Posts

Why Modern Sales is so Anti Trust

/5 Comments/in /by

The Sandler Sales Institute offers one of many approaches to selling available to corporate sales organizations.

I don’t know their work personally, but they have a good reputation, as far as I know. And just two weeks ago, I heard a very solid testimonial about some of their work from a very savvy, and satisfied, client.

I say that as preamble because I have no reason to think they are worse than any other sales training approach in the market; in fact, my only first-hand data says they are better. Still. Nonetheless. Try this quote(pdf) on for size:

Sandler Rule: The professional never does anything by accident. You should never ask a question, make a statement, or behave in any way unless it is in your best selling interest.

The advice that follows is pretty good—listen more, let the customer talk—but it’s hard to get past that opening statement. Basically, it says, never do anything that won’t help close the sale for you.

That would rule out mentioning solutions that don’t rhyme with what you’re selling. It would rule out referring customers elsewhere. Or suggesting a customer can’t afford what you’re selling. Or that your product might be wrong for a particular customer.

Simply put—if your customer’s needs don’t match what you’re selling—don’t mention it. Sell it anyway. Don’t do, say, or think anything that might keep you from closing that transaction.

Think about the mindset implicit in this view. It says the seller’s interests are deeply, inextricably opposite those of the buyer. That buyer and seller are in competition, in a zero-sum game. That there can only be one winner in the customer-seller struggle—and we all know who that is supposed to be.

This is not an isolated quotation. Here’s another, from the website of a Sandler licensee.

Prospects are inherently motivated to get as much information about your company, your competitors, and the competitive alternatives (like doing nothing, or buying something that is completely different from your product/service). They want to see your complete proposal first…

Prospects LOVE proposals…Sales is the only profession where people are expected to give away valuable information prior to payment. The more technical the sale, the more information is expected prior to signing a deal.

Again, the assumed context is us against them. In this view, the customer’s job is to squeeze as much competitive information, and to gain as much competitive leverage from the seller as possible. The seller’s job is to withhold as much information, and to extract as high a price, as possible.

This is the ideology of the past. The world is moving toward more interdependence, not less. Suspicion is expensive—and there are greater and greater opportunities for suspicion in a connected world.

Trust is the counter-intuitive solution to suspicion. You can build trust in commercial relationships; contracts can either be defenses against evil perpetrators, or the occasion for in-depth discussions about expectations and transparency. One is expensive. One lowers costs.

In sales, the era of competing against your customer is over. We need something like Trust-based Selling™, based on a simple principle: if you consistently do what is good for your customers, you will end up creating more value than those who are solely motivated by self-aggrandizement.

And you will end up getting your fair share of that added value.

Hey! Your Company Just Turned Into a Supply Chain!

/0 Comments/in /by

 What’s the biggest business change of our time? You might say it’s the Internet. Or globalization. Or outsourcing.

But let me make a case for something else. Something that incorporates those other ideas, but puts them all in a bigger context. Something Big but Simple.

We are moving from a world of Competition to a world of Commerce.

In the old competitive world, most business was transacted within companies, as part of a hierarchically-organized management process.

In the new commercial world, those same business transactions are happening increasingly between companies—not within them—as part of a horizontally organized commercial process.

Let me break that down:

• Business is now done between, not within, companies.
• Business is now done not hierarchically, but horizontally.
• Transactions are no longer managed within firms; they are bought and sold between firms.
• The people you transact with no longer work for you—now they sell to you.

When Tata Motors recently announced the $2500 car, the interesting fact was not the cheapness of the car, but the authors of the announcement. It was the Tata supply chain, not Tata the company, who would make the car. Tata is willing to outsource even the final assembly.

Companies still compete with each other: e.g., GM vs. Toyota, Citibank and Chase, etc. But the bulk of business transactions are no longer internal, they are external, and they are not between competitors, but between suppliers and buyers—collaborators, not competitors.  It’s not that competition doesn’t exist anymore, it’s that your company isn’t in charge of your competitiveness.  Your supply chain is.  And you have to get along with your partners to share in your collective success.

Those who persist in viewing the world through competitive lenses are marginalizing themselves. It’s a relationship world. You can’t go it alone. Those who see through collaborative lenses are, paradoxically, those who will win—not those who set out to "win" by competing.

GM no longer competes in the car business—they just add the final 10–20% of the cost structure in an automotive supply chain. The real “car business” is a whole bunch of companies, inextricably linked in a commercial web. Except for those who continue to believe their suppliers and customers are their competitors. To compete is, increasingly, to lose.

Those who work together well—those who can play in the sandbox nicely with others—are those whose supply chain will win, and them along with it. Those who still think they’re competing with their suppliers and customers are those whose supply chains will lose, dragging them along with it.

Competitive advantage doesn’t determine success anymore—collaborative advantage does.

It’s the external commercial relationships that dominate the value add in the new economy, not the internal ones.

Competition isn’t dead; it’s just not where the action is. Commerce—the ability to get along with others in a supply chain—is where the action has gone.

Hey! While you were sitting in a classroom reading about competitive strategy, your company just morphed into a supply chain!

Why Influence Is Only Halfway to Trust

/1 Comment/in /by

I was interested to read, in the Wall Street Journal  that persuasion is taking the place of old-style command and control management 

True—and yet only half the truth.

The author, Erin white writes:

Managers say they increasingly must influence — rather than command — others in order to get their own jobs done. The trend is the result of leaner corporate hierarchies and the erosion of division walls. Managers now work more often with peers where lines of authority aren’t clear or don’t exist.

Historically, each business-development staffer worked with a specific engineer in Mr. Martino’s group [at IBM]. He wanted to create teams of engineers to work with business-development staffers. Business-development managers feared the move might lead to confusion and missed connections. So Mr. Martino agreed to appoint team leaders to help coordinate. He says the system is working well.

"The more we operate as a global company, you’re going to be faced with dealing more" across group boundaries, he says. "It’s just the reality."

That’s the truth part: that as organizations become more global, they must get more horizontal, matrixed, and team-based.

Now here’s the half-truth part: that isn’t the half of it.

Marry globalization to business process outsourcing, and you have a massive replacement of clear vertical management not by indirect management—but by commercial contracts with third parties.

Think it’s hard coordinating business development managers in Armonk with engineers in Tennessee? Try coordinating them with an engineering subcontractor in Bangalore.

The difficulty is not just about lines of authority—it’s about horizontal, commercial, supplier/customer relationships with the companies that now handle the work you used to handle internally across those corporate boundaries—which you used to think were complex!

Handling vague lines of authority is merely a way-station on the road to globally outsourced supply chains.

Jack Welch had it half right when he talked about the need for boundaryless companies. The half he missed was to get rid of the word “companies.”

Courses on influence are indeed taking over the corporate agenda from courses on management. But it’s a half-step and change is hampered because “influence” is still chained to an us vs. them paradigm.

The value of “influencing” skills is harshly limited if they are applied only to the achievement of sustainable corporate competitive advantage. If I’m on the same team as you, I might not mind being influenced. But if I’m the outsourcing partner you’re trying to influence, in order to increase your bottom line at the expense of mine, then every attempt at influencing me just makes me more cynical about your motives.

When applied to outsiders, when we say "influence," we mean “getting you to do what I want." Until we see customers and suppliers as on the same side of the table as we are, we cannot move to trust—helping us both get what we both want.

Collaboration is the New Competition: Isn’t It?

/2 Comments/in /by

On the one hand:

  • This year a main theme of the Davos conference, where the worlds elites meet, was collaboration;
  • The buzz du jour—actually, for quite a few jours now—has been networking;

And yet—the lesson doesn’t seem learned just yet. In fact, business is positively schizophrenic these days. Three examples:

1. In Fortune’s March 17 issue, A.G. Lafley, CEO of P&G, talks about the major change he implemented. At one point he says, “I encouraged [managers] to compete like hell externally but to collaborate like family internally.”

A few paragraphs later, he says “we began to seek out innovation. Innovation is all about connections, so we get everyone we can involved: P&Gers past and present, customers, suppliers, even competitors.”

So, which is it? Do you compete with your competitors, or collaborate with them? Yes.

2. I wanted to hire my good friend John, a lawyer, to do some legal work for me. I told him I wanted him to be practical, not theoretical—and I needed good value for money. He replied, “I will focus on practical, and will be careful with funds, while also balancing the need to protect myself.”

Protect yourself? From whom, John? I’m the only threat he can possibly be talking about. So, what am I? A client, or a competitor?

3. The Wise Marketer , a group that focuses on loyalty programs, says in its newsletter of March 6:

“…by retaining 5% more of its customers, a company can almost double its profits… In other words, it pays to engender loyalty. So that’s WHY we need loyalty programmes – or more specifically, the data that we can gather from them."

Their words, not mine: the reason we have loyalty programs is for us to make more money. Loyalty—as in semper fi, or ’til death do us part—is engendered by business in order to make money—not for its own sake. Means, not ends.

Like Hugh Lofting’s Pushmi-pullyu, business has become of two minds.

On the one hand, the reigning strategist of our time, Michael Porter, teaches that business is about competition, that there are Five Forces of Competiton, and that two of them are about a company’s rivalry with customers and with suppliers.

By this view, the natural state of business affairs is a Hobbesian state of nature, where we fight with others in our supply chain. Made a lot of sense 20-30 years ago. So Detroit competed with its union, its dealers, and its suppliers.

Meanwhile, Toyota collaborated with its suppliers, and today enjoys a huge cost advantage because of it.

On the other hand, in a world where increasingly you have to get world class at one thing and outsource the rest, you had better get really good at collaborating with your supply chain—not suing them and having them sign NDAs. Collaboration is the new competition.

What is happening here, Mr. Jones, is that a Brave New World is colliding with a rapidly obsolescing business ideology. As always happens, the New World will eventually win. The only question is, how much damage will be sustained along the way. Because old ideologies die slowly, like old ideologues.

Business will have to re-learn the lesson of the human race. Survival does not depend on Darwinian strength—it depends on co-existence, co-location, collaboration. Darwin himself stated, if I’m not wrong, that survival depended more on adaptation than on overcoming.

We’re going to have to root out an awful lot of knee-jerk beliefs and behaviors based on the old-think of competition, in order to get to a more universally efficient and value-producing world of collaboration. It’s not so much an issue of moral illness, as it is of mental illness. We need to think anew, and aright.

Oh, and I’m still hiring John. It was his training, not his heart, doing that bad talking. It’s his heart I trust.

It’s a Dog Eat Dog World: Isn’t It?

/0 Comments/in /by

My last posting—The Deeper Message of Financial Volatiilty—generated responses at The HuffingtonPost.com I also got a call from a TV interviewer, who posed the question:

How can you say competition is increasingly less relevant—it is, after all, a dog eat dog world out there—isn’t it?

This metaphor of cannibalistic canines needs a little deconstructing.

First, I think it’s pretty much only a metaphor. Outside Jack London, I doubt there are too many Donner Pass incidents in the history of dogs.

More seriously, I learned early on that if I rode my bike past a snarling, menacing dog and pedalled like crazy to stay away from it—the dog would chase me.

But—if I actually approached the dog and said, “good boy, come here,” the same dog would wag its tail and befriend me.

In my experience, this pretty much describes people too.

People often live up—or down—to others’ expectations of them. And if we can learn that about ourselves, then we have gained the keys to our freedom. We can see that we own our own oppression; that we empower what we fear. And escape it.

The parallel extends to business. If I expect the worst of my suppliers and customers, then I’ll throw lawyers at them, endlessly calculate their financial value to me, use need-to-know communications, and generally make sure I’m always in control.

At its best, this response gives us dynamics like union vs. management. At its worst, we get endemic inefficiency and cynicism.

Now add change to the equation. Decades ago, we had monolithic corporations with fixed boundaries, competing against each other. Now, as BusinessWeek describes in its August 20 & 27 cover story The Future of Work , we have something quite different:

The very idea of a company is shifting away from a single outfit with full-time employees and a recognizable hierarchy. It is something much more fluid, with a classic corporation at the center of an ever-shifting network of suppliers and outsourcers, some of whom only join the team for the duration of a single project…

The hard part for multionatinals is getting people to work well together…such pressures put a premium on recruiting staff who are globally minded from the outset…Nokia is careful to select people who have a “collaborative mindset…”

Exactly.

The playbook that business schools still teach from is the one labeled Big Monolithic Corporation—and the chapter heads are all about Competition.

The playbook that hasn’t been written yet is about the Fluid, Shifting, Morphing Entity that BusinessWeek describes—and the chapters are not about Competition, but about Collaboration—with customers, with employees, with partners.

Dog eat dog? Why? When dogs eat dog food instead of each other, and figure out how to work together, life gets better.

And in an emerging business world that throws everyone together in constantly permutating ways, that old competitive nature we prized decades ago is becoming a bit of a millstone.

Business doesn’t need, or want, competitors and competitive talents as much as it used to. The emphasis will shift from competition to customers. Business needs more collaborators. Not in order to become more “competitive” or to “win”—but to become more successful.