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Here are Three Root Causes
Every Senior Executive Needs to Know
by Michael J. Webb
Improvement in sales productivity doesn’t grow on trees. Once you understand what is really involved, the causes of statements like these jumps out at you:
- Company President: “I really like the new sales process you helped us design. Now, I expect my Sales VP to implement it. After all, I pay him enough.”
- Director of Marketing: “I understand how the Voice of the Customer (VOC) could help us improve product development, customer satisfaction, and retention. However, what does VOC have to do with sales conversion?”
- CRM company executive: “The sales process in most B2B companies is quite rudimentary. Yet, when we show the Sales VP what our system can enable them to do, their eyes glaze over. Why is it like pulling teeth to get them to see the value of this?”
- Sales training executive: “B2B companies pay to train salespeople, and yet they resist buying reinforcement training for sales managers. Why can’t they see this is the reason training doesn’t stick?”
Functional Silos = Wrong Standards
It is a good thing that companies organize themselves around separate functions. After all, the talents of marketers, sellers, and servicers really are different.
The problem occurs when those functions become and end in themselves, rather than something the customer values. A healthy company is a system whose purpose is to help customers solve their problems.
The functional mindset gives middle managers the wrong standards for what is good and what is bad. It focuses on the parts, irrespective of the whole. That’s why companies can’t help turning out products no one wants, brochures no one reads, proposals no one buys, and customers whose problems are not solved.
Years ago, Japanese companies began beating American ones at the manufacturing game. The Japanese approach (sometimes called “Lean Kaizen”) provided a better framework for deciding what is good, and what is bad in a production system. Good means:
- The customer will pay for it (i.e., it creates value for the customer)
- We can make money doing it (i.e., it creates value for us)
Lean means everything in the system is judged against these standards. Kaizen means everyone in the company works to continuously improve their performance.
Under this system, functional silos are replaced with production systems. Those production systems are continually revised to increase quality, and reduce inventory, lead time, and cost.
In Lean Kaizen, functional excellence is placed in service of a process that creates what a customer will pay for.
What Does Lean Kaizen Have to do With Sales and Marketing?
Everything. You cannot improve sales productivity until you learn to see marketing, selling, and servicing (find-win-keep) as a production system. Manufacturing executives know their managers need leadership and training to travel along the “Lean Kaizen Journey.” They know that until managers “learn to see” waste (i.e., what is bad vs what is good), problems remain unseen and unchallenged.
What we “see” is filtered by our assumptions, especially as you get farther away from the action (called “gemba” in Japan, “the place where truth is found”). Wrong assumptions are an occupational hazard of senior managers, who live far from the daily work, whether it is on the factory floor or in the customer’s office.
Most people in sales and marketing organizations can sense that their business is not designed very well. Many have good ideas about how to improve. Unfortunately, with no recognized standard for what creates value and what is waste, it is difficult to collectively “see” the waste. Who’s opinion counts the most?
Salespeople make their own decisions and move on. They are not empowered to make big changes.
Three Root Causes of Low Sales Productivity
Getting to the bottom of this problem requires beginning at the beginning: What are the undesirable results? What data and evidence exists? What are the potential causes of these undesirable results? Working out cause-and-effect diagrams with sales and marketing organizations typically produces root causes such as.
- We have no production measurement system to tell us what needs to be improved in sales and marketing (because management didn’t know we needed one).
- Almost no standard work is defined across the find-win-keep system (because management didn’t understand the value of it).
- We don’t really understand what the customer wants (because management hasn’t prioritized VOC, and doesn’t know what to do with the information).
To some degree, these roots causes are common to most companies, especially in North America. They are great places to start improving, because they don’t cost anything. They are primarily educational and cultural, which means they won’t change overnight. However, they provide valuable insight for executives who want to overcome barriers to improving sales productivity.
For example, consider the the statements at the beginning of this article:
- Company President: “I really like the new sales process you helped us design. Now, I expect my Sales VP to implement it. After all, I pay him enough.”Should the sales department alone be accountable for its results? Could there be marketing or servicing factors that get in the way?
- Director of Marketing: “I understand how the Voice of the Customer (VOC) could help us improve product development, customer satisfaction, and retention. However, what does VOC have to do with sales conversion?”If the marketing department doesn’t know what qualified prospects want (VOC), or where to find them, how can they help the sales department lift results?
- CRM company executive: “The sales process in most B2B companies is quite rudimentary. Yet, when we show the Sales VP what our system can enable them to do, their eyes glaze over. Why is it like pulling teeth to get them to see the value of this?”If people don’t understand the value of standard work, and have no measurement system, how can they possibly benefit from a CRM system?
- Sales training executive: “B2B companies pay to train salespeople, and yet they resist buying reinforcement training for sales managers. Why can’t they see this is the reason training doesn’t stick?”If the company does not have data indicating what systemic issues are causing current sales performance and productivity, how can any initiative, such as sales training (or anything else) be any better than a shot in the dark?
How to Improve Sales and Marketing Productivity
Once, early in an engagement, an intelligent sales VP said to me “The rest of this company thinks making the sales numbers is the sales department’s problem. If we can’t get them to recognize that they have to change as well, this isn’t going to work, and we’re going to get the blame again.”
Sales VPs (or Marketing VP, or even the Servicing VPs) who attempt to improve their processes on their own can’t help but threaten the functional status quo. Without senior executive leadership their functional peers will eat them alive. (It is the same in manufacturing organizations, by the way!)
Your team must begin at the beginning: they must be lead to identify the undesirable results, find evidence and root causes, and begin fixing them one by one.
What do you think about this? Have you seen these things in your organization?
Dec 15, 2009