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October 28, 2010
 By Mark Faust
It is effective management and not charismatic leadership that builds sustainable competitive advantage, and fosters the process of innovation. Now, more than ever, better management is needed to grow companies and organizations.
Charismatic leadership is a dangerous fad, and “leadership charisma” is not a sustainable basis for successfully building a company or managing any type of organization, salesforce, team or even a nation.
At the heart of many floundering organizations and teams is the struggle between charismatic leadership versus an effective management process. Where is your company focus?
When a salesforce surrenders to a charismatic leader; throws hope behind an individual and not process, charisma and not logic, speeches and not dialogue, then we are surrendering our own responsibilities, and thus our own freedoms.
 Leadership What does this mean to you as director over a salesforce or team in a business? Focus less on your style and desire to inspire or motivate your salesforce with emotive effort and focus more on the process of management, continuous improvement, systematic innovation, logic, and focus on the customer. As a result you will build sales, profits, and the quality of your team.
If you are an owner, president or top manager, you must focus on effective management not leadership. Here are the operative meanings of these two words:
• Management – maximizing the strengths of resources around you (human and otherwise) while minimizing the impact of the weaknesses in order to reach agreed upon objectives.
• Leadership – motivating groups or individuals to follow your direction, vision or desires bya variety of possible means (charisma, persuasiveness or power)
Hitler, Mussolini and Mao were powerful leaders, but poor managers who followed few of the essential elements of effective management. They led by threats rather than mutual dialogue. Perhaps, you could think of a few more modern “leaders” currently in power around the world. Are they good managers though? Truman on the other hand, was not known to be a good leader, but he is recorded as a president who was one of the best “managers” in the presidency, and was highly effective, despite some mistakes politically he may have made.
Washington and Lincoln were not known for their charisma as much as they were known for earning and giving respect. They didn’t dictate as presidents, they managed.
By this time you may be thinking, “This is just semantics.” No, this is a battle to shift the focus in business from too much weight being put on relationship and charisma to more emphasis on the process of value creation, systemic innovation, logic and focus on the customer. For example, great managers are good facilitators who help their team continuously clarify and refine objectives and the measures of success.
Are you helping your salesforce or teams continuously refine their individual and organizational objectives?
Here are steps you can take to become a better manager and help your salesforce or organization eschew the lure of charismatic leadership.
1. Work with the team to clarify goals…quarterly not annually.
2. Take responsibility. Don’t feel threatened by ambitious subordinates, but celebrate their triumphs with them. Don’t point blame on others. Understand that responsibility ultimately lies with you (be the anti-Donald Trump).
3. Earn trust by being consistent, managing expectations, clarifying and reinforcing clear values that your organization believes in and helps build.
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October 21, 2010
By Mark Faust
On the wall of an employer hung the sign, “In business as in life it’s all about three things: 1. Relationships 2. Relationships 3. Relationships.”
While recently participating in a conference of sales VP’s, we heard from researchers and panels of successful sales leaders who shared some contrarian insights. University professors Dr. Chris Plouffe and Dr. Arun Sharma shared a variety of insights from their extensive research on selling and sales effectiveness.
One discovery was that younger salesforces tend to outperform older salesforces. Now this did not mean that a sales team of twenty somethings will consistently outsell those with ten or twenty years more experience, rather sales teams with average ages lower than companies very similar to them consistently had better results. They mentioned the younger salesforce performance factor because it related to another more important finding; effective relationship sellers are significantly out sold by those that focus their selling on added value.
In fact, sales reps that are not as well liked as others on a team are often significantly outselling reps who rate very high on rapport and relationship because they sell value well.
 Relationship vs. Value Selling This didn’t mean that relationships were not important; rather, what these new studies are showing is that in our new economy, selling value is more important than ever, and selling value is getting better results.
This has brought to mind the many experiences of our smaller agricultural company clients whose most experienced reps have been losing business to “young punks” from the larger multinationals. While our clients weren’t often certain why they lost the business, and the sales reps were pointing to that “special deal” or “special pricing” as the reason for the lost business, our research finds otherwise.
As is customary in our work, we interview champion customers, customers with potential for significant growth, and lost customers. The customers lost to the large multinationals do occasionally mention certain “deals” they may have received or some attractive pricing offer, but more often than not, they speak in terms of how the package offer is a better overall value and how they feel and hope that by going with the new supplier they are going to make more money. While some will sometimes point that the “more money” is coming from a lower price, in the same breath those lost customers are asserting that the quality, effectiveness and result from the product and service is basically the same, but most lost customers believe that there will be an increase in performance/value/profits/net return. They were consistently sold by the “young punk” on value, not relationship.
So what can you do to insure that all of your team is improving their focus on value?
The Value Quota – Metrics for Success
In the dashboards and metrics that we help sales management build to better manage their team; we often suggest a measurement, coaching around and inspection of Value Clarification. Rather than starting the focus on “how much do you think you can sell customer X?” start the focus on “how much added value do you think you could bring to customer X and why?”
How do you think your customers wish you would sell them? Wouldn’t they prefer that you created a list of not just the biggest customers, but a list of those whom you thought would have the most financial gain from your solution? Suppose target lists were managed not on the supplier’s benefit and profit, but on the customer’s. Your sales will go up; we know it, because we see it all the time.
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September 21, 2010
By Mark Faust
Selling is one of the most emotionally draining efforts in business. One’s self esteem is put to the test with each challenge, objection and rejection. But unlike most competition, sports, or even war, sales is usually a fight that one person is making on their own. Worse yet, if one fails in a sales call or series of efforts, they not only face the initial rejection, but the cross examination and second guessing from management and their peers.
So given the pressures and solo nature of sales is there anything that can be done to ameliorate the potential for self doubt, emotional downturns and static sales strategies?
There is a strategy that many of the best companies strategically employ to foster continuous improvement in selling efforts, cross training, improved esprit de corps and for enhanced credibility; team sales calls. Unlike the shadowing of a sales manager with their sales rep, team sales calls of two sales reps have a different dynamic. There are times where it is important to have management shadow sales reps, but this strategy is different.
 Team Sales Calls What we have found with client after client is that when occasional team sales calls are scheduled between peers in the field there are several benefits; increased productivity, exchange of selling strategies and ideas, improved closing ratios and improved morale.
We find that tying current top objectives to the purpose of the team sales calls can often accelerate progress toward reaching those objectives. Whether it’s training and skills improvement, productivity improvement or just improving sales revenues, incorporating team sales calls can often help a company to reach its sales development goals faster. Here are a few applications of the concept:
Peer to Peer Evaluations & Training – Sales reps of all experience levels have areas that they could improve. Having your sales team create a list of areas that they would like to improve organizationally and in their own selling execution is a great start to beginning peer to peer evaluation and training. Create a check list and/or ratings sheet of areas that need to be evaluated. Alternate reps evaluating each other on team sales calls as well as require recommendations for improvement. Professionals that evaluate others on their performance end up learning much for themselves. Best of all the recommendations tend to be more readily received because they’re from a peer and not “just management who doesn’t really know what it’s like out there right now anyway.”
Sales Blitzes – To address productivity that is lower than the potential or to penetrate a territory quickly that is new or has been somewhat ignored, it can be quite effective to get “all hands on deck”. Put as many people into this target territory to make joint sales calls and see as many of the prospects and customers as possible. The teaming tends to ensure that everyone is productive and making as many calls as possible. The result is proof and confidence that a much greater number of calls can be made. Also, it can be a bit of a shock treatment for the market/prospects who experience your company coming out in full force and thus making quite a powerful impression.
King Calls – Involving presidents, GM’s and owners on calls can be miraculous at improving credibility, shortening sales cycles and bringing improvements to the sales efforts. Customers and reps appreciate the respect that is shown by occasionally having the top echelon out in the field. Many of the best CEOs make this a regular practice.
Determine where you could make team sales calls and watch sales improve!
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March 9, 2010
What is the Goal of Your Business?
By Mark Faust@EchelonManagement.com
“The goal of this business is to make money, of course!” responded the owner.
Then we asked a few more questions.
How do you involve your team in efforts to improve profitability or has this mostly been the job of management?
- Besides yourself, who else is given incentives to improve profitability?
- How aware are your people as to what areas most affect profitability, such as pricing concessions, controllable expenses etc.? Are you able to prioritize, quantify and communicate to the team to what extent the top areas of profit drain are within your business?
- What types of business, customers, products, services etc. yield you the greatest profitability? Is your sales team aware of these and are there incentives for them to sell profitably? Are you coaching them to effectively – helping to move more business toward the more profitable areas?
- What we find with our clients is that tremendous increases in profit can occur by implementing a process around improving profits. Here are a few strategies that can help to create results around increasing profits.
  It helps if you can determine incremental awards or incentives around ideas that improve profits. We’ve seen rewards given as a percentage of money saved and thus tens of thousands of dollars with a potential cap as well as simple small cash or gift card awards for any and every idea that has an impact on profitability. Determine an incentive program that you can live with and deliver upon regardless of how voluminous the profit improving ideas may become. Back up monetary rewards with genuine praise and gratitude; this can be in written or formal spoken expression.
Not that selling your most profitable products and services is always the highest priority, but it helps to show your team the rankings of how your products and services stack up in regards to profits. It also helps to show as many areas of costs that may have any potential for improvement. Don’t limit these areas to just the immediate areas of responsibility of the employee, but rather allow their creativity and awareness of what is happening on the front lines of your business help to innovate completely new solutions or incremental savings no matter how small.
Encourage even the smallest of savings. Even if just 15 employees came up with 15 ideas that each increased profitability by an average of just .05%, that could in some cases work to double the profitability of a company.
Often the greatest drains in profitability occur in the selling process. Sales people often are unaware that even just a one percent price concession is frequently well over a 10% reduction in profitability. Training your team to sell on value and to negotiate options and the estimates of what your solutions stand to deliver are just a couple of ways of inoculating your team from profit draining price concessions.
 There are the Eight Essential Areas of Objectives in the strategic planning process (for a free Strategy Handbook email us) and while Profitability Objectives are of the lowest priority according to Peter Drucker it is still always essential to have specific profitability objectives. Like all objectives they must be measurable on a regular basis, preferably at least monthly. There needs to be clear accountabilities and at least quarterly points at which progress will be measured and discussed.
Involve your whole team in setting and executing upon the objective of improving profitability and you will get far more accomplished than doing it alone.
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October 25, 2009
By Mark Faust
How accurately can you project the sales that will be closed in the next week, month or quarter? Are your team’s projections accurate and reliable? If you experience unpredictable undulations in sales forecasts and revenue, consider implementing a more effective sales pipeline management solution, because the lifeline of many businesses is in the Sales Pipeline.
Ask yourself what it would be worth to: 1. know what deals are going to close by when, 2. be getting the optimal production out of your sales force, 3. know on what you need to focus and 4. how much is needed in order to deliver on the orders?
We interviewed Rye D’Orazio, a partner with Ray & Barney Group, a national consulting firm that has worked with large seed companies as well as a host of small and midsized companies. Here are some points Rye made about the benefits of implementing a pipeline solution in a SharePoint software solution or centrally shared spreadsheet in a simple Excel format.
· You can quickly access a view of the pipeline around 1, 3 or 100 reps
· You’ll foster consistency across the organization, in communication, management and productivity
· Gives you the ability to more accurately predict revenue and production needs
· Streamlines & Shortens sales cycles
· Focuses management on the right areas needing their coaching or assistance
Many managers say their critical success factor is spending more time in the field with the right reps on the right calls to better coach the reps and help advance more of the best business. The pipeline dashboard is perhaps the most needed tool for focusing management.
To begin the process management should involve team in assembling a list as to what they think needs to be managed. The effort should be positioned not as a “reporting tool” but a tool to direct management where to better support, coach, and help them sell more, and better manage resources.
Management should also explain how this helps sales people to see what and where they need to focus more time; i.e., prospecting, advancing, or closing accounts and the art of balancing the large accounts with enough smaller accounts in order to give them both stability in commissions and higher potential earnings.
The next step is to identify your target markets and criteria of what is a real prospect. Then you can label the Sales Phases, for example, they could be:
1. Identifying your prospects
2. Profiling your prospects
3. Setting of appointments or phone call
4. Identification and qualification of Opportunity
5. Proposal
6. Identifying your advocate
7. Footprinting – getting your customer to participate in your building of your proposal
What is in it, only 10 or so items of info,
1. Client
2. Contact
3. Opportunity descript
4. Projected close
5. Line of business
6. Location
7. Dollar opportunity
8. Likelihood to close
9. Using the process
10. Online Current Views of the Sales Pipeline and Reporting
The process needs to be online. If you haven’t migrated sales information online yet, now is the time, the speed and ease of keeping this up to date online is incontrovertible.
This dashboard becomes the tool for owners and managers to have a more accurate view of the sales pipeline and provides better information for coaching reps and running sales meetings. The team will begin to focus on reviewing each opportunity by phase, line of business, location and other elements that are most important for them to get and keep a customer. Suddenly, the focus is on prioritizing activities and helping both your sales reps and customers, make more money.
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