You Can't Do Strategy Without Input from Sales
One of the best books ever written about selling is David Dorsey's The Force. Dorsey turns a year in a Xerox sales district in Cleveland into a riveting drama about people, accounts, the operatic highs and lows of the sales cycle, and the triumph of making quota. Dorsey focuses on Fred Thomas and his sales team and the sometimes strange but effective motivational techniques of his district manager, Frank Pacetta. It's a great ethnographic study of B2B selling for capital goods.
But even as Thomas and Pacetta make their sales, Xerox is missing the larger strategic point, although the facts are staring at them in every office where Thomas and his team make sales calls: more and more copies are being handled by printers linked to personal computers, not by copiers. Thomas is doing his best to maintain Xerox's share in copiers. But the disconnect between sales and strategy (in this case, a lack of strategy to deal with a technology that is redefining the market and customer behavior) is the hidden subtext of the book.
Even Dorsey, as great an observer as he is, misses it. Instead, he explains that by the mid-1990s Xerox competed with Canon, Kodak, Minolta, Ricoh, Savin, and other copier manufacturers, without mentioning HP, Brother, and other makers of computer printers that were eating Xerox's lunch. It makes Dorsey's summation of his story a non sequitur: "A once-thriving American business loses share to the Pacific Rim, gets scared, adopts TQM practices, raises productivity, and begins to win back business. The way the Cleveland district sells copiers illustrates . . . this comeback." No. How could it be when selling, however clever and creative, is divorced from the main strategic reality facing the firm?
Twenty years later, the real lesson of the Xerox story may seem obvious. But this disconnect between strategy and sales is costly, dangerous – and pervasive. Selling is, by far, the most expensive part of implementation for most firms. Yet, relatively few strategies—some studies indicate less than 10%–carry through to successful execution and, on average, companies deliver only 50-60% of the financial performance that their strategies and sales forecasts promise. That's a lot of wasted effort and money. Similarly, a recent survey of more than 1,800 executives across industries found that their biggest challenges are ensuring that day-to-day decisions are in line with strategy and allocating resources in a way that supports strategy.
What's the problem? One big problem is that in business schools, daily practice, and strategic planning, sales and strategy are treated, as in Dorsey's book, as separate worlds. In academia, there is remarkably little written about how to link strategy with the nitty-gritty of field execution. Few of the many, many books and articles on strategy formulation have much, if anything, to say about the role(s) of a company's sales channels in executing strategy. In fact, sales advice, if it's even discussed, usually revolves around a combination of "reorganizing" and "incentives." But there's no one best way to organize, and sales reorganizations are always costly and risky because they disrupt established call patterns and client relationships. And appropriate incentives are a necessary but not sufficient cause of getting field behaviors to align with company goals. You ultimately can't substitute money for management.
What does exist in practice is a vast trade lore (most of it anecdotal but some grounded in good research), mainly from consultants and trainers who believe in a particular selling approach. But they also treat selling in isolation from strategy, and so the focus of much sales training can have a perverse effect: people work harder but not necessarily smarter.
Finally, the planning process in firms generates a disconnect. About two-thirds of companies treat strategic planning as a periodic event, typically as part of the annual capital-budgeting process. Companies tend to do plans by P&L unit, even when Sales (for good reasons) sells across those units. The average corporate planning process takes 4-5 months per year. While this is going on, the market is doing what the market will do, and sales must respond issue by issue and account by account. In other words, even if the output of planning is a great strategy (a big if), the process itself often makes it irrelevant to sales, which is responsible for executing strategy where it counts most: in daily interactions with customers.
Linking sales efforts with strategy is vital for profitable growth and must be a two-way street. In any business, value is created or destroyed in the market with customers, not in planning sessions or training seminars. Without credible sales input, any strategy runs the risk of dealing with yesterday's market realities, not today's. Conversely, daily selling efforts—successful or unsuccessful, smart or stupid—constrain and redirect strategies in often unintended ways. Selling in your firm can't generate sustained returns if it's not linked to your strategy.
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