What it Takes To Drive Effective Selling
In Aligning Strategy and Sales, Harvard Business School professor Frank Cespedes takes on one of the more intractable challenges of business: connecting the strategic choices and decisions made at the top of the company with the company’s sales efforts and initiatives.
When sales results are disappointing, executives and their sales managers will often look within the sales function for the root of the problem. The incompetence of salespeople, the poor distribution of territories, the lack of information (“if only IT would get us what we need”) are just some of the diagnoses offered as explanation. But perhaps the problem is quite different: simply put, that the sales tasks are not aligned with the firm’s strategic choices.
Cespedes gives the example of the pseudonymously named Document Security Management, Inc. (DSM), whose core business of taking boxes of documents from corporations, law firms and organizations and either shredding them or securely storing them was thriving — until online storage services started dominating the document-security industry. DSM responded by introducing its own digital storage services and trained its sales staff to sell these new services. The results were disastrous. The digital strategy meant different sales tasks, selling behaviors, incentives, pricing structures, sales control systems and even a culture change in reporting to management. Even top management reviews had to change. “Can a sales training program fix all that?” Cespedes asks. “If you find one, buy it and let me know.”
So how can companies better align sales and strategy? The first step is clearly understanding the definition of strategy. Strategy, Cespedes explains, is “fundamentally the movement of an organization from its present position to a desirable but inherently uncertain future position.” To reach that “inherently uncertain future position,” the company needs to make choices about, in Cespedes’ words, “where we do and don’t play in this world and how we propose to win in those places where we do choose to play.”
Cespedes breaks down strategic choices into three elements:
Objectives. What are our goals in terms of customer value (the value we bring to customers) and financial value (the value we receive from customers)?
Scope. The focus here, writes Cespedes, is on “where will we play in the opportunity spaces available in our markets?”
Advantage. The question is not only about where to play but also how to win: what capabilities do we need? It’s important here, Cespedes notes, to differentiate between capabilities that need to be world-class to support the strategy and others that can be just good enough.
Once a clear strategy statement detailing objectives, scope and advantage has been developed, it is now possible to determine the sales tasks: the goals of the sales function and the most important competencies required for salespeople to support the strategy.
As detailed in the book, the key is to align selling behaviors with the required sales tasks. Cespedes presents in his framework three levers for creating this alignment:
Salespeople, notably their knowledge, skills and attitudes needed to execute your strategy;
Sales Force Control Systems, including performance metrics and compensation systems;
Sales Force Environment, which is the overall environment in which go-to-market initiatives are developed.
Cespedes offers an in-depth and sometimes contrarian book on strategy built on common-sense and real-world situations (his debunking of the business as war metaphor and his questioning of the conventional wisdom about compensation are two examples of his grounded yet edgy approach). This is a must-read for everyone from the C-suite to the sales floor.