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| November
2006 > Letters to the
Editor |
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Special Issue on Sales
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Dear Editor:
The special issue on sales (July–August 2006) was very
enlightening, but I wanted to point out a frequently
overlooked area of sales performance improvement that can
provide a compelling increase in revenue: presales
operations.
On every sales team involved in a complex
sales cycle, there are two roles, the sales rep and the
support sales engineer (SE). SEs can compose up to 50% of the
sales force. Despite SEs’ large numbers and the critical role
they play in generating revenue, few if any traditional
sales-force-automation vendors complement their sales
methodologies with a specific presales process. Lacking such a
process, SEs invariably figure out their job on their own.
This causes abundant inefficiencies in operations and revenue
generation.
Instead of trying to squeeze the last drops
of improvement out of sales reps, companies can boost revenue
quickly and cost-effectively by focusing on presales
operations. A program designed to improve presales performance
could make cost of sales and revenue generation more efficient
through faster solution closure times, larger deal sizes,
better-quality sales funnels, and higher win
rates.
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Phil Janus
President and
CTO
TechSellEnts
Boston
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The Sales Learning Curve
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Dear Editor:
I enjoyed reading Mark Leslie and Charles A. Holloway’s
“The Sales Learning Curve” (July–August 2006), but I am a bit
amused that the article implies this “learning curve” is
almost a new idea. Sales has always understood this concept.
The real test is whether the organization has the stomach to
do the right thing with quotas and plan numbers during times
of learning and the patience to tolerate a ramping result
without criticizing those who are delivering
it.
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Thomas J. Miller
Vice President, Sales and Marketing
Trend
Micro, North America
Cupertino,
California
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Leslie responds:
Entrepreneurial managers and investors know that there is a
lot of uncertainty as new products are brought to market. The
sales learning curve idea is one that resonates exceptionally
well with their experience in this area. The value of
articulating the principle is that the community can then
adopt a shared framework, which can inform management
decisions as new products are brought to market. In companies
where both management and board members have bought into the
sales learning curve idea, I have seen their view of quotas
and compensation come into line with the recommendations in
the article.
In an analogous situation, manufacturing
learning curves have become widely accepted over the years and
are built into manufacturers’ cost-per-unit planning. Maybe
someday the sales learning curve will enjoy the same
acceptance in the go-to-market programs for new companies and
products.
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Leveraging the Psychology of the
Salesperson
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Dear Editor:
As a career sales professional, I was delighted to see
an issue dedicated to the subject of sales. Then I read the
cliché-ridden interview with G. Clotaire Rapaille, “Leveraging
the Psychology of the Salesperson” (July–August 2006).
Printing Rapaille’s mention of the myth regarding Eskimos’
words for snow demonstrates laziness on the part of
HBR.
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Edward Pierpont
President and CEO
Triga USA
Eugene,
Oregon
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Rapaille responds:
Thank you for your interest and your emotional response. I am
sure you are familiar with the differences between clichés,
stereotypes, and archetypes. My work for the past 30 years has
been dedicated to archetypes. I have written 14 books on this
subject, most of them academic. None of them generated the
interest and the emotional reactions (including a lot of
positive ones) that this article has.
But this was a
journalistic article, not an academic one. The Eskimo story,
which has been mentioned by numerous authors, is just a
question of form. I could have made the same point using the
Japanese language or the difference between French and German.
The cliché is the tip of the iceberg; what really matters is
its deep unconscious structure. If we disagree on the
substance, then I think we can have a great discussion about
this subject, which obviously concerns you
deeply.
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The Wisdom of Deliberate
Mistakes
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Dear Editor:
After reading Paul J.H. Schoemaker and Robert E.
Gunther’s article, “The Wisdom of Deliberate Mistakes” (June
2006), I question how many companies would encourage their
employees to make mistakes. To err is human, yes, but to
accept error is not company policy in a typical organization.
Even if a company did encourage deliberate mistakes, one
wonders whether its executives would commit them, knowing full
well that rather than the lessons learned from them, the
mistakes themselves are what people tend to remember. The
authors are right: In business, “an executive’s reputation and
rewards are typically based on the height of her successes,
not on the depth of learning from failures.”
In my
view, the prerequisites for a deliberate mistake-committing
culture are open and transparent management, a risk-taking
mind-set on the part of the decision makers, and total
avoidance of finger-pointing. Just as success stories are
shared across the organization, lessons from mistakes need to
be disseminated.
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S. Viswanathan
CEO
John Fowler (India)
Bangalore,
India
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Schoemaker and Gunther
respond: We fully agree with S. Viswanathan that strong
leadership is vital to creating an environment that encourages
mistakes, and it is far too rare. Without it, the organization
will be too risk averse even to engage in experiments, let
alone deliberate mistakes.
Former Johnson & Johnson
CEO James Burke recalls how, early in his career, he was
product director for several over-the-counter children’s
medicines that were all failures. When he was called into the
chairman’s office, General Johnson told Burke that business is
about making decisions, and you don’t make decisions without
making mistakes. Just don’t make the same mistake twice. A
less-talented leader might have fired him on the spot. Burke
never forgot this lesson, and he went on to become a CEO
widely admired for his courage. He took a huge risk with the
Tylenol recall, which was clearly a mistake in the short term,
given the immediate costs, but proved wise in the long term.
Leaders need to engage in making deliberate mistakes and
visibly reward others who fail for the right reasons or
succeed by challenging a deeply held assumption that proved
false.
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Are Leaders Portable?
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Dear Editor:
The only modification I would suggest to Boris
Groysberg, Andrew N. McLean, and Nitin Nohria’s insightful
article “Are Leaders Portable?” (May 2006) is to note that
very technical, long-lived investment businesses like oil and
gas exploration and production call for an additional,
nonportable skill set: technical as well as strategic
understanding and confidence. When I worked in commodities
trading and in other energy industry segments, such as power
plants (of all forms), engineering services (including
nuclear), pipelines, processing, and retail marketing, this
was not the case. I assume that the pharmaceutical and
computer manufacturing businesses are similar to oil and gas
exploration and production in this regard.
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James T. Hackett
Chairman, President, and CEO
Anadarko
Petroleum
The Woodlands, Texas
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Groysberg, McLean, and
Nohria respond: We are grateful to James Hackett for his
insightful letter. He correctly notes that different
industries can vary along a number of important dimensions.
One can add to his list other key dimensions, such as “thin”
versus “thick” margins, regulatory intensity, competitive
intensity, the power of producers relative to their suppliers
and customers, product life cycles’ half-life, and
intellectual property protections. These are reasons why we
emphasize the importance of industry-specific skills in our
discussion of how portable a leader’s talents may be.
A
careful analysis of similarities across industries that might,
on the face of it, appear dissimilar—like oil and gas
exploration and pharmaceuticals—may provide interesting
opportunities for identifying leaders whose skills may be
transferable to other industries. Yet we would caution against
being too quick to focus on apparent similarities. For
example, the regulatory and intellectual property environment
that governs the oil and gas industry is quite different from
the one that influences pharmaceuticals.
Taken to an
extreme, our argument might seem to imply that leaders can
very rarely be effective in an industry other than the one in
which they are experienced. We would not go so far. We would
simply encourage leaders and those who choose them to think
hard, as Hackett clearly has, about how the structure of an
industry influences the experiences and capabilities of
leaders and the extent to which that frame of reference would
be valuable in the situation the leader is considering or is
being considered for.
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Eager Sellers and Stony
Buyers
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Dear Editor:
I applaud John T. Gourville’s application of the
psychology of gains and losses to new-product launches in
“Eager Sellers and Stony Buyers: Understanding the Psychology
of New-Product Adoption” (June 2006). However, I am concerned
that the author’s conclusion—that consumers are three times
likelier to overvalue an existing offering, while innovators
are three times likelier to overvalue their new offering—may
be an oversimplification. Anomalies, such as the endowment
effect and the status quo bias, have both a mean and a
distribution. Some customer segments, therefore, will
overweight the benefits of an incumbent product by a factor of
much less than three; that is, they will be more unhappy than
the average consumer with the existing products. The focus for
innovators, then, should be on the distribution rather than
the mean: How many consumers would be more amenable than
average to the introduction of an alternative
product?
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Brad White
COO
(R)evolution
Partners
Atlanta
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What B2B Customers Really
Expect
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Dear Editor:
In their April 2006 Forethought article, “What B2B
Customers Really Expect,” Philip Kreindler and Gopal Rajguru
suggest that sales managers should hire sales reps on the
basis of their product or industry knowledge rather than their
interpersonal skills. I couldn’t disagree
more.
Customers don’t really see what goes into being a
high-performing sales rep. They don’t see, or at least don’t
appreciate, the political maneuvering, information gathering
at various levels, and persistence needed to successfully
conclude large sales. They only notice when the salesperson
didn’t know exactly which bolt went where. Knowing all the
details about a product is sometimes useful for making a sale;
knowing how to handle the complexities of a team- or
committee-driven sale is always critical. The primary
responsibility of any sales manager is to drive sales, not to
create some utopian environment in which prospective customers
can talk to a product or industry expert and educate
themselves about an offering before they go and buy it from a
sales expert (at another company) who knows how to get the
documents signed.
If the authors want to argue that
businesses should spend more of their training and development
dollars on educating their salespeople about the products,
services, and industries they represent, they’ll get no
objection from me. We owe it to our customers and our
companies to put well-informed representatives at the
forefront in our client dealings. But it’s illogical to
extrapolate that sentiment into believing sales managers
should drastically alter their hiring
criteria.
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J.B. Smith
Sales Manager
Cary, North
Carolina
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Harvard Business Review OnPoint articles and
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We welcome
letters from all readers wishing to comment on articles in
this issue. Early responses have the best chance of being
published. Please be concise and include your title, company
affiliation, location, and phone number. E-mail us at hbr_letters@
hbsp.harvard.edu,
send faxes to 617-783-7493; or write to The Editor,
Harvard Business Review, 60 Harvard Way, Boston, MA
02163. HBR reserves the right to solicit and edit letters and
to republish letters as reprints. |
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