Sales Team Transformation Pays Huge Dividends
Today’s business press is filled with stories about sales transformation through CRM initiatives and sweeping training programs. These priorities are reflected in 2018 corporate spending: Nearly $88 billion on training and $48 billion on CRM.
We suspect far less was spent on sales team building. But as the following case demonstrates, paying close attention to the fundamentals of sales management—such as team building—can generate dramatic sales performance breakthroughs.
Consider two critical facts: First, most company revenues come from a small number of key accounts. Second, a diverse, cross-functional team of people is required to serve these key accounts. In other words, a single salesperson cannot manage a key account on his/her own.
The implication of these two points is obvious: significant improvements in key account team effectiveness can produce tremendous gains in customer retention, revenue growth, and profitability.
Background
In 2010, I joined Huawei in Shenzhen City, Guangdong, China as Senior Advisor to Huawei’s newly appointed CHRO. My responsibility was to help design and build an HR function and improve Huawei’s overseas workforce performance.
In the first few weeks, Ken Hu, one of the rotating CEOs, called me in to his office. He told me the locals (non-Chinese sales team members) in Western Europe hated Huawei and were quitting at a rate of about 30 percent per year. This was in stark contrast to the Chinese national turnover rate of six to seven percent.
Ken said the Europeans wanted better training and career paths, so my job was to improve training and career paths for Western Europe. I told him I knew very little about Huawei and even less about the specifics of Huawei’s situation in Western Europe. But I explained that my experience with sales in other multinationals told me that, in all likelihood, the core problem was not training and career paths. I secured his agreement to do a situation assessment and report back to him about the real problem and a proposed solution.
Poor Team Definition
To secure multiple perspectives and utilize the latest thinking on sales management, I asked an outside consultant, Dean Walsh, to partner with me. Dean brought abundant experience and an innovative approach to transforming sales teams. Dean and I began the initiative by conducting focus groups not only with sales team members, but also with people in functions that connected with Sales, like Finance, Supply Chain, and Human Resources. We quickly found the core problem: team members were not clear on how they were to coordinate within Sales – and between Sales and other functions.
Each key account had what Huawei called a CC3 team. The teams were led by an Account Director, a Solution Director, and a Fulfillment Director, and were staffed with Account Managers, Contract Managers and so on. There was little to no agreement on the roles and responsibilities of the various team members. But there was full agreement that team members did not work well as a team.
Using a sports analogy, every team has plays, and every member must learn and perform a specific role for each play. On a sales team, there should be one play for cross-selling, another play for relationship building, one for solving a customer service problem, etc. Then, it is vital for each team member to know exactly what they must contribute and how during each play.
Instead of having clearly defined plays and roles, Huawei was like a children’s soccer team where every player from both sides runs to the ball. There was no clarity about who should do what on each play in order to win, retain and serve customers.
Additional Problems
During the focus groups we discovered a new sales operations program, Lead-to-Cash (LTC), was recently rolled out. We were told it was quite ineffective.
- A deck with more than 1,000 slides was sent to the CC3 team members via email. This material overwhelmed team members and gave them an excuse to not attend.
- The email was followed by a training event, but many CC3 teams were only represented by a few members.
- Key training sessions were conducted in Chinese without translators, so European team members were not invited or refused to attend.
- Some meetings were held on Saturdays, which was counter-cultural for Europeans but not for Chinese team members. The Chinese criticized the Europeans for being too lazy to attend, and the Europeans criticized the Chinese for not holding the training sessions on weekdays.
Focus group attendees also complained about ineffective CC3 team meetings. They said the meetings almost always focus on immediate problems and never addressed the bigger issues involving team roles and planning.
Worse, when decisions were made during the team meetings, the Europeans complained the Chinese would later go to dinner or hang out together in the Chinese dorms and change the plans. Then come Monday, the Chinese team members would start in a new direction and the Europeans would be completely confused and irritated.
European team members complained customers knew what was going on. Customers knew the Huawei locals had no power, so they only wanted to talk to the Chinese.
Not surprisingly, overall sales team effectiveness was low and morale for the European team members was especially low. Hence, they had high turnover. In other words, my hypothesis that training and career paths were not the core problem was convincingly confirmed by our focus group findings.
Sales Management Flaws
Earlier in my career at AT&T, I learned to spot a successful sales manager with one question: “How do you spend your week?” Bad sales managers talked about their harried life. They described themselves as being in constant demand, being flooded with requests from headquarters and their subordinates, and so on.
In contrast, strong sales managers would respond with things like: “I’m glad you asked. On Monday morning I have pipeline reviews with every Account Manager. They are 30 minutes each and here is the standard agenda. Every Tuesday afternoon, I make sales calls with AMs so I can give them coaching and deepen customer relationships.” And so on. These managers are in charge of their business. But for the weak manager, their business was managing them.
The sales managers at Huawei Western Europe were not in charge of their teams. They were managing within their cultural groups. Rather than focusing on overall team performance and how everyone needed to contribute to the team, they let the cultural differences and conflicts manage them.
The Solution: Key Account Operating Model
Our proposal to Huawei senior management was to build operating models for its key account sales teams. We proposed doing this in real-time with each team. Our rationale was to use the process to build stronger teams and, and at the same time, establish agreement on the operating model to be adopted by each team. Our proposal was enthusiastically approved.
We created a two-day workshop for each Western EU country. All teams and team members attended. For example, in Germany, we had the Deutsche Telecom, Vodaphone Germany, Telefonica, and KPN CC3 teams.
The workshop was divided into three parts. First, we defined LTC for each team. Second, we defined roles, responsibilities, coordination and career paths. Third, we reviewed the decisions with the team directors. Fourth, a sales management system was established for each team.
Session 1: Lead-to-Cash Process
For the first session, team members sat around a long table. We took the teams through each major step in the LTC process. For each process step, we asked basic questions like:
- Who is responsible for this step?
- How should we measure success?
- How are we performing now?
- What are the barriers to improvement?”
We also asked every team leader what they needed from the team, when, and in what form.
We pushed for details. For every answer to the above questions, we often asked: Why? We uncovered underlying assumptions and made sure each team agreed on the assumptions and reached consensus before moving on to the next step in the LTC process.
Based on the teams’ answers, we prepared summary documents customized tailored to their unique situations and requirements.
Session 2: Role Definition
The second part of the workshop was used to define who was required on the team, the role they were to play on the team, the career paths for each role, and how each team member/role needed to collaborate with other team members.
Session 3: Management Commitment
During the third session, we gathered all CC3 team members in a room, and the team directors were asked to sit at the front of the room. Key changes and requests from the prior session were reviewed with each team director. For example, the fulfillment director was asked: “Mr. Fulfillment Director, the fulfillment team here says they go to work on any given morning and do not know if their team will be present. Previously, you would change a person’s assignment without warning or notification. They ask you to not do that in the future. Do you agree to follow the new process instead?” These discussions and commitments were summarized in a report.
Session 4: Sales Management System
Once roles were defined and key changes identified, we defined the sales management system to be used by the teams. A generic process was presented, and each team tailored it to fit their unique needs. The process covered things like: What regular meetings are needed? What triggers the meeting? Who must attend? What is the standing agenda? Who is the meeting owner? What meeting documentation is required? How is performance reviewed? How do reviews impact appraisals, etc.
Each team had the option to accept or change the generic process. But they had to make a decision, and it had to be documented.
Approval and Customer Roll-Out
After the workshop, the sales team directors took their new operating models to senior management—the Top Team—for review and approval. The team leaders were congratulated for their work. The Top Team also made clear: sales team directors would be held accountable for effective implementation of the new operating models and management systems.
The new operating models were summarized and presented to customers. They were used to manage customer expectations and to say: “This is how we will serve you.” These presentations helped customers view each team member as empowered to meet specific needs, regardless of nationality. Essentially, the operating models helped Huawei form authentic and deep partnerships with their key accounts.
Results
In a short period of time, Western Europe became Huawei’s most successful region, mainly due to its success with key accounts.
Lessons Learned
Dramatic performance gains are often available from improvements to core sales management systems. This was exactly the case at Huawei, where transformation of the key account operating model, reinforced by codification and implementation of basic management practices produced great results. We transformed how sales teams worked with their customer organizations. We started in Germany, then Italy, then the UK, etc. to cover all of Western Europe. The entire project required about nine months of fully dedicated work from two professionals with part-time support from many others.
While sales transformation is also possible by embracing advanced technology and adopting new selling methods, sometimes nothing is more cost-effective than fixing the core sales management system.
Bradley W. Hall, Ph.D. provides advisory and consulting services to Chief HR Officers on globalization, strategic HR and organization development, and creating world-class HR functions.
Brad recently served as Advisor to the Chief HR Officer of Huawei Technologies in Shenzhen, China. Huawei is China's largest non-state-owned company with USD $107.5B in annual revenue. He was hired to partner with a new CHRO to design and build the company's HR profession. Huawei is now China's most desirable employer and most successful global company.
Dean Walsh is passionate about improving client performance. He has worked with more than 100 clients across industries and functions, and uses a proprietary performance improvement model to transform organizations.
Roughly half of Dean's clients are HR executives and half are general managers. He is an HR expert who thoroughly understands business – and a business strategist who thoroughly understands HR.
Dean recently helped a major bank become the nation's "Top Employer" - and achieve record profits. He helped a global technology company redesign its HR operating model to support fifteen R&D centers around the world. And he helped an engineering consulting firm design and implement a new operating model -- and retain its top two clients.
