Ch 8: The Manager and the Challenger Selling Model
initiative will fail. Whether it’s changes to comp plans, the CRM system, the sales process, or more basic skills and behaviors, it always comes back to the manager. The frontline sales manager in any sales organization is the fundamental link between strategy and execution—this is where change initiatives and sales force transformations live or die. Implementing the Challenger Selling Model is no different. You cannot expect to successfully build a Challenger sales organization if your frontline sales management layer is broken. It’s the linchpin in terms of making the model work. While this point may be obvious to the seasoned sales leader, what sales organizations can actually do to boost manager effectiveness is less so. While there is rather broad consensus that manager quality is the most important lever for driving rep performance, sales leaders tend to view manager effectiveness as a sort of enigma. As one of our members told us, “I know that manager success is crucial to my overall success; problem is, I don’t know what to do about it.” And that concern is widespread, especially as sales leaders look to the future. In fact, when we asked SEC members about manager capability, a shocking 63 percent reported that their managers do not have the skills and competencies they need as their sales model evolves, to say nothing of the 9 percent of managers who don’t even have the skills required to be successful in their role currently. Three-quarters of our members self-identify as having managers who aren’t going to perform in the new environment. And that’s deeply troubling. While leaders agree on the fundamental importance of the role, very few feel confident about the actual people currently occupying that role, and most are even less confident still about what to do about it.
PORTRAIT OF A WORLD-CLASS SALES MANAGER In an effort to identify the key attributes of a world-class sales manager—the skills, behaviors, and attitudes that matter most for sales management excellence —we created a survey we call the Sales Leadership Diagnostic. At last count, more than sixty-five companies have administered this diagnostic (to more than 12,000 reps), and we have collected data on more than 2,500 individual frontline sales managers.
As with any survey we conduct, the data is a strong, representative sample of every major industry, geography, and go-to-market model across the Council’s membership. In the survey, we asked reps to assess their manager’s performance across sixty-four different attributes of performance, some of which you see in the four broad categories in the table on page 141 and above. First, we asked about management fundamentals—things like integrity, reliability, recognition, and team-building skills. These variables aren’t necessarily specific to sales, but they are incredibly important. So we included them in our analysis to understand how they compare to other attributes in terms of driving manager performance. Second, we looked at attributes related to actual selling ability. While we don’t want our managers selling for their reps, it stands to reason that they probably do need to know how to sell if they’re going to help others to do it better. Here, we asked about attributes like negotiation skills and whether the manager offers the customer unique perspectives. Third, we asked about the manager’s coaching skills. Do managers prepare for and customize coaching interactions? Do they follow through on their development commitments? Lastly, we looked at sales-specific aspects of leadership—things like account planning, territory management, and the level of innovation the manager shows in positioning offers to customers. Next, to ensure that we weren’t allowing one unhappy rep to skew our results, we excluded those managers from the analysis for whom we had data from fewer than three reps. Then, to make the results manageable, we applied factor analysis to the data, boiling it down to the smallest possible number of statistically significant groups or categories. The factor analysis told us that those sixty-four variables fall into five distinct categories. Finally, to understand how important each category is relative to the other four, we ran a regression analysis of those factors against actual manager performance—as determined by both the reps and the companies. And that allowed us to determine, of all the things a manager could be good at, which of these sixty-four skills and behaviors matter most for actual manager performance—as assessed by the reps who observe those behaviors every single day as well as by companies, which have a broader sense of how those managers maintain and grow their territories over time. Ultimately, this exercise generated the answer to the key question of manager performance, i.e., the the smallest number of statistically significant— and distinct—categories that, when combined, explain frontline sales manager excellence. To interpret what we found, let’s start by separating management fundamentals, like reliability, integrity, and listening skills, from the more sales- specific drivers of manager performance. As it turns out, management
fundamentals account for roughly one-fourth of sales manager success. These are the foundational skills that are necessary for success in any management job, irrespective of function. Yet interestingly, we also found that performance on these attributes does not fall along a spectrum but tends to be binary. Either you’re reliable or you’re not. You have integrity or you don’t. And that in turn tells us that these are inherent traits you should be looking for in the people you hire, not skills you want to be developing in your staff over time. Put another way, great reps don’t necessarily make great managers. You can’t just excel at sales to be a great sales manager, you’ve also got to excel at management as well. Yet that is exactly how most companies still source new frontline management talent. This approach to hiring is the root cause of many organizations’ high manager failure rates. Not surprisingly, our analysis of manager performance indicates that a handful of managers (roughly 4 percent in our sample) fail on at least one of these management fundamentals. So one of the first recommendations we make to SEC member companies completing the Sales Leadership Diagnostic is that they find new positions for managers who fall into this 4 percent. Because we haven’t even gotten to the sales-specific attributes of a world-class manager, and these people have already failed to meet the manager bar.
Source: Sales Executive Council research. Figure 8.1. Management Fundamentals Are the Essential Base of Sales Manager Success On the other hand, while a star rep track record is not a reliable indicator of management potential, an alternative lies in the data presented in this chapter. Armed with an understanding of the star manager profile, organizations can adapt their candidate assessment protocols to look for candidates who are likely to demonstrate behaviors known to drive successful commercial outcomes. And knowing that some of these attributes are difficult (if not impossible) to develop over time—notably, management fundamentals like integrity and reliability— these are clearly places where it makes sense to screen up front. However, traditional, interview-based assessment methods can be unreliable indicators of candidate potential and basic management ability. As a result, we find that progressive companies use a variety of experiential “live fire” assessment methods that let them see a candidate do the job before giving him the job. For example, one large high-tech manufacturer uses a full-day simulation-based skills assessment to precertify external candidates’ management capabilities before employment offers are extended. A construction materials supplier uses a similar approach for internal candidates—its pre- promotion sales manager screening ensures that candidates possess and demonstrate the core combination of skills necessary to succeed as sales managers.
The Sales Side of Sales Manager Excellence In the Army, there’s an old saying that applies equally well to sales: “No plan survives engagement with the enemy.” No matter how carefully one plans for battle, running through every possible scenario of what might happen and what might go wrong, the reality on the field will inevitably be different. As a result, Army leaders have adopted a style of leadership known as Commander’s Intent. Commander’s Intent is just that: a clear, concise statement of the specific goal a commander is looking to achieve. Something like, “Capture and hold that hill until reinforcements arrive.” In this approach to leadership, Army leaders have stopped giving step-by-step instructions on how to actually go about capturing the hill, because they’ve learned that once their troops get out in the field and engage in battle, they’re going to have to quickly adapt to the situation on the ground in unanticipated ways. Not surprisingly, then, the field leaders who excel in the Army are the ones who are creative, innovative, and able to adapt to their circumstances. Typically, they’re the ones who recognize possible courses of action that no one behind the front would have recognized in advance and then guide their troops to victory through creative interpretation of their commander’s intent. It’s proven to be a powerful management philosophy that matches process on the one hand with empowerment and innovation on the other. When victory is on the line, put the battle in the hands of your best field-based leaders—the ones who identify a wide range of choices and develop an innovative option that specifically matches that particular situation. As it turns out, when we studied the sales side of management excellence, the attributes that account for the remaining three-quarters of a sales manager’s success, we found the same thing to be true. Figure 8.2 shows the sales attributes that matter most for manager excellence. Here is where our story shifts from preventing failure to promoting success. When we ran the analysis, we found that the attributes contributing to manager excellence fall into three high-level categories—and they’re about what you might expect: selling, coaching, and owning. This last category is all about the various aspects of business ownership that senior leaders like to see in managers—the extent to which they run their territory as if it were their own
business. Source: Sales Executive Council research. Figure 8.2. Attributes Affecting Frontline Sales Manager Performance Figure 8.2 represents the statistically significant factors that define the sales side of sales manager excellence (recalibrated to 100 percent, as they represent 100 percent of the sales side of the job). The first thing we can say about this side of the manager job is that selling still matters. To be sure, these results aren’t saying that your best managers spend 25 percent of their time selling, but they do indicate that if we were to explain what makes your best managers so much better than everyone else, roughly 25 percent of the reason would be because of their great selling skills. As all sales leaders know, selling skills are necessary at times since managers are often asked to cover vacant sales territories, to help close the largest sales, or just to fill in for a rep who may be on leave. But more to the point, managers are also expected to be able to model great selling behaviors for their teams. What’s especially interesting about the “Selling” bar on this chart, however, is the specific attributes that rose to the top inside that category. Here, we see that the same skills that matter most for manager success are the exact same sales skills we found to matter most for rep success: “Offers the customer unique
perspectives,” “Tailors the offer to the needs of customers,” “Is comfortable discussing money.” This implies that your best managers are likely going to come from your Challenger ranks, and it helps explain why top-performing managers are heavily sought after for the support they can provide on the largest, most complex deals—deals where Challenger skills, as we have seen, are most needed. This brings us to the second driver, coaching, which accounts for 28 percent of frontline sales manager effectiveness. The size of this impact tells you what you probably expect: Coaching absolutely matters when it comes to sales management. It is a key element of manager effectiveness and, as we have long advocated to our members, a huge driver of rep performance as well. Unlike selling, however, which is about a manager’s ability to be a rep when needed, coaching is about the manager working side by side with reps to share his knowledge, insight, and experience to diagnose and correct specific rep behaviors known to hinder high performance. When we look at the specific attributes of effective coaching, we find that the focus of these coaching efforts, at least for world-class managers, is again the same Challenger skills we saw in the selling category: “Guiding reps to tailor effectively,” “Showing reps how and when to assert control,” “Helping reps through complex negotiations.” Coaching is such an important part of the manager effectiveness story that we’ll spend a good portion of this chapter discussing it. That said, it’s not the whole story. While many sales leaders have come to simply equate good management with good coaching, it turns out that manager excellence is a matter of providing not just coaching but leadership, direction, and guidance more generally. It’s about demonstrating effective ownership of the business. Indeed, our analysis shows that more than 45 percent of sales manager excellence is a function of excelling at managing the overall business. While great sales managers are fantastic at coaching their reps, they’re even better at building their business. Great coaching is important, but it’s still only part of the story. Yet if we were to have guessed, we would have said that being an effective sales leader is mostly about how one allocates resources—things like driving process compliance, correcting actions out of step with that process, and managing resources across the territory as efficiently as possible. But it turns out that’s not the case. All of these skills are captured in the resource allocation category—which at just over 16 percent is the smallest bar on the chart. What that tells us is that resource allocation isn’t the most important part of a sales manager’s job. In fact, it’s the least important part of the manager’s job.
So if “sales leadership” isn’t about resource allocation, what is it about? Well, it turns out that sales leadership is mostly about how innovative sales managers are. Now “innovation” is admittedly a loaded term that can mean many things to many people. What we’re referring to here is managers collaborating with reps to understand as deeply as possible what’s holding up a deal, figuring out why and where a deal is running into trouble at the customer, and then finding innovative ways to move it forward. It’s important that innovation in this context is emphatically not about creating a new value proposition or inventing a new set of capabilities or product features. This is about creatively connecting the supplier’s existing capabilities to each customer’s unique environment and then presenting those capabilities to the customer through the specific lens of whatever customer obstacle is keeping that deal from closing. This is Commander’s Intent applied to the world of sales. It is about creatively modifying deal-level sales strategy to adapt to the specific customer context— the “reality on the ground,” as it were. What this “Sales Innovation” factor tells us is that star-performing managers have an uncanny ability to unstick stuck deals and get them closed. Notice how different this is from coaching. Coaching is about driving performance around known behaviors. It’s a perfect approach to sales management in a world characterized by a predictable path to success. Innovation, on the other hand, is about driving performance through unforeseen obstacles. It’s best suited to a world of dynamic and unexpected events. In coaching, the manager already knows the answer and imparts it to the rep. In innovation, neither the rep nor the manager knows the answer, so instead they collaborate through the manager’s leadership to discover an effective path forward. You can’t coach what you don’t know, but you can innovate. Arguably the biggest finding from all of our work on sales managers is just how important this skill really is. At 29 percent, sales innovation is the single biggest sales-related attribute contributing to world-class sales manager performance—more important than selling skills and much more important than a manager’s ability to allocate resources. While coaching is a close second at 28 percent, what’s so interesting about sales innovation is that, unlike sales coaching, which has received a huge amount of time and attention over the last five years, it isn’t something that most sales leaders have ever really thought about in any systematic fashion before. If given a blank sheet of paper and asked to list the four to five attributes that account for manager success, how many of us, unprompted, would have included anything other than selling, coaching, and resource allocation on that
list? And yet the data tells us that sales innovation is a distinctly important set of attributes. In their survey responses, reps often ranked a manager high on coaching attributes but low on sales innovation attributes, or vice versa. The two skills moved independently of one another. Sales innovation is the missing link in terms of fully realizing the benefits of the Challenger Selling Model. Even armed with the best teaching pitches and honed capabilities for tailoring and taking control—even with strong sales managers who coach to these behaviors and can model the Challenger selling behaviors themselves—many deals will still not happen. While the Challenger model increases the likelihood that deals will move through the funnel, beating the status quo is a hard task. Customers are reluctant to change. The requirements for consensus continue to expand. Decision makers will continue to choose “no decision” even over a good decision. This is where the innovative manager comes in. Armed with the ability to innovate at the deal level, the manager can help the rep to avoid “no-decision land” more often than the rep— even a Challenger rep—can on her own. It’s a critical capability in the battle to sell increasingly complex solutions to understandably ever more reluctant customers. For most sales leaders on a mission to improve the effectiveness of their frontline sales managers, these data reveal a huge untapped opportunity to dramatically improve sales manager performance. Because of that, we’re going to spend some time in this chapter digging into this concept of sales innovation to understand what it is, how it works, and, most important, how we can build it more systematically into our entire sales manager population. Before we get into this notion of sales innovation in more detail, however, it first makes sense to engage in a deeper discussion around sales coaching. Formalized sales coaching represents one of the biggest opportunities to improve rep performance in a complex sales environment, but it is also one of the most misunderstood and mismanaged productivity levers.
COACHING TO THE KNOWN To understand why coaching is often mismanaged by sales organizations, we need to start with a definition of coaching. This is the definition of coaching that we’ve established with the help of a working team of members: “An ongoing and dynamic series of job-embedded interactions between a sales manager and direct report, designed to diagnose, correct, and reinforce behaviors specific to that individual.” This definition lays out the foundation of coaching, and also how it differs from training. There are a few points we always emphasize with our members in terms of this definition. First, coaching is ongoing—it’s continuous as opposed to a one- off event or series of training events. Second, it involves diagnosis specific to the individual rep—so coaching is customized. Whereas training typically involves a one-size-fits-all approach of delivering the same teaching in the same format to everyone, coaching is completely tailored to an individual rep’s specific needs. And finally, coaching is behavioral—it’s not just about obtaining skill and knowledge; it’s about demonstrated application of that skill and knowledge. None of this is to suggest that training has no value. Training is good for sharing knowledge. Coaching is about acting upon it. The unique advantages of coaching stem from how it’s tailored to the individual and systematically delivered at the point of need. Many organizations define coaching simply as “informal training,” but our research has shown that effective coaching is, in fact, very formal. It’s highly structured and regularly scheduled. In the conversations we have with our members on this topic, there is another important distinction we make, which is how coaching differs from managing. While most frontline managers we speak with maintain that they do coach, for many, those efforts amount to little more than managing. We “tell” rather than “ask,” we “do” rather than “guide.”
The Business Case for Sales Coaching Figure 8.3 (page 152)—which is one of the findings the Council is best known for—shows the huge impact that effective coaching can have on a sales organization. When you improve coaching quality, the performance curve doesn’t shift, it tips. The middle moves, but the feet don’t. What exactly does that imply? First, moving from below-average to above-average coaching appears to have little impact on our weakest performers, which seems counterintuitive. You’d imagine that these reps would be the easiest people to get a performance pop from if you just coached them a little better. But the bottom left of that chart tells us just the opposite. You can’t coach away a bad fit for a job. Source: Sales Executive Council research. Figure 8.3. Distribution of Relative Sales Rep Performance by Coaching Effectiveness Likewise, the shift from weak to strong coaching doesn’t have much of an impact on star performers either. This finding is also a bit counterintuitive, since
you’d like to think that coaching could make stars even more stellar. The analogy we use is a professional golfer. Many of them have swing coaches and they work with them all the time. But in the end, they are hoping to shave maybe a stroke off their average. They’re already high performers; they are only looking for slight, incremental improvements beyond their current level of play. But if you’re a core performer, the quality of the coaching you receive has a significant impact on your performance. The data from our research suggests that the median performers on your sales force could see a performance boost of as much as 19 percent given a significant improvement in the coaching they receive. The impact of simply moving from the bottom third to the top third of coaching effectiveness would still result in a performance gain of between 6 and 8 percent for the core of the sales force. Not many investments can deliver that sort of productivity lift to a sales organization. This isn’t just theoretical impact; it’s real. We’ve seen this from the majority of the organizations we work with that have embarked on this coaching journey. One of our members, a major player in the insurance industry, saw a result similar to what our data suggests: a 10 percent improvement in rep performance for those reps who participated in the company’s new coaching program versus those who didn’t. Coaching matters. Formalized coaching represents a huge performance improvement opportunity in a complex sales environment. It can make the difference between hitting or missing goal for the bulk of your sales force. Our strong recommendation to our members looking to improve sales performance is to do away with coaching democratically—that is to say, coaching everyone equally—and instead shift the majority of their coaching focus away from low and star performers and toward the core. What’s more, it turns out that coaching isn’t just a huge driver of sales performance—it’s also a major factor in employee retention and what we call “discretionary,” or extra, effort. This was one of the bombshell findings from our original quantitative study on this topic, as it showed just how much impact coaching quality can have on employee morale. What the data tells us is this: Good coaches make people want to stay. Bad coaches, on the other hand, create a fundamentally demoralizing environment and drive people from the organization. This is true not just for our low performers but also for our core and star performers. To corroborate this finding, we also cut the data by discretionary effort. We included a question in our survey that asked just how much effort people put into their working day in sales. Essentially, what we found is that bad coaching and bad managers make people want to give up. From low-performing reps to our
superstars, none of them can be bothered if they don’t feel they’re getting effective coaching from their managers. Coaching quality matters.
Give Sales Managers Something to Coach To When it comes to delivering quality coaching, the key lesson we’ve learned from several years of researching this topic is that managers can’t coach effectively unless they have something to coach to. You can’t just say, “Go forth and coach.” You have to make it concrete for your managers. They need to have something to coach to: a clear understanding of what “good” looks like in your organization when it comes to sales (i.e., a hypothesis). While we’ve documented a whole range of coaching best practices, tools, and templates at the Council, one of the smartest tactics we’ve seen employed for boosting sales coaching quality came to us from one of our members in the financial services industry. They built their new coaching process directly on top of their existing sales process, so that managers’ coaching efforts are directly embedded into the sales activities they’re already pursuing with their sales team. In figure 8.4, you see a genericized version of what this company built for their sales managers. Each sales process stage has a different set of objectives. These are the behaviors critical to that stage that the company wants to reinforce. The tool also offers a number of sample questions a manager might ask to engage his reps in a coaching conversation around the objectives of that particular stage. If you look at the first stage, “Opportunity Creation,” as an example, the manager can consult this chart to verify the specific objectives and activities associated with this stage in the sales process. Things like setting and confirming a clear objective for the sales call, and completing sufficient pre-call research— things your high performers are probably already doing. Then, below that, you see the questions the manager can use to elicit how the rep is pursuing those objectives: for example, “What is your primary objective for this call?” We’ve found that what often happens is that managers focus on outcomes rather than behaviors in coaching conversations, saying things like, “Your conversion rate is way down. What’s the problem? Aren’t you following the process?” That’s not really what you should be after. Some members like to call that “spreadsheet coaching.” It’s focused on business results, not behaviors, and it’s delivered in a one-size-fits-all manner—everybody gets the exact same treatment. But done well, coaching is about behaviors, not outcomes. And that’s
exactly what makes this tool so effective. Even better, all of this is captured on a one-page road map that is really not much more complicated than what you see here. In fact, this company’s sales managers carry laminated versions of this page with them in their bags.
Source: Sales Executive Council research Figure 8.4. Sales Proces-Aligned Coaching Guide This is the perfect cheat sheet to jump-start coaching conversations—without requiring a bunch of procedural hoops, training, and admin. In a world where most managers are, at best, skeptical about coaching, a tool like this goes a long way by giving managers a practical, nonin-trusive framework for coaching that isn’t overengineered and that doesn’t require them to dramatically change their behavior. In appendix A, we’ve provided an excerpt of our manager coaching guide built specifically to help reinforce the Challenger Selling Model (you can download the full version at our Web site). This is the same tool our Solutions group uses in its Challenger Development Program. Like the aforementioned sales process–aligned coaching guide on page 155, it maps to the pillars of the model—teaching, tailoring, and taking control—providing managers with guidance around what “good” looks like for each of these critical behaviors, as well as starter questions to facilitate coaching discussions.
Help Managers to “PAUSE” for Effective Coaching The importance of the manager—and, specifically, the manager’s role as coach —in making the Challenger model stick is almost impossible to overstate. Given the importance of good coaching to driving behavior change of this sort, we tell our members to start from the assumption that their coaching program is probably not working as well as it should be. In our SEC’s Solutions group, we’ve worked with dozens of companies to help their sales managers improve their coaching abilities, teach deal innovation skills, and otherwise raise the quality of the frontline manager corps. One of the key components of our Manager Development Program is “Hypothesis-Based Coaching,” which we think addresses the most pervasive issue companies struggle with when it comes to coaching: getting managers to execute the “double jump,” from product-selling rep to solution-selling manager, becoming experts in observing sales interactions as well as experts in coaching based on those interactions. Hence, Hypothesis-Based Coaching, where managers enter coaching conversations with a clear hypothesis of what “good” looks like. Hypothesis-Based Coaching leverages a powerful framework called “PAUSE,” and it’s something we encourage all of our members to use with their managers. Here’s what PAUSE stands for: • Preparation for the Coaching Conversation: Managers need to do proper and thorough preparation in advance of any coaching session. This provides continuity between coaching events. And by thinking through which stage of the sales process the rep is in, managers can tell what behaviors are going to be critical, which is the first step to solving the observation problem of situational variation. • Affirm the Relationship: If the rep isn’t ready to hear the coaching and buy into the manager’s role as coach, the coaching effort will be wasted. Managers need to be taught how to emphasize development by separating performance management from coaching interactions—there is always a gray line, but it is possible to create “safe” situations for coaching to occur. • Understand Expected (Observed) Behavior: The challenge for many
managers is understanding what they are seeing and what to look for when observing their reps. If managers understand what should be happening in a meeting, it’s much easier to know if it is happening. • Specify Behavior Change: If managers know what defines critical behaviors and have an objective standard for judging those behaviors, it’s very easy for them to provide specific objective feedback. This prevents coaching from being generic, subjective, ill focused, or overwhelming. • Embed New Behaviors: The purpose here is to move a coaching program away from being all about the coaching moment and instead make it an institutionalized process. Companies should provide tools that allow managers to create action plans for each of their reps, give continuity to managers’ coaching conversations, and give second-line sales managers a quantitative and qualitative view into their managers’ coaching activities and abilities.
Again, we like this framework because it surmounts some of the big obstacles to delivering coaching effectively. We also find that the notion of PAUSE can be powerful for the manager because it suggests this idea of slowing down and thinking through the intent and purpose of the coaching interaction as opposed to making it a “check the box” activity as most time-pressed sales managers are naturally inclined to do. This approach helps ensure that one coaching conversation is a continuation of the last. It helps managers to keep coaching objective and prescriptive as it focuses on documented development opportunities. Getting coaching right is hard work, but ignoring it is far more painful—especially for an organization trying to install an ambitious change like the Challenger Selling Model—than taking the time to make sure it’s properly designed and executed. We’ve spent a fair amount of time talking about coaching because it absolutely is a pillar of world-class sales management. However, if we go back to the results of our analysis of manager effectiveness from earlier in this chapter, one of the surprises to our members is often that the coaching bar isn’t actually bigger. Before we released these results, many of our members speculated that a good 50 percent or more of manager excellence would be attributable to whether they provide that coaching effectively. That’s not the case. It’s fundamentally important, of course, but while coaching is certainly crucial for rep excellence, we now know that there’s much more to the story of manager excellence. Let’s take a look at the last element of manager effectiveness, sales innovation.
INNOVATING AROUND THE UNKNOWN If sales innovation is the manager attribute that matters most, what does that mean sales managers should actually do in order to innovate? Figure 8.5 shows the nine attributes that rose to the top as most important in defining the sales innovation factor. As you can see, these attributes sum into three key sales innovation activities: investigate, create, and share. Investigating is all about the manager’s ability to determine what exactly is getting in the way of advancing a sale. Who’s involved? What decision criteria will they consider? What kind of financial concerns might get in our way? The innovative manager works closely with reps to map out, in as much detail as possible, the customer’s decision-making process for any given deal— particularly one that’s stalled somewhere along the line. Source: Sales Executive Council research. Figure 8.5. Components of Sales Innovation This is important, not just because most suppliers have only minimal information on how their customers make decisions, but because your customers often aren’t sure themselves how their organization makes decisions. Add to that your own efforts to sell more complex solutions to both new and existing
customers and you’re left facing an infinitely complex array of possible deal- level obstacles. This is the battlefield where the innovative manager really thrives: collaborating with reps to creatively identify where a specific deal is bogged down and then determine how to shake it loose. The second way innovative managers stand out is by creating solutions. We are not suggesting that you should empower frontline sales managers to cobble together new solutions or invent new services. Remember, this isn’t product innovation, it’s sales innovation. But that still leaves innovative managers significant latitude to innovate at the deal level. This might include repositioning the supplier’s capabilities to better connect to the customer’s challenges or shifting risk from the customer to the supplier in exchange for a longer-term contract or access to additional cross-sale opportunities. All of your managers spend a lot of time with reps working on deals, but most of that time is probably spent checking in on their work: “Did you call them back?” “Did you send the proposal?” “Did you mention the optional service package?” That’s not solution creation, it’s deal inspection, and we’d venture to say it takes up a good 70 to 80 percent of the time your managers spend with their reps. By contrast, innovation isn’t about checking up on the rep. It’s about co-creation (i.e., thought partnership) without value judgment, about working together collaboratively to find a better way to advance a deal. At the end of the day, you’ll want your managers focusing their innovation efforts on those deals where the stakes are the highest—in other words, where their innovation time and effort is likely to pay the biggest returns. And if you think about it, we all have a few truly innovative managers. They’re the ones who always find a way to get a deal done—even the ones that looked as though they had no chance at all of making it. And it’s the solutions they come up with that often become the stuff of interoffice legend across the sales team. “Did you hear how Bob managed to help Cindy close the Smith account?” “Yeah, that was brilliant! How does he come up with this stuff?” One of our members called these managers “sales ninjas.” It’s a funny term, but when you think about it, it kind of fits. These people are masters of every tool of the trade. They can find a way in when no one else can. Finally, innovative managers eagerly and actively share the fruit of their innovation efforts. There’s huge value in being able to replicate the application of that innovation elsewhere if you can just capture it in ways that others can learn from. This is how you get scale from all those innovation efforts. Innovative managers are all about sharing best practices, developing and sustaining a strong relationship network inside the organization, and passing new ideas and solutions to the rest of the team.
So now that we’ve got a better sense of what sales innovation is all about, let’s go back and compare it with the other part of the ownership category of manager excellence. There are some really important implications we will discuss regarding how well resource allocation and sales innovation can peacefully coexist.
Worlds in Conflict When we discussed the “portrait of a world-class sales manager” earlier in this chapter, you’ll recall that the required profile of the sales manager has really changed to become more of a leadership profile. World-class managers today are defined not just by their ability to coach to the known, but by their ability to innovate around the unknown. This is critically important for an organization pursuing the Challenger model. Even with Challengers armed with effective teaching pitches and the right skills to tailor and take control of the sale, overcoming the customer’s status quo is not going to happen 100 percent of the time. Many deals will still go off the rails and get bogged down. Here’s where an innovative manager can make all the difference between closing a deal and chalking up another loss to “no decision.” Unfortunately, you’ll also recall that when it comes to boosting manager effectiveness, most sales leaders tend to place their biggest bet on resource allocation—that is, directing frontline sales managers to more efficiently manage their limited resources through better territory management, deal qualification, and sales process compliance. When you think about it, that’s what resource allocation is all about: efficiency. Sales innovation, on the other hand, is very much about effectiveness. Yet as figure 8.6 (page 162) shows, when you look at the impact of an efficiency focus on manager performance compared with an effectiveness focus, you find that an effectiveness focus has nearly twice the impact of an efficiency approach. Source: Sales Executive Council research.
Figure 8.6. The Relative Impact of Resource Allocation and Sales Innovation on Manager Effectiveness Now, just to be clear, we would never say that driving process efficiency is wrong for a sales organization. But efficiency is all about doing what you already know how to do better and better. Let’s get the right reps chasing the right customers, engaged in the right activities. And let’s do that again and again and again. If possible, faster each time. But that kind of single-track focus on efficiency only works if every deal is the same. If you live in a world of knowable needs, findable business, and predictable customer behavior, then lock down process and coach the heck out of it. For most sales managers, that’s a pretty accurate description of their worlds five or six years ago, when straightforward product selling was still a relatively large part of their business. But that’s not the world most sales leaders are living in today. If they’re going to grow revenue in today’s environment, driving efficiency around the known must give way—in part at least—to an ability to collaboratively innovate around the unknown. As one member told us, “If we had religiously followed our sales process last year, our three biggest deals would have never gotten done.” Sales success today is much less about getting better at what you already know and much more about creating an ability to tackle what you don’t know. In order to thrive in that world, you’re going to have to build a sales organization— and a sales culture—that enables that kind of innovation activity. A world where effectiveness is elevated above efficiency. However, we find that most sales organizations have a long way to go on that front—look at figure 8.7. Source: Sales Executive Council research. Figure 8.7. Sales Manager Response to Question “Do you think that senior management at your company is more or less likely to encourage and support the following?” In a recent survey of frontline sales managers, we asked respondents how they
would characterize the current strategy of their senior leadership team based on a range of attributes and behaviors. And the answer was very clear. Most managers told us they currently operate in an environment dominated by a strong emphasis on efficient execution of the sales process. Meanwhile, almost no managers agreed with the statement that “leadership empowers managers to set their own course of action.” Yet in that same survey, managers also told us that they believe that empowerment—or freedom to make decisions—is in fact the most important factor in their current success. And our own study of sales manager effectiveness would suggest they’re right. Now, to be sure, every organization has to have enforceable rules. Certainly, we need to set targets around specific business outcomes and push to attain them. But within that context, we still need to find a way to empower managers to pursue those ends with innovative means. Yet few companies appear to have the kind of culture in place to allow that to happen. This is the rather sobering message of this seemingly innocuous finding: At a time when sales leaders need to “get back to growth,” the growth engine for most organizations is built atop the wrong chassis. Your organization is designed for efficiency at a time when effectiveness is going to win the day. What the data suggests is that most organizations have a long way to go to build a culture where sales innovation can thrive. While shifting from an efficiency- to an effectiveness-focused sales culture is a long-term migration for any company, the good news is that there are certainly things that you can do right away to help equip your sales managers to be more innovative at the deal level.
Helping Managers to Understand Their Biases As it turns out, the kind of thinking managers rely on every day to do many other aspects of their job well is one of the biggest obstacles to their being innovative. In figure 8.8, you see that we call this kind of thinking “narrowing thinking.” Narrowing thinking is all about looking at a complex problem, weighing existing options, and producing a single solution. It’s incredibly valuable in a world where managers must make tough, rapid decisions on things like allocating scarce resources. Unfortunately, at the same time, narrowing thinking also severely limits managers’ ability to develop creative solutions to hard-to-solve customer challenges, as it’s focused on eliminating options from consideration rather than generating new ones for consideration. Source: Morgan D. Jones, “The Thinker’s Toolkit”; Sales Executive Council research. Figure 8.8. Modes of Manager Thought The alternative is “opening thinking,” which is characterized by the
generation and vetting of as many alternative options as possible. While narrowing thinking may be better for resource management, opening thinking is better for deal innovation. If you’re going to build innovative managers, you’ll have to overcome managers’ natural inclination—and day-to-day pressure—to think narrowly, and equip them with tools and frameworks to think openly, at least at those times when sales innovation is called for. To do that well, the first thing an organization needs to do is to effectively raise their awareness of what’s getting in the way of opening thinking in the first place. Decades of research into human behavior has uncovered a number of human biases that commonly hinder opening thinking. The six most common are: • Practicality bias: Ideas that seem unrealistic should be discarded. • Confirmation bias: Unexplainable customer behaviors can be ignored. • Exportability bias: If it didn’t work here, it won’t work anywhere. • Legacy bias: The way we’ve always done it must be best. • First conclusion bias: The first explanation offered is usually the best or only choice. • Personal bias: If I wouldn’t buy it, the customer won’t either.
These biases are not inherently “bad.” In fact, these are mental tools we all use every day to help us rapidly sort through large amounts of information and make decisions more quickly. These are basically filters that allow all of us—and especially time-strapped sales managers—to make rapid decisions in the face of complexity. This ability is critically important to their success. At the same time, however, each of these biases effectively cuts off certain paths of inquiry. They help us to make decisions quickly, but at the sacrifice of making decisions thoroughly, as each of these biases leads us to view the world exclusively from our own perspective. That can be deadly in the world of sales, as it means managers often fail to place themselves in the shoes of their customer, not because they’re bad managers, but because they’re human. They sit down with a rep, look at a deal that appears hopelessly stalled, and see the world through these biases, failing to uncover an innovative way to move that deal forward. There are two simple means of helping managers overcome these biases and open up their thinking. The first is simply to make managers aware of these biases in the first place. Just informing managers that the biases exist—and reminding them on an ongoing basis—can significantly reduce their natural tendency to self-censor in this manner. Second, we can train managers to ask themselves (and their reps) specific questions to prompt thinking from alternate
perspectives. Let’s dig into this idea of “prompting questions” in a little bit more detail to really understand how it works.
Holding Biases at Bay Simply put, prompting questions are a forcing mechanism to expand your thinking. Good prompting questions encourage us to do one of three things when considering a problem or situation: deepen our understanding, broaden our perspective, or expand our ideas. Source: Sales Executive Council research. Figure 8.9. Characteristics of Effective Prompting Questions Many prompting questions are designed to help us fully explore our understanding of an issue before drawing conclusions. For instance, “What’s the bigger picture that this customer situation falls into?” or “What else must be going on behind the scenes for this to be true?” These types of questions are great for helping managers avoid defaulting too quickly to a one-size-fits-all answer. Second, there are questions that force us to consider alternate viewpoints. Questions like, “If you were the customer’s CFO, how would you view this offering?” or “What’s the head of marketing going to think when he sees this proposal?” are especially useful questions for managers who tend to believe they’ve got all the answers already. Finally, there are questions that encourage us to temporarily set aside
practicality concerns that limit our thinking. A good question here might be, “What would you do differently if you had more budget to pursue this customer?” These are great questions for managers who run too quickly to all of the reasons why we can’t do something, rather than explore how we could do something. How could something like this work in practice with sales managers? Take a look at the tool in figure 8.10. Source: Michal Michalko, “Thinkertoys: A Handbook of Creative Thinking Techniques” (2006); Sales Executive Council research. Figure 8.10. SCAMMPERR Framework At the Council, we’ve pulled together an entire library of prompting question tools for our members, but this is one of our favorites and one that a number of our members have put to good use in their own sales organizations. It’s called the “SCAMMPERR Framework”—the name comes from the first letter of each word down the first column—and it’s a classic tool used to facilitate brainstorming exercises. What’s beautiful about this tool is how simple it is. It’s a very straightforward way to equip your managers to systematically probe a deal for innovation potential without having to somehow rewire their brains or put them through
years of training. As you read through this, notice that while the tool itself may be unfamiliar, you’ll probably recognize much of this as exactly the kind of thing your star-performing managers do automatically almost every day. Let’s say that a manager is working with a rep to advance a deal that has become bogged down due to the customer’s strong resistance to a price increase. Of course, you know how the rep would propose moving that deal forward. If price is the problem, then the price is too high. You should offer them a discount. Rather than narrowing immediately to that solution, however, the innovative manager will use a tool like this to broaden their thinking on what to do next. Using the tool, a sales manager can articulate a series of ways in which this deal might be repositioned in order to make it more palatable to the customer without having to modify the price. Prompting questions like “What might we substitute?” or “How might we combine this offer with others?” or “What ideas that have worked elsewhere can be adapted to this situation?” force the manager and rep to think more expansively before running to offer a discount. In keeping with the example, under “Modify,” perhaps we can sell the customer smaller quantities with greater frequency. Or under “Eliminate,” maybe we can get rid of unnecessary or customized packaging in order to offset price increases. It’s not necessary to answer every question for the SCAMMPERR tool to work. The framework is simply a forcing mechanism to help managers expand the universe of possible actions. Again, this is one of the many innovation tools we’ve developed for our members at the Sales Executive Council.
BRINGING IT HOME Now that we’ve discussed the important role of the frontline manager in this story, it’s time to turn to some of the implementation lessons that we’ve learned from helping companies to build their own Challenger sales organizations.
9 IMPLEMENTATION LESSONS FROM THE EARLY ADOPTERS Since unveiling the Challenger findings in 2009, our team at the Council and our sister consulting practice, SEC Solutions, has been helping sales and marketing leaders to adopt the Challenger Selling Model in their own organizations. We’ve learned a lot from the experiences of these early adopters. This chapter provides implementation lessons for sales, marketing, and senior leaders informed by our experience in the field.