I recently had an interaction with a successful leader where he shared his view on the elements needed to achieve success. One of them was very interesting, it was as simple as ‘think’.

In the panic of the global meltdown it is fascinating to compare and contrast leadership styles, and how ‘think’ is applied within organizations and sales. The knee jerk reaction to a bad situation is to put in more process and control. Process and control is needed in all business, but it must be measured – balanced. Neil Rackham provides some great evidence in his work around process and sales productivity. In small and medium business, Rackham notes that there is a direct correlation between quantity sold and quantity of sales calls. These are transactional sales, low quantity and low value per deal, often requiring a single sales interaction. However, in multi-call or complex sales cycles (Upper Medium or Enterprise), it is a different story. Consider this (via):

Whenever it takes many calls to conclude a sale, and the economy tanks, sales leaders may ask their Reps to work harder. Reps then build bigger funnels and half-sell to twice as many prospects. This is a proven recipe for big effort with small rewards. An example which Rackham cited: a capital goods company in which Reps were making an average of 1.4 calls per day. The VP Sales pushed for more effort and got:

• a 36% increase in calls/day
• a 16% increase in orders
• a 1.5% decline in sales (as the average deal size declined)
• resignations from 4 of his top 10 salespeople
• subsequently fired

Instead, in these circumstances, Rackham advocates:

• working smarter, not harder (serve the right few)
• creating value (rather than communicating it)
• making calls so valuable that prospects would pay for them
• focussing on safety (it will matter more than price)

For the sales leader who is not balanced, who prioritizes operational excellence or metrics above all else, this must seem counterintuitive. The VP pushed for sale call tracking and ‘more calls’, surely that will lead to more sales? But what is forgotten is the value of people and thinking. The value of inspiring people to do great things.

Metrics such as volume of sales calls or a scorecard are valuable tools to indicate where an organization is. I have often told my teams, putting contacts and opportunities correctly into a CRM tool is not a negotiation – it is a condition of employment – we need to know where we are. Nothing frustrates me more than having to do a manual forecast – it is a waste of the saleforce’s time and management time. But it must be remembered that metrics are not the end goal, they are a tool to reach a goal. After all – if you raise your number of sales calls but miss your number, or you have the best scorecard inside the company and miss your revenue target – you still failed.

So there needs to be a balance and one must carefully guard against a cultural shift where adherence to the process becomes more important than evolving the business. Thinking must not be replaced by blind obedience. If ‘thinking’ stops, then how will the business find new ways to outperform the competition? After all, a company cannot outperform a market by adhering to the norms – whether external norms (market conditions) or internal norms (doing it exactly like corporate dictates).

In the book ‘What would Google do?‘ there is a great quote:

‘To gain control, you have to give up control’.

There is a balance to be struck. Put in place operational excellence so you know where you are as you pursue your goals, while trusting in people, helping them take risks, watch those risks pay off, make a few mistakes and learn from those mistakes. And as that leaders stated, remember to ‘think’.