If you listen only to Kirk Nelson’s first few words in the interview below, you’ll be missing out on one hell of a treat!
Kirk starts the interview by assuring me that ARCA has an accurate sales funnel and a good understanding of what’s going on in the business.
That’s good, right? But, where’s the money?
Well, listen up, because after Kirk’s understated opening, all hell breaks loose! The real fun starts when I ask Kirk if Sales Process Engineering has had any impact on sales.
Turns out there has been an impact. Kirk started his journey in July 1, 2012. By the end of the year, revenue was up 37%. And Kirk expects to finish this year (2013), with another 40-50% increase in revenue. Over this period the volume of units shipped has increased ten times.
We’re delivering ten-times the number of units per month than we were a year ago
And, it gets better! To achieve this, Kirk reduced his sales team from five people down to two. He also scrapped the commission and bonus plan and put the remaining salespeople on straight salary. And, in spite of the fact that he has a mandate to add more salespeople when his existing team hits 80% utilization, he hasn’t had to because the team is still only averaging 60%.
Bottom line, then, is that Kirk’s organization has just about doubled sales with two-fifths of its original sales team and with the remaining salespeople operating at half throttle! And, no, before you ask, Kirk’s organization is not a start-up!
ARCA: cash-automation technology
Kirk Nelson is an Executive VP at ARCA. ARCA provides cash-automation machines to financial institutions, retailers or anyone else who wants to automate the receipt or dispensing of cash. (If you’ve ever cashed-in a pile of chips in a casino, the odds are that you’ve interacted with ARCA’s technology.)
ARCA is both a distributor and a manufacturer of its own technologies. The organization has been in existence for 13 years and has operations on a number of continents. You can find ARCA here.
Ballistix’s involvement: virtually none!
ARCA is another example of an organization that has implemented SPE – and achieved stunning results – with vitually no direct assistance from Ballistix. I ran a two-day (Solution Design) workshop for ARCA in June 2012 but, aside from that, Kirk has produced this outcome using only The Machine (my upcoming book) as his guide. (I think he also read my first book and attended a webinar or two.)
This is awesome, for two reasons:
- If organizations can implement SPE without the assistance of Ballistix (and a rapidly increasing number are), this is a powerful validation of SPE
- It’s just not cricket for for me to crow about the accomplishments of our own clients. However, if an organization can achieve a breakthrough by themselves, that’s something I feel a little more comfortable making noise about!
So much value
As is often the case, the real value in this interview is not the headline. The truly valuable nuggets are the casual revelations that Kirk makes as he tells his story:
- Like when Kirk jokes that he would not like to have to answer to one of his salespeople’s sales coordinators (“they are brutal”, he says!, when explaining how Sales Coordinators genuinely own opportunities – in spite of the fact that they earn less than half what salespeople do)
- Like when Kirk reveals that he now has an uncanny ability to forecast revenues (he’s close to achieving a forecasting accuracy of ±10% accuracy at 90 days)
- Like when Kirk explains why salaried (rather than commissioned) salespeople are actually more effective
- Or when he talks about how Project Leaders have been able to effortlessly convert small transactions into (much larger) enterprise-wide opportunities (and reduce opportunity-lead-time into the bargain)
- Or when he describes how SPE has united the organization’s leadership by giving the executive team a common set of metrics (specifically, by allowing the sales function to be evaluated using metrics that make sense to executives who have been schooled in Lean and Agile)
The constraint shifts
The highlight of this interview, for me, was one of those interstitial moments when Kirk happened to mention that Mort (ARCA’s CEO) had recently declared that Sales is no longer the organization’s constraint. “The speed at which we can step on the gas”, says Kirk, “… is simply astonishing”.
Those viewers with an operations background will really appreciate the significance of this statement. If ARCA (or pretty much any organization) can scale sales rapidly it enables that organization to keep the constraint in production – to keep operational infrastructure operating at full utilization at all times.
This, ladies and gentlemen, is how real money is made!
Update (Oct 7, 2013): An article on ARCA’s progress appears in News Observer, here.