In his recent book, The Machine, A Radical Approach to the Design of the Sales Function, Justin Roff-Marsh recommends a new assumption for Sales. The old assumption is broken, he says, and no longer fits in our world.
What is the old assumption? In the old model a salesperson owns the relationship with the customer and all interactions with that customer. In this model, we assume that “sales should be the sole responsibility of autonomous agents.”
After the Civil War, Traveling Salesmen Criss-Crossed the Country
Well, of course they should. The model of the salespeople as autonomous agents is integrally tied with the history of our country. After the Civil War traveling salesmen (yes, they were all men) fanned out across the country using the newly built rail networks. They developed relationships with the general stores in each town in their territory. Since they worked for wholesalers (not the manufacturers), they sold a wide variety of goods. They cultivated relationships with their customers and advised them on business practices and promotion. They had the power to issue credit and to offer discounts. By necessity these sales people operated as autonomous agents.
The sales profession attracted people who thrived in a work environment where they could operate independently. They created a culture that encouraged independence from management.
The Traveling Salesman Model Ceases to Work
Roff-Marsh explains that this model no longer works. How do we know? Because the role of the sales function is not only to sell, but to “consistently sell all of the organization’s production capacity.” Whether it is a manufacturing plant with machines and equipment or a software company with teams of engineers, investors expect a return on their equity that can only come about if the sales function can keep up with the company’s ability to produce.
Alas, the sales function has simply not kept up with the productivity gains in production.
Measured against this more meaningful goal, sales consistently fails in most organizations. In recent history, the modern organization’s capacity to produce has accelerated past its capacity to sell, and idle machines and production personnel are costing shareholders dearly, month after month and year after year.
What causes this underperformance? Roff-Marsh identifies three primary reasons:
- Salespeople aren’t selling. Too much of their time is taken with “customer service and administrative activities, to solution design and proposal generation, and to prospecting and fulfillment-related tasks.”
- Most sales opportunities arise from existing customers, not new customers. So even if management reallocates the work of salespeople (quality declines) or hires more salespeople (costs go up), they all simply end up spending their time on existing customers.
- Salespeople are difficult to manage. Their profession is all about the ability to function as autonomous agents and so they “run roughshod over production and finance personnel, they ignore management directives, and they make frequent references to “their” customers, implying that they can leave and take the organization’s goodwill elsewhere—which, to some extent they probably can.”
Time for a new assumption
Of course, it’s our own fault that sales is consistently failing most organizations. We are the ones who have made salespeople autonomous agents. We hold them accountable for the outcomes they produce, not the activities they perform. If a sales opportunity is lost, we hold them responsible. If a customer is unhappy or falls behind in their payments, the salesperson must take ownership.
We give them full responsibility for a customer, including all the administration and solution design. Then we expect them to also prospect for new customers.
If making sales the sole responsibility of autonomous agents is the wrong assumption, what is the right one?
For the answer to that question, we need look no further than the production function in any company. Unlike the craftsperson of two hundred years ago who did everything to make clothing or farm implements or bread, today’s modern manufacturing plants have divided the labor among many specialists. Specialization of labor enabled production to drastically improve its productivity. Yet sales is still largely stuck in the craftsman model.
Sales will only improve its productivity if it adopts a similar model to the successful one in the production side of the company.
Therefore, Roff-Marsh recommends this new assumption: “Sales is the responsibility of a centrally coordinated team.”
Roff-Marsh has worked with many companies who are willing to adopt this new assumption. He’s seen them achieve massive performance improvements as field salespeople spend 100% of their time in the field and regularly schedule 20 business meetings a week, as inside sales people generate high rates of sales at low costs, and as customer service meets all customer needs for administration and order completion.
In his remarkable book, Roff-Marsh explains how they do it.