WHITE PAPER

Sales Change Management

 

© The TAS Group Inc. 2010

 ABOUT THE TAS GROUP (www.thetasgroup.com)

The TAS Group® is a Sales Performance Automation company that helps you sell smarter, and manage your business better. Our industry-leading TAS® methodology has helped more than 750,000 sales professionals find and close more deals, and our proven sales process shows you what you need to do to move opportunities through the pipeline. The result is increased revenue, accurate sales forecast and pipelines, and timely information to make better decisions. It all gets delivered through our on-demand Dealmaker® technology that integrates with your existing CRM system to produce sustained, measurable results. And to ensure that your sales teams get the full benefit, Dealmaker virtual learning delivers on-the-job training worldwide – reinforced by expert coaching.

Dealmaker solves these problems:

• We have a revenue problem. Is your pipeline weak? Do you find yourself saying, “I don’t have enough deals in the pipeline, and I’m not sure about the quality of what I do have?” Or maybe it’s “We’re losing too many deals”, or “Our sales cycle is too long”. Companies like Xerox, Bluecoat and Kodak use proven sales methodologies and process from The TAS Group to improve pipeline quality and size, increase win rates, and shorten sales cycles. And with Dealmaker reinforcing and measuring best practices across the sales team every day, you get a revenue boost that lasts and actually improves over time.

• I need to improve the effectiveness of my sales team - consistently. Are all of your sales people working on the right deals? Are they customer-focused and can they identify and build relationships with the real buyer? Our proven TAS sales methodologies solve those problems, and show your team how to gain control of the sale and build an opportunity plan to win. TAS workshops are supplemented by Dealmaker virtual learning for pre-workshop knowledge transfer, and post-workshop reinforcement. This eliminates the average 87% drop in retention typical within 30 days of learning in traditional classroom sales training. Post-training, our Dealmaker Sales Performance Automation platform integrates with your CRM system so that the sales person applies what they learned – where they need it – on every deal.

• Forecasting is time-consuming and isn’t accurate. Sales people spend on average 2.5 hours per week on sales forecasting – and in most cases deals do not close as forecasted. The sales process science in our Dealmaker software takes the guesswork out of forecasting by removing sales people’s subjectivity and guides them to truly understand when a deal will close. Accurate sales forecasts result because of Dealmaker’s objective in-depth analysis of the team’s actual performance and knowledge of what it takes to close deals – based on your business.

 

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INTRODUCTION

The TAS Group publishes a range of White Papers on best practices in Sales Process, Sales Methodology and Sales Technology. All are focused on enabling – and hopefully inspiring – the global selling community to improve their sales performance.

At the heart of all of these White Papers, and at the heart of sales performance, effectiveness or productivity improvement, is the simple but elusive factor that this involves changing the behavior of sales professionals and leaders, and managing that change successfully over time. Changing your behavior is hard, as you need patience and determination in the early days as your normal levels of productivity dip while you acquire the new way of doing things. You need to see early benefits too, which encourages you to fully adopt the new behavioral skills and move down the path towards mastery of the ‘new way’ and of sales improvement. This also assumes that a raft of variables in your colleagues, managers, leaders and organization is also favorably disposed to your success.

Since the understanding and mastery of change is so fundamental to sales improvement, it seems right that a White Paper should be devoted to the mechanics of change and to the conditions and commitment that needs to be in place for it to happen. Literally thousands of publications have gone before this one, with the same noble intent, and still our industry recognizes the primacy of change management yet at the same time still struggles with it.

This White Paper covers sales change management. It levers off some excellent research and publications in this space, and uses them to delve into why change is not successful, and what factors and conditions need to be in place when change is successful.

As with any of our White Papers, there will be a big variance in the seniority and experience of the readership. This White Paper aims to provide something for the complete range of requirements, but if you want to dig deeper or move wider, we urge you to get in touch with us individually. You can do this via email to: marketing@thetasgroup.com.

WHY CHANGE FAILS

In 1996, John P Kotter, leadership and change guru and Emeritus Professor at Harvard Business School, published Leading Change. The research that Kotter drew on showed that only 30 percent of change execution programs succeed. Nothing has changed in the decade and a half since Leading Change. In 2008, a McKinsey survey of 3,199 executives around the world found, much as Kotter did, that only one transformation program in three is a success. Kotter identified a number of factors that contributed to the 7 out of 10 programs failing, and we explore these below.

SALES CHANGE MANAGEMENT

 

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Allowing Too Much Complacency

Kotter attributes the biggest flaw to executing change successfully in jumping into a program or initiative without instilling enough urgency and excitement in managers and employees. This is especially true for first-line sales managers in charge of a team. Our own numerous transformation engagements with customers over the years have confirmed that the first-line sales manager is the critical cog in the machine for transforming sales behavior; successful transformation requires them to lead by example. Managers therefore need to be more knowledgeable, internalize the expected behavior change and adopt it as the accepted way to coach and manage their business.

Transformations are never achieved when people don’t understand why the change is necessary, and what the objectives are for the change. This area is often underestimated. Sales people need to understand what is driving the change, what specific problems it is solving, and what goals this will accomplish. They need to be ‘clued up’ and ‘fired up’ about the changes. Complacency kills any sales training or other change initiative, and creates a ‘flavor of the month’ phenomenon. This will delay the impact beyond the point of any effectiveness or competitive advantage.

To use a sporting analogy, when Tiger Woods decided to change his golf swing, his immediate performance slipped for a few tournaments, but then he went on to win back-to-back-to-back tournaments and arguably enjoyed the best performances of his career. He achieved this through a great deal of coaching and support, as well as understanding of where he wanted to get to, accompanied by a sense of urgency to make these changes in order to remain head and shoulders above the competition.

Conversely, when leadership or management – perhaps conscious of this – show a lack of patience and rush into the program, this can often create a sense of anxiety in the sales organization which simply reinforces the resistance to change. When the sense of urgency and purpose is correctly communicated to people, and instilled in them, then they understand the payback from making the necessary sacrifices to change and are more amenable and ready to learn, apply and adopt.

The TAS Group approach: as part of our Change Execution Process for sales academies or sales effectiveness programs, we incorporate Executive Alignment Workshops and Management Alignment Workshops, so that sales managers and leaders agree on what the sales organization is trying to accomplish, and how it will accomplish it, and understand the importance of bringing every one of their sales people along the same journey before the training begins.

Failing to Build a Substantial Coalition

We’ve already stated that change will fail without getting the sales manager adopting and coaching the desired behaviors. It is also stated that change will fail without the buy-in of the head of the business, but really this is true for all senior level personnel within the business and the sales organization. Inversely, an executive sponsor alone will not be able to create the needed change. Invoking the Buckminster Fuller theory of the ‘trim tab’ effect, you need 5% of people that have the right balance of power and / or influence to lead the change and mobilize 20% of the population.

In order for the transformation effort to be successful, the VP of Sales, VP of Sales Operations / Effectiveness / Learning and Development, and the sales managers need to be aligned and work as a team and a committed

 

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force for change. Realistically, you will not always get all senior people onside at first. If you’re serious about your initiative, and it’s critical to your growth, you should focus on the people that carry enough power and / or influence to lead and be the change agents

When a sales transformation has been successful, it’s when the coalition has had influence and momentum. This comes from their formal seniority in the business, the knowledge and skills they have, their reputation within the business, the relationship they have with their peers and the sales teams, and their own natural capacity to lead. You can’t do this on your own, no matter how many of these boxes you check, unless your sales organization is very small. You need to build your coalition.

The TAS Group approach: as part of our Change Execution Process, we coach sales leadership on the management performance processes for getting and keeping support and momentum for a sales initiative. This helps leaders agree sales initiative objectives with management, communicate them, and watch out for and correct the warning signs.

Underestimating the Need for a Clear Vision

You have to have an idea of where you’re going when you embark on a journey, or else how will you know when you’ve got there? Nothing could be truer for sales transformation, where you have your investments and all your profit-making assets – in the form of your sales producers – at stake. Vision is a key catalyst for change because it paints a picture of what we can be if we all make the commitment. Vision helps to get people behind the cause and inspires them to see the personal, emotional and financial benefits of taking the tough path that leads to improved sales performance.

If the vision is lacking – either it’s not there at all, or it’s not the right vision – your sales change program can result in wasted energies, lost time and dwindling morale. This throws the risk of change into stark relief, because if you sacrifice the time trying to change behaviors and you fail, you incur fewer revenues than if your teams had been continuing to sell under status quo conditions. Your initiative is viewed as a series of tactical blunders rather than a strategic masterstroke.

The TAS Group approach: our sales effectiveness programs – such as our Enterprise Academies – are built around sales transformation as a process, not a series of one-off events. Our focus is on keeping your sales teams productive as they transition their sales behavior from the current levels to their improved levels.

Failing to Clearly Communicate the Vision

Having the vision is one thing, but you have to be able to communicate it – early, well, and often – to give the expected changes any chance of taking hold. Your sales people have to be able and willing to change, and even if they are underperforming at the moment, they may be unwilling to change their behavior if they don’t understand and fully buy into what the change is designed to do, why they should do it, and how they will benefit if they do it well.

Your sales managers and sales people need to believe that the benefits of your sales initiative outweigh the effort and hardship of undertaking it. They also need to believe that the initiative has a good chance of success, and unfortunately your communication task is made harder if your organization has a history of unsuccessful initiatives and people who are inured against future programs.

 

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Communicating is about leading by example, both in what you say and how you act, and it is more important that you ‘walk the walk’ than ‘talk the talk’. Sales leaders and managers who do not back up the vision with their own behavior will quickly dismantle any edifice that you have sought to build up for your sales initiative.

The TAS Group approach: our Success Charter is an integral part of our Change Execution process, and helps businesses to frame what success looks like for their sales initiative. A key part of this is how you will communicate the vision of the initiative, and we can provide you with structured examples and templates to help you with the communication process.

Permitting Roadblocks Against the Vision

Even when your leadership, management and sales teams are on board with the vision, roadblocks can arise. This is inevitable when a major sales change involves and affects so many people. It is essential that you remove the roadblocks, since otherwise they will become a huge demotivator. Roadblocks will come from several people and perspectives, and it is crucial to understand its root cause. All too often, the feedback provided is taken at face value, and that is ‘what permitting roadblocks against the vision’ means.

We can categorize roadblock root causes in 4 ways: Understanding, Habit, Attitude, and Structure.

• Understanding: Your sales people must fully understand the why, what, how and when of the change management exercise. You should provide solid explanations and equip them with the knowledge of what you are asking them to do and why. The vehicles for this are sales methodology, definitions and terminology, processes, sales technology and so on. The recommended process here should be: train, teach, tell, read, re-teach, re-explain etc. Do not underestimate the process in which people understand things. Sending an email and expecting it to be read, digested, retained and understood does not work. People learn at different paces and it is critical to watch for it and make allowances for it.

• Habit: Your sales people need to acquire the knowledge for it to become a habit. For it to become a habit, they need to take the knowledge they acquired, and practise it over time. As the Greek philospher Aristotle said; “We are what we repeatedly do.“ Excellence is not an act, but a habit. This is echoed by older, seminal research called the ‘21 Day Habit Theory,’ developed by Dr Maxwell Maltz in his book ‘Psycho-Cybernetics.’ He found that our brains do not accept new data for a change of habit until it is repeated each day for 21 days.

• Attitude: Your sales people may have the knowledge, the skills, and the mastery of the behavior, yet from an attitude standpoint, if they don't buy into the value, they won't adopt the change. Attitude dictates our behavior, and to understand the true attitudinal barriers or resistance to change, it is important to dig below the surface to understand the underlying fears and perceptions. If there is resistance, it is shaped by the way that we perceive the change and its effect on us. If the resistance is not understood or addressed, we will not be able to modify behaviors because we did not address their attitude or perception about the change. Archaic carrot and stick theories do not suffice. To change mindset, leaders need to leverage a number of conditions for change which we will come to later in this White Paper.

• Structure: Your sales people need to be convinced that all the framework elements that go into enabling them to perform the desired behavior are in place. These elements are numerous, but they include the

 

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compensation plan, the supporting systems, and making sure the deal reviews, management reviews and other internal processes connect to the new way of doing business.

Not Planning and Not Getting Short-Term Wins

Implementing a major sales change exercise is a major undertaking. It takes time, and should be viewed as a process, not a one-off event. Sometimes it’s difficult to see if a change in selling behavior is producing results, as some sales organizations have very long sales cycles and it can take a while – sometimes too long – for the results to come through.

It is important to set early milestones to celebrate and build confidence and momentum along the way. Splitting up the journey into more achievable sections is essential, otherwise people won’t embark on the journey; all they see is the finish line way off in the distance.

Even more dangerous, if you don’t have the quick wins under your belt, then you run the risk of complacency or even active resistance setting in. Short-term wins have to be focused on the behavioral changes you are looking to engender in your sales managers and sales people. It is these early signs of behavioral change that will lead to the later signs of success, in the form of revenue improvement, and better sales velocity. Using the new sales language correctly, adhering to a new sales system, withdrawing from deals that are a bad fit to the business, completing opportunity plans for all opportunity plans, and carrying out opportunity reviews are all examples of the right kinds of behaviors that you should reward and celebrate early.

The TAS Group approach: our Success Charter provides the framework for businesses to agree what success looks like for their sales initiative. It’s expressed in revenue objectives, and non-revenue (ie behavioral) objectives. The Change Execution Process is the vehicle for delivering on the Success Charter and monitoring, recording, reviewing, correcting and celebrating progress toward the vision.

Declaring Victory Too Quickly

Changing sales behavior is a battle, and the war is never over. Celebrating the early wins is essential, but declaring that you’re almost at the finish line reveals the ignorance of managing change as a never-ending wheel. You hear the phrase ‘making it part of their sales DNA’ a lot in sales training, which evokes the idea that a new way of selling has become embraced to such a degree that it is part of the sales person’s core, part of who they are.

To become this deeply absorbed into the organization’s way of working takes a long, long time and requires unending commitment from the business, since the sales organization is constantly changing with people entering or exiting the business. This might take years, and any new sales initiative less than a year old is still vulnerable to resistance, apathy, and outright aggression.

It is important to take the long view, once you understand the scope of what you are trying to do when you instigate a new way of selling. If your timeframes are too short, your changes won’t stick. It’s no use pulling up the plant every so often to see if the roots have grown.

You must be on your guard against indicators that give you a false sense of progress. These can either be the indicators themselves, or they can be people with an agenda to force that is either for or against the initiative.

 

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Pro-change initiators may be too keen to look for kudos, and politically minded resistors may join in the celebrations and push for the training work to stop before the new ways of working have taken root.

The TAS Group approach: our Change Execution Process provides the structure for you to monitor behavioral compliance and record your pre-sales initiative baseline, and your actual results against target results over quarters and years so that you stay the course.

Not Anchoring Changes in the Corporate Culture

Once the communication, encouragement and the right kind of pressure have been applied for long enough, the changed behaviors become the accepted way of working. Until this happens, there is always the risk of the train slowing down, stopping, or being derailed. Once the new culture is said to be the current corporate culture, then the change management exercise can be deemed a success.

In order to do this, you must communicate to people the connection between the changes they made and the benefits that resulted, so that they understand the connection. Calling out examples of the specific behaviors and mindset people adopted that led to improved performance is key. When you’ve got this far, you want to make sure people are not making the wrong connection for success and consequently developing the wrong behaviors.

Lastly, and most importantly, you need to take time to ensure that your crucial agents of change, namely your front-line sales managers, are still walking the walk, and are living, breathing examples to new and seasoned sales people of the ‘way of we sell round here’.

The TAS Group approach: we do not vacate the premises once your sales training or the workshop-driven aspects of a sales initiative have taken place. We hold ourselves accountable for your success and in our Change Execution Process we continue to be stakeholders throughout your partnership with us.

MORE ON THE ROOTS OF FAILURE

The seven-tenths failure rate is sufficiently disastrous for us to dig a little deeper, since it should help inform your own transformation efforts. Organizational behavior consultant Pete Abilla, in his blog www.shmula.com, also draws on multiple pieces of research to explore why transformation efforts fail. As we have seen, a range of issues contribute to this, in the following proportions:

 

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In the sales organizational context, 72% of the failure rate is due to organizations issues, ie sales professionals or sales managers, and not to a lack of resources, as might be expected. Abilla outlines the typical characteristics in transformational failures, which have some pertinent parallels with the Kotter findings:

• No obvious connection to outcomes that the organization values

• Aspirations of the organization are not clear, concise or communicated

• Desired behaviors are not role-modeled, trained or reinforced

• Top team is not aligned

• Informal ‘how things get done’ remain inconsistent with espoused values

• Change champions lose interest and move to the ’next’ change program

• Leaders charged with implementing the change do not possess the requisite knowledge, skills and abilities

We now have a comprehensive list of symptoms and factors of failure in sales change management. Let’s flip the coin over and analyze what needs to be in place for us to end up in the happy place of the 30% of sales change management initiatives that are successful.

CONDITIONS AND FOR SUCCESSFUL SALES CHANGE MANAGEMENT

First and foremost, you need to plan the transformation. Too often, organizations underestimate what is involved in conditioning behavior change. The key is to identify which are the right levers to condition the change. In the course of analyzing why change management programs fail, we have already indirectly addressed what needs to happen for them to succeed.

In this White Paper we have already leaned heavily on eminent research in this area, and we are once again indebted to the work that has gone before. In particular, a piece of research from McKinsey Quarterly is particularly instructive. In June 2003 Emily Lawson and Colin Price published ‘The Psychology of Change Management’, which outlined four conditions – each of which need to be independently acknowledged by sales people – that must be in place for staff to change their behavior. We have taken those four conditions and broken out one of them to make five conditions that should be place in order for sales change to take place.

At their core is the notion that in order for you to change people’s behavior, you have to change their mindset, or attitude, first. Sales people submit willingly and with an open mind to training if they understand why change is necessary and agree with it to a sufficient degree. We present below, therefore, the five conditions for successful change management

 

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Condition 1: A Purpose to Believe In

Sales people need to believe in the overall purpose of the change management initiative, and you will only achieve this through a robust communication plan. Within this plan you need to address these critical components:

• Why is this transformation necessary (for the industry, the organization, the sales people, their customers)?

• What are the problems this initiative will solve? It is important to clearly call out the problems preventing them from achieving their transformational goals

• How is this initiative going to help achieve the desired outcome of the transformation?

• What are the short, medium, and long-term results expected out of this initiative?

• What must change as a result of this initiative?

• What’s in it for them – what do they gain, what do they lose?

You should package the components in a compelling story that your sales people can identify with.

 

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Condition 2: Consistent Role Models

Role models significantly affect behavior change in sales organizations, as much as the four other conditions put together. The peer group to which the sales person belongs – typically the sales team – also affects it. For this reason, individual role models, particularly individuals with rank and / or influence (in other words sales leaders and sales managers) need to internalize the desired language and behavior in order for the change in the sales teams to be prevalent, profound and lasting.

Condition 3: Reinforcement Systems

Sales coaching, performance measurement and rewards or recognition need to be aligned to the new sales behavior. When a company’s goals for new behavior are not reinforced, too much erosion occurs after training, and there is not enough momentum to sustain the change. Furthermore, structures that initially reinforce the new behavior do not guarantee that it will be sustained. They need to be supported by changes that complement the other four conditions.

Condition 4: The Skills Required for Change

Sales leaders need to focus on sales managers and sales people being instructed in how to make the sales training work for their situation, their Opportunities and their Accounts. This takes time. In addition, the teaching needs to be broken down into digestible chunks to aid absorption. Also, once the new way of working has been learned, it is best cemented by applying the knowledge straight away to real Opportunities and Accounts. Inversely, considering the two previous conditions (role models and reinforcement systems), sales leaders need to acquire the appropriate level of skills to coach and sustain the transformation.

Condition 5: Process, Process, Process

In our view, processes – and the connection to them – need to be brought out into a separate condition for successful sales transformation. Sales methodology, sales process and sales technology need to be connected explicitly to the internal processes that a sales organization follows to run its business. If your sales people have to make the connection themselves between the new behaviors and their ongoing day-to-day activities, it is highly unlikely you will see the sustained behavior change you’re looking for.

Sales managers and sales people need to establish the connection between new behaviors and internal processes to the same degree that the other four conditions need to be satisfied, in order to effect the attitudinal change in your sales organization that drive the new (and hopefully lasting) sales behaviors.

SALES CHANGE MANAGEMENT WITH THE TAS GROUP AND DEALMAKER

Much of the research explored in this White Paper, combined with over two decades of experience implementing sales academies and sales transformation programs for companies and enterprises, inform our globally proven sales change management process, which we call the Dealmaker Change Execution Process. Dealmaker is an integrated sales approach with learning and best practices constantly reinforced through its everyday use. It comprises a proven methodology and optimized sales processes, embedded into on-demand sales performance automation technology, with effective on-the-job sales training and reinforced by expert tuition. Since sales

 

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effectiveness is a continual process, Dealmaker breaks down the critical elements of the process into the following eight stages, split across three phases: planning, delivery and adoption.

• Define: Defining the objectives for the sales change management initiative

• Design: Designing the solution to address the objectives of the initiative

• Align: Securing agreement and buy-in from all stakeholders to the initiative

• Deploy: Implementing the sales technology piece of the initiative

• Learn: Acquiring the sales methodology and sales process concepts

• Apply: Applying the acquired concepts to real accounts and opportunities under expert tuition

• Measure: Measuring performance according to behavioral objectives and other success metrics

• Coach: Coaching to the new process and reinforcing adoption of the new way of doing things

For more detail on the Dealmaker Change Execution Process, which is designed to secure the conditions for successful sales change management outlined in this White Paper, please contact marketing@thetasgroup.com.

 

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SUMMARY

Improving sales performance is about recognizing and managing change. Research has shown that seven out of every ten change initiatives fail, and this losing record has remained consistent over time. A variety of factors, many of them rooted in the way people are, contribute to this failure rate, and they are as true for sales effectiveness initiatives in sales organizations as they are for other change programs in businesses of all sizes and industries.

Research has also identified four conditions that need to be present for a change management exercise to succeed, and we break up one of these conditions to make five conditions for success in the selling context. When you understand the psychological implications of change, this provides additional insights to further inform how you lay the groundwork for the conditions.

The TAS Group has worked with some of the world’s most admired selling enterprises for more than 20 years, and from this experience has established a proven change management template which we call our Change Execution Process. It espouses the lessons gleaned from the research presented in this document, and provides for the businesses who partner with us a foundation on which to successfully transform their selling activities and sales velocity.

If you wish to find out more about The TAS Group’s sales performance offerings, or anything else discussed in this White Paper, please contact us at marketing@thetasgroup.com.

Recommended further resources:

• The TAS Group White Paper – Evaluating Sales Training Programs

• The TAS Group White Paper – Establishing Lasting Changes in the Sales and Marketing Enterprise

• The TAS Group Success Charter – guides you through measuring success for your sales effectiveness initiative

• Dealmaker Genius – generates customized sales processes in a matter of minutes

• Reaching Sales Quota More Consistently: Best Practices Adopted by The TAS Group Customers. Aberdeen Group Analyst Insight, October 2010