| The Phoenix Effect | | | | task to diagnose the situation and communicate a |
| Looking back at the previous economic downturn | | | | solution, there are several opportunities for the |
| can shed some light on our opportunities during | | | | process to get off on the wrong foot. Most |
| the current economic crisis. When the dot com | | | | important is to ensure that enough of the senior |
| bubble burst a few years ago, two companies | | | | management is bought into the initiative to |
| weathered the resulting economic storm much | | | | support the transition. According to sales people, |
| better than could have been predicted. | | | | one of the key reasons they resist a change in |
| Cisco Systems was at the heart of the Internet | | | | behavior is when they detect their superiors don't |
| economy. Being the leading provider of | | | | walk the talk. |
| networking equipment not only put them in the | | | | An effective visioning process should include a |
| heart of the internet growth cycle; it also put | | | | group effort with the entire senior sales leadership |
| them at the higher end of the risk spectrum | | | | contributing to the definition of the objective, |
| when the cycle retracted. After the dust settled, | | | | problem statement and solution strategy. It's very |
| however, Cisco only had a 15% drop in revenue | | | | common for an initiative to die for lack of buy in |
| from 2001 to 2002; better than most of the | | | | from the same leaders that would be responsible |
| internet dependent market. This feat of leadership | | | | for overseeing the execution of such an initiative. |
| could easily go unappreciated until it's compared to | | | | Another critical aspect of the visioning step is to |
| the competition: 3Com and Nortel both suffered | | | | communicate the vision in terms that represent |
| revenue drops of over 40% during the same | | | | the company as well as the individuals who will be |
| time period. | | | | called on to make changes in their daily behavior. |
| In a parallel story, Dell Computers also rode the | | | | If the sales person on the street does not |
| internet growth cycle with impressive results. | | | | understand why they should change, they will find |
| However, when the rug was pulled out, they too | | | | ways to passively or actively resist the campaign. |
| recognized a slowing demand for their flagship | | | | Lastly, it's all too easy to under communicate a |
| products; personal computers. But their retraction | | | | leadership initiative. In his ground breaking book, |
| and subsequent growth profile looks even more | | | | "Leading Change", John Kotter estimates that |
| favorable. Dell's revenue dropped 2% year to | | | | failed leadership initiatives under communicate by |
| year during the retraction, but rebounded over | | | | factors of 10, 100 or 1000. One memo is not |
| 13% in 2003. In contrast, Compaq experienced a | | | | enough to support the communication |
| 21% decline. | | | | requirements of a behavior changing initiative. |
| So the question is, what did Cisco and Dell do to | | | | Brand the Initiative: There is a significant value in |
| avoid the significant calamities that other | | | | branding the initiative with a catchy phrase, icon or |
| companies suffered? | | | | other simple labeling option like an easy to |
| To answer this question, let me start with what | | | | remember acronym. If the branding is effective, it |
| we didn't see. | | | | will conjure up the entire vision statement each |
| Sales Weaknesses Revealed | | | | time it's used so that the participants are regularly |
| When the economy is healthy, and demand is up | | | | reminded about the objective, the problem and |
| for new business solutions, a variety of sales skills | | | | the solution without having to reiterate the details. |
| usually suffer from neglect. This is not a critique | | | | Train the Troops: Behavior change begins with |
| on any particular organization; it's simply a matter | | | | awareness, but the recipe also requires a skill |
| of which effort brings the highest return. In | | | | development component. Where ever possible, |
| Cisco's case, during the run up of the Internet | | | | use training that not only conveys the concept, |
| market surge, demand was so strong for their | | | | but allows the participants to develop the new |
| products that their sales teams rarely engaged | | | | skills with relevant exercises. When using outside |
| customer stakeholders outside of the customer's | | | | resources, it's important to ascertain their ability |
| IT organization. Related to this, they also rarely | | | | to customize the skill development exercises to |
| took the time to gain an understanding of the | | | | your products, your customer situations and your |
| customer's business challenges or help the | | | | sales skill challenges. |
| customer contact justify the purchase with return | | | | Early Wins and Communicate Success: If the |
| on investment discussions. Their time was best | | | | objective for the initiative is something that will |
| spent educating their customers on the latest | | | | take some time to achieve, it's critical to define |
| products, negotiating contractual commitments, | | | | some early wins that indicate your team is on the |
| and managing the quarter end closing drill to higher | | | | road to success. For instance, if your objective is |
| and higher levels. | | | | to increase revenue growth by 15%, the results |
| Dell was no exception to the lack of sales | | | | may not show for a quarter or more. Pick a set |
| discipline across the board during the internet run | | | | of early wins that indicate you're on the road to |
| up. The "1-800" business model which created a | | | | success; perhaps a pipeline increase or forecasted |
| multi-billion dollar enterprise developed strength in | | | | orders for a new product for example. Select |
| marketing advertising, catalog distribution,custom | | | | something that can be achieved sooner than the |
| product configuration and fulfillment. The | | | | overall goal, but is truly a stepping stone on the |
| demographic of their sales force was largely | | | | way to success. Then take the time to |
| recent college grads that entered a culture | | | | acknowledge, communicate and celebrate the |
| dominated by a clock, visible in all call centers, | | | | success. |
| displaying the time a customer was placed on hold | | | | Realign the Environment: When a company |
| while waiting to order. Responsiveness was valued | | | | matures over the course of many years, the |
| most of all. | | | | systems, processes, and cultural norms form to |
| Like the first example, skills like gaining access to | | | | support expected behaviors. If new behaviors are |
| key stakeholders, developing financial justifications, | | | | identified as crucial, the environment should be |
| or creating need for complimentary products | | | | analyzed for realignment opportunities. Examples |
| were not highly valued skills at Dell during the run | | | | might include forecasting terminology or |
| up. Nor were they necessarily needed. | | | | milestones, marketing messaging topics, |
| Leadership | | | | communication formats, meeting agendas, |
| When the market retracted, both organizations | | | | previously acceptable cultural norms and more. |
| recognized that passively riding out the storm | | | | Remove Obstacles: Although the topic above is a |
| was not an option. Without delay, Cisco | | | | form of obstacle identification and removal, in this |
| implemented a leadership driven campaign to | | | | section I'm referring to people obstacles. Every |
| adjust their sales behavior in light of the slowing | | | | significant transformation of behavior will have its |
| market conditions. When they engaged my | | | | fair share of detractors; people who don't want |
| services, they were well versed in their strengths | | | | to change, and will passively or actively resist the |
| and weaknesses. | | | | change. In some cases, they form coalitions, |
| They knew they needed to break their | | | | groups of people resisting the change and working |
| dependency on the I.T. sponsor and gain access | | | | together to undermine the initiative. The critical |
| to the business unit "real" customer to overcome | | | | action for the leader of the initiative is to identify |
| the general spending freeze that a large number | | | | the detractors, attempt to neutralize their stance, |
| of their best clients imposed. They also cited the | | | | win them over, or remove them. Sales people are |
| lack of skill in selling other products and services | | | | very adept at "waiting out" leadership initiatives. |
| outside of the main switch and router product | | | | Nothing short of a direct focus on this issue will |
| lines. In other words, they felt that they were | | | | provide any relief. |
| leaving money on the table by not selling other | | | | Upgrade the Team: There are two facets to this |
| products that might be applicable to the | | | | concept. The first is to communicate expectations |
| customer's situation. | | | | for required skill levels, provide development |
| But now they had the motivation to take action | | | | opportunity, measure, and deliver feedback. In |
| on the situation. | | | | other words, upgrade the skills of the team. The |
| With the help of many senior executives in the | | | | second facet incorporates the process of |
| company, we jointly created an initiative to sell | | | | replacing members who are incapable or unwilling |
| internet business solutions directly to the business | | | | to improve their own skills. |
| unit management of their customer targets. The | | | | Skills and Leadership |
| rationale was that even during spending freezes, a | | | | In both the Cisco and Dell situations, the skills that |
| company still spends money. They simply do a | | | | were not valued during a growing economy, but |
| more diligent job of prioritizing where they spend | | | | became especially critical during the retracting |
| their money. Cisco's job was to create need for | | | | economy included:o Creating need for other |
| their solutions with the business unit decision | | | | products.o Accessing influential stakeholders |
| makers that were in the best position to prioritize | | | | outside of the infrastructure group.o Uncovering |
| a purchase of networking solutions. | | | | impact to help the customer justify and prioritize |
| The initiative was very successful. The early wins | | | | the purchase in economic terms. Sometimes |
| included a 300% increase in the post meltdown | | | | referred to as ROI selling skills.o Preparing |
| pipeline. And they cited many examples of large | | | | proposals that speak for themselves. A price |
| opportunities that came out of the ashes of | | | | quote might suffice in a growing economy, but a |
| spending lockdowns. | | | | persuasive business proposal is required to pass |
| On Dell's side, they were also equally adept at | | | | the muster of a penny pinching sign off authority. |
| describing the skills that were not valued during | | | | But skill development alone is not enough to |
| the good times. They realized that their culture | | | | change behavior. Consider all of the forces that |
| created a very responsive organization that was | | | | work against the individual who needs to change:o |
| lax in need creation skills. Previous attempts to | | | | Customers push the seller to present product |
| introduce other products were described as | | | | capabilities, limit access to decision makers, and |
| lackluster, at best. | | | | may not understand the impact enough to create |
| I was asked to help Dell execute on a leadership | | | | their own justification.o Many company's have |
| campaign to integrate a wider array of new, | | | | product training that does just that, providing |
| related products into their sales opportunities. One | | | | training on product features, not customer usage |
| of the key results of the campaign was a | | | | situations that would benefit the seller in creating |
| dramatic increase in the "attach metric"; a | | | | need, building justification and establishing |
| measurement used to track the sales of servers, | | | | executive level credibility.o The sellers own |
| storage and services. Currently, these other | | | | comfort zone is an impediment to change, |
| products now account for over $14 Billion in | | | | especially if has worked for him or her enough to |
| additional revenue, contributing over 23% of the | | | | make their quota goals in the past.o If your |
| total $61 billion in 2008 revenue. Not a bad payoff | | | | website and key marketing collateral are hyping |
| for an initiative born out of crisis. | | | | product capabilities, but you want your sales |
| The Devil is in the Details | | | | teams to call on executives, there is an opposing |
| The summaries of the leadership success of Cisco | | | | force in play. |
| and Dell in their rebound efforts following the | | | | The list is actually longer, but the point is that |
| popping internet bubble may sound like it was | | | | leadership is the critical ingredient in causing sales |
| easy, but both cases required a significant amount | | | | behavior to change. More specifically, leadership is |
| of leadership to produce a return on their | | | | required to help the team overcome the |
| respective initiatives. | | | | obstacles that stand in the way of changing |
| Here's a high level list of the types of leadership | | | | behavior. Creating and communicating the vision, |
| steps they implemented to produce a major | | | | role modeling expected behaviors, defining early |
| change in sales behaviors:o Develop the Visiono | | | | wins, removing obstacles, navigating resistance |
| Brand the initiativeo Train the troopso Define early | | | | and revamping the team are all leadership skills. I |
| wins and communicate successo Re-align the | | | | often suggest that skill training is less than 10% of |
| environmento Remove Obstacleso Upgrade the | | | | the requirement to cause behavior change. When |
| team | | | | contrasted with the other leadership activities |
| For the remainder of this article, I'll expand on | | | | required to bring about change, the actual training |
| each item, however, initiatives of this complexity | | | | event is a small portion of the overall pie. |
| can consume far more paper for the overall plan | | | | So if your team could benefit by augmenting their |
| that this short article will use if you decide to print | | | | selling skills during this difficult market, this article is |
| it out. For this reason, I'll footnote this section with | | | | intended to encourage you to consider the |
| an acknowledgment that I will probably under | | | | leadership planning and execution that will be |
| serve each topic simply because the length and | | | | required to help them benefit from the change. A |
| scope of this article isn't intended to concisely | | | | majority of failed sales transformation efforts can |
| relay the particulars. Please refer to our other | | | | be traced back to underestimating the scope of |
| white papers on sales transformations for more | | | | the leadership contribution required. Just |
| information. | | | | remember that behavior change is 90% |
| Develop the Vision: Although it seems like a simple | | | | leadership! |