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The Evil Sales Org Flywheel

(This post originally appeared on LinkedIn here)

In more than 35 years in sales I came across one phenomenon again and again: The management concept of fighting ambiguity with complexity while everybody knows that complexity increases ambiguity.

It all starts with management lacking a correct understanding of customers’ buying decision influences. Sales managers are used to looking at dashboards with KPIs. These dashboards are powered by CRMs like Salesforce. Unfortunately, the true complexity of buying decision influences is never captured by CRMs and granular information on why a deal was won or lost gets lost.

Lacking the correct understanding of these buying decision influences inevitably leads to setting wrong targets: quotas without proper analysis of business potential, pushing new products the customer is not ready to buy yet, underestimated sales cycle complexity ….

Wrong targets will be missed leading to loss of trust between management and sales. Lacking trust in their management will make sales lie to them: “It's the competition!”, “Our prices are too high!”, “Our offering isn’t competitive!”.

What management will hear is: “Sales lacks the capabilities to sell our fantastic offering”, “We hired the wrong people”, and ultimately “We need to be more prescriptive in how we run sales cycles!”.

They resort to implementing overlay functions, e.g., product specialist sales, industry specialist sales, installed base sales, telesales, in an attempt to drive their priorities into sales cycles. Unfortunately, the more overlays they add the more internal communication is required. At the expense of the time sales spends with customers, their understanding of buying decision influences, and customer intimacy.

As a result, sales efficiency goes down and targets will be missed even more!

This is where the Evil Sales Org Flywheel gets its fuel from: Loss of trust, management/sales disconnect, more overlay functions, more complexity, less efficiency, missed targets, loss of trust.

As a leader you want to break this flywheel instead of growing it!

So what’s the treat?

It all starts with the customer: Of course managers cannot dive deep into every single customer or even deal. But aggregating signals is not the solution. Instead managers from time to time must dive deep into some customers and deals, join the field, meet decision makers, help build non-traditional value propositions.

The same is true for analyzing missed targets: Managers must get to the root cause, exactly understand what sales did to reach the target and why it didn't work.

And - finally - managers must resist the temptation to fix lack of target achievement by institutionalizing what they regard as remedy. Creating overlays to drive sales behavior will always come with a huge price tag: exploding communication effort, ownership dilution, and - ultimately - loss of growth.

By practicing the above managers will earn trust and gain influence on sales behavior WITHOUT having to build overlays.

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