Five Myths About Top-Down Planning

Many B2B organizations are taking stock of their 2012 planning process. And many sales and sales operations leaders complain about why the top-down planning process does not work and results in targets that are not aligned with the market’s potential. There are several reasons that I continue to hear (and even once believed) that purport to explain why top-down budgets have no value. I now believe much of what’s stated as fact is really myth. If all B2B companies that made it through the recession or have found ways to show growth are retaining their sales reps, it means someone must be setting revenue targets correctly, right? So I decided to compile a list of myths about top-down planning in an effort to get to the truth. Here goes:

• Myth 1: Senior executives lack market intelligence. The majority of B2B CEOs got to where they are today by spending a successful career in the market that many insinuate they know nothing about. The fact is that CEOs have more access to the best networks and information than any role in a company. Their entire day is filled with meetings and conversations focused on gathering market intelligence via customer interactions, internal meetings and data analysis. The truth is that these leaders are in the best position to understand the market. Period.
• Myth 2: Sales input is never considered in top-down planning. Best practice B2B companies hold business reviews at least every quarter, and many also have two or three off-site leadership meetings throughout the fiscal year. Are we to believe that all that input does not go into the process? Just because sales leadership may not be physically represented at every meeting throughout the planning process, this does not mean that their insights and input have been forgotten.
• Myth 3: Growth targets are designed to satisfy shareholder expectations. There is no such thing as a B2B organization that would be satisfied with flat revenues every year. Growth is what all companies are driven by, and that includes the sales organization. Sales leaders sometimes make this comment because they have not proactively prepared for the planning process by performing an in-depth bottom-up review. Knowing what’s in the pipeline, the capacity of the sales organization, planning for enablement activities to drive productivity, and real-time data are essential to understand what are obtainable targets.
• Myth 4: It’s always about doing more with less. This is a myth to the extent that “doing more with less” is considered an arbitrary or unrealistic component of goal setting. I believe the correct statement is about finding ways to get more out of the resources that the organization has today. Best practice sales organizations are always looking at ways to create greater efficiencies to drive higher productivity. This is not about headcount, but rather about optimizing the skills and knowledge of the people currently in the organization. Next, sales leaders must assess what processes and tools are needed to increase capacity. These discussions should happen before any consideration of increasing headcount.
• Myth 5: Top-down planning is always internally focused, forgetting about the customer. Senior executives know that if they do not retain existing customers and gain new customers they will never be successful. They may not do a great job of communicating this internally, but they are 100 percent focused on the customer every day. Many times their line of sight is clearer, as they move outside the sales process and can focus more on the buying cycle, which is directly tied to the customer.

There are always exceptions to the rule, or in this case companies where one or more of these myths are actually true to some extent, but these are hardly the majority. In the end, debunking these myths does not make the planning process any easier; however, it can adjust the way sales organizations think about the process so they can focus on driving productivity. When I was able to change my view, I saw opportunities to proactively participate instead of feeling the impulse to react defensively to what senior executives might envision for the company. Sales leaders need to understand that both top-down and bottom-up planning are essential to define sales goals and strategies for achieving them.