Sales White Paper: The Growing Sales Organization

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This White Paper covers the growing sales organization. It will touch on research into different frameworks for explaining company growth phases, and cover the four ages of the sales organization, the pressures at work and the initiatives and requirements for successful business. It will close with an analysis of how the Dealmaker from The TAS Group supports each of the four stages and sustains the organization as it grows and transitions from one stage to the next.

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Sales White Paper: The Growing Sales Organization

  1. 1. The Growing Sales Organization WHITE PAPER
  2. 2. Share this White Paper! Copyright ©TheTAS Group. All rights reserved. 1 THEORIES OF COMPANY GROWTH CATEGORIZATION As you might imagine with organizational theory, an abundance of thinking and frameworks exists to help us explain the stages of an organization’s growth. William S. Cottringer, PhD, proposes a model with four stages of organizational development: Acquaintanceship; Friendship; Conflict; Union. He also touches on the JohariWindow, a process for guiding companies through the stages. The Growing Sales Organization INTRODUCTION The vast majority of businesses operating today has a sales arm, sometimes direct and employed, sometimes indirect and managed as a distribution channel, that is responsible for bringing customers on board and developing relationships with them. In very small organizations, this sales person may also wear a number of other hats. In very large organizations, the selling effort is co-coordinated across regions and Business Units by a complex, multi-tiered hierarchy of sales professionals, managers and leaders. Depending on the nature of the company’s business, sales organizations are also subject to varying customer buying processes which they attempt to mirror with their own sales processes. These might be transactional in nature, with shorter, quicker and more predictable processes. They might also be longer, more drawn out affairs, with multiple stages, multiple buyers, in some cases involving a fair amount of uncertainty, intrigue and politics. They might also fall somewhere in between these two models. It is entirely possible that companies are subject to more than one type of sales process, depending on their offerings and their customers. While it is possible for a one-person outfit and a multi-national enterprise to follow the same sales process and chase the same customer, companies of different sizes are typically subject to different business pressures and requirements. As a company grows and its sales organization develops in parallel, it will experience these pressures and requirements in its journey from start-up to industry leviathan. ThisWhite Paper covers the growing sales organization. It will touch on research into different frameworks for explaining company growth phases, and cover the four ages of the sales organization, the pressures at work and the initiatives and requirements for successful business. It will close with an analysis of how Dealmaker fromTheTAS Group supports each of the four ages and sustains the organization as it grows and transitions from age to the next. As with any of ourWhite Papers, there will be a big variance in the seniority and experience of the readership. ThisWhite Paper aims to provide something for the complete range of requirements, but if you want to dig deeper or move wider, we urge you to get in touch with us individually. You can do this via email to: info@thetasgroup.com. Another model, dating back to 1972, is the Greiner Curve, using Greiner’s 6-phase growth model for organizations. Each phase ends with a particular crisis that in turn precipitates organizational change to address the next phase, if the company is to continue growing:
  3. 3. Share this White Paper! Copyright ©TheTAS Group. All rights reserved. 2 THE FOUR GROWTH AGES OFTHE SALES ORGANIZATION For the purposes of thisWhite Paper, we distinguish 4 specific growth ages for the selling organization. Organizations may not experience all of these phases in their development, and the vast majority will at some stage transition from at least one to another. THE SOHO – SMALL OFFICE-HOME OFFICE The SOHO is often the classic start-up, with the founders working out of a home or even someone’s garage. It is also a sole operator or consulting practice, a family-run business, perhaps even a Mom-and-Pop arrangement, around for a good few years and with no plans to get much bigger. Perhaps it is a small business, either serving the local community with a specialist or niche offering, or doing business primarily via the Internet or telephone and distributing its products either via the Internet or from the same office. Staff numbers are embryonic, in the region of 1-12 employees. People with a selling responsibility would be in the region of 1 to 3. Revenues per year would be under around $2.5m. The working environment is typically very informal, with most staff wearing multiple hats, in a flat hierarchy. Companies of this size tend to be more entrepreneurial in nature, very fast moving and agile, able to change strategy and respond to new customer demands in a matter of days. All staff would probably be networked to the one site, with personal productivity or small business office systems to take care of the necessary commercial, legal, and regulatory processes. Sales processes at the SOHO vary considerably, depending on the nature of the companies’core business. Customers might also be a combination of consumers and businesses. It is likely that business drivers for the SOHO would include the need to maintain positive and stable cash flow, to increase the number of profitable customers to spread the risk, and to plan for capital and operational expenditure. There would be pressure to differentiate their offering from the competition, and they might have very little leverage with larger customers or suppliers. • Phase 1 – Growth through Creativity, ending with a Leadership Crisis • Phase 2 – Growth through Direction, ending with an Autonomy Crisis • Phase 3 – Growth through Delegation, ending with a Control Crisis • Phase 4 – Growth through Co-ordination, ending with a RedTape Crisis • Phase 5 – Growth through Collaboration, ending with a Growth Crisis • Phase 6 – Growth through Extra-Organizational Solutions, a 6th phase added by Greiner to his original 5-phase model, where organizations continue to grow through mergers, acquisitions, and looser partnerships and networks. These 2 approaches seem a little too generic for our purposes, which concern the business-to-business sales organization. James Fischer proposed the 7 stages of organization growth, which at first glance is more practical for our analysis: • Stage 1 – Start-Up, 1-10 employees • Stage 2 – Ramp-Up, 11-19 employees • Stage 3 – Delegate, 20-34 employees • Stage 4 – Professional, 35-57 employees • Stage 5 – Integration, 58-95 employees • Stage 6 – Strategic, 96-160 employees • Stage 7 –Visionary, 161-500 employees Fischer’s model is closer to helping us frame sales organizational growth, but is based on a multi-year study of entrepreneurial companies in SiliconValley, with the consequence that the upper end of firms analyzed and profiled is not sufficiently large for our purposes. We need to come up with better categories of sales organizations that address the business pressures they face and the requirements for selling successfully.
  4. 4. Share this White Paper! Copyright ©TheTAS Group. All rights reserved. 3 or larger businesses, and is starting to appreciate the benefits of scale in its daily operations, though there will still be single points of failure in some of the specialist roles. Business pressures include increased competition and the threat of more frequent consolidation, and merger and acquisition activity. There is pressure to perform on a regular, predictable and periodic basis, to satisfy external investors and shareholders. There may be regulatory and human resources- based demands on the firm with a larger workforce to keep happy. There could be challenges to maintain profitable distribution channels to complement the direct sales effort, and small-to-medium businesses need to watch as they grow that they have a coordinated approach to looking after their customers, rather than getting‘siloed’in their thinking and working. Businesses of this size have a formal sales organization, and you should see more layering, with front-line sales reps, sales managers typically looking after teams of 4-10 reps, and sales leadership with responsibility for the company’s overall revenue number. Sales calls are more commonplace – and time-consuming – with the weekly calls to try and get a sense of how the month or quarter was progressing. The emphasis is on developing and retaining existing major accounts, as well as forging new accounts and working with channel partners to penetrate new markets and regions. Expect to see some class of contact management system, if not a full CRM system, in the small-to-medium business. The marketing department takes on the burden of marketing communications and demand generation, using dedicated email marketing and lead management systems, to generate the right quantity and quality of opportunities for the sales teams to purse. There is likely to be some formal acknowledgement that a defined sales process increases revenues and business efficiency. Sales training might focus on selling skills from time to time, and, in more enlightened companies with appropriate customer buying cycle, on sales methodology too. Forecasting, performance assessment and business analysis is probably also done, perhaps using spreadsheets, the default components of CRM systems, or even specialist third party systems. Small sales operations, learning and development or sales training areas within the small-to- medium business are responsible for product and solution knowledge, more so than management and coaching. It is possible, but not probable, that sales people in this size of organization have embraced Customer Relationship Management (CRM) systems to manage their customer interactions. Contacts might be maintained in individual email programs, and the email program might be used to send email campaigns out to targeted groups of customers. There might not be a discrete marketing function, with sales carrying out their own demand generation and business development, while also covering any public relations and media-related activity. Sales processes and sales techniques could be homegrown, intuitive and inconsistent, rather than formalized and consistent. It’s likely that a formal sales methodology is not used, and that investment in sales training is small or non-existent. Forecasting is often verbal or back-of-an-envelope-based, and any kind of business analysis might be minimal. A small amount of mentoring might occur, but it is hard to imagine an instituted ethos of coaching in the SOHO. THE SMALL-TO-MEDIUM BUSINESS With the small-to-medium business you see the separation of responsibilities into discrete, specialist functions like sales, marketing, legal & finance, operations (taking in development staff in a technology-based business, production staff in a manufacturing business for example), customer service and so on. It is normal to expect a preponderance of this size of firms in heavily fragmented industries, with a great deal of specialist, boutique providers. We expect staff numbers in the range of 13-200, of whom quota-bearing sales people would be in the region of 4 to 39. Revenues would be in the ballpark of $2.5m to $40m. The entrepreneurial mindset in these companies would still be important, but companies might have to work harder at keeping the mindset as the political and coordination skills of working with other departments become more noticeable. It is likely that the small-to-medium business will have a number of sites or offices, spread regionally, nationally or even internationally. Some sites may take advantage of serviced offices to mitigate the cost of a physical presence. You should expect to see slightly more formalized sales processes in evidence, and companies of this size generally serve either the consumer or the business-to-business sector. The small-to-medium company is more capable of allocating resources to complete for major business against similar-sized
  5. 5. Share this White Paper! Copyright ©TheTAS Group. All rights reserved. 4 different practices and cultures of other companies in a constantly shifting M&A environment. Regulatory pressures may well loom large, along with business continuity and employment union challenges. The need to show constantly improving sales performance has already been noted. Companies may also have to wrestle with the conflicting and shifting loyalties of partners in the supply chain, as well as a rapidly changing customer landscape. With such a large sales force, you see more tiering in the hierarchy, with pre-sales and sales teams perhaps being organized along specific product or solutions lines to fully exploit the range of offerings in the company portfolio. It becomes increasingly harder to get the entire sales force together, or even regional sales forces together, to get everyone aligned to the company vision, direction, and goals. Account management roles might be split between teams that look after one global client, individuals who look after one or a small number of accounts, and those who have a whole portfolio of smaller clients under their belts. Emphasis is on getting all the channels to be productive to help the selling effort, and visibility of the channel’s activities can become a challenge. The marketing function may also outsource elements of the marketing mix, such as telemarketing specialists to fine-tune and filter the sheer volume of leads being created. Companies of this size probably have highly integrated systems, using CRM, Business Intelligence (‘BI’), Enterprise Resource Planning (‘ERP’) and financial/billing systems which talk to each other and help address the complexities and dynamics you would expect to see. Dedicated departments probably oversee the optimizing of sales processes to cater to complex buyer processes, as well as the formal training and reinforcing of sales methodologies and skills to try and sustain sales performance and quickly bring on new staff in a sales force where turnover is a constant presence. The company also may invest in specific sales performance technology to extend and enhance an over-stretched CRM system that is trying to satisfy the differing needs of several functional areas. Underlying data integrity and reliability would be all- important, given the importance of accurate forecasting and business planning to the company. THE MID-TIER COMPANY The mid-tier company sits between the small-to-medium business and the large enterprise, but may already consider itself to be a full-blown enterprise. It might serve a large national market, or have a multi-national presence with a handful of offices and a presence in all the world’s major economic regions. It may have outgrown the notion of departments and divide its business into separate reporting divisions, or Business Units, each with their own general manager and Profit and Loss (‘P&L’) accounts. Some of these Business Units may be organized by business line or according to national borders. In some major markets, the mid-tier company is the engine room of the national economy, and the major contributor to the country’s gross domestic output. The mid-tier company has an employee base of around 200 to 1,000. Of this number, sales people would be in the region of 40-200. We expect companies of this size to turn in revenues of between $40m and $250m. This size of company is likely to have a flexible approach to working, with tele-working and career breaks commonplace, probably as a result of a diverse workforce and the need to retain key experienced staff. Enlisting the help of external consultants is the norm, as is outsourcing non-core operations to third party specialists, in order to the keep the company as nimble and focused as possible. As a fully-fledged commercial entity, you should expect to see formalized processes and procedures in all parts of the business, and also the emergence of more specialist Service Units such as Project Management, Purchasing, and InformationTechnology. The business is heavily reliant on large enterprise customers for the majority of its income and margins. Many of these companies could be publicly owned and traded, bringing an extra dimension of discipline to financial dealings, in the form of quarterly earnings calls, analysts briefings and reporting.The world’s financial communities expect actual performance to be strictly within the forecast range, and do not react well to surprises that deviate from either side of the estimates. Intense competition is likely to feature strongly as a business driver, and companies have to work hard to assimilate the
  6. 6. Share this White Paper! Copyright ©TheTAS Group. All rights reserved. 5 Business pressures and requirements for the enterprise in many cases can be thought of as an extension of those of the mid-tier or small enterprise, with international competition, cultural practices and regulation being especially marked. With a vast sales force, possibly numbering in the hundreds in some countries, the emphasis is on trying to standardize across a common, standardized terminology and best practice across sales processes, sales methodology and sales technology. You should expect to see further tiering of the account management functions amongst the enterprise customers. A major challenge for firms of this size, with a matrix approach to their sales force, (perhaps split across both regions and product lines, or else horizontally across customer size and vertically by solution) is to get one window on their addressable market, or on their global customers. Sales organizations of this maturity may well be on their second or third generation systems, and the upheaval of changing the CRM system, for example, is major. With the need for perhaps the most sophisticated forecasting and analysis, it is somewhat surprising to note that many firms of this size do not forecast in their CRM system, resorting instead to more traditional paper- and spreadsheet-based methods, using up considerable portions of their reps’and managers’ available selling time in the process. Expect to see large Service Units established to fulfill the requirements of their internal customers, the Business Units. These areas tend to be primarily for overseeing the deployment of specialist sales technologies to support the enterprise’s various sales forces. They might hold their own budgets, but in the main the power and decision-making rest with the Business Units, as the chief beneficiaries of these investments. Furthermore, the SalesTraining function assumes major significance for the enterprise, and it is common to see large departments of internal trainers with the responsibility for the overall sales performance wellbeing of the sales forces. In these cases, firms still adopt specialist sales methodologies but invest in a‘train the trainer’ approach, preferring that their own people deliver the sales methodology training, rather than that provided by the owner of the sales methodology Intellectual Property (IP). THE ENTERPRISE The 4th of the 4 growth ages is the Enterprise, the established, multi-national businesses whose companies and brands are household names. The top end of this group makes up the Fortune-type lists and forms the base stocks for the national economic and exchange indices. The enterprise has a truly global presence and is often foremost in the mind of government bureaucrats and policy-makers. They can exert immensely powerful influence over regional and national economies and are generally not shy at making their political feelings known and negotiating preferential trading conditions when they set up new operations. The enterprise, for the purposes of thisWhite Paper, has in excess of 1,000 staff. Of these employees, 200 or more might be in sales, contributing to annual revenues in excess of $250m and at the top end higher than the total domestic product of some countries. This is generally the most mature type of organization, with strength and depth in all areas, and also some specialist areas like government lobbying. Highly complex and tiered in its organization, the enterprise invests heavily in the legal function, protecting itself against anyone who might encroach on its patch, patents or processes. Constantly in the spotlight, the enterprise and its leadership team are generally subject to widespread admiration and are often signaled out in articles as examples for other businesses and students to follow. The CEOs of such organizations are usually hugely gifted and driven, and are considered the captains of industry and our general economic wellbeing. This becomes a somewhat double-edged sword in times of financial hardship or impropriety. The enterprise, by virtue of its size, operates according to highly formalized processes and procedures. Companies of this size sometimes find it hard to change course and respond to market changes. Where the SOHO can incorporate something new in days, this might stretch to weeks in the small-to-medium business, months in the mid-tier company, and many months or even years in the enterprise. Customers of the enterprise will include governments and other large enterprises, and may be long-standing, formal partner arrangements with equally large enterprises in the supply chain, distribution, financial and business consulting areas.
  7. 7. Share this White Paper! Copyright ©TheTAS Group. All rights reserved. 6 Dealmaker and the Small-to-Medium Business In the small-to-medium business, it becomes harder to get a handle on all the activity in the sales organization. Communication is more difficult, and there are the increasing challenges of maintaining consistent messaging, sales language, sales process and culture within the organization. The notion of ownership of opportunities and accounts also becomes more important. Dealmaker helps the sales professional reinforce their individual opportunity and account management skills on a daily basis. It can also support a range of permissions and sales hierarchies for day- to-day management and reporting. Dealmaker is delivered to the customer preconfigured to their specific business situation, and the straightforward administration function helps with ongoing management. Furthermore, a complete virtual learning and certification system within Dealmaker, reinforced by expert coaches, removes the need for the entire sales force to be absent at a physical training workshop. Dealmaker and the Mid-Tier Company The mid-tier company is truly connected, not just with its stakeholders but also within itself, as a range of systems talk to each other to enable the company to know what’s happening end-to-end in its business and to compete as effectively as possible. Dealmaker is 100% native in Salesforce CRM so businesses can trust the security, performance, and scalability of Dealmaker to match that of Salesforce itself.Time and wasted energy wrestling with deal analysis and forecasting can be a major business pressure on the mid-tier company. The sales process science in Dealmaker software takes the guesswork out of analysis and forecasting by removing sales people’s subjectivity and providing accurate insights into deal health and deal progression. This is achieved through objective in-depth analysis of the sales organization’s actual performance and knowledge of what it takes to close deals. DEALMAKER ANDTHE GROWING ORGANIZATION Dealmaker is a sales performance automation system designed to help companies to sell smarter and manage their business better. It is geared to sales organizations that have a relatively involved selling process, and helps them solve the problems of revenue shortfall, inconsistent sales effectiveness, and deal and performance analysis. We serve customers in a range of industries. Some of our customers have less than 5 sales people, and some have more than 5,000 sales people. Some of them are looking to train a couple of their new hires, while others need to establish globally successful sales academies. Regardless of their size and business pressures, they use Dealmaker to manage and guide their selling efforts. Dealmaker is not only the ideal partner for sales organizations in each of the 4 growth ages, but also a constant partner as the growing sales organization makes the sometimes painful transition from one growth age to the next. Dealmaker and the SOHO In the small office or home office environment, communication between and management of a small sales team is easier.The founder can often be the chief sales officer, and will be very close to any additional sales people. Dealmaker is a software-as-a-service offering, and as such has a low up-front and affordable ongoing investment for the embryonic sales team. Dealmaker provides full opportunity management and account planning systems, housing the sales methodology and sales process best practice. It is also equipped with full deal analysis, performance analysis, coaching, deal alerting and virtual learning components. Since Dealmaker is accessed via theWeb, this also means that any geographically dispersed team members can also stay close to opportunity and account management activity, as well as deal and performance reporting.
  8. 8. Share this White Paper! Copyright ©TheTAS Group. All rights reserved. 7 TransitioningYour Growth Ages and Growing the Business with Dealmaker As companies grow their business, they follow a step-like graph as their circumstances change and they invest and prepare for the next phase of their existence, so that they can reap the benefits of their new size and reach. Sometimes these step changes in growth can seem more like mini- chasms, each needing to be successfully negotiated if the organization is to remain competitive, cash-rich and profitable. Against this background of major distractions and shifting business pressures, sales organizations have to continue selling and keep the business flowing in. They can’t afford to take a couple months off while things get sorted; the pressures to bring in revenue, improve performance, and accurately forecast demand for their products and services, are relentless. Dealmaker can help with these transitions. As the sales organization transitions from SOHO to small-to-medium business, a major issue is capturing the sales knowledge and experience of the founding sales people. Dealmaker is the perfect vehicle for this. For companies moving from small- to-medium status to mid-tier company, communication between all members of the wider selling teams becomes a major pressure, as does the need to bring consistency and standardization to selling processes and terminology. Dealmaker provides the glue to make this happen. Mid-tier companies making the leap to fully-fledged enterprise face major logistical hurdles aligning large teams that are focused on one very large opportunity or account. Dealmaker allows the enterprise to insure its teams are fully engaged and informed on the activities. Dealmaker grows naturally as the sales organization grows, and adding users is straightforward and cost effective. Furthermore, Dealmaker andTheTAS Group’s change execution process allows the bourgeoning organization to bring on, train and ramp up new or merged sales staff on a continuous basis, to support the constantly changing workforce. Dealmaker and the Enterprise Dealmaker enables all the major engines of a successful sales organization – sales teams, sales leadership, sales operations and training – to perform at their maximum level. It is specifically designed and configured to help sales people to sell smarter and sales leaders to manage their business better. Dealmaker is completely configurable to the enterprise’s business model, and will support the automation of and reporting on several different sales processes. The platform also enables the enterprise to see across its entire global addressable market or global accounts, for account planning and deal optimization. Dealmaker can easily be extended beyond the sales organization to all other areas of the enterprise, to enable non-sales divisions to be better informed by and better support the activities of the sales organization. TheTAS Group works with some of the world’s most admired sales organizations, and from this experience has developed a successful blueprint for enterprises to build their own world- class global sales academies and sales performance initiatives. This blueprint includes the development of a custom‘success charter’to help the enterprise think about how they will measure both financial and behavioral benchmarks of success for their programs. We also guide enterprises through our proven change execution process, and provide additional consulting around project management, governance, sales process optimization, and opportunity and account reviews, channel management programs, and a range of other services.
  9. 9. Share this White Paper! Copyright ©TheTAS Group. All rights reserved. 8 Salesforce PlatformeLearning Coaching Methodology Analytics IntelligenceKnowledge Virtual Learning Onsite Workshops Success Checkpoints Customer Success Charter Change Execution Process EDUCATION SERVICES SUMMARY Sales organizations come in different sizes and phases of maturity, which we define as the four growth ages: SOHO, small business, mid-market, and enterprise. The growing sales organization is subject to a changing canvas of business pressures, and as it grows it must define and execute its evolving requirements in a range of areas, including sales skills, methodology, process, marketing, management, coaching, compensation, development, technology, adoption and reinforcement. As such it is constantly in the change management business. The Dealmaker sales performance automation platform brings together sales methodology and sales process for sustained and predictable revenue growth. Dealmaker customers come from all 4 growth ages and Dealmaker is adept at fulfilling the sales productivity and reinforcement requirements of companies of all sizes. Dealmaker can also be a long-term partner for the sales organization as it grows out of and into the various procedures and technologies that support the business. If you wish to find out more aboutTheTAS Group’s sales performance offerings, or anything else discussed in this White Paper, please contact us at info@thetasgroup.com. Recommended further resources: • TheTAS GroupWhite Paper – Sales Considerations During Mergers • TheTAS GroupWhite Paper –When Companies ComeTogether • Dealmaker Genius – Generates customized sales processes in a matter of minutes • Dealmaker Index - Evaluates your company’s sales process, as well as your own, so you can see how they stack up against others.
  10. 10. ABOUTTHETAS GROUP TheTAS Group helps progressive sales organizations increase their sales velocity resulting in higher win rates, bigger deals, shorter sales cycles, and more qualified deals in the pipeline. Our unique value is deep methodology embedded within intelligent Dealmaker software, 100% native in Salesforce. Smart coaching, delivered just-in-time, improves sales performance and accelerates sales results.We have changed the paradigm of improving sales effectiveness from traditional sales training to delivering sales methodology and insights when and where the sales person is working a sales opportunity. For more information visit www.thetasgroup.com Copyright ©TheTAS Group. All rights reserved.This briefing is for customer use only and no usage rights are conveyed. Nothing herein may be reproduced in any form without written permission ofTheTAS Group.

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