Commercial Excellence and Maturity Framework

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Commercial Excellence and Maturity Framework

Commercial excellence and maturity frameworks and models vary by industry, by type of process or system measured, and by company. There are similarities among these frameworks, including defined systems of ranking organizational performance across metrics, strategic methodologies for implementation of these frameworks, and a focus on application of systems and processes throughout every segment of the organization. Examples of these frameworks include those outlined by McKinsey for sales and marketing, the CCM from IACCM, and the People Capability Maturity Model, the dimensions of which are each outlined in detail below.

Excellence and Maturity Frameworks for Sales & Marketing

  • For achieving sales and marketing excellence and maturity, McKinsey’s research shows that commercial excellence and maturity frameworks can vary widely by industry. Achieving the highest levels of excellence/maturity “is a journey, not a destination,” and involves continuous reviews and improvements across multiple sectors within the company. They note that companies achieving superior levels of commercial capabilities maturity “outperform their peers in margin and revenue growth.”
  • Their research also shows that the dimensions for most industries’ commercial excellence maturity frameworks are similar, though dimensional segments can (again) vary by industry. Several points-of-focus that are similar for all industries (for sales and marketing) include: Using benchmarking against industry best practices; Identifying the data to pull based on the metrics for measurement; identifying gaps where attentions are needed; and successfully implementing and managing change during implementation of new or revised processes that better meet framework goals.
  • They outline five key characteristics for all similar sales and marketing frameworks: [1] Discovery process that aligns all functional leaders on framework and language; [2] Clear links of each capability to output, goals, results; [3] Perfect alignment of priority capabilities with long-term strategies and goals; [4] Highly-engaged leaders and influencers driving adoption throughout the process; and [5] Tracked and quantifiable improvements across capabilities.
  • Additionally, McKinsey highlights how the capabilities noted as “most valuable” also vary by industry and change over time, as well as the measures used to assess success changing. For sales and marketing excellence, these capabilities include (but are not limited to): strategic marketing capabilities, sales and account management, innovation and product management, and commercial support. Changes within industries also mean changes within how excellence is defined.
  • McKinsey notes how companies “improve their performance faster by relying more on facts and analytics than on anecdotes and intuition,” and recommend using the tools and processes available within the marketplace to adapt to meet their needs.

Capability Maturity Model from IACCM

  • IACCM’s Capability Maturity Model (CCM) is a long-time standard across multiple industries in that it “provides a mechanism to rapidly and accurately assess both buy-side and sell-side process performance by focusing on the key commercial attributes that drive business outcomes.”
  • With this model (unlike many others), company results “are immediately benchmarked against a portfolio of similar companies and processes,” which helps all companies on that spectrum see where they compare against their competitors providing valuable insights into areas “for priority improvement”. The model is used successfully as a way to understand the current capabilities at an organization, as well as to provide information into how to determine the best paths toward improvements on areas needing such.
  • The nine business dimensions included in the CCM are pulled from Six Sigma techniques, long-proven as standards across all industries, and developed by a “cross-industry, international team of practitioners and experts”. These dimensions include: “leadership; customer/supplier experience; execution and delivery; solution requirements management; financial; information systems / knowledge management; risk management; strategy; and people development.”
  • IACCM developed a Six Step Plan to help companies rapidly move through “assessment, validation, and improvement planning” using the CCM. Step 1 involves benchmarking and gap analysis; Step 2 involves developing value propositions and statements of need for capabilities; Step 3 involves setting up the framework that identifies measurable standards for results; Step 4 involves defining potential projects toward identified improvements, as well as identifying and determining quantitative and qualitative outcomes; Step 5 involves prioritizing the improvement projects, including weighing cost-vs-output; and Step 6 involves creating a business plan outlining all findings, where improvements need to take place, the benefits of achieving these goals, and recommended actions.
  • For assessment, the model assigns a phase-level to each capability dimension: Phase One start up” // Phase Two disciplines under development” // Phase Three discipline in functional” // Phase Four continuous development” // Phase Five world class (best-in-business)”.

People Capability Maturity Model

  • The People Capability Maturity Model (P-CMM, or People CMM) is a framework for evaluating an organization’s measures against best practices “in areas such as human resources, knowledge management, and organizational development.” Developed by the CMMI Institute to focus on people management processes at the institutional level, the model helps “identify skill gaps, break down workflow bottlenecks, and empower team members to develop skills that will help the organization succeed.”
  • The model was based on the concepts of the Capability Maturity Model (CMM), and has proven that it helps organizations to “retain, grow, and nurture competent” employees. There have been two major versions of the framework published (1.0 and 2.0, the latter of which is the current version).
  • The model includes five levels of maturity which organizations can reach, including: Level 5: Optimizing, Level 4: Predictable, Level 3: Defined, Level 2: Managed, and Level 1: Initial." Each level includes a set of practices and processes to adapt to the organization and implement toward reaching the next stage of maturity/excellence.
  • Companies scoring the lowest level (L1) are start-ups or those with low-people-maturity whose workforce practices need major overhauls. Companies scoring at Level 2 have learned to manage their workforce, but still have a long way to go toward achieving any type of people-management success. By Level 3, companies have reached the first stage of maturity, which means they have the basics in place, but are likely inconsistent in adhering to these practices across all segments of their organization.
  • Companies reaching Level 4 have reached the second stage of maturity. They have an established and reliable organizational framework for assessing and managing their workforce, are fairly predictable in their implementation of best practices across all segments, and can quantify their performance. By Level 5, companies exhibit all these characteristics, as well as continuously and proactively working toward improvements.
  • Organizations using the model see benefits such as: reduced employee turnover, increased rates of employee satisfaction, and improved organizational reputation. They also see increases in “transparency, democracy, and openness” in the company culture, a culture that is competency-focused, and a transformation of management toward being the most effective they can be.

Research Strategy

The team’s initial research identified one well-known excellence and maturity framework. From this vantage point for this request, we focused on finding other highly-respected and often-used frameworks for success. This led us to collections from places like Flevy, as well as to individual frameworks. From this collection, we selected a variety of frameworks, outlined them, and noted the similarities in dimensions across all of them.

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Commercial Excellence and Maturity Framework:

Examples of best-in-class measurements for various frameworks for sales and marketing excellence include the approaches used by an international logistics company to measure ROI across various channels and a CPG company using econometric analysis and brand tracking to measure short- and long-term ROIs. Examples of best-in-class measurements used for the CMM include Rockwell Automation and Cisco Systems’ self-assessment (during the initial phase) approach. Best-in-class example of the use of one aspect of the P-CMM includes Bridgewater Associates’ idea meritocracy for meetings.

McKinsey’s Frameworks for Sales & Marketing Excellence

  • McKinsey, one of the Big Four global consulting firms, performed a longitudinal, multi-industry study on “200 commercial capabilities at 200 clients” with the various excellence frameworks used in the studied industries. The performance of these companies were measured on eight separate dimensions in both 2012-2013 and 2016-2017, and a comparative analysis was done on the findings to identify which dimensions were identified as “most valuable” in which year-set, as well as which industries found which dimensions most valuable (as both were different).
  • These dimensions are: Strategic marketing, Go-to-market design, channel partner management, sales and account management, innovation and product management, marketing enablement of sales, price and contract management, and commercial support.
  • For best practices in measuring ROI across different channels, McKinsey recommends using an “apples-to-apples way of comparing returns across a range of media.” They outline an international logistics company’s three-step approach, which included “measuring the impact of advertising on consumer recall, on the public’s perceptions of the business, and on sales leads and revenue.” This approach allowed executive leadership to reaffirm their commitment to the expensive rebranding the company had just done, and provided a standardized set of metrics by which to evaluate these aspects organization-wide.
  • Another example provided by McKinsey of a best-practices approach for one dimension was from a consumer packaged goods company that used “econometric analysis and frequent brand tracking to assemble a scorecard of returns in the short term (average and marginal marketing ROIs within 12 months) and the longer term (progress on brand equity and brand loyalty for periods of more than 12 months).”
  • As noted in the previous research, McKinsey proved that companies showing superior capabilities (excellence and maturity) outperformed “their peers in margin and revenue growth” across all industries, though most notably in the fields related to Telecommunications, Computers and Electronics, Travel and Logistics, and Medical Products.

Capability Maturity Model from IACCM

  • In the Six Step Plan to implementing effective Capability Maturity Model (CMM) frameworks, the first step includes benchmarking the company’s current situation and conducting a gap analysis part of which is done through a corporate self-assessment and includes “process user perspectives of process maturity.”
  • IACCM, the creator of this model and thus the best judge of best-in-class examples of the use of it, noted Rockwell Automation’s self-assessment process, which began with a multi-pronged approach. The approach included regional managers from each major region (“North America, Europe Middle East and Africa, Asia Pacific and China, and Latin America") completing assessments on their respective regions, then a group discussion with all regions, wherein “they reviewed each other’s assessments and challenged assumptions” of their perceptions on maturity levels.
  • This approach allowed each region to rebalance “their maturity assessments to more ‘realistic’ levels.” This higher level of realism helped curb organizational tendencies to “over-emphasize the positive attributes” of the organization’s performance, and “conversely, underplay the negatives or areas of needed improvement.” Requiring the defense of the assessment also helped add an element of realism to the final findings which ultimately lead to greater clarity in initial benchmarking.
  • Another example provided by IACCM is the self-assessment process undertaken by Cisco Systems at the start of their tenure using the framework, though admittedly, this case study is fairly dated (though the article it’s included in is current). During Cisco’s initial phases, this company used a similar approach to the self-assessment process. They gathered members from the commercial management teams and added key stakeholders, like “legal, purchasing, and finance,” toward a combined approach on assessment. Overall, the team was able to “identify areas where perception of the functional groups differed,” and allowed them to use that information to laser-focused initiatives.

People Capability Maturity Model

  • The People Capability Maturity Model (P-CMM) is helpful in transforming models for excellence in organizational people management. Lucid Meeting created the Meeting Performance Maturity Model (MPMM) as part of the overall P-CMM. They used the P-CMM as the foundation, and built their standards on the back of its success.
  • The MPMM outlines specific steps toward meeting maturity that organizations should follow to success. It includes five focus areas, including: Meeting Design; Meeting Skills; Stakeholder Satisfaction; Facilities, Technology, and Resources; and Cultural Ownership. This model proved especially helpful and useful “for people advocating for change within their organization,” and included incremental steps to follow, as well as the resources and buy-in needed at each step.
  • Bridgewater Associates’ “idea meritocracy,” which helps provide “decision-making clarity, radical transparency, and aggressive effectiveness” in their meetings is one example of the Meeting Performance Maturity Model in action. The idea behind this is that every meeting is “highly specific” and “intentional meeting practices” are deployed; these practices have become a “major mechanism of Bridgewater’s [phenomenal] success.”

Research Strategy

These examples were identified through a direct search for case studies from each of the institutions identified in the previous request. We determined that if the founding organization outlined the case study as part of the educational materials, then these were most likely to be best-in-class examples. Case studies were focused on the ways the companies used the frameworks and measured their results.

Sources
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