The Next
Structural Breakthrough in Sales
Recently a
writer for a major sales and marketing magazine called to ask my opinion
about figure he said was taken from a Gartner Group study. "Fifty
percent of sales automation projects fail," he stated, asking, "Do you
agree with that figure?"
My first reply was that a fact-based number like that deserved more than
my personal opinion in response. (Digging through my files, I found that
back in 1986, the New York based research group Conference Board found
that 45% of sales and marketing automation projects delivered payback in
24 months or less. I'm in sales: the glass looks half full, to me!) My
second comment was that, even if a survey like that existed, the numbers
were not especially relevant. Each sales process improvement effort
either stands or falls on its own merits. How everyone else is doing is
secondary. Some pioneers are successful. Others, regrettably, do not
make it to the promised land.
Sales automation and process improvement can be tremendously rewarding,
as trail-blazing companies such as Yellow-Freight, Ascom-Timeplex, Nalco
Chemical, and many others have shown. Ask the head of AT&T Universal
Master Card's automation effort whether they're satisfied or not. Can
you imagine travel agents and airline companies going back to a manual
reservation system? I don't think we want to turn back the clock on this
one.
So the question, "Do 50% of sales automation projects fail?" may be fair
in one context, but I don't think it's direct enough. What is an
attention-getting figure like that supposed to lead to, anyway? I can
hear it now. "Hey, Jane. Our competitor's sales automation project
failed! I'm scared. Maybe we better cancel our improvement project
before it's too late." Like a magician's diversion, the question shifts
attention from what should be our real concerns.
Unsuccessful attempts at flight didn't stop the Wright Brothers. Let's
recall a bit of history. In 1903, the Wright Brothers' flight covered
about 850 feet at Kitty Hawk. In 1969, just 66 short years later, Apollo
11 traveled through space a distance of 239,000 miles to land on the
moon.
Aside from the inspirational value, the history of flight is also
instructive in two other important ways.
First, recall that many of the early flops in flight were based on the
paradigm of how birds fly. Our built-for-land bodies just can't flap a
pair of home-built wings fast enough to get that model off the ground.
Ouch! When we stopped trying to recreate a metaphor, and focused more on
the aerodynamics of airfoils and the propulsion offered by engine-driven
propellers, progress was made in a hurry. (If DaVinci had the internal
combustion engine, the helicopter might have flown 400 years earlier.)
Maybe unsuccessful efforts in sales automation need a paradigm shift,
too.
Second, aside from the physics and mechanics involved, let's remember
another reason Neil Armstrong holds the distinction for being the first
human being on the moon. Without the shock Sputnik caused in 1957 and
the first manned space flight by Yuri Gagarin in 1961, our national
policy and the necessary leadership to meet this goal would not have
been galvanized. Establishment of one of the world's greatest
systematic R&D efforts, aimed at achieving one highly specific and
measurable goal, followed.
Back to sales automation. The more important pragmatic issue is, what is
it about sales automation projects that increases their chance of
success? The answer to this question cannot lie solely in how well the
software and hardware works, per se. Electronic mail, electronic sales
presentations, and contact management software all work, physically. If
you select electronic mail as the solution for a process problem that
only an electronic sales presentation can solve, what will happen?
Automation is not the problem here; the quality of execution is
paramount.
For a quality effort, well trained people need to understand the sales,
marketing and customer service process, modern technology, and the
economics of what makes for positive cash flow. The team needs to have
the time and resources available to do the job. User training is
critical. Many factors have to work well together, as with any major
innovation to succeed. A peer-reviewed guideline such as the Sales
Automation Association's Sales Automation Audit Standards and Excellence
Program contains a more complete checklist of best practices than can be
relayed here.
In the space remaining will address both sides of the issue, offering
specific reasons for failure and success. The ultimate conclusion will
be a bit startling, however. Why? Just as models for aircraft needed to
get beyond designs asking people to flap wings like crazy, real progress
in sales, marketing and customer service needs to get past the notion
that successful automation means giving reps a laptop, and asking them
to type like crazy.
First: why do projects fail? I've seen first-hand many, many sales
automation efforts. I've also talked at length with many highly respect
consultants and with the leaders of hundreds of automation/improvement
teams. It turns out that six problems seem to characterize efforts that
turn out less than satisfactory.
1) Firms simply don't know how to create a tangible link between sales
and marketing automation, and concrete business
goals.
2) Project teams are asked to develop and implement incredibly complex
systems within "quick fix" cultures not conducive to systematic, patient
thinking and planning.
3) Companies have not been keeping necessary analytic baseline data
about cost, quality, quantity, and cycle time regarding their sales
process.
4) Project sponsors seem to expect purchase of software and hardware
alone to solve their problems.
5) Training and support are viewed as unnecessary or expendable, or they
focus too much on "key-pressing" versus using a tool to accomplish a
job.
6) Controls essential to determine whether automation is providing
satisfactory results are superficial or absent.
Your list may be different from mine.
What common elements characterize successful sales process improvement
efforts? Companies who succeed avoid the six pitfalls I've listed above
in a proactive fashion.
1) Successful firms map out a causal link between sales and marketing
automation, and concrete business goals.
2) Successful project teams are more careful to implement in manageable
stages, systematically planning the steps and thinking things through.
3) Successful companies use baseline data about cost, quality, quantity,
and cycle time regarding their sales process to prioritize their
greatest needs for improvement, and they focus on those first.
4) Successful project sponsors acquire or build software and hardware of
sufficient operational capability to directly address their business
problems.
5) Training and support is viewed as absolutely essential, and focused
on teaching how to accomplish a job through the use of a tool, versus
"here's what the Tab key does."
6) Controls essential to determine whether automation is providing
satisfactory results are based on the initial business goals, monitored,
and actively used to stay on track and further improve. You can add your
own ideas to the list.
Maybe these elements appear somewhat basic. But if sound practices are
so obvious to those who have mastered sales automation "101," the next
question is, why do the same problems keep appearing? Answer: because
there's a deeper problem involved. Sales process engineers can solve
symptoms, but they should try to arrive at systemic solutions whenever
possible. Let's dig deeper.
The first and most obvious reason these six problems surface so often is
that companies embarking on their first efforts have, almost by
definition, little experience with how automation can cost-effectively
support sales, marketing, and customer service. The whole subject of
sales and marketing automation linked to systematic sales process
improvement is quite new. Integrated circuits only arrived in the
'70's. Let's face it -- at this stage, true experts are naturally few
and far between. It has taken years just to clearly identify the
opportunities to improve in the first place. The SAA's professional
courses on the subject have only been offered for two or three years.
We've come a long way, but it's safe to say our knowledge base is not
yet mature.
Second, just look at the world in which sales, marketing, and customer
service providers live. Ironically, our very strength -- bringing home
the bacon to feed the rest of our company -- is our weakness. As a sales
person, I can personally attest that the adrenaline that flows when
closing a sale is incompatible with calm thought. We're trained to be
doers: sellers, marketers, influencers, movers and shakers, speedy
problem solvers. When we think, it had better be on our feet. When we're
asked a question, we better have an answer. Fast. That's our world, and
it's how we're paid. We are rewarded well for being successful this
month, this quarter, this year. That's how our environment is
structured.
That's not all. We've been right-sized and empowered to the point where
only the essentials to get through the day stay on the table. The rest
falls off. Many of our markets are not just competitive: they are
hyper-competitive. Even if we wanted to change, the structure of
contemporary sales and marketing does not support the necessary
contemplative analysis and lab work to study the new technology and its
impact. So regarding automation, we all too often buy the process
solutions and automation we're sold, which may not be the same as what
we need.
To sum up this second point, the very way we think and the way we're
structured tends to keep us in an orbit centered on the current way
things are done. Without some sort of booster to propel us out of our
groove, the orbit may be inescapable.
Quality expert W. Edwards Deming pointed out long ago that personal
action, such as the tactics we teach our salespeople to perform,
controls only about 20% of process outcomes. The remaining 80% of an
outcome is controlled by process structure. To escape our current orbit
requires a structural change.
Sales, marketing, and customer service now has the internal combustion
engine Leonardo lacked when he drew his novel "air screw" in 1488. We
now have portable, mobile computing and communications devices, and huge
storage units capable of gathering and holding terrabytes of data. We
still lack something else.
Hint 1. The next quantum breakthrough in sales is not more automation.
We've got plenty of good automation. Many of us have already experienced
that structural breakthrough.
Hint 2. The next revolution in sales has more to do with correcting the
lop-sided nature of the brain-trust found in many of our
companies. Clues as to what that defect is and how to fix it stare us in
the face.
From 1961 to 1977, W. Germany and Japan increased their R&D spending, as
compared to their GNP, by some 46% while US R&D dropped by more than
20%! What happened in the following decade is a matter of record. Do you
own a US made camera? How about a US made VCR? TV? Camcorder?
Another clue. In modern times no other product has come so far, so fast,
as the computer. In recent years (biotech aside),
computer companies dominated Business Week's list of top R&D spenders,
ranked by spending per employee. Any "aha's," yet?
Investments in R&D pay off, or US companies wouldn't spend, on the
average, almost 4% of their total sales volume on product R&D. Two
questions, then my conclusion. What percent of sales does your sales,
marketing, and customer service process R&D budget occupy? If you have
something you can call such an effort, is it staffed by R&D trained
personnel -- by real engineers?
After thinking about this for a good while, I've concluded that the lack
of a genuine sales process R&D effort is the structural cause of failure
in the majority of unsuccessful sales automation and improvement
efforts. The biggest breakthroughs in sales will come when we organize
and fund a true R&D function aimed at improving sales, marketing, and
customer service processes in a carefully thought out sequence.
Companies spend plenty, and they hire and train lots of talented
engineers to do just that on the manufacturing and product development
side of the business. Now it's time for sales and marketing to benefit
in a similar way from the income they themselves bring in to a company
in the first place.
The solution put on the table will strike some as being too "new,"
"radical," and "unconventional." The novelty and the size of the
investments we're making in our process changes require new approaches.
Keep in mind, this is a solution that's already working in manufacturing
and product development. Propose a different solution in your own
company if you like. Until you do, are you gambling on a 50-50 throw of
the dice?
A top executive should be able to determine how much, if anything, is
being spent on improving the part of the firm that brings in 100% of the
business and consumes between 15% and 35% of its operating expenses.
With the proper structure in place to design truly capable processes, I
predict huge gains, with paybacks of two to one the rule rather than
engaging in a crap shoot.
You wouldn't expect most sailors to be naval architects. Our staffs are
currently crewed with fine men and women. But most are trained and paid
to be doers, not process engineers. Who leads your sales process
improvement effort: sailor or architect?
Continuing the analogy, I'll wrap up with a story about sailing. In the
mid-1800's a sailor named Matthew Maury spent five years tediously
plotting the wind and currents of the high seas, drawing data from
thousands of logbooks. Maury's work was scoffed at by traditional
sailors as untested theory. Then, in 1848 a ship using Maury's charts
docked in Baltimore 35 days ahead of schedule, loaded with Brazilian
coffee. The news electrified the waterfront; sailing the seas would
never be the same. Maury's systematic analysis paid off for generations
to come. Companies that follow his example will be first home to their
markets.
Automation, per se, is a structural breakthrough we've already
experienced. The next breakthrough is predicated on establishing a long
term sales process research and development function in our companies.
Only a policy decision by an executive who understands the critical
importance of being systematic can bring this about. If the results in
manufacturing and product R&D are any indication, taking this step will
dramatically increase the chances for sales automation success in the
near term, and for sustained improvement in our sales, marketing, and
customer service processes in the years to come.
It's time to stop tinkering and get on with it.
© 1996 Paul H. Selden All Rights Reserved Please call for permission
to reprint or republish.
Originally published in the Sales Automation Association's quarterly
journal, "Sales Process Engineering & Automation Review," March 1996.
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