Where is the Veto Power in o2o Selling Situations?

Our last contribution, “The myth of the Ultimate Decider”, described the approval of the decision by the Relevant Decision Maker rather as “rubber stamping” needed to commit the company to spend the funds with the supplier chosen by the Actual Decision Maker This triggered an interesting discussion on Google+ making us aware “approval” having varied meanings leading to quit different outcomes.

What is the meaning of “approval”?

Essentially three different meanings for” approving” could be identified from the discussion:

•             Rubber stamping

•             Voicing a concern

•             Vetoing

“Rubber stamping”

Relevant Executives tend to see approving purchasing decision rather as “rubber stamping the final step in the process to decide how to solve a problem. These executives are more actively involved in the decision whether an identified problem is urgent enough to be addressed by the organization. They usually are also actively engaged in make/buy discussion, which end in a decision to buy a solution. The finding and selecting the supplier of the solution is considered less critical and therefore is frequently delegated.

Evaluating or vetoing

Sometimes Actual Decision Makers admit that their decision needs approval in particular from the legal and the purchasing department.  Approval in this context can mean checking suppliers’ proposals and contracts for conformity with internal rules in place. As examples, the legal department will check terms and conditions from a legal perspective whereas purchasing might first check whether the supplier figures on the preferred supplier list and whether terms and conditions are in line what usually can be obtained on the market.

It is essential to understand for the seller what will happen when one of these approvers denies approval due to elements not being in conformity with the rules they usually apply.  Are the Actual Decision Maker or the Relevant Executive actually bound to consider this “disapprovals” and have to abandon a deal if these elements cannot be overcome? If this is the case, the purchasing and legal departments therefore have a defacto veto power.

In other cases, Actual Decision Makers or even more so Relevant Executives take “disapprovals” rather as recommendations which can be overruled. In this scenario, the “disapproval” has the character of a recommendation that might be considered or can be overruled. Purchasing and legal departments therefore should rather be considered having an Evaluator role in the formal buying center. “Approving” actually means:  Evaluating a supplier’s offer from their legal or purchasing point of view.

Conclusion

Whenever sellers hear somebody else than the Relevant Executive referred to as an approver in a description of a purchasing process, they should ask whether approval implies having veto power. If this is the case, knowing the issues that have led to vetoes in the past as early as possible can help minimize stalling of a deal at the last moment for such reasons. 

One contributor to the discussion mentioned that in his experience getting early to the Relevant Executive minimizes the danger of purchasing and legal Departments trying to veto a decision.

For knowing how the Relevant Executives will use his/her approving power, more subtlety is required.  Understanding the level of trust between the Relevant Executive and the Actual Decision Maker is key. If asked directly, Actual Decision Maker’s may consciously or unconsciously overestimate their ability of getting a deal approved. An indirect approach might be necessary to find a more viable answer to this question.

What else would you consider that can minimize the risk that you might be surprised by veto power used at the last moment hindering a deal to close?

The Sales Data Hub

Underlying trends

The trends that have had an effect on the way we deploy and use IT can be grouped into three subsets.

1.     Business Trends

Businesses and their structures have become more and more complex, in terms of both hierarchical organization and in terms of infrastructure.  There are more and more different systems that need to be taken into account.

2.     People Trends

Two trends to note here.  Firstly there has been an explosion in the use of social networking sites and their corresponding notifications, comments, discussions, posts, updates, etc.  Secondly, the emergence of the BYOD (bring your own device) trend, has resulted in a displacement of access points away from the computer to the mobile screen (tablets, phones).

3.     Offer / Solution Trends

Over the last two years APIs have become more generalized and there has also been a move towards homogenizing authentification modules.  At the same time, social networking has moved from the personal sphere, into the business sphere.  And, the standard functions of social business software are now usually free to use.

Experiences and conclusions: “solution” is a problematic word

During our work with our clients we have often noted the same comments coming from them, the users.  The single CRM solution is often inadequate.

·         CRMs are usually not sufficiently able to deal with the relationship aspects of complex sales.

·         The single solution is unrealistic, often combining complicated to use add-ons or bespoke developments.

·         An unbalanced situation between the needs of the company to have a database of sales relevant information and the users’ needs to have information that sheds light on their daily business.

·         The single database is a myth.  Individual users usually supplement the company database with excel charts, outlook contact lists, iPhone entries, etc.

Enter the Sales Data Hub

The Sales Data Hub refers to the real-life and workable solutions that many companies are choosing to deploy.  

It has 6 fundamental characteristics.

1.     It works using pivots and facets.

2.     It is multi-polar.

3.     Information is accessed where it was first input, in its native system.

4.     It links semantic value and added value.

5.     Relationship management is possible.

6.     It is dynamic.

The Sales Data Hub is a virtual unified system that brings together several interoperable systems.  Each of the participative systems maintains its functionalities and relevance and continues to be used each time it makes sense to do so.  It is accessible with today’s technologies.  It will enable companies to move to the next stage of commercial efficiency, by equipping their sales force with the tools they really need to do their jobs well.

Antoine de Septenville.

The myth of the ultimate decider

In sales, myths are created when concepts and models are used out of the context they were originally designed for. The concept of the Ultimate Decider is an example of this.

Selling to the small and medium enterprise

In small and medium size enterprises the Ultimate Decider can be found in the person of the owner or the CEO of the company. It is he/she who decides what is to be bought from whom. This person also has the power to commit the enterprise to spend the necessary funds needed to acquire goods and services.

Selling to the large enterprise

Sellers dealing with large enterprises often find, what Andy Paul in his book “Zero-Time Selling” calls the Actual Decision Maker. This person has the authority to decide what is bought from whom. However the authority to engage the enterprise to spend the necessary funds for the purchase lies with another person.

Sellers entering late in the buying journey are though faced with a dilemma. Should they trust the Actual Decision Maker that she/he is capable to get the signature for the purchasing contract of the supplier of his/her choice or should the seller follow the common wisdom of calling high and try to reach the person who has the power to engage the enterprise?

Especially for purchases with lower strategic value, the person with the signing authority is usually just approving the decision made by the Actual Decision Maker. The term Ultimate Decider is thus a misnomer in such situation. Trying to call on this person just slows down the sales cycle. Also the chances to revert a decision of the Actual Decision Maker are very slim.

When to call high

The person with the signing authority is usually of higher rank than the Actual Decision Maker. Especially for strategic deals the question though arises when to call this person.

Stephen J.  Bistritz and Nicolas A. Read in their book “Selling to the C-Suite” have introduced the notion of the Relevant Executive. The Relevant Executive is the person most affected by the problem for which you offer a solution and/or can profit the most from the offered solution.

Based on their research, they recommend that the Relevant Executive is either called after a successful implementation of a project or very early in the buying cycle. In the former case this is a very good moment to establish a relationship which might be beneficial for future deals. In the latter case the aim is to initiate a buying journey. At this point in time it is premature to solicit a purchasing decision. .

The first decision you can expect from a Relevant Executive is to acknowledge the existence of a problem or an opportunity that merits further investigation by the organization. The next decision in the buying journey is then about how to carry out information collection on possible solutions. Depending on how much the Relevant Executive is a “hands off” person, the management of the buying journey is can be passed to at this early stage to the person who later becomes the Actual Decision Maker. The hand over to the Actual Decision Maker may come later, at the screening and selecting of possible suppliers. The Relevant Executive keeps the right to engage the company in the actual purchase through his/her signature. As one can assume that the buying journey is delegated to a person who has the trust of the Relevant Executive, the act of signing is more of an approval than a decision.

The impact of corporate culture

As we have shown in a previouspost, the way decisions are made is also strongly influenced by the corporate culture prevailing at the purchasing enterprise. So it can well be that the Relevant Executive role is limited to initiating the decision making process about whether the problem merits attention and whether a solution is to be purchased.

Conclusion

It seems thus that when selling to large enterprises, the Ultimate Decider is a myth. Chasing after this phantom will thus just delay or even derail your sales campaign.

What is your experience with the concept of the Ultimate Decider?

Christian Maurer

RIIM CONF' 2012

Yesterday was the 7th edition of the RIIM CONF’ (relationship intelligence and influence management conference).  Opinion leaders, experts in sales, network specialists and international business people gathered in the Cercle National des Armées in Paris to share their ideas on relationships and networking in complex sales, global accounts and differing cultures.

Over the coming weeks we will be sharing some of the key ideas from the speakers on this blog.  Today, I’ll give a general outline of the speakers, to whet your appetites.

The day started with François Fleith, from Alcatel-Lucent, who spoke about the need to understand and manage relationships when working with large accounts in the public sector.  He told us of the all too real possibility of eliminating deals as “no go” too soon in the process, due to a lack of technical ability, while relationships and networks can save the day and help both sides of the deal develop new products and therefore new business opportunities.

Serge Papo, President and co-founder of Nomination, demonstrated how important it is to follow decision makers as they make career changes.  He used illustrations from Nomination’s own business case studies and during a live demonstration let us see the “musical chairs” in some large companies.

Christian Maurer, co-author of this blog, spoke about the myth of the ultimate decisionmaker.  He drew on his experience as an independent sales and business consultant to show how there are influencers working behind the scenes in every decision, and also how the role and positioning of the decision maker changes with the company culture.

Jean-François Ruiz, co-founder of PowerOn showed how to use social networking sites like Twitter and LinkedIn to for new business development in a B2B context.  He gave a concrete example of recent work PowerOn has done to develop leads and sales for a client using the technique “collaborative white book”.

Hervé Debaecker, Chief Methodologist from Perfluence, spoke about the need to manage the relationship capital of a company.  Based on years of experience and feedback from many clients, he gave approaches to doing this and ways that a sales team in a complex sales situation can work together to manage their ecosystem.

Matthieu Aubusson and Sébastien Leroyer from PricewaterhouseCoopers spoke about strategic value selling.  Matthieu started with a precise and informed description of what exactly is strategic value selling and how to go about ensuring your company provides it.  Sébastien continued by sharing information from PwC about the reality of what companies are actually doing versus what they should be.

Antoine de Septenville, Chief Technology Officer from Perfluence, introduced the Sales Data Hub.  He spoke about recent and continuing trends in IT, in sales, and in data management systems.  Using “pivots & facettes” he showed how it is possible to combine several systems to answer a company’s particular needs.

Sophie Galoo from ADP-GSI showed how to bring value to clients by enlarging the shared ecosystem.  She told us how ADP-GSI has moved very quickly from working alone as an HR specialist, to now working within and managing their ecosystem, including their partners and competitors in their scope.  She laid out the essential question that anyone embarking on this route will need to ask themselves.

Then two speakers shared their insights into different cultures and how these affect the networks and relationships.  Sam Wellington from Safran spoke about Brazil.  Starting from a historical perspective he showed how networks in Brazil are created and maintained.  Jean-Michel Terrier from Altair gave his experiences of working with Asian cultures, notably China and Japan.  He was able to draw comparisons between these cultures, the Anglo-Saxon culture and the French culture.

The day finished with a round table chaired by Christian Maurer with the following experts.

David Gotchac from E-DEAL, Thomas Cochin from Microsoft Dynamics, Khalid Madarbokus from Oracle and Hervé Debaecker from Perfluence.  They discussed the triangle of people, processes and tools, and the efficiency of CRMs to manage this.  The question of how to achieve high adoption of any tool was raised along with the importance of good change management.  The general conclusion was that any IT system should be sales method agnostic and that users would adopt it if / when they could see that it served their own best interests.

Special thanks for

Matthieu and Sébastien from PwC, who stepped up at the eleventh hour and gave a remarkably solid presentation.

Sam, who came from Brazil not just for us but it was very appreciated.

Apologies to

Sophie, who had her presentation cut short.  About half the audience came to complain to me in person.

As I get in the blog posts from the speakers I’ll add links to their posts to this page.

Please feel free to comment and share your ideas on this.

Cate Farrall

Job crafters and the network

Job crafting

Job crafting refers to the way that each individual shapes the job that he / she does in order to satisfy their own needs and desires.  This can be independently of the organization’s needs.  There are three main areas that job crafting affects:

·         Quantity of work (you can do more or less)

·         Relationships with others (these can be improved or can deteriorate)

·         Perception of work (an insurance agent sees his / her work as helping people after accidents, rather than just processing claims)

For more details, please refer to “What is job crafting and why does it matter” (Berg,Dutton & Wrzesniewski).

Jobs are crafted by different aspects of a person: ambitions, desires, skills, personality traits, personal interests, etc.

An interesting part of the job crafting approach is the finding that those who actively engage in it are more likely to be engaged and motivated workers.  If you are interested, you can find more informationby clicking here.

Job crafting is similar to job redesign, the difference being that job redesign is negotiated with the employer in a formal process while job crafting is done under the radar.

The job and the crafter

In a previous post (the company, the job, the person) we argued that the person and the post they fill should be kept separate within CRM systems because of the way that people move from one job to another in their careers.  Job crafting and its effects requires the person and the post they fill to be kept separate but for different reasons.

The job can be considered to be what the person should be doing.  It involves a list of requirements, expectations and reporting lines.  The crafted job is how the person currently holding that position fulfills the requirements, meets the expectations and respects the reporting lines.  The difference between the job and the crafted job will vary depending the person, but there will always be a difference.

Job crafting and the effect on the sales meeting

We can picture all the people in a network busily job crafting in their own manner (with a positive or negative outcome, knowingly or subconsciously).  The effects of this will filter down to many business situations, including the sales meeting.

·         The sales person who considers the job in terms of hitting his / her commission at the end of the month will have a different approach to one who thinks in terms of making the client happier.

·         The client who sees the purchase as part of a wider plan will use different criteria from a client who is looking for the cheapest, quickest to deploy solution.

       

As a manager of a sales team, I need to think about which aspects I want my individual team members to develop and which ones I think the whole team could embrace.  This kind of insight will help me to plan training and assessment programmes.

Job crafting and o2o

Within the o2o complex sales situation, job crafting will also play a role.  A new occupant, of whatever position, is going to bring his / her own way of crafting the job.  This could be in terms of

·         Priorities for business development (opening new markets in a given zone, etc)

·         Personal criteria for making decisions (carbon footprint, ethical business, etc)

·         Personal preferences for partners (size and profile of suppliers, etc)

As a sales manager, I need to think about which of my team, as job crafters, will be best suited to working on a particular account and with certain people within that account.  Using my knowledge of my team I am better able to not only cover the network (see our post onnetwork coverage in o2o) but also to cover it with people intelligence.

In addition, understanding how key people in my client’s ecosystem have crafted their jobs will help me to get a better understanding of the way that they fit into the network.  I can look for people who are making similar changes and possibly use this to my advantage.  The use of Key Opinion Leaders by pharmaceutical companies is an application of this idea.

Next generation CRM

Job crafting affects the way we as individuals work and the way we affect the organizations we work for.  And recognition of this is growing on both sides of the Atlantic.  It is clearly going to play a role in the way we think about people and the jobs they do. 

The question is: how will future systems manage this aspect of the person / post combination?



Cate Farrall

Client’s Corporate Culture and o2o selling

In the o2o selling situation, buying occurs when an orchestrated seller team is in a synchronized process with the buyer team. .Knowing about the buyer’s organization culture will help you to identify the working style of the buyer team you have to work with.



Four types of corporate cultures

These four types of corporate culture have proven relevant when trying to answer two basic questions:

-       How are decisions made in this company?

-       How do the people in this structure gain and build power?

In a bureaucratic culture, communication is tightly controlled and flows along hierarchical lines. Silos are an essential element of this culture. The power of any one individual depends strongly on his / her hierarchical position. The probability that the final decision is made by a single individual is relatively high.

In an entrepreneurial culture, speed is of an essence and short decision paths are a characteristic. Power comes from being an entrepreneur or from being an individual enjoying an entrepreneur’s trust. For this type of culture, there is also a high probability that the final decider is one individual because the entrepreneur or the trusted individual has the authority to make decisions. In fact, decision making will probably happen even faster than in the bureaucratic culture as there is a flatter hierarchy.

The consulting culture is composed of partnerships with high territorial and subject matter expertise. The members are highly autonomous. This kind of structure is a prototype of the individualistic culture. Here the source of power is influence. In its turn, influence comes from the individual’s competence and performance. The decision maker depends on the type of purchase. If I want to sell to one partner I can expect to have one individual as decision maker. When I want to sell to the firm as a whole, I am confronted with many individuals having major roles in the decision process. These organizations also have little experience in finding consensus. They only do this out of absolute necessity.

The collaborative culture is based on open communications. Power source is influence which is determined by performance. As in the consulting culture, influence matters more than hierarchy. However, decision making style is different. In the collaborative culture the decider wants to assure a consensus among all concerned irrespective of the hierarchy before taking a decision. The decider deliberately does not want to use his or her rank.  Decision making can be “democratic” by majority vote. “The decider” is then the role of a spokesperson for the team vis-à-vis the seller.

Consequences for relationship intelligence

Although the above cultures might often not appear in their pure form, being able to understand

the prevailing culture at the customer’s organization is the first act of relationship intelligence.

We must also consider that in large organizations separate specific cultures in part of the organization might coexist with a different overall corporate culture. In this case, the prevailing culture of the organizational unit involved or concerned by the decision is relevant.

The decision making process associated with one of the four culture types then determines the relationship network I need to understand in order to be able to effectively manage influence and decision making.

Consequences for influence management

For organizations with bureaucratic or entrepreneurial cultures, establishing a relation to the decision maker or at least somebody with direct influence to the decision maker might be sufficient to influence a buying decision in favor of my solution. Contacts with other individuals in the organization might be necessary for the purpose of understanding the subject and the type of argumentation I must choose to persuade the decision maker.

To get to a buying decision in organization where an individual or collaborative culture prevails, I need to establish relationship with all the people involved or considered in the decision making process. My added value as the seller is to help the organization to find the consensus in an organization with an individualistic culture or help build the consensus on behalf of the “spokesperson” in the case of a collaborative culture.

Conclusion

Success in complex deals with large organization undoubtedly requires the involvement of multiple people. This is the first step and will ensure that there is no single point of failure for the relationship between the seller and the buyer organization.

If in addition, you pay attention to the prevailing corporate culture this will help you to understand for what purpose you want to maintain and establish these multiple contacts.

What are your experiences about this topic? 

Christian Maurer

Network Coverage in o2o selling

My network

I know my own professional network well and I have a good idea of:

·         Who I know

·         How well I know them and how well we get on

·         Where they work and what they do

·         And any other relevant information that’s going to help me win and drive business

If I am lucky, I work in a company that encourages me to share my network information with my coworkers, so we can use the combined power of our relationships to work more efficiently and quickly with outside contacts.

Client’s network

I may also have some idea about the network of my own professional contacts, especially those who make up my client list.  I have an understanding of:

·         Who my client knows

·         How well my client knows them and how well they get on

·         Where my client’s contacts work and what they do

·         And any other relevant information that’s going to help me win and drive business

Network coverage

It’s also good to know, and some of you may have the tool to help you visualize and share this information, how my network overlaps with my client’s network.  In other words, how many of the people in my client’s ecosystem are in contact with the people from my company.  When working in an o2o sales environment (see our post of March 9th2012) having this kind of insight is essential.

	A n d r e w	K a r e n	D e b o r a h	E s t h e r	V a l e r i e
John		X	X		X
Khalid	X	X	X
Annabel
Jamie		X
Phil	X	X			X
Steve			X

In the table here, the people in green are part of my company and the people in blue make up the client’s company.  I admit, it’s neither a big or complex ecosystem, but I think you’ll get the point.

The crosses show who knows who.  It’s as simple as that.

The ability to assess your network coverage as it evolves is important for two reasons.

1. Who knows who

I can see that Karen knows a lot of people in that account.  This makes sense as she’s the KAM.  Esther is new to the team, so she doesn’t yet have contacts here.

This kind of insight can help me to plan and organize my team to prepare for situations like maternity leave, retirements, people moving on to another job, etc.  If Karen informs me tomorrow that she is pregnant, I can I react quickly to work out how best to fill the holes in my network coverage in time for a smooth handover.  Using my chart it looks like Deborah is currently best placed, although she would need to build up relationships with Jamie and Phil.  Alternatively, I could chose to bring new blood and fresh eyes to the account, and decide to get Esther involved.  This all depends on the real business case and my motivations behind decisions.

And, when Karen comes back to work, I can look at my network coverage again to work out what to do for the best.  As the concept of a job for life is evaporating, being able to do this kind of analysis quickly and simply is becoming more and more important.

2. Who isn’t known

Looking at my simplified network coverage, I can see that Annabel isn’t in contact with anyone from my team.  Depending on who Annabel is, this may or may not be important.  Given that she is part of my client’s ecosystem, I should at the very least identify her and her role.  And then, depending on my business objectives and the role that Annabel plays, assign the job of getting in touch with her to someone in my team.

Adequate tool support?

While the sample table above could easily be presented in an excel sheet, the problem is to keep the information up to date with other aspects of my relationship intelligence.  And herein lies the challenges.  You should not be surprised if your CRM systems cannot provide you with this functionality.  Even plug ins that can augment CRM functionalities are rare to find.  I actually know of only one. Do not hesitate to conatact me if you want to know more.


Cate Farrall