Managing Change in the Sales Organization
Posted By Dr. Tom Sant | Aug 07, 2013
Bringing about change in a sales organization is one of the most difficult jobs in management. Let me share three quick anecdotes that illustrate the point, and then offer some observations about what we might learn from them:
Desperation in Dayton
After buying National Manufacturing and renaming it National Cash Register, John Henry Patterson found he had a problem. He was going broke. Retailers saw no reason to buy a complex, expensive cash register to use in their businesses.
Just when things were looking particularly bleak, Patterson's brother-in-law, Joseph Crane, figured out a better way to sell. It was so much better that Crane was soon selling as many cash registers as the rest of the sales force put together. What Crane had discovered was the first business-to-business consultative sales approach, the foundation of later methods like Solution Selling, SPIN, and others.
Instead of focusing on the cash register's features or how it worked, Crane focused on the customer—specifically on solving the customer's problem of shrinking profit and delivering a sizable return on investment. Patterson recognized that what Crane was doing was brilliant. And there was no reason it wouldn't work for every sale. So he had a stenographer record Crane's entire sales pitch word for word, then had copies typed up and mailed to all of his other sales reps with the directive, "This is how Crane presents the product," he said. "Memorize it and use it in your territories!"
And, of course, they refused.
They had a coal car full of excuses: It might work for Crane, but it wouldn't work with their customers. It was too wordy. It was too complicated to memorize. It lacked pizzazz.
Patterson got so frustrated that he kicked in the side of at least one desk and fired more than one sales rep who failed his spot check of whether they had the pitch memorized.
Inventing a Sales Culture
Thirty years ago, when AT&T went through divestiture, the company recognized that it had no true expertise in selling. As the world's largest monopoly, AT&T had perfected the process of taking orders for phone service, but the company didn't really need to sell much. Judge Harold Greene's decision changed all that. Sales management at AT&T responded by training its business sales professionals in consultative selling skills, but that wasn't enough to change a century's worth of attitudes and behaviors. So the next move was to introduce a program of "certification". In order to get promoted, a sales person had to sell a major deal and then had to write up a description of how the deal was sold, accompanied by documentation (including letters from the customer), showing that the sales person had followed the approved methodology.
Clever sales reps soon figured out how to game the system. Confident sales reps quit and went to work for MCI or Sprint. Sales managers were turned into thesis advisors. And the whole system failed.
Overcoming the Inertia of Success
A few years ago one of the largest industrial firms in North America attempted to reinvent their sales process. Rather than selling small jobs to the maintenance manager, they wanted to sell big contracts to the company's owner. But sales management recognized that selling large deals at the top of the food chain requires a different set of selling skills, which most of the current sales force did not have.
The company invested heavily in training, but a huge percentage of their sales force flat out refused to change. In exasperation, the vice president of sales told me that he didn't think the new process would really start delivering results until at least half of the existing sales force was gone. "They've been successful most of their careers doing things the old way," he said. "Why would they want to change now?"
His prediction was accurate. Within the next five years, the company laid off, fired or offered retirement packages to over half the existing sales force. The new hires were picked for their ability to sell larger deals. The sales system, including the tools and compensation plan, was modified to match their needs, and the company began to dominate its market.
What are the lessons from these anecdotes?
I think there are several points we can pick up from these anecdotes. We're talking about sales people handling large accounts, primarily selling new business and new products. Regardless, some of these points may apply to your sales environment:
- Successful sales people have strong egos and are often entrepreneurial in their mindset. They often don't respond well to orders. They particularly don't respond well to being told to copy another sales rep's methods.
- Successful sales people are also results driven. As a result, they tend to be ruthlessly pragmatic. Will this help me hit my numbers? Will this maximize my commissions? If the answer is a clear yes, they may be able to overcome their qualms about copying somebody else's approach. If the answer is no, they will ignore the new approach or find a way to game the system.
- Change is not welcome. Not among sales people, not among surgeons, not among school teachers, not for anybody. In fact, our brains have evolved to see change as a threat and to reject it or avoid it. Members of the sales team who are successful will be most resistant because they aren't feeling any pain. The first step to accepting change is to recognize that something isn't working.
- An isolated training event will not bring about change. The only way to change behavior permanently is to create new habits so that the desired behavior becomes automatic. Lots of people attend training, become inspired, resolve to do things differently, and then lapse back into the same old same old within a few months.
- New habits come about through practice. For sales people, forming new habits—bringing about permanent change—takes a focus on the three R's:
- Reinforcement (new tools that support the new approach, regular updates, ongoing reinforcement, review sessions)
- Recognition (making heroes of those who are using the new methods),
- Reward (tying the compensation plan to using the new methods or approach so that success achieved the new way has a significantly higher payoff)
- Sales people hate to embarrass themselves in front of customers. (Who doesn't?) Giving them scripts, slide decks, and sales support materials that help them deliver the new kind of message smoothly and professionally will accelerate their acceptance.