A Skeptical Look At The Dogma of Sales Effectiveness

After walking the hallways of business for over 25+years what is it that strikes me?  Nonsense. Specifically, I am struck by how much of what is accepted as the standard way to think about and do things, in business, strikes me as nonsense. It occurs to me, that some of the ‘best’ nonsense is labelled ‘best practice’.

The Nonsense of the Sales Pipeline and Sales Forecasting

There is a particularly delightful piece of nonsense, ‘best practice’, in the area of the sales pipeline and in particular sales forecasting.  Let’s start with disclosing what the ‘best practice’ is. From what I have seen it occurs to me that the ‘best practice’ is:

  • to break the sales pipeline process (some call it opportunity management) into stages and to associate a specific probability of success to each stage;
  • each opportunity, at whatever stage of the opportunity management process, has a revenue figure , an expected close date, and an associated probability attached to it;
  • the sales forecast (of how much revenue the sales force will close) is calculated from these opportunities – the revenue, the probability of successfully closing that opportunity, and the expected close date; and
  • each sales person is held to account for delivering the expected sales forecast figure from his pipeline.

This all sounds sensible if looked at on its own divorced from the real world. What shows up when you expose this ‘best practice’ to the real world? Let’s imagine that five vendors are pursuing the same sales opportunity ($1m) with MegaCorp and they are all using the same six stages to track and forecast this sales opportunity within their organisations.

  • Initial Contact – 0% (probability of successfully winning this opportunity)
  • Qualification – 20%
  • Proposal Submission – 50%
  • Presentation to Decision Maker – 80%
  • Contract Negotiation – 90%
  • Close – 100%

Now let’s assume that three of the five vendors have made the final cut and thus been invited to make a presentation to the decision maker.  What will show up in their sales forecasts?  Each of the vendors will be forecasting revenue of $800k.  And given that the probability is at 80% (so high) the unfortunate sales reps responsible for these opportunities are likely to find themselves committed (by the rules of their organisations ‘best practice’) to delivering this revenue.

Now let’s look at the situation. $1m is on the table. Three organisations are in the running for this prize. Each has an equal chance – 33.33% probability and so each should only be forecasting to win $333k.  Yet, each is forecasting $0.8m and collectively they are forecasting to win 3 x $0.8m = $2.4m.

Let’s assume, that two of the three vendors are invited to submit a contract for negotiation. What will be contained in the sales forecasts?  Each vendor will forecast $1m x 90% = $0.9m and collectively they will forecast $1.8m in revenues. What is the money on the table? It still remains at $1m.

It occurs to me that in the absence of having fixed the game in advance, the probability attached to an opportunity, at whatever stage, is (or should be) works out as follows (if one stays firmly in touch with the real world):

  • Probability of winning sales opportunity <= Deal size / No of vendors still in the running

It also occurs to me that if this way of accounting for opportunities was embraced then more sales people would record and track their opportunities rather than waiting to win/lose the opportunity and then going back and filling in the requite fields in the CRM system or Excel spreadsheet.

The Nonsense of Process

If there is a God in the world of business then it occurs to me that it is ‘Process’.  The taken for granted assumption is that there has to be a process for every piece of work that has to be done in an organisation. Why this insistence on process?  It occurs to me that folks in business have collapsed effectiveness/performance (generating the desired outcomes) with process (doing work through a prescribed set of steps and methods):

  • following process = generating the desired outcomes.

This is clearly not the case. And I say, it is especially not the case when it comes to effectiveness in the domain of sales and selling.  Yes, it is quite likely that training a green / novice / incompetent sales rep in process will result in an increase in his sales performance: he will close more deals.  No, it does not follow that process turns an average sales rep into a great one.  It is quite possible, even likely, the need to follow prescribed process creates unnecessary work, and gets in the way, of good sales people working sales opportunities and closing them.

Let me put it differently, if success in sales is so highly dependent on following a prescribed sales process then we should be able to take people who are great at following process and turning them into able sales folks.  Which folks in business are treating at following process?  How about the folks in Customer Services, or Field Services, or Finance, or Logistics, or Operations, or IT?  Having second thoughts?

It occurs to me that success in sales requires a certain way of being-in-the world. In part this way of being in the world involves how one relates to and is involved with people and the challenges/risks/anxiety involved in the world of selling.  If this is not your way of being-in-the-world then it is highly unlikely that you will excel at selling no matter how versed you are in the process or how skilled you are in the tools of selling.

Above and beyond this familiarity with people and ease with the anxiety of selling is attunement. What attunement? An attunement to the situation – the context – at hand: the economic environment, the company you are selling to, the people you are dealing with in chasing opportunities, the product/s you are selling, the organisation you work for, the competitors etc…

No amount of process, method, templates and tools can generate this attunement in and of themselves.  This attunement has to be earned through lived success and lived failure, through learning by doing.  This kind of attunement arrives only after one is scarred through real world experience on the ‘battlefield of life’.  Still wondering what I am talking about?  I invite you to read the following passage:

I think it was in Argentina that I turned professional. I had been on the road for a year; I had been very high and very low, and everywhere in between. The world no longer threatened me as it had; I felt I had the measure of it. 

…. Riding the bike was as natural as sitting on a chair. It scarcely tired me at all. I could pack and unpack the bike with the automatic familiarity of shaving, and I did not allow the prospect of it to annoy me.  The same was true for minor maintenance problems: a puncture, cleaning a chain, aligning the wheels, whatever it was. I did it without giving a thought to the inconvenience. The things were facts of life. I slept on the ground more often, and my bones began to arrange themselves accordingly…

I felt very much tried and seasoned, and no longer expected to make silly mistakes or confront unexpected hazards. I had also developed a battery of useful instincts. I knew when there were thieves around, when the bike had to be protected and when it was safe ….. I knew when to expect trouble from strangers, and how to defuse it. I knew what drivers of cars and lorries were going to do before they knew it themselves. At times I think I could even read the minds of stray dogs, though it was a rarity to see one on the highway that was not already a pulped carcass at the roadside

Ted Simon, Jupiter’s Travels

And Finally

I leave you with my assertion: a lot of that which is sacred in business is nonsense. What it takes to see this nonsense is to empty oneself of the theory, of ‘best practice’, of the taken for granted way of thinking about and doing things, and to look at the situation with fresh eyes:

“The real voyage of discovery consists not in seeking new landscapes, but in having new eyes.” 

– Marcel Proust

Musings on Leadership, Performance, and Customer Experience

Is performance a function of an ongoing attunement to the ‘truth’ of the situation?

It occurs to me that, all else being equal, the probability of the airliners successful arrival/landing at San Francisco is a function of the the pilots attunement with reality: that which is and is not.  Let’s make this concrete by considering some examples:

  • If as the pilot, I have access to the gap between the actual flight and the flight path which is necessary to get the airliner to San Francisco, and I do make the necessary course corrections, on an ongoing basis, then I increase the probability of safe-timely arrival.
  • If as the pilot, I become aware that there is a serious problem with one of the engines and I can accurately determine which engine it is, and I do shut down the troublesome engine as/when it becomes necessary to shut that engine down then I increase the probability of safe-timely arrival.
  • If as the pilot, I become aware that there is a security lockdown at San Francisco airport and that the airliner is running out of fuel, and I head for the nearest alternative airport (say LA) then I increase the probability of safe-timely arrival.

You get the idea: the probability of success in this venture is a function of the pilot/captain’s ability to ensure that ‘the actions that are critical to the safe arrival of the airliner’ at San Francisco are in attune with, on an ongoing basis, with what is so (and is not so) as this impacts the airliner.  Furthermore, this attunement can be broken down into:

  • an accurate-timely grasp of what is so – the ‘truth’ of the situation; and
  • taking appropriate-timely action, on an ongoing basis, to ensure attunement with this reality.

I ask you to notice the following as regards the very structure of this game of commercial flying:

  • that which we are talking about applies irrespective of who/what is piloting the airliner. And what shape the airliner takes;
  • every crew member who values his life finds him/herself called to pass on information that helps the pilot to be attuned to the truth of the situation and take the appropriate action;
  • every sane pilot (one who values his life) is motivated to be open to and seek knowledge of the ‘truth of the situation’ and take the action that the situation calls for given the commitment to arrive safely at the desired destination;
  • lack of sufficient attunement to the the truth of the situation would affect the lives of all including the pilot/captain – even if the pilot/captain could ‘parachute’ out (and leave all the others to their fate) his live would be affected sufficiently negatively that parachuting out does not show up as an attractive option for any same pilot; and
  • there is no space to ‘hide behind’ an ideology that does violence to the ‘truth’ of the situation – the structure of this game is such that any significant lack of attunement with the ‘truth’ of the situation will lead to visible disaster and those held responsible will pay a public price.

Are large-established organisations in attunement with the ‘truth’ of the situation?

What accounts for the rampant malfunction, even outright failure, when it comes to large-established organisations? I say that it is a lack of ongoing attunement with the ‘truth’ of the situation. Put differently, it occurs to me that the first and most serious casualty of organisational life is the ‘truth’ of the situation; the ‘truth’ of the situation is moulded so as to speak-pander to the interests of the powerful and to conform to the reigning ideology.

Perhaps, there is no greater challenge for those who aspire to be leaders and who fill leadership positions then calling forth and truly listening to the ‘truth’ of the situation: seeing ‘reality’ in the nude – naked of personal interest and the dominant ideology.

How to illustrate, make concrete, that which I have been talking about here?  How to give it flesh and bones?  Let’s revisit the latest news on the NHS. Here is what jumped out at me from a piece (NHS-on-brink-of-crisis-because-it-became-too-powerful-to-criticise.htmlin the Telegraph newspaper:

THE NHS should not be treated as a “national religion” while millions of patients receive a “wholly unsatisfactory” service from GPs and hospitals, the official regulator has warned.

David Prior, the chairman of the Care Quality Commission, said the health service had been allowed to reach the brink of crisis because it was “too powerful” to be criticised.

He said parts of the NHS were “out of control” because honest debate about the weaknesses of the health service was not tolerated.

… he said. “When things were going wrong people didn’t say anything. If you criticised the NHS – the attitude was how dare you?”…..

Mr Prior suggested that the “target culture” imposed by Labour a decade ago fundamentally damaged the culture of the NHS, creating a “chillingly defensive” operation in which the truth was often sacrificed. “The whole culture of the NHS became so focused on targets that it obscured what real quality was about,” he said. “The voice of the patient wasn’t in those targets.”

He said many hospitals needed radical reform.

And finally

Is it just many hospitals that need radical reform?  It occurs to me that many organisations need radical reform. It occurs to me that our whole way of life requires radical reform. It occurs to me that our fundamental way of being-showing up in the world requires reform.

Where to start? It occurs to me that, at an ‘organisational’ level, a great place to start is to create a context which call forth an enquiry into, and a grappling with, the ‘truth’ of the situation from all of the actors who find themselves in or impacted by the situation.

When it comes to Customer Service, Customer Focus, Customer Experience, CRM, Customer Obsession, a great place to start with is the question, “Do we REALLY want to play this game, play it full out? Are we willing to do what it takes to EXCEL at this game?”

I say excellence in the game of cultivating meaningful customer relationships and excelling at the Customer Experience is an ongoing attunement to the ‘truth’ of the situations as experienced-lived by the Customer.  This kind of attunement takes more than customer surveys or mystery shopping. I say these mechanisms are merely ‘defence mechanism’ – ways of avoiding what it truly takes to be attuned to the ‘truth’ of the situation as lived by the Customer.