“Sell more, with fewer resources, faster. Oh, while you’re at it, bring me the broomstick of the Wicked Witch of the West.”
How’s that for a quartet? If you haven’t seen these challenges in a PowerPoint slide at your latest management meeting, you probably will. Most of us are already experienced delivering at least three of them.
We responded even before the banking meltdown. We absorbed higher sales quotas, targeted prospects better, made our lead generation more efficient, and shortened sales cycles. What’s unclear is whether we’re rocking uncomfortably from the ripples we’ve created. Time and again, we learn that our sales efforts have a negative impact on customer relationships. Our prospective customers often don’t trust salespeople, don’t like them, and don’t want to communicate with them. Are we pushing too hard? Should we cool our jets? Maybe the time has come for a Slow Sales movement.
Decades of Fast Sales dictums have yielded tactics that clash with long-term strategic goals:
“Close the Sale” versus “Build a Relationship”
“Generate a Quick Win” versus “Improve infrastructure to gain long-term improvements in customer loyalty”
“Win the monthly individual sales incentive” (and hoard tacit knowledge) versus “share knowledge so the entire sales organization can benefit”
“Make the quarterly revenue goal” versus “maximize the total value of the customer”
The Slow ideal has found a growing audience willing to question whether our obsession with collapsing timeframes serves our longer-term interests. The Slow Food Movement began as a counter-force to government and commercial entities that promoted convenience food and economies of scale without regard for sound nutritional and environmental practices. Educators have recognized a parallel danger. Peggy Orenstein wrote in The New York Times (Kindergarten Cram, May 3, 2009) “maybe the current economic retrenchment will trigger a new perspective on early education . . . Call it Slow Schools. After all, part of what got us into this mess was valuing achievement, speed and results over ethics, thoughtfulness and responsibility.” In education, it takes a brave person to question outcomes that are sacrosanct to many. But Ms. Orenstein reframed the question: it’s not about how can a child’s development be sped up, it’s “why are we so hellbent on doing so?”
Similarly, in sales, we must change the overarching questions we’re asking. The problem is, “how do we sell more, better, faster?” sounds better at the Achiever’s Club golf outing than another question I recently heard, “what steps do we need to take with each prospect and when should we take them based on the natural progression of our prospect’s purchase process?” That long-winded question sounds way too kind, and many sales executives would feel silly asking it. But by asking and answering that question we’re possibly more likely to achieve strategic sales success than by relentlessly pursuing tactics to satisfy the first one. Fast Sales rarely comes without high pressure and customer pain—two conditions that damage, rather than improve, financial results.
The promoters of the Slow Food movement exposed exploitation after recognizing a long-simmering win-lose relationship between top producers and end consumers. Large food manufacturers such as Monsanto, ConAgra, and Archer Daniels Midland could meet their financial objectives while at the consumer end of the value chain, people became overweight and undernourished. But Slow Food and Slow Sales are an imperfect comparison. The Slow Food movement encompasses ideals I haven’t seen on the white board for any sales planning meeting I’ve attended: equitable distribution of products and resources, and responsible stewardship of the planet.
Not that we’re unconcerned and mercenary, but in sales, one simple financial reality explains our preoccupation with speed: Net Present Value. Assuming the cost of capital is constant, the present value of a dollar in revenue today is worth more than in any future period. That cold fact drives strategic decisions. Sometimes customers benefit—sometimes they don’t. So through the Net Present Value lens, the juxtaposition of “slow” and “sales” might mean a situation to avoid rather than an inspirational movement.
But the same way fast food brings us Type II diabetes, and high-achieving preschoolers bring us win-at-any-cost adults, tactics to secure short-term revenue bring unwanted side effects that could take more than one generation to fix. Some progressive companies understand this, and not surprisingly, have embedded Slow Sales ideals into their brand. For example, “At Oboz we build shoes for outdoor use—shoes with meaningful innovation, solid performance and recognizable quality. We are also stewards of our rich natural heritage and believe that a business should contribute to the greater common good.”
If that lofty goal conjures up images of American consumers (who want affordable quality footwear, available in local retail outlets) holding hands in the woods with citizens of producing countries (who want jobs, unpolluted air, and clean lakes), it’s probably a mirage. Would Oboz voluntarily curtail sales growth to avoid sourcing materials from non-compliant vendors (a common dilemma in eco-manufacturing)? There are no easy answers, and tradeoffs must be made. But kudos to Oboz! At least I sense this issue has a spot on the white board in the company board room.
Like other Slow movements, Slow Sales requires taking some unpopular stances, and asking uncomfortable questions that put tried-and-true in the cross hairs of change. For some companies, that means looking at selling in a fundamentally different way by regarding a purchase transaction as a point on a timeline, rather than the end-game of a sales process.
Slow Sales won’t work for every company. It requires a long-term planning horizon, and companies that don’t have the resources to go the distance will trade one set of risks for another. But as with food and education, Slow might provide the best way to deliver value that can sustain both producer and consumer now, and in the future.
Wednesday, May 13, 2009
Wednesday, May 6, 2009
Hype of Hope: For Salespeople Does Social Media Live up to its Promise?
Social media has permeated our personal lives so thoroughly that we hardly notice when a new technology tool chips away a little more of our privacy. But in sales and marketing, we embrace social media as transformational. We're primed for game changers, and we don't need to look far for good old fashioned hype in these articles about how social media will transform sales:
. . . But is social media living up to its promise?
Double-edged sword
It depends. One statement by Kevin Waldvogel, Account Executive at Image Systems sums up the ambivalence of eight senior salespeople I interviewed for this article: "Social media is great to help people and get your name out there, but not the greatest place to make instant business. It reminds us to listen to people who are in need of help and think about helping them because you never know when you might be in that situation. It's kind of a double-edged sword."
One edge symbolizes that social media provides valuable improvements to sales processes, and the other that social media won't help if it's not intelligently embedded with more mature, proven sales techniques.
From Waldvogel's comment, one senses that if the plugs were suddenly pulled on LinkedIn, Twitter, and Facebook, life would go on—at least for this group. Social media touches their jobs, but outside of collaborative CRM, I couldn't find one case of a corporate mandate to use it.
Clearly if there were a mandate, it would have to consider the boundary of social media, a question Jeff Baker, Major Account Manager for Hewlet-Packard asked. "It's important to expand the list, to expand the footprint" of social media. According to Baker, it's everything from the directories in today's cell phones, which can be shared, to electronic community directories. Joe Panella, Sales Manager at Alpha Systems, corroborated Baker's idea. He has scoped the recipient line of more than one neighborhood community email to find domain names of companies he targets for his company's suite of data collection products and services. When he finds one, he sometimes contacts the individual. But from there, his sales processes are little changed from the early '90's when he joined his company.
Mike Chiappetta, Unified Computing Systems Specialist at Cisco, voiced a similar view. "Selling hasn't changed in fifty years. LinkedIn makes for great icebreaker discussion, but you don't know your prospect's agenda or business problems, so you gather nothing that will help you in a B2B sales process. There are no shortcuts for doing real homework."
Real homework requires learning strategic and operational pain points that ignite sales processes—information which social networking sites don't offer. And while the sites offer community, there's no insight about the activities between community members. According to Chiappetta, "if I spend time on my client's corporate website or Yahoo Finance, I'll get more information to help me build trust than I ever can on LinkedIn."
Still, I probed for a big social media success story. Panella told me of a large order he sold when he serendipitously discovered a friend's posting on Facebook. Baker described how he facilitated a sale for HP hardware in Eastern Europe by connecting a graduate school colleague to an Outlook contact who specializes in IT financing in that region. But despite these positive outcomes, neither Panella nor Baker is convinced that the same tools could dependably enable them to repeat those successes in the future.
Internal collaboration
For the salespeople I interviewed, social media's greatest impact results from how it enables internal sales collaboration. Cathy Cromley, Sales Director at market research firm IDC Government Insights, uses Yammer, which her company implemented to enable employees to share knowledge internally. In an organization with over 1,000 analysts, Cathy would find it overwhelming to identify expertise on high-level topics such as cloud computing or green that she researches for her prospects and clients. But with Yammer, she can find referenceable projects, connections to subject matter experts, and blogs internal to IDC.
Eric Freeburg, Senior High Touch Account Manager with Motorola Enterprise Mobility Business leads teams of up to 70 people on sales engagements for large accounts such as Kellogg, Whirlpool, GM, Ford, Chrysler, and La-Z-Boy. For Freeburg, internal collaboration is mission critical. If he spends time on social networks, it's managing his team through Motorola's CRM software, Salesforce.com. "Who has time for LinkedIn?" he asks.
External sales processes
When it comes to client contact, the veteran salespeople I spoke with use social networking tools conservatively, and in different ways. Baker of HP, manages one customer, AOL. "I know everyone I need to connect with at AOL. I don't do prospecting the way others do."
Trudy McCrea, CEO of IT Services firm Achieve-IT, LLC in Northern Virginia, avidly uses social media tools, but not to close business. Through Outlook, she maintains a list of target accounts, and uses LinkedIn for an advanced search to uncover who isn't in her database. She searches for specific information about the kind of people who work for a company, their education, previous company affiliation, and other background to develop a second tier of contacts. From there she might make a cold call by phone or send an inMail. She also uses LinkedIn's Groups function extensively. McCrea understands the role luck plays in developing new business, saying "I make many unplanned discoveries."
Protocol and impediments
This conservative use of social media might result from the fact that adoption of social media tools faces large hurdles—an often-obscured reality. According to Panella, "some employers don't allow their employees to use (social media) for company purposes. They place restrictions around it."
Such impediments aren't fully recognized. In a March 31, 2009 webinar "Hear it Now! Social Selling: Live Q&A on Selling with Web 2.0," Christopher Carfi of Cerado, Inc. said that it's important to engage with an influencer in their place first, and that if they have a public persona to use the mechanisms provided. Unfortunately, social media websites have driven many influencers away. McCrea, who regards client privacy of paramount importance, works with a high-level contact at Google who had a public persona, but changed because the visibility brought unwanted solicitations. According to McCrea, "LinkedIn doesn't shield customers. (My contact) got unwanted email and now uses Facebook. Now, people keep less data on LinkedIn to keep from being found."
Several salespeople shared that simple business etiquette guided their decisions about how to adopt social media. Cromley believes that using social networks as a prospecting tool is "not appropriate," adding "I'm offended by someone trying to tap my network simply to hawk their wares." While she uses LinkedIn to look up information about prospects, she cautions that salespeople "should be careful not to look like you've stalked the person."
And then there's The Law. A senior business development professional who sells technology solutions to the legal industry said that attorneys must address confidentiality, security, and privacy issues of Electronically Stored Information (ESI), and the public nature of the Internet adds to the complexity of legal issues. Many sources of ESI are discoverable in legal matters —something to think about before you set up your next social media campaign. My contact cited the case in which Whole Foods CEO John Mackey posted blogs for over eight years on Yahoo online stock forums by using a pseudonym. The SEC opened an informal inquiry to see if any insider information was released. Although the SEC ultimately concluded that Mackey hadn't broken any laws and that no action needed to be taken, ethical issues linger.
Social products and services
If better social media mousetraps exist, salespeople will buy them, and Twitter has made the shopping list of at least two. Ironically, the staid legal industry occupies the vanguard of industry adopters. That's because "congress is adopting Twitter, so attorneys are as well," according to my legal industry contact. Cromley also considers Twitter a potentially valuable tool. The analysts at IDC use it extensively in the financial services vertical, and the company will expand its use to all six verticals in which it competes.
The road ahead
If the individual insights of these salespeople prove anything, it's that social media's promise depends on the ingenuity of the people using it. But there's another takeaway. Even in the face of market upheaval, and a great shift in information power from vendor to consumer, legacy selling processes are surprisingly durable. We're a long way from the seismic changes in selling others have predicted.
So where are we on the Social Media Maturity Curve? No one can say with certainty. Some have suggested that we're at a social-media saturation point. In her recent column, Let Them Eat Tweets—Why Twitter is a Trap (The Medium, New York Times, April 19, 2009), Virginia Heffernan wrote "Twitter may now be like a jam packed, polluted city where the ambient awareness we all have of one another's bodies might seem picturesque to sociologists (who coined "ambient awareness") to describe this sense of physical proximity, but (it) has become stifling to those in the middle of it."
If that's the case, in an uncertain economy, should companies take a conservative approach and delay implementing new selling strategies by waiting for the Next Great Thing after social media? No. When deployed intelligently, social media can provide remarkably valuable outcomes. Here are a few points to remember:
For Sales Guys, Social Media is the New Cocktail Party
Five Ways to Increase Sales Through Social Media
How to Tap into the Social Media Phenomenon for Greater Sales and Profits
Social Selling—Building a Web2.0 Sales Force
. . . But is social media living up to its promise?
Double-edged sword
It depends. One statement by Kevin Waldvogel, Account Executive at Image Systems sums up the ambivalence of eight senior salespeople I interviewed for this article: "Social media is great to help people and get your name out there, but not the greatest place to make instant business. It reminds us to listen to people who are in need of help and think about helping them because you never know when you might be in that situation. It's kind of a double-edged sword."
One edge symbolizes that social media provides valuable improvements to sales processes, and the other that social media won't help if it's not intelligently embedded with more mature, proven sales techniques.
From Waldvogel's comment, one senses that if the plugs were suddenly pulled on LinkedIn, Twitter, and Facebook, life would go on—at least for this group. Social media touches their jobs, but outside of collaborative CRM, I couldn't find one case of a corporate mandate to use it.
Clearly if there were a mandate, it would have to consider the boundary of social media, a question Jeff Baker, Major Account Manager for Hewlet-Packard asked. "It's important to expand the list, to expand the footprint" of social media. According to Baker, it's everything from the directories in today's cell phones, which can be shared, to electronic community directories. Joe Panella, Sales Manager at Alpha Systems, corroborated Baker's idea. He has scoped the recipient line of more than one neighborhood community email to find domain names of companies he targets for his company's suite of data collection products and services. When he finds one, he sometimes contacts the individual. But from there, his sales processes are little changed from the early '90's when he joined his company.
Mike Chiappetta, Unified Computing Systems Specialist at Cisco, voiced a similar view. "Selling hasn't changed in fifty years. LinkedIn makes for great icebreaker discussion, but you don't know your prospect's agenda or business problems, so you gather nothing that will help you in a B2B sales process. There are no shortcuts for doing real homework."
Real homework requires learning strategic and operational pain points that ignite sales processes—information which social networking sites don't offer. And while the sites offer community, there's no insight about the activities between community members. According to Chiappetta, "if I spend time on my client's corporate website or Yahoo Finance, I'll get more information to help me build trust than I ever can on LinkedIn."
Social media's greatest impact results from how it enables internal sales collaboration.
These seemingly prosaic uses of social media are emblematic of the resourcefulness of people who sell for a living. They don't necessarily rely on sophisticated social networking software to capture, share, and use information about the organizations and people who are potentially valuable to them. They exploit little ways to improve on what they already do. I asked about the most visible social-media created change in their jobs. The prevailing answer? Email—not voice—now transmits an overwhelming majority of prospect sales communication. According to Panella, "I rarely get a phone message, but I touch 200 emails a day."Still, I probed for a big social media success story. Panella told me of a large order he sold when he serendipitously discovered a friend's posting on Facebook. Baker described how he facilitated a sale for HP hardware in Eastern Europe by connecting a graduate school colleague to an Outlook contact who specializes in IT financing in that region. But despite these positive outcomes, neither Panella nor Baker is convinced that the same tools could dependably enable them to repeat those successes in the future.
Internal collaboration
For the salespeople I interviewed, social media's greatest impact results from how it enables internal sales collaboration. Cathy Cromley, Sales Director at market research firm IDC Government Insights, uses Yammer, which her company implemented to enable employees to share knowledge internally. In an organization with over 1,000 analysts, Cathy would find it overwhelming to identify expertise on high-level topics such as cloud computing or green that she researches for her prospects and clients. But with Yammer, she can find referenceable projects, connections to subject matter experts, and blogs internal to IDC.
Eric Freeburg, Senior High Touch Account Manager with Motorola Enterprise Mobility Business leads teams of up to 70 people on sales engagements for large accounts such as Kellogg, Whirlpool, GM, Ford, Chrysler, and La-Z-Boy. For Freeburg, internal collaboration is mission critical. If he spends time on social networks, it's managing his team through Motorola's CRM software, Salesforce.com. "Who has time for LinkedIn?" he asks.
External sales processes
When it comes to client contact, the veteran salespeople I spoke with use social networking tools conservatively, and in different ways. Baker of HP, manages one customer, AOL. "I know everyone I need to connect with at AOL. I don't do prospecting the way others do."
Trudy McCrea, CEO of IT Services firm Achieve-IT, LLC in Northern Virginia, avidly uses social media tools, but not to close business. Through Outlook, she maintains a list of target accounts, and uses LinkedIn for an advanced search to uncover who isn't in her database. She searches for specific information about the kind of people who work for a company, their education, previous company affiliation, and other background to develop a second tier of contacts. From there she might make a cold call by phone or send an inMail. She also uses LinkedIn's Groups function extensively. McCrea understands the role luck plays in developing new business, saying "I make many unplanned discoveries."
Unfortunately, social media websites have driven many influencers away.
Motorola's Freeburg works with between 50 and 300 active customer contacts at a time, but uses one resource—Salesforce.com—for the daily information he requires. He uses LinkedIn mainly to post his professional credentials so he can "present myself without bragging." IDC's Cromley thinks of online social networks as a dynamic Outlook application that doesn't require time or resources to maintain. She uses LinkedIn and other tools "mostly to keep up with where people are."Protocol and impediments
This conservative use of social media might result from the fact that adoption of social media tools faces large hurdles—an often-obscured reality. According to Panella, "some employers don't allow their employees to use (social media) for company purposes. They place restrictions around it."
Such impediments aren't fully recognized. In a March 31, 2009 webinar "Hear it Now! Social Selling: Live Q&A on Selling with Web 2.0," Christopher Carfi of Cerado, Inc. said that it's important to engage with an influencer in their place first, and that if they have a public persona to use the mechanisms provided. Unfortunately, social media websites have driven many influencers away. McCrea, who regards client privacy of paramount importance, works with a high-level contact at Google who had a public persona, but changed because the visibility brought unwanted solicitations. According to McCrea, "LinkedIn doesn't shield customers. (My contact) got unwanted email and now uses Facebook. Now, people keep less data on LinkedIn to keep from being found."
Several salespeople shared that simple business etiquette guided their decisions about how to adopt social media. Cromley believes that using social networks as a prospecting tool is "not appropriate," adding "I'm offended by someone trying to tap my network simply to hawk their wares." While she uses LinkedIn to look up information about prospects, she cautions that salespeople "should be careful not to look like you've stalked the person."
And then there's The Law. A senior business development professional who sells technology solutions to the legal industry said that attorneys must address confidentiality, security, and privacy issues of Electronically Stored Information (ESI), and the public nature of the Internet adds to the complexity of legal issues. Many sources of ESI are discoverable in legal matters —something to think about before you set up your next social media campaign. My contact cited the case in which Whole Foods CEO John Mackey posted blogs for over eight years on Yahoo online stock forums by using a pseudonym. The SEC opened an informal inquiry to see if any insider information was released. Although the SEC ultimately concluded that Mackey hadn't broken any laws and that no action needed to be taken, ethical issues linger.
Social products and services
If better social media mousetraps exist, salespeople will buy them, and Twitter has made the shopping list of at least two.
If social media hasn't forced major process changes among the group I interviewed, it has dramatically changed the products they sell. Motorola, long a dominant player in mobile technology and retailing "has always been a strong supporter of social networking and is developing solutions for its clients," according to Freeburg. IDC has conducted numerous studies of government's use of social media and has released a case study about how the DC Government used YouTube for procurement, entitled Social Networking and Takin' Care of Business Every Way. In the legal industry, FTI Consulting broke ground in legal discovery with Attenex, a software application that provides visualization of social networks by tracking email traffic and document trails. In a global economy, this resource provides crucial support to corporations that might need to document connections for a seamy side of social networks—bribery activity.If better social media mousetraps exist, salespeople will buy them, and Twitter has made the shopping list of at least two. Ironically, the staid legal industry occupies the vanguard of industry adopters. That's because "congress is adopting Twitter, so attorneys are as well," according to my legal industry contact. Cromley also considers Twitter a potentially valuable tool. The analysts at IDC use it extensively in the financial services vertical, and the company will expand its use to all six verticals in which it competes.
The road ahead
If the individual insights of these salespeople prove anything, it's that social media's promise depends on the ingenuity of the people using it. But there's another takeaway. Even in the face of market upheaval, and a great shift in information power from vendor to consumer, legacy selling processes are surprisingly durable. We're a long way from the seismic changes in selling others have predicted.
So where are we on the Social Media Maturity Curve? No one can say with certainty. Some have suggested that we're at a social-media saturation point. In her recent column, Let Them Eat Tweets—Why Twitter is a Trap (The Medium, New York Times, April 19, 2009), Virginia Heffernan wrote "Twitter may now be like a jam packed, polluted city where the ambient awareness we all have of one another's bodies might seem picturesque to sociologists (who coined "ambient awareness") to describe this sense of physical proximity, but (it) has become stifling to those in the middle of it."
If that's the case, in an uncertain economy, should companies take a conservative approach and delay implementing new selling strategies by waiting for the Next Great Thing after social media? No. When deployed intelligently, social media can provide remarkably valuable outcomes. Here are a few points to remember:
- Social media should transform processes, but not etiquette.
Technology-enabled sales tactics will backfire unless acceptable business protocol is considered in the customer experience. - Social media enables business strategy. It's a set of tools, not an endpoint.
- In the short-term, deploy social media tools selectively. Identify the most persistent selling problems you or your sales team faces, and embed social-media tools where appropriate. Unless there's a compelling reason, don't rip and replace.
Thursday, April 16, 2009
Thought Leaders: PLEASE tell me something I DON'T know!
This year CMG Partners, an East-coast based marketing strategy firm hosted a panel discussion entitled Why Good Products Fail & How to Improve the Go-to-Market Process. The face-to-face event was complimentary to the local business community in Northern Virginia, and included experts from four enterprises: startup beverage company Honest Tea, National Geographic Channel, WeatherBug, and Intelevision.
Five minutes into CMG’s introductory PowerPoint, a man in the audience named John interrupted the presenter and opined “You’re the experts in marketing strategy, and yet, I don’t hear anything new. You haven’t provided anything we don’t already know!” He continued by reciting the unremarkable bullet points projected on the large screen in the front of the room, and emphasizing that he wanted to hear thought provoking insight worthy of his time. The slack-jawed audience at the McLean Hilton fell so totally silent you could hear a Blackberry hitting the plush carpeted floor.
Faced with this unexpected detractor, the presenter replied with such aplomb that his response belongs in the history books along with Lloyd Bentsen’s legendary debate response to Dan Quayle : “Well John, you get what you pay for!” The widespread laughter that followed was evidence that the tension of the moment had been broken.
The exchange somehow ended amicably, although I don’t think John will receive an e-invitation to CMG’s next event. The panel tried hard to live up to John’s expectations, thanks largely to Mark McNeely, CEO of Intelevision (more about that in a moment). During the post-panel networking, I introduced myself to John and thanked him for voicing an opinion that was probably unspoken by many, including me. “I might not have said it the same way, but I appreciate that you spoke your mind. There have been many times that I’ve wanted to say what you said, but didn’t.”
John might have been similarly moved during the recorded one-hour webinar on social media and selling I listened to on Monday. The topic is of particular interest as I’m completing a series of interviews with salespeople for an article I’m releasing next week. Like CMG’s event, there was a panel of thought leaders with cross-functional expertise—a great blend that should have created pungent discourse. And there were some good ideas that I jotted on my notepad and marked with an asterisk. But a few opinions were so over-worn that I stopped the recording and pushed back the timer a few seconds to make sure I heard them correctly: “We have to be in touch with our customers and understand what’s OK for them and what they expect from us.” And “It’s becoming more critical to know your customer.” Really? I acknowledge these comments are removed from the context of the discussion, but they were as attention-grabbing in the webinar as they are here.
Which leads to a question: are thought leaders fostering a sort of institutional stupidity by being too timid to espouse bold ideas? Or are thought leaders simply reacting to a perception that businesspeople need to be spoon-fed unremarkable ideas (not too big, not too small, not too hot, not too cold) so they can be nudged into considering larger ideas? On the other hand, could executives and managers simply be too intimidated by the multitude forces that are upending their business plans and strategic objectives to consider big ideas?
Mark McNeely might have answered the question when he synthesized the reason for the problems American businesses face: “there’s no oxygen in the room. Companies are run by management that is stagnant, bureaucratic, and self-satisfied.” He predicted that will change—because, if you subscribe to the idea of a Darwinian process for business, it has to.
Resolving our global economic situation demands the creation of provocative ideas. Controversial ideas. Ideas that are unpopular or disagreeable. We don’t need any more Mom and Apple Pie. In marketing and sales, nothing great will happen when well-known truisms are dusted off and passed on as contemporary expertise.
To those who regularly offer contrarian views, keep doing what you’re doing. The world needs your fresh perspectives now more than ever.
Five minutes into CMG’s introductory PowerPoint, a man in the audience named John interrupted the presenter and opined “You’re the experts in marketing strategy, and yet, I don’t hear anything new. You haven’t provided anything we don’t already know!” He continued by reciting the unremarkable bullet points projected on the large screen in the front of the room, and emphasizing that he wanted to hear thought provoking insight worthy of his time. The slack-jawed audience at the McLean Hilton fell so totally silent you could hear a Blackberry hitting the plush carpeted floor.
Faced with this unexpected detractor, the presenter replied with such aplomb that his response belongs in the history books along with Lloyd Bentsen’s legendary debate response to Dan Quayle : “Well John, you get what you pay for!” The widespread laughter that followed was evidence that the tension of the moment had been broken.
The exchange somehow ended amicably, although I don’t think John will receive an e-invitation to CMG’s next event. The panel tried hard to live up to John’s expectations, thanks largely to Mark McNeely, CEO of Intelevision (more about that in a moment). During the post-panel networking, I introduced myself to John and thanked him for voicing an opinion that was probably unspoken by many, including me. “I might not have said it the same way, but I appreciate that you spoke your mind. There have been many times that I’ve wanted to say what you said, but didn’t.”
John might have been similarly moved during the recorded one-hour webinar on social media and selling I listened to on Monday. The topic is of particular interest as I’m completing a series of interviews with salespeople for an article I’m releasing next week. Like CMG’s event, there was a panel of thought leaders with cross-functional expertise—a great blend that should have created pungent discourse. And there were some good ideas that I jotted on my notepad and marked with an asterisk. But a few opinions were so over-worn that I stopped the recording and pushed back the timer a few seconds to make sure I heard them correctly: “We have to be in touch with our customers and understand what’s OK for them and what they expect from us.” And “It’s becoming more critical to know your customer.” Really? I acknowledge these comments are removed from the context of the discussion, but they were as attention-grabbing in the webinar as they are here.
Which leads to a question: are thought leaders fostering a sort of institutional stupidity by being too timid to espouse bold ideas? Or are thought leaders simply reacting to a perception that businesspeople need to be spoon-fed unremarkable ideas (not too big, not too small, not too hot, not too cold) so they can be nudged into considering larger ideas? On the other hand, could executives and managers simply be too intimidated by the multitude forces that are upending their business plans and strategic objectives to consider big ideas?
Mark McNeely might have answered the question when he synthesized the reason for the problems American businesses face: “there’s no oxygen in the room. Companies are run by management that is stagnant, bureaucratic, and self-satisfied.” He predicted that will change—because, if you subscribe to the idea of a Darwinian process for business, it has to.
Resolving our global economic situation demands the creation of provocative ideas. Controversial ideas. Ideas that are unpopular or disagreeable. We don’t need any more Mom and Apple Pie. In marketing and sales, nothing great will happen when well-known truisms are dusted off and passed on as contemporary expertise.
To those who regularly offer contrarian views, keep doing what you’re doing. The world needs your fresh perspectives now more than ever.
Friday, April 3, 2009
Ready to Sell? Quick--Name Your Prospect's Issue!
Author Michael Korda said “great leaders are almost always great simplifiers who cut through argument, debate, and doubt to offer a solution everyone can understand and remember . . . straightforward but potent messages.”
As the photo illustrates, simplicity alone doesn’t make a message potent. What’s missing? Two crucial factors that Howard Gardner describes in his book Leading Minds: how effectively the scripts are enunciated and how convincingly the deliverers of the communications embody the scripts. On those dimensions, “now serving food” doesn’t demand rigorous analysis.
In marketing and sales, we live and breathe message potency. We have to. Everything we do must nudge, push, or demand a change in one or more entrenched behaviors. So, when it comes to potency, could the intended change be as significant as the message itself?
To answer that, we must address a challenge even more basic than potency: how to select the right issue to address in the first place. From experience, I know it’s hard to get it right. In business, we tout high ROI when our clients want strategic enablement. We push strategic enablement when cost reduction matters most. We communicate about best practice knowledge transfer when the greater issue is how to build communities. We promote social media tools to build communities when a client’s overarching concern is managing profitable growth. Our assumptions leave us in a fog of sometimes-happy ignorance. Most exasperating, our prospective clients usually can’t tell us that we’re attacking the wrong issues because they’re not even aware of our companies or our products!
Happily, every now and then, we find a great example that reminds us that we can connect to visceral issues and make our communications potent—but first we have to understand what the issues are. An advocacy group called Food Democracy Now (FDN) has a mission is to advance “the dialogue on food, family farm, environmental and sustainability issues at the legislative and policy level.” Against a powerful food industry lobby intimate with the complexities of the Farm Bill and the machinations of the National School Lunch Program, Dave Murphy, FDN’s president, faces a daunting challenge. According to a recent article in The Washington Post (“Where Policy Grows," March 25), Mr. Murphy recognizes that it’s not only important to understand the legislation, but to “recast the debate about good food from a moral battle to an economic one. Take the school lunch program, which Congress will review this year. Food activists have long argued that more fruits and vegetables from local producers should be included to help improve childhood nutrition. But Murphy says the better way to sell the idea to legislators is as a new economic engine to sustain small farmers and rural America as a whole (italics, mine). Talk about nutrition and you get a legislator’s attention, he said. ‘But you get his vote when you talk about economic development.’”
Bland? After all, ‘economic development’ lacks originality—many times over. In addition, because righting economic wrongs isn’t FDN’s primary mission, Mr. Murphy could be forgiven for being more pedantic about nutrition, health, and the environment. But he knows that by building an economic frame around his cause that FDN will accomplish more than it could through moral grandstanding. By going after the wrong issue Mr. Murphy would find promoting his cause a much tougher row to hoe (pun intended).
Mr. Murphy’s circumspection about issues applies equally to other marketing challenges with differing complexities. What does finding the right issue mean for achieving a targeted return on invested capital? Sales productivity? Reducing sales risks and shortening sales cycles? Meeting revenue forecasts? Everything. Attacking the wrong problems (or attacking the right problems the wrong way) creates a cascading set of selling failures. When it comes to changing entrenched behaviors, not all issues are created equal. For maximum potency, messages need a highly motivating context, and that means choosing the right issue.
Like FDN, when you find the right one, you can change the world!
Thursday, March 19, 2009
Hold the Trust: A "Trusted Advisor" Who Earns a Sales Commission is Just an Advisor
“We want our salespeople to work as trusted advisors to our clients.”
The VP of sales who shared that idea has a noble vision, and he’s not alone. Building customer trust is inseparably connected to building shareholder value. Not surprisingly, there's great interest: searching the phrase “how to build customer trust” returned 3,890 results on Google. But the VP has a conflict: his sales team is “coin operated,” vernacular for “they earn commissions based on revenue.” Could that undermine the platform of trust that’s core to his strategy? After all, his customers don’t know his company’s sales commission plan, and it’s no secret that clients don't always benefit.
In the US, commission-based arrangements for sales forces come in many flavors and varieties. And they're widespread, according to Barry Trailer of CSO Insights. His company's research found that of companies responding to their 2008 sales compensation survey, 98% included variable pay as part of their compensation plans. I know from personal experience that a commission-earning salesperson walks a fine line as a Trusted Advisor, and there's an ethical morass on either side.
Variable pay by itself doesn’t destroy trust, but the opacity that commonly accompanies it does. The headlines we've read about AIG and Madoff remind us why. In The New York Times, Frank Rich wrote “The question in the aftermath of the Madoff calamity is this: why do we keep ignoring what we learn from the black boxes being retrieved from crash after crash in our economic meltdown? The lesson couldn’t be more elemental. If there’s a mysterious financial model producing miraculous returns, odds are it’s a sham—whether it’s an outright fraud . . . or nominally legal, as is the case with the Wall Street Giants that have fallen this year.” And Republican Richard Shelby of the Senate Banking Committee, quoted in The Wall Street Journal (March 17), said of AIG's widely-condemned bonus payments “There’s been no accountability, no transparency to speak of. . . Whatever we’ve gotten, we’ve had to extract it piece by piece, little by little. There’s too much secrecy.”
Agreed. Secrecy stinks. But Madoff committed deception. AIG . . . didn’t. And in what way do these issues relate to an Account Executive who sells professional IT services to companies in the Midwest? Fair question. There is a connection. Customers think salespeople have something to hide—and that’s a trust breaker. In a March 2, 2009 issue, InformationWeek reported the results from their survey of 345 technology professionals. The participants were asked “if you could get vendors to start doing one thing, what would it be?” Thirty-four percent of the respondents indicated “being up front about how their products do and don’t meet customer requirements.” That was more than twice the percentage for any other response.
In our technology-rich world, it’s humbling to think that good old fashioned honesty exists at the top of the list of customer wants. If only we could easily give our customers what they’re begging for. But for a salesperson with money on the line, “being up front” presents a wide ethical strike zone. And companies use variable pay to influence a myriad of actions, which include the ethical decisions the sales force makes. (Specific ethical dilemmas salespeople face are discussed in an earlier CustomerThink article, "On My Honor As a Salesperson: Why Sales Ethics Matter") Similarly, in my selling past, there were many background situations I didn’t disclose, but they influenced the advice I offered. For brevity, I’ll list just four:
Service plan revenue generated 8% commissions (at the time, the highest percentage category)
Selling direct to customers (versus through a channel partner) credited 40% more revenue toward achieving my sales quota
There was a quarterly bonus of $10,000 for achieving the quarterly revenue goal
Competitive displacements earned higher commission than installed account sales
In March, I decided to investigate this issue in more depth, and through LinkedIn I asked salespeople “Do you think prospective customers should know how much their salesperson might make in commissions and/or bonuses from their purchase transaction?” Although the number of responses received wasn’t large, they supported the idea that for salespeople, such transparency was not needed—with one notable product exception: sales of financial securities. A few nuanced views discussed the importance of disclosing to a customer how much a broker might make selling Security A versus Security B. But why draw a boundary around financial services? Shouldn’t customers of other products and services demand equal levels of transparency from their sales advisors?
Some companies believe so, and in the name of increasing shareholder value, they have adopted a progressive view for creating sales trust and transparency—and been rewarded for the effort. The Wall Street Journal reported on March 16th (Best Buy Confronts Newer Nemesis) that Best Buy CEO-designate Brian Dunn “opposed (Best Buy’s) 1989 decision to do away with commissioned sales in favor of salaried staff, which was widely opposed by sales workers who feared losing income. He now concedes it was the most important shift in company history, lowering worker costs, and changing the core model of electronics retailing. Best Buy expanded across the US, and Circuit City eventually followed by eliminating sales commissions.” To the victor go the spoils. Analysts believe Best Buy will capture half the business of now-defunct archrival Circuit City.
There’s more to that story than just sales commissions, but it’s worth pondering how—for a business as complex and dynamic as electronics retailing—elimination of sales commissions was granted such honored recognition. As one who eschewed buying from high-pressure Circuit City salespeople, I know the decision had as much to do with improving customer experiences as with lowering labor costs. According to Mr. Dunn, “we want our stores to morph into a series of experiences . . . to do that, you need to go where the rubber meets the road, the sales floor.” For Best Buy, eliminating sales commissions makes it easier to foster the transparency required for creating valuable customer relationships.
Outside of electronics retailing, improving customer experiences doesn’t mean eliminating variable pay, but it does mean looking at sales compensation differently. Are the right outcomes rewarded? Does rewarding revenue achievement alone work at cross purposes for maintaining excellence in customer experiences and building loyalty? Does increased transparency matter to customers? When it comes to trust, what changes would be most valued? If transparency is increased, what additional changes would cascade throughout the sales organization? Would those changes be positive for building shareholder value?
Best Buy, which now has a new major competitor in Wal-Mart, has the right perspective on trust, transparency and customer experience. I hope others will follow their example.
The VP of sales who shared that idea has a noble vision, and he’s not alone. Building customer trust is inseparably connected to building shareholder value. Not surprisingly, there's great interest: searching the phrase “how to build customer trust” returned 3,890 results on Google. But the VP has a conflict: his sales team is “coin operated,” vernacular for “they earn commissions based on revenue.” Could that undermine the platform of trust that’s core to his strategy? After all, his customers don’t know his company’s sales commission plan, and it’s no secret that clients don't always benefit.
In the US, commission-based arrangements for sales forces come in many flavors and varieties. And they're widespread, according to Barry Trailer of CSO Insights. His company's research found that of companies responding to their 2008 sales compensation survey, 98% included variable pay as part of their compensation plans. I know from personal experience that a commission-earning salesperson walks a fine line as a Trusted Advisor, and there's an ethical morass on either side.
Variable pay by itself doesn’t destroy trust, but the opacity that commonly accompanies it does. The headlines we've read about AIG and Madoff remind us why. In The New York Times, Frank Rich wrote “The question in the aftermath of the Madoff calamity is this: why do we keep ignoring what we learn from the black boxes being retrieved from crash after crash in our economic meltdown? The lesson couldn’t be more elemental. If there’s a mysterious financial model producing miraculous returns, odds are it’s a sham—whether it’s an outright fraud . . . or nominally legal, as is the case with the Wall Street Giants that have fallen this year.” And Republican Richard Shelby of the Senate Banking Committee, quoted in The Wall Street Journal (March 17), said of AIG's widely-condemned bonus payments “There’s been no accountability, no transparency to speak of. . . Whatever we’ve gotten, we’ve had to extract it piece by piece, little by little. There’s too much secrecy.”
Agreed. Secrecy stinks. But Madoff committed deception. AIG . . . didn’t. And in what way do these issues relate to an Account Executive who sells professional IT services to companies in the Midwest? Fair question. There is a connection. Customers think salespeople have something to hide—and that’s a trust breaker. In a March 2, 2009 issue, InformationWeek reported the results from their survey of 345 technology professionals. The participants were asked “if you could get vendors to start doing one thing, what would it be?” Thirty-four percent of the respondents indicated “being up front about how their products do and don’t meet customer requirements.” That was more than twice the percentage for any other response.
In our technology-rich world, it’s humbling to think that good old fashioned honesty exists at the top of the list of customer wants. If only we could easily give our customers what they’re begging for. But for a salesperson with money on the line, “being up front” presents a wide ethical strike zone. And companies use variable pay to influence a myriad of actions, which include the ethical decisions the sales force makes. (Specific ethical dilemmas salespeople face are discussed in an earlier CustomerThink article, "On My Honor As a Salesperson: Why Sales Ethics Matter") Similarly, in my selling past, there were many background situations I didn’t disclose, but they influenced the advice I offered. For brevity, I’ll list just four:
Service plan revenue generated 8% commissions (at the time, the highest percentage category)
Selling direct to customers (versus through a channel partner) credited 40% more revenue toward achieving my sales quota
There was a quarterly bonus of $10,000 for achieving the quarterly revenue goal
Competitive displacements earned higher commission than installed account sales
In March, I decided to investigate this issue in more depth, and through LinkedIn I asked salespeople “Do you think prospective customers should know how much their salesperson might make in commissions and/or bonuses from their purchase transaction?” Although the number of responses received wasn’t large, they supported the idea that for salespeople, such transparency was not needed—with one notable product exception: sales of financial securities. A few nuanced views discussed the importance of disclosing to a customer how much a broker might make selling Security A versus Security B. But why draw a boundary around financial services? Shouldn’t customers of other products and services demand equal levels of transparency from their sales advisors?
Some companies believe so, and in the name of increasing shareholder value, they have adopted a progressive view for creating sales trust and transparency—and been rewarded for the effort. The Wall Street Journal reported on March 16th (Best Buy Confronts Newer Nemesis) that Best Buy CEO-designate Brian Dunn “opposed (Best Buy’s) 1989 decision to do away with commissioned sales in favor of salaried staff, which was widely opposed by sales workers who feared losing income. He now concedes it was the most important shift in company history, lowering worker costs, and changing the core model of electronics retailing. Best Buy expanded across the US, and Circuit City eventually followed by eliminating sales commissions.” To the victor go the spoils. Analysts believe Best Buy will capture half the business of now-defunct archrival Circuit City.
There’s more to that story than just sales commissions, but it’s worth pondering how—for a business as complex and dynamic as electronics retailing—elimination of sales commissions was granted such honored recognition. As one who eschewed buying from high-pressure Circuit City salespeople, I know the decision had as much to do with improving customer experiences as with lowering labor costs. According to Mr. Dunn, “we want our stores to morph into a series of experiences . . . to do that, you need to go where the rubber meets the road, the sales floor.” For Best Buy, eliminating sales commissions makes it easier to foster the transparency required for creating valuable customer relationships.
Outside of electronics retailing, improving customer experiences doesn’t mean eliminating variable pay, but it does mean looking at sales compensation differently. Are the right outcomes rewarded? Does rewarding revenue achievement alone work at cross purposes for maintaining excellence in customer experiences and building loyalty? Does increased transparency matter to customers? When it comes to trust, what changes would be most valued? If transparency is increased, what additional changes would cascade throughout the sales organization? Would those changes be positive for building shareholder value?
Best Buy, which now has a new major competitor in Wal-Mart, has the right perspective on trust, transparency and customer experience. I hope others will follow their example.
Friday, March 6, 2009
When False Expections Lead to "I Don't Think There's Anybody Back There"
If you’re old enough to remember Wendy’s Where's the Beef? commercial, you’ll recall Clara Peller, the woman on the right of the skeptical customer trio, slipping in one final barb, “I don’t think there’s anybody back there,” as she struggles to peer across an oversized sales counter. I doubt if anyone reading this hasn’t wondered the same thing at least once after clicking “submit” on a customer support web page.
The commercial parodies the frustrations of customers trying to squeeze a plaintive request through a monolithic corporate bureaucracy, and it would be even funnier if it weren’t so true. The ladies’ voices echo off stark, confining walls, ominously distorted by the camera. It’s unclear who they are talking to. There’s no response to their now-iconic question “Where’s the beef?” Dancer Fitzgerald Sample, the ad agency that created the commercial in the early ‘80’s, might have been unintentionally prescient of Voice of Customer (a yet-to-be popularized term at the time) challenges in the age of the Internet.
Technology hasn’t made us any better at hearing customers. But the issue is greater than companies using simple email services and Web 2.0 to craft a “we’re listening to you” image for their customers and prospects. That over worn approach has now become a cliché. It’s about companies taking action when they’re creating the expectation that they are going to take action.
In the last two weeks, I’ve requested support from two companies, CraigsList, and a communications service called DimDim. Both companies offer an online feature that enables a person to send questions and other information from a web page. In both instances, I carefully composed a written explanation of my support question and clicked “Submit.” Then—nothing. It’s more than a coincidence. It’s happened with other companies enough times that when I see Clara trying to peer over that counter, I know exactly how she feels.
What should customers expect? Well, at the very least, to receive a response. In the case of CraigsList and DimDim, an auto response such as “Thank you for your question. Because our support manager decided to take two months off to go mountain biking in the Andes, it might take a week or so to answer your question.” would be better than to hear nothing at all. A few websites offer a great service that requests my phone number online. Within one second after clicking “submit,” my phone rings! Then, an agent gets on the call. At least I know there’s someone on the payroll!
Failure to support breaks trust, and breaking trust is fatal for successfully selling anything. In an era when so many past truths are called into question, the certitude of “no trust, no sale” might even be half comforting.
I don’t care how cool a company’s technology is. When they belly flop on customer support, what message does that send about how they care about their customers? What information do consumers receive about the capabilities of their operations? What do they convey about their ability to provide value in the future? I don’t think there’s anybody back there!
The commercial parodies the frustrations of customers trying to squeeze a plaintive request through a monolithic corporate bureaucracy, and it would be even funnier if it weren’t so true. The ladies’ voices echo off stark, confining walls, ominously distorted by the camera. It’s unclear who they are talking to. There’s no response to their now-iconic question “Where’s the beef?” Dancer Fitzgerald Sample, the ad agency that created the commercial in the early ‘80’s, might have been unintentionally prescient of Voice of Customer (a yet-to-be popularized term at the time) challenges in the age of the Internet.
Technology hasn’t made us any better at hearing customers. But the issue is greater than companies using simple email services and Web 2.0 to craft a “we’re listening to you” image for their customers and prospects. That over worn approach has now become a cliché. It’s about companies taking action when they’re creating the expectation that they are going to take action.
In the last two weeks, I’ve requested support from two companies, CraigsList, and a communications service called DimDim. Both companies offer an online feature that enables a person to send questions and other information from a web page. In both instances, I carefully composed a written explanation of my support question and clicked “Submit.” Then—nothing. It’s more than a coincidence. It’s happened with other companies enough times that when I see Clara trying to peer over that counter, I know exactly how she feels.
What should customers expect? Well, at the very least, to receive a response. In the case of CraigsList and DimDim, an auto response such as “Thank you for your question. Because our support manager decided to take two months off to go mountain biking in the Andes, it might take a week or so to answer your question.” would be better than to hear nothing at all. A few websites offer a great service that requests my phone number online. Within one second after clicking “submit,” my phone rings! Then, an agent gets on the call. At least I know there’s someone on the payroll!
Failure to support breaks trust, and breaking trust is fatal for successfully selling anything. In an era when so many past truths are called into question, the certitude of “no trust, no sale” might even be half comforting.
I don’t care how cool a company’s technology is. When they belly flop on customer support, what message does that send about how they care about their customers? What information do consumers receive about the capabilities of their operations? What do they convey about their ability to provide value in the future? I don’t think there’s anybody back there!
Wednesday, March 4, 2009
What Makes a Social Network Valuable? The Answer Might Surprise You
“What do we know about the networks of high performers? What promotes knowledge worker productivity? What would you do if you could see the networks? What would you do differently?” Rob Cross, author of a new book, Driving Results through Social Networks, shed light on the answers to these questions and others in a webcast I attended on February 19.
These questions are especially important because the answers lead organizations away from practices that worked a year ago, but might not today. For example, if you really want to know how your firm won a new client, what’s the value in knowing that your marketing team began by mining a database? As Mr. Cross shares, “when you look inside teams and see networks that are forming around an idea, you get a totally different perspective about how value is getting built in organizations.” And that perspective offers killer insight for sales teams.
The Social Network Analysis (SNA) tools Mr. Cross describes identify bottlenecks and gaps that hinder customer relationships. They also identify where “value is built out,” and where cross-selling occurs—insights particularly important for large, multi-division global organizations. Adding more Web 2.0 connectivity won’t help. According to Mr. Cross, “we don’t need more calls, meetings, and emails.” The key strategic and tactical changes result from learning where and how organizations need to add social network connectivity, both internally and externally.
Mr. Cross offers a social network taxonomy and fascinating statistics that upend entrenched views about how ideas are created, sold, and implemented. Three types of people hold critical importance:
Central Connectors: Leaders, experts, long-term employees. Central Connectors represent 3% to 5% of the individuals in a company, but account for an astonishing 25% of the value-added ties—relationships that foster the transfer of best practice knowledge, innovation, and revenue. Unfortunately, when it comes to information flow and value exchange, the same people can also create bottlenecks and impediments.
Brokers: The “unsung heroes” of an organization. Brokers drive change through organizations through their cross-division, and cross-department connections. Mr. Cross discovered that a paltry 30% overlap exists between these enablers and the “top talent” that corporate HR departments identify through traditional contribution measures such as revenue achievement. Ignore the insight at your own risk. Many know from painful experience what happens when a company lays off a critical inside resource who was viewed as “overhead.” “We’re sorry about Tom. He just didn’t have the numbers to justify our keeping him on board.”
Peripheral players: As the term connotes, peripheral players have few connections, and 40% are newcomers to their organizations. This issue presents special challenges for distributed sales forces. When new salespeople are brought into an organization, their companies suffer from long periods of low productivity as salespeople assimilate the tacit knowledge required for the job. But as Mr. Cross points out, social network analysis identifies opportunities to more rapidly connect peripheral individuals—and the knowledge [i]they[/i] bring—into their organizations.
So given these archetypes, what [i]do[/i] we know about high performers and their social networks? One thing is clear: bigger is not necessarily better. Through his research Mr. Cross found that high performers
Develop networks that minimize insularity
Maintain balanced ties across organizational lines
Nurture relationships that extend individual expertise
Mr. Cross demonstrated how to identify these individuals through looking at actual network diagrams. In one instance, using just one mouse click, he subtracted them from the network. The remaining people in the network appeared almost free-floating in space, untethered to Central Connectors in other divisions remaining on the screen. Through this representation, the real-world result becomes chillingly apparent: a company that doesn't know its key liasons with its customer community can become virtually isolated if--and when--those individuals leave. Does the possibility that this could happen (slowly [i]or[/i] quickly) keep you up at night?
Advances in Social Network mapping will enable companies to examine collaboration for sales and business development in a new light. What are the strategic opportunities? The risks? The costs? Mr. Cross frequently points out the irony that companies scrutinize routine travel expenses to the penny, but don’t often track collaboration costs such as time spent in meetings—possibly a far more significant expense for many corporations.
Mr. Cross shows that the energy that flows around the creation, development, and implementation of ideas can not only be documented, but that social network analysis yields new ways to model how enterprises create and transfer value. As the state of the art matures, it's exciting to think about how companies will use this insight. Which new strategies, tactics, and processes will result?
These questions are especially important because the answers lead organizations away from practices that worked a year ago, but might not today. For example, if you really want to know how your firm won a new client, what’s the value in knowing that your marketing team began by mining a database? As Mr. Cross shares, “when you look inside teams and see networks that are forming around an idea, you get a totally different perspective about how value is getting built in organizations.” And that perspective offers killer insight for sales teams.
The Social Network Analysis (SNA) tools Mr. Cross describes identify bottlenecks and gaps that hinder customer relationships. They also identify where “value is built out,” and where cross-selling occurs—insights particularly important for large, multi-division global organizations. Adding more Web 2.0 connectivity won’t help. According to Mr. Cross, “we don’t need more calls, meetings, and emails.” The key strategic and tactical changes result from learning where and how organizations need to add social network connectivity, both internally and externally.
Mr. Cross offers a social network taxonomy and fascinating statistics that upend entrenched views about how ideas are created, sold, and implemented. Three types of people hold critical importance:
Central Connectors: Leaders, experts, long-term employees. Central Connectors represent 3% to 5% of the individuals in a company, but account for an astonishing 25% of the value-added ties—relationships that foster the transfer of best practice knowledge, innovation, and revenue. Unfortunately, when it comes to information flow and value exchange, the same people can also create bottlenecks and impediments.
Brokers: The “unsung heroes” of an organization. Brokers drive change through organizations through their cross-division, and cross-department connections. Mr. Cross discovered that a paltry 30% overlap exists between these enablers and the “top talent” that corporate HR departments identify through traditional contribution measures such as revenue achievement. Ignore the insight at your own risk. Many know from painful experience what happens when a company lays off a critical inside resource who was viewed as “overhead.” “We’re sorry about Tom. He just didn’t have the numbers to justify our keeping him on board.”
Peripheral players: As the term connotes, peripheral players have few connections, and 40% are newcomers to their organizations. This issue presents special challenges for distributed sales forces. When new salespeople are brought into an organization, their companies suffer from long periods of low productivity as salespeople assimilate the tacit knowledge required for the job. But as Mr. Cross points out, social network analysis identifies opportunities to more rapidly connect peripheral individuals—and the knowledge [i]they[/i] bring—into their organizations.
So given these archetypes, what [i]do[/i] we know about high performers and their social networks? One thing is clear: bigger is not necessarily better. Through his research Mr. Cross found that high performers
Develop networks that minimize insularity
Maintain balanced ties across organizational lines
Nurture relationships that extend individual expertise
Mr. Cross demonstrated how to identify these individuals through looking at actual network diagrams. In one instance, using just one mouse click, he subtracted them from the network. The remaining people in the network appeared almost free-floating in space, untethered to Central Connectors in other divisions remaining on the screen. Through this representation, the real-world result becomes chillingly apparent: a company that doesn't know its key liasons with its customer community can become virtually isolated if--and when--those individuals leave. Does the possibility that this could happen (slowly [i]or[/i] quickly) keep you up at night?
Advances in Social Network mapping will enable companies to examine collaboration for sales and business development in a new light. What are the strategic opportunities? The risks? The costs? Mr. Cross frequently points out the irony that companies scrutinize routine travel expenses to the penny, but don’t often track collaboration costs such as time spent in meetings—possibly a far more significant expense for many corporations.
Mr. Cross shows that the energy that flows around the creation, development, and implementation of ideas can not only be documented, but that social network analysis yields new ways to model how enterprises create and transfer value. As the state of the art matures, it's exciting to think about how companies will use this insight. Which new strategies, tactics, and processes will result?
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