Professor Frank Cespedes sits down to talk to Brian Kenny about his new book Aligning Strategy and Sales: The Choices, Systems, and Behaviors that Drive Effective Selling about why it’s imperative that a company’s sales force inform its strategy.
“The Business” is an official production of the Harvard Business School. We publish twice monthly, and you can find all interviews at www.hbs.edu/thebusiness. Subscribe to “The Business” on iTunesU or SoundCloud.
Listen to the interview and read the full transcript at Harvard Business School.
Firms in the United States invest three times more in selling than advertising, 20 times more than online media and 100 times more than social media, according to research presented in a 2013 Harvard Business Journal article. In fact, the money spent on sales training is often the biggest learning expense in firms, fragmented across branches, business units and functions.
Worse, it’s getting more expensive. Due to big data and analytical tasks facing many sales forces, productivity ramp-up times have increased. Each new sales person now represents more spending and more time that has to be devoted to training. Further, even in a recession, sales turnover averages 25 to 30 percent annually, according to research done by industry research organizations Chief Sales Officer Insights. At many firms, that means the equivalent of the entire sales force must be replaced and trained every four years or so.
It’s never been more important to get the most from sales force investments. The following “do’s” and “don’ts” for CLOs focus on sales tasks and behavioral goals to maximize learning ROI and minimize retention issues:
Read the full article on Chief Learning Officer (CLO).
For many years Document Security Management (a pseudonym) had a thriving business in retrieving and shredding or securely storing organizations’ documents. Executives and their assistants loved its one-stop-shopping value proposition, and the sales force cultivated deep relationships with them. By the early 2000s, however, it was clear that cheaper digital storage technology, especially the cloud, would disrupt the company. So DSM introduced its own cloud-based storage and directed the sales force to bundle it with traditional services.
The results were disastrous. Many of the salespeople lacked the technical knowledge to work effectively with clients’ IT departments. Pricing was a problem, because the physical and digital services had very different cost structures. And in spite of being trained to bundle offerings—a key to the new strategy—reps often sold only the lower-priced, digital service. Contract renewals for traditional services fell sharply, as did profits. DSM modified its sales compensation plan, but then digital sales dipped; meanwhile, new competitors began signing clients. Ultimately DSM spun off its digital unit.
What went wrong at DSM goes wrong at many companies: Management embarks on a strategy without considering the realities facing the people who must execute it with paying customers.
Read the full article in the Harvard Business Review.
Listen to the HBR IdeaCast.
When CEOs look to the VP of sales for a report on the latest results, volume and growth are the usual metrics discussed. But these two points don’t necessarily link sales with strategy. That requires better metrics, for a variety of reasons.
Read the full article on Chief Executive.
Online book discussion site Goodreads just released its list of recently published books for its users this month.
As it has done for the past few months,National Jeweleragain has sifted through the virtual stacks to find a handful of recent releases that may be useful to business owners, including a book about closing the gap between business strategy and sales efforts, looking beyond the obvious to find the information needed to make critical decisions, and how to regain lost minutes and hours from “time bandits.”
Read the full article on National Jewler.
You know they’re important. HR is on your case about getting them done. But, they’re time consuming, uncomfortable, and disorganized. And as a manager, you have more important things to focus on right now.
We’re talking about the dreaded performance review.
They’re among the most underused levers for affecting behavior in most organizations. Reviews encourage people to play by the company rules, stop bad habits, set priorities, and clarify accountabilities owned by the rep versus the manager or the firm. Doing performance reviews well reinforces effective leadership skills.
I recently published my new book, Aligning Strategy and Sales, and its entire tenth chapter focuses on performance reviews. Pulling from that section, here’s a guide for what to do before, during, and after the review.
Read the full article on HubSpot.
An estimated 85 percent of companies in the United States use incentive plans, accounting for approximately 40 percent of total sales compensation. That’s a lot of money and managerial effort. Yet in a recent survey of 700 firms by CSO Insights, 20 percent reported that their compensation plans had “minimal or no impact on selling behavior,” 12 percent said they “do not know” about the impact of their plan and only 8.9 percent found their pay policy “consistently driving precise selling behavior.”
One reason for disconnects between incentives and salesperson behavior is that, in many firms, the people designing pay plans do so according to an obsolete vision of sales tasks. There’s no such thing as effective selling if that selling doesn’t link toyour firm’s strategy. To bridge this gap, businesses should adhere to the following when designing their compensation plans…
Read the full article on Business 2 Community.
This week sees the publication of a new book I want to bring to your attention. It’s by Frank Cespedes, a professor at Harvard Business School, and an old friend from our mutual consulting days. The book is called Aligning Strategy and Sales, and it might have been called “The Massive Business Gap Sitting Right Before Your Eyes.” To use an overly simple athletic metaphor, the handoff from strategy to sales is the source of a great deal of lost value.
I hesitate to call it a revolutionary book – but you haven’t seen anything like it. It’s very important. Especially for those of you in sales, I recommend it.
Read the full interview with Charles H. Green on the Trust Matters Blog.
The equivalent of an entire sales force is replaced at many firms every four years, so it’s critical that go-to-market initiatives remain tied to strategic goals. Frank Cespedes explains how in his book, Aligning Strategy and Sales.
Too often, there’s a huge gap between a company’s overall business strategy and the way its salesforce operates in the field. In fact, says Frank V. Cespedes, articles and books about strategy rarely take sales into consideration at all.
“Everybody talks about the importance of talent management,” says Cespedes, a senior lecturer in the Entrepreneurial Management unit at Harvard Business School. “But far fewer confront a basic fact: Companies typically spend much more money and hire many more people, annually, in their sales function than they do anywhere else in the firm. At Google and Groupon, for instance, a higher percentage of employees work in sales than engineering or data mining. And at Facebook the salesforce’s ability to translate ‘likes’ into advertisers will make or break that company’s valuation and fortunes going forward.”
Read the full article and an excerpt from Aligning Strategy and Sales on Harvard Business School Working Knowledge.
That gap between your company’s sales efforts and strategy? It’s real – and a huge vulnerability. Addressing that gap, actionably and with attention to relevant research, is the focus of this book.
In Aligning Strategy and Sales: The Choices, Systems, and Behaviors that Drive Effective Selling, Harvard Business School professor Frank Cespedes equips you to link your go-to-market initiatives with strategic goals. Cespedes offers a road map to articulate strategy in ways that people in the field can understand and that will fuel the behaviors required for profitable growth.
Enter this week’s MarketingSherpa Weekly Book Giveaway for a chance to win a copy of Aligning Strategy and Sales.