
So, we have “three camps” in the organization.
1. Accountants and financiers
2. Back office
3. Sales and related
The first group counts the money and distributes it.
2. The second one creates a product (rather than just a commodity).
3. The third one works in the market.
Each of the groups is clearly very important and very useful; otherwise, they wouldn’t exist. Each group is stereotypically viewed by the others:
1. People think that accountants are parasites and have stopped understanding that the world wasn’t created for accounting.
2. The back office is often seen as lazy, with a negative interest in attracting clients— the more clients there are, the more work they have to do.
3. Sellers are thought to be incompetent, self-absorbed, and demanding too much attention.
You know, it’s all true 🙂 Let’s add a universal phrase: “They don’t understand a thing about <Insert relevant expertise>, yet they keep butting in with their advice!”
Scientists who study complex and obscure structures use the method of extraction to understand the purpose of various elements within that structure. For example, when studying the brain, the functions of certain parts are inferred not from their activity, but from their damage. “Oh, he went blind—this means that the area is responsible for vision.” So, let’s imagine an organization where we will sequentially extract certain “organs.” Not just extract, but allow them to function not in opposition to the other components, but in harmony with them.
Let’s start with the easiest to imagine: sales.
Sales teams never ask for money from the finance department. They don’t go on business trips, don’t spend money on advertising, and don’t demand new locations; much to the delight of management accounting, they consistently stay below the budgeted spending limits. Moreover, they are satisfied with the product provided by the back office and genuinely believe in the standard back-office mantra that “you can sell anything, and if you can’t, it means you are incompetent as salespeople.” They don’t burden the back office with unusual problems, don’t generate accounts receivable—meaning they don’t sell on credit, and during meetings, they carefully listen to the directives from other departments and try to follow them. It paints a beautiful idyllic picture, one that every finance professional, accountant, or clerk seems to dream of. However, from a philosophical standpoint, this tranquility is akin to death. Balance can only be achieved through movement. Try to maintain balance on a stationary bicycle. In short, it comes down to the following:
- Sellers lack activity and an active stance. An active stance means the expenditure of resources.
- Sellers are trying to sell junk (not actually selling it).
- Sales are declining.
- Cuts are starting in the back office, accounting, finance, and economics departments.
- With less support, the pressure on the accounting department is increasing, which is completely burdened with fixed tasks that do not depend on the size of the organization. Confrontation is growing. There are no sales, everyone is being laid off, yet the workload remains the same.
- In the end, they cut the sales department and decide to “close up shop” with their existing clients, as it seems clearly more profitable. (You won’t believe it, but I’ve seen such decisions made when, in the midst of problems, they let go of their salespeople.)
- Working with existing clients is akin to passive defense, and sooner or later, competitors will gradually chip away at them.
- They are considering hiring new salespeople, but it turns out that the organization currently has no established processes for sales; instead, they have processes designed for “don’t touch me.” The new salespeople struggle to fit in, which convinces the rest of the company of the incompetence of these “talkers” and “clowns.”
- Death. Slow and painful, as all the most capable people from other departments start to leave, unwilling to sink into the swamp. And with the incompetent leftovers, you can’t make anything worthwhile. It’s necessary to close everything down and start anew. It will be both faster and cheaper that way.
Now let’s imagine an organization with a completely compliant accounting department, finance team, and the like. A shareholder’s nightmare, so to speak. Every salesperson knows that “if you don’t grease the wheels, nothing will move,” and the higher the sales expenses, the better the sales results. There are two types of spending: personal efforts—applying skills, being active, managing processes—and using money: opening new sales offices, paying commissions (preferably in advance), organizing cash payments for commissions (and sales won’t be delayed like they would be with accounting), covering transportation costs, including gas (oh no), and paying for entertainment events (yes, including alcohol). An accounting department that caters to sales will first and foremost face serious cash flow problems because, even if the projects that salespeople push for are effective, it often means spending a lot today and receiving returns later, if at all. Additionally, issues that seem “just technical” to sales can be a significant strain for accounting, distracting them from their regular work that requires precision, and sometimes even leading to legal conflicts. The back office, on the other hand, is entirely an extensive organization, and if given the chance, they would want both trendy equipment and fancy software, as well as carpets on the walls. As a result:
- The company is experiencing a shortage of working capital, which is a consequence of any rapid growth.
- The company is forced to resort to borrowed funds.
- The cost of borrowing makes the business less profitable.
- All ongoing extensive projects are being reassessed, and some funds are inevitably being wasted to focus only on what will generate revenue immediately.
- At the same time, promising projects are being implemented by competitors.
- The company’s offering in the market is becoming even less attractive.
- Delays in the payment of commissions and salaries are starting to occur.
- Sellers are starting to leave.
- Sales are falling.
- Everything will proceed according to the scenario described above.
- Plus, the company finds itself “on the radar” of the tax authorities.
It’s time to close up shop and start over. There are plenty of examples of projects that “caved to sales pressure.” Every reader has encountered those in their industry who first poured money into “buying market share” or “buying ratings,” only to later find themselves struggling to keep their pants up. The period around 2008/2009 showcased many striking examples of such behavior.
The third scenario we’ll look at is showcasing a completely loyal back office.
When it comes to finances, there are no requests. The staff is increasing— we’ll squeeze in and it doesn’t matter if we lose good employees because there are no air conditioners in the office. We don’t need to maintain a CRM; we can manage everything with MS Excel.
For sales: want another new product? Sure! It’s complex and expensive, and the demand doesn’t justify the costs of development and promotion? No problem! We love having lots of small clients who don’t bring in profit! We’re happy with the “empty” reports from agents, and we’re ready to spend a ton of time on those beautiful accounts receivable reports. We don’t care that sales decided to open an office in Usty-Zazhopsk. We’ll send information there not by fax, but by helicopter, and ship products from the nearest warehouse in Bryansk. Unless, of course, the accounting department objects. And if they do object—let the clients solve their own problems. So, what do we end up with?
- The company is overwhelmed with its product range.
- In this case, the client ends up being the last priority for the company’s interests.
- Products are increasingly lacking “added value” and are becoming less and less profitable.
- We have less cash flow.
- Our sales are declining.
- Let’s look at both scenarios above.
- Turning off the light.
Have you really encountered companies that have a lot of products, even though most people only buy one? The products themselves are unclear or lack obvious advantages, the salespeople sell “variety” rather than addressing customer needs, and the atmosphere inside these companies is like a concentration camp, despite the externally attractive signs. So, can you name some names? 🙂 These are companies with a completely loyal back office.
We could also spend some time discussing scenarios where one department in the company is clearly dominant and overwhelming. In that case, the outcome would be similar, but two of the other departments would be “loyal” instead of just one, and the disaster would occur sooner.
It turns out that the harmony of a company lies in the balance of three opposing forces, each seemingly with its own interests.
How can one live in such a situation and avoid emotional conflicts, focusing only on procedural ones? As a rule, the role of mediator in these circumstances should be taken on by the salespeople, due to their skills (if they are, of course, competent). I have encountered companies where the understanding CFO also acted as such a mediator. Here are the steps to take:
- Appoint an arbitrator. It should be the company’s Director. It would be preferable if they came from sales rather than the back office, but that’s not the main point. The important thing is to have an agreement—unresolvable issues should be addressed with them, and it shouldn’t turn into a “whoever complains first is right” situation. Calmly present a description of the problem, prepared together and amicably, for discussion with the arbitrator’s participation.
- Agree not to say “no,” but to say “yes, with conditions.” Let the conditions be unattainable. It may take time to explain why the answer is “no.” Until people believe that the other side is saying “no” sincerely and not out of their own insecurities, we need to agree to clarify. Very often, clarification leads to a different solution to the same problem that could satisfy everyone. Of course, the party refusing must “buy” the importance of solving this problem from the inquiring party and think “together,” not “against.” This is why mediators often turn out to be salespeople.
- The main mediator should talk to the other departments and explain what is written in this post. They should convey that they understand the interests and aspirations of your department, which sometimes conflict with the desires of my department. However, this is a good thing, as it leads us to a common goal; otherwise, it would simply be dangerous. Thank you for being here!
- To ask for help: “You know, given that we are pursuing different local goals, my team’s requests may not align with the company’s overall objectives. I kindly ask you to politely stop my team when necessary and, if possible, explain to me the reasons for the refusal. I will inform my team about what went wrong and show them that they were mistaken.”
- To ask for reciprocity: “And, of course, I will also help you” (meaning we reserve the right to call out other departments, but a) with justification (we act as if the director is present), b) kindly, and c) with a common goal in mind).
- Agree on information exchange and the creation of “working groups”—people who often collaborate but work in different departments. Let them meet once a week and write meeting minutes until they transition to an informal coordination mode. For example, if you frequently open new offices, this would involve financiers, accountants, lawyers, and salespeople.
- Meet more often and discuss everything happening in the company. Give gifts and show signs of attention. It’s true!
The goal of all efforts should be to eliminate the element of social games like “I’m more important” or “I have more power” from communication between departments, by acknowledging and highlighting contradictions rather than hiding them.
(before presenting the idea to the director)
— Klavdiya Petrovna, do we have 100,000 in February?
— And why do you need it, Nikolai Ilyich?
— As always — just ramble on 🙂
— Oh, I know you, but seriously?
— Well, there’s an idea here, I just don’t know if it’s worth starting it if we might have money problems…
— What’s the idea?
Пожалуйста, предоставьте текст для перевода.
Not like this:
(in the presence of the director)
— We need 100,000, and we need it in February!!!
— Why did you decide that we have that kind of money???
— If you don’t want to, then don’t! Sell all of this yourself!
and so:
— Klavdiya Petrovna, I have a question for you, as an artist to an artist: How do other companies manage to issue gasoline to private individuals?
Not like this:
— My junior assistant to the assistant specialist is going on a business trip. He needs gas—please arrange it!
Sellers! Speak the language of the customer. When discussing finances, talk about profits and return on investment timelines. When communicating with the back office, focus on streamlining processes and avoiding mistakes. When speaking with the HR department, discuss vacation policies, and when talking to the Director, address the company’s goals.
And everything will be fine, really!