Brent Adamson's Blog, page 24

Breaking Out of a Siloed Sales Culture

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In our world of growing sales complexity, sales organizations face the difficult task of coordinating leaders, knowledge and goals across multiple business units. But while allocating the right resources to the right areas of the organization can be a daunting task to begin with, finding greater efficiency in leaner teams creates a systemic challenge for sales leaders to tackle under a mandate to grow.

All too often, members tell us how customer expectations of a deal fall short once it makes it to the implementation phase, or how siloed business units fail to work together on similar challenges in reaching performance expectations. In response, sales leaders are looking for new ways to drive cross-company collaboration and leverage collective wisdom across all levels of the organization.

While these activities are likely to result in long-term benefits (especially when it comes to creating a positive customer experience), this strategy often faces resistance in practice. Taking the time and effort to collaborate may not be pertinent to short-term tasks, and doing so can often feel burdensome for reps who continually prioritize quarterly goals over organizational synergy.

That’s why encouraging enterprise-wide collaboration and communication requires planned approaches to scale resources and provide directly relevant information to promote a positive sales experience – both from the customer perspective and the sellers’ standpoint. The SEC has seen sales organizations drive cross-company collaboration from three different perspectives, each enabling the sales force to provide customers with the positive sales experience needed for both short-term wins and long-term strategy:

1)      Organizational Structure

As sales leaders struggle to find the right structural balance to optimize resources, the SEC has seen more companies adopt leaner and flatter structures that align directly to customer need segments.  While the emphasis is to increase front-line accountability and provide leaders with greater visibility into the field, increased deal complexity requires reps to partner across silos to service customer needs. The SEC recently completed a benchmarking initiative to find out how organizations ensure scarce sales resources align to the right opportunities and most profitable customers, and found that companies are using a team selling approach to leverage key roles and increase customer focus.

SEC Members: See the Key Findings from our Organizational Structure Library and an overview of sales org structure trends we’ve observed from the study. (Page 3 of each company profile includes a section on specific tactics to foster cross-company collaboration.)

2)      Internal Processes

The more complex a deal becomes, the more likely the deal will create systemic implications that go beyond a particular business unit, and often even beyond the sales organization. While siloed business units tend to make decisions independent of one another, the outcomes tend to be in the best interest of the particular silo – and fail to serve the interests of both the organization and the customer. To break down toxic siloes, organizations must implement policies that open new lines of communication.

SEC Members: See how Alcatel established standardized Solutions Commitment Templates to ensure sellers know that proposed deals can be executed before making promises to the customer. And, see how Bombardier facilitates Peer Consulting Cohorts of managers across business units to help push one another’s thinking and develop innovative approaches to real-world business problems. While the intention of this tactic is to boost managers’ creativity in bringing ‘stuck’ deals through the pipeline, other companies who have established manager cohorts have seen increased collaboration between teams and business units.

3)      Sales Compensation

Another tactic to foster cross-company collaboration is to use compensation as a tool to encourage teamwork. Team-based compensation is an emerging trend, and the key is to focus on boosting information-sharing across an entire team by tying a small portion of reps’ variable pay to team results. The benefit of adopting a team-based incentive is that sends a strong signal that management values teamwork, and is often a first step in building a team-oriented culture.

SEC Members: See how Dimension Data created Cross-Silo Deal Collaboration Incentives to encourage team selling on global opportunities. Rather than focusing on deal volume, Dimension Data’s incentive program rewards the level of quality and deal support provided across cross-silo opportunities.

What other tactics have been successful in encouraging cross-company collaboration? Please add your thoughts in the comments section below.

Three Myths About Millennial Reps

[image error]We get it: Gen Y is different.  So why should you pay attention? Over the next 10 years most of your experienced sales reps (the boomer generation) will retire, Gen X will take on the leadership ranks, and millennials will fill your sales organization.

According to research from our sister program for HR executives CLC, Gen Y constitutes about one-third (34%) of the current high-potential population globally, and represents the majority of high-potential employees in some geographic locations, such as China (58%) and India (64%).

So what should you be doing differently today, if anything, to deal with Gen Y reps?

The conventional wisdom: Millennials are high-maintenance. They want it all (work-life balance, a higher sense of purpose, and rapid career progression).

Truth 1: Yes, Millennials expect a lot out of their organization, but Gen Y employees also have high expectations of themselves. The young professionals joining your sales ranks have grown up in super competitive environments (putting together college applications since grade school), like over-achieving, and expect to be and feel valuable.

Take away: Don’t stunt your young Gen Y ‘s desire to achieve. Empower your reps and give them enough rope to sell in ways that make sense for them, and not just for your managers.

The conventional wisdom: Gen Y wants different things out of their employers. They are used to receiving constant praise, expect their manager to be highly involved, and need to receive a lot of feedback.

Truth 2: While there are meaningful differences in drivers of attraction for Gen Y sales employees vs. Gen X sales employees, CLC Employee Value Proposition (“EVP”) data shows that in fact the two generations share in common 80% of the top 10 EVP drivers, and both generations rate Development Opportunity as a top 10 driver.

Take away: Millennial reps, just like Gen X reps, want to receive feedback and be coached in order to develop in their career. Top sales organizations continue to assess their coaching capabilities, equip their managers with the tools and coaching resources they need, and measure their progress to see coaching’s impact on sales goals.  See SEC’s newest diagnostic tool, The Anatomy of World-Class Coaching Practices.

The conventional wisdom:  Millennials have no work ethic; they are entitled and it’s hard to focus their energy as they are easily distracted by technology.

Truth 3: Millennials are technology-fluent and they do value work-life balance, but they also like efficiency (they grew up in a world of instant gratification), and they know how to leverage the resources available to them (especially technology) to complete tasks faster and better.

Take away: Millennials’ comfort with technology is an untapped resource for your sales organization.  SEC research shows that the best reps actively engage in social media channels and are able to position themselves as key influencers in those channels in order to shape customer demand.  Consider how to best leverage Gen Y reps’ social selling skills, and empower them to engage in reverse mentoring to help Gen X and Boomer reps hone their social media skills.

Share your thoughts on Gen Y reps!  What challenges are you facing with the increasing number of millennials joining your sales organization?

SEC Members, take our 10 minute Sales Coaching Effectiveness Pulse Survey to gauge the quality of your sales managers’ coaching, and learn about how SEC Solutions Hypothesis-Based Coaching can help you build a world-class coaching organization.

Three Myths About Gen Y Reps

[image error]We get it: Gen Y is different.  So why should you pay attention? Over the next 10 years most of your experienced sales reps (the boomer generation) will retire, Gen X will take on the leadership ranks, and millennials will fill your sales organization.

According to research from our sister program for HR executives CLC, Gen Y constitutes about one-third (34%) of the current high-potential population globally, and represents the majority of high-potential employees in some geographic locations, such as China (58%) and India (64%).

So what should you be doing differently today, if anything, to deal with Gen Y reps?

The conventional wisdom: Millennials are high-maintenance. They want it all (work-life balance, a higher sense of purpose, and rapid career progression).

Truth 1: Yes, Millennials expect a lot out of their organization, but Gen Y employees also have high expectations of themselves. The young professionals joining your sales ranks have grown up in super competitive environments (putting together college applications since grade school), like over-achieving, and expect to be and feel valuable.

Take away: Don’t stunt your young Gen Y ‘s desire to achieve. Empower your reps and give them enough rope to sell in ways that make sense for them, and not just for your managers.

The conventional wisdom: Gen Y wants different things out of their employers. They are used to receiving constant praise, expect their manager to be highly involved, and need to receive a lot of feedback.

Truth 2: While there are meaningful differences in drivers of attraction for Gen Y sales employees vs. Gen X sales employees, CLC Employee Value Proposition (“EVP”) data shows that in fact the two generations share in common 80% of the top 10 EVP drivers, and both generations rate Development Opportunity as a top 10 driver.

Take away: Millennial reps, just like Gen X reps, want to receive feedback and be coached in order to develop in their career. Top sales organizations continue to assess their coaching capabilities, equip their managers with the tools and coaching resources they need, and measure their progress to see coaching’s impact on sales goals.  See SEC’s newest diagnostic tool, The Anatomy of World-Class Coaching Practices.

The conventional wisdom:  Millennials have no work ethic; they are entitled and it’s hard to focus their energy as they are easily distracted by technology.

Truth 3: Millennials are technology-fluent and they do value work-life balance, but they also like efficiency (they grew up in a world of instant gratification), and they know how to leverage the resources available to them (especially technology) to complete tasks faster and better.

Take away: Millennials’ comfort with technology is an untapped resource for your sales organization.  SEC research shows that the best reps actively engage in social media channels and are able to position themselves as key influencers in those channels in order to shape customer demand.  Consider how to best leverage Gen Y reps’ social selling skills, and empower them to engage in reverse mentoring to help Gen X and Boomer reps hone their social media skills.

Share your thoughts on Gen Y reps!  What challenges are you facing with the increasing number of millennials joining your sales organization?

SEC Members, take our 10 minute Sales Coaching Effectiveness Pulse Survey to gauge the quality of your sales managers’ coaching, and learn about how SEC Solutions Hypothesis-Based Coaching can help you build a world-class coaching organization.

The Challenger Sale Enters the Academic World

It hasn’t even been a year since CEB’s The Challenger Sale was published with much acclaim throughout the sales world.  And in this short time we’ve seen a wide variety of commercial organizations adopt the Challenger approach.  Now, I’m pleased to announce that we’re taking the concept to the academic world.

CEB has partnered with Georgetown University’s McDonough School of Business to offer a new open enrollment program designed to help senior sales leaders transform the sales function, improve their company’s performance, and increase their own leadership abilities.  Inspired by The Challenger Sale, Innovating Sales: Strategic Management and Leadership Development is a three-day Executive Education course in successful sales strategy and leadership.  The course will examine organizational effectiveness and deliver high-impact strategies for motivating and managing your sales force.

CEB sales experts Matt Dixon (co-author of The Challenger Sale), David Anderson, Tom Disantis, and Ted McKenna, along with Georgetown Professor Rebecca Heino, will be teaching the course – to be held September 10-13th at Georgetown University.

If you’d like more information or want to share this with your colleagues, visit the Georgetown Business school website. 

Share Your Experience and Win a Kindle Fire!

[image error]Big Data. The buzzword of the year. Organizational data is increasing exponentially, with some numbers putting the volume growth at 60% year over year. Along with this data comes the promise of more accurate decision-making – but is that really happening? As it turns out, only 38% of knowledge workers have the skills or processes to use data correctly – the remainder either ignore it, making decisions based on their gut, or, more often, suffer from “analysis paralysis.”

So, more data obviously doesn’t equal better decisions. How can we change this? The Market Research Executive Board is trying to understand which data sources are used for customer-facing decision-making and how data integration might help make better decisions.

Contribute your experiences by taking our quick 15-minute survey!

Participants will be entered to win one of 10 Kindle Fires (or $200 donation to the charity of your choice).

3 Steps to Make Your Sales Strategy Actionable

[image error]We’ve just hit the mid-year mark, a time when, for many companies, the planning process begins for 2013.  However, in many sales organizations, the plan takes a back seat to the here-and-now.  With all the pressing demands from customers, as well as requests from internal stakeholders, we tend to throw our strategic priorities aside just to stay above water.

It almost feels like someone has pulled a fire alarm.  One member shared with us that over three quarters, sales had received requests to fulfill 77 priorities – that’s a new priority almost every other business day!

So what can be done?  How we can focus our organization only on the most important tasks and priorities?

The key is limiting your sales organization’s priorities, and then building metrics to track progress against those priorities.  Here is a quick, three step process to filter all the things your organization could be doing down to what they need to be doing:  

Step 1:  Filter out by alignment with corporate strategy – does the initiative help you achieve corporate objectives (I bet you can get rid of more than half the things sales is asked to do here…)?


Step 2:  Filter by alignment with sales strategy – do the remaining items help you achieve your sales goals?  This can include a number of sub-filters, including:

Alignment with existing customer segmentation
Sales force capabilities
Sales force capacity (note this is different from capability, and needs to be asked in addition.  It’s good if your sales force can do these things – but do they have the time?)




Step 3: Filter by financial impact – at this point you likely have a pretty good list of targeted priorities – now we need to ensure we get paid for them.

So now you have a small number of true priorities for your organization to pursue.  I would encourage you to go one step further by assigning metrics and goals to track progress against those priorities at the individual, team, and organizational levels.  As we all know, what gets measured gets done.  And by placing concrete outcomes against these priorities, it will help to focus your organization on executing against them.

Additionally, to help members with priority setting, we’ve created a 15-minute, leadership-oriented survey to help members prioritize internal investments and activities.  This survey leverages our Anatomy of a World-Class Sales Organization to help members focus on the top 2-4 areas that are most in need of investment.  (SEC Members, if you are interested in leveraging this, see these instructions for how to launch the survey in your organization.)

Managing requests that compete for time and investments is a fact of life in sales.  They key to success in this environment is honing down the list of things you and your team could be doing, to those things that you need to be doing.

SEC Members, for more information on the planning and filtering process, see this example of a Strategy Prioritization Toolkit from Schneider Electric or learn more about Toyota’s Problem Reframing Process, which ensures priority setting efforts are aimed at solving the correct problems.

The Cost of a Failed Sales Manager? $4 Million…

[image error]A member recently shared with me that they’ve estimated the average cost of a single failed sales manager to hover around $4 million, calculating all the direct and indirect costs of lost productivity, attrition or poor team engagement and lackluster customer experience, not to mention recruitment, salary and training costs. Simply put, bad sales managers are toxic.

So, how can we build better managers?

Well, what if we all started with better raw material in the first place — surely prevention is better than cure, right? Some of the best companies follow the principles of Train, Certify and (only then) Promote. Putting manager candidates through their paces BEFORE promotion is much less risky than trying to do so after the fact.

A few years ago, Kohler, the manufacturer of specialized plumbing fixtures, had to let managers go at a rate of 10-12%.  It turns out that succeeding as a manager in a more complex sales environment proved too high a “double jump” for its newly promoted reps.

In order to build the right bench of future manager talent — ultimately achieving some truly remarkable results — Kohler developed a “Top Gun” training program that rigorously identifies individual development needs of manager candidates and provides a customized training regimen that includes live training in the field, embedded in the candidate’s typical workflow, and peer support from other Top Gun candidates.

To reduce sales manager failure, Kohler instituted a rigorous three-stage process: 

• Stage 1—Screen reps for management competencies; to receive consideration, a rep needs to be a solid performer but not necessarily a star

• Stage 2—Have candidates independently evaluated against the competencies and skills required by first-line sales managers

• Stage 3—Individually customize training to target each candidate’s specific skill development needs; then certify

Sales reps may only receive manager promotions after successfully completing the requirements outlined above and executing against objectives outlined in individual development plans.  To determine candidates’ effective completion of Top Gun, candidates’ supervisors use checklists outlining candidates’ specific objectives.  These checklists objectively track candidates’ completion of required courses, presentations to supervisors, virtual classroom sessions, and elective projects (e.g., successful completion of an account plan).

The program provides a number of benefits, not least of which is that it’s a highly transparent and fair way to filter out less qualified candidates. Top Gun’s penalty-free, opt-out clause ensures that candidates deemed unfit for management positions may exit the program and pursue non-management career paths.

Executives note that this practice serves as a continuation of Top Gun’s emphasis on matching individuals to positions that best utilize their skill sets. Personally, I believe this is such an undervalued positive benefit, so important in changing a sales culture with a “only way is up” mentality — Super Sellers have just as much prestige within the company as do managers.  In addition, executives note that the costs associated with removing sub-standard manager candidates outweigh the potential costs of candidates’ decisions to pursue alternative career paths outside the company.

As a result of this approach, Kohler’s manager involuntary turnover rate sees dramatic decrease — dropping from 10-12% to no more than 2%. Moreover, Kohler is able to see results from these pre-wired new managers faster, with ramp time decreasing 1.5x within the first 4 years.

One final point, I’d recommend that you start screening for future managers from within your current pool of Challenger reps. As shown in SEC’s data on manager effectiveness, you’ll need managers who can demonstrate (and coach to) the selling behaviors most likely to win!

I’m keen to hear what lessons your company has learned about manager screening…what else works?

SEC Members, see the full Kohler manager screening case for additional information on the screening process. And for more tips and resources on building effective managers, see our Developing Managers topic center or review the key findings from our recent study on the manager skills that best drive growth.

The ‘Just Add Water’ Approach to Social Media

(This is the third post in our series on sales organizations’ emerging use of social media as a channel for shaping demand.) [image error]

Although many people agree that social media can be an incredibly helpful tool for sales prospecting and due diligence, the question we hear over and over is “But is it scalable? We know that high performers can do it, but we are worried about the rest.”

The challenge facing many organizations is the best way to roll out social media use and ensure that it doesn’t negatively impact other initiatives, or backfire entirely.

How can you make sure this doesn’t cut into reps’ ability to do their real job? How can you be sure they don’t say things that are off-brand, or that do not reflect well on the company? How can you support them to be successful once they start to get involved?

One company, IBM, has figured out a solution that works for them: sales and marketing work together to increase reps’ use of social media. The collaboration harnesses the strength of both to make sure messages remain consistent, don’t take too much rep time, are personalized and delivered where customers are learning.

Reps work with the company to create a personalized blog on the company site, join Twitter and other social networks and enhance their profile. IBM points reps to Subject Matter Experts and key influencers in their field and encourages them to network. Marketing helps reps stay up-to-date with things they need to know so reps are knowledgable in their tweeting and status updates. The company support helps reduce the time reps would need to figure things out or find interesting and relevant content, and Marketing ensures that the messages are appropriate and support company goals.

Sales reps add the human touch to messages and breakup dense information flows. They establish themselves as thought-leaders and are able to alternate between different kinds of messages. People sell to people and adding a face to the message makes the company more approachable.

Our research shows that establishing or reshaping demand is key to getting in earlier and that social media is a good place to do that. Company-wide initiatives that help sales enter the social media landscape are a good way to embrace the trend, get ahead of the curve but avoid the pitfalls that we all worry about.

SEC Members, see the full IBM case, listen to the replay of our recent webinar on ‘smart’ social media, and download appendix materials detailing tips for social media use, sample social media policies and examples of social media groups across industries.

Is Your Comp Plan Incentivizing the Right Behaviors?

With the first half of the year now complete, many organizations are evaluating their performance against annual goals. Inevitably, performance in many areas won’t perfectly match predictions, and now serves as an ideal time to reprioritize and adjust strategies for the latter part of the year. It’s a good idea to take a look at your sales compensation plan as well to ensure that your sales team’s priorities are aligned with your organization’s.

We recently polled our members about the design and management of their sales compensation plans and the different metrics they use when measuring rep performance. Different metrics encourage reps to focus on different things, so it’s important to choose the correct metric or combination of metrics to make sure you are driving the right behaviors.

Following are some of the most commonly used metrics and the behaviors they drive, as well as the unintended consequences of each that you should be aware of. 

Gross revenue. The most commonly used metric in reps’ comp plans is the gross revenue they generate through sales. Our new compensation benchmarking shows that 67% of companies include some sort of gross revenue metric in their comp plans.

Benefits: Gross revenue metrics encourage your sales team to sell, sell, sell—great for revenue and unit volume maximization.
But watch out: While gross revenue metrics will encourage large revenue generation, they also encourage sales reps to use excessive discounts to close deals, which can really dig into profits when pricing isn’t pre-set.

New revenue. Gross revenue metrics are great for ensuring a certain level of revenue is being maintained, but to encourage revenue growth, you’ll need something more. 45% of organizations use a new revenue generation metric to communicate this priority.

Benefits: New revenue metrics ensure that reps are creating new sources of revenue and not just living off of renewals.
But watch out: Since new revenue metrics don’t specify where this revenue comes from, too much emphasis on new revenue generation may drive some reps to become excessively aggressive in pushing existing customers to buy more. If increasing market share is a high organizational priority, consider using a new account acquisition metric (used by 28% of members).

Sales of specific products. While revenue metrics easily communicate the most basic priorities of most organizations, we’ve found that comp plans that include only revenue metrics to be less effective than those that also include a non-revenue metric. The most common non-revenue metric measures sales of specific products, and is used by 35% of organizations.

Benefits: Easily communicates to reps what products they should be focusing on.
But watch out: This may cause reps to neglect products with weaker incentives, and can become confusing if you include metrics for too many products. See our advice on specific product metrics.

Profitability. When reps have a lot of autonomy in negotiating prices or when terms and conditions can incur major costs, it is often helpful to include a profitability metric your comp plan. Our recent comp plan benchmarking found that 30% of organizations include this metric in their plans.

Benefits: A profitability metric will reduce reps’ urge to discount heavily to close deals, and ensures that deals have acceptable margins.
But watch out: Reps’ focus shifts from aggressively closing deals to wringing as much profit out of each deal as possible, slowing down the sales process. Additionally, this can create conflict with new customer acquisition, which generally happens at lower price points. See our advice on using profitability metrics.

These are only the most commonly used metrics. There are many other metrics you can use to communicate different organizational priorities to your reps. However, be advised—for a comp plan to effectively convey what’s most important, it must be simple and objective. Too many metrics will confuse your reps and are likely to end up conflicting with each other.

SEC members, learn more about selecting the right metrics for your sales compensation plans and see the results from our recent comp plan design benchmarking.

Don’t Let Biases Impact Your Key Account Selection

(This is the second post in our multi-part series on Key Account Strategy and Management).

You’d think that investing in our best customers would lead to easy growth.  They buy a ton from us already, so if we just partnered a little more strategically then we could grow even more, right?  Wrong – and often, we’re the reason why.

Before we can even think about selecting key accounts that we want to target to grow, we need to make sure we have a compelling value proposition to get the customer to want to partner with us.  As my first post in this series addressed, if you can’t articulate the objective, scope, and advantage of being deemed a key account of your organization, neither can your customer.

But let’s assume we’ve got a solid value proposition in place.  Now it’s time to figure out which of our accounts to put into the key accounts program.  Many companies struggle with this because they put too much focus on revenue/volume metrics.  That’s not to say that current and/or potential revenue isn’t important, but there are things that revenue can’t measure.  Too much focus on revenue leads to us ignoring bigger issues like cost to serve or strategic alignment, and often emphasizes short term gains at the expense of strategic initiatives.

So how have companies overcome this? 

By conducting more thorough and objective analyses of many crucial variables prior to promoting accounts to key account status. 

Electrolux built a way to rigorously assess cost to serve by measuring things like profitability, relationship depth, brand strength, strategic value, value creation, and supply chain alignment.

Square D did something similar, ensuring that reps objectively assess not just the size of the opportunity, but how well an account is strategically aligned with their goals.  You’re now making decisions based not just on the size of the opportunity, but how well this customer is a good fit for your organization.

By making these assessments more objective, you’re helping to remove human biases that otherwise help the wrong accounts sneak into your key accounts programs.  Accounts that sound like good accounts because of the brand name or the size of the opportunity, but when you dig into it aren’t good fits for a key account program and never get the returns we expect.

So are we now ready to grow?  Not quite.  We have a value proposition in place.  And we’ve objectively quantified the accounts that have the highest future value and strategic fit.  There’s one factor we haven’t yet explored – the customer’s role in all of this.  We’ll examine that in a future post.