National Paper: Transforming Sales Costs into Consulting Revenue

National Paper: Transforming Sales Costs into Consulting Revenue Smith had seen it coming. Toward the end of the discussion, things started to get serious. Up until that point the atmosphere had been relaxed. Smith watched as his boss stood up and went to the window. “There’s just one more point,” he said as he gazed across the hilly Allgau landscape. Smith was vice president of sales at National Paper. Today he was sitting in his CEO’s office to lay out goals for the 2008 business year. It wasn’t the first time they’d had this type of discussion. And it wasn’t the first time that it had ended with a “point.” Smith’s boss turned around. “Our owners are demanding a significant improvement in results for the coming year. That means we’re going to have to cut costs and increase efficiency.” Smith had already heard about it. News of the owners’ earnings expectations had gotten around fairly quickly. He assumed that his division would be affected, too. “It will definitely not be easy. But everyone is going to have to contribute and improve the bottom line, even the sales division.” Then, as Smith sat in stone silence, he added: “Five million, Smith. Five million cost savings for your division. That’s what we’re looking at for 2008. Somehow I know you’ll manage it, Smith. I know you will.” Smith noticed that his heart had begun to race. Suddenly he felt hot and sweaty. He cleared his throat and answered in a calm voice. “Yep. Somehow we will manage it. Give me two weeks. By then I’ll be able to give you a draft implementation plan.” National Paper was a division of National AG, a producer of paper machines, water turbines, propulsion systems and industrial services with