theolynn

Posts Tagged ‘Harvard Business Review Sales Issue’

Where will our sales leaders come from?

In Business Education, DCU Business School, Dublin City University, Entrepreneurship, Ireland, Masters Education, Sales, Theo Lynn on September 26, 2010 at 11:30 am

Last week, the stigma of “sales” was confirmed to be alive and well to my dismay. Of 150 new postgraduates, only a couple would admit to having considered a career in sales. To a certain audience, “sales” is not “cool” or for the matter worthy of “academic attention.” And yet at the crux of any business, if there are no sales, there is no business.

My interest in sales education really started following my experience in Educational Multimedia Group in the late nineties and early noughties. I was then and remain now convinced that sales can be studied academically and indeed is worthy of such study. On joining DCU Business School, I retained this interest and began looking at the area in more detail. At that time, GrowingCo had just surveyed 218 executives in the Chicago area.  They found:

  • 38% of mid-market organizations (defined as having greater than $2.5 million in annual revenues) lack internal agreement on the role of marketing
  • 85% of sales forces have never been exposed to their companies’ marketing strategy or marketing plans.

The survey emphasised the negative impact of poor coordination of sales and marketing activities and to some degree highlighted the difference between the functions. Marketing and sales are intrinsically linked and the success of a sales effort is impacted heavily by the marketing effort – therefore incentives should be aligned. Interestingly in other surveys on sales management perception, one finds that senior management typically view their sales team performance as less than perfect. In Forum Corporation’s survey of 111 senior sales executives in 96 major corporations across 17 industries around the world, the average grade was 7 out of 10 or a C- in this context (although this could be a first class honours in Ireland!). Superior sales forces had no single differentiator – they performed better across the full spectrum of management, process and skills. A 2004 Accenture survey found 56% of 178 executives saw their salesforce performance as average, worse than normal or catastrophic.

Soon after, in 2006, the Harvard Business Review published a special double issue on “Sales” which served to highlight the dearth of academic research and highlight the area of sales management.  This is not the first time academia has sought to highlight this problem, but merely the most high profile. As far back as 1979, the enigma of the study of sales management was recognised – selling costs account for the largest share of marketing expenditure and yet is one of the weakest areas of academic research (Bagozzi, 1979).

Things have not changed much. You rarely find robust dedicated modules let alone programmes on sales or sales strategy in business schools. And I would be surprised where such modules are delivered, faculty either deliver them or if they do, have any real practical and sustained experience in selling at an operational or more importantly a strategic level. Donaldson (1998) summarises the problems of studying sales management as

  1. Traditionally, the emphasis in sales management is on implementation and tactical operations rather than strategic planning and policy, which has been the prerogative of marketing.
  2. The difficulty of isolating the sales response function and its causes. Many factors other than selling effort affect sales response.
  3. A myopic view that behavioural relationships and interactions in selling are not amenable to classification or variables are impossible to measure.
  4. Many principles of sales organisation, deployment and motivation are based on “how to “ principles, some of which are difficult to assess or understand, for example how to overcome objections. Much of the data are highly specific and anecdotal.
  5. The terrain on which operations take place is continually changing (territories, personnel, customers).
  6. Much of the input on sales management issues comes from disparate areas of research, behavioural sciences, operations research and economics.
  7. Much study and evidence is US-based and these findings in empricial research do not remain intact across the Atlantic.

In fairness to HBR, since 2006 they have published on the subject regularly however has the wider business education system followed this lead? Do primary and secondary schools encourage students to pursue a career in sales? If they do, what university programmes can they take? Is there now an abundance of postgraduate Masters programmes for the sales leader? Unfortunately not.

While few business postgraduates, and specifically MBAs, might value a sales position as their post-MBA career entry point,  in practice, good CEOs place an emphasis on spending time in the field with the sales force, view sales teams as strategic resources and understand that sales is critical to their personal career and their organisation’s success. Sales literally is where the money is…..but marketing sounds better to postgrads and….parents.

A couple of years ago, one of my postgrads and I surveyed a small group of students and sales professionals on their perceptions of sales as a career choice. Unsurprisingly, sales was not the most attractive career but for those interested, it was seen as a career that was potentially well paid and where earnings were very related to effort. Yes for sales professionals, one of the main reasons for the choice of a career in sales was that it didn’t require one to work weekends. Pay and control (whether related to effort or creativity) remained important but flexibility more so. These are probably not career attributes we “sell” in school or as parents for our future workforce.

Let’s face facts – it can be a brutal job. It is probably the most accountable job there is – you literally cannot hide from the numbers. Are we developing a generation of business graduates afraid of such brutal accountability?

In today’s post-growth economy, sales should be a huge focus. However, the investment in sales versus other market supports seems comparatively small. In many of the business networks, there are often experienced accounting professionals offering advice to SMEs to control costs and management cashflow, and this is very important, but there are few experienced sales professionals offering advice on how to grow sales.  And they’re not in academia either. And maybe this is the problem.

We need vision not just in R&D-based innovation but across all organisational processes. We want Ireland to be centre for excellence in bio-tech, ICT, financial services and many other sectors. Who is going to sell these products and services?Sales generates taxes. Ireland could be a global centre for excellence in sales.  If we aren’t going to be, someone else will. And that will be to our detriment.

PS – we now do deliver strategic sales workshops and personal selling modules in DCU Business School covering areas such as channel selection, sales models and process, tendering, selling tools, sales competencies, staff selection and sales team structure, rewards and incentive design etc etc. These are delivered by the Marketing Group.

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