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How to Nail Your New Product Sales Goals Every Time

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How many times have you seen performance against new product sales goals or any of your important KPI’s come up short? And what do you do when that happens?

All too often, the answer is to just push the target out further or readjust the goal to reflect reality.

But what if there were a way you could proactively focus your organization on actually hitting those top goals?

Well, there is a way, and it’s an approach out of the Theory of Constraints/ Critical Chain toolbox called the project buffer. While initially developed for projects, it works for long-term goal achievement of any sort.

In order to track and achieve that KPI, the project buffer is visualized using a fever chart – a very powerful visual method for assuring your successful goal achievement.

What you end up with is a dashboard as shown below that gives you an early warning of sorts so you can take action early while you still have time left.

New Product Sales KPI

The chart plots your progress and anytime you stray above the 45o line, you are falling behind and need to focus more attention on this KPI.

In the chart shown above, the green, yellow, and red signify how much buffer we burned with green being the first 3rd, yellow being the 2nd, and red being the last. Another variation shown below uses green, yellow, and red on a bias indicating ” tracking as required”, “remedial planning required”, and “remedial action required.”

New product fever chart

How about an example to show how all of this works in the real world? Let’s say that our strategic planning identified that one of our top 3 critical success factors for the next 5 years is new product sales into a particular new market or region. Further, we’ve just launched a new product for that market. So our next step is to set an intermediate objective to sell $10 million dollars of that new product over the next 3 years.

This is all very easy to set up and track using something as simple as an Excel spreadsheet (just right-click to save our free version) although you might want to consider Exepron’s Critical Chain Software. It’s capable of far more, but gives you a great cloud-based dashboard to share across your leadership team and can also track other key projects. Here’s how you go about it in either case.

You start by setting a best case timeline for the goal. I typically recommend a very aggressive one that only has a 50% chance of achievement. As a rule of thumb, that would be 2/3rd of the timeframe for a more realistic target. In the case of our example, the aggressive goal would be to reach $10M in 2 years or 500 workdays. The time difference between the aggressive and realistic goals, becomes a 250 day buffer protecting our actual target date – the one you will ultimately measure and reward against.

As shown above, during execution,we visualize progress by charting buffer consumed on the Y-axis vs. goal achievement on the X-axis. To create these charts, we start by breaking the goal down into a number of equal pieces—almost like dependent tasks in a project.

For our example, we would break the $10M goal into 10 tasks with the objective of each task being to deliver the next $1M in new product sales. Then using our aggressive goal of 500 Days, we have to assign each $1M a certain number of days to reach the target. It’s simplest just to divide them up evenly, but if there is a big induction period, you can give the first millions longer than the others. Maybe something like in column 2 below:

New Product Innovation Tracking Spreadsheet

Here’s a free spreadsheet you can use to track your KPI’s.

Then in execution, you simply track the time it takes to achieve each $1M in sales. If the first $1M takes 95 days, it has burned 20 days or 8% of our 250 day buffer. Is that good or bad?

You can think of the buffer as a burning platform, and we have to finish before the buffer is burned up. In the example, we achieved 10% of the total target while using only 8% of the buffer. That means we are accomplishing our goal faster than the buffer is burning, so that’s a good thing.

You might see this approach and try to set “stretch goals” of reaching your goal without burning any buffer—big mistake. Whenever this happens, some managers will start trying to hold peoples’ feet to the fire for meeting the stretch goals. This backfires because it hurts the transparency you have created around goal setting and just encourages the organization to put even more padding into the initial estimates.

Finally, if you are focused on a handful of key goals/ KPI’s that your organization absolutely must nail, they can all be displayed as a portfolio snapshot.

New Product KPI Portfolio View

This view gives you an instant picture of which of your key goals are tracking fine and which need leadership attention to remove obstacles and blockers that are causing them to burn buffer.

And that’s how you keep your organization focused so you can nail your new product sales goals or other important KPI’s every time.

 

 

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