The fourth sales trend from our 12 Sales Trends for 2017 report explains why we have to embrace complexity in order to have extraordinary sales teams and operations.
As John Lord said: “Perhaps a greater understanding of what I am saying might be obtained by exercising a greater willingness to think more deeply”.
Regrettably, most organisations only view their sales operations as tactical linear functions of the value chain — and while sales teams need to get up close and personal on a tactical level with customers, if sales is only viewed through the overly simplistic lens of “foot soldiers selling products” then these organisation are doomed to fail.
Why has this been the case?
Sales operations are complex variable systems with many moving parts — they do not follow a straight line; smart companies get this. They recognise that oversimplification is their enemy when it comes to developing and deploying effective sales strategies.
However, in a world of soundbites, instant information, and the constant pressure to come up with solutions to someone’s problems, easy answers have the greatest appeal even though these are usually far removed from the best answers. This leads to the proliferation of the oversimplification of complex issues.
Opting for the simple answer can often make matters worse or delay progress to finding and implementing the best solution. Add to this the fact that there are so many people trying to earn a living by coming up with simple solutions to complex problems and a strong picture of oversimplification starts to emerge. And like the siren’s call to a sailor, these become very enticing but ultimately very distracting and dangerous.
When challenged, some sales leaders readily admit that they need a sales strategy. However, the pressure to meet shorter-terms targets and their heavy involvement in day-to-day operational issues (even if these do relate to sales) means that strategy takes a back seat.
More and more, the high cost of selling, longer lead times, a multiplicity of choice, maturing markets, rampant competition and diminishing differentiation, are taking their toll on sales performance. Not only are salespeople being squeezed to produce more sales revenue/volumes, at better margins, but corporate return on sales effort isn’t what it used to be.
The Global Financial Crisis (GFC) kindled the deepest recession in the world economy since World War II. In the midst of the depressed world economy, Australia performed better than other developed countries on nearly all relevant indicators. Sure, our economy slowed, but it didn’t fall into recession (as many others did). And while unemployment rose, it did so by far less than in many other developed economies.
All of this presents a picture that, while more attractive than most global economies at the time, was exceedingly bleak in comparison to the years prior to the GFC.
And while the GFC spurred companies on to make changes in the management of assets, in reducing costs and in improving optimisation of equipment, it somehow failed to spur sales on to make any significant changes or to do anything differently.
In response to the pressures of a decline in demand, the pressure to reduce selling prices (on the buying side), and a push for greater volume at better margin in the face of increasing competition (on the supply side), companies sought to cut costs. Similarly, organisations looked for ways to be more efficient; production, logistics and operations all looked for ways to be more streamlined; and finance pulled back, cut credit lines and reined in spending. However, in the main, sales and salespeople continued to do the same things, with the same processes, in the same way as they always have. If anything, what sales did do was increase its resistance to change. Sales leadership seems to have forgotten that doing the same things, in the same way is unlikely to get a different result.
The major reason for this lack of change is the lack of any exposure to or understanding of sales strategy. This resulted in sales leaders floundering, and uncertain about what approach to take. Subsequently, it forced marketing and corporate strategists to become involved in taking the lead, even though they mostly had little understanding of the very specific focus of sales strategy. And because of this lack of understanding on their part, the solution to all sales problems and challenges was seen as some form of sales training. Once again, the simple solution to a complex problem.
“One big problem is that in business schools, daily practice, and strategic planning, sales and strategy are treated as separate worlds. In academia, there is remarkably little written about how to link strategy with the nitty-gritty of field execution. Few of the many, many books and articles on strategy formulation have much, if anything, to say about the role(s) of a company’s sales channels in executing strategy. In fact, sales advice, if it’s even discussed, usually revolves around a combination of ‘reorganizing the sales force’ and ‘incentives.’” — Frank Cespedes, a senior lecturer at Harvard Business School and faculty chair, in “You can’t do strategy without input from sales”, 27/8/2014
What sales leaders and other managers soon learned, however, was that sales training alone didn’t encourage the changes that could result in improved sales volumes or margins. Nor did increasing (or decreasing rewards), expanding (or contracting) territories, etc.
The reason for these failures was not that they were incorrect, but rather that they were driven more by panic than by strategy. They were motivated by a need to try and get some improvement in sales by a simple solution, rather than looking for a way to improve customer satisfaction.
Sales leaders failed to look at the bigger, more complex picture. It was just easier (and perhaps more comforting) to push for more sales productivity or to cut prices than to step back and re-examine the entire process.
The message is clear. If sales leaders fail to have a clear picture of what they want to achieve, and embrace and manage complexity combined with the courage and conviction to make their strategy real, they are doomed to fail.
Smart companies are already moving away from the oversimplification of the sales excellence industry that has been (and still is) notorious for peddling “silver bullet” solutions over the years.
Instead of searching for the latest app, smart sales leaders and their chief executives are starting with sales strategy — analysing their sales strategy and operations frameworks and assessing all the variables. By examining these aspects as part of a complex system, smart companies are finding they can better manage and lead their sales teams and the whole business.
Taking into account all the variables they ask questions like:
- • What directs the efforts of the salespeople on a sustained basis?
- • What support, resources, skills and plans provide salespeople with the focus they need to be fully effective?
- • What gives the sales force the discipline and sets the standards of behaviour that differentiates one professional salesperson from another, or that reinforces the brand equity the company has invested in creating?
- • What is the optimal size for the organisation’s sales force, and the best way to remunerate, reward and motivate them? And how does one shape the sales force to make sure it is able to best serve customers and prospects?
- • What is the optimal sales structure for the organisation as a whole, for the regions / states and for the branch operations that ensures sales has an unfettered track to follow; that synthesises the sales effort with the organisation’s strategic imperatives?
- • What infrastructure allows salespeople to function at optimal levels without being hamstrung by unnecessary administrative activates, complex management dictates or inadequate information support?
The trend in smart companies is to recognise that selling is much more complex than just getting business (new or incremental), and understanding and working with that complexity will help the organisation and its sales teams to move from ordinary to extraordinary.
Remember everybody lives by selling something.
You can help us (and help yourself)
Small and medium businesses and startups have never needed credible, independent journalism and information more than now.
That’s our job at SmartCompany: to keep you informed with the news, interviews and analysis you need to manage your way through this unprecedented crisis.
Now, there’s a way you can help us keep doing this: by becoming a SmartCompany supporter.
Even a small contribution will help us to keep doing the journalism that keeps Australia’s entrepreneurs informed.