Frank Cespedes - Aligning Strategy and Sales: The Choices, Systems, and Behaviors that Drive Effective Selling

Here is one big thing I have learned from running a business, consulting with companies around the world, and teaching executives and MBAs at a good business school for nearly twenty years: for most firms, the largest, most difficult, and most expensive part of strategy implementation is aligning sales and go-to-market efforts with the company's espoused strategies and goals.

This alignment challenge is the largest in multiple dimensions. Doing this well is essential for marketplace success and company valuations. A key to meeting growth potential is eliminating the gulf between big-picture strategy and field execution. Yet, in a recent survey of more than eighteen hundred executives, more than half (56 percent) say their biggest challenges are ensuring that day-to-day decisions are in line with strategy and allocating resources in a way that supports the strategy.

Aligning strategy and sales is the most difficult part of implementation because it involves a combination of factors: a coherent strategy, the right incentives, hiring, developing a performance culture, and sustaining field behaviors in the face of market changes largely outside the control of the seller. This is hard stuff, and despite the aspirations (some would say, pretensions) of management professors like me, business is not and never will be like physics. Unlike the math and concepts in the Higgs boson or string theories, most important things in business are easy to sayadvice from a fortune cookie: be customer focused, strategy should drive structure, work as a team, and so forthbut hard to do. A sales force consists of peoplea messy variable, as a research colleague once saidwith different capabilities and motivators. Unlike thermostats, you can't regulate people via an algorithm. Good salespeople bring flexibility, street smarts, and the ability to customize a value proposition, build relationships, and work within their own company to marshal resources into a winning team. They also bring egos and the need for security and meaning. Unlike advertising, salespeople cannot be turned on and off. Unlike a website, they cannot be expanded and upgraded overnight.

These activities are also increasing as a portion of costs. Continuous improvement in production and back-office functions has been driving managerial attention for decades. Companies have pursued goals such as six-sigma quality and tenfold reductions in cycle times. Ideas have consequences and sometimes good consequences. This attention to production activities has yielded results and, as consumers, we benefit. But as in any competitive interaction where winning is ultimately measured by relative advantage, the very success of these activities means that the focus of productivity improvement is shifting. In the first decade of the twenty-first century, production efficiencies enabled an average S&P 500 company to reduce its cost of goods sold by about 250 basis points, but SG&A as a percentage of revenue has not declined. Where would you look next for a source of competitive advantage?

Because aligning strategy with sales is vital to business success, this topic must be a priority for business schools and practitioners, right? Wrong.

On the academic side, there is little written about how to link strategy with the nitty-gritty of field execution. Certainly, there are now many books and articles about strategy formulation and strategic planning. Some are based on industry analysis, and some on finding points of differentiation independent of industry conditions (e.g., blue ocean strategies). But few have much to say about the role(s) of a company's sales channels in executing strategy. In fact, a combination of reorganizing and incentives is usually the prescription if sales is even discussed. But there is no one best way to organize (see ), and reorganizations in sales are always costly and risky because they disrupt established call patterns and client relationships. Experienced sales executives also know that appropriate incentives are a necessary but not sufficient cause of getting field behavior to align with espoused goals. So the strategy literature essentially leaves sales with the kindly parson's suggestion about how to get to heaven: Always do good and avoid evil. Undoubtedly great advice, but, like most sermons, it may work when you're preaching to the already converted, but it's too abstract if you're not.