It’s that time of year again: the dreaded performance review. While this practice is key to getting teams to set priorities and clarify actions, managers (and employees) often treat it as a make-work task instead of a productive conversation. Perhaps it’s no wonder then that companies worldwide deliver just 50 to 60 percent of the financial performance their strategies promise due to a noticeable gap between their goals and employee behaviors. To mend this gap and create real impact for 2015, it’s time for both parties to make this process an actionable dialogue. And they can start by avoiding these seven mistakes…
Frank sat down with Linda Richardson of Top Sales Magazine to discuss “Translating Strategy into Sales Behaviors That Win.”
It’s tough for people to implement what they don’t understand. Communicating priorities to the front line, especially salespeople, is highly correlated with business performance. Conversely, this “middle ground” is where strategy execution often breaks down. Yet, many executives resist making strategy explicit. The most common reason is fear that this information will get to competitors. As a consequence, the organization tends to become a “global mediocrity”: good at many things, but not very good at any particular things. And the essence of strategy is being excellent at things your customers value and competitors find hard to imitate.
First, let’s address the issue of competitors “stealing” your strategy. The strategies of successful firms are usually well publicized. How many books, blogs, and case studies get written about Apple, IKEA, Nike, Southwest Airlines, and others? For decades, Toyota has allowed outsiders to study its factories on-site. This may increase knowledge of operations (which is not the same thing as strategy). More often, as a 4-year study of Toyota’s production system concluded, “observers confuse the tools and practices they see on their plant visits with the system itself.” In a world with a global infrastructure of consulting firms and others paid to disseminate information, confidentiality as a reason not to articulate and communicate strategy is both myopic (the information is just not that hard to acquire) and often beside the point (you have bigger things to worry about than competitors reading your strategy documents if your people don’t know your strategy and therefore can’t execute it well).
Business strategy is about the choices a company makes in its attempts to compete in a market. Some choices are explicit. They’re put in a plan or discussed at meetings. But many are implicit in the decisions made, often without thinking of them as strategic, in the flow of running the business or on a project-by-project basis. This includes the hurdle rates used to evaluate capital requests and the questions you’re expected to ask and answer when you propose an R&D, marketing, operations, or sales initiative.
The gap between your company’s sales efforts and strategy can be a huge vulnerability, says a new book. But there are ways to link your go-to-market initiatives with strategic goals.
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 this two-part interview.
Excited to announce “Aligning Strategy & Sales” is in the running for the Top Sales & Marketing Book of 2014. To cast your vote, please take a minute to click on the link below. Appreciate your support in advance!
“Aligning Strategy & Sales” was named to the 800-CEO-READ Business Book Awards Longlist as one of the best sales books of 2014.
Putting the right team on the field is crucial, especially in sales, where differences in individual performance are greater than in other functions. Studies in B2B contexts find that rep performance in similar territories often varies by 300 percent, while in retail stores selling productivity typically varies by a factor of three to four. In other words, there are salesstars in many firms.
But focusing on hiring only “the best,” as many firms say they do, is not the best approach, for multiple reasons. Given the time and management resources required, most firms just can’t afford to hire stars in all sales positions. When firms are polled about their recruiting criteria, over half say they look for “selling experience within the industry.” This means that you and your competitors shop first among each other’s stars. And research indicates that stardom is not easily portable, especially in sales. Sales tasks are determined by your strategy and target customers, and selling behaviors are heavily influenced by your control systems and culture. Those are firm-specific factors. When you hire a star, or when a competitor hires one from you, that salesperson leaves all of that behind.
The truth is, you’ll never have enough stars for all positions. In fact, you don’t want stars in all sales jobs. In any sales context, some activities exhibit high performance variability but little strategic impact. Others may be strategically important but exhibit little performance variability – because the tasks are standard, because your firm or industry has reduced variability, or because your business model simply limits the bandwidth of performance variance. Think about the difference between sales personnel at Nordstrom, where personalized service is key to strategy execution, versus Costco where low price and product availability make selling activities less complex and variable.
Perhaps it’s time for a re-think of “Death of a Salesman.” After two decades of talk about the “new economy” and the “disruption” of certain professions by the Internet, you might think that sales as we know it is as stale and outdated as Willy Loman — a function that has been “disintermediated” by the digital revolution.
In fact, reports of the death of sales are not just exaggerated; they are wrong. To paraphrase a line from Arthur Miller’s play, “Attention must still be paid.” The sales force remains a force. True, the digital impact on business has been significant and, in some industries, revolutionary. But companies that view sales as just part of the plumbing do so at their peril.
Strategy has shrunk. For many firms and even for some prominent strategy consultants, the concept is now nothing more than “just-in-time decision making” or “a few critical initiatives” or other variations on “adaptability.” Driving this view is a set of assumptions: that making and integrating strategic choices “assumes a relatively stable and predictable world,” and that the speed of information flows and change in our high velocity world makes a search for sustainable advantage an ephemeral exercise that’s not worth it.
Forget, for a moment, the paucity of data supporting these assertions and the evidence that contradicts it. (U.S. Census Bureau data indicate that the average age of businesses is increasing and that new-business formation and other metrics of what economists call “business dynamism” have, sadly, been declining for decades.)
Instead, consider: how different are we, really, from what has come before? The idea of information overload was the basis for Alvin Toffler’s pop-sociology book Future Shock in 1970. That’s a few business generations ago: think mainframes with spindle cards, Nixon, and gas guzzlers; your parents were probably younger then than you are now. You can look at history too: creative destruction has been the fruitful norm, as Schumpeter emphasized, at least since the steam engine.