podcast | April 6, 2015
Case Study: Keeping the Sales Team Focused
Paula Shannon, the Chief Sales Officer and Executive Vice President of Lionbridge Technologies, appeared on the SBI podcast recently. The topic of the interview was keeping the sales team focused on the year’s priorities, as the year progresses.
Paula is worth listening to. She has over 24 years of sales leadership and general management experience, speaks 6 languages and holds a degree from McGill University in Montreal Canada in Linguistics.
If you are not familiar with Lionbridge, they have 4,800 employees and do just under $500 million in annual revenue. They provide translation, online marketing, global content marketing and testing solutions.
You can listen to the podcast here.
Here is what you will learn by listening to this:
I hope you enjoy this fascinating interview.
Speaker: Welcome to the SBI Podcast offering CEOs, sales and marketing leaders ideas to make the number.
Greg Alexander: Good morning everybody. Welcome to SBI’s Weekly Podcast. This is Greg Alexander the CEO of Sales Benchmark Index and today we have a very special guest with us, Paula Shannon. Paula is the Chief Sales Officer and Executive Vice-President of Lionbridge Technologies. She has over 24 years of sales leadership in general management experience, speaks six languages, I didn’t know that was possible. Hold a degree from McGill University in Montreal, Canada in linguistics.
Lionbridge for those are not familiar with the company is based in Waltham, Massachusetts. They have 4800 employees and do just under 500 million in annual revenue. They provide translation, online marketing, global content marketing and testing solutions. Paula, welcome to the show.
Paula Shannon: Thanks, Greg. I’m delighted to here. Thank you for the invitation.
Greg Alexander: You’re welcome. Say something in one of these crazy languages that you know, say, “Good luck everybody in 2015.”
Paula Shannon: . Good luck in 2015 everyone and I hope you hit your number.
Greg Alexander: Cool. I feel very international now. All right, today’s topic is continuing to keep the team focused on our 2015 priorities. Now, we come out of our kickoff, you know the first quarter gets underway, we’ve got lots of momentum. We want to make sure that momentum is maintained as we progress through the year and as things change as the year goes. My first question Paula is, what is the right level of detail that a sales leader should be requesting from their direct reports to gauge execution?
Paula Shannon: Greg, great question. Definitely one that I think every leader struggles with that balance of management and reporting versus the time that the people need for execution. I think in today’s changing world every leader is focused on adapting and evolving their sales force to new end markets and new verticals so there has to be some accountability for that. The leaders if they’re going to buy into that plan they really have to be charged and tasked with the strategy on how they’re going to take their resources, their people, the marketing spend or solution spend they have and re-camp to the bid for those new markets.
I think it’s a level of strategic reporting that might be a kickoff report at the beginning of the year that’s fine tuned. Minimum of once a quarter to see how they’re doing on path. I think at the other of the spectrum there’s no replacement for some serious pipeline management discipline. I do think that with the tools that we have at our disposal today, the sophistication of sales operations we’ve all become quite comfortable looking at dashboards and dials.
Do we really use them to manage the individual BDD? Business development director sales rep whatever the company calls them. Are you coaching your sales leaders on what it all mean? I have the sense over the past few years many sales leaders at that regional sales level are a bit overwhelmed with the dashboards and dial. They lose sight about what it really means in terms of performance.
That is absolutely a weekly, monthly cadence. Then in our particular company we have a quite transparent monthly cadence per sales, execution service operations to be on a very transparent call where there’s a qualitative discussion of the big deals, what needs to happen and are we still on track and on focus. Spectrum, strategy, high end over the horizon, a lot of focus on the details of day to day sales pipeline management. Then in the middle of this collaborative transparency.
Greg Alexander: The cadence that you’re following is monthly, is that right?
Paula Shannon: Monthly for the comprehensive reporting, weekly though still for forecasting and weekly updates on where the quarters are going to end. Quarter forecast weekly, monthly cadence on performance and quarterly tune ups on directions of strategy.
Greg Alexander: It’s a both top down and bottoms up or one way?
Paula Shannon: In the sense … Greg, are you meaning that are the sales reps and individuals contributing to that process?
Greg Alexander: Yes, so when you think about forecasting pipeline management is it an aggregation that bubbles up to your desk or is it request that comes from the CEO and the board then you go looking for a report?
Paula Shannon: Okay, I wanted to be clear on that. We do very much of a bottoms up, bubbling up, in fact best practice would be that this is just an output from the normal interaction that they have within CRM system. I’d like to say that we’re actually getting pretty close to that. The weekly forecast is done at a very granular level bubbles up by major account. Because we do have a substantial amount of our quarterly revenue that is work in process with large customers.
Then of course the reps are reporting on the book and bill in the quarter. That’s coming in an individual level, aggregated at the sales leadership level and then available and transparent at the management level. Request for that at the board and CEO levels but the data is there.
Greg Alexander: Okay, so many of our clients are B2B Organizations and as a result to that their business model is they get large amounts of revenue from relatively small number of customers. As opposed to B2C we get lots of revenue in small and commence from millions of customers. As a result to that sometimes we live in dime by the big deal especially quarter to quarter. If you have any experience with that and does that apply to you and if so do you separate the big deals and follow a different process for those or the big deals just part of the overall forecasting pipeline management process?
Paula Shannon: Greg, this is an evolution that we’re living right and the first part of the question, you know, “Have we experience that and seen that?” I’d say that’s been really one of the primary factors in the growth and history of Lionbridge. We have been primarily a big account company, big deal company, large relationship. We bubbled along sometimes with as much as 60 plus percent of revenue coming from top three customers.
Our top 10 really it’s a classic 80/20 story where the top 10 customers are yielding that much revenue. I think it’s more that we’re struggling in a different way, our systems have been long designed for that big deal management, the big deal process. Lots of the tools that we use are geared to that large account management. We have some pretty good discipline about how the big deals are tracked to the pipeline, what happens when they’re one and booked.
We’re comfortable enough to let those big deal bookings be spiky and then work on some interpretative algorithms. What does that mean? Book a big deal in queue one, what’s the take down on that revenue as we go through the rest of the year or even beyond. This could be 12 to 18 months on service cycle. Our struggle is maybe a bit different and kind of interesting as well because we’re trying to diversify and capture more of the project based.
It’s not B2C but it’s really almost B2B within that disaggrated spend at large Fortune 500. We’re seeing competitors in the marketplace and a number of new startup enter with more of an on demand model. A friction list self-serve model, lots of small transactions, lots of small price point but they really add up and properly executed with good production process use and workflow. The gross margin on that business can be quite attractive.
We’re trying right now to create two different processes, our classic sale stages of deal management. We use kind of is it at a champion stage, a goal shared, all that kind of classic stuff does not apply for a quick transaction model where they go from maybe a self-quote to close in a matter of day. We’re struggling in the direction, Greg, if that’s a clear answer.
Greg Alexander: Yeah, that’s a great answer. Actually, it’s funny within the technology industry we have two dimensions going on, right, we have companies like yours that are excel at large account management and a coming cork down market. Then you have all these smaller SAS companies that have now been around for a few years that are trying to get into the enterprise. It’s a great opportunity for a cross pollination.
The things that you’re struggling with others have fixed and the things that you’re great at others are trying to learn. That’s really the purpose for a podcast like this one. Okay, we’re talking to Paula Shannon the Chief Sales Officer and Executive Vice-President of Lionbridge Technologies. Paula, we’re going to take a quick break here to make our audience aware of some new fresh SBI content so we’ll be right back.
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Greg Alexander: Okay, we’re back with Paula Shannon the Chief Sales Officer and Executive Vice-President of Lionbridge Technologies and we’re discussing how to keep the team focused on the 2015 priorities as the year moves out. Paula, I wanted to change the line of questioning to a different area. What I find sometimes is the year builds quarter to quarter so Q1 is a little bit difficult as compared to Q4. In Q2 gets a little bit, in Q3 gets a little better and then sometimes companies make their entire year in the fourth quarter.
This requires organizational patience which at times can be in a limited supply. How do you deal with your CEO and your CFO and how do you keep them patient and stick to the plan as the year moves on? Because they’re under a tremendous amount of pressure especially as a public company to meet the expectations of the street and the board.
Paula Shannon: Greg, that’s the name of the game every day isn’t it and I think that we’ve tried over the past two or three years. I do think that there was a big change in the interaction or the way that this problem was viewed. Once many of us went through the slowdown in the early 2009 with the collapse of the IT sector. Since that time and let’s just rewind for a moment many companies were in a situation where you really had not seen that coming.
That was the business challenge at a board level. You’re sitting in Q4 of 2008, many customers reduce their spend, reduce their activity in the marketplace by 20 – 25%. It’s across a lot of different companies, I’m not speaking that anyone in particular. Why was that not seen? What about the early warning signs? That got us focused quite squarely on managing some of the up-stream milestones and ratio.
It is taken quite some time because you need a lot of historic data to understand truly what your bookings level really means in a services industry for recognized revenue. This is not a one to one correlation, a large program that has a tail on it of two year may trick allowed and book revenue above the initial booking trade. There could be amendments and statements at work that grow.
Smaller projects could have optimistic kind of starting point and then descope and the time to revenue is also not consistent across different end markets and industry. We put a lot of focus into studying the data. I have a very talented head of sales opp who pulls the data for bookings, actual revenue recognized and rated pipeline at each of those moments in time and looked back over 12 to 16 quarters of historic data.
We started to be able to say, “Here is what the bookings is showing us. Here is what the rated pipeline is showing us,” we feel confident. We’ve seen an up take of X percent this quarter, our data suggest that tale is 8 to 12 weeks out. Here is why we think we’re going to make the number in Q1. When we’ve seen negative indication and we’ve seen perhaps a retrenching in the pipeline we’ve been brave enough to also point that out that say, “Don’t like what we’re seeing, you have to look a little bit more deeply in it but this is not a good indicator.”
I think it’s just a bit more honesty and transparency and admitting that this is an imperfect science. I think that the last thing that you want to do is claim that you have the magic, crystal balls I can say, a dollar of bookings today equals X rev reck tomorrow but you’ve got to bring along on the journey.
Greg Alexander: That’s an interesting application of predictive analytics. Many times people are doing analytics but it’s looking backwards. It’s not necessarily predictive and you’re right it’s an imperfect science. How predictive is the predictive analytics? How accurate has it been?
Paula Shannon: I tell you in the last two years this has become accurate enough to run our business and we have been able to call the quarters where it looks like it’s going to be a shoestring tackle and make changes in our behavior. Really start to take that seriously early enough in the quarter that we can go out and have conversations with key customer, maybe introduce some inducements to accelerate business. It also helps us in our mindset about deal terms and the value of that revenue perhaps in quarter.
I think, I’m not saying it’s perfect by a long stretch. We could not use our sales operations metrics to go to the street and predict revenue for an upcoming quarter. The combination of the operations or service execution teams view triangulated with that data is giving us a plus or minus 2%.
Greg Alexander: Wow, that’s outstanding. That’s best in class.
Paula Shannon: Right in the quarter, I mean Greg, within the quarter and then the coming quarter I think the real holy grail is, “What are we doing today?” That’s really the first question that you asked, “How do you make sure that you’re on track to make the number?” What are we doing today in our business to make sure that in Q3 we have the bookings that we need to power 2016. In a services business at the long tail it’s not an exaggeration to say that that’s the kind of cadence that matters.
Greg Alexander: Yeah, you’re being modest. Even still plus or minus 2% is pretty impressive. Many of the listeners here would love to be able to make that claim so congratulations on that. You must have a great sales operations leader who’s helping you collect all that information. Okay, we’re going to take a quick break here and make the audience aware of a new content offer from SBI. We’ll be right back with Paula Shannon from Lionbridge Technologies.
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Greg Alexander: Okay, welcome back everybody. Today we’re talking about how to keep the team focus on the 2015 priorities as the year moves on. Today our guest is Paula Shannon from Lionbridge Technologies. Paula, I want to now shift our word track, line of question out here around gaining support from the functional pierce so that your team isn’t battling the internal sale. I had somebody say to me the other day that the internal sale can be harder than the external sale.
You have these priorities and roll them out the year is moving on. How do you keep your peers whether it be in finance or product or marketing or what have you, HR? How do you keep them rowing the boat in the same direction?
Paula Shannon: That’s one on a personal and a professional level Greg that I work on and I struggle with all the time. I think may sales leaders have this challenge because we got to where we are because we are good at sales extensively, right. That probably means we have an assertive or fairly commanding personality and at a certain career point it shift and it’s about the team and it’s about developing people and it’s about collaboration.
I know I went through a reset in 2008 thanks to a senior VP of HR we had and went through an intensive leadership at the peak program. Which involve five days of … 360 degree feedback from your peers in these function groups that you talk about and ways in which you needed to improve. The goal of this as a leader had a give and get constructive feedback, how to collaborate and it was tough.
This was a transformative 5 or 6 days with 8 or 10 top C level executives from different industries and companies. It’s something I have to work on all the time because as a sales leader you are under the gun. Our company culture is very much focused on sales and marketing. Our monthly transparent call that I referred to so professionally you know what that’s about Greg.
Greg Alexander: Yeah.
Paula Shannon: That’s a transparent call, right? The focus is very much on making the number. What happens if the number is alluding you because of the service execution problem. We’ll keep our business and that’s a normal part of our business. Working with the functional leaders first in execution, service, operation is critical. I’m really lucky we have a leader now to filling a COO level role that Lionbridge who comes from the digital marketing world which is very fast paced, very customer focused.
I’m happy to say that this is a great partnership, I mean he really gets it. Working with some of the other groups marketing is about bringing them in. What I’ve learned in the past few years is you can’t chart the course, you cannot motivate people to get them going at a sales team pace and expect later to bolt in people from solutions, finance and marketing. You really need to bring them in early, let them know what you’re thinking about.
For example, as we went over to a new style of communicating with customers at the sales level looking at things like the challenge or methodology. Looking at power messaging which is the way that we make this real. We had to have a marketing leads in there, get them excited about it too because we need them to create a great content that would make this possible. It’s a constant area of focus and an area of personal weakness that I keep front and center.
Greg Alexander: Yeah, you know I think … I struggle with that myself and I was in my corporate career and I went to a similar 360 process and they were tough. You’re correcting me, you have to really have fix skin and not take these things personally and understand that they are meant to be constructive and it’s a growth opportunity for all of us.
Paula Shannon: Yeah, great. I saw a four star general in the US army cry in the session.
Greg Alexander: Wow, that’s something. It goes two ways too, I mean you have your needs and you go to your functional leaders and seek their support in helping you advance your agenda and execute your strategy. They have their needs and they have their strategy and they need the support of the sales team in order to pull that off. It’s a little give and take. Tell me a little bit about the difference there between going to a quote, get what you need and then giving? You mentioned give – get, tell me a little bit about that.
Paula Shannon: That’s also interesting because I think we’re in a year two of an evolution where we have distinct sales team organized either around an end market or in the case of Europe and Asia geography. They carry a number and a quota and a primary focus for set of our core services. You start at the podcast by explaining that those are around language and translation, content and digital marketing.
They are also a resource for other groups who have developed and launched new product who’s in sales, have a target and a quota for delivering the revenue for that but who want to tap those sales organizations and use them as a channel. That’s a bit of a gap, how do you open that up, how do you allow them for the good of the company, right, for the growth of the company to have access to those resources but not confused people and not over burden them with too much information and too much training.
I think that the get is to staff a very responsive solution architect group. People who can help with that gray in the middle. I think on the sales operations front which I own both a direct team but also obviously the global CFO agenda which includes sales enablement. You have to be very unbiased and very fair, make that an office or function that works for everyone equally. Then collaborate as a leader, what is the goal of the company.
I think it’s a tough situation, we all have metrics by which we’re judged and ideally those aligned with the corporate strategy at the highest level. Part of our job is to make that bridge. If you’ve got a team focused on their number how do we also intend them to do what’s right for the company.
Greg Alexander: Okay, we’re going to pause one last time here quickly to make the audience aware of a new SBI piece of content that they might get some value out of us specially if they’re enjoying this podcast. We’ll be right back.
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Greg Alexander: Okay, welcome back everybody. This is our segment here with Paula Shannon of Lionbridge Technologies and we’re discussing how to keep the momentum going through to 2015 and keep the organization focused on the priorities and develop this organizational patience so to speak. Paula, I wanted to shift gears to this large account management expertise that you have. When you design sales strategy heading into a new year and then subsequently execute as the year goes on, you know things change.
The customers needs change, the buying behavior change, there might even be a change internally to the company’s strategic direction. This issue of strategic alignment starting with the company and then as it cascades through the various functions, the product group, the marketing group, sales group, delivery operations, so on and so on. How do you in the context of managing these large accounts that are so critical to you? How do you shield the noise, too much change and how much change is consumable if that’s such a word?
Paula Shannon: Yeah, that’s a tough one, Greg, because there are two sides to this. The success that you have with a large account on many level is based on your knowledge of that account, right, about their culture, their business needs, their motivation, what’s changing in their landscape. The critical thing is to communicate that through the group of people who execute and work on that account.
You talked about selling inside sometimes being tough. I think the large account management team do a good job of that because they spend a lot of their internal selling educating people within our firm about their major customer, what’s happening, what’s the shift, why is this matter. Excuse me. That has to be the critical focus and yet there’s a tension, a natural tension.
Because if we were to simply provide the same services that we do today to that customer whose landscape is changing. Our business and revenue will shrink over time and we’ve seen with one of our customers. That over the last five or six years we’ve actually seen a shift of almost 40% of their revenue. It is a large number go away from our traditional services and be perfectly replaced and almost hedged with new offerings that we have in areas that we were not even providing five, six, seven years ago. Digital marketing, global web publishing, marketing operation.
The answer to your question is, “Have those teams not being educated and informed about this new strategy for the company, the new direction?” We would have missed out on this ability to swap out the revenue. It is an absolute balance I think that we have to trust in the power of these large account managers. Those people who own big portfolios of accounts that equally at the table with people who have large region and let them also determine the cadence.
Yes, my team needs education on the following things let’s stagger it, let’s start with this thing first. Does that answer the question kind of a balance between respect for the knowledge they have about the customer, number one. Then, pushing a bit so that at quarterly business review or whatever the interim is that you meet with that large customer we can always be bringing new ideas and new solution.
Greg Alexander: That’s a great answer and it’s an answer I wish I heard more of because you are … You found the proper balance between being customer focused and company focused. Unfortunately sometimes corporate has these initiatives and they push them down. The account team that’s dealing with the customer starts to roll their eyes in the back of their head and say, “Here we go again. This is another corporate initiative, I mean how many of these things can I consume in a given year. My customers getting some fatigue.”
It sounds like in your company the respect for the account team and their knowledge of the customer is valued so you can throttle.
Paula Shannon: I think it will be perfect balance and value when we are able to direct the release schedule of our customer. Until now I have not have successful to bring that but that’s the last frontier.
Greg Alexander: Yeah, yeah. All right, well very good. Paula, this was a great interview. I learned a lot. You are excelling in this large account management space which is something that many of us can improve upon. I think as you expand your business and you get into these maybe smaller organizations with shorter sale cycles there some things that you guys can pick up from other folks that will be on this podcast. I’ll be sure to send you those recordings and you can listen to those. On behalf of the SBI audience thanks a bunch for being on the podcast.
Paula Shannon: Thank you so much Greg. It was a delight and these podcast are very, very useful so thank you for inviting me to participate.
Greg Alexander: Okay, one more good well wish in a foreign language.
Paula Shannon: , Greg, that’s Dutch. Until we meet again, til I see you again.
Greg Alexander: Very good. Thanks, Paula. I appreciate it.
Paula Shannon: Thanks, Greg.
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