The Eight Quarter Company

I am often asked “when should I begin to see results from different programs, plans and changes within my company”. Result time horizons, of course depends on the industry and the stage of your company. For example, an automotive company such as Ford might plan in 10 year time horizons, while a high tech start up might plan in months or have a one year plan (to survive).

There are always extremes and exceptions to any business example, but in general I believe planning should be done in eight quarter (24 month) increments. This is a logical choice between the one year budgets and financial plans and the three to five year strategic plans that quite often get put in a drawer after a fabulous 2 or 3 day off-site planning meeting.

The company that manages to an eight quarter plan can view this like a football or basketball game with 4 periods. These four x six month periods are when you will see results from starting or making changes in each area. The four periods are:

Direct Sales Results, Quarters 1 & 2 = Sales is the shortest term results and are tactical in focus and timeframe. The impact time from direct sales depends on the sales cycle length and complexity. This is the most costly way to get revenues but is also allows you the most control. A direct sales model change or a new sales rep given an average sales cycle length should begin to show some results by the sixth month.

Marketing Results, Quarters 3 & 4 = Marketing is a mid-term results strategy. It can see results in weeks or months with targeted lead generation campaigns and events, while taking years for image and brand creation. But in general, Marketing with its broad expanse of programs will begin to see results in 6 – 12 months (quarters 3 & 4). Marketing is not as black and white in measuring results as sales but is equally important to a company’s success. Without good marketing, you won’t win or achieve what you should achieve.

Channel Sales Results, Quarters 5 & 6 = Sales through a channel partner program is always underestimated in revenue impact timing. It typically takes the channel partner six months to get up and going (shorter if a simple consumer product, longer if a complex software solution). Many companies use channel partners as an after-thought or secondary to a direct sales strategy, so the program planning, launch, training, support and management is usually lacking. This results in lack luster revenue performance. However, if done right this is a very cost effective business model and it is easily leveraged and scalable.

Strategic Planning Results, Quarters 7 & 8 = The strategic results that happen from planning will on average begin to show results in months 18 – 24 (quarters 7 & 8). These might include an acquisition, a new business model or decision to enter a new market etc. Another area that typically takes this long to demonstrate results is launching internationally. Many executives underestimate the length of time, planning and effort it takes to launch a regional push into Europe or Asia.

So this is your eight quarter company. To play this game requires your focused attention to operate as efficiently as possible and understand the timing and results you need to see.

What do you think? How does your company handle this?