Challenging the Organisation's Role in Sales

The Challenger Sale is not a “read once and succeed tomorrow” model. The deeper, organisational level stuff is really where The Challenger Sale can add value. Without going into detail about what the model is and what it means to be a Challenger Rep, I thought I’d outline a few of my favourite high level concepts from the book.

I have just finished reading “The Challenger Sale” by Matthew Dixon and Brent Adamson. There is a fair amount of hype around this book and while there is a heap of excellent content and food for thought within, the cynical part of me surmises that it’s possibly primarily designed to sell CEB's Sales & Service consultative offerings. Not that there’s anything wrong with that; that’s clever marketing!

I’m not a huge fan of prescriptive sales methodology. “Open up with this statement; lead the client to the punch line; show this slide now and that slide then and hey-presto, you’ll double your closure rate, guaranteed!” For me, sales should be more intuitive than that, customers just aren’t that easily manipulated. For this reason I approach most sales teachings with a healthy scepticism.

While there was a little of that in the book, it didn’t prescribe to the notion that simply improving a sales rep’s script and sending them out with a new set of presentation slides would somehow turn them into a selling superstar. If you’re hoping for that sort of a quick fix, this book isn’t for you.

I won’t go into what “The Challenger Model” is as far as trying to describe the nature of the model and the stats behind the research. The book does a pretty good job of outlining that in detail, including case studies demonstrating how companies have introduced the model and are making it work for them.

Instead I’ll try and frame some of the messages in the book, because the real gold nuggets for me were not so much about “The Model” itself, but in some of the more high level concepts that the book contained.

The Challenger Sale advocates examining the sales process through a company-wide angle lens. It encourages companies to dig into their collective knowledge and collate insights that can add value to their customers, over and above the price tag and a feature/benefit analysis of their product.

It stresses the need for sales and marketing teams to work together. Rather than seeing their roles as disparate, sales and marketing should be intertwined and focused on the mining and delivery of insight to their customer base.

During those meetings that are aimed at closing a deal, there is immense power in a sales rep’s ability to deliver information – something that challenges a customer’s pre-conceived ideas about their business or their industry – but the weight of the insight should be driven at an organisational level, not simply left up to the rep to discover and disseminate.

The book outlines a set of behaviours that CEB’s research shows to be necessary for effective sales. It highlights the fact that without constructive, ongoing and personalised coaching, sales reps are often left to their own devices and results can be unpredictable, or worse, completely predictable.

Over and above training for skills and knowledge, coaching for the right behaviours is an essential ingredient. (It could be said that coaching for the right behaviours should extend far deeper into a company than simply at the sales-training level).

The other essential ingredient is innovation; looking at a sale with a view to doing things in new ways and taking the time to really prepare, research and understand the sale and the prospect, so that empirical innovation can occur.

The authors challenge companies to have a close look at their messaging. Is their marketing material full of buzzwords that focus on their company, their history, their solution, how unique they are? Does it talk about how customer focused they are, how innovative they are?

This book invites all marketing executives to revisit the material they are producing and ask two questions.

• Why should customers buy from us over our competition?
• What truly makes us different from everyone else?

 If you think it’s because you’re the unique, innovative leader in your industry (or if that’s what your marketing material is saying) check out your competitors. Are they all saying the same thing?

“Ironically, the more we try to play up our differences, the more things sound the same. The utter sameness of language…we simply end up sounding like everyone else.”

I don’t agree with a one size fits all, prescriptive model for sales success, nor do I think this book is advocating it, although the hype around the book in some ways makes out that's what this is.

To me, it's moreover promoting the concept of an organisational push to better understand core competencies and competitive advantage and then arming everyone with the tools necessary to deliver that message to the customer.

Developing a Strategic Mindset

Keeping KPIs relevant

“You can only manage what you can measure”, but if it doesn’t matter, why spend too much time and energy measuring it? KPIs that don’t relate to the goals of the business are like ingredients that don’t belong in the pot and muddle the taste of the dish.

Clearly outlining and understanding departmental goals is the first step in developing solid, meaningful KPIs. Knowing what is truly a measure of success means linking each metric to an organisational goal. Just like the theory that having too many goals makes it hard to focus, having too many KPIs also dilutes focus.

Tether KPIs very strongly to the organisation goals for each primary function of the business and look to industry and competitive benchmarks for guidance; if improving a process speed is your objective, what do other company’s success metrics look like?

A matrix that plots organisation goals, KPIs and benchmarks across the functions of the business (HR, Finance, Sales, Marketing, R&D, IT, Design, Administration, Operations etc) can help clarify what’s really important.

Once the business goals and objectives have been listed, research can be done into what sort of KPIs would best measure process improvements, and input/output activity directly relating to those objectives.

Review metrics regularly as to whether they still relate to company goals.  If a metric no longer matters, is there still a need to measuring it?

Intrapreneur; the creative Change Agent

Not everyone wants to start their own company. But creative, innovative change agents are everywhere, hungry and passionate about what they do, happy to wear multiple hats and dream big about their day jobs.
 
During a conversation I had recently about mentorship programs the term “Intrapreneur” was discussed. It’s not a new word, apparently the term Intrapreneur was first coined in 1982.  But I do love it, such an aspirational notion!

Meet the Intrapreneur...those self-educating, self-motivators who are willing to take risks, set goals and challenge their peers and superiors to think and act differently, for the good of a company that is not their own. 

Those inventors and departmental protagonists who think about solving problems or creating new revenue streams in the car on the way home, over dinner, in the shower.

During the course of their careers, these characters are from time to time asked “Why don’t you start something up on your own?” 

Mitigating risk and maintaining stability are both valid reasons why most don’t go it alone. And that’s okay, the world needs Intrapreneurs!

It’s worth investing some time into finding out more about this character profile, to either better understand yourself (if you are one) or better understand how to manage, grow and inspire them (if you have one working for you).

Are you an Intrapreneur? If you’re the business owner, do you have one working for you?

The Third Wave; a book review

Every now and then you read a book that stays with you for while after you finish it.

"...It is ironic that we spend so much energy as a nation debating how to deal with refugees arriving illegally in leaky boats…migration laws cannot protect our jobs from keen workers who remain in their own countries..."

The Third Wave: Micro-globalism and the coming employment crisis in Australia is a compilation of Scott Linden Jones’ theories on the future of employment in a global community. 

Currently in Australia, with some of the highest living standards and wages in the global economy, big and small businesses alike are exploring ways to reduce labour costs. We have seen our manufacturing industry pummelled as business shifts operations to countries that allow them to reduce costs and maximise profits. Our leaders are well aware of this and are talking up policy around these issues.

Thanks to technology, the increasing ease of access to a large body of skilled and inexpensive offshore labour is an enticing proposition for any capitalist. The trend towards offshore labour is one far less heralded in the political debate as we head towards our election.  Government and educational institutions need to start paying more attention.
 
Jones writes of his predictions and the impact that the brave new world of “micro-globalism” is having on the Australian economy. It is a world of both huge threat and equally huge opportunity, but as a country we need to start being hyper-aware of the situation that is unfolding; switch gears and start preparing our young people for potentially a very different employment landscape in the not too distant future.

It is not all doom and gloom, although halfway through the book you’re beginning to wonder if Jones sees any light at the end of the tunnel. He makes some very insightful and humbling observations about our deservedness with respect to the current crop of political leaders, our expectations and feelings of entitlement as a nation and our comparative work ethic.

He also explores ethics themselves and the place they will have in an increasingly competitive business landscape. What power will ethics hold over simple and effective capitalism?
 
A must read for Australians seeking to understand the new global landscape of economics and anyone with a position of influence over the future of our young people.

PESTEL Analysis

 

A PESTEL Analysis examines the external or Macro Environmental factors that could potentially effect or influence the industry and the company; such as taxes, tariffs, business and consumer sentiment, demographics, changing technology landscapes, the environment and laws and regulations.

The BCG Matrix

BCG Matrix;
a tool to analyse business units, products or brands in a company's portfolio.

• Stars shine very brightly, but require heavy investment
• Cash cows should be milked
• Question marks are often hard to know quite what to do with, be selective about these investments
• Poor dogs perhaps should be liquidated.

History of Management

When you review the history of management, you get an interesting perspective on current management techniques and trends.
 
American mechanical engineer Frederick Taylor (1856 – 1915), known as the father of Scientific Management, was one of the first “management consultants”.

The scientific approach to management is the art of gaining efficiencies by increasing the output volume of workers.  When you consider the era, this approach was born at a time when workers predominantly used their backs to produce results.

Frederick’s fundamental principle revolved around maximum gain for both employer and employee by effectively training each individual employee in a role that was most suited to their capabilities.  Of particular interest was investigating ways to increase output by reducing unnecessary movement.

German sociologist Max Weber (1864 – 1920) developed what is known as the bureaucratic approach to Management.  The principles of this style of management centre on job specialisation and clear job descriptions, where qualifications determined positions.  Clear hierarchy and control along with the uniformity of applied regulations created formal rules and performance indicators.  Clear pathways for career advancement were designed to promote long term employment with a single company.

Elton Mayo (1880 – 1949) approached management from a more social aspect.  Coined human relations management, the theory he developed was more concerned with employee motivation, team building, communication and leadership skills. He theorised that employee motivation stems from relational factors such as feedback and team dynamics more so than simply pay and environmental conditions.

French mining engineer Henri Fayol (1841 – 1925) took an administrative approach and developed six primary functions of management; Forecasting, Planning, Organising, Commanding, Coordinating, Controlling.  These are closely aligned with 14 principles of management that cover off the division of labour, authority, discipline, unity, remuneration, order, equity and initiative.

Management consultant, author and educator Peter Drucker (1909 – 2005) was interested in the social ecology of man, exploring the way we organise ourselves and interact.  With an extensive body of work (39 books and countless articles) he was and remains incredibly influential when it comes to management by objectives; believing that by setting clear goals and with effective collaboration and communication, it is possible to allow staff to do a job in their own way.

A retrospective look at management evolution enables us to see how modern management borrows aspects from each of these theories.  Management today is a healthy mix of science, bureaucracy, administration, human relations and goal setting.
 
Good managers should be borrowing techniques and theories from all these approaches and applying them as best determined by the particular situation.

Choosing to be Great takes discipline.

The thing that struck me the most about Great by Choice – Jim Collins & Morten T. Hansen’s handbook on choosing greatness over mediocrity – was the sheer weight of the research involved.  All good books undoubtedly require a lot of research, even those based purely on fictional characters and events require some level of research to build plausibility.

It was the minutiae of the research that impressed me; the dedication to trawling through years of corporate records for indications of luck, discipline, creativity, risk and reward.

The basic premise of the book entails taking two like coins and turning them over and over under a high wattage desk lamp, looking for irregularities and differences.  What is it that makes one coin infinitely more valuable than the other?  Why, when flipped, does one coin seem to come up heads, the other tails?  What dictates whether that was a lucky flip?

The coins are company comparison cases; two similar businesses in field and opportunity over a set timeframe – one experiencing extraordinary results of greatness, the other fading into mediocrity if not complete obscurity.

The research examines the key physiognomies of each company and why one rose to fly in the face of luck; maximising their returns regardless of events being fortuitously beneficial or unexpected calamity.  The insights that this research uncovered formed a set of characteristics that those who choose to be Great exemplify.

 

Key concepts that I took away from this reading:
 

• Choosing to be Great takes discipline and a consistent approach to vision, mission and execution.
• A leader’s job is to set out for their team firm guidelines about how far they need to travel each day; set boundaries and targets so they don’t overreach or underachieve, and make sure they have reserves for whatever the next day brings.
• The most effective creativity is that which is based on evidence and facts.  Research and pragmatic understanding of a situation helps with strong and sensible decision making. 
• Innovation must be timed so that it happens at the right point in the curve.  Innovation should meet market demand rather than pre-empt it; crest with the tide rather than after it.  Learn how to experiment so that riding a large wave of innovation is simply the culmination of many smaller test runs.
• Luck will find you; it is an absolute certainly in a chaotic business environment.  It’s what we do with our luck and how we prepare for that luck (good or bad) that counts.

Out of all of the concepts, this was the kicker; keep an eye open for the people who will be game changers for the company.  Out of all of the strategic and methodical plays a business can make, finding and keeping Great people is the single most important one.  

Porter's Five Forces

Originally developed by Michael E. Porter while working for the Harvard Business School and the Boston Consulting group, Porter’s Five Forces are five powerful forces seen to impact profitability and completive clout in a business situation.

The Five Forces:

• Industry Rivalry - How many competitors are in the market, who are they, what are their growth prospects? 
• Threat of new entrants - How easy is it for start-ups to muscle in on your turf, what are the factors that would encourage or discourage them?
• Threat of substitutes - How easy is it for clients find alternative ways of satisfying their needs?
• Bargaining power of suppliers - What is the relationship you have with your suppliers, how easy is it for them to drive up pricing?
• Bargaining power of customers - How sensitive are they to pricing, how transparent is the market, what is the value of the customer to the business, how unique is your product or service?

Reviewing each of these market forces in depth and determining whether the power or pressure of each is low, medium or high gives insights into the “micro environment” of the business.

Porter’s Five Forces can help understand both the strength of the current business position as well as assessing a situation you’re about to move into; it helps to determine the attractiveness of a market; how potentially profitable that market will be.