Why Are Enterprise Sales Teams Resistant to Agile?

To be fair, in my experience, sales teams have been resistant to process innovations as long as I remember. Plant operations, distribution networks, backoffice operations are unrecognizable from their 1990s counterparts, but sales funnels, pipeline management and key sales activity metrics barely changed in decades. While a plant manager from 1950s could not possibly run automated manufacturing operations or a robotic warehouse, a sales manager from the same era could arguable manage a current B2B salesforce. But not a B2C one. And that’s the point. Lean startups, agile sales and growth hacking emerged and thrived in a new sales paradigm while traditional enterprise sales carried on basically unchanged.

Having worked in the 1990s on Business Reengineering projects instigated by Michael Hammer’s research, most companies focused on core operations, manufacturing and backoffice. Not sales. The major award of the day was the Malcolm Baldrige Quality Award than many companies doing reengineering also aspired to. Out of the 1000 possible points towards the award, sales processes did not have a single point assigned. Sales process excellence was not perceived to be important to customer quality.

In later years we’ve seen the same phenomenon with Six Sigma and Lean. You would be hard-pressed to find more than 5% of companies who considered sales processes for Lean or Six Sigma. After years of search, I can barely find success stories attributed to sales transformation and growth due to these projects outside some narrow areas of inside sales, call centers and mass marketing.

But lack of adoption of Agile in large enterprise selling remains a mystery. It is well aligned with some of the innovations, like measuring sales velocity and linearity. In fact a burn-down chart (or burn-up if you like) can be a much better linearity and velocity indicator than any sales ratio. Even software shops with strong agile development culture would use the same funnel and activity metrics their ancestors did. 6-9-month long sales funnels are to 4-week sales sprints like 18-month development waterfall methodologies to 2-week agile sprints.

Many sales teams carry 60% or more stalled pipeline and similar metrics yet still run sales plays that are months-long (full funnel) vs weeks-long (sprints). Time to change that. The good news is that salespeople are actually very innovative and creative when it comes to their deals. That is why the best salespeople do not follow ineffective sales processes or succeed in spite of them. Agile Sales could be a way to select a few sales teams, let them loose with shorter term sprints and deliver product (sales) early and often. And obliterate their quotas in the process.

Agile Sales – 4 Years On

After 4 Years of Agile Sales (LEAN as we called it) – there are many new learnings. Sticking to our focus on the standards of Lean Sales instead of some theoretical procedures, we can now take inventory of what worked at what didn’t so far. Today’s post is about what worked well. In a later post I’ll address innovation we are doing on things that did not work well or at all.
As a reminder here is the link to our original vision of how to set up your Sales Kanban.

THINGS THAT WORKED (MOSTLY)

Delivering on the WHY
The primary reason was to double the effectiveness of the team in terms of both pipeline and revenues per person as well as deal quality (net new vs existing customers). We definitely accomplished both objectives and that should now be table stakes.

Focus on customer value creation
We constantly validate our ideas with customers and shut down events, meetings and other activities that they do not see value in.  Same with the so-called “business value added” (i.e. internal) activities. We prioritize internal requests by how badly the other party needs our involvement and output.

Make the team’s work visible
Maybe a year late but we are getting close to where I thought we could be in a few months. There are practically no status updates except on our Kanban boards (Trello) and in our KPI systems (forecast). Most team members update their task lists, track their progress on a daily basis. There is a measurable difference in work output for those in our team that work in a Lean way vs those that do not.  We systematically eliminated many non-value added activities and projects and many team members routinely pivot on their project direction as a matter of business without requiring major reviews, offsites etc.
As a sales leader i can see 70-80% of activities, comment on bottlenecks, share best practices, intervene on bottlenecks. Given this is a completely dispersed virtual team with practically no face-time – I consider this the ultimate win

Limit the tasks you are juggling
Reducing WIP is forced through questioning what is adding value and by limiting available resources. Most of the teams simply do not have the resources for worthless projects and parallel activities

Measure your effectiveness
We keep the KPIs simple and focus it all on customer value add. Given we are in sales all activities are prioritized and measured in 3 categories:  1) deal origination (net new business) 2) deal influence (moving existing opportunities forward) 3) support (supporting internal teams). The percentage of time and revenue associated with each of these priorities are strictly measured against a predefined target allocation of pipeline and revenues. We did not do daily standups but our forecast calls were weekly standups of sort where we dealt with target effort, time and blockers.

Continously strive to improve
A lot of this actually happens as part of the work being visible and KPIs constantly reviewed.  We still do our version of Kaizen events in leadership offsites but the focus is less on strategic and tactical pivoting (which happens as a matter of daily business) but more on execution.

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Making Sales Workflow Visible

There seems to be many reasons why sales teams struggle to adopt Lean. Apart from repetitive and structured sales areas like inside sales, complex and large account selling is perceived to be more of an art than science. Mostly because the great salespeople in large value sales functions are treated more like rock stars than line workers.
While all large sales organizations have established sales processes and training, in my experience most practitioners follow their gut and not the defined process except in areas of compliance and approvals.

There are great opportunities for all organizations to define the Perfect Sales Cycle (as standard work) and measure the effectiveness and efficiency around the defined process.
A good first step towards this goal is making the team’s actual tasks and activities visible to themselves and the team. The Kanban Method that works so well in the creative work of software development is perfect for the creative art and science of sales as well.

Going back to the 2 rules of Kanban has and will transform many sales teams on their eventual Lean journey:
1) make work visible (put everything on your team’s Kanban board)
2) limit work in progress (juggle only a few things every day, week and month)

I use both a physical kanban board in my office for my global team and Trello for virtual kanban board for all to see. Everyone on the global team sees everyone else’s tasks.

Once the Lean journey starts, the non-value added tasks will shrink by 40-50% and that immediately doubles the available selling time. Once selling time doubles, so does customer satisfaction, revenues, commissions and overall team rewards.
And that as we know, more than anything, will convince sales teams to get with the program…
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Living Kanban (in Tokyo)

We’re on a global sales meeting in Tokyo and I never realized that I would be facing kanban epiphanies here. Yet everywhere we go we notice the Japanese meticulous focus on efficiency and flow. Most office buuldings we visited have a version of an RFID-based Kanban system to manage and control the flow of visitors in the building. Very similar to the story Dave Anderson describes in his Kanban Method book. In fact, I visited today the very East Garden of the Imperial Palace where kanban cards are tracking visitors.
I went to small restaurants where kanban cards track the flow of guests and their belongings (like the shoes you take off at the entrance).
Thinking uninterrupted customer flow can become second nature for us, our teams and it seems entire industries.
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Lean Sales and High Growth Business Models

The recent business literature is awash with articles questioning the long term value add of Lean and Six Sigma initiatives. What started out as a checklist of success for Six Sigma and Lean projects, in the last few years turned into an all-out frontal attack on the approach; culminating in CBSNews calling Six Sigma the #1 stupidest management fad of all time.

Interestingly Lean focus brings a lot of speed to businesses partially because it eliminates waste and partially because of the enormous focus of customer driven activities. Six Sigma (not my expertise) had a strong focus on quality. The combination promised higher agility and higher quality. Many businesses (Kodak, 3M, Motorola, etc) that became world class Six Sigma shops were criticized by repeatedly missing business model innovation and be outrun by what should be ‘less agile’ competitors.

The main design principles for SCALE (our version of Lean Kanban) was to keep a balance between speed (Lean), business model innovation (our PSS method or BMG approach) and customer pull (Kanban).

In its ideal manifestation:

  • we innovate solutions that the customers get fired up about (pull),
  • we only work on activities that are customer facing and customer paid (by spending time, resources or money),
  • we limit all non-value added and waste activities (Lean/Kanban)
  • keep all of our work visible to everyone inside the firm (Lean/Kanban)
  • measure our baseline and keep changing our approach so we get better (Lean/Kanban)

We redefined our Lean principles to best suit our needs in 5 rules:

  1. Focus on customer value creation (PULL)
  2. Make the team’s work visible
  3. Limit the tasks you are juggling (WIP)
  4. Measure your effectiveness (not efficiency)
  5. Continuously strive to improve

The journey is now ON.

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Launching a Lean Sales Transformation

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Despite 50 years of Lean in manufacturing and a decade or two in high tech, you still have to look far and wide to find great stories of sales-driven Lean programs.  Which is amazing considering Lean is all about sales and the customer. It should be all about Pull.

So in January 2013 we decided to take a successful strategic sales organization focused on complex enterprise technology sales at the board level – and turn it to Lean.

We have a year. We will do it faster. And learn along the way.
Only a week into the effort we already connected with several Lean Sensei at various auto (of course), tech and industrial manufacturing firms and started gathering their learning as well.

WHY ARE WE GOING LEAN?
– double the revenues per headcount in our group
– respond to customer requests in half the time

It will be a fantastic journey combining the best of 3 philosophies:
LEAN (especially the LEI variety), Kanban Method by Dave Anderson and our own business model innovation process called P/S/S (more on that later…)

We are looking forward to fascinating learning, great collaboration and fun times ahead. And most importantly – very happy customers spending twice as much in half the time.