The Business Alliance Grapevine - It's All in the BAG!

The Next Level

As the year begins, we are thinking about our goals for 2007. Many of us desire to advance our business to the “Next Level.”  What does the next level mean for you?

For some, the next level means a professional image in print, on the web and in the community.  For others, the next level means improving cash flow, receivables, or customer service.  For many of us, the “Next Level” means having enough left over to be able to give back.

In the Sales and Marketing column of the Business Alliance Grapevine, the Next Level means increasing revenues (sales) and increasing visibility and credibility (marketing).   We will have guest columnists write about improving sales and marketing from their perspective.  Whitney Hill and Ed Thacker will write about meeting these goals with web presence and enhanced ways to receive payments, Lois LaSavoy will write a column dedicated to keeping in contact with your network in new and fresh ways; and Sharon Wolfe will write about using logo gifts to enhance your marketing program.  We will also have a column on using CRM tools effectively.   We have space for a few more columns and your input and ideas are appreciated.

At The Vista Group, we believe taking a business to the Next Level means not only increasing revenues, but also building a reliable and sustainable mechanism for increasing sales.  We need to consider all elements of the process, the “who” and the “what” of sales in addition to the “how” of sales.

Many entrepreneurs build their sales force themselves, slogging through piles of resumes, working through hours of interviews and, finally, attempting to instill in the their new hires the same passion and focus that they have.
 
Other business owners hire a sales manager. They find someone with years of experience in corporate America who has recently been downsized. Initially, things go well. Many hire a rep or two they've worked with in the past. Then after a few months, they realize sales are not coming in the way they are supposed to. It becomes apparent that selling for a growing company is completely different than selling for corporate America. Reps then leave in search of a better opportunity and before long, the sales manager is asking for patience, while the entrepreneur seeking results, have a falling out. Now, the small business is nine months further down the road, short on cash and revenues are flat.

You may have recently heard about contract sales or, simply stated, outsourcing your sales department.  There are three options a business owner can choose when outsourcing a sales force.

The first option is to “hire” commission-only sales reps. The benefits of this plan is simple, if they don’t sell, you don’t pay.  Successful commission-only reps make more money in commission-only sales than in any other type of sales engagement, especially in the small business world.  For the right individual, linked with the right company, commission-only sales can be very lucrative.  The drawback to this plan is that a business owner does not have control over the activities of the sales reps.  

People don’t typically think of hiring commission-only sales reps as outsourcing a sales force, but that is essentially the nature of the arrangement.  Commission-only reps are, in fact, mercenaries who sell for a check.  Selling for money, as opposed to selling for a business, translates into sales reps will eventually find a business that will pay a higher commission, or may even starting selling something else on the side.

Commission-only reps merely appear to be free.  By the time you’ve spent your time and resources training, equipping and mentoring them, etc., the cost can be quite high. Commission-only is a one-on-one management situation.  The owner pours himself into the success and support of the commission-only rep, one rep at a time.  There is no tie and no loyalty, which then in turn, results in a high churn rate.  So you’ve spent all your energy, effort, and emotional capital on a sales rep that, ultimately, is a mercenary.

The second option is when business owners create an Agent Program.  The business owner contracts with other companies to get them to sell products and services that are generally similar to other products and services they already sell. This is asking sales reps to have a split focus. Do you really want to leave your sales in the hands of somebody who isn’t focused solely on your business and may even misrepresent the capabilities of your product or service either out of ignorance or a desire to get a commission from you?  This option would not be considered a strong overall sales strategy.

The third option, which my company pioneered, is the newest way for a small business owner to develop a traditional sales force that is very similar to a sales team one would find in a larger and more established business.  The business owner contracts for a professional management team who then performs all of the functions of a fully-fledged sales force but for a fraction of the cost. This option offers the small business all of the benefits of a top performing sales manager without the risks associated with investing in a single individual.  The management is leveraged across a few small businesses while providing professionally trained sales associates, each of which are dedicated to one single business.  The benefits of this option are that the management team is responsible for the screening, hiring, and oversight of the sales associates and reports the activities to the business owner, who can then in turn focus on actually running the business. The challenge of this system is that there is an initial cost to start the program, but the ROI comes much faster than in almost any other traditional investment.

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Designing Leadership Development: What Works?

Over the last 30 years we have worked in every sector of society with senior leadership teams led by CEO’s, Board Chairs, Executive Directors, Plant Managers, Senior VP’s, Chancellors, Chief Medical and Scientific Officers, and prominent community figures.  All faced common leadership challenges, yet every one was in a unique circumstance.    Given the wide range of possible approaches in developing these leaders, what is the best way to think about what will work for whom?

The first and strongest strategy is to work on site, over a period of time, and in context with the executive’s entire management team and their daily challenges, rather than, delivering off-site and off-the-shelf programs.  This approach allows you to address specific needs, alter the program on a moment’s notice and to stay focused on priority demands.

The second strategy, and the central point of this column, is to assess each executive with respect to four essential domains of perspective and skill.  Within the great libraries of literature and leadership development, resources fall easily into one or more of the following four domains.  Assessing skills and deficits at each domain level allows for greater precision in designing leadership programs that work.  Note that this brief introduction to the four domains does not recommend a first priority; in practice, the priority approach is negotiated based on current business needs and the identified preferences of each executive. 

Institutional Level Leadership is the domain of technical mastery of organizational structure and machinery, with respect to the law, federal and state regulations, policy, procedure, finance, etc.  Vehicles of the Institutional Level include: financials, organizational charts, strategic plans, workflow analysis, staff allocation, compensation and benefits, legal contracts, and more.  Leadership resources include: an MBA curriculum; Engineering or Law School; Accounting and readings such as David Allen’s Getting Things Done.

Cultural Level Leadership is the domain of the ability to relate to and lead groups, including understanding the shared values, customs and language of constituent groups.  Vehicles of the Cultural Level include the broadcast media, public speaking and the use of story-telling, metaphors, symbols and rituals; enrolling groups in vision, aligning teams on operating agreements, running effective meetings, diversity and multicultural leadership; creating environments, establishing reputation, and leading culture change.  Leadership resources include a strong liberal arts education, marketing  and advertising experience, top of the line diversity training, Toastmasters, biographies of charismatic leaders and Meg Wheatley’s The New Science of Leadership.

Interpersonal Level Leadership is the domain of transactions between two people with a focus on one-to-one behaviors and communications.  This domain reveals the leader’s ability to render ideas quickly, clearly and to similarly facilitate others’ communications.  Vehicles of the Interpersonal Level are primarily speaking and listening in one-to-one conversation such as conducting performance reviews and supervisory interviews, facilitating conflict resolution, or simply delegating a piece of work.  Leadership resources include communications training such as transactional analysis, role-playing and videotape feedback, conflict resolution training, and Ken Blanchard’s The One Minute Manager. 

Personal Level Leadership is the domain of individual thoughts, feelings & values, including emotional literacy, spiritual conviction, integrity, the maintenance of personal health and work/family balance.  A leader’s beliefs about a higher power as the source of wisdom and universal intelligence ultimately informs his or her actions.  The leader’s worldview is the essential underpinning of their management philosophy.  Vehicles of the Personal Level include forms of personal development, study, learning, introspection, meditation and values clarification, to name a few.  Leadership resources include spiritual guidance, emotional literacy training, and literature on creating a personal mission/vision such as the first steps in Stephen Covey’s The Seven Habits of Highly Effective People and a personal philosophy of leadership such as John Heider’s The Tao of Leadership.

Distinguishing these domains in practice can be a powerful tool.  It takes some practice, though.  Here are some descriptions of leaders in action while in one of our programs.  Can you identify which levels might be at play

The CEO who believes the company is just a big complicated machine with employees as working parts (D).

The Plant Manager who redesigns the manufacturing line to produce an “impossible” 100 mid-range diesel engines per day (A) while seriously demoralizing his own leadership team (B,C).

The VP of Research (A) who is tapped by her peers to tell the CEO that morale is at a critically low level throughout the company (B) because he has been both unavailable and unclear about strategic direction (B).    

The quiet Chief Medical Officer (A) with impeccable integrity and technical genius (D) who is wholly inept at making small talk (C) and holds painfully boring meetings (B). 

The Chancellor who cares very deeply and holds high personal value to be a leader in social justice (D), but consistently fails to predict the adverse impact of his well-intentioned actions with respect to the black student population (B). 

(A = Institutional   B = Cultural   C = Interpersonal   D = Personal)