Sales Leadership Linking Sales Strategy To Sales Results


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Sales Leadership Linking Sales Strategy To Sales Results

  1. 1. Sales Leadership: Linking Sales Strategy to Sales ResultsBy: Victor R. Buzzotta, Ph.D., and William E. Beane, Ph.D.For many organizations, the link between sales strategy goals and sales force execution is often missing.Steps to ensure that execution actually supports the sales strategy must include: clear communication ofthe sales strategy goals throughout the field sales force, accompanied by multilevel management support offield sales management; accountability for achieving the goals; and objective tracking of results. “When all is said and done, too often, much is said and little is done.” — AnonymousS ales executives must coordinate a myriad of factors in 5. Do the sales organization’s leadership policies and actual order to successfully reach their desired market. To practices support the effective execution of mission- name a few, they must have a product or service that critical sales behaviors?meets customer needs and quality standards, is competitively 6. Do salespeople understand how their sales practices andpriced, and has adequate distribution. behaviors make possible the achievement of the organi- The sales executive has little direct control over most of zation’s sales strategy?these important factors. What the sales executive does 7. Is there a mechanism in place to track progress towardscontrol is how effectively the organization’s sales force sales goals that will ensure accountability for, and adher-“touches” and influences the customer. The sales executive ence to, sales practices and behaviors?can ensure that the field sales force has all the capabilitiesand resources to sell to potential buyers. Figure 1 gives an overview of our sales leadership model: Let’s see how this can be done. On a periodic basis, organizations establish marketplacestrategies and expected sales goals. These may range from Figure 1: Sales Leadership“launch new product X” to “maintain margins on productY” to “open and penetrate new market Z” to “build market Organizational Strategyshare for product A.” These overall organizational sales goals need to be linked Sales Strategy Articulationsto specific customer sales targets for each salesperson in thefield. This requires active and effective sales understandingand leadership to make certain that no disconnects occur Sales Capabilities to Executebetween the overall sales goals and specific execution by thefront-line salesperson. Which Link Planning & Deployment Back to . . . Here are seven questions that address areas in whichdisconnects may occur: Sales Executive Support and1. Is there a clear link between the overall organizational Leadership strategy and the sales organization’s specific sales strategy? Salesperson Understanding &2. Is the sales strategy known and understood throughout Commitment the sales force?3. Does the sales force (sales managers and salespeople) Ensuring & Measuring Outcomes have the capabilities required to execute the sales strategy? Sales Results4. Does the sales strategy form the foundation for planning and focusing sales resources at field level?© Psychological Associates®, Inc., 2008 1
  2. 2. Let’s examine each of these seven factors in more detail. them meaningful and understandable to others in the organ- ization.3 Our own research has shown that even when a sales1. Is there a clear link between the overall organizational strategy has been defined, the knowledge and understanding strategy and the sales organization’s specific sales of that strategy can vary widely throughout the organization. strategy? It can even vary between levels within the sales organization. The sales organization’s sales strategy must be a direct out- For a sales strategy to be understandable, it must be moregrowth of the overall organization’s strategy objectives. The than an opaque table of projections, forecasts, and numericalsenior sales executives must meet and develop a clear set of estimates. It must be a clear articulation of what the salestheir organizational sales goals in complete alignment with force is charged with doing, and communicate the reasonthe organization’s strategy. They must clearly identify not accomplishment of that charge is critical to the organization.only specific sales strategy goals but also the priority of each We often find that the “what” is not completely clear, andgoal. the “why” is often non-existent. Unfortunately, there is Our research with sales executives has indicated that there frequently an assumption at the senior level that says, “Theyare five primary business drivers that help define the sales should understand why this is important.”strategy goals for a growth-minded organization.1 They are: 3. Does the sales force (sales managers and salespeople)A. Growth via Customers: Acquiring new customers for have the capabilities required to execute the sales present products and services. strategy?B. Growth via Products & Services: Introduction of This question should move the organization’s focus to new products and services to either new or existing ground level. Does the sales force have the skills and knowl- customers, cross-selling opportunities. edge to effectively execute and achieve the organization’s specific sales strategy goals? Capabilities within these threeC. Growth via Market Expansion: New end markets and areas should be assessed. (Examples taken from published market segments, vertical and/or horizontal expansion of assessment tools will be cited for illustration.) current markets into new areas. A. Capabilities of the salespeople.D. Growth via Profitability: Margin management, focus on high-margin products and services, cost of sale B. Capabilities of the first-line sales managers. control, increased ROI/ROWC. C. Senior sales management’s commitment to provideE. Growth via Brand-Building: Product/service/channel/ necessary support for the field sales force. sales force differentiation in new or existing markets. A. Capabilities of salespeople Even when the senior team feels it has already defined its Most organizations have salespeople who do “all the rightsales goals, reviewing them in terms of these five categories things.” Our research and experience indicate that sales-often helps it to further clarify and prioritize them. The people dress appropriately; they know their product orresult of this process enables the rest of the sales organization service; and they know their customer, the marketplace, andto determine steps to take, such as creating ideal customer competition.profiles, selecting prime customer targets, and developingstrategies for selling to key customers. Most capability gaps occur in interpersonal skills, such as, “ability to develop product/service solutions for different If the organizational strategy is clear, sales strategies and customer needs,” “effective management of customer objec-goals can be derived and developed from the organization’s tions and concerns,” or “adapting the sales approach tooverall direction. As John Byrnes has noted, “All companies customers’ behaviors and personal needs.”have business plans, but often these plans, which featuremainly company and market analysis, sets of programs and The ability to interface with the customer is vital. Thesenumbers, are not adequate to guide a sales force.”2 All too people skills often are a major differentiating factor amongoften, complex business strategies end up being communi- salespeople. Gaps between current capabilities and thosecated simplistically as “Sell more!” required by salespeople to reach the sales strategy goals call for developmental efforts.2. Is the sales strategy known and understood throughout the sales force? B. Capabilities of first-line sales managers While most organizations have articulated some form of a It is ironic that this group, which research indicates issales strategy, it has not always been communicated effec- pivotal in achieving the organization’s specific sales strategytively to the rest of the organization. Research has deter- goals, is frequently left out of the sales execution equation.mined that 35 – 40% of organizations do a poor job of Often, the first-line sales manager acts as an administrativecommunicating the strategy and goals in a way that makes arm of more senior management. Little value is placed on© Psychological Associates®, Inc., 2008 2
  3. 3. close salesperson coaching skills. Yet, research indicates that salesperson and customer, make or break even well-madethis manager’s ability to guide and support the salesperson’s plans. In order for sales managers to play this day-to-dayselling practices is a vital part of ensuring sales success. role, they must assess and coach individual salespeople in their sales executions with key customers. Goals and Desirable interpersonal coaching capabilities include: expectations must be clear and unambiguous.“effectively motivating and inspiring salespeople by under-standing their needs and aspirations” and “coaching the These expectations will encourage coaching and dialoguesalesperson on more effective ways to interface with the cus- between sales managers and salespeople. This process gainstomer.” Even seemingly administrative tasks can require salespeople’s commitment to what they need to do to achieveexcellent coaching capability. Examples include “ensuring both individual targets and overall sales strategy goals.that salespeople have the necessary resources and tools to This type of leadership and one-on-one planning is ofmaximize selling effectiveness” and “gaining commitment to utmost importance. It is what moves the sales force fromcompany directives, programs, and initiatives in order to talk to action. As Pfeffer and Sutton state, “Related to themaximize the achievement of sales strategy goals.” mission and vision problem is the planning problem. Just asC. Commitment level of senior sales management people confuse talk with action and mission statements with reality, they frequently confuse having a plan and doing The senior executive group must be committed to the planning with actually implementing the plan and learningsuccess of the field sales force in executing the strategy. The something. There are file cabinets in organizations filledgroup must make certain that its policies and communica- with plans and strategies that remain unimplemented.”6tions actively support field execution. Without successfulexecution, efforts are often superficial, incomplete, and do 5. Do the sales organization’s leadership policies andnot work. It must “walk the talk.” As Pfeffer and Sutton actual practices support the effective execution ofhave pointed out in The Knowing-Doing Gap, “One of the mission-critical sales behaviors?main barriers to turning knowledge into action is the A small sales force may have only one sales manager ortendency to treat talking about something as equivalent to head of sales. Larger sales organizations have multiple levelsactually doing something about it.”4 of management spread out geographically, often across Senior management must answer questions, such as: “Are continents. Regardless of size, the connection between salessales managers recognized and rewarded for developing and strategy goals and the sales leadership at a first-line level is ofcoaching salespeople?” “Is hands-on observation, coaching, utmost importance.and development of salespeople by sales managers given a One must ensure that sales strategy goals, roles, expecta-high priority in a sales manager’s job responsibilities?” tions, support, and accountability remain aligned and ex-“Does the job structure and specified responsibilities for sales ecuted as one moves down through levels to the first line.managers allow adequate time, attention, and resources for This requires close initial scrutiny and constant monitoringsalesperson coaching and development?” as to whether all levels are “walking the talk.” Senior man- Comparisons of the answers to these questions received agement, particularly, must be open and candid about cri-from senior sales executives, as well as salespeople and their tiquing its role and responsibilities in setting the tone andsales managers, will uncover whether the groups agree that modeling accountability for all other levels.senior management will support their field sales efforts. To elaborate, it is the job of first-line sales managers to4. Does the sales strategy form the foundation for clarify expectations, provide necessary coaching and manage- planning and focusing sales resources at field level? ment support, and hold salespeople accountable for achiev- ing sales objectives. The next level of sales management must This is another critical step in executing a sales strategy then be doing the exact same thing for first-line sales man-that is too often not a reality. John Byrnes notes that, agers. They need to know that providing expectations,“Effective business plans have three essential roles: first, to support, and accountability for their people is a centralstate clearly the company’s objectives; second, to specify new expectation of their role. In addition, they also need theinitiatives, required resources, and expected results; and support of their managers, as well as managementthird, to guide the day-to-day activities of the company accountability.toward maximum profitability. In most companies, the firstobjective is usually met, the second is sometimes met, and the This alignment of expectations, support, and account-third is often neglected. When this occurs, it causes the sales ability extends from the sales head, down through all levelsforce to be disconnected from profitability.”5 of management, to the line salesperson. If at any level expec- tations, support, or accountability are missing, execution Final implementation must always occur at ground level of begins to falter and alignment of activities with strategy thenthe sales organization. What happens between sales manager becomes problematic. This cascading chain of leadershipand salesperson and, finally, what happens between responsibility is critical for sustaining the clear line of sight© Psychological Associates®, Inc., 2008 3
  4. 4. and linkage between sales strategy and eventual execution. 7. Is there a mechanism in place to track progress towards sales goals that will ensure accountability for, and 6. Do salespeople understand how their sales practices adherence to, sales practices and behaviors? and behaviors make possible the achievement of the Once we have clarified what sales practices and behaviors organization’s sales strategy? are critical to achieving the desired sales results, a mechanism The answer to this question demonstrates the need for is needed to ensure that they are being effectively executed sales leadership at all sales management levels, but particu- across the sales force. larly at the first line. Our research has validated that clarity in expectations is essential to performing well in any en- Fortunately, the same performance system used for setting deavor. Unfortunately, clarity is often lacking. expectations and planning actions can also be used to track goal progress. This final element in our system can be used In a 2005 study, performers were asked what one addi- in an ongoing way to ensure that salespeople and sales man- tional management action would be most helpful to them in agers do what they say they will do with key, high-potential improving their personal performance. customers. The most often mentioned item was “A clear understand- In Conclusion: ing of what is expected of me.”7 In a similar fashion, research on performance expectations has established that while first- The path from setting sales strategy goals to obtaining line managers claim that they give clear, set performance measurable sales results requires support; commitment; expectations 84% of the time, their direct reports say this accountability; execution; and, most of all, leadership. The occurs only 39% of the time — a huge gap.8 majority of leadership and execution behaviors described call for perspiration, not inspiration. This gap occurs for several reasons. At least two are related to sales cultures. First, since most salespeople have a sales The task of providing a compelling and strategic sales quota for a given period, it’s easy to assume that “everyone strategy, of gaining commitment to it, and of keeping people knows what’s expected of them.” engaged as they move toward achievement is not esoteric. It does require discipline and effort. The payoff, however, can Of course, the problem is that the sales quota does not be substantial. The writers believe that any organization can specify what prospects should be pursued, which accounts achieve a competitive advantage by keeping a laser-like focus should be selected, what criteria should be used for qualify- on implementing the common sense steps described in this ing prospects, what products/services should be emphasized, article. etc. These are the expectations that really align activity with strategy goals, not simply quotas. Two measures help to ensure that expectations are in line Victor R. Buzzotta, Ph.D., is Co-CEO of Psychological with the defined organizational sales strategy. First, clarity is Associates. achieved by using the SMART criteria for goal setting. Most organizations are familiar with these. They specify that expectations should be specific, measurable, achievable, William E. Beane, Ph.D., is Senior Vice President, Client realistic, and timely. Second, by using an online performance support system in which salespeople can enter goals and Services for Psychological Associates. action plans, both sales manager and salesperson can jointly track and monitor progress towards goal achievement. For more information on our programs and services, call Performance research has also confirmed that expectations Psychological Associates, Inc., at (800) 345-6525 or which are defined and tracked are far more likely to be (314) 862-9300. achieved. This moves us closer to execution of a successful sales strategy.9 Discussion of a computer-based goal tracking system brings us to the final critical link in our system, ensuring outcomes.1 Yoli, B., Personal Communication, “Sales Executive Research,” 2004, Psychological Associates, Inc.2 Blessing & White, “International Employee Engagement Survey,” 20053 Byrnes, Jonathon, “Reconnect Sales Management to Profitability” Harvard Business School, Working Knowledge Newsletter, 20044 Pfeffer, J. & Sutton, R., The Knowing-Doing Gap, Harvard Business School Press, 2000. P.305 Byrnes, op. Cit.6 Pfeffer & Sutton, op. Cit.7 Blessing & White, op. Cit.8 Beane, William, Engaging Performance: A Performance Leadership Handbook, 2005 (In Press)9 Jimenez, R., Personal Communication, Vignettes in Training, Inc.© Psychological Associates®, Inc., 2008 4