This week Likeable Radio embraces the new, with our first ever Meerkat session – fueled by host Dave Kerpen’s passion for the new streaming video app. This week’s guest is Frank Cespedes, a senior lecturer at Harvard Business School who has consulted businesses around the world. He has written over 40 case studies about companies and numerous notes on varios topics. He is also the author of the highly-acclaimed Aligning Strategy and Sales: The Choices, Systems, and Behaviors that Drive Effective Selling. Sold? I thought so!
CFOs play an increasingly integral role within an organization – so much so that Frank Cespedes, Senior Lecturer in the Entrepreneurial Management Unit at Harvard Business School and author of “Aligning Strategy and Sales,” says that CFOs can and should start acting as a catalyst to help integrate roles across C-Suite functions, particularly between the sales and strategy teams. I spoke with Frank to learn more about what CFOs can do to foster these connections.
The gap between a company’s sales and strategy are important now more than ever. While we may or may not be recovering from a lengthly recession, it has been a slippery slope towards recovery for many years. The average S&P company decreased its COGS by over 250 basis points, indicating that the prolonged recession has had an impact on firms. While this seems like a large number, SG&A has increased a percentage of the firms’ total costs. Shifts being made to include customer-acquisition, back office, and supply-chain costs as well as other go-to-market strategies have steered the focus to productivity improvements.
Most executives are surprised by the amount of money that is spent on sales. U.S. Companies spend 3-times their total media ad spend, more than 20-times their spending on all online ads, and 100-times their current spend on social media annually. The greatest point of implementation for most firms is selling yet, research indicates that less than 50% of employees fully understand their firm’s strategy. In relation to sales and service people at companies, the percentage beings to decrease even further. The outlook is not much better at the board level. A 2013 McKinsey survey of 772 directors found that only 34% of those surveyed believed their boards understood their companies’ strategies, proving that it is not only about sales but good governance as well.
Reducing operating costs is a good way to increase profitability. Aligning both strategy and sales has an impact on cost and revenues. Consider how costs and asset-utilization patterns are established in companies, specifically in B2B organizations that account for much of the economic activity in most countries. For the seller in a transaction, an order touches several functions as it transfers from a customer’s RFP or quote to a purchase order, through pre-sale applications, and post-sale services (ex./warranty or field engineering). The sales process continues through nearly all activities. The sales rep generally receives the customer’s questions, complaints, and is the one who interactions with other functions in order to respond appropriately to the customer’s need. Cost management without the proper attention to the relevant procurement and selling process is essentially limited.
Companies typically spend more hiring their sales forces than any other function in an organization, yet sales managers often aren’t adept at assessing the right skills to make good hires. It’s time to turn that around in order to drive better bottom-line results.
If you want people in the field to understand your strategic initiatives and demonstrate behaviors that will drive profitable growth, then there must be a clear roadmap to drive that alignment, says Frank Cespedes, author of “Aligning Strategy and Sales: The Choices, Systems, and Behaviors That Drive Effective Selling.” He discusses the issue with Anita Bruzzese in the second part of this interview that looks at hiring and how sales will be affected by an improving economy.
In the preface to Aligning Strategy and Sales, Frank Cespedes writes; “Selling is, by far, the most expensive part of implementation for most firms… The amount invested in sales forces (including salaries, benefits, and other components of SG&A — selling, general and administrative expenses) is about $900 billion annually. This is more than five times the $170 billion spent on all media advertising in 2012 and more than twenty times the $40 billion spent on all online advertising and marketing in 2013.”
According to Cespedes, 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 Aligning Strategy and Sales, published by Harvard Business Review Press.
Welcome to a Leadership Channel podcast on TotalPicture Radio, with Peter Clayton. Joining Peter for our interview with Harvard Business School professor and author Frank Cespedes is David Dalka, Business Transformation Consultant, Facilitator, and Keynote Speaker.
Frank sat down with Linda Richardson of Top Sales Magazine to discuss “Translating Strategy into Sales Behaviors That Win.”