Does Your Sales Compensation Incentivize the Correct Lean Behavior?
Does Your Sales Compensation Incentivize the Correct Agile Behavior?
Co-authors, Jeffrey Liker and David Meir, of The Toyota Way Fieldbook defined the Supplier Partnering Hierarchy of Toyota that consisted of 7 steps. I have always found these to be a good outline when describing how an organization should aspire along their sales path or journey with a company. An excerpt from the Blog, The Value Problem with Lean in Sales and Marketing:
This 7 step hierarchy is where I first saw the opportunity to apply Lean to sales and marketing. If I was marketing to Toyota (The 7 step Lean Process of Marketing to Toyota), I would be seeking to climb the supply chain as a vendor. I have written a great deal on this but what it comes down to is improving my value proposition with my customer and the marketplace. At a micro-level, the value proposition is nothing more than a promise that I make in every sales conversation.
It continues on…
The pull-in Lean at the macro-level is knowledge and understanding of the markets our customers participate in. It is not enough to listen to the voice of the customer or even voice of market. It is the ability to co-create value through PDCA or continuous improvement with the customer. At the micro level, it is the conversation. It is building that understanding on what the customer needs (Sales and Service Planning with PDCA). At the Macro or Micro levels, you are not looking to deliver latent knowledge, what you’re doing is looking to develop knowledge, and that newly developed knowledge, that newly learned knowledge, from the act of PDCA is really the pull. This is the highest level a vendor can achieve with Toyota according to Dr. Liker.
I think all of us aspire with our Key Accounts to move from that initial one to one selling to a more interdependent sales process and even with select accounts an integrated system. This has been the backbone of any Key Account Management (KAM) program. The building of relationship along this hierarchy has been described countless times in KAM and in countless books by author Malcolm McDonald. Malcolm’s Amazon Page: http://amzn.to/2fQSuJI.
The team selling concept is being highly touted in Lean and Agile circles disguised in the terms like cooperation, co-creation, and even somewhat the idea of dealing with complexity. However, adequately transitioning from solo/individual type selling to team selling is very difficult. It is much easier to just start there at the beginning. But the traditional forms of compensation often preclude this from happening. Also, most customers prefer to grow into this arrangement, as the old Warren Buffet saying goes; “Don’t test the depth of the water with both feet.” Is there a Secret Sauce Transitioning from Solo to Team Selling?
The diagram also is a reminder that the role substantially changes for a salesperson. It changes so dramatically that he could actually develop an account that he loses versus gaining. That begs the question, are we incentivizing the correct behaviors of our salespeople?
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