In recent years, CSOs have had to devote considerable time and energy to establishing and maintaining disciplined sales processes, including everything from customer segmentation to sales staff compensation. Given the complexity of those processes, even well-run sales departments have to work hard to get them all operating smoothly. But many stop there—and they can’t afford to. The heightened expectations of customers, peer executives in other functions, and the sales force itself require the head of sales to shoulder new responsibilities, ones that have changed the job almost beyond recognition from what it was 20 years ago.
New Environment
Examine the calendar of any successful chief sales officer, and you’ll see how complex the job has become. (For an example, see the exhibit “A Week in the Life of Ben Bulkley.”) That complexity stems from the following changes, which have affected sales activities at most major companies.
Customers have gained power.
It’s no secret that in many industries, supply outstrips demand. Customers have more choices and more information—thanks largely to the Internet—about what they can buy and how they can buy it. The shift in power from sellers to buyers has made customers demand more of their suppliers and the buying experience.
Customers have gone global.
The globalization of business has made the structure of many sales organizations (those with a regional or national focus) anachronistic. Suppliers had better be sure that their organizations mesh with their customers’ global orientation and sourcing processes. “Gone are the days when we could think of this part of our business as ‘North American’ or that part as ‘pan-European,’” says Joe Walker, president of the North American and European business units of Southfield, Michigan–based R.L. Polk, a major provider of customer data to automakers. “A corporate customer making a purchase decision in Detroit is doing so on behalf of his global organization.”
Channels have proliferated.
At one time, the direct sales force was the sales organization. Today, most companies, regardless of size, go to market through multiple channels. The sales organization may comprise not only people employed by the company—field sales, telesales, and online reps—but also those outside the company, including partners and resellers.
More product companies sell services.
Whether wrapped around or embedded in products, complementary services have become a way to enhance or simply maintain a product’s competitive edge. Selling these services calls for a special mind-set. “The holistic approach required to seamlessly package products and services together is very different from the traditional selling of product,” explains Greg Shortell, the president and CEO of Network Engines, a provider of storage and security appliance services in Canton, Massachusetts. (Until recently, Shortell was a senior vice president of global sales and marketing for enterprise solutions at Nokia.) The reason for the difference, he says, is that “after a certain period of time, a customer stops buying your product and starts buying your strategy.”
Suppliers have adopted a “one company” organizational structure.
Business-to-business marketers selling products and solutions across many categories have moved away from a structure in which multiple business units sell separately to the same customer. Instead, sales resources companywide work together to sell all products to the customer through a single point of contact. In this newer model, sales specialists—focusing on, for example, product features or applications or technical requirements—typically support account managers, who are responsible for individual customers. The single corporate face makes life simpler for the customer. It also can boost sales results through cross selling and improved focus on providing integrated solutions that meet customer needs. But this approach increases sales expenses and can create confusion about accountability for results, presenting yet another challenge for the chief sales officer.
New Roles
These changes in the business environment have made running a sales organization more demanding than it’s ever been. Sales will always be the ultimately accountable job. No other function bears such exposed responsibility for delivering on the numbers. These days, though, that is just the starting point. The successful CSO also needs to oversee sophisticated processes for such tasks as customer segmentation—processes that not long ago represented state-of-the-art practice but today are considered sales essentials. As if that were not enough, the CSO must take on five new distinct, but related, roles.
Company leader.
The chief sales officer must hit his targets while ensuring that the sales organization’s actions—at all levels and across all channels—support the company’s strategy. Striking that balance means communicating broader goals to the rank and file, so salespeople can connect their day-to-day responsibilities with the big picture; it also calls for effective collaboration with other functions. “Sales leaders can no longer think of themselves as working in a tight little box, responsible only for revenue generation and relationship management,” says Peter Andruszkiewicz, the vice president for national account sales at health care provider Kaiser Permanente in Oakland, California.
Every CSO faces similar general objectives: achieving revenue growth, launching new products, acquiring customers, expanding business with current customers, improving sales productivity, and containing or reducing selling expenses. Only through strong leadership can sales chiefs make it clear how these goals can be achieved in support of corporate strategy. In fact, at least 15% of a CSO’s time should be spent establishing and communicating a clear course for accomplishing the current year’s business plan. “Without an articulation of the company’s strategic direction to the sales force—and, incidentally, to customers and channel partners—you run the risk of less-than-optimal performance,” says Network Engines’ Greg Shortell. In large part, that’s because disagreements about priorities arise.
The best sales chiefs are, along with the rest of the senior executive team, leaders of the company as a whole. They actively participate in formulating company strategy as well as executing it. No enlightened CEO considers entering a new market, expanding the company’s product portfolio, or taking on a new channel without seeking the advice of the CSO—that is, if the CSO has won his respect and trust. For instance, a sales chief can offer valuable insights about the company’s customers: which ones plan to grow, where their growth will come from, and what their particular needs will be. “My CEO expects that I will bring him market intelligence about what our customers require from us so they can be successful in their business,” says Mary Delaney, who leads a 600-person sales force for the online job broker CareerBuilder.
A sales chief can take on an even higher profile role in a company where the sales function hasn’t traditionally been a priority, Continue reading »
