Far too often, sales leaders look to org structure first regardless of the underlying cause of their performance issues. Why? It is viewed as an easier change to make, and it is likely you have executed or been a part of one at a prior company. The reality is org structure is rarely the problem, and a deeper assessment is needed to understand the true root cause. You can review SBI’s rapid diagnostic questions focused on org design to understand if org design may be the root cause.
I will cover the seven most common sales org designs and the pros and cons of each, but before I do, it is important to understand a few macro themes.
- Performance Conditions vs. Talent – 50% of your teams’ ability to hit the number is based on the performance conditions they are surrounded with, and the other 50% is based on the team’s talent. That means that if you deploy the perfect org structure, but the team is full of C-players, you will miss your number. On the flip side, a team of A-players with a less than ideal org structure will likely overachieve the team of C-players in the perfect org design.
- Coverage – a lot of coverage issues are diagnosed as a sales org design issue. They are related, but a re-org will not always solve coverage issues. From a coverage standpoint, it is helpful to think about a “RAD” model. Ask yourself, which accounts should I deploy a “retain” motion, which should I deploy an “acquire” motion and which should I deploy at “develop” motion? The other key to coverage is a direct vs. indirect model. A direct sales org re-design will miss the mark if the customer or prospect would rather work through a channel partner.
- Buyer/Market Changes – When was the last time you executed a true market listening or voice of the customer project? It is critical to perform win/loss interviews and buyer/customer interviews to understand what the market is saying before undertaking a sales structure change. Understanding how buyers want to buy and designing an org around that is key to success.
Now that we have discussed talent, coverage and market listening, let’s get into the seven most common sales org design models. I will cover what the model is when to deploy it, and the pros and cons that must be considered for each. You can also download our Org Design Cheat Sheet to review all seven options on one page.
- Stratification – Stratify your accounts based on size (current spend, spend potential, employee count, etc.)
- Geography – Structure sales organization based upon rep proximity to geographic areas
- Hunter-Farmer – Roles based on specific activities (new logo hunters and up-sell / cross-sell farmers)
- Persona – Structure sales organization based on buyer personas (CEO, CTO, CMO, etc.)
- Product/Solution – Structure sales organization based on specific product or solution
- Industry/Vertical – Organize to focus on specific verticals
- Hybrid – Any combination of the designs listed above. *note, more than two options combined for a hybrid approach adds too much complexity and will be difficult to implement and scale.
Now that you understand three macro themes to review before making an org design change and the seven different org design options, you can determine which is right for you. Remember to download our cheat sheet to reference when making your org design decisions. You can also read more about how to determine the right number of “feet on the street,” what type of reps you need, and the best organizational chart for you.
For a further discussion on this topic, visit my friends and I at SBI’s Studio.
Located in Dallas, TX, our facility offers state-of-the-art meeting rooms, lounge, full-service bar, and a studio used to record our TV shows. SBI provides the location and facilitators to finalize which org design is right for your team.