM from our salesperson in Florida. A big buyer had a last-minute cancellation in his schedule and could fit our guy in at 8 AM. He needed sales reports, projections and pricing. Our accountant stayed up all night to complete the tasks! Our salesperson got the reports on time and made the sale!
There’s a lot of talk today about engaging and empowering your people. Companies want to get back to the entrepreneurial culture. The backbone of entrepreneurship is sales. The two-division company reinforced the value of teamwork, engaged everyone in sales and virtually saved our company.
Isn’t time to take another look at your company structure? After all, pyramids are for dead pharaohs, aren’t they?