The 2001 AFC Business Plan – Part 4: The Goal that saved AFC

Now that we had the vision in place, it was time to work on action plans to achieve our goals. Many of the goals were directly attached to the end vision of a Tier 1 carrier focused business. This goal was different and was built out of executing better on our present position. There was a big win here for us financially and got us to buy into the plan for the long term.

We were asked to pair up into small teams and write goals. I believe at least 2 of the teams came up with this type of goal and our plan around it will make it clear why this was important.

The Present Position of AFC in 2001 included the availability of what was known as System 8. System 8 was a combination of Hardware, Software and ASICs that turned the UMC from a TDM based phone product to an ATM based data product aimed at DSL. This was a huge investment for AFC. We had done a step-wise release earlier. We had released new cards, new software, and new chips. This was literally 150+ Man Years of effort into building a DSL system. We were selling very little of it.  About 60K ports of DSL in a year. We sold more POTS port than that every month.

As you can imagine, this was distressing. We were spending a lot of money not to sell the product. The TDM business was continuing so we were making money, but we knew the future was somewhere else. How to make this product invested in work?

What we did was assign individual Salespeople quotas for DSL Sales. Normally we did it by sales volume, but we wanted to ramp up the sales of DSL. We quadrupled our previous year results and gave the numbers to folks and it would be a big part of their commission.

The reaction was immediate. Instead of the pablum we were getting about why customers loved our solution we finally got the objections back inside HQ. If you are in Sales, you need to take the toughest objections to your marketing and product teams. In our case, we had 3 technical objections and 1 price objection. These were all about how to deploy in our existing systems, not new systems.

Technical – Power, Cooling, Battery
Price – Upgrade Cost

When we went through our Present Position we found that 50%+ of our cabinets were small (under 200 lines). These cabinets had been built specifically to hold our TDM products in low density deployments. Because absolute cost was high for the bended metal compared to the rest of the installation, they was no overhead in any part of the design.

Power: DSL takes more power than POTS and our DSL cards were also POTS cards. Many of these small cabinets were network DC powered (which could no longer work) but even locally AC powered units had challenges.

Cooling: POTS uses a lot of the power required to power the end customer’s phone. DSL added all that additional power inside our enclosure. This killed our cooling capacity.

Battery: Telco systems required 8 hour backup and adding this power meant we needed to augment the batteries.

Upgrade: We did not just upgrade the DSL plugs for System 8. We changed many of the common control cards. This meant the cost of the first DSL port was high even though a fully loaded cost would be good.

Once we had these issues, we built teams to go after solving them. Resolving these issues sent DSL sales through the roof. We hit and then exceeded our goals. I already noted that many customers were augmenting networks not replacing units. This meant our solutions now played well in our installed base.  Given that we were a majority market share owner, this locked folks into our solutions.

AFC was not going to go out of business without this goal. We were profitable and had nearly $1B on the Balance Sheet. This goal showed us how powerful that alignment of Sales Teams, Product Teams and Management could be when we were all trying to accomplish the same thing. This was really important to the Executive Team and buoyed the morale in the company. That is how this goal saved AFC.

Jim Sackman
FocalPoint Business Coaching
http://www.jimsackman.focalpointcoaching.com/
We Focus On Your Business – Time, Team, Money, Exit
Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis
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