It's a common leadership success story: A new leader comes into a crisis situation and implements a successful turnaround. Steve Jobs did it for Apple. Charles Schwab did it for his namesake, after being called out of retirement. David Simon and John Browne did it for British Petroleum. The list goes on and on.
Historically, being in crisis is a positive contributor to successful transformations at all levels of the organization, either company-wide or within a single department (such as the sales organization). But why is this the case?
The first contributor is the alignment of personal motivations across the organization. Usually, the employees of a company want to keep their jobs, and the health of their company has a lot to do with this outcome. It is easier to gain the commitment to change when the alternative is losing a job or much-needed compensation. When the whole company is in the same boat, the recruiting effort for a change initiative is simplified.
Second, the closer alignment of interrelated organizations contributes to a successful transformation during crisis. It appears crisis helps otherwise-cantankerous relationships focus on the most important issues to survive.
Third, the initiative becomes the most important topic. When there are fewer topics competing for attention, every communication, every meeting, and every action can be directed toward the change initiative.
On the flip side, without crisis, personal motivations are all over the map and at times counterproductive. Interdepartmental collaboration is mostly dictated by the interpersonal relationships of their leaders—a recent survey indicated that less than 50 percent of CSOs and CMOs are on the same page.
Finally, the barrage of competing topics can bury a transformation initiative in the din of quarter-end drills, new product releases, economic fluctuations, rising competitive threats, reorganizations, and other daily distractions.
So is it fruitless to attempt a transformation absent crisis? The short answer is, no. It is not fruitless, but it is more difficult and tends to be error-prone.
This article will identify the most common mistake made in non-crisis transformations and provide some suggestions for leading a successful sales transformation without crisis as the driving factor.
We use a model called the growth, recovery, and crisis cycle to explain the conditions creating the need for transformations. It is also useful for predicting the challenges common to sales transformations, and the actions required for successful transformation with or without crisis.
The GRC model represents the five potential operating states of any organization (maintain success, innovation, realign, turnaround, and shut down), in addition to the three associated health cycles of a company or organization (growth, recovery, and crisis). A growth cycle is fueled by supplementing the base of a successful operation with a series of various innovations of products, process, or strategy.
On the less attractive and more sobering side, a recovery cycle is represented by an entity that must realign itself to return to a successful situation. Realignment is usually called for when results are disappointing but not quite disastrous.
Lastly, the crisis cycle occurs when realignment fails or is not heeded, leading to imminent or predictable disaster. A turnaround is best described as an exercise in parsimony: paring organizations, scaling back product lines, or consolidating markets serviced. These actions attempt to get the company back to a defensible, yet successful core business.
To answer the question, "Why transform without crisis?" we draw your attention to the innovation and realignment situations. They are very similar to each other in scope, actions and outcomes. They are most simply differentiated by the concept of proactive versus reactive initiatives. That is, innovation is the result of recognized opportunity spurring proactive initiatives, and realignment is the result of disappointment causing reactive (but likely similar) initiatives.
Examples of innovation-driven initiatives include creating new products, offering new services, selling to new stakeholders, or pursuing new markets, among many potential situations. Whereas disappointment prompts action to correct unmet expectations and may include a more keen focus on existing operational process or realignment to better exploit existing products or services, unsatisfied markets, ignored stakeholders or other tactics require a change in behaviors.
To underscore the similarity of the initiatives in both recovery and growth cycles, both will require a transformation of sales behaviors to be successful.
So the long answer to the simple question is this: sales transformations are routinely used in the absence of crisis to proactively contribute to growth and reactively used to improve otherwise disappointing results. It is also interesting to note the vehicle for innovation and realignment can appear in two forms.
It can be a grass roots-driven initiative born from the best practice successes shared within an organization from the bottom up. Alternately, it can be a leader-driven transformation instigated by a champion who spots an opportunity or simply desires to accelerate the natural pace of change.
Many companies achieve their success, in large part, due to the success of a single great product. As the product success spins off significant cash or strategic value, the company begins investing in expanding product lines organically or by acquisition (frequently with a combination of both).
As the product line grows, so does the customer stakeholder list, the potential markets to serve, and competition. When this happens, many companies recognize the need to innovate their product-centric sales culture into a solution-selling culture. The reasons span more efficient selling engagements, competitive advantages in stakeholder access, and simply selling more products in each opportunity.
A solution-selling transformation often manifests as a shift from an infrastructure organization-focused sale to a business unit sale, leveraging the buying power and more strategic budgets of the actual end-use customer. It can also be described as bring more products or a wider solution into play via a more thorough diagnosis of the customer's challenges, the stakeholders involved, and the impact of taking action.
When a sales organization proactively transforms itself to more effectively sell across the product line, outsell less-sophisticated competitors, or create the need for services to address the needs of more complex buying challenges, it is innovating a sales process.
On the other hand, when a sales organization reactively transforms itself to become more effective at selling lagging products, combat annoying competition, or use services to overcome the objections of more risk adverse prospects, it is realigning its sales process.
You may notice the adjectives are the only clues to the difference in the two situations.
In either the case of innovation or realignment, a common mistake made by CSOs materializes when they attempt a transformation with a frontal strategy. A frontal strategy is defined as a directive/all hands on deck/do or die implementation. Using this type of transformation strategy in the absence of crisis almost always invites resistance. The result is an extraordinarily high number of failed transformations when compared to crisis-based transformations.
Kevin Temple is president and CEO of The Enterprise Selling Group.