Just when you think process is your salvation, it turns out to be your weakness. That’s why many companies that have attempted to bottle what works best in sales—what you might call the tricks of the star performers—are still finding themselves at a loss.
“Even as leadership has tightened compliance with the processes that have served so well, sales performance has grown increasingly erratic,” Brent Adamson, Matthew Dixon and Nicholas Toman write in Harvard Business Review. “Companies are reporting longer sales cycle times, lower conversion rates, less reliable forecasts and compressed margins. The sales machine is stalling.”
Clearly, the authors say, the old models just aren’t working anymore. Organizations marked by “strong process orientation, clear lines of authority and close governance through formal rules,” with “a competitive atmosphere characterized by frequent contests, campaigns and the regular updating of leaderboards,” along with “close attention to near-term metrics,” are often coming out behind.
Meanwhile, coming out ahead are organizations that emphasize “the judgment of individual reps rather than their compliance with protocols; and a managerial focus on providing guidance and support rather than inspection and direction.”
Peter Drucker was a strong advocate of this latter approach, and he felt that management by self-control required a “complete rethinking” of how companies approach process. “Procedures can only work where judgment is no longer required, that is, in the repetitive situation for whose handling the judgment has already been supplied and tested,” Drucker wrote in The Practice of Management. “In fact, it is the test of a good procedure that it quickly identifies the situations that, even in the most routine of processes, do not fit the pattern but require special handling and decision based on judgment.”
The notion of the “sales machine” is common in business because it is natural to seek order and clarity and limit arbitrary personal judgment. But it can easily cause managers to become “hypnotized by procedure,” as Drucker put it.
Not to mention that it can create a lot of paperwork—a topic we’ve explored more than once. Drucker cited the example of a large insurance company that “built up a strong central-office organization concerned with such things as renewal ratios, claim settlement, selling costs, sales methods, etc.,” and, to that end, got managers to fill out myriad reports that would supply the needed data.
The results? “Top management learned a lot about running an insurance company,” Drucker wrote. “But actual performance has been going down ever since.”
How can a business codify and leverage what works without becoming a prisoner to process?