Strategic Account Management Blog

By: Greg Bartlett

Six critical guidelines to build (or rebuild) and support the top management team

For two years researchers Nathan Bennett and Stephen A. Miles were involved in a project focused on identifying keys to top management team success. In the process, the men had the chance to study the struggles of a number of post-merger and -acquisition executives as they labored to come together again in the new enterprise as a top management team. Through that research, Bennett and Miles identified six critical guidelines to help executives and boards effectively build (or rebuild) and support the top management team. The first three recommendations focus on activities that should start very early and be continually reinforced throughout the process. The fourth and fifth recommendations concern challenges that will be most pressing during the integration process. The final recommendation involves activities that should begin as soon as legitimately possible and become habitual as the new entity develops.

Guideline 1: Reduce role ambiguity.

Though M&A is often defined as adding technology, products or market share or achieving synergy, it is inescapably about people and their capabilities. The combined company must do what it can to control which employees leave and remain. Many potential “ship-jumpers” are vital to both the team and organization.

Guideline 2: Due diligence around talent is a dangerous corner to cut.

The second vulnerability management teams face in M&A reflects a naivete caused by inadequate due diligence around talent management. Sufficient attention should be given to assessing the personnel who will lead the new enterprise.

Guideline 3: Recognize that old habits die hard, but not all should.

Companies have well-established routines that are retained because, simply put, they work. There is an art to recognizing how habits serve different groups, how habits impact performance and the role they will play in the newly formed company.

Guideline 4: Don’t tolerate bad behavior.

The research revealed three common forms of harmful behavior in top management teams: cliques, information asymmetries and the sabotage of decision making. Moving beyond this requires strong leadership and setting very public examples from the top.

Guideline 5: Practice patience with purpose.

The completion of an M&A event is a heady time, but the immediate enthusiasm needs to be bridled somewhat during the new entity’s break-in period. The toughest challenge here is to find the rhythm for pushing ahead that properly balances the need to respect the potentially fragile nature of newly forming relationships with the need to produce evidence of positive results.

Guideline 6: Count and celebrate your blessings.

Everyone associated with the deal is in a difficult situation. This is the time to repeatedly reinforce and communicate the upside of the deal: that there was a clear reason the deal was pursued.
Source: Nathan Bennett and Stephen A. Miles, “Six steps to (re)building a top management team,” MIT Sloan Management Review, Fall 2008, Vol. 50, No. 1.

Preview: Organizational Challenges in Managing Large Global Projects

Lee Pryor, President of ESSAYONS! Consulting, Inc. delivers a preview of his session at SAMA’s Pan European Conference, February 28-March 2, 2010.

The session highlights the challenges strategic account organizations face in managing large programs and projects for their key customers, with emphasis on how to organize strategic account programs and projects. Teaming issues also will be addressed along with options for funding methods. Case studies and examples will be used.

SAM-level negotiations are often some of the most complex deals, and therefore some of the most frustrating. How do you demonstrate solutions against price? Whether it is reacting to irrational competitive offers, or addressing demands to lower price, the pressure is on the SAM and his or her team to come back with the best deal for the company and the client.

At SAMA University Atlanta February 1-3, Carrie Welles, Vice President of Think! Inc. will be leading a session at SAMA University (Session #4, Strategic Negotiation: Claiming Value in a Negotiation & Turning in a More Profitable Deal) that allows individuals to bring in an account negotiation they are working on to create the best possible deal.

Q - In your session, you talk about determining and acquiring power during a negotiation. How important is this to negotiating the deal?

A - Hugely important. Determining who has the power in a negotiation will help illuminate how probable the deal is. In addition, it can be the difference in winning not just a good deal, but winning a great deal. We’ll review in our session how you determine that power, and subsequently build your courage.

Q - You ask participants to bring in real-world negotiations to audit during the session. Is there a particular type of deal that SAMs should bring into the class?

A - Our session reflects our real world, so any deal that has not closed yet is appropriate. To be most effective, I would suggest bringing a deal that is not set to close right after you finish the session, but rather one where you have room to ‘try on’ the concepts you learn and better your opportunity.

Q - Is there a common structure to strategic negotiation?

A - Absolutely. Research that we’ve done in the past two years suggests 97% of the time you can anticipate reactions of your buyer and use a structured ‘negotiation blueprint’ to help you prepare for a negotiation that previously you may have thought was ‘unpreparable’. 97%! That is a compelling number. AND, the negotiation blueprint encompasses only (3) concepts.

Q - Price is always an issue, no matter how close of a relationship a SAM has with a client. How do you avoid getting stuck on price during the negotiation process?

A - Often, and in this economy especially, price certainly has a way of headlining a negotiation and our buyers & procurement executives are seasoned at keeping it that way. Price is part of the negotiation, no doubt, however a negotiation is never just about price. It really can’t be given all the other intrinsic pieces that make up our solutions, and subsequently, our offer(s). Our job as SAMs is to do a better job of putting value on all those intrinsic pieces and then making them known in our offers(s) so we begin to get credit for all of them. We’ll also learn how to do this in our session.

Q - Irrational competitive offers can often derail negotiation. Is there a way to prepare and protect against this?

A - Without question, however it does take the will to do the work and prepare appropriately, earlier on and in conjunction with your consultative sales process, so you can devise your negotiation strategy & stick to it. We offer a tool called “Multiple Equal Offers” that will allow a SAM to take pressure off price, competitive offers and all the while giving customer’s a few solutions, not just one. These solutions, or offers, encompass business relationships that you can have with your customer that will get titled - generally a departure of what we do - and are reflective of the business issues you will solve for them. This concept allows for a ton of flexibility and responsiveness to our customer!

In the 12/14/09 issue of Businessweek,  an article discusses the merits and drawbacks of a new management fad coming out of India, called jugaad.  One of the elements of jugaad is the ability to innovate on the fly.  And while it’s often associated with cutting corners in India, the concept as a management tool is being employed by some very impressive companies.

Excerpt:

U.S. companies are starting to put jugaad into practice. At Best Buy’s headquarters, in Richfield, Minn., Kalendu Patel, the retailer’s executive vice-president for emerging business, is holding jugaad workshops to help store personnel and managers come up with new products or services that could be added easily and inexpensively to generate more sales per store. Among the ideas: home health-care equipment.

This kind of thinking reminds me of one of the key concepts of  Strategic Account Management–creating demand.

A successful Strategic Account Manager will partner with his or her customer to develop new, scalable solutions.  If done correctly, it can be scaled up to a global level or down to the local level.  The partnership uses co-creation methodologies and techniques which allow the strategic supplier and the strategic customer to innovate business solutions directly relevant to making money and bringing growth to both partners.

What’s important to remember is that while this new fad may have some merit, there are already developed and proven methodologies that make SAM work.

A column in this week’s Economist magazine lists several companies taking new directions in the middle of this recession. This is recommended reading for strategic account managers and SAM executives! Cisco, a SAMA corporate member, is among those mentioned. Here.

Selling to the executive level is often the most important stop a Strategic Account Manager has in closing the deal, and it is also the most difficult. How should you change your message? What metrics are important to them? How are their needs different from the other levels in the organization?

At SAMA University Chicago, October 19-22, Jim Melillo, President of Executive Conversation, and a CFO for more than a decade of public and privately help companies will lead a workshop (Session #2, Creating and Communicating Value at the CxO Level) that demonstrates the tools and thought processes needed to successfully communicate to top-level executives.

Q - At SAMA University Chicago, you’ll be leading a session on creating and communicating value to C-level Officers. A question we hear a lot at SAMA is do executives see a lot of strategic account managers struggling to demonstrate value at the executive level?

A - My impression was that 80-90% of the presentations that I have seen were bad or did not address me and my concerns. My view is based on what I saw in sales people as they presented to us either in my office or at the final review phase. I always assumed because I was a finance guy from New York I was being hard on the sales professionals. What I have come to find out working with the 20 or so former CXOs at Executive Conversation is that the results were the same for Randall the former Under Secretary of Defense or Brian the former Managing Director of DHL shipping.
Continue reading…

Many SAMs and SAM teams struggle to connect with their customers. If done right, the account planning process should be a win-win for you and your customers, addressing you and your client’s goals. So why are so many people struggling with this? What if your client’s long-term goals are at odds with your short-term goals. How do you measure success?
Continue reading…

Selling with confidence demands an understanding of 10 rules of engagement. Each rule serves as a general reminder to all members of a firm of what is needed to grow both profits and revenue in increasingly competitive and price-oriented markets. Here, in brief, are the 10 rules to selling confidence.

1. Build the foundation of value.
2. Learn to love competition.
3. Leverage services.
4. Don’t expect all customers to value value.
5. Know your customer.
6. Use the offering to flush out the poker player.
7. Learn to say no to customers and requests for proposals.
8. Plan the battle.
9. Manage value, not price.
10. Sell with confidence.

For more about how to follow those rules, SAMA members may read “Selling with confidence: how to keep revenue and prices up at strategic accounts,” by Reed K. Holden, founder of Holden Advisors. The article recently appeared in SAMA’s Focus: Account Manager newsletter and can be found in full within SAMA’s resource library.

Bravo to co-authors Philip Lay, Todd Hewlin and Geoffrey Moore for encouraging suppliers to agitate their customers as a way to add value and beat the current economic crisis (“In a Downturn, Provoke Your Customers,” Harvard Business Review, March 2009). In the article, they beautifully describe the process by which organizations can provoke their customers.

But we think that a lot of companies will find their greatest challenge – and reward – in implementing the right corporate structure to support provocation selling. While we all agree that mere consultative selling is not enough, the burden of provocation selling too often falls on the sales team alone. But sales people can only do so much. Provocation selling really pays dividends when it is deployed as a company-wide initiative. Our term for this is Strategic Account Management (SAM).

In reality, SAM initiatives are quite rare.  A 2008 survey conducted by our organization showed that 80 percent of SAM programs were younger than 7 years old, and only 12 percent of respondents reported that their SAM programs were “fully functional and effective,” and they identified “organizational structure” as their greatest challenge. Only when provocative selling becomes a corporate initiative will CEOs, senior executives and other departments (marketing, finance, engineering, etc.) work together to realize the benefits. Otherwise, sales people seeking to provoke their customers will have to confront the inevitable barriers existing within their own organizations.

View a synopsis of the original article or purchase it here: http://hbr.harvardbusiness.org/2009/03/in-a-downturn-provoke-your-customers/ar/1

The most underleveraged asset in sales at many companies is the executive team. But correctly involving it is an art few executives have the natural skills or training to do. This is especially true if an executive has little to no real-life sales experience. Frequently executive customer visits are clumsy attempts to close a deal an account manager has been unable to complete. These types of calls often do more harm than good. An executive call should rarely be used to sell a specific product or service. The primary and most effective use of an executive is to represent his company, not his company’s product.

In short the executive is to position his company in a manner the account manager would, by rank, be unable to do. The customer needs not only to believe in the product or service, which is the account manager’s responsibility, but also believe in the company behind the product, which is the executive’s responsibility. This entails discreet discussions in areas such as corporate direction, commitment and expansion in research and development, mergers and acquisitions, etc.

If the executive becomes confused and allows the conversation to creep into the account manager’s domain, then the executive, many times unknowingly, steals currency from the account manager. Once this takes place it is difficult for her to regain a position of value in the customer’s eyes. Why would the customer want to deal with the account manager when it could deal with the executive? Rather than stealing currency from the account manager, the executive should focus on building the account manager’s currency. Executive visits should never be done at the expense of the account manager. To the contrary, they should be designed to proactively increase her value. A good start is to have the executive say he is there at the account manager’s request.

The account manager must be seen as responsible for the orchestration of value for the account. The only exception to that rule is if there has just been a change of account manager assigned to the account. The customer should be trained to respect the protocol that all lines of communication flow through the account manager unless an emergency requires specific actions outside the norm. This single point of contact is foundational to an efficient major account program. Without it the left hand would not know what the right hand was doing.

(The preceding text originally appeared in SAMA’s Focus: Teams newsletter in fall, and the material itself is an excerpt from the white paper “The role of the senior executive team in major accounts,” which can be found in full within SAMA’s resource library and was written by LaVon Koerner, president and chief revenue officer at Revenue Storm Corp.)