Most organisations think strategy lives in documents such as PowerPoint decks, spreadsheets and carefully worded statements about markets, priorities and strengths.
But if you really want to know your strategy, look at sales conversations – especially the ones that happen under pressure.
Ask yourself: Is the strategy your salespeople are enacting the one you figured out at your last retreat? Or is what actually happens something else entirely?
***
At a minimum, a strategy should determine:
- First: of all the things we could sell, what will we sell, what will we not sell – and why?
- Second: of all the people we could sell to, who will we focus on, who will we ignore – and why?
- Third: why will customers continue to enable us to make money rather than giving it to competitors – or just keeping it themselves?
Those questions are simple, but answering them well is hard work.
And having done that hard work, you want it to manifest. To have that happen though, you need to understand: to a large extent, your actual strategy is what your sales people actually do.
Here’s an example from a Tier 1 car parts supplier making interior panels. Boy, was the CEO frustrated. His customers – the big car makers – would only put his components in their cars in return for year-on-year price reductions. If he couldn’t make the promise, he’d lose the business, probably forever. If he did make the promise, he then had the problem of how to deliver. To do that without losing all his margin, he had to get more and more efficient.
It’s a tough business. His strategy was to innovate constantly, improving quality to maintain current, not reduced, prices. In terms of my three questions above:
“We will sell increasingly higher-finish and scratch-resistant interior panels to prestige OEMs and they will continue to buy from us at decent prices because, through our innovations, we will offer them enhanced differentiation against their competitors without a cost increase.”
As it happened, the CEO was a loyal buyer of a car model made by a customer. It’s a well-known prestige marque. When he took delivery of the latest version and found last year’s panels still being used he was gutted. “Why haven’t my people sold the new panel? All the work we put in to developing it. Don’t they get why it matters?”
Here’s how it seemed to the sales people: “The customer understands the old component. I can ‘sell’ it without a visit. I don’t have to risk re-opening the decision process. It’s a faster and safer way for me to make my quota.” That sort of thing.
There are a number of lessons here but this is the most important:
What determines your actual strategy is not what your most recent strategy says, but what salespeople do when they’re in front of a customer, trying to close something, solve something, or just keep a relationship alive.
***
I discussed this dynamic with an old friend and vastly experienced sales director, Paul Heldens of Roca/Laufen Group. We kept coming back to this simple phrase: what actually happens.
For example:
- What are salespeople actually selling – not what’s on a slide deck, but what they lead with?
- What do they default to when a deal gets hard, time is short, or the customer pushes back?
- What actually gets rewarded in practice – even if nobody would ever write it down?
Those answers are your strategy.
When translation breaks down between the centre and the frontline, people improvise, fill in the gaps and generally do what works for them in the moment. And from their perspective this is entirely rational. “Strategy” can seem tidy and conceptual. But the messy world of targets, objections, quarter-ends and awkward customer conversations is anything but.
People translate what you tell them into something they can use. Sometimes that translation is accurate, but often it’s impressionistic: a Monet rather than a Vermeer. Sometimes a Jackson Pollock.
Your strategy…
Johannes Vermeer — Girl with a Pearl Earring — Mauritshuis / Public Domain
Your strategy in action…
Claude Monet – Woman with a Parasol – National Gallery of Art / Public Domain
Hopefully not your strategy in action…
Jackson Pollock – No.5, 1948 – Public Domain (UK/EU)
More often than you would like, what happens on the ground directly contradicts what the C-suite thinks is happening. It’s a major reason why executives get baffled by their own outcomes, and it’s why more work on execution may be beside the point: if the wrong customer is sold the wrong thing, then it doesn’t matter how well the delivery is executed.
And what goes for sales goes for everything else. I find that executives need to make time to get out of the C-suite and pay more attention to what actually happens – especially where people are under pressure, making trade-offs, and doing whatever they think will work.
Because your strategy = what your people actually do.