Dismantling the Sales Machine, by Brent Adamson, Matthew Dixon and Nicholas Toman in this month’s Harvard Business Review is a well-timed and well-aimed shot at what has become entrenched “wisdom” in selling today. If you’re in sales management, you should get your hands on the entire article. I would first like to summarize the main points of the article, and then give my own commentary.
The title is a bit misleading. The “machine” they urge to be dismantled is not the sales organization; far from it: sales today is even more important than ever. The machine that should be dismantled is the current sales process. The authors’ first point is that the current fixation on process discipline is broken, and is causing all kinds of woes such as lower margins, longer sales cycles, and less reliable forecasts. The reason is that buyers are engaging suppliers much later in their own process, so that they already have defined their needs and identified available solutions. What remains is a competitive process in which suppliers have little room to do anything but respond as quickly as possible with the lowest possible price. So in order to compete, managers stress strict compliance with sales process and discipline, to give the sales force a chance to respond faster and more efficiently than the competition.
Second, the only way to rise above this squeeze is to change the game by challenging the customers’ thinking and offering unexpected solutions, and this can only be done early in the sales cycle. The emphasis has to go from efficiency of response to the effectiveness of demand creation. While efficiency is best promoted by flowing the shortest distance between two points, there is no one best way to proceed through the sales cycle, so there is a premium on individual judgment and creativity in finding ways to shape the customer’s thinking about the situation.
The hard part, of course, is moving from the first point to the second, and this where sales management has to radically change its approach, in several ways. At the risk of oversimplification, they are:
- First, managers need to learn to let go and become facilitators and coaches instead of enforcers, because salespeople who are smart and adaptable sales reps who have the confidence to challenge their customers will not submit to tight command and control.
- Because insight-based sales require a longer-term focus, managers need to focus on long-term measurable results rather than a short-term focus on activity, and add value by helping reps think creatively about ways to change their customers’ thinking.
- Measurements have to focus on outputs rather than inputs.
- Emotional intelligence, or EQ, is no longer enough. Sales forces have to hire for IQ, critical thinking skills and judgment. Their own research shows that only 17% of current sales reps have the competencies needed to succeed.
- The climate and incentives also have to change. These types of sales reps are not as “coin-operated” as transactional reps; they will thrive in a climate that provides the intrinsic motivations of autonomy and more meaningful purpose.
Commentary
First of all, I agree with and applaud the general theme of the message. I applaud the emphasis on judgment, critical thinking and creativity on the part of reps. In my more than two decades of sales training, invariably the members of the sales force who stand out are those who go beyond the confines of their job description and see themselves as business problem solvers for their customers.[1] Unfortunately, they haven’t always had the support of their management in their efforts, so the fact that an influential publication such as the HBR gave them a forum for these ideas gives me encouragement that—just maybe—life will become easier for these top salespeople, and by extension better for their customers.
At the same time, I don’t agree that sale processes need to go away. In fact, the authors themselves say, ”Our data do not suggest that process and structure are always bad.” (As in their past writings, they set up a strawman that helps them emphasize their points.) Process should not go away, but it does need to be modified. Sales organizations tend to begin with a general, loosely structured set of activities that emerge from successful sales efforts. When these are used as guidelines they are immensely helpful in disseminating effective practices and bringing up the general level of performance. But good processes go bad because they tend to be evolve into tools for management convenience than for sales effectiveness. They gradually shift their focus toward activities and precise inputs because they are easier to measure and track than more vague outputs and customer agreements. Eventually they become ends in themselves rather than a means to an end, particularly when they are housed in those shrines called CRM systems.
But I digress…the article actually advocates its own “new” process, which differs from the old bad process in two ways. First, the sales funnel should be “customer-verified”, meaning that progress in the sales cycle is tracked by meaningful steps taken by the customer, such as running a pilot application or agreeing that status quo is untenable. Second, process activities need to be front-loaded, so that more work is done early to create the right kind of demand, not simply to respond to it when it’s too late to do anything about it.
Finally, I enjoy it when a new publication comes out from this trio of writers, because they actually do a great job of eating their own dog food. Their entire approach to selling is to provide disruptive insights, and I predict this article will toss a few bombs into more than a few boardrooms. Regardless of whether you agree entirely with what they write, they always make you think, and that’s the whole point, isn’t it?
[1] As a student of military history in my other life, I also find it ironic that the US Army learned about the value of putting judgment into the hands of people out in the field long before most sales forces have.
Would you buy what he’s selling?
I generally agree with the premise of challenger selling, that you should be willing to provide sometimes uncomfortable insights to your customers. Sometimes customers don’t know what they don’t know, and you provide value by educating them in ways that they can be better off.
But doing so requires a certain amount of tact, a quality totally lacking from the email I received last night. Here’s the first part:
Jackmalcolm.com Team,
I thought you might like to know some reasons why you are not getting enough Social Media and Organic search engine traffic for Jackmalcolm.com.
1. Your website Jackmalcolm.com is not ranking top in Google organic searches for many competitive keyword phrases.
2. Your company is not doing well in most of the Social Media Websites.
3. Your site is not user friendly on mobile devices.
There are many additional improvements that could be made to your website…
What’s wrong with this message? For all I know, it’s probably true, and I would probably benefit from some of the services this company can offer, BUT…
I’m human, and my immediate reaction to being told I’m doing something wrong is to either defend what I’m doing or to take offense at the messenger. In this case, my gut reaction was a combination of both of those. (Then I was thankful for having a blog topic idea dumped in my lap, but that’s not the main point.)
If you’re going to give someone an uncomfortable truth, you have to prepare them to receive our message, and earn the right to deliver it.
How could he have improved his message so that I would be willing to engage further?
First, make the salutation personal. Some companies make it difficult to figure out who the decision maker is, but it’s obvious from the name of the site to the home page that my web site is about one person, so why not address the email to that one person? The fact that he did not indicates to me that he really didn’t study my site, as he claims later in the email.
Second, begin with a compliment or two. Quite frankly, flattery works. At the very least, it will get me in the right frame of mind to read the rest of the message. He could have said he was impressed by my web site, tossed in one or two specific things he liked about it, and then given me the message about how he could make it even better.
Third, earn my trust. Here’s another part of the email:
Sound interesting? Feel free to email us or alternatively you can provide me with your phone number and the best time to call you. I am also available to meet you in person and present you this website audit report.
PS I: I am not spamming. I have studied your website and believe I can help with your business promotion. If you still want us to not contact you, you can ignore this email or ask to remove and I will not contact again.
There are two things wrong with this. First, if he really had studied my website, he would have known my phone number. He also says if I ignore the email he will not contact me again, but in fact this is at least the second message I’ve received.
There is tremendous value in being able to bring challenging insights to potential clients, but truth is not enough. Truths that are ignored don’t do anyone any good. When doctors have a good bedside manner, their patients are more likely to trust them and follow instructions, as well as less likely to sue them for malpractice. Wise doctors know that it’s not only what you say, but how you say it.
The bottom line for this guy is that he probably just made a sale—for someone else. I’m intrigued enough to consider hiring someone to improve my web site, but it will probably someone else. That’s probably irrational, I know, but then isn’t that how most decisions are made?
I don’t know who came up with the title phrase, but I first heard it from John Hensel, with whom I worked in sales training about 10 years ago. I liked the phrase so much that I “borrowed” it and continue to use it in sales training today.
Does your product create a lust for possession in the buyer’s mind? When a product is beautifully designed, uses amazing technology, and is obviously useful, customers will suspend judgment and line up in the wee hours to have a chance to be one of the first to own one and to show it off to their friends. If you’re selling something like that, all you need to do is to show it off and watch the orders come in. Steve Jobs knew that and that is why his presentations centered around the product itself—and why they were so successful.
The problem is that very few products (and I include services in this broad definition) actually work that way. They may not be exciting, they may be difficult to figure out, their benefits may not be obvious; most of all, they may not look that different from everything else on the market. They certainly don’t create lust in the buyer’s mind.
In fact, most products create the opposite effect: buyers are so wary of being sold that their critical faculties go on full alert. They automatically question all the good things that are said about it and search for reasons not to disrupt the status quo, not to spend money, not to take the risk, etc.
If you have the product with you during the sales call, you will always be tempted to bring it out and show it, or talk about it, too early, like a fisherman jerking the rod at the first hint of a nibble. The instant the prospect drops the slightest hint that they might have a glimmer of interest, like Pavlov’s dogs hearing the dinner bell, you can’t resist jumping straight into our pitch or your demonstration.
Once the product becomes the center of attention, its pluses and minuses become fair game. If you begin talking about the product before they’re thirsty, resistance automatically kicks in, you dig yourself into a hole, and there is definitely no “lust” for what you’re selling.
So, when is the right time to take the product out of the car? When the prospect practically begs you to see it. Just like plain old boring water tastes exquisite when you’re thirsty enough, your job as a salesperson is to make the buyer thirsty. When you have asked the right questions and guided the conversation so that the prospect has told you about their problems and opportunities and has told you that the status quo is too costly or risky to continue—that’s when their minds are receptive to finding out about what you have.
If you’re making a presentation, don’t show the “product” slides until the audience has fully agreed with your description of the need, and every eye in the place is off their devices and focused squarely on you, because they can’t wait to hear how you’re going to make their lives better.
That’s when you are allowed to go get it out of the car, and not a moment before.
What if you could win on every number?
Salespeople are not fragile. It’s well known that resiliency is a crucial prerequisite for successful salespeople. It’s not just the frequency of rejection they face, because when long term results are fairly predictable it’s easy to take short term losses in stride—think of a .300 hitter in baseball. Resiliency is more important because results in sales can be so random and unpredictable. While it’s true that skilled salespeople with a good product at the right price can produce reasonably predictable results, there is still a lot of randomness that is out of their control. Maybe the reputation of their company is damaged because of something someone else does, or a long-time champion moves to a different company, or a competitor introduces a new technology that changes the rules.
Fragile egos don’t hold up for long in the face of such uncertainty. It takes robustness and resiliency. When you’re robust, randomness does not damage you; when you’re resilient, you may be damaged but you quickly recover.
Robustness is not just about a personal mental quality. A full funnel is robust, because it can withstand the shocks of losing deals. Or having a good number of smaller deals as protection in case the “big deal of the year” does not pan out. Not being dependent on a particular industry can also be robust, because you’re not as subject to cyclical downturns. Your compensation plan can even make you robust or fragile. Quarterly plans can make careers very fragile, because two bad quarters in a row can undo even someone with a few years of stellar performance.
Even better than robustness and resiliency is the quality of being antifragile. This term was coined by Nassim Nicholas Taleb in his fascinating and challenging book by the same name. Antifragility means that besides being able to withstand random setbacks and shocks you actually profit or improve from them. Things that go wrong may have short term or local negative effects but make the organism or the system stronger in the long run.
Anitfragility is actually common in nature. When you work out, you damage your muscle fibers, but the healing and rebuilding process makes those fibers larger and stronger. Natural selection is the ultimate antifragile phenomenon; although organisms die, species adapt and evolve.
There are three main ways to apply the concept of antifragility in sales—to profit from randomness and volatility: learning, maintaining optionality, and avoiding iatrogenics.
Learning: Use failure as your textbook
None of us welcome obstacles, failure and uncomfortable change, and it’s tempting to shove negative experiences to the back of our minds. Yet losses and setbacks offer limitless opportunities for antifragility, such as:
- Learning, not just recovering, from your mistakes
- Improving your offering in response to a competitor’s move
- Conducting after-action reviews after every sales call
- Using loss reviews to improve your approach or your offering
- Fostering a climate that learns from losses rather than immediately assigning blame
- Responding faster than your competitors to new information or conditions in the market
- Resolving a complaint in a manner that makes customers happier than they were before
- Listening, curiosity and lifelong learning, because they have low downsides and high upsides
- Constantly looking for information that disconfirms your expectations and projections
- Using failure and rejection as information and as a stimulus to more intelligent effort
- Even success can teach lessons, as long as you don’t automatically assume it happened because you’re so smart.
Optionality: Build a secure floor and no ceiling
Besides personal assets or psychological qualities that can increase antifragility, there are also ways to structure your work to reduce downside and take advantage of randomness. The key concept is to maintain options so that you are not forced into poor choices.
If you can build a secure base that does not take all your time, you can then focus the rest of your attention on the really big deals that bring the big paydays, the recognition, and the trips to Hawaii. Taleb call this the “Barbell” strategy, because it’s a way of focusing on both ends of a range rather than in the middle. The way this would work in a sales portfolio or a funnel is to build a secure base of customers that will keep you in the game and insulate you from large losses. It’s best to have a lot of smaller deals, where the loss of a few won’t hurt too much. While it’s tempting to see security in having a few larger customers, with which you have very solid relationships and big barriers to competitive entry, this is much more fragile than it seems.
Iatrogenics: Don’t screw it up
When something is naturally antifragile, managing it too closely or intervening too much can cause unintended harm. Iatrogenics is technically a medical term, describing unintended harmful results from medical treatment,[1] but the idea applies to other systems as well. For instance, prevention of minor forest fires makes the ecosystem more fragile by preventing the burning off of underbrush, leading to catastrophic fires at some point.
Sales managers always want to do something, but sometimes doing nothing may be the best management. Sales managers contribute to iatrogenics by excessively monitoring sales activity, by rigid procedures to regulate action, by automatically stepping in or by dropping prices to avoid losing deals.
If you’re a sales leader, you need to work on removing sources of fragility, without adding those of your own unintended doing. Since personal learning is one of the most powerful antidotes to fragility, anything that discourages learning is going to make your performance fragile. Blaming people for mistakes; fostering a culture of fear (e.g. “third prize: you’re fired”) Excessive monitoring of activity and rigid procedures that allow little room for initiative or flexibility cause fragility.
We salespeople like to say we make our own luck, and I believe that’s roughly true in the long run. But maybe the surest way to build a successful long term career is to put yourself in a position where even bad luck is ultimately good.
[1] In fact, it’s the third leading cause of death in the US, with an estimated 225,000 deaths a year.
