by Cindy Barnes
Then, over time, the company can either add to this solution or create more new solutions until such a time as a greater part of its offerings are now solutions. In this way, some of the existing sales staff can make the transition to a different style, while some customers – they won’t all do it – shift their buying from commodity to solutions. The key is to make the shift evolutionary, not revolutionary.
While this explanation makes the whole process sound easy – it isn’t. There is a huge psychological barrier that those individuals who interact with existing customers must be helped to cross. Selling is a challenging job and harder still when an experienced salesperson is asked to alter an approach or style. Coaching may help as well as carefully prepared scripts or role-plays to provide him/her with the confidence to attempt a new skill.
Law 8: use the sales process as a guide and select the appropriate sales approach and style for your market positioning
Many businesses, particularly technical or engineering businesses, lump all things ‘sales’ into one big category. To fully exploit the tools and techniques presented in earlier chapters, it is crucial to understand the differences between:
Sales process: the stages are the same for all, but the techniques for moving through the process are different depending on what is being sold and the sales approach.
Sales approach: transactional or consultative.
Selling style: transactional, expert, solutions or consultative.
For any given marketing strategy, companies should select the most appropriate sales approach and style for their business. Mixing styles can be disastrous.
The sales process lists the stages of any sales opportunity – starting from suspect through to contracting the deal; whether or not a company uses a documented sales process, all sales follow these stages. For some types of selling it can all happen quickly, even in one meeting; for others, the process can take months or years. Deploying a documented sales process is a useful way to:
manage sales;
forecast sales;
inform others in the business what is happening with any given opportunity;
map sales support needs.
The sales process exists regardless of the industry involved, the sales approach selected or the selling style. It is universal.
The sales approach relates to how a company’s offerings are positioned in the marketplace. Transactional selling supports efforts on the lower half of the Value PyramidTM and consultative selling, the upper two layers. The two types of selling are very different and, typically, a different sales force is used for each:
Use transactional selling for commodity or amalgamated offerings.
Use consultative selling for solutions or joint ventures.
The sales style
There are, fundamentally, four different sales styles and each is appropriate for different situations:
transactional;
expert;
solution;
consultative.
Do not confuse the consultative selling style with ‘selling consulting’ – the two are very different and selling consulting is closer to the expert style of selling.
Sales skills
All discussions in this book have assumed that all or any salesperson will possess competent, core selling skills. These skills have not been covered, not because they are not vital, but because there are literally hundreds of authors who have written about the topic already. So, while one cannot make a good meal without high-quality ingredients, it is also impossible to create a high-performing sales force if they do not possess the basic skills.
Law 9: you can’t mix your selling styles in one meeting
You must have a team selling process with clearly delineated roles and responsibilities – you cannot mix your selling styles (eg consultative with transactional) in one meeting. This mixing of different representatives and styles from the same selling business is such a common but significant error that it merits its own separate law. How can a business determine whether it regularly makes this mistake? A business that uses a well-defined sales process and approach will find itself in this position less often. Selling is not ‘one size fits all’. Companies should invest the time and effort in understanding what is most appropriate for their particular business. Given these basics, there are some rules that can be followed to avoid the perils of accidentally and inappropriately mixing sales types in one meeting:
Never send two or three different (and competing) sales types to a qualifying meeting ‘just in case’.
Always prepare, do research and then make a judgement about which sales type would be more appropriate. Hedging bets and sending them all will most likely end in a lost opportunity and an annoyed or confused prospective customer.
Never send inappropriately skilled sales staff to customer meetings, particularly the qualifying meetings.
Always make it clear who is in charge when there are two or more representatives from your company in a sales meeting. Whoever is in charge has final accountability for making a successful sale and should direct the conversation.
Law 10: this process – the value proposition work and organizational adjustments – never stops
If there is one fundamental principle in business, it is that everything changes: the market, customers and their requirements, suppliers, employees, government legislation… the list goes on. The Value Proposition Builder™ process is an excellent way to help manage change and design for future innovation.
Once a company has carried out value proposition work, it should have developed the skills and behaviours to continuously assess its business ‘treasures’ and understand the entire business ecosystem. Coaching may help in driving forward the process and guiding appropriate behaviours but, fundamentally, such a company will have shifted to a more customer-centric business and the necessary adjustments will become easier and easier to implement without external help. This condition will leave a company in a far healthier position to respond to customers and the market, and to deliver profitable business.
By following these laws you have the foundation you need to start building a selling organization: one that is customer-centric, resilient and responsive to change.
Reference
Berne, Eric (1963) The Structures and Dynamics of Organizations and Groups, Grove Press, New York
08
Creating the selling organization
We started this book with a contemporary paradox. Although customers have more power than ever, they are less satisfied with the businesses that serve them. As we have seen, this customer power comes from factors like ubiquitous technology, easy access to information, growing competition and the spread of globalization.
And as this book has illustrated so far, many businesses are failing to meet expectations. They are not putting the customer first (even though many are likely to say that they do) and not building their sales propositions on the things that customers genuinely value. As a result, they are missing opportunities and getting attacked by disruptive competitors.
We have examined how to tackle this problem head-on – first by developing a value proposition that is rooted in a genuine understanding of customers, and then translating it into powerful customer sales propositions. Then we looked at how best to deploy appropriate sales approaches at the right time, backed up by sales stories that take customers on an emotional journey.
Throughout the book we’ve featured organizations that have put this new approach into practice to different degrees, in every case with a measure of success. In fact for some of the organizations featured, it has transformed the way they work.
The subtitle of this book is ‘How to transform your business into a selling organization’. If, like the businesses we’ve featured, you follow the approach outlined so far, there is much to be gained. Organizations have created entirely new, successful business lines, stemmed losses and reconnected with customers they had been losing. It is powerful stuff.
But the most success has come from when people create a ‘selling organization’. This does not just refer to an efficient sales operation (although sales should definitely be efficient). Much more than ‘papering over the cracks’ – rebranding, for example – it is about transforming into the type of organization that is totally focused on meeting customer needs. A key component of this is to achieve the right balance between organizational structures and behaviours.
3rd Law of Value Proposition Selling: the structures and behaviours of a business must be kept in balance with each other.
If structures are more dominant the organization will be too rigid and inflexible; however, if behaviours dominate then the organization will tend to have a culture of being personality-led and responding to the individual(s) with power.
Sounds easy, right? Indeed for some organizations, it is. If you are a start-up, without a sprawling, legacy structure to deal with, it is not hard to build everything you do around the customer. Many of the disruptors in financial services – such as Metro Bank, which uses internal social networks to spur innovation – are doing this. Even larger organizations, and even those in the public sector, can make the change too. As Aylesbury Vale District Council (featured in Chapter 2) shows us, a local authority can be an agile innovator with the right customer insights, leadership and motivation.
For many businesses, though, the path to becoming a selling organization is harder. The key reason is that this kind of organization is very different from the traditional hierarchical structures that have prevailed for so long.
A ‘selling organization’ has more in common with a biological system. It is flexible, and open to new ideas and influences. It learns fast from its experiences and its errors. It includes plenty of strong feedback loops. And it is prepared to take risks and to trust its partners.
Describing this as ‘redesigning for resilience’, business thinker Giles Hutchins illustrates the idea simply.
All organizations are somewhere on a spectrum between these two extremes – although the old-fashioned hierarchy on the left-hand side of Figure 8.1 is still very persistent today.
Figure 8.1 Hierarchy versus resilient design
SOURCE Hutchins, 2016a
It does not take an imaginative leap to instantly see how difficult it can be to make quick, responsive decisions in a traditional organization. An issue is referred up through layers of management, where it can get stuck in silos, overlaid with the assumptions of senior managers, and generally lost. And if there are multiple P&Ls held by different people in the different silos, this causes problems too: a new solution that cuts across business lines might be profitable in one country, but loss-making in another. Anyone who has worked in an organization of any scale is likely to have experienced one or more of these difficulties.
The old style of organization has its roots in the Industrial Revolution and the principles of ‘scientific management’, when a business was entirely focused on making products as efficiently as possible and then ‘pushing’ them out to the market. Hutchins (2016b; see also 2016c) describes this as the ‘machine paradigm’:
The responsibility for optimizing the organizational machine became management’s domain and their primary concern. This mechanistic logic coupled with economies of scale, centralization and control-based thinking led to the hierarchical organization structure with its silos and bureaucracy we know only too well today. Employees were relegated to the role of efficiently performing the duties as defined by management. As management seeks to improve the efficiency of the machine, they unwittingly undermine the creativity, agility and empowerment of people in the process… No matter how we try to reconfigure a machine, the very idea of a machine means it is not very agile or creative and, notwithstanding our love of technology, we rarely feel passion for, or commitment to the machine.
Hutchins summarizes the differences between a ‘machine’ and ‘living’ organization as follows:
TABLE 8.1 Differences between mechanistic and living organizations
Machine
The Living Organization
Produces
Creates
System of discrete components
Organic interdependent relationships
Does as it is told
Learns and adopts
Purpose is to ‘do’
Purpose is to serve
Predict and control
Sense and respond
Transactional
Relational
SOURCE Hutchins, 2016b
Ways to create the selling organization
How do you build a selling organization? There is no single, tried-andtested method. Business has been experimenting with alternative ways of organizing itself for many years. What has emerged is a range of approaches, all of which have been successful in different ways and to different degrees. For some organizations these have been the foundation for stellar growth or decades-long success; for others, they have been experiments that worked until the old ways took hold again.
Small, semi-autonomous teams
Even the corporate monolith General Motors (GM), which ground to a halt in 2009 and had to be bailed out by the US government, had successes in its history when it organized along more ‘natural’ principles. Company president Alfred P Sloan introduced a system where autonomous business units were co-ordinated centrally. According to Karl Ludvigsen (2009), this created ‘a vibrant enterprise whose operating divisions were close to their markets and individually creative. They also commanded great brand loyalty. GM’s divisions fought harder with each other than they did with their external rivals, creating a competitiveness that generated fine products and appreciative customers.’
Because full-scale transformation is such a massive challenge, organizations often use spinoffs or small specialist divisions to experiment with new approaches. The term ‘skunkworks’ originates from defence contractor Lockheed Martin, which set up the eponymous division that ultimately created some of its most celebrated innovations. In the book Leading Innovation, Creativity and Enterprise (Cook, 2016) the author Peter Cook explains why size is important when it comes to innovating in a business context. He cites ‘Dunbar’s number’, which, at 150, is the maximum size of a hunter-gatherer community and the ‘cognitive limit’ on the number of people with whom it is possible to have stable relationships.
The experience of GM shows how it is possible to create a ‘selling organization’ – in fact, several of them – within a large company. Its success in its glory years can be attributed at least in part to the fact that small, autonomous divisions could be much more responsive, with teams closer to one another and to customers. As a result, they were able to develop clear sales propositions that resonated emotionally with customers. Once the company consolidated and centralized, it lost this advantage. The rest is history.
Decentralized organizations
Visa International
Visa International was developed in the 1960s on entirely decentralized principles. Founder Dee Hock created a highly collaborative organization designed to deal with its complex marketplace, where its bank customers had simultaneously to co-operate and compete with one another. Hock has variously described Visa as ‘largely selforganizing’, ‘enabling’ and ‘management-proof’. Indeed when Hock left Visa to go farming for a few years, the company carried on its successful trajectory (Waldrop, 1996).
History suggests that Hock’s ‘whole organization’ approach has been more resilient than autonomous teams at GM. According to Ludvigsen, the automaker’s failure came about as it gradually lost touch with its customers. Visa remains a multibillion-dollar global organization that has not needed bailouts to build and maintain its strong market position.
WL GORE & Associates
Materials manufacturer WL Gore & Associates describes its structure as a ‘flat lattice’. It is designed to encourage individual initiative from its employees, who are called ‘associates’. In sharp contrast to the traditional c
orporate hierarchy that co-founder Bill Gore had experienced at chemical company Du Pont, the company has ‘no traditional organizational charts, no chains of command, nor predetermined channels of communication’.
Associates don’t have bosses, but are instead accountable to fellow team members. And rather than being forced into specializations, they are encouraged by ‘sponsors’ to find projects that match their ability and skills. According to Gore, leaders are more likely to emerge naturally than to be appointed, and they are defined by ‘followership’.
Four guiding principles for all associates hold the lattice together:
fairness to each other and everyone with whom we come in contact;
freedom to encourage, help and allow other associates to grow in knowledge, skill and scope of responsibility;
the ability to make one’s own commitments and keep them;
consultation with other associates before undertaking actions that could impact the reputation of the company.
With sales of over US $3 billion and 10,000 associates, Gore has appeared in Fortune’s annual ‘100 Best Companies to Work For’ list since 1984, ranking seventeenth in 2015, and in the same year was third-placed in the World’s Best Multinational Workplaces list by the Great Place to Work® Institute.