Productive sales organizations are built with healthy competition. Selling any products, services or so-called solutions (in my opinion, solutions are almost always a combination of products and services) requires successful completion of at least three critical competitive milestones within an engagement with a prospect (or in the case of complex products, services and solutions, prospects):
- Persuading, and
Each of these three critical milestones, if achieved, mark a moment of success in the sales engagement where the sales person, rather than a competitor, won a commitment from the prospect. No brainer, right?
Now let’s jump to a review of a typical sales organization within a business. Sales organization are generally managed by one individual with a title like Head of Sales, or Vice President of Sales, or the like. This layer of management is in place to accomplish at least two objectives: 1) to alleviate the work load carried by the CEO and 2) to deliver the revenue objectives for the business through sales. Of course, the order of these two objectives may be reversed, depending on the life cycle stage of the business and/or management priorities. Nevertheless, these two broad objectives underpin sales management structures across almost any type of business with more than twenty staff members (twenty is an arbitrary number).
With a sales organization in place (complete with its own management), accountability for successful delivery of sales objectives is in place. However, an important and almost imperceptible shift has also taken place. A level of healthy competition has been removed. There is now, in fact, only one Head of Sales/Vice President of Sales with no competitor.
Fostering a business with this type of hierarchical organizational structure for sales makes sense as long as objectives are achieved. When objectives stop being achieved, it makes sense to inject back into the sales organization a level of contention and competition amongst the sales staff to get activities back on track. Better yet, modify the structure of the original sales organization by permitting a hierarchical and necessarily vertical structure with a Head of Sales to function upon a completely horizontal “playing field” where hire/fire and other major organizational decisions may only be made by the CEO or Head of Operations, etc.
I have participated in two business engagements where dramatic results were achieved via the modified sales organizational structure that I have just described. In one case, objectives were rarely missed. In fact, the modified sales structure was in place from the start of serious business activity, in the form of a matrix sales structure. This matrix sales structure included outside sales staff who “teamed” with teleprospecters and inside sales staff who reported to a separate sales manager. Healthy contention within this matrix sales structure took this brick and mortar business from zero to $7M in annual sales within two years. Within the following five years the business went public.
In the second case, the CEO applied the horizontal structure after the hierarchical structure failed to produce the required results. Once again, the improvement in the overall performance of the sales team was dramatic and completely positive. Further, gaps in product marketing were revealed which, once filled, provided a healthy foundation for a surge in revenue.
Bottom line: Sales is all about healthy competition. Remove the competition and you may end up removing sales.
© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved