Why Individuals No Longer Rule on Sales Teams

Note: This post was written by Brent Adamson, Matt Dixon, and Nick Toman for the Harvard Business Review.

Companies have long developed and managed their sales people differently from other employees, placing great emphasis on individual performance. To foster it, they often give sales its own learning and development team, recruiting specialists, compensation plan, and management and IT systems — but now they’re finding that those differences can hinder success as much as they support it.

Our colleagues in CEB’s HR practice have documented an extraordinary shift in the relationship between individual achievement and business unit profitability, both across the enterprise and within the sales function. From 2002 to 2012, the impact of individuals’ task performance on unit profitability companywide decreased, on average, from 78% to 51%. But the impact of employees’ “network performance” — that is, how much people give to and take from their coworkers — increased from 22% to 49%. Even in sales, network performance now accounts for about 44% of the impact.

On the most effective sales teams, particularly B2B, the individual no longer reigns supreme. Strong sellers don’t merely execute their day-to-day tasks well; they also engage with their colleagues to marshal resources, wrangle involvement, and coordinate people’s capabilities. As we discuss in our recent HBR article, “Dismantling the Sales Machine,” they rely on collective, even crowd-sourced, skills in ways that weren’t possible just a few short years ago.

Take, for example, a large media company we work with that invested in an internal social-networking platform for the commercial organization. The goal was to help sales reps exchange information about complex accounts. In the few years since the system has been in place, cross-sales have increased, cycle times have declined, and conversion rates have gone up. In one account alone, the improvements have driven $3.5 million in incremental revenue. Collaboration is better not only among the reps selling into different parts of that customer organization but also across the product and marketing teams charged with building and positioning broader solutions for the customer. Because sales reps are more directly networked with their colleagues through technology, they more easily aggregate skills, knowledge, and experience to uncover new opportunities and to debate tactics for generating business.

Click here to read the rest of this post on HBR.