article | March 13, 2013
How Do You Know that Your Sales Force is Structured Correctly?
Success = 50% Talent + 50% Performance Conditions
If this is true, then why do so many sales forces hire top talent and fail to organize the team effectively?
This post will provide guidance on how to diagnose and correct a flawed structure. If you are selling in a B2B environment, this post is for you. It’s the first step towards unleashing the full power of your sales teams. A downloadable tool for assessing and correcting your structure is included.
We see a common condition among clients with structure problems. It creeps up on them. They often suspect other problems are the root cause of underperformance. They hear rumblings of dissatisfaction from customers and sales people. They often suspect a compensation problem or lack of effective training.
Checklist for Diagnosing a Structure Problem
Sales leaders often do not notice structural problems because they evolve over time. It is rare that a single action or decision is the cause. A long series of changes are usually to blame. An overlay team is added to launch a new product. Some specialists are added to address a new industry opportunity. A telephone and internet team is added to reduce travel costs.
Over time the result is Frankenstein – a collection of good intentions bolted together.
Use the checklist to the right to spot signs of a structure problem.
Complaints mount from customers about not knowing who to call. New hires take ever longer to understand the organization and come up to speed. This steady stream of indications often goes unnoticed. Then one day, someone on the board of directors does the math. “Why do we need so many people to generate this revenue?”
The HR leader plays a key role in alerting the sales leader to these warning signs.
The Problem Comes into Focus
Suddenly it becomes clear. There was never a master plan. Just a series of corrections. They don’t add up. This is especially prevalent in large B2B companies that have grown by acquisition. Separate sales organizations call on the same customers. One is structured with an Industry focus to serve a sweet spot. Another has a tiered structured to focus on Key Accounts. They pass each other on the highway heading to sales calls. Customers wonder why they see so many sales people. They are frustrated, confused and certain that they are not getting the most from the relationship.
Hybrid sales structures are less effective than a single strategy. On paper, they neatly satisfy every possible go-to-market condition. But specialization is not free. The increase in effectiveness comes at the cost of efficiency. Communication and accountability challenges rise when multiple sales people must coordinate activities. Customers hate it.
How to Evaluate & Correct Your Structure
The 5 steps below outline the way to design the correct structure for your unique situation.
1. Assess the need for market, product, and activity specialization
2. Develop coverage matrix
3. Generate specialization alternatives
4. Identify reporting relationships, command and control
5. Evaluate structural alternatives, make trade-offs
Changing structure is a long term project that requires careful planning. Just implementing another quick correction makes the problem worse. However, the execution can be done in an Agile manner. This is best done in partnership with professionals who have successfully implemented structural changes.
Next Steps & A Tool
Take a few minutes now to download the Sales Structure RACI Template.
Use the RACI to map clear responsibilities across the organization. Identify who is Responsible, Accountable, Consulted, or Informed at every step of the sales process.
Make 2 passes. Use this tool to map both current and future state:
If you find redundancies or gaps, assess the impact. It may be severe enough for realignment. I’m interested to hear what you find. Look for trends towards excessive complexity, too. Avoid a structural crisis before it saps your organization’s power. This groundwork will start you on the path to Making the Number this year. Be sure your performance conditions give your sales team a strong competitive advantage.
© 2017 Sales Benchmark Index (SBI)
A Business Strategy Consulting Company
2021 McKinney Avenue, Suite 550
Dallas, TX 75201
© 2018 Sales Benchmark Index (SBI), B.V.
A Business Strategy Consulting Company
Cornelis Troostsraat 29
Amsterdam, The Netherlands