By Craig Saphin
The podcast currently has 23 episodes available.
Executive Summary:
Executive Summary
Executive Summary
Nick Johnston is a serial entrepreneur, a leading sales professional and a successful business owner. He started his career in London’s competitive financial sector before being lured to Hong Kong by a business acquaintance. Using his financial services experience, the recruiting company, Wall Street Associates, was established with his business partner in Hong Kong before Nick decided to go it alone and focus on the Japan market.
In 2010 Wall Street was sold to en Japan, and Nick moved to Singapore to start the next phase of his life. Nick is now a private investor and business advisor and has a keen interest in HR technology solutions and HR business processes.
Craig: Can we start by talking about your experience as a sales executive; when you were an individual contributor and also when you owned a business.
Nick: I was a recruiter, and I set up a recruiting business, but a lot of the sales practices apply in many sales strategies, especially B2B. I learnt from an early mentor who told me: “Talk to decision-makers”. It’s the most common sense and logical piece of advice, however, it has been a challenge through my whole career in managing sales teams.
Getting sales professionals to talk directly with decision-makers is more difficult than it should be. People forget its importance. The decision-maker is in the best position to understand the requirements and the subtleties required to close the deal. For example, in the recruiting process, the decision-maker or hiring manager is in the best position to identify whether the candidates are technically strong or a great fit for their business. As well as this, some candidates undersell themselves. Therefore, my job was to get a great candidate in front of the decision-maker. This gave the best outcome.
Executive summary:
• Competent strategic sales executives are the “20%” in your team that contribute 80% of revenue.
• From your client list, establish the top 20% based on the potential opportunity (not historical opportunity because it is “history”). Develop an account plan for each. • The Key Competencies of a Successful Strategic Account Manager include commercial awareness, communication skills, ethics, results-oriented and problem-solving.
Over the years, I have had the great opportunity of working with groundbreaking companies who valued strategic selling and encouraging their best key account representatives to achieve the highest level of relationship with clients.
In the 1980s the American academic and researcher, Neil Rackham, established the Huthwaite Institute, published “SPIN Selling” and “Major Account Sales Strategy” and developed a close relationship with IBM and Xerox. These collaborations established the foundation for modern strategic account management methods and processes.
At the same time, both IBM and Xerox invested heavily in the development of their people. Around this time, I was participating in a training program at Xerox’s University, situated on a spectacular campus on the banks of the Potomac River in Leesburg, VA. Such was the commitment to training by the large leaders of US corporations.
Executive summary:
• The best sales professionals are outstanding at intensive farming of a territory.
• The best sales leaders apply a comprehensive territory management plan across their team. • Have a communicated rule on how often key accounts need to be engaged.
• Have communicated criteria on how accounts are graded.
• Insist on account management plans from the front-line account managers.
• Have multiple account managers working for large clients.
Who owns the relationship with your biggest clients?
If one of your key account managers leaves tomorrow does the relationship also leave the business?
Are new members in your sales team given a warm set of relationships or starting from the deep freeze?
What are your criteria for sales activity in your top 20 accounts?
Many years ago, I studied agricultural science at the University of New England in the northern tablelands NSW city of Armidale. As part of my studies, I learned the stark difference between the intensive farming that is found in horticulture or pork manufacturing compared with the broadacre requirements found on some beef properties in central Queensland. In the latter, the stocking rate could be where one beast requires 10 or 12 hectares on which to graze.
Related to this, I have found that the best sales professionals are outstanding at intensive farming of a territory. The less skilled requires a broad acre approach. This is also akin to “picking the low hanging fruit” without too much sweat or application.
Executive summary:
• All organisations are looking for sales professionals. Develop a comprehensive talent acquisition strategy.
• The training curriculum should cover onboarding, relevant professional development as milestones are achieved and leadership training. • It is a very high risk to have too much of the budget depending on one individual.
• Fraud in the sales process is more common than most people think.
• Protection of intellectual property (IP) can be achieved by including a data protection clause in employment contracts and reinforcing the company confidential nature of critical client data.
One of my trusted business advisors has a breath-taking level of confidence in the importance of marketing in scaling a successful business to new heights. Our discussions are always energetic, and we don’t agree on everything. He acknowledges the importance of the sales function in a fledgling organisation but enthuses about marketing’s potential and power. I find his strong viewpoint counterintuitive because he comes from a finance and accounting background and specialists from this area of the business are not the usual enthusiasts for elaborate marketing plans
Depending on your perspective: finance & accounting, marketing, sales, comprehensive operational excellence or people & culture; you are likely to have a preferred bias and focus.
At some stage, some focus for a founder wishing to build a business will be a comprehensive and professional sales function. If this is executed competently, then the sales function will be able to deliver the orders necessary to achieve the strategic revenue plan.
Executive Summary:
• Sales support should be used for the areas where salespeople are notoriously weak or relatively uninterested.
• Before adding the additional cost of sales support, it can be more cost-effective to provide necessary training and sales automation tools to enable the sales professional to be more productive.
• All salespeople are not created equal.
• Allocate expensive sales support in a careful and specific manner.
• Expect a return on investment. Measure and track this return.
The best sales professionals in the world are hardcore business practitioners. They understand their own specialist vertical intimately. They are well connected and highly remunerated. As a business owner, you want this. Sales professionals read their compensation agreement carefully and then set out to achieve the best outcome for themselves and the company.
When the planning and business analysis is done, the members of the top sales are 20% who contribute 80%.
In this situation, the average company provides a lot of support in pre-sales with the explicit goal of leveraging the highest performing sales members.
The case for providing sales support can be examined from two angles: skill enhancement and ROI.
The Balancing Act – Compensating Performance
Executive Summary:
• Provide a culture which aims at developing its people and compensating them fairly. • Mitigate risk by not having the organisation too dependent on any one individual.
• “A” Players love working with “A” Players and therefore, attract the same.
• The internal communications piece is a powerful retention tool. • What is the percentage of gross margin budgeted for total people costs?
• Be slow to give away equity.
Over a recent coffee in Sydney’s CBD area with a small business owner, I discussed her strategies for compensating her high performers. Her retention strategy for pillar leaders was to give them equity and pay them, on target, 50% above the market. On further exploration, she revealed how fearful she was of other key members leaving the organisation. However, despite showering this leadership team in gold, there had been a recent defection. There was shock and self-recrimination on what should have been done better to retain this “key” leader in the organisation.
People leave organisations. The reasons for leaving vary. It is rarely just for compensation. In a talent-short market, great talent will always have a choice. You should always assume your best talent is regularly being head-hunted. The best strategy is to provide a culture which aims at developing people and compensating them fairly. At the same time, it is important to mitigate risk by not having the organisation too dependent on any one individual. That includes you, the business owner. Sharon Koss writes that compensating performance needs to address three levels: • Talent attraction • Peak performance • Talent retention
2.3 Like a Great Red Wine: Developing a Leadership team
Executive Summary:
• Establishing a leadership team will gradually permit the business owner to move up “onto the business” and gain more time to think and strategise.
• It is important for every member to have a distinct role and a reason for being in the team, no passengers, only drivers.
• The leadership team should feature diversity in personality, business skills, gender and ethnicity.
• A weekly communications meeting can be effective and a quarterly or semiannual offsite to reset and align is paramount.
• Technically, each leader is expected to wear a different hat when they are in the leadership forum.
Being able to select a young red wine full of tannins and fruit and predict its greatness in 10 + years hence is an art. To the uninitiated, the wine could be almost undrinkable. However, to a trained and experienced wine drinker a relatively easy thing to accomplish.
Similarly, choosing your leadership team members from existing managers and staff is an art. The experience will make you better, but at first, there will be missteps. We all know that many great individual contributors cannot make the step up to management. In the same way, many managers cannot make the step up to be leaders.
The podcast currently has 23 episodes available.