American corporations invest heavily in sales training, spending approximately $7।2 billion each year, according to the Journal of Personal Selling. However, most organizations don't know if that significant investment is actually paying off.
"You have to think of sales training differently because it has a different impact on your company," said Brian Dietmeyer, president and CEO of Think! Inc।, a global negotiation strategy consultancy. "You should expect a return on investment [because] sales is the growth engine of any company."
To determine what makes a sales training initiative successful, 150 best-in-class organizations were surveyed and studied, and the findings were reported in a white paper by Think! Inc।, SellingPower and the Professional Society for Sales & Marketing Training. According to the white paper, 56.5 percent of the respondents considered a successful sales training initiative to be one in which the "use of the methodology is strongly encouraged, measured and rewarded, and in which there are consequences for noncompliance. "
So if the success of a training initiative is determined by adoption, then what drives adoption? The answer: The sales training is directly linked to a larger growth strategy, has executive sponsorship and is supported by a coaching network।
After connecting the training to a larger goal and getting senior management's attention, those in the training function must set up a coaching network, in which individuals are coaching to the competencies।
"The fact is that if you're going to train someone in a key sales technique, whether it's account management, opportunity management, or negotiation, you've got to set expectation metrics for the coaches," Dietmeyer said। "You've got to set the same expectations for the field sales force to say, 'If you go on a sales call, it's required that you do this work. We're going to audit it, we're going to coach against it, and if you don't do this work, there are costs for noncompliance. '"
To ensure success, the training function must only push the adoption of one initiative or process at a time।
"If you're rolling out three things to your sales team over the year, you need to determine which of those is most critical for your success, and that's the one that you want to implement," Dietmeyer said। "It's difficult to implement two or three different processes simultaneously into a sales force. They just don't have that much bandwidth."
Once there is adoption, organizations can measure return on investment। However, only 36 percent of the respondents were measuring an initiative's success. To determine true return on investment, organizations must choose some key leading and lagging indicators and measure those before and after the implementation of the initiative.
"Before the sales training, you want to decide where you're going, which is a lagging indicator, and how you're going to get there, which is a leading indicator," Dietmeyer said। "This is why adoption is so key because [it] is the workhorse that does all the work."
Author: Lindsay Edmonds Wickman is an associate editor for Chief Learning Officer magazine.
Sunday, June 8, 2008
Thursday, June 5, 2008
Excerpts from Mr. Michael Porter's Interview
Q। Do you think that in today's world the discipline of strategy is getting its due place?
A. There is a widespread acceptance that strategy is a fundamental discipline of management, that most organizations need a strategy. Most boards insist on being involved in making strategy. The principle of strategy is finally getting its place. Twenty years ago, some people thought that strategy was a fad, that strategic planning was a waste of time। The acceptance of the importance (of strategy) is universal। Now the constraint is really about understanding how to think about and develop a strategy. But there is a lot of confusion about what strategy really is, and how to define it—a lot of confusion between strategy and operational effectiveness. That is one of the most important distinctions in all of management. You have to distinguish between pursuing practices that are good for every company and pursuing a position that is unique to your particular organization. There is also much confusion about the difference between a strategy and a vision, or a strategy and a mission statement. While everyone thinks strategy is important, then, there is much room for improvement in actual practice.
Q। What specific problems do you see in companies?
A. A common example would be a company that confuses outsourcing with strategy. They outsource many services to India, and call this a strategy। But outsourcing is actually about being operationally effective or reducing costs. Strategy is about creating a unique position in terms of overall cost or differentiation. The trouble with outsourcing is that the more you outsource, the harder it is to have a unique strategy, because everyone else can outsource too. Misunderstanding strategy, companies pursue steps in this case outsourcing that actually makes it harder to achieve strategic uniqueness. Similarly, a merger is not a strategy. A merger is a step that may move you towards a unique position, to have a strategy. Managers confuse doing deals with having a strategy. Strategy is about competitive advantage, about how a company serves customers differently from competitors. A merger may contribute to a strategy, but a deal in itself is not a strategy. A strategy has to do with a company's fundamental positioning in the marketplace.
Q। Do these misconceptions bother you?
A. I don't like to see companies fail, and resources not put to good use. It is better for consumers that companies have strategies. The more companies have strategies, the more consumers have unique choices. If everyone made the same car with the same features, customers would be worse off. So having a strategy is socially beneficial. A lot of people don't understand this. They want all companies to compete on price, and look for the vendor who gives them the cheapest product. This is not good for customers, who should really want a product that delivers them the best overall value. And society wants choice and to encourage innovation. Strategy is all about innovation— innovation not necessarily in technology but in the way a company competes. Many managers have a zero-sum view of competition. They think there is only one ideal way to compete, and the challenge is to be the first to get there. My work stresses that there are many different ways to compete, many different ways to deliver value to customers, and many different customer needs। Strategy is fundamentally about deciding what you are going to be as an organization while also adopting best practices.
Q। The five forces framework is almost three decades old. Today there is a lot of emphasis on knowledge-intensive industries that operate under a different set of realities. In many industries like pharma or IT, economies of scale seem to matter less than smart ideas do. Sometimes existing competition doesn't matter; rather, competition comes from across industry boundaries. Does the five forces framework need to change in this new environment?
A. My article "How Competitive Forces Shape Strategy" was published in the Harvard Business Review in 1979. This past January, a new article titled "The Five Competitive Forces That Shape Strategy" appeared in HBR। It reinforces, updates, and extends the original work. Among other things, there are new examples and a box in the text focusing on how to conduct industry analysis in practice. That having been said, the five forces framework is meant to be independent of time. At any point in history, the same five forces are at work. These forces are innate to competition itself. Every industry is different, of course, with different economic characteristics, different customer characteristics. But the five forces are common: They provide a tool for looking at the dynamics of any industry. Economies of scale don't matter in some industries, but they do matter in most industries. Although they may matter less in some Internet companies, look at Amazon or eBay where economies of scale are extremely important to success. The five forces framework does not say that there is one kind of industry competition; it says there are many kinds of industry competition, but every industry is governed by this underlying set of principles. While much has changed, the changes don't have to do with the five forces. They have to do with particular technologies or the characteristics of particular industries. I wrote an article titled "Strategy and the Internet" (Harvard Business Review, March 2001) which shows why so many smart people made so many mistakes in that space. They thought the Internet was something different, rather than seeing the Internet as an enabling technology that had to address the same underlying principles of competition. Looking at trends, I would say that the geographic scope of industries has widened. More and more industries are truly international, with competition occurring across many countries. That's because needs have become more similar and the underlying cost of coordination and logistics has been dramatically reduced. So it is becoming easier to shift goods, easier to exchange information, easier for people to travel, easier to outsource services via the Internet, and so on. Another trend is vertical disintegration. Instead of a car manufacturer making its parts or running its data center, now other firms take on many functions in the value chain. We now increasingly have firms that specialize in certain parts of the value chain, and different parts of the value chain are moving to different locations.
Author:
Michael Eugene Porter is arguably the best known name in the world of competitive strategy. The Bishop William Lawrence University Professor at Harvard Business School, Porter's work traverses a huge expanse: from competitive strategy and the dynamics of how nations compete, to healthcare. He is the author of seminal books such as 'Competitive Strategy', 'Competitive Advantage' and 'The Competitive Advantage of Nations'. In a rare interview with TOI's Neelima Mahajan-Bansal, Porter talks about his ideas in today's new world. The first part of this interview focuses on his work on strategy, while Part 2 (to appear in next week's edition) will talk about Porter's ideas about the competitiveness of nations.
A. There is a widespread acceptance that strategy is a fundamental discipline of management, that most organizations need a strategy. Most boards insist on being involved in making strategy. The principle of strategy is finally getting its place. Twenty years ago, some people thought that strategy was a fad, that strategic planning was a waste of time। The acceptance of the importance (of strategy) is universal। Now the constraint is really about understanding how to think about and develop a strategy. But there is a lot of confusion about what strategy really is, and how to define it—a lot of confusion between strategy and operational effectiveness. That is one of the most important distinctions in all of management. You have to distinguish between pursuing practices that are good for every company and pursuing a position that is unique to your particular organization. There is also much confusion about the difference between a strategy and a vision, or a strategy and a mission statement. While everyone thinks strategy is important, then, there is much room for improvement in actual practice.
Q। What specific problems do you see in companies?
A. A common example would be a company that confuses outsourcing with strategy. They outsource many services to India, and call this a strategy। But outsourcing is actually about being operationally effective or reducing costs. Strategy is about creating a unique position in terms of overall cost or differentiation. The trouble with outsourcing is that the more you outsource, the harder it is to have a unique strategy, because everyone else can outsource too. Misunderstanding strategy, companies pursue steps in this case outsourcing that actually makes it harder to achieve strategic uniqueness. Similarly, a merger is not a strategy. A merger is a step that may move you towards a unique position, to have a strategy. Managers confuse doing deals with having a strategy. Strategy is about competitive advantage, about how a company serves customers differently from competitors. A merger may contribute to a strategy, but a deal in itself is not a strategy. A strategy has to do with a company's fundamental positioning in the marketplace.
Q। Do these misconceptions bother you?
A. I don't like to see companies fail, and resources not put to good use. It is better for consumers that companies have strategies. The more companies have strategies, the more consumers have unique choices. If everyone made the same car with the same features, customers would be worse off. So having a strategy is socially beneficial. A lot of people don't understand this. They want all companies to compete on price, and look for the vendor who gives them the cheapest product. This is not good for customers, who should really want a product that delivers them the best overall value. And society wants choice and to encourage innovation. Strategy is all about innovation— innovation not necessarily in technology but in the way a company competes. Many managers have a zero-sum view of competition. They think there is only one ideal way to compete, and the challenge is to be the first to get there. My work stresses that there are many different ways to compete, many different ways to deliver value to customers, and many different customer needs। Strategy is fundamentally about deciding what you are going to be as an organization while also adopting best practices.
Q। The five forces framework is almost three decades old. Today there is a lot of emphasis on knowledge-intensive industries that operate under a different set of realities. In many industries like pharma or IT, economies of scale seem to matter less than smart ideas do. Sometimes existing competition doesn't matter; rather, competition comes from across industry boundaries. Does the five forces framework need to change in this new environment?
A. My article "How Competitive Forces Shape Strategy" was published in the Harvard Business Review in 1979. This past January, a new article titled "The Five Competitive Forces That Shape Strategy" appeared in HBR। It reinforces, updates, and extends the original work. Among other things, there are new examples and a box in the text focusing on how to conduct industry analysis in practice. That having been said, the five forces framework is meant to be independent of time. At any point in history, the same five forces are at work. These forces are innate to competition itself. Every industry is different, of course, with different economic characteristics, different customer characteristics. But the five forces are common: They provide a tool for looking at the dynamics of any industry. Economies of scale don't matter in some industries, but they do matter in most industries. Although they may matter less in some Internet companies, look at Amazon or eBay where economies of scale are extremely important to success. The five forces framework does not say that there is one kind of industry competition; it says there are many kinds of industry competition, but every industry is governed by this underlying set of principles. While much has changed, the changes don't have to do with the five forces. They have to do with particular technologies or the characteristics of particular industries. I wrote an article titled "Strategy and the Internet" (Harvard Business Review, March 2001) which shows why so many smart people made so many mistakes in that space. They thought the Internet was something different, rather than seeing the Internet as an enabling technology that had to address the same underlying principles of competition. Looking at trends, I would say that the geographic scope of industries has widened. More and more industries are truly international, with competition occurring across many countries. That's because needs have become more similar and the underlying cost of coordination and logistics has been dramatically reduced. So it is becoming easier to shift goods, easier to exchange information, easier for people to travel, easier to outsource services via the Internet, and so on. Another trend is vertical disintegration. Instead of a car manufacturer making its parts or running its data center, now other firms take on many functions in the value chain. We now increasingly have firms that specialize in certain parts of the value chain, and different parts of the value chain are moving to different locations.
Author:
Michael Eugene Porter is arguably the best known name in the world of competitive strategy. The Bishop William Lawrence University Professor at Harvard Business School, Porter's work traverses a huge expanse: from competitive strategy and the dynamics of how nations compete, to healthcare. He is the author of seminal books such as 'Competitive Strategy', 'Competitive Advantage' and 'The Competitive Advantage of Nations'. In a rare interview with TOI's Neelima Mahajan-Bansal, Porter talks about his ideas in today's new world. The first part of this interview focuses on his work on strategy, while Part 2 (to appear in next week's edition) will talk about Porter's ideas about the competitiveness of nations.
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