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Harvard business review onpoint summer 2017




FROM THE

EDITORS

Making Sales More Profitable

G

Brent Adamson, Matthew Dixon, and Nicholas
Toman recommend against demanding that reps
than it used to be. Persuasion is no longer enough.
comply with set protocols but, instead, encouragYou need creative people and relevant data in the
ing them to come up with creative insights—and
field, supported by an eicient but flexible operasolutions—for customers. Managers who provide
tion back at home base. And if you manage a sales
that type of support will foster an environment
force, you also must know how to keep your talent
that appeals to smart, engaged salespeople who

engaged and excited.
care about generating value more than getting
In their article “Motivating Salespeople: What
extrinsic rewards.
Really Works,” Thomas Steenburgh and Michael
Even the question of who actually makes the
Ahearne argue that most companies have their
purchase decision has grown knottier. In “Major
incentives all wrong. One-size-fits-all compensaSales: Who Really Does the Buying?” Thomas V.
tion plans undermine team performance, they
Bonoma advises that sellers identify who is in the
say, because salespeople at distinct points on the
performance curve—stars, core performers, and “buying center”—a group that usually includes
initiators, gatekeepers, influencers, deciders,
laggards—vary in how they respond to diferent
purchasers, and users. Each one of them makes
inducements. The authors lay out which programs
choices shaped by diferent—sometimes conflictwork best for each segment of your team and ofer
ing—forces. Closing the deal may therefore take
advice on how to structure incentives accordingly.
skillful investigation and, certainly, emotional
Sales reps also need more autonomy. Because
intelligence. But the payof is decidedly worth the
customers are armed with more information than
investment.
ever before, reps need greater latitude to exercise
judgment. In “Dismantling the Sales Machine,”
—The Editors
GETTING SALES RIGHT IS much more complex

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OnPoint Summer 2017

Contents
92

122

34

44

50

MANAGING TALENT

MANAGING TALENT

MANAGING TALENT

What Makes a Good
Salesman

Motivating Salespeople:
What Really Works

David Mayer and
Herbert M. Greenberg

Thomas Steenburgh and
Michael Ahearne

Leveraging the
Psychology of the
Salesperson

Originally published in
July–August 1964

Originally published in
July–August 2012

56
##

A conversation with
psychologist and anthropologist
G. Clotaire Rapaille

MANAGING TALENT

A Radical Prescription
for Sales
Daniel H. Pink

Originally published in
July–August 2012

Originally published in
July–August 2006

60 70

78

MANAGING THE
ORGANIZATION

MANAGING THE
ORGANIZATION

MANAGING THE
ORGANIZATION

The New Science of Sales
Force Productivity

Dismantling the
Sales Machine

Ending the War Between
Sales and Marketing

Dianne Ledingham,
Mark Kovac, and
Heidi Locke Simon

Brent Adamson,
Matthew Dixon, and
Nicholas Toman

Philip Kotler,
Neil Rackham, and
Suj Krishnaswamy

Originally published in
September 2006

Originally published in
November 2013

Originally published in
July–August 2006

4 Harvard Business Review OnPoint | SUMMER 2017

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92
SALES TECHNIQUES

Major Sales: Who Really
Does the Buying?
Thomas V. Bonoma
Originally published in
May–June 1982



OnPoint Summer 2017
Culled by the editors of Harvard Business Review from the magazine’s
rich archives, these articles are written by some of the world’s leading
management scholars and practitioners. They are accompanied by
“Article at a Glance” summaries, plus suggestions for further reading.

70

104 112

14

122 130

SALES TECHNIQUES

SALES TECHNIQUES

SALES TECHNIQUES

SALES TECHNIQUES

The End of Solution Sales

How Right Should the
Customer Be?

Tiebreaker Selling

Negotiating with a
Customer You Can’t
Afford to Lose

Brent Adamson,
Matthew Dixon, and
Nicholas Toman

Erin Anderson and
Vincent Onyemah

James C. Anderson,
James A. Narus, and
Marc Wouters

Thomas C. Keiser

Originally published in
July–August 2012

Originally published in
July–August 2006

Originally published in
March 2014

Originally published in
November 1988

VOICES
MANAGING TALENT

MANAGING THE ORGANIZATION

SALES TECHNIQUES

10 The Best Salespeople Do
What the Best Brands Do

18 Four Ways to Build a Productive
Sales Culture

Denise Lee Yohn

Frank V. Cespedes and Steve Maughan

30 To Increase Sales, Get
Customers to Commit a Little
at a Time

12 Seven Personality Traits of
Top Salespeople

20 Help Your Salespeople Spend Time
on the Right Things

Steve W. Martin

Andris A. Zoltners, P.K. Sinha, and Sally E. Lorimer

14 Ineffective Sales Leaders Can
Cause Lasting Damage

21 Why Sales Ops Is So Hard to Get Right

Andris A. Zoltners, P.K. Sinha, and
Sally E. Lorimer

15 Why Salespeople Need to
Develop “Machine Intelligence”
Thomas Baumgartner, Homayoun
Hatami, and Maria Valdivieso

Frank V. Cespedes and David Hoffeld

32 When to Sell with Facts and
Figures, and When to Appeal to
Emotions Michael D. Harris

Andris A. Zoltners, P.K. Sinha, and Sally E. Lorimer

136 EXECUTIVE SUMMARIES
23 Support Staff Make Up Nearly Half of
the Best Sales Teams
Michael Viertler, David Sprengel, Sebastian Küchler,
and Jochen Ulrich

26 When You Need Sales Specialists,
Not Sales Generalists Mark Kovac
27 How to Succeed at Key Account
Management Lynette Ryals

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The Best
Salespeople Do
What the Best
Brands Do
by Denise Lee Yohn

I

IT’S NOT NEWS that the role of salespeople and selling is changing. In the past,
salespeople were often the irst step in a purchase process and could signiicantly inluence customer decision making by controlling information about
pricing, availability, competitive advantage, and so on.

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But in this era of nearly ubiquitous information, customers usually engage with salespeople after they’ve researched their purchase
and, in some cases, made their purchase decision. Digital commerce and disintermediation
have caused many customers to question the
importance of having a sales relationship at
all. Moreover, companies are learning that true
sales success isn’t indicated by the number or
size of the deals closed; it’s measured by getting
and keeping the right customers.
Great salespeople succeed in this new business environment by doing what great brands
do. In my irst book I laid out seven critical
brand-building principles that great brands
follow. These principles are as instrumental to
restoring sales to its role as a valuable, sustainable, integral business function as they are to
building great brands.
— Great brands start inside. Great salespeople sell inside first. Just as great brands
start brand building by cultivating a strong

Bogdan Dreava

MANAGING TALENT


brand-led culture inside their organizations, great salespeople know they actually take their irst step to sales success
inside their own companies. They contribute tremendous value through their
market insights and direct communication with customers, and they help with
product development, marketing strategy, and customer service by serving as
the customer’s voice internally.
— Great brands avoid selling prod-

ucts. Great salespeople cultivate emotional connections with customers. In
the book What Clients Love: A Field Guide
to Growing Your Business (Warner Brothers, 2013), Harry Beckwith explains that

Control of the Customer Conversation
(Portfolio, 2011).
— Great brands don’t chase custom-

ers. Great salespeople attract the best
customers for their company. Just as
great brands know they’re not for everybody and seek to attract loyal and profitable customers through shared values
and common interests, great salespeople
are selective when engaging prospects.
Research by VoloMetrix, a sales productivity irm, shows that top sellers build
deeper relationships with fewer customers rather than casting a wider net of
shallower engagement. Salespeople cultivate profitable, sustainable customer

True sales success is measured
by getting and keeping the
right customers.
relatively few businesses actually sell
products, services, or even expertise;
most sell satisfaction. “Progressive does
not sell car insurance. It sells comfort:
the comfort of knowing that if you have
an accident, they will be at the scene,
ready to write a check.” In the same way,
great salespeople don’t try to sell items
or programs. Instead, they appeal to and
connect with their clients through emotion, brand storytelling, and thought
leadership. In doing so they take the attention of price and features and appeal
to the customers’ values and identities.
— Great brands ignore trends. Great

salespeople don’t imitate; they innovate. Great brands don’t follow what
everyone else is doing or take their lead
from customers. In the same way, great
salespeople ofer their customers unique
perspectives and push their thinking.
They challenge customers’ status quo
and teach them something new and
valuable. They are the “Challengers,”
or high sales performers, that Matthew
Dixon and Brent Adamson identiied in
their book The Challenger Sale: Taking

relationships by focusing on accounts
that represent a good it with their company instead of trying to close as many
deals as possible.
— Great brands sweat the small

stuff. Great salespeople create extraordinary experiences that embody
their brand. Great salespeople know
they can strengthen their brand if they
interpret and reinforce it and its differentiating value throughout the sales experience. So they examine all the diferent touchpoints between the customer
and the brand in the sales process and
infuse the most influential ones with
the brand’s key values and attributes.
They’re also aware of the power of social selling and carefully manage their
social network activity to make informed,
authentic, personal connections.
— Great brands never have to “give

back.” Great salespeople create real
value for their customers. Great brands
don’t engage in questionable business
practices and then try to make up for
them with charitable activities and
social responsibility programs—they

create a positive social impact in the way
they design and run their businesses.
Likewise, great salespeople don’t engage
with customers simply to make a sale—
they look for ways to make their clients
more successful. Leadership consultant
Scott Edinger observed, “Sales-training
programs rightly focus on finding clients’ ‘pain points.’ But great salespeople
also know there’s value in pointing out
successes waiting to be exploited.” They
realize that improving a customer’s condition may not always involve a sale, but
nonetheless they do it.
— Great brands commit and stay

committed. Great salespeople impart the unique value of their brand.
Many salespeople feel pressure to gain
new business or retain accounts at any
cost, but the most efective ones do not
give price concessions just to win deals.
They are sure of the value their company ofers, and they skillfully help their
customers understand it as well. They
use the techniques James C. Anderson,
Nirmalya Kumar, and James A. Narus
describe in Value Merchants: Demonstrating and Documenting Superior Value
in Business Markets (Harvard Business
Review Press, 2007), drawing on their
knowledge of what clients value so that
their ofer resonates with them.
Great salespeople implement all of
these principles in a cohesive, coordinated approach that mirrors the brandas-business management approach used
by great brands to develop powerful and
valuable brands. Just as great brands cultivate mutually beneicial relationships
with their customers, great salespeople
develop a deep connection between their
company and their clients’ business.
To borrow entrepreneur Guy Kawasaki’s term, the best salespeople are brand
evangelists. Evangelism, as he deined it,
means “convincing people to believe in
your products or ideas as much as you
do.” Over the years, many technology
companies have developed the role of a
technology evangelist or “chief evangelist” who builds up support for a given
technology and then establishes it as a
standard in the given industry. Like these

HBR.org | SUMMER 2017 | Harvard Business Review OnPoint 11


VOICES
FROM HBR.ORG

technology evangelists, brand evangelists—that is, great salespeople—build
up support within a market for a brand
so that it becomes the brand leader in
its category.
Most important, brand evangelism
is not one of the customer-centric or
customer-driven sales approaches that
have recently become popular. Customercentric sales are pursued for the sole
purpose of increasing sales. Brand
evangelism is about engaging customers in order to produce stronger, morevaluable brands and sustain long-term
business success for their companies
and their clients.
This is what great salespeople do.

Originally published on HBR.org
August 15, 2016

Denise Lee Yohn is a leading authority on
building and positioning exceptional brands
and has 25 years of experience working
with world-class brands including Sony and
Frito-Lay. She is a consultant, speaker, and
author of What Great Brands Do: The Seven
Brand-Building Principles That Separate
the Best from the Rest (Jossey-Bass, 2014)
and the e-book Extraordinary Experiences:
What Great Retail and Restaurant Brands
Do (Denise Lee Yohn, 2015).

Seven Personality
Traits of Top
Salespeople
by Steve W. Martin
IF YOU ASK an extremely successful
salesperson, “What distinguishes you
from the average sales rep?” you will
probably get a less-than-accurate answer,
if any answer at all. Frankly, the person
may not even know the real answer because most successful salespeople are
simply doing what comes naturally.
During the past decade, I have interviewed thousands of top B2B sales-

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people who sell for some of the world’s
leading companies. I’ve also administered personality tests to 1,000 of them.
My goal was to measure their ive main
personality traits (openness, conscientiousness, extraversion, agreeableness,
and negative emotionality) to better understand the characteristics that separate them from their peers.
The personality tests were given to
high-tech and business services salespeople as part of the sales strategy workshops I was conducting. In addition,
tests were administered at Presidents
Club meetings (the incentive trip that
companies award their top salespeople
for their outstanding performance).
The responses were then categorized

top salespeople position the team (presales technical engineers, consulting,
and management) that will help them
win the account as the centerpiece.
2. Conscientiousness. Eighty-five
percent of top salespeople were highly
conscientiousness. They had a strong
sense of duty and were reliable. These
salespeople take their jobs seriously and
feel deeply responsible for the results.
Selling style impact: account control.
The worst position for salespeople is to
have relinquished account control and
to be operating at the direction of the
customer or, worse, a competitor. Conversely, top salespeople take command
of the sales cycle process to control their
own destiny.

The best salespeople fight for
their cause and aren’t afraid of
rankling customers.
by percentage of annual quota attainment and classiied into top performers,
average performers, and below-average
performers.
The test results of the top performers
were compared with those of the average
and below-average performers. The indings indicate that key personality traits
directly inluence top performers’ selling
style and ultimately their success. Here
are the main characteristics of top salespeople and the impact of those traits on
their selling style:
1. Modesty. Contrary to conventional
stereotypes that successful salespeople
are pushy and egotistical, 91% of top
salespeople had medium to high modesty and humility scores. Furthermore,
the results suggest that ostentatious
salespeople who are full of bravado
alienate far more customers than they
win over.
Selling style impact: team orientation.
Rather than establishing themselves as
the focal point of the purchase decision,

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3. Achievement orientation. Eightyfour percent of the top performers scored
very high in achievement orientation.
They ixate on achieving goals and continuously measure their performance in
comparison with those goals.
Selling style impact: political orientation. During sales cycles, top sales performers seek to understand the politics
of customer decision making. This instinctively drives them to meet with key
decision makers. They strategize about
the people they are selling to and how
the products they’re selling it into the
organization instead of focusing on the
functionality of the products themselves.
4. Curiosity. Curiosity is a person’s
hunger for knowledge and information.
Eighty-two percent of top salespeople
had extremely high curiosity levels.
Selling style impact: inquisitiveness.
A high level of inquisitiveness correlates to an active presence during sales
calls, which drives the salesperson to ask
customers diicult and uncomfortable


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VOICES
FROM HBR.ORG

questions to close gaps in information.
Top salespeople want to know whether
they can win the business—and to learn
the truth as soon as possible.
5. Lack of gregariousness. One of
the most surprising diferences between
top salespeople and those ranking in
the bottom one-third of performance is
their level of gregariousness (preference
for being with people and friendliness).
Overall, top performers averaged 30%
lower gregariousness scores than belowaverage performers.
Selling style impact: dominance. Dominance is the ability to gain the willing
obedience of customers so that they follow the salesperson’s recommendations
and advice. The results indicate that
overly friendly salespeople are too close
to their customers and have diiculty
establishing dominance.
6. Lack of discouragement. Fewer
than 10% of top salespeople were
classiied as having high levels of discouragement and being frequently overwhelmed with sadness. Conversely, 90%
experienced sadness infrequently or
occasionally.
Selling style impact: competitiveness.
A very high percentage of top performers played organized sports in high
school. There seems to be a correlation
between sports and sales success, as top
performers can handle emotional disappointments, bounce back from losses,
and mentally prepare themselves for the
next opportunity to compete.
7. Lack of self-consciousness. Selfconsciousness is the measurement of
how easily someone is embarrassed.
The by-product of a high level of selfconsciousness is bashfulness and inhibition. Fewer than 5% of top performers
had high levels of self-consciousness.
Selling style impact: aggressiveness.
Top salespeople are comfortable ighting
for their cause and not afraid of rankling
customers in the process. They are action oriented and unafraid to aim high in
their accounts or courageously cold-call
new prospects.
Not all salespeople are successful. Given the same sales tools, level of

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education, and propensity to work, why
do some salespeople succeed where others fail? Are some better suited to sell the
product because of their background?
Are they more charming or just luckier?
The evidence suggests that the personalities of these truly great salespeople play a
critical role in determining their success.

Originally published on HBR.org
June 27, 2011

Steve W. Martin teaches sales strategy
at the University of Southern California
Marshall School of Business. He is the
author of Heavy Hitter I.T. Sales Strategy:
Competitive Insights from Interviews with
1,000+ Key Information Technology Decision
Makers and Top Technology Salespeople
(TILIS, 2014).

Ineffective Sales
Leaders Can
Cause Lasting
Damage
by Andris A. Zoltners,
P.K. Sinha, and Sally E. Lorimer
SUCCESS IN a sales force requires having
strong talent up and down the organization. A weak salesperson will weaken a
sales territory, a bad sales manager will
damage his team and dampen results in
his region, and a poor sales leader will
eventually ruin the entire sales force. It
can be diicult to recognize the signs of
a poor sales leader and the possible damage that person can do—especially when
he appears to do some good early on.
Consider two examples.
An education technology start-up
hired a sales leader who came from a
large, well-respected irm. He had extensive market knowledge and a stellar
track record. Although good at scaling
and operating a sales organization, the
leader was unable to succeed in a rapidly

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changing environment that needed experimentation and nimbleness. The mismatch between the start-up’s needs and
the leader’s capabilities set progress back
at least a year.
A medical device company hired a
vice president of sales with an intimidating management style. He ruled by fear.
Achieving goals was everything. He tolerated (and even encouraged) ethically
questionable sales practices. Results
looked excellent at irst, but the sales
culture became so unpleasant that good
performers began leaving in a trickle,
and then in a lood. The average tenure
of salespeople dwindled to just seven
months. The damage to the company
continued for years after the VP was
replaced.
Sales leaders can fail in four categories:
— Direction: a poor understanding of
the business, leading to errors in vision and strategy
— Talent: an inability to pick and keep
the right people for the team
— Execution: poor processes to serve
customers and bad people management skills
— Culture: inappropriate values that
damage the core of the organization
When such failures are coupled
with a leader’s egotism or lack of selfawareness, it’s unlikely that the leader
can lean on others and overcome her
own deiciencies.
Nevertheless, inefective leaders can
do some good in sales organizations by
bringing about needed change quickly.
Insensitive leaders have an easier time
eliminating poor performers, and intimidating leaders can use their muscle to
implement diicult changes that former
leaders avoided—for example, an organizational restructuring that disrupts an
existing power hierarchy.
But unless a poor leader can overcome or compensate for his deiciencies,
eventually the bad will overpower any
temporary good. A tyrant, for example,
may ix some things in the short term but
create other problems at the same time.
For every gain, there probably will be
multiple missteps with the sales force’s


Bad sales leaders can sometimes bring
about change in a broken environment
and make temporary gains. But they
will wreck a sales force unless they are
replaced quickly.

Originally published on HBR.org
January 30, 2017

Andris A. Zoltners is a professor emeritus

vision, team, execution, and culture. A
key visible marker of ongoing or impending trouble is when talented people on
the leader’s team become frustrated and
depart the company.
It can take years to repair the damage
done by an inefective sales leader.
First, it takes time to replace the leader
and reconstruct the sales team. When
a health care company hired the wrong
leader for a sales region, it took more
than three years to rebuild the team and
recover from the initial error of putting
the wrong person in charge.
Second, it takes time to reverse the
questionable decisions that an inefective sales leader makes, especially decisions that afect sales force structure or
compensation. Weak leaders at a technology company decided to restructure
the sales organization using a model
from their own past that did not match
the current situation. Again, it took more
than three years to undo the damage.
Third, it takes time to rebuild the culture a poor leader creates. Poor leadership at a medical device company had
allowed an unhealthy “victim” culture
to pervade the sales force. Salespeople
had no conidence in their leaders, and
managers were willing to accept sales-

people’s constant excuses for poor
performance.
Bringing about change required replacing the medical device company’s
president, followed by more than two
years of sustained focus on transforming the sales force using the following
process:
— Creating a fresh vision, reflecting a culture in which salespeople
trusted their leaders and in which all
salespeople were held accountable
for results
— Communicating the vision using
every opportunity, including sales
meetings, videoconferences, and
the company’s intranet
— Rebuilding the team, starting with
a new vice president of sales with
integrity and judgment who was
willing to replace anyone on the
sales team who couldn’t adapt to the
new culture
— Realigning sales support systems
and rewards by overhauling the
systems for recognizing and rewarding performance and creating
accountability
These four steps are a good starting
point for any company seeking to recover
from poor sales leadership.

Why Salespeople
Need to Develop
“Machine
Intelligence”
by Thomas Baumgartner,
Homayoun Hatami, and
Maria Valdivieso
ARTIFICIAL INTELLIGENCE (AI) is on quite
a run, from Google’s AlphaGo, which
earlier last year defeated Go World champion Lee Sedol four games to one, to
Amazon’s Echo, the voice-activated digital assistant.
The trend is heating up the sales ield
as well, enabling entirely new ways of
selling. Purchasing, for example, is moving to automated bots, with 15% to 20%
of total spend already sourced through
e-platforms. By 2020 customers will
manage 85% of their relationship with
an enterprise without interacting with a
human. Leading companies are experimenting with what these technologies
can do for customers, typically around
early-stage transactional processes.

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Getty Images

Bad sales leaders will wreck a sales
force unless they are replaced quickly.

at Northwestern University’s Kellogg School
of Management in Evanston, Illinois. He is
also a cofounder of ZS Associates, a global
business consulting firm headquartered
in Evanston. P.K. Sinha is a cofounder
of ZS. Sally E. Lorimer is a consultant
and business writer based in Northville,
Michigan. Zoltners, Sinha, and Lorimer
are coauthors of eight books on sales
force topics.


VOICES
FROM HBR.ORG

Sales Activities Will
Become Increasingly
More Automated
The “death of a salesman” is an overplayed trope, but the road ahead does
mean signiicant changes for how sales
work is done. The changes focus primarily on automating activities rather than
individual jobs, but the scale of those
changes is likely to profoundly disrupt
what salespeople do.
We analyzed McKinsey Global Institute data on the “automatability” of
2,000 different workplace activities,
comparing job requirements to the current capabilities of leading-edge technology. We found that 40% of time spent on
sales work activities can be automated
by adapting current technologies. If the
technologies that process and understand natural language reach the median
level of human performance, this number will rise to 47%.

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Pity the parts salesperson, an occupation where 85% of all activities have
the potential to be automated with today’s technology. Gathering customer
or product information to determine
customers’ needs, processing sales or
other transactions, taking product orders from customers, and preparing
sales or other contracts collectively account for approximately three-quarters
of a parts salesperson’s time—and all
can be automated. In contrast, most
of a sales manager’s activities, which
involve strategic decision making and
employee supervision and coaching,
cannot be automated.

Sales Leaders Will Still
Need a “Human Touch”
Much of the focus on AI and automation has been on which jobs or tasks will
be replaced. That’s understandable, of
course. But it’s also clear that sales leaders and reps will continue to be crucial
to the sales process even as they adapt to
working with machines.
The “human touch” will need to focus
more on managing exceptions, tolerating ambiguity, using judgment, shaping
the strategies and questions that machines will help enable and answer, and
managing an increasingly complex web
of relationships with employees, vendors, partners, and customers.
Machine learning and automation
tools, for example, will be able to source,
qualify, and execute far more sales opportunities than reps can keep up with.
Sales leaders therefore must develop
clear escalation and exception protocols
to manage the trickiest or most valuable
situations, making sure a sales rep keeps
a robot from losing a big sale.
While machine learning will continue
to evolve, for the foreseeable future senior executives must point the technology in the right direction. They’ll have to
consider several questions: What sorts of
decisions should be automated? Which
kinds of automation will help deliver
on strategic growth goals? What are the
legal and risk implications? How can
vendor and technology relationships be

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managed and integrated to create the
greatest competitive advantage?
The hiring and managing of sales reps
also has implications. An empathetic
personality will still be important, but
beyond their relationship skills, reps
will succeed according to their ability
to understand and interpret data, work
efectively with AI, and seize quickly on
opportunities. That’s a diferent sales
proile from the one many companies
recruit for today.
Machines are already doing many
sales jobs more efectively and eiciently
than their human counterparts, and
boosting customer satisfaction in the
process. How sales leaders respond will
determine what the future of sales looks
like—and how well it works.

Originally published on HBR.org
June 10, 2016

Thomas Baumgartner is a senior partner
at McKinsey’s Sales and Channel Practice.
Homayoun Hatami is a senior partner
and leads McKinsey’s Marketing and Sales
Practice in Europe, the Middle East, and
Africa. Maria Valdivieso is a director
of knowledge in McKinsey’s Sales and
Channel Practice. Baumgartner, Hatami,
and Valdivieso are the coauthors of Sales
Growth: Five Proven Strategies from the
World’s Sales Leaders (Wiley, 2016).

Getty Images

For example, AI applications can take
over the time-consuming tasks of initiating contact with a sales lead and then
qualifying, following up, and sustaining
the lead. Amelia, the “cognitive agent”
developed by IPsoft, can parse natural language to understand customers’
questions, handling up to 27,000 conversations simultaneously and in multiple
languages. Because “she” is connected to
all the relevant systems, Amelia delivers
results faster than a human operator. Of
course, sometimes even AI is stumped,
but Amelia is smart enough to recognize
when to involve a human agent.
As we learned from researching our
book, Sales Growth, companies that
have pioneered the use of AI in sales
rave about the impact, which includes
an increase in leads and appointments of
more than 50%, cost reductions of 40%
to 60%, and call time reductions of 60%
to 70%. Add to that the value created by
having human reps spend more of their
time closing deals, and the appeal of AI
grows even more.
Clearly, AI is bringing big changes.
But what do they mean for sales—and
salespeople?


INTRODUCING DXC TECHNOLOGY.
A NEW LEADER IN IT SERVICES.
We’re a brand-new company with 60 years of innovation
behind us. We have a clear vision of how to create the future.
And the hard-won experience to make it happen.
DXC.technology/GetItDone

© 2017 DXC Technology Company. All rights reserved.


VOICES
FROM HBR.ORG

Four Ways to
Build a Productive
Sales Culture
by Frank V. Cespedes and Steve Maughan

A

ALL BUSINESSES face opportunity costs. In the case of a sales organization,
money, time, and efort allocated to accounts A and B are resources not available for accounts C, D, and so on. That reality drives the distinction between
efectiveness (doing the right things) and eiciency (doing things right) that
Peter Drucker and others made years ago.
A confusion between eiciency and optimization plagues many sales efforts. In an automobile analogy, sales eiciency (SE) initiatives—such as CRM,

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training, and KPI dashboards—improve the
engine’s horsepower. Sales optimization (SO)
decisions—such as aligning sales tasks with
business strategy, customer selection, and
sales force deployment across opportunities—
set the direction in which the car will travel.
As the saying goes, “If you don’t know where
you’re going, any road will take you there.” But
if a car is going in the wrong direction, getting
there faster is not the solution.
Companies spent about $26.3 billion on CRM
alone in 2015, according to Gartner. But consider the work of the Boston Consulting Group,
which indicates that SO practices, such as targeting high-value customers and deploying
sales resources with strategically appropriate
criteria, have more than three times the impact
on revenue growth than SE initiatives.
The lesson is clear: How and where you allocate available sales resources is where the
leverage resides for more-proitable growth.
To build a productive sales culture, you should
focus on four capabilities.

Getty Images

MANAGING THE ORGANIZATION


Strategy and planning process. According to surveys, about two-thirds of
companies treat strategic planning as an
annual precursor to the capital budgeting process. Companies tend to do plans
by business unit, regardless of the irm’s
go-to-market approach (which often
spans business units). Furthermore, this
process now takes, on average, four to
ive months, during which the market is
doing what the market will do. No wonder only 11% of executives say that strategic planning is worth the efort and why,
in a survey of 1,800 executives, more
than half (53%) the respondents said
their employees don’t understand their
company’s strategy.
Keep in mind: Customers’ buying processes have no interest in accommodating your planning process, so sales must
respond account by account. Hence,
even if the output of planning is a great
strategy (a big if), the process itself often
makes it irrelevant to those on the front
lines who must make important decisions throughout the year in accordance
with external buying rhythms and selling cycles.

Cost to serve and customer selection. All customers are not equal, and
prioritizing customers is how irms make
real the crucial “scope” component of a
coherent strategy—for example, decisions about where to play in a market.
Proit is the diference between the price
a customer pays the seller and the seller’s total cost to serve a customer, which
can vary dramatically. Some customers
require more sales calls, or geography
makes them more or less expensive to
serve. Some buy in large, productioneicient order volumes, whereas others
buy with many just-in-time or custom

orders that afect setup time, delivery logistics, and other cost-to-serve elements.
These diferences are important if you
or your investors take seriously the notion of return on capital, because many
capital costs are embedded in cost-toserve diferences, which are typically
ignored in SE metrics. If you can’t measure your cost to serve, then your salespeople will be driven by competing price
proposals. And when you chase price
and volume—as most sales compensation plans encourage salespeople to do—
you can wind up damaging proits and
your business model. You won’t allocate
sales resources optimally.
Finally, you are ultimately at the
mercy of competitors who can measure
their true costs and do these things more
efectively.

Sales capacity and allocation of
effort. Sales productivity is largely determined by how efectively the sales
force can handle call capacity and reach
target customers. Allocating that capacity is a crucial SO lever, but many leaders lump SE and SO together. The result:
Resources are allocated inappropriately.
The issue is not lack of data; it’s knowing
what data to use and how to use it.
A common metric the C-suite uses
for evaluating sales is the expense-torevenue ratio. This SE measure can shed
light on the relative cost eiciency of
selling activities but not (by itself) on
their cost-efectiveness, which is a more
complex relationship between selling
costs, revenues, proit margins, and customers acquired.
Big-data analytics make these relationships accessible. But the average U.S.
irm with more than 1,000 employees
already has more data in its CRM system

Aligning strategy and sales means
sometimes “firing” customers
that, despite all attempts, remain
unprofitable accounts.

than in the entire Library of Congress.
To make sense of this tsunami of factoids, never forget that data and analysis are not ends in themselves. To have
value, your analysis must result in better
resource-allocation decisions.
Good leaders know that data is not
just numbers but a way of viewing reality by the people who should use that
data. Salespeople will ignore analytics
that they can’t apply to where they live:
in daily encounters with customers.
Performance reviews. The most underutilized lever for improving sales is
the performance review. Busy sales managers tend to treat reviews as cursory,
drive-by conversations that are mainly
about compensation, not evaluation and
development.
Yet core SO issues are often apparent
only at the account level and via conversations with those account managers.
Reviews are where strategic direction
(versus allocation of efort) is revealed,
call patterns and customer selection
are supported or changed, and data is
applied to customer interactions. Efective reviews can explore options ranging from changing prices to relect cost
to serve, reducing technical support for
certain customer segments, changing
the locus of relevant support, determining diferent ordering or delivery options,
and perhaps instituting a channel strategy that offloads some cost to serve to
resellers whose economies of scope allow them to perform these tasks more
eiciently.
Aligning strategy and sales also means
sometimes “iring” customers that, despite all attempts, remain unproitable
accounts. It would be naive to expect
salespeople, especially those who receive bonuses based on volume, to do
that on their own. Managers must manage this decision.
It’s not our intention to discourage
eiciency improvements. But efective
selling can’t exist if it is not linked to
your strategic goals. SO decisions are the
prerequisite for any SE improvements.
Among other things, a focus on SO allows
sales leaders to grow the top line using

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VOICES
FROM HBR.ORG

Originally published on HBR.org
June 16, 2015

Frank V. Cespedes is a senior lecturer at
Harvard Business School and the author of
Aligning Strategy and Sales: The Choices,
Systems, and Behaviors That Drive Effective
Selling (Harvard Business Review Press,
2014). Steve Maughan is the president
of Cozmix, a firm that works with companies on sales force sizing, territory design,
customer segmentation, and resource
allocation issues.

Help Your
Salespeople
Spend Time on
the Right Things
by Andris A. Zoltners,
P.K. Sinha, and Sally E. Lorimer
SALES EXECUTIVES typically have two
levers to increase sales: They can increase the quantity of sales efort by

adding salespeople, or they can improve
the quality of sales efort by investing in
coaching and training.
A third approach is often overlooked:
improving the allocation of sales effort. Salespeople can work smarter, not
harder, by dividing their time more appropriately among customers, products,
and sales activities. Sales-efort allocation has a large impact on sales and profits, sometimes more than increases in
the quantity and/or quality of efort.
Sales executives frequently talk about
how sales forces misallocate effort.
Salespeople spend too much time with
“friends and family” (existing customers
with whom they have rapport) instead
of focusing on high-potential prospects.
Strategically important products don’t
get suicient sales support. Service or
other nonsales activities creep into the
sales job, and role pollution prevents
salespeople from developing new business. Costly allocation errors such as
these are diicult to diagnose and ix.
By asking six questions (in order from
the simplest to the most complex), you
can trace the probable cause of any salesefort misallocation back to the sales
force decisions and programs and make
improvements.

1. Do salespeople know what’s
important? If salespeople aren’t clear
about which markets and products are

priorities, they’ll create their own rules
about how to spend time. The remedy
is clear, consistent communication:
“Here’s how we want you to spend your
time, and here are the results we expect.”
Coaching, performance management,
and sales goals reinforce communication,
whereas metrics track performance:
“What gets measured gets done.” When
a business logistics company wanted
salespeople to spend more time selling
three strategic product lines, it focused
sales force attention on those lines by
giving salespeople a sales goal for each
line, separate from their goal for the
overall portfolio. Salespeople could track
their up-to-the-minute achievement of
all goals.

2. Do salespeople have the information they need? Salespeople are more
likely to spend time efectively when
they have access to good information
and tools. A telecom company used predictive models (think Netlix and Amazon) to give salespeople direction about
how to improve sales with underperforming, high-potential customers. By
inding “data doubles” for these customers—for example, similar customers who
were buying much more—the company
provided salespeople with insights about
which underperforming customers had
signiicant unrealized opportunity and
which sales strategies had worked in

Getty Images

the resources they already have by deliberately focusing selling eforts on those
that will really make a diference.


comparable situations in the past. The
information helped salespeople focus
on product oferings that matched customer needs, thus increasing sales.

3. Do salespeople have the competencies required? When salespeople
neglect priorities because they lack the
pertinent skills and knowledge, the remedy is coaching and training. A computer
manufacturer selling through resellers
discovered many of the resellers’ salespeople weren’t suiciently supporting
the manufacturer’s new product, resulting in low sales and lost opportunity. The
manufacturer’s product training for the
resellers’ salespeople emphasized technology speciications. This worked for
the best and most experienced salespeople but left others overwhelmed and unprepared to approach customers. When
the manufacturer refocused the training
around how to sell the product (such as
how to ind and qualify buyers, describe
the product’s competitive advantages,
and show customers why they should
buy), the resellers’ salespeople became
more conident and sales increased.

4. Are salespeople motivated to
succeed? Salespeople are motivated

competitive instrument displaced, and
it set up a mobile app with a leaderboard
of salespeople with the most displacements. First-line sales managers also
recognized salespeople’s successes.

Originally published on HBR.org
February 15, 2016

5. Do salespeople have enough
bandwidth? If salespeople have too

Andris A. Zoltners is a professor

many diverse responsibilities, a new
sales force structure can ensure they focus on company priorities. When newcustomer development lagged at a technology company, it reorganized the sales
force into a hunter/farmer structure.
Hunters specialized in developing new
accounts. Once a sale was made, a farmer
took over to cultivate the relationship
and generate repeat business. Farmers
provided existing customers with the
ongoing support they needed, whereas
new-business development lourished
because hunters were not distracted by
time-consuming service activities.

6. Do salespeople have the right
innate characteristics? Training can
develop salespeople’s competencies, but
success can also require certain innate
qualities. When salespeople lack characteristics such as intellectual lexibility or
tenacity, the remedy is to hire and retain

If salespeople aren’t clear about their
priorities, they’ll create their own
rules about how to spend their time.
when they perceive value from their
eforts: career success, recognition, personal satisfaction, money, or all of the
above. Remedies for an unmotivated
sales force include changing the incentive plan and/or modifying the criteria
for recognition programs while acknowledging the salespeople who are
successful. When a medical instruments
manufacturer wanted to build market
share by displacing a speciic competitor,
it ofered salespeople a bonus for every

the right people. A construction supply
distributor historically hired former construction workers for its sales force. Many
of these salespeople had technical expertise but lacked the personality, capability,
and drive to sell in challenging situations.
When the economy slowed, selling became more difficult, and salespeople
started focusing almost exclusively on
friendly, loyal customers. The distributor changed its hiring strategy: Instead
of hiring industry experts, it began hir-

ing “natural sellers” who were willing
to learn the industry. The change drove
considerable revenue improvement.

emeritus at Northwestern University’s
Kellogg School of Management in Evanston,
Illinois. He is also a cofounder of ZS Associates, a global business consulting firm
headquartered in Evanston. P.K. Sinha
is a cofounder of ZS. Sally E. Lorimer is
a consultant and business writer based in
Northville, Michigan. Zoltners, Sinha, and
Lorimer are coauthors of eight books on
sales force topics.

Why Sales Ops
Is So Hard to
Get Right
by Andris A. Zoltners,
P.K. Sinha, and Sally E. Lorimer
WHEN XEROX irst established a sales operations group in the 1970s to take on activities such as sales planning, compensation, forecasting, and territory design,
group leader J. Patrick Kelly described
his responsibilities in Neil Rackham’s
book SPIN Selling (McGraw-Hill, 1988)
as “all the nasty number things that you
don’t want to do but need to do to make
a great sales force.”
Forty years later, the concept of sales
operations, or “sales ops,” is considered
essential for efective sales management.
With a growing demand for data analytics, sales ops capabilities have become an
even more important ingredient in sales
force success. Perhaps the biggest challenge for sales ops leaders is handling a
huge diversity of work in a constantly
changing business and technology
environment.
For example, a recent job posting on
a global health care company’s website

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VOICES
FROM HBR.ORG

Strategy:
• Contribute to the one- and threeyear business vision as a member
of the executive leadership team
• Evaluate sales force strategies, plans,
goals, and objectives
• Contribute expertise to optimize
sales force and territory sizing,
structuring, and alignment

Operations:
• Oversee sales performance analyses
and reporting, territory alignment,
and customer proiling and targeting activities
• Administer quarterly sales-incentive
compensation plans and the goalsetting process
• Manage sales force automation and
CRM systems and processes
• Provide data, analyses, modeling,
and reporting to support sales force
quarterly business reviews
Can one person really handle all of
these tasks? The diversity of this position cuts across two dimensions. First, a
sales ops leader must have knowledge
of a range of sales force decision areas,
including strategy, organization design,
talent management, incentive compensation, and sales force automation. Second, a sales ops leader must be strategic
and tactical, and able to handle tactical/
support tasks (for example, providing
data for quarterly business reviews) as
well as strategic/design activities (for example, contributing to a one- and threeyear business vision).
Consider the competencies required
to deliver on some typical sales ops
projects.

Strategy. Responsibilities such as
evaluating sales force strategies or optimizing sales force size and structure
require a deep understanding of speciic
sales management issues. These activities are best performed by people who
have analysis/design expertise: individuals with strong creative and problemsolving skills, as well as project management and collaborative abilities. Such
individuals have credibility with top
executives and generally crave creativity
and variety in their work.
Operations. Tasks such as administering quarterly incentive compensation
plans or managing sales force automation systems require speciic technical
knowledge. These responsibilities are
best performed by people who possess
process/detail expertise: individuals
who have a strong operational mindset,
are passionate about quality control and
efficiency, are technically adept, and
generally like structured work, even if
it’s repetitive.
A steady individual who is good at
supporting operations is unlikely to
possess the outside-the-box thinking
needed for designing strategy. At the
same time, an individual who is good
at strategy probably lacks the process
discipline for operational work. Asking
a process/detail expert to do the work of
an analysis/design expert, or vice versa,
is a recipe for disaster.
What does this mean for sales ops
leaders? They must hire, develop, manage, and lead a team of people with diverse and specialized competencies
who do fundamentally different jobs
and probably have dissimilar career aspirations. The team must not only have
a broad range of sales force issues expertise but also include process/detail

The right person to lead sales
operations respects both the
analysis/design and the process/
detail mindset.
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sought a sales ops leader who could do
the following:


experts and analysis/design experts
working together around the goal of
sales force success.
Strategies that use both internal and
external resources can enable sales ops
leaders to build and manage these diverse capabilities cost-efectively.
To build a strong internal team, leaders must deine roles and responsibilities,
develop hiring proiles, acquire talent
with the right characteristics (including analysis/design and process/detail
capability), and continuously develop
and nurture that talent. Companies
such as GE use internal teams to oversee
many sales ops projects. Team leaders
have competencies in quality management and process-improvement methods, which gives them analysis/design
expertise as well as an appreciation for
processes and details. These leaders can
structure problems, delegate work, and
help process/detail people see the big
picture so that everyone works toward a
common goal. Many companies encourage job rotations with other company
departments, such as inance or marketing. Rotations between the sales force
and sales ops can allow salespeople and
managers to build on their sales experience while broadening their skill sets. As
salespeople become increasingly techsavvy, more will possess the technical
and analytic ability and interest needed
for a sales ops role.
Companies can also use external (outsourced) resources to deliver many sales
ops capabilities. Some outsourcing partners excel at process/detail work; others
bring analysis/design expertise. With
their experience working with many
companies, they can provide functional
and industry expertise. Because of
advancing technology, disappearing
cultural barriers, and greater business
expertise among ofshore talent, many
companies are using ofshore partners
for both types of work, allowing them to
source the best expertise while reducing
long-term costs.
The right person to lead sales operations respects both the analysis/design
and the process/detail mindset, can en-

vision the business and technology future, and can work with leaders across
the organization, as well as with external
partners, to enable ongoing sales force
success.

Originally published on HBR.org
December 29, 2014

Support Staff
Make Up Nearly
Half of the Best
Sales Teams
by Michael Viertler, David
Sprengel, Sebastian Küchler,
and Jochen Ulrich
SALES REPS are most efective when they
have the right amount of support staf,
but exactly how much support staf does
a company need, and how should it be
structured? Call it a Goldilocks quandary:
Too little support, and your salespeople
can’t do their jobs well; too much, and
you’re wasting money. But get it just
right and your sales eforts can drive productivity and growth.
By looking at detailed sales data from
40 companies in technology-related industries, we have identiied guidelines
for the optimal amount and type of sales
support and management. This includes
all non–quota-carrying roles in the organization: customer-facing support, sales
operations and administration, and sales
management.
Evaluating our sample set of companies in hardware, machinery, industrial
equipment, and information and communications technology, we have found
a wide disparity in the amount of sales
support that organizations employ. The
eiciency of their sales departments, as
measured by sales ROI (gross margin
over total sales cost), also varies widely:
The top 25% of companies we analyzed
boast a sales ROI that is more than twice

HBR.org | SUMMER 2017 | Harvard Business Review OnPoint 23


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