CacheFlow, Inc.

CacheFlow’s president and CEO Brian NeSmith was dumbstruck. His newly hired CFO, Bob Verheecke, had just informed him that sales productivity remained flat at $1.2 million per sales team per year (roughly 40 percent of the industry norm), despite a layoff that included the bottom 15 percent of the sales force. Equally surprising, productivity had never risen above $1.2 million, even when the company’s sales were growing 50 percent quarter over quarter. NeSmith wondered how this could be the case. The company’s tremendous growth during the Internet bubble and dramatic drop post bubble distracted NeSmith from an issue that normally commanded much of his attention. It was now May 2001, and clearly he needed to get to the root cause if he was to turn the company around.