podcast | May 4, 2015
Case Study: How the HR Leader Should Help the CEO When Assessing Sales and Marketing Executives
Are you a Chief Human Resource Officer working for a CEO who is wondering if he, or she, has the right sales leader for the job? Or the right marketing leader?
If so, click here and listen to this podcast.
It is an interview with Steve Byars, the CHRO of the AMX division of Harman International, the leading provider of premium audio and visual solutions. Harman has 14,000 employees and does $5.3 billion in annual sales.
By listening to this interview, you will learn how Steve has helped CEOs:
Why should you consider what Steve has to say?
Steve has 32 years of experience, all in HR, and has led HR teams at some of the world’s great companies, such as Fidelity Investments, Trammell Crow, Texas Instruments, and Pratt Hotels. In addition he has degrees in both economics and psychology, and an MBA.
If you are a CEO with these problems, partner with your HR leader to find a solution, as many have done with Steve over the course of his career.
If you are a head of HR, and have been approached by your CEO with this issue, follow Steve’s advice here.
Speaker: Welcome to the SBI Podcast, offering CEOs, sales, and marketing leaders ideas to make the number.
Greg Alexander: Welcome, everybody. This is Greg Alexander, co-founder and CEO of SBI, and welcome to the weekly SBI Podcast series. Today, we got a killer show for you, because we got a rock star guest. Joining me today is Steve Byars, and Steve is the global Chief Human Resources Officer for the AMX division of Harman, the leading provider of premium audio and visual solutions. Harman has 14,000 employees and does 5.3 billion in annual sales. Steve has been in this position for 14 years, and prior to this, Steve led HR teams at Pratt Hotel Company, Fidelity Investments, Trammell Crow, and Texas Instruments. How about that for a resume?
He has 32 years of HR experience and holds an undergraduate degree in economics, another one in psychology, and an MBA, all from the University of North Texas. Go Green, which happens to be my wife’s alma mater. Steve, welcome to the show.
Steve Byars: Thank you, Greg.
Greg Alexander: All right. Today’s topic is one that is somewhat controversial, but since we have a veteran of human resources, I thought this would be a great one. That is helping the CEO understand if he or she has the right sales and marketing leadership team. Allow me to put this in context. In my practice in working with CEOs, they often confide in me that they don’t trust their sales leader. He or she is looking for something he can collaborate with on go-to-market strategy. Instead, sometimes, feels as if he’s being positioned, or even manipulated in some situations, by the sales leader. Lots of political back slapping.
This is when we typically pull in the Head of HR and we ask for help. Given the fact that Steve has been doing this for 32 years across a variety of companies, we thought he would have a great perspective on this. Steve, my question would be to you, have you seen this? If so, what do you do in this situation?
Steve Byars: No softball topics this morning, huh, Greg? Dig right into this. Yes, I think anyone that’s been around the business world for a while has seen is because the heart of any business is revenue, and so the Sales Leader is so key to the business. Within that, you have so many issues that gets everyone very focused on that portion of the business. Creating trust, not only would the CEO, but across the entire executive team. It’s so key so that everyone’s aligned and everyone’s moving towards the same objectives, and they’re doing it in concert. I’ve seen it where it wasn’t working well, and you can look at the numbers and say, “Well, how are sales growing? Are you hitting your numbers?” That’s one metric, but that’s only one of the metrics. You may be growing but you aren’t capturing all the market share available, or you might be growing at the expense of long-term objectives.
There’s a lot of things to be wary of, but the first key is how is the sales leader trust? Is he trusted by the CEO? By the Board? By the executive team? By the Sales Leader’s team themselves? That, to me, is the first. Does the Sales Leader exemplify the values and the culture of the company? Or is the Sales Leader a walking brand for the company? Does he help differentiate the company from the competition? There are so many elements of looking at this that differentiate success and failure. It really is more than just about the numbers.
Greg Alexander: I love the term, the walking brand. Over your long and successful career, when you bumped into this from time to time, and you’ve had to counsel the sales leader on how to … Because trust has to be earned. Doesn’t happen overnight. How do you counsel a sales leader and how to earn trust, as you said, not just from the CEO, but the entire executive leadership team?
Steve Byars: Everyone has to realize we’re all on the same team, and the team is the key concept. We’re all contributors, and if any one of us is failing, the the whole thing is not going to go forward as it should. We all have this interdependency upon each other for ultimate success, and so there has to be that trust that we’re all helping each other, and the sales leader can’t just go out and make the numbers work and be the rockstar, and say, “Hey, I did it. I did it.” It really is more about we are all going to succeed or fail. It’s just not going to Sunday afternoon, the great quarterbacks in the League, they all hold up the trophy, but then they’ll bring their offensive linemen, the defense, they’ll thank the coaches, everyone else. They realize it was a team effort.
Greg Alexander: Yep. That’s a great point. When I encountered this, it usually follows a disappointing quarter or two, where two or three weeks before the quarter closes, the Sales Leader is confident that he’s going to hit the number, and he shares that with the CEO, so the CEO is communicating to the various stakeholder groups, in some cases, Wall Street, maybe the board, or what have you, that everything is good. In the B2B world, where you have a hockey stick, where big piece of the revenue comes in at the end of the quarter, and then a couple of deals push and everybody misses the number. This is when CEOs have turned to me and said, “Hey, can I really trust this guy?” Sometimes, it’s an unfair characterization because it wasn’t as if he was trying to deceive anybody. He thought the business was going to come in, the information that he had indicated that, but it just didn’t happen.
If you look at the other side of the coin here, where sometimes CEOs, particularly those who haven’t come up through the sales ranks, something like that happens, it’s unfortunate, and they jump to the conclusion that maybe the Sales Leader can’t be trusted before they really understand what happened. At times, things are outside of the control of the sales leader. When working with CEOs, who you have many times, what advice would you give CEOs that might be listening to this show on kind of how to process that situation and think about it in a balanced way?
Steve Byars: We all recognize no one likes surprises. The CEO doesn’t want to have that conversation with the shareholders, the rest of the executive team doesn’t like those surprises. If you have products that you’re producing, you don’t want to suddenly have a lot of products sitting on the shelf that you’re expecting to ship out. It’s just a ripple effect is huge when you have a surprise like that, as you well know. The first question is, what happened? Because if the Sales Leader is so out of touch with the business that he is surprised, and it becomes a regular event, then you’ve got a huge problem, obviously. Because a Sales Leader really needs to know where is that revenue coming in, what is the likelihood, what are the risks, so he can clearly communicate that with not only the CEO, but the rest of the team, because all of us are working towards the same objectives, and all of us are pushing in terms of having the right expense structure in place for that revenue structure, having the right product and services in place.
There’s a lot that goes into from everyone, and so if there’s a surprise, what happened? There needs to be an honest accounting of what happens so it doesn’t happen again. Because if it happens regularly, then obviously there’s a big problem.
Greg Alexander: The honest accounting piece is such a critical element there. This is where I really think a world-class HR Leader can play a role. They can create this environment where this authentic, honest, nonjudgmental conversation can take place, so that we can get to the root cause of the issue. It’s a great point.
Steve Byars: Absolutely. I think honesty is so key. We love to have an environment where you encourage risk taking or you encourage innovation, where you have transparency of decision making, but within that, there has to be an honesty with everyone that that’s such an integral part of the values of the company that says, “Okay, we’re not going to judge anybody. We have to be honest, and then we’ll work through whatever issues there are together. Without that environment, then people become distrustful of sharing information at all levels, including at the highest levels, and so that’s just a very unhealthy environment at any company.
Greg Alexander: Yeah, I agree. Okay. We’re talking with Steve Byars, the Chief Human Resources Officer at AMX, which is a division of Harman. Today’s topic is how HR can help the CEO understand if he has the right sales and marketing leadership team. We’re going to take a quick break right now, and when we come back, we’re going to shift the conversation with Steve to when the issue isn’t trust-based, it’s competency-based. Stick with us, we’ll be right back.
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Greg Alexander: Welcome back, everybody. We’re here with Steve Byars, the Chief Human Resources Officer at AMX, a division of Harman, and today’s topic is how HR can help the CEO understand if he has the right sales and marketing leadership team. Steve, right before the break, we were discussing how to create this environment that allows for authentic, honest conversations between the CEO and his leadership team, and in this particular case, sales and marketing. You gave some great advice around building this trust-based relationship, but sometimes the issue isn’t trust. The CEO does feel he’s getting the truth but the question still remains, which is, do I have the right leader in this role?
Again, I think this is a great opportunity for HR to partner with the CEO to properly assess the situation. The situation that I’m referring to is we have a corporate strategy and the person who’s leading the Sales Team and the Marketing Team has to execute against that strategy and we’re questioning at this point. Does that person’s particular skill set line up with what it is that we need at this moment in time? Have you seen this over your long career? If so, what advice would you offer the audience?
Steve Byars: Yes, Greg, I have. Unfortunately, running the best… I assume a lot of folks have, and I’ve run into it from a couple of different ways. One, the company grows and expands beyond the ability of a leader. I’ve also seen where you hire a leader from the outside and then you later find out maybe didn’t have quite the skill set that you thought that they did. I’ve seen it in two different ways. I guess at the end of the day, it both comes down to the same thing. Can you correct, is this competency a correctable situation for you within a reasonable time frame to continue the business moving forward?
Hopefully, most times, it’s something that whatever this competency issue may be, if it’s singular or multiple, it can be addressed, you can correct that competency or build on it, and it doesn’t harm the Leader’s ability to continue performing in the job. If that’s the case, you can do it internally or you can bring in outside experts to help build that competency. If it’s not, that’s where it gets more tricky, and I think this is very common, also, is the competency is not there and you really can’t correct that within a time frame without disrupting the business. In that case, then you have to make a change, and you have to step up to it.
You see businesses suffer because there’s a hesitancy to make a change, and I think the worst thing you can do within a business is you hire the right people, but if in some cases, you don’t have the right people, you need to make a change in some way because everyone around that individual is looking for them to pull their weight. If they don’t, then it pulls the whole team down.
Greg Alexander: Yeah. You mentioned time period there. This competency issue, can it be corrected in a reasonable time period? I want to talk to you about this. It seems like today, especially in a public company, expectations are so high in this question of time, how much time does somebody have to fix an issue that they may be dealing with? Addressing a competency does take time. It’s not going to happen overnight. Is there a generic answer to this question? How much time should you give somebody to fix a competency?
Steve Byars: No Greg, there’s really not, because there are so many variables that go into play, as you well know. There’s the link to the sales cycle, the competencies could be affecting things that are going to impact you for years in the future, get the long sales cycle. If you have a short sales cycle, you’re seeing them immediately. You’re also the depth of the competency impacting the issue and how can you build around that and create a support structure around that while that person is being corrected. Does it exist or does it not exist? There are so many variables that go into this of, okay, is there a way we can work around this while we correct it? Sometimes there is, sometimes there’s not.
Greg Alexander: Yeah. Again, I want to highlight that, having a great HR Leader as your partner as a CEO is so important here, because sometimes a CEO doesn’t have experience in this area. Maybe he or she didn’t come up through sales and marketing and doesn’t even know what the competency problem is. Or, if he does recognize what the competency issue is, doesn’t have an appreciation for the length of time it’s going to take to fix it. By turning to an HR professional who is skilled in competency assessments or maybe has a group of service providers to rely on, expectations are going to be set correctly there. Replacing these leaders in these two functions is so disruptive because if you do decide to replace somebody, it takes time to find the person, and then convince him to join your company, then they have to get their legs underneath them, and it can be really damaging to the business.
Steve Byars: One of the things that I’ve found is it’s so key for the HR leader to have the trust and the open communication and dialogue with the CEO and the Board, but also with the Sales Leader and the rest of the team. If you only have the trust and the communications open on one side of it, then you’re really not able to maneuver and be a part of the solution, as much as it’s so critical in making something like this work. Within that, part of the trust is developing a culture and a reputation and knowledge and belief from everyone that regardless of what happens, you’re going to be fair with the individuals, and that regardless of what happens, and usually what I’ve found. If the individual knows that you’re going to be fair and you’re going to treat them with respect, and you’re going to help them in every way possible, then they’re going to be honest, and usually they will say, “I can do this or I cannot do this, and let’s figure out how we move this forward.”
The individual usually has a lot of pride and they want to be successful, and they don’t want to be in a situation where they’re not going to be successful. They can help make the decision with you many times.
Greg Alexander: Yeah. Let’s talk about the HR leader earning the trust of the leadership team, the CEO and the executive leadership team. I come into contact with HR leaders in our practice fairly regularly, and I’m going to generalize here, which isn’t fair, but I would put them into one of two categories. The first category, which is the desired state, is an HR Leader who is a strategist, who is a trusted confidant of the CEO and the leadership team, and is a key member of the strategy formulation. Then there’s the other type of HR leader that, unfortunately, sometimes is a little tactical and is really only focused on administrative duties and things that might not be CEO-worthy.
Everybody, all the HR leaders that I work with, want to be in the first camp. They want to be that trusted right-hand person and that strategist, but they have a hard time getting there. You’ve been doing this for 32 years, and clearly, you’re a strategist. How did you go from tactician to strategist in the role of HR?
Steve Byars: I try and build my teams to be strategists, also, and I guess I wound by default, because I never plan to be an HR leader. I started out my career in a management rotation program at Texas Instruments, where I worked in all of the functional areas, and gained skills in each of the areas. From that, I stay involved in all areas of the business, all I’ve wound up being in HR as my functional area of expertise, but I still get involved, in fact. I have, later today, I’m going on a sales call with a major lead client that I helped bring in, and I’m going to help that all the way through the sales process. I also am going to be sitting in this afternoon, also, with one of our R&D projects, trying to move a product forward.
I encourage those folks who work for me, when they first begin working for me in the HR teams to do exactly the same thing. Understand the business. Go out and become involved in the business. Learn the business. Whether it’s a service or product, go out and become part of it. All the way to the loading docks. Go back, understand what those folks face, help them out occasionally, get involved, learn what those folks are doing, and then all the way through the sales, all the way through the product development. Learn all those businesses, and you’re going to have a whole different orientation for how things work. By another way of looking at, also, is I found very, very valuable, if you’re sitting in headquarters and you have all this information around you, you see all the decision makers, and you have that environment around you, don’t just spend times in headquarters. Get out in the field.
The whole thing looks very differently when you’re in the field. It doesn’t matter if you’re a global organization and you’re going to go to your office in China or Germany, or the same thing would go if you’re going to your office in Detroit or New York. Things look a little different than they do in headquarters, and I encourage people in HR organizations to get out, work with those people, go out on sales calls, be a part of the business, and you’re going to have a whole different appreciation for what is the business all about and how can you help that business move forward.
Greg Alexander: You just made my day. An HR leader who’s making sales calls. I wish there were a million of you in the world. That’s fantastic. Everyone from HR who’s listening to this, take that to heart, get out there, ride with the sales reps, meet with customers, learn the business. This is how you become a strategist. All right. We’re going to cut to a break real quick. When we come back, we’re going to talk about search, executive search.
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Greg Alexander: Welcome back, everybody. I’m here with Steve Byars, Global Human Resources Officer at AMX, a division of Harman. We’re having a very interesting conversation here around helping the CEO understand if he has the right sales and marketing leadership team. Up to this point in the podcast, we’ve been discussing issues such as trust and competency assessments, et cetera, and we’re kind of using a use case here. Let’s continue with that use case. Steve, let’s say that the analysis that you did on behalf of the CEO, the competency analysis, confirms the CEO’s fears, and there is a need for a new sales or marketing leader, and they come to you and ask for help in hiring the right one.
When I’ve seen this, I see CEOs sometimes, they have some battle scars. They have made a hiring mistake in this function before, and they don’t feel as if they can afford to make another mistake. Because of that, they doubt their abilities sometimes, and they ask for counsel, which is wise of them to do that. HR can play such a key role here. Have you seen this? If so, what do you do about it?
Steve Byars: If you are making a change, and how do you move forward from that, is that the question, Greg?
Greg Alexander: Yeah. The question is, the CEO comes to you and says, “Okay, I thought I had a problem with my Sales and Marketing Leader, we’ve done an assessment and realize that we do. We’ve tried to fix the competency, we can’t fix it, so we need to make a change. However, me as the CEO, I’ve mishired in this role before, so I don’t trust my own abilities to pick the right candidate, so I’m coming to you, my HR partner, and asking you to help me hire the right person.”
Steve Byars: Right. Unfortunately, all the problems you’ve indicated on this podcast, I’ve run across.
Greg Alexander: I figured you might.
Steve Byars: I don’t know if that’s good or bad. Yeah, I don’t think this is a unique problem. It might be unique in people admitting it, but it does exist and I think we’re all aware and have seen it. In moving forward and trying to make sure that the assessment process moving forward is as effective as possible really is dependent upon having multiple views of the various candidates and the various options moving forward. I like to do a couple of things. One, I think all of us have a variety of succession plans and development plans, trying to create successors in place, but I think it’s also equally important to make sure, when you have those plans in place, you also give at least equal weight to developing a very strong applicant pool from the outside.
You have a wide, wide net cast of what are all your possibilities in going forward, and then examining what worked and didn’t work of prior candidates, not just the most recent one, but all of the candidates. You can go back and look at the things that made them successful, the things that made them not as successful. What has changed in the marketplace now that you need to emphasize more or less, and looking at those, and giving those the appropriate weighting. If you’re working with a search firm, then making sure they understand these things completely and are really focused in the right ways. If you’re not, then you’re working through social media and casting the net yourself.
Once you get that large pool of qualified applicants, then I like to involve as many perspectives on the selection as possible, with the board being involved, if you have any volunteers from that, certainly the CEO. The peers on the executive team, always really, really helpful to get their perspective, and some of the direct reports on the sales team. I think having really a 360-degree process is very, very positive experience by getting everyone’s buy-in and moving forward. It’s good to get all these different perspectives, not just from a screening tool, but also you have that immediate buy-in whenever a selection decision is made, that everyone has bought in to this, and everyone’s going to help. Because they have buy-in, they’re going to help this person, this individual become very successful moving forward.
The CEO can feel some relief that they have this group of people that are helping move this thing forward, and seeing the same individual from so many different perspectives.
Greg Alexander: Yeah. You talked about using a search firm, and there’s many great ones out there, and even within the big search firms, there are great search professionals. What’s your opinion on choosing a search firm? Generalist or specialist? Try to relate that to the specific task here, which is hiring a Sales Leader and/or a Marketing Leader. Can you hire a generalist firm or do you need to go with a boutique specialist firm?
Steve Byars: That’s an excellent question. There were times that crossroad we have to make that decision, and I’ll point out the obvious that everyone knows. You go with a big-name firm, everyone’s going to take that phone call, because you want to have a great relationship with that big-name firm. On the other side of the coin, they have a very large hands-off list of folks they cannot work with because they placed them recently, and they’ve worked with those companies. That’s their pluses and minuses, and we all know. Whereas a boutique firm has a much wider net of being able to cast of candidates because they have a smaller hands-off list, but they also don’t have the visibility to all the candidates across the spectrum, because they are a smaller firm. They don’t have all the resources and all the research teams and so forth.
It really is going to come into what the unique needs are of the individual company, and trying to assess what type of firm to go with. At the end of the day, I always like talk to both when we’re making a decision like that, and have them come in and explain what they’re going to do, how they’re going to do it, and recognize that the folks that you’re meeting with, and ask them those hard questions. Who’s going to really do the research of developing the candidate pool? Is it you sitting across the table from me or is it people that are going to be working for you who may or may not be there sitting there?
Greg Alexander: Yeah. That’s good advice. I agree with you. I think it’s highly situational. At times, the big search firms are perfect, at other times, the boutique is perfect. It really depends on the situation. Okay. We’re going to one more break. When we come back, we’re going to shift our focus is compensating the Sales and Marketing Leader. Come back after the break.
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Greg Alexander: Okay. Here we are with Steve Byars, Chief Human Resources Officer for the AMX division of Harman. We’ve been discussing helping the CEO understand if he or she has the right sales and marketing leader. We’ve been using kind of a hypothetical case here in walking through the different decision points. Where we are in our journey right now is we’ve gone out to the market, potentially used an executive search firm, and we have found the perfect candidate. What we’ve learned is that this candidate is expensive, and the CEO goes to the HR leader and says, “Help me craft a compensation plan that lands the candidate but prevents me from overpaying.” Steve, this is always a tricky subject because A player talent tends to be costly, and CEOs sometimes don’t like to pay up, so to speak, to get the talent. How do you finesse that situation?
Steve Byars: What is the cost to a business? Some businesses, every business has a different margin, and every business, the cost of additional revenue, what is the value of that? If it’s a business that is, you know exactly what your revenue is going to be two years from now or one year from now, the value is not nearly as great as you know you can hire this new Sales Leader and you expect to have a bump in revenue of 20% with high margins. The questions that you ask like that can give you some real insights into what type of leeway and what type of value add there is. Because paying someone a lot of money when the value creation isn’t there is just foolish, obviously.
Most sales leaders are going to make a tremendous difference, and most companies look to them to make that tremendous difference. Businesses as usual isn’t reward, it’s got to be that exceptional business that they wouldn’t have had otherwise, and then what is the value of that additional revenue, and how should they be rewarded within that structure? I agree. I love it when you have sales leaders, and even individual bag-carrying salespeople who are making as much or more than CEO. I think that’s a wonderful scenario if they’re delivering that kind of value. I those are great success stories. Because they’re creating that kind of value and that’s an incredible thing. Those are rare individuals. If you can find them, they are well worth their dollars.
Greg Alexander: What about on the marketing side? Because it’s a little more difficult to measure the contribution of the Marketing Leader, but as we know, a great CMO is so valuable and so rare. Is it the same approach there?
Steve Byars: That’s another interesting one you’ve brought up, because I think the ongoing joke in business is everyone looks around all the business functions, and they go and marketing departments, having a great time. They go, “What is it those guys do?” In reality, the marketing department has changed over the years from just the department that created a bunch of campaigns and ads and show some things like that to a department that really, because of social media, and because of the way companies create hire brand and their image and their solution to end users and customers, the marketing department is taking a front stage suddenly.
If your marketing department isn’t really working and delivering that through technology as suddenly the market has changed over the last ten years so dramatically, then you’ve got the wrong marketing department. There are ways now that the marketing department can be every bit as critical as your sales department.
Greg Alexander: Measurable, right? With all of the analytics. Yeah. Okay. All right. Let’s kind of wrap up what we’ve learned here today, and give the audience some takeaway value. Let me make a contribution first, and then, Steve, I’ll ask you to make some specific recommendations to the audience and things that they can do immediately following this podcast. The subject today was how human resources plays a role in helping this CEO understand if he or she has the right sales and marketing leadership team, how to think through that process, and make a sound decision.
If you are a CEO with these problems, my recommendation is to partner with your HR Leader to find a solution. As many have done with Steve, as you just heard over the course of his career. If you’re Head of HR and have been approached by your CEO with this issue, and need sales and marketing specific domain help, our firm potentially is a source of education for you, and you can go to our website, salesbenchmarkindex.com. When you get there, click on the about us section, and then click on our services, and you’ll see a service offering titled talent program. Within that service offering is all kinds of educational material, systems, methods, processes, tools, templates, things that you can put to work that I hope you will find valuable.
That would be my recommendation to the audience members. Steve, how about maybe something that might be a little bit more broad than that? Because obviously, there’s lots of things that you can do here and many providers. What maybe are the two to three things you would advice one of your peers to go do right now if faced with this challenge?
Steve Byars: I would make sure that you have developed trust with the Sales Leader, the CEO, and the executive team, because that is so key on to being able to work in a situation like to any successful outcome. I would then look at what are the accountabilities that need to be in place and make sure they’re fully understood by all parties, and they are reasonable. Then I would make sure everyone knows what those accountabilities are and they’re being communicated. Then look and see what are your options as a business to move forward, and how you’re going to be most effective in moving forward, and there are so many options, as we talked about.
I think that transparency, engagement, trust, all those are so key in moving forward and getting everyone to work together within the sales team, executive team, the Board, the CEO, and making sure that outcome is as everyone would agree. This is the appropriate outcome for this situation. Apart from that, I’ll also, and Greg asked me to say this, but I’ll say SBI has been so helpful to us in looking at how we approach our go-to-market strategy over the years, that I can’t say enough for Greg and his team, how helpful they have been to us.
Greg Alexander: I appreciate that, and I want to, on behalf of the listeners, thank you for being on the show. I hit you with a really hard topic. The reason I came at you with this hard topic is because you have 30-plus years experience with some of the world’s great companies in dealing with this very issue, and that’s rare. I find my clients in this situation nervous, and they don’t know necessarily how to think through this. The counsel was very appreciated. Thank you for giving us time, I hope to see you soon.
Steve Byars: Thank you, Greg.
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