Leading Today’s Sales Organization
Constant change in today’s business environment has made running the sales organization more demanding than it has ever been. The CSO (Chief Sales Officer) is regularly challenged by new demands and priorities from the CEO, customers and peers. To stay out in front of these demands, we find that successful CSOs are continuously thinking about and refining their points of view about the following six areas.
- Change vision. A change vision means having a view about what a company needs to do to succeed with customers and the courage to put in place the competencies and processes to make that vision a reality. Effective CSOs develop a clear vision of what must be done to increase sales and, in turn, sales effectiveness and the results they expect from the changes required of their organization to meet new demands. CSOs that: 1) Move quickly without gaining “buy-in” through-out the sales organization; 2) Assume that systems where in place to keep track of results; and, 3) Focus on shifting around boxes on the organization chart without the benefit of a clear customer strategy, invariably do not achieve the sales targets assigned to them by the CEO.
- Leadership and managerial skills. Customers motivate change. In fact, in some industries they demand it. In companies where the CSO and his/her leadership team achieve a substantial increase in profitable top line growth, they do three things well: 1) They look to their customers to understand what is required to gain and sustain a competitive advantage; 2) They direct and participate in the processes in which their company sells and provides service to customers; and, 3) They make investments in resources that enable the sales organization to work productively with their customers. To support these leadership mandates, CSOs look to their front line managers; field managers need to develop a much broader range of skills in several areas to do business with customers. Typically, these areas include: 1) Financial; 2) Communications; and, 3) Facilitation/consensus building.
- Customer focus. Being truly “customer focused” is easier to talk about than to implement. Companies want to align their selling practices to the buying process of their customers. However, the ability to do so successfully is a bit of a paradox because they are managing sales for today’s success while at the same time speculating on what future buying models will actually look like. The growing popularity of the Internet is an example of how a new form of access to customers requires a rethinking of company’s traditional models of sales and service coverage. One important dimension of customer focus is the sales channels a company puts in place to do business with customers. For example, companies that cover the market with a direct sales force allow the field sales staff to decide which customers to approach, sell to, and build relationships with. To grow profitably, CSO find that they must determine the channels that are most effective to access and keep customers, and the sales models that are needed. In turn, tools must be in place help both field and inside sales staffs determine which customers are the best customers to invest in. Without such tools and processes, resources could be wasted on the wrong customers, that is, customers who actually reduce the opportunity for profitable business growth.
- Marketing and sales collaboration. Generally speaking, in many companies the working relationship between the marketing and sales departments has improved substantially in the last five years. Once companies understand that there is a disconnect between how they do business and how customers want to buy, they realize that they have an acute need for the marketing and sales departments to work together effectively. To achieve effective collaboration between marketing and sales, successful CSOs have developed a revenue growth implementation planning process. This process focuses on high opportunity customer segments and requires both functions to invest effort in initiatives that lead to business success. For example, the marketing department, through the use of innovative data mining techniques, can provide sales with various tools and information to target customers who offer the greatest revenue growth opportunities. The sales department can provide marketing with valuable information about how customer buying practices are changing and, therefore, how marketing may need to alter product offerings, value propositions, and service guarantees in the future.
- Productivity and investments in the sales function. Companies look to their sales organization to produce: 1) Revenue growth in strategic areas like acquisition of new customers or the successful launch of new products; 2) Greater sales productivity, e.g., higher sales per selling expense dollar, greater sales per customer account; and, 3) Better allocation of selling expenses, i.e., shifting sales costs to the most effective form of customer coverage. To increase sales productivity, the CSO must help the “sellers” increase the return on time invested on the job. The investments that companies are making in technology enabled selling — giving customers access to information that enables them to learn the status of new products, orders, etc. without sales person contact — is one way to increase field selling time. However, investments in technology alone may not result in the revenue growth that companies expect. Through our surveys on “Executive Confidence in Sales Growth” respondents consistently report average expected growth in sales in the range of 10% to 15%. To achieve growth, some companies are investing in “head count” growth. This is because, in some cases, it is physically impossible to realize incremental revenue because too few salespeople work on growing the business — they are consumed with retaining business with current customers.
- Sales force motivation. To create and sustain a high performing sales organization, the CSO and his/her leadership team must continuously work to direct, motivate and reward sales people for achieving sales success with customers. In many cases, the reason customers do business with a company is become of their relationship with the salesperson. Therefore, it is important that the sales organization understands the company’s vision for growth, expected outcomes, and, alignment with various sales force management programs — quotas, incentive compensation, and recognition. These programs – particularly compensation and recognition – are essential to sustaining sales force morale, motivation and, in all likelihood, retention of key people.
CSOs and, their leadership team, must hold the view that because the sales function is continuously evolving and changing, there is a consistent need to reexamine and enhance thinking and the related processes and programs in these six areas in order to deliver the profitable top line growth the company expects.
For a more in depth discussion of job the CSO’s job is changing and what sales leaders are doing to respond to those changes, see our article, “The Ultimately Accountable Job: Leading Today’s Sales Organization”, Harvard Business Review, July-August, 2006, pp. 124-131