Berlin, Main station, about 12:30 pm. Time for lunch. Coming straight from a session with my coach, I figured I would treat my body to a healthy meal. I head over to Dean & David to get me some salads. During the mid-day peak there are always plenty of people in the store and plenty of orders to process for the team. Orders are coming in through new takeaway customers, new walk-ins and fresh online orders. The team of three people behind the counter struggles to keep up. I place my order, I pay and do as I am told and take a seat with my receipt waiting for my order to be prepared and my name to be called up. While waiting, I observe how more and more people enter the store and how more and more salads and fresh bowls are being prepped and handed over the counter. My two salads are NOT among them.
This scene goes on for about 15 minutes uninterrupted as I sit there and watch. Finally the man behind the kitchen counter gets a small break and starts cleaning the counter instead of preparing my salads. Now I know for sure: my order has fallen through the cracks of the system.
So I got up, reminded the staff of my order and saw it finally land on my table. Munching away happily I reflected on this simple everyday life situation - one that I am sure you too have already witnessed. It reminded me of the flow of deals through a pipeline, as well as the relationship between sales teams and product development or operations teams in all kinds of B2B businesses out there. There is a regularly occurring breaking point of even the best documented processes - one that lets deals ‘fall through the cracks’, leaving employees overburdened and customers unhappy. It occurs when the filtering process of incoming leads, deals and finally signed contracts is not properly maintained, allowing WIP to skyrocket in the production process and leading to all kinds of friction between all departments involved. What is missing in these cases is a person or department that is holding everybody involved accountable to a certain level of process quality and who are making sure that work is only passed along to later stages in the value chain, when these departments are equipped and ready to take on more workload. Is it fun to be a pain in the ass for your co-workers and to be super 'German' about sorting the order tickets before they enter the kitchen's production process? Oh no!
Is it necessary? Oh yes! If this role is not in place, you might feel like everything is going peachy, sales flying in left and right and everything is amazing just moments before your entire system overheats and, eventually, comes to a grinding halt.
So as you grow, you want to make sure to install an 'order keeper' within your 'deal production' team - or actually in your entire team. It might feel like the rules this person or department is implementing and enforcing slow you down in the short term. Nevertheless, these same rules will be the reason you grow further in the long term and accelerate to higher growth rates than you would have without such a role/system in place.
The math behind it is simple: When WIP (= Work In Progress) in a production line reaches a critical threshold, then the output of the entire production line is reduced.
Why should this matter to you? Bottom Line - a sales pipeline works the same way as a production line for cars or any other product. Looking at sales processes through 'production line glasses' has helped us to increase and optimize productivity levels in many sales engines we have come across. For those of you who wanted to get the key piece of advice from this article and nothing more, you are done here and you can skip the rest. For those of you with your inner nerd raging and wanting to understand the production process logic and 'math' behind it, feel free to continue reading.
So what is WIP? The concept of "Work in Progress" (WIP) refers to the inventory or tasks that are in various stages of completion within a production process. It represents the work that has been started but not yet finished. WIP can include physical items, such as partially completed products, as well as intangible elements like tasks or projects, in our case: open deals within our sales pipeline. WIP impacts the efficiency and productivity of the workflow directly. The relationship between WIP level and productivity can be understood through the concept of flow efficiency. Flow efficiency measures how smoothly and quickly work moves through a production process. When WIP levels are low, meaning there are fewer tasks or items in progress, it allows for better focus, faster completion, and shorter cycle times. This is because resources, such as equipment, personnel, and materials, can be fully utilized on a smaller number of tasks, leading to improved throughput.
However, as WIP levels increase beyond a certain tipping point, productivity and flow
efficiency starts to decline. This happens due to several reasons:
To mitigate the negative effects of high WIP levels, production processes often implement strategies like lean manufacturing and just-in-time (JIT) production. These approaches aim to minimize WIP by focusing on reducing waste, improving workflow, and ensuring a smooth and continuous flow of work. By maintaining an optimal level of WIP, production processes can achieve better flow efficiency, reduce lead times, improve resource utilization, and ultimately enhance overall productivity. It is important to find the right balance that allows for smooth operations without overwhelming the system. From the perspective of a sales engine leader this means that it is important to groom your pipeline on a regular basis and make sure you are not carrying around any 'deadweight' aka 'unnecessary WIP' in your funnel.
Otherwise your sales agents - and you - can end up in a situation where all of you are not seeing the forest for the trees anymore. From the perspective of the overall system designer and operator it is important to install quality gates along your value chain. This way you can make sure that your operations team is not flooded when your sales team is closing a lot of deals very fast. Regulating the deal inflow can even further improve your sales performance as it improves the 'position' of your sales agents towards new customers: "You can buy now, but you have to wait to benefit from our solution, since there are already a lot of other customers who have signed up and are currently on boarding. The longer you wait to sign the contract the longer you will have to wait in general!" So aim to limit WIP under the critical threshold, challenge your team to uphold process quality and dare to limit the number of customers you onboard at the same time.
Your team, your process quality and eventually your customers will be very happy about it!