Tearing Down Walls: How Kelley Tate Built An Era Of Trust Between Finance And SalesSince Tate became Chief Financial Officer in 2011 at the exclusive distributor of Cummins products for the mid-Atlantic, Connecticut and Bermuda territory, he had made it his mission to tear down the walls separating sales and finance. Now, finally, sales was embracing a finance person as one of their own.


“Most sales organizations don’t trust CFOs as far as they can throw them,” says Tate, who is now president of Bristol, Pennsylvania-based Cummins Power Systems. “But having sales and finance on opposite sides of the table almost always works against the best interest of the company. That’s why it should be a CFO’s first job to get rid of that mutual distrust.”


The job of finance is NOT TO BE the Department of No.

The tension between sales and finance makes sense. Sales is looking to close as many deals as possible and increase revenue as much as possible, sometimes even at the expense of profits. Finance, by contrast, doesn’t necessarily view every sale as a good thing unless it meets certain benchmarks of profitability—standards on minimum margins that at times can seem unreasonably demanding to the sales executive just trying to close a deal. The result: Sales and finance can spend more time pushing against each other than pushing toward what should be the common goal of making a sale.


“Finance people need to recognize that it’s in their interest, in the company’s interest, to make deals work,” Tate says. “It’s not so much about setting different standards for sales; it’s about seeing the importance of what they do differently. At the end of the day, if you don’t have sales, it’s game over—no matter how great your audit process is, or how superior your training program, or how innovative your manufacturing process.”


To bring both sides together, Tate decided to put them literally on the same bench. He embedded a finance person in each sales team. That person went to sales meetings, visited customers and participated in negotiations. At the end of the process, Tate wanted the finance person to be pulling for a deal to close as much as the sales rep.


“The job of finance is not to be the Department of No,” Tate says. “It’s to figure out clever ways to make the deal protect both the interests of the customer and Cummins.”


He likens the relationship to players and coaches. “You never want to hold back your players, but if they get penalties all the time, then in the long run it’s going to hurt the team,” he says. “It’s up to the coaches to help them with the plays that will avoid penalties but also score as many points as possible.”


“Players do make more money than the coach because they’re making the win happen,” he adds. “I’m okay with that because it is, after all, the players scoring the points.”


Tate’s approach is about breaking down silos, making finance understand the perspective of other departments and making them see themselves as facilitators, not obstacles. He wants every P&L operation to work as a team, pulling for the same victory, rather than using functional designations as barriers.


“In finance we do what a deal requires to make it close,” Tate says. “Don’t ever tell me something a customer needs is too hard. We’ll do it manually if we have to. When sales knows you’re putting the deal first, then you start to build that trust you need to function well.”


Much of what Tate espouses he learned in his decade with Fairfield, Connecticut-based General Electric Co., where he held a variety of positions with the energy services business and GE Capital. In one of his last jobs there, Tate served as GE’s head of commercial finance for the Southern region. It was during the recession, and the first instinct of the company was to cut off credit to floundering customers, reducing GE’s risk exposure.


“That would have been the exactly wrong thing to do,” Tate explains. “If customers were already having trouble buying stuff, cutting off their credit would most certainly contribute to them shutting down.”


Finance and sales worked together to devise a different model for customers in bankruptcy or facing bankruptcy—one that would help them survive but protect GE at the same time. Eventually, other regions adopted the new credit risk model.


“This is a great example of how finance and sales can work together to keep a customer viable,” Tate says. “A lot of companies would have let all those customers go under. But that not only would have been wrong, it would have been bad business.”


Tate believes that working on the commercial finance team gave him a much better appreciation of what makes sales tick. “Salespeople are definitely out to make a nice living for themselves, and rightfully so, but they can’t do that without having some really serious skills and the ability to really take care of the customer,” he says. “They’re fighting to create a long-term customer for the company. And I admire that.”


When he came to Cummins, Tate was determined to create a similar working environment to the one he left at GE. That meant tearing down the silos, but also making sure compensation was effectively reinforcing the sales goals.


Besides embedding finance representatives in sales teams, Tate addressed an even touchier subject—commissions. One of the things senior management did at Cummins was to tie the size of the commission to the gross margin of the sales contract.


Tate agreed with this structure, but he tweaked it to give salescash up front on commissions. “Even though the equipment hasn’t left the building, I am going to pay them as if the company has already been paid,” Tate notes. “Helping them earn what they need to earn and make what they need to make goes a long way to building that trust.”


Currently, Tate is working with SBI on a new commission system that will provide a bigger base and reduce the commission variable, particularly for those salespeople who are playing more of a support role and not driving the sale. The program will be implemented in April.


One problem Tate faced when he arrived was the inability of the sales team to project revenue moving forward. “When I first got here, we could not predict the power generation business to save our lives,” he recalled. “Even the monthly forecast would be off.”


Once he embedded a finance person with the sales team, those projections began to become useful. “Today that business has become very accurate,” he says. And it’s doing really well on top of that.”


As Tate explains, it’s not only about getting finance to fight for the deal; it’s also about getting sales to recognize the realities of a balance sheet. “It’s really about bringing the two worlds together, letting them see they’re both working for the same goal,” he explained.


“When I first got here, I told finance that my job was to kill finance,” Tate says. “That got their attention. But they know now that what I mean is I want to kill those attitudes that make finance and sales think somehow they aren’t on the same team working for the same goals.”

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Mark Synek

Leads SBI client engagements, primarily in the Enterprise space, and is typically engaged at the senior sales and CXO levels.
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Few people in the sales and marketing world besides Mark can claim they are former opera singers. And now SBI clients everywhere are singing his praises. Perhaps that’s because Mark has taken his extremely diverse background, which includes post-graduate work at The Juilliard School and living abroad for several years, and distilled it down to an enormous passion for helping sales and marketing leaders make their number.

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