The tale of the boiling frog

Vance had been called many names as one of his manufacturing firm’s leaders. But until now, no one had called him a boiling frog.

Now CEO, Vance took over leadership of his third-generation automotive components manufacturing company in 2003 from his father. His company was once the only manufacturer of petroleum products in the greater PA, NJ, and NY area. As population and demand grew, so did the automotive technology, demand, and supply chain.

The growth of the transportation industry was inevitable, and he was proud to lead the organization during a time that doubled its production and revenue. Times were great, and Vance’s lifestyle became even better. He made decisions for the organization that kept it at pace. He trimmed the fluff and ran lean. Employees were happy and their systems and processes were adequate to keep them at a level of increased production. Named the best place to work three consecutive years, Vance felt that things were not just good. They were great.

As the 2000s marched on, the environment changed. Vance scoffed at the rise of competitors worldwide, even as the economy slowed in 2008 and then again with supply chain issues during 2020. He believed his product was made with superior materials and was one of a kind. Like the generation before him, he also thought they didn't need clients or distributors in adjacent markets. Vance’s peers suggested he expand into the airline or railroad industry to grow the company. Still, Vance felt that their long-term relationships with a handful of specialty automotive manufacturers would stand the test of time. Leadership had worked so hard to position this company as a market leader. Hadn’t they earned a break? Why kill themselves to become one of those giant corporations when they were happy with the company they built?

Vance had the necessary components in place to operate effectively. The firm employed a legal team, an accounting team, a COO, a smooth assembly line, and an ERP to manage inventory and supplies. The sales team would call and check up on their clients and attend trade shows from time to time. Sometimes team members would voice concerns about lack of data or not knowing the strategic plan for the company. The team accepted dealing with the peculiarities of the aging systems. From Vance’s point of view, life at the plant was great despite those challenges. He chose to ignore the news of inflation and a possible recession. Margins would come back. He was willing to bet on it because the demand was there. Or so he thought.

One day, Vance’s usual routine was interrupted. A younger salesperson who had joined the team in 2019 resigned. He called Vance a “Boiling Frog.”

Confused, Vance accepted the resignation and tried to just go on with his day. Instead, he thought about this young man who didn't have the same 20-30 years of experience under his belt. Maybe he just wasn’t the right fit. And what the heck is a Boiling Frog?

Boiling frog syndrome

Boiling Frog Syndrome was first introduced to me by a friend almost 20 years ago. I was fascinated by this 19th-century science experiment! As the story goes, researchers found that when they put a frog in a pan of boiling water, the frog quickly jumped out. But when they put a frog in cold water and set it to boil over time, the frog just boiled to death. The temperature change is so gradual that the frog does not realize it’s slowly perishing. This was later disproved, but the urban legend of the boiling frog still has meaning today.

Are you a boiling frog?

We’ve changed the names and other essential details in this real-life story for sharing purposes, but the lesson remains. We often meet with the leadership of middle-market manufacturers, distributors, builders, and other industries in the same stage as Vance. I like to call it Stage One of the Five Stages of Learning. You simply don’t know what you don’t know at this stage.

Almost all growing middle-market companies find themselves at this first stage. Real growth comes from getting to the second stage, “I now know about it, but I’m not good at it.” The hurdle of getting to stage two often happens when a company's leadership becomes comfortable, like Vance. The tale you read is common with manufacturers who struggle to adapt to changing markets, embrace digital transformation solutions or integrate their ERP systems with their customer service, sales, and marketing functions.

In Vance’s example, he did exceptionally well, but his growth will slow as his competition adopts the digital transformation he is hesitant to pursue. His symptoms were the following:

  • Teams and management have different definitions of the organization's goals, or they are not well defined
  • Use of Excel spreadsheets to manage sales and customer service efforts
  • Communication between departments is typically slow or detached
  • Each department has its own set of tools disconnected from each other
  • Calculating ROI on marketing efforts is difficult
  • Management of lead qualification and sales follow-up is manual and cumbersome
  • Customer information is saved in multiple places; there is no one single record with all information about a customer from sales to service
  • Management and segmentation of customer and lead databases is complex and tedious
  • No clear attribution of website activity to sales
  • Staff burdened with manual processes, such as filing and manual email follow-up
  • Internal processes are not standardized or well documented

When companies don’t align their technology and communication, sales, service, and marketing goals fall through the cracks, and processes become inefficient. These issues stunt growth, expend more person-hours, and limit the number of leads and sales they receive to get to the next level. In addition, these inefficiencies chip away at your margins over time. Vance didn’t realize it, but his financial performance was under attack on both sides–bloated processes on the inside and competitive market conditions on the outside.

How to leverage RevOps to implement digital transformation

Does any of this sound familiar to you? The pandemic years forced a dramatic change in adaptation skills, software, processes, and communication. Many companies are cobbling software and other technology together to align their departments and functions, but the implementation is foggy.

Getting that frog out of the hot tub and back into the pond requires the optimization of Revenue Operations. Revenue Operations drives more revenue efficiently by aligning marketing, sales, service, and operational efforts. Ultimately a completely aligned organization poised for growth has these attributes:

  • Non-Siloed cross-functional teams working toward solving complex customer challenges
  • Unprompted innovation arising from cross-functional teams
  • Tech-enabled staff no longer burdened with manual tasks
  • Organizational goals are bi-directional, coming not only from the executive team but also from supporting departments
  • Revenue acceleration and growth arising from reallocated resources
  • Improved customer satisfaction and communication
  • Transparency in reporting and data
  • Team ownership and accountability of company systems and processes

All of these increase efficiency, save hours, and create value. And of course, we want the tale to end with Vance getting to this transformational stage, rehiring the salesperson that alerted him to his scalding predicament, and growing to a level he never dreamed possible.

Illumine8 helps manufacturers, distributors, builders, and service providers in the building industry drive more revenue with Revenue Operations. If you are curious about effective transformation in your B2B, middle-market growth stage company, take our digital transformation readiness quiz to get started.

 

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