Sell A Story of Transformational Marketing

D r . A n d r e w G . C o o k

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SellA Story of Transformational Marketing

Dr. Andrew G. Cook

Copyright © 2008 by A. G. Cook

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Copyright ©2008 Andrew Cook

For additional information on the concepts and ideas presented in this book or for additional copies, please contact:

The Advanced Industrial Sales and Marketing Institute 5 Musket Trail Simsbury, CT 06070 Tel: 860-658-0866

All rights reserved. Except for the usual review purposes, no part of this work may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or an information retrieval system, without written permission of the author.

This book contains the opinions and ideas of its author. It has been designed to provide useful advice to the reader on the subjects cov-ered. The publisher and the author specifically disclaim responsibility for any liability, loss or risk (financial, personal or otherwise) that may be claimed or incurred as a consequence, directly or indirectly, of the use and/or application of the contents of this book.

The publisher and author assume no responsibility for errors or omissions. They do not attest to the validity, accuracy, or completeness of this information. The strategies in this book are not guaranteed or warranted to produce any particular result. Use of a term in this book should not be regarded as affecting the validity of any trademark or service mark.

Portions of these materials are copyrighted by Oriel Incorporated, formerly Joiner Associates Inc. and are used here with permission. Further reproductions are prohibited without written consent of Oriel Incorporated. Call 1-800-669-8326.

Layout and design by Bruce ThompsonPrinted and bound in the United States of America

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This book is dedicated to all of the great sales professionals, management leaders and sales teachers with and for whom I have had the privilege to work with and for. This list is long but it includes right at the top: Thomas Murrin, Dr. Richard Slember, Thomas Christopher, Lee Elder, Ray Rongley, Skip Hudson and Dr. Richard Siudek.

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Introduction Initial Thoughts on Sales

Table of Contents

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Table of Contents

Table of ContentsAcknowledgements and Credits

Setting the Stage

1. Getting the job - what you think you know and what you don’t know - “Raring to go.”

2. The real time confusion, chaos, intensity and urgency of the sales envi-ronment - “I’ll get this place under control.”

3. Quick fixes based on a lack of understanding actually make things worse - “When does a sale start?”

4. The importance of relationship development in the industrial sales process - “Stop the socializing and get down to work.”

5. Metrics of end results with out process step metrics will not improve the outcome - “Where are your reports?”

6. Controlling the environment without an understand of the critical process steps and whether they are under control is not effective in improving the outcome - “Finally, under control.”

The Crisis Builds

7. Controlling the environment without understanding the process will cause the unconscious competents to quit - “Why did he quit?”

8. Customers change their decision process, in mid process, it is important to be aware and agile in order to respond - “That’s not fair, they changed the process.”

9. The competitor who has discovered the customers’ buying process can win before a bid is even issued - “They did not even put it out for Bid!”

10. Lack of understanding of the sales process results in lack of orders - “We’ve lost every order since I started.”

11. Lack of a closing process, a process for approvals, and a closing leader can result in the loss of an awarded order - “The customer terminated?”

12. The top line, sales, is so important to a business’ success that the orga-nization will find a way to sell, EVEN if the formal sales function is failing - “Feeling the heat (end runs, consultants, and creation of “shadow” groups)”

13. The initial customer and opportunity development steps are critical to creating a stream of bids to propose - “What are the opportunities?”

14. Without spending 60% of your time on the initial process steps there is nothing to spend the remaining 40% of your time on - “The phone isn’t ringing!”

15. Industrial customers are real people, not abstract entities, with real concerns, task needs, personal needs, hopes, dreams and problems - “Who are our customers?”

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Table of Contents

Awareness Before Salvation

16. How to do a discovery interview, the basis of industrial sales relation-ship development, personality styles in action - A chance meeting on a plane back from the Taylor Account.

17. Identification of a process approach to industrial selling, and a consul-tative agreement in action - Understanding people.

18. The four steps of tactical selling: relate, discover, advocate and support- How sales teams work.

19. To win it is essential to learn the customer’s needs. To do that it is es-sential to build a relationship of trust and credibility, then do discovery - “How do we meet their needs?”

20. How to do a “discovery” interview.

21. The importance of a supportive peer group to reinforce behavior changes in a hostile environment. - “There is a process?”

22. The basic selling strategic process steps - “I already do it?!”

23. Industrial selling is a team endeavor; there are no lone wolves in consis-tently high performing sales success stories - “What team, I am succeeding on my own!”

24. Processes that create internal dialogue around key orders improve sales effectiveness. - The importance of internal visibility

25. As you move from being an unconscious incompetent to a conscious incompetent, you will lose confidence - have faith - go where the customers are. - No one ever bought anything in your office

26. Outline of the seven strategic sales steps - “What were the steps again?”

27. It’s not what to do, it’s why don’t we do it? - “Do we really do it? Why and why not?”

28. Relationship building in practice.

29. The first person to convince of the merits of process discipline - is yourself - “Two plans? I don’t have time.”

What is a process?

30. Developing a process orientation: inputs, outputs, measures - “But Sales is not like manufacturing.”

31. How developing a process orientation really works - inputs, outputs, measures

32. You follow some sales model, consciously or unconsciously - a func-tional versus a process approach - Process examples - “This is all theory; I have to deal with reality!”

33. Positive transformation brings together and energizes the entire com-pany team - “What are the disconnects?” – a team meeting

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Table of Contents

Making it happen

34. Transformations without a clear end goal can be worse than no trans-formation at all.

35. How to use future oriented visions to create a shared sense of purpose - Pulling the team together

36. A systematic way to create a vision, defining the current state - A shared sense of purpose

37. A systematic way to create a vision: defining the desired state, a win-ning team plan, building a team sense of purpose - What’s in it for everyone?

38. How to put the vision into action, all the customer wants, is what he wants - An unexpected success

39. Be proactive, go and listen to the customer, listen to your teams’ input - It was just a fluke

40. When you listen, you close - Winning again, “We did it!”

From Vision to Action: Creating Skills, Modifying Behaviors

41. How to develop sales and marketing skills in your teams

42. Leadership by example - how to transfer the learning

43. Learning from your students - they know more than you might think

44. How to be a coach for salesman - no easy task in industrial selling

45. Demonstrations of pragmatic industrial sales approaches - Goals, executive summaries, sales force incentives, hiring, organization, audi-ences, messages, interviewing - It becomes a language

46. Another approach to developing customer focused solutions

47. Achieving culture change through training - Unexpected changes, awards banquet and metaphors

48. Tough issues in real life and a beautiful example - Charlotte puts consultative selling to work

49. How to plan a negotiation - A negotiated close

50. True customer driven organizations can be misunderstood by those used to conventional command and control approaches - “What’s happening here?”

51. Need for management team buy-in - “Selling is a whole company effort!”

52. The role of the process owner - A meeting with the boss

53. Process champions - “But how will I be measured?”

54. The ultimate and true role of the Vice President of Sales and Marketing - Thinking about the day after tomorrow

55. Team selling has no room for egos - “But who is the hero?”

56. What’s in it for you - Going home proud.

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Table of Contents

Epilogue - Ten Years After -

57. Nothing has changed, everything has changed.

58. An unexpected career.

Author’s Reflection

59. Author’s reflection

Appendices

1. Thoughts on Sales

2. Suggestions for the New V. P. of Sales and Marketing

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Can an introverted, immigrant, ungainly, MIT PhD Nuclear Engineer, a Cornell Magna Cum Laud graduate in Physics and Mathematics, a person who knew more about integrating discontinuous functions through the complex plane than he knew about interpersonal relationships, possibly become a respected leader of successful sales teams?

And can a person with all those handicaps help teams close over $6.5B in industrial orders and consistently beat the competition, regardless of the company they represent?

You bet. I did it. My teams did it. If I did it, you can, too. These are clearly skills and processes a person can learn and succeed with. I am living proof. I studied, I learned, it worked. The systematic application of modern quality and process driven sales and marketing approaches for leading industrial sales teams consistently results in dramatically improved closed order success. The data is overwhelming. Good people are often given the responsibility to turn around poorly performing industrial sales and marketing departments. They find themselves responsible for closing hundreds of millions of dollars of business. Often, they have no idea how to lead a sales team. So they apply management techniques appropriate to other functions. The results are usually disappointing or worse.

This book is designed to serve those leaders after they have been on the job for about 120 days. That is when they discover, as they lose their first major sale, that there is something about sales and marketing they do not understand. They are searching for help.

This book will help. It can be read in confidence. It provides direction and understanding, without requiring a major shift in approach. If the book’s guidance is used, the reader will succeed, the statistics are clear.

Our Premise

The premise of this book and my lecture series is:

There is a systematic process and associated metrics that can be applied to industrial campaign selling.

Consistent application of the process will result in consistently higher sales process yields with lower process variability independent of the personnel.

In layman’s terms this means: if you run your sales campaigns according to this approach every time, you will get more closed sales per dollar of sales budget invested on a sustained basis. On top of that, your confidence that you will get the amount of closed sales per dollar invested will grow. You will be more predictable.

Preface

Cook’s First AxiomThe sales team or salesman that spends the most time with the client, learning about the client and meeting his person-al and business needs is the salesman who closes more sales.

Joe Gerard, the world’s best car salesman, demonstrated this truism through his behavior. While other salesmen waited for opportunities to walk in the door looking for a car, Joe identified customers (he pulled out a phone book) and called the customers and asked them, and I emphasize asked them, what their automobile needs were, their current status, etc. Joe sent cards, Joe sent notes, Joe spent more time with his customers than the competing salesmen and he sold more.

After identifying a client, the salesman has to go and see him and learn about him. This is “Sales 101.” But I cannot emphasize enough the need to spend time with the customer and just be with him.

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I would like to thank Dr. Brian Joiner, of Joiner Associates (now Oriel Inc) for the valuable insights and lessons he provided on the Deming approach to management. Dr. Joiner has a long list of impressive credentials including being one of the original nine judges for the Malcolm Baldridge National Quality Award. The Westinghouse Nuclear Fuel Division was the first winner of this award in the manufacturing category. I was the Division’s Total Quality Manager at the time and a member of the very strong team, including Anne Pauley, which was leading the Division’s quality transformation under the direction of Dr. Richard Slember, the Division General Manager.

It was at Brian’s urging that I read “Out of the Crisis” by Dr. Edwards Deming - a critical book in my evolution as a quality process driven sales leader. I was privileged to hear both Dr. Joiner and Dr. Deming at a seminar in Milwaukee in 1989. This book’s main character is Rick. His visit to San Diego is modeled on this seminar trip that I took. Milwaukee was a little colder than San Diego but the material was just as excellent. Oriel Joiner’s Incorporated very kindly allowed me to use selected figures from Dr. Joiners’ training material.

I was especially impressed by Dr. Deming’s “bead experiment” and the implications to leaders and managers. I would strongly recommend the course I was privileged to attend, now provided by Oriel Incorporated under the name “Executive Overview of Statistical Thinking.” Oriel Incorporated can be reached at www.orielinc.com or Oriel Incorporated, 3801 Regents Street, Suite AB, Madison, Wisconsin 53705. The bead experiment is included in that course.

I would also like to thank the three readers of the first draft of this book: Ron Schild, Ray Rongley and my wife, Chris. They each took a significant amount of time to review the rough draft and provide critical insights and comments.

I attempted to respond to their many good and meaningful suggestions. I hope they will see their impact in this final version and will forgive me for not including some of their suggestions. Special credit goes to my daughter Betsy for her review of the partially complete first draft. She kept my faith up and kept me going when she said, in a quite unbiased manner, “Dad, it’s very good. You should finish it.”

Betsy is a potential world class sales person all on her own, and she does not even know it. She impressed the whole family when, at the age of three, she purloined small items from each of us, opened “The Dollar store”, and sold our own things back to us. The Dollar Store was a smashing success: for just a dollar you could buy back your own things, one at time. It was to her credit that she thought the idea up. She needed money, she thought about it, she had an idea and it worked. Who could turn her down?

Betsy commented that I introduced too many characters, too many deals and too many customers too fast in the book. She found herself deep in a maelstrom with no warning. She encouraged me to use a more paced approach to gently draw the reader into the fray. Her point was valid and well taken.

I did not, however, take her advice. I have entered new sales and sales management positions six times in my life. In each case I was asked (as you may be asked) to take over, not because things were going well, but because they weren’t. When one walks into those opportunities, one walks in when the house is on fire - whether you know it or not. People, customers and decisions start to hit you on hour one, and you are forced to take action with little data and knowledge. But you are there and you are the captain on the bridge. Since this is a book to help the reader learn and experience what it is like, I decided to stay the course. Its real, it will happen, and your head is spinning while you

Acknowledgements, credits and thanks:

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are trying to put out the fire and build a new house, all at the same time. So if you feel overwhelmed as you read the initial chapters - well that’s what it is really like.

Betsy is disappointed I did not weave her into the text. For this I apologize, there just did not seem to be a place for “the Dollar Store” approach to customer development, at least in this book!

A special thanks to Dixie Reichard and Bruce Thompson. I labored over this book for ten years. As a result the original Apple computer I had the text on not only died but the technology was obsolete so the files could not be recovered. The only draft I had was paper copy. Dixie ably recovered hundreds of pages of hard copy, retyped them and made me a base document I could work with. Bruce Thompson then took my lengthy document and made it in to a visually appealing book that people would want to read, would enjoy reading and would also get value from. I am indebted to Bruce for his work in creating the layout, format and actually publishing the first draft. And I also thank Bruce again for creating the layout, creating the visual appearance and successfully getting this final version printed. I may have been the father and mother of the book but Bruce was the obstetrician. It would not be here except for him and his efforts.

I also appreciate all the sales and marketing input and guidance I have received from my many employers, my competitors, my subordinates, team mates, students and peers. I got this learning through actual sales campaigns, wins, losses, classes and direction. These thousands of touch points created a complete sales picture that I have presented here. I could never have learned so much without them.

Much of my learning sprung from the initial teaching I had at Westinghouse on the consultative sales approach developed by Larry Wilson. This training experience was suggested by Anne Pauley, my supervisor, as part of the organizational transformation the Westinghouse Nuclear Fuel Division undertook under the leadership of Dr. Slember. I was so junior at the time that I did not appreciate the real value of the organizational development

experience they had provided me. However as the years have progressed I have come to appreciate what an excellent learning experience both Anne and Dick provided to me. The initial ideas for this book originated while I worked for them.

And I thank you for taking your time to read it. I am extremely eager to see a high level of customer driven, consultative, professionalism introduced into industrial sales and marketing. You can help us do it. Thank you for being part of our transformational team!

Andy

Acknowledgements, credits and thanks

Portions of these materials are copyrighted by Oriel Incorporated, formerly Joiner Associates Inc. and are used here with permission. Further reproductions are prohibited without written consent of Oriel Incorporated. Call 1-800-669-8326.

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Organization ChartsOrganization Charts

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Organization Charts

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Organization Charts

Setting the Stage

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Disconnects resulting from a non-systematic sales process

- Sales at or below full cost- Uncontrolled and un-reviewed risk built into

contracts- Absence of a closing negotiation plan- shipments rejected for inconsistency with the

contract- Poor internal image of sales force- Poor or non-existent hand-offs from the sales

team to the project team- Dropping sales volume mis-diagnosed as

a personnel problem while the real causes remain hidden and uncorrected

“Would you be willing to take over as Vice President of Sales and Marketing?” Rick’s ears were still ringing, had he heard this correctly? Did he really say, “Yes?”

It seemed like a dream come true. Rick Mann knew a lot and he was ready.

For twenty years he had worked as an engineer, a quality assurance manager, a licensing manager, a manufacturing director and as a variety of other critical internal functions. His career path was one of orderly, systematic progress and promotions. He was the consummate “inside” man. And over his career he had repeatedly been a victim of overzealous salesmen.

But there was also a lot Rick did not know. He did not know that it was common to put a high performer, like himself, in charge of an under performing sales and marketing department. And it was common that those appointees had little or no sales and marketing training or experience. So despite their excellent background in operational and staff assignments, they were often destined for a very rocky road in the hectic, extremely competitive and many times ruthless world of industrial selling.

What Rick did not know was that the people who typically make the decision to replace the sales and marketing manager were at least two levels above the Sales and Marketing manager’s position. In Rick’s case it was the Board that had told “RJ” Jones that it was time to make a change. RJ had not wanted to make the change and had begged for more time. Bob Doyle had been chosen for the position by RJ years ago, and Bob was RJ’s friend and his college classmate.

What Rick did not know was that many of his conventional command and control approaches to management, and even his industrial process approach to management and particularly his historical success in management of keeping processes under tight control, could be fatal in a multi-player sales environment.

Chapter 1: Getting the job - what you think you know and what you don’t know

Raring to go.

Setting the Stage: Raring to go.

I have included through out the text, in these blue boxes, “disconnects” and com-ments from an actual “sales process map” I did with one of my organizations. They are included to provide an impression of issues that are common to all industrial sales processes today.

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Maybe most critically what Rick did not know was that he did not know what he did not know. This may sound like a riddle, but the biggest challenge in learning about selling, is learning that there is in fact something to learn about selling. Once we’ve learned there is something worth learning, the learning itself is easy and makes sense.

And there was no one there to help Rick. The reason for that is that his boss and peers did not know or really understand the management of industrial sales and marketing either. Rick had entered into a realm where there is precious little training, little to read and usually a non existent pool of in-house experience to draw upon. But on top of that almost no one in the Company knew that there was anything to know. This is because only a very few individuals actually interface directly with the customers and experience the competitors. Only a very few have the pulse of the market. And almost all of those few are in the Sales and Marketing Department already!

But with a characteristic strong sense of self confidence, based upon years of successful performance, Rick thought he knew what he needed to know. For example, he knew about Tom Schultz, the salesman who landed the big Axiom account, the biggest account the Company had. That sale launched the entirely new and very successful “IO” line. It had also launched Tom’s promotion to Eastern Region Director of Sales. Yet Tom had sold the job at a price dangerously close to the Company’s full cost. And Rick had been stuck with the project of making the contract a success.

Every night and every weekend that Rick had slaved over that project he swore to himself again and again, “If I ever get to run sales, I’ll never let a contract like this happen again.”

Rick remembered again the day in Engineering that they discovered the “fine print” in the Main Line deal that had been sold by a Sales and Marketing guy a year earlier. The fine print committed Engineering to uncapped liquidated damages of $50,000/day for every day they were late in delivering the design drawings to the customer for review. No one knew about this clause and they had “back burner-ed” the project until it was too late to recover. When the first unexpected invoice came in, the Company was already $300,000 in the hole and the tab was growing. Rick’s boss lost his job over that one (and Rick got promoted to Engineering Department Manager as he executed a heroic recovery.) But everyone knew the real fault lay with the salesman (Jake McCormack) who had sold the company down the river when the contract was signed.

It took Rick 100 days to get the Company back on schedule and to get the customer to cap the damages at $50M. But that hit had flowed directly to the bottom line and forced the Company to lay off over 100

“Leaders must lead.” -General George S. Patton

Setting the Stage: Raring to go.

Cook’s Second Axiom

The team that knows that it does not know what it does not know, is the team that will find that information and win.

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“This above all else, to thine own self be true.” - William Shakespeare

people and furlough another 100 to make the year. It was painful. It really hurt Rick. He had seen many of those impacted develop with the Company. Some were his friends. To see them forced out of a job because of a contractual term issue really hurt. He had sworn to never forget Black Thursday.

And Rick recalled the time in his manufacturing department when he learned that a salesman had sold the IO units to Energy Inc., a major account won over from a competitor. But Jack Brown had sold the units with different cosmetic features than “the standard.” It meant a retooling of the whole line and rework of half the job that was underway (Rick’s team had started the run without checking the drawings). The manufacturing cost over-runs on the first shipment ate up all the profits for the whole contract.

And his manufacturing teams were totally beat. They had been forced into mandatory double shifts with weekend back shifts. Everyone’s social life, family life, scouts, children’s athletics, all of it went out the window as they pushed to recover. It was family time his team could never recover. Rick had tried to compensate. He had held family dinners at the plant that everyone could bring their family to. And he worked in a special bonus for everyone along with the over-time pay. But none of these actions could ever really make up for the lost personal time that job cost them all.

Rick never understood why Jack Brown had allowed the customer to buy so far out of specification. But he did remember exactly who the salesman was who had threatened Rick’s team’s production that year. Rick had been surprised that Jack ended up as the Western Region Director of Sales. Rick mused, “Jack’s days are numbered.”

Rick had spent countless nights dreaming about what he would do if he ran Sales and Marketing – things that would make that department work right and get it under control. Rick wanted to get the department in a position where it would not hurt the rest of the company, not hurt the shareholders or for that matter not hurt the other employees: no more “Black Thursdays”, no more mandatory double shifts, instead more control, more logic, and less damage. He knew what needed to be done. All the partying, golfing outings and big dinners would soon come to a screeching halt. It always burned him how the Sales Department splashed money around, hard earned dollars that were potential profits.

And now here he was. Sales volume had been running at about $200M per year for the last ten years. Bob Doyle, Vice President of Sales, had been doing an okay job running the department. But last year sales were down to $192M and this year the forecast was for $185. Everybody knew something had to be done, and President Richard Jones (“RJ”) was a man of action.

Setting the Stage: Raring to go.

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Bob Doyle was surprised when he was assigned to Special Projects. Tom Schultz, the top regional sales manager in Bob’s department had been the logical successor. No one was surprised when Bob Doyle was reassigned; the handwriting was on the wall. But with Rick’s appointment it seemed RJ was trying to send a message. It was not going to be business as usual in Sales and Marketing. The place needed a shake up, a new perspective, someone to turn things around, and especially someone The Company could trust. Everybody in The Company was suspicious of anyone in the department.

And so here was Rick. Finally he was on the Company’s general staff, and in a function he had thought the most about. This truly was a Good Friday, just like the calendar said. Rick knew it was a dream come true and Rick was raring to go. What he did not know was that it was an experience that would change his life and the Company, forever. And he did not know how painful, wrenching and fulfilling that transformation would be.

Setting the Stage: Raring to go.

“When it looks the darkest, keep the faith, stay on process,

you will succeed.” - Andrew Cook

Help! I just got promoted to Sales Manager!

The average tenure of a sales leader has declined from 24 months to 21 months within the last two years. From Caliper AdvertisementSelling Power, June 2007

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Setting the Stage: I’ll get this place under control.

Phones were ringing. People were literally running around. Someone screamed into a squawk box something about “We’ve got to do it now, their way, or we lose it now, now – can’t you understand?”

Rick walked up to his new office. Suzanne Krisp, Bob’s secretary, greeted him and asked, “Do you need me to book any flights for you now? Also Jack Brown has already asked to see you. He says the Taylor deal is going south and he needs your help immediately.”

Rick smiled. Jack Brown was the guy who had closed the Energy, Inc. IO deal. It was only a matter of time before Jack would be looking for a new job.

“Suzanne, call a staff meeting for 1:00. I’d like to introduce myself to everyone.”

Twenty minutes later Suzanne leaned in the office. “Only Jack Brown, Ellen Kramer and I can be there at 1:00. Jim Martin, Bill Edwards and Jake McCormack are all traveling. Tom Schultz can’t come and said Tim West has customers touring the plant. Tom also said Sid Grains and Eric Black are both very busy trying to get proposals out. Jack said he would come because he hoped you could use the time to discuss the Taylor deal. And as you know Jack’s three people are all based out west, so they cannot …”

Rick rocked back in his chair in shock. This was almost insubordination. He’d asked for a meeting and no one was going to attend. This had never happened to him before. “Who approved all this travel?”, he asked.

“Oh, the guys just go when they have to,” Suzanne responded.

“Well, who approved Tim’s tour of the plant?”

“Nobody I guess, Tim just set it up and told the manufacturing Vice President, Al Dewlots, to make sure the plant was ready and that the shop looked sharp.”

Chapter 2: The real time confusion, chaos, intensity and urgency of sales environment

I’ll get this place under control.

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Setting the Stage: I’ll get this place under control.

“Well when are these proposals due?”

“Tom said they were over due. Sid and Eric had to beg Boston Corp. and Chicago Central for extensions and now the bids have to be in by the close of business today.”

Unknown to Rick, he was experiencing the reality of the chaos and urgency of a competitive, industrial sales department. The competition and customers were on the move, whether or not Rick’s company chose to move with them. And, as Rick would learn, the windows of opportunity to influence an order open and close quickly. There is little time for in depth reflection. The order, structure and more orderly pace of a manufacturing, engineering or even financial department is quite dissimilar from the intensity of a department like Sales and Marketing, whose timing is set largely by others outside the company. He may have felt like he was drinking from a fire hydrant, but it would get worse.

Rick tried to settle down and started to scan the paperwork. Two letters immediately caught his attention. One was a letter from one of Jack Brown’s salesmen, Dale Hoffman. It offered a $2 million price cut on the $50M Taylor proposal contingent on an award by Friday. The second was a handwritten note from a product line engineer, Lynn Wadsworth, responsible for the “IO Lite” line. It was sent to Bob Doyle and indicated that she had agreed during a teleconference with the Taylor buyer to a Limit of Liability for the Taylor deal of three times of the anticipated contract value. This was well beyond policy.

Rick called Dale and asked him about the price cut. Dale said the Taylor V. P. of Purchasing said they had to do it to get the nod. Rick asked if Dale had the signed, formal approvals to make the cut. Dale paused for a long time and then said,

“Rick, you and I have not worked together so we really do not know each other. But I know you know that in sales sometimes timing is everything and you just have to do it, otherwise the sale will be gone like a ghost in the night.”

Rick paused and asked again. “Did you have approvals for this move?”

Dale paused and said, “Bob Doyle always approved moves like this, it needed to be done.” This was still not an answer.

Rick’s pulse raced. “Did you know about the Limit of Liability concession our product line engineer made?”

Disconnects resulting from a non-systematic sales process

- Late proposals- Upset and alienated internal contributors- Customers who are not attended to- Uncoordinated and non-prioritized sales

activities and customer interfaces- Narrow spans of control- Absence of planning, “reactive mode”- No obvious theme or strategy, no grand plan

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Setting the Stage: I’ll get this place under control.

“What!” Dale almost shouted in the phone. “She did what? When? Nobody told me. That’s significant! What happened? I’ve been begging for that for weeks. How could she do that without telling me? That was more important than the price move. I thought I was making the price move to make up for our inability to meet their LOL requirement. This is unbelievable – what is happening back there, don’t we have any discipline? Rick you’ve got to stop this. Don’t they know that we are supposed to be the channel to communicate with the customer? Why doesn’t Peter Diligent make his people talk to us? Oh man, I give up.” And he hung up.

Rick’s shock level rose, if that was possible. What was going on here? Who was in charge? The place seemed totally out of control.

He was about to call Peter Diligent, the V. P. of Projects & Products, when suddenly the phone lit up. On one line was the Company’s Vice President of Engineering, Roy White. There was a standing joke in the Company that in Engineering everything is either black or white so that is why they put Roy on the job. Roy was hot. He wanted to know why his people were being asked to support Tom Schultz’s two last minute proposals. It was ridiculous to spend this amount of time, at the last minute, when there are other priorities. It looked to him like Sales had no planning; this type of scramble was a typical Sales Department ploy to attempt to ram something through the system. “If I ran Engineering like …” Rick put the call on hold.

The second line was the Vice President of Purchasing at Taylor. He wanted to know if The Company wanted to do the deal or not and he wanted to know now! (Those two concessions must have hit the mark.)

The third line was the Vice President of Production at Axiom. Nobody had been in to see him in three months and he wondered if The Company cared about Axiom any more.

Rick’s temperature started to rise. What stupid thing had Tom Schultz done to get him in hot water with his old buddy Roy, the V. P. of Engineering. Tom seemed to have done it again.

In just two hours Rick had come to a quick resolve. “I’ll get this place under control and I am going to do it fast.”

Getting a sales and marketing department under control is, as Rick will learn, relatively easy. Getting it well structured, motivated and trained to consistently succeed is, as Rick would learn, a much more difficult task - one foreign to an excellent leader like Rick and similarly foreign to many of his peers. Rick, like many in his situation, had entered into an important adventure, but with none of the formal training, mentoring or guidance he had experienced in his previous assignments. It is unfortunate this situation existed for Rick.

29

Setting the Stage: I’ll get this place under control.

Part of the reason is the low opinion that many in industrial organizations have of Sales. So it becomes a self fulfilling topic. Low opinion, low investment in training and development, low result, low opinion and on it goes. Rick was next manager to be placed into the meat grinder.

30

Rick dictated two memos to Suzanne. The first was titled “TRAVEL” and said in effect that all travel in the department had to be approved in advance in writing by Rick. And that he did not plan to approve travel unless it was associated with an active request for quote.

The second was titled “CORRESPONDENCE”. In it he said that all department correspondence with the customer and any commercial commitments had to be approved by Rick in advance. He also pointed out that he was tired of poor grammar and unclear writing in the correspondence, and that he felt this was at least partially the cause of the contract commitments that were costing The Company so much money. He told Suzanne to issue the memos immediately.

He then called Jack Brown into his office to review the “urgent” Taylor situation. Rick started the dialogue.

“Well Jack, when was the Request for Quote issued?”

“It was never issued Rick, this is a negotiated deal.”

“What?”

“Yes, we’ve been fortunate in working to extend the contract we already have in place. We are adding some features to the current contract in return for an extension on the order.”

“Things like a $2M price concession and a three times the contract value limit of liability?” Rick asked.

“Yeah, that’s part of it – I’m glad you are up to speed so fast. This could be the biggest close this year; we are looking at a $50M deal. Now the problem Rick is…”

Chapter 3: Quick fixes based on a lack of understanding actually make things worse.

When does a sale start?

Setting the Stage: When does a sale start?

31

“Whoa, wait a minute. How do you even know that this is what the customer wants? I mean without an RFQ it’s not even an official request from their side. Something about this doesn’t smell right and, Jack, I had a bad experience with you before.”

Rick paused and then said with emphasis, “Selling on a negotiated basis, without a Request for Quote. I don’t know. This almost seems unethical.” Rick looked Jack over carefully. He wondered if what he always thought was true was really true. Did Jack have something going on behind the scenes? Did he have an ethics issue here?

Jack worked hard to control his emotions. Jack did not realize that Rick was really a beginner in sales. Things that seem intuitively obvious to “born salesmen” or even people who have been in the field for years, are not at all obvious to beginners. So Rick misunderstood what was happening on the order, and Jack misunderstood Rick. Rick carried a lot of lingering emotional baggage about how the Sales Department had hurt his people. Jack would never have guessed that a person with no sales training or experience would be asked to run a sales department.

Jack was an unconscious competent. He knew intuitively what to do to win orders. But he did not know why, or even know that he knew. And he for sure did not know that his intuitive, self-taught approach was incomplete and was not as successful as it could be.

“Look Rick, we’ve got them in the palm of our hand. Their buyer wants the deal and so does the V. P. of Purchasing. All we have to do…”

Rick cut him off again. “Jack, when does a sale start?”

Jack was about to respond to this amazing and out of context question when Rick jumped back in.

“I’ll tell you when, it starts when a customer issues a RFQ. That’s when we get in gear, that is when we know exactly what he wants, because he has written it down in black and white. If we respond to his RFQ and we have the best response, we win. That’s the ethical way to do business. I just don’t know what you are doing but it smells fishy to me. You call the buyer and say we’re sorry this all got started, we apologize and we’ll wait for their RFQ.”

Jack was dumbfounded. He started a vehement and loud protest. He was offended, one of the best s ales in his life was falling apart, the sale that could have saved the year. And further, his integrity had been challenged by someone who had never sold a thing in his life. The dialogue deteriorated and Jack stormed out.

Setting the Stage: When does a sale start?

When does the sales process start?

- After the RFQ is issued?- Before the RFQ is issued?- Before the client knows he has a need?- When a customer is identified?- When you decide to start selling a product?- After a contract is closed?

Do sales processes have some common steps?

- Post bid negotiations- Issuance of an RFQ- Preparation of a bid- Contract signing- Other thing(s)?

32

Of course these well structured and orderly approaches seemed natural to Rick. They were consistent with setting design specifications, with preparing formal manufacturing drawings and with the signing of formal manufacturing certifications that things had been built correctly. Orderly, well structured processes are what an excellent manager who works within the business operations departments would expect - because that is how excellent internal groups work. And Rick knew darn good and well that quick fixes imposed upon processes generally are not accepted and fail. What Rick did not yet know was that the sales process, with its many external players, was not structured in the way that processes internal to a company, and 100% within a company’s control, are typically structured. Rick’s error is normal. The results would be normal too, and not positive.

Two hours later the V. P. at Taylor called Rick. After a cordial dialogue the V. P. said, “My buyer just told me that Jack called and said you wanted to withdraw from our negotiation and wait until we issue a formal request for quote. Are you sure this is the right thing to do?”

Rick said with confidence, “You bet, I’m really sorry this all happened. We’re turning over a new leaf here I’m going to get things done differently and correctly.” There was a long silence at the other end, not what Rick had expected.

“Differently, how?” the V. P. paused.

“I’m going to get this place under control and we are going to respond to your requests for quote in a quality manner.”

“Oh, we had not been planning to issue an RFQ. We have been pretty happy with things as they are. Do you mean we need to issue an RFQ to get your bid?”

“You bet, otherwise how can we be sure what you want?”

“Okay,” said the V. P. but he sounded a bit amazed. Even the Purchasing V. P. had no formal training in sales processes. But he knew intuitively that this situation was highly unusual. This was not how sole source negotiations for industrial business typically went. But since he, like Rick, was untrained, he just couldn’t put his finger on the issue. Rick sounded smart and ethical and seemed to sound customer responsive, but this action truly was unusual. They said goodbye pleasantly and hung up. Rick was unsettled. He had expected a more positive and reinforcing dialogue. The conversation had seemed strange.

Setting the Stage: When does a sale start?

33

Well, on to other things. Suzanne arrived at his doorstep. “Here are three letters and six bids you need to review immediately. The guys saw your memo and they are taking it seriously.”

One letter was a follow-up letter to a recent social outing thanking the customer for a great time and the chance to meet his wife. The second was a letter to another client confirming that the time and materials rates for last year could be extended for three months until the new rate sheet was issued. The third offered a $1M price concession on a proposal made a year ago. The six RFQs ranged from a quote for a $600 part to Sid Grains’ $10M Boston Corp. proposal (it was 4 inches thick). All the bids were due by close of business as was the price concession letter.

Now as Rick’s heart raced, his stomach joined it in turning into a knot. There was no way he could review all these in time. He tried to get more time but was told, this was it. Rick decided he better dodge the ball and asked his Directors to review the documents and counter sign them if they thought they were appropriate, Rick was not going to sign anything until he figured what the heck was happening here. All the letters and bids went out exactly as they would have without the review process.

By 6 P.M. Rick was exhausted. This was overwhelming. He had no way to set priorities, no way to judge. The paper flow was constant and intense, and out of control. So were his customers. It sounded like a bad joke but it was true. All kinds of unorthodox things were happening: negotiated bids, unsolicited bids, sole source bids, modifications to bids after the original bid was submitted, attempts to save a bid after the award was already made. It was as sleazy as he thought it would be, but he never imagined that it really was this sleazy.

And worst of all his sales team seemed to have no idea of when their job was supposed to start, after the RFQ is issued. He called it a day and drove home.

Rick had never really been close to anyone. He studied hard and worked hard and had made his own way. He enjoyed solitude. It was a chance to think, plan, read and study. When he got home he went into the study and sat at his desk. Boy, was he wiped out and disturbed, this was an incredible day. Bob Doyle must have really been out of control, but that conversation with the Taylor V. P. still gnawed at him. Something wasn’t right. For the first time in months he went over to his liquor cabinet and poured himself a tumbler full of Irish Cream, then another, finally he started to feel a bit better about things. He wasn’t a drinking man but today he felt he earned it.

The house was quiet. Everything was in its place. The kitchen was as sparkling as he had left it in the morning. The cleaning woman (she was in twice a week) had left the house immaculate, just the way he liked it. Well at least here things were the way they were supposed to be. He headed off to bed.

Setting the Stage: When does a sale start?

34

As Rick sleeps, lets stop for a second and observe what is going on. Truly the department, like most industrial sales departments, is out of control. Rick is right. And the lack of systematic approaches leads to last minute proposal and decision making crises with a lack of information to base those decisions upon.

At the same time, like most industrial sales departments, it truly is a dedicated department of dedicated individuals who do not, themselves, know what they really do or why it succeeds. And for that matter, the customer does not understand the sales process that will serve his need best either. The mission orientation, control, training, systems and structures, the orderliness and control the team needs are not those of raw control over observable behaviors. It is something at a much higher level, not something that can be developed through a good’s night sleep, and for sure not something any Vice President can achieve alone.

Rick’s challenge is compounded by a lack of understand of human interpersonal relationships. Again, his situation is not particularly unusual in industrial environments filled with engineers and technologists. So appreciating the very human sales process will be even more difficult for Rick than it would be for many beginning retail sales representatives. His training has pre-dispositioned him away from critical skills needed for his new job.

Rick thinks he can make the necessary improvements happen by brute force. He will get a wonderful chance to learn how to really do it.

Setting the Stage: When does a sale start?

35

Rick got into the office at 9. There seemed to be a big discussion under way in Jim Martin’s office. Rick went over to listen in. The dialogue centered around the upcoming ProAm golf tournament and who was going to be invited, who would golf with whom, where they would eat, whose wife would be invited. Every salesman in the office was involved and the dialogue was intense. Rick was not pleased, but thought he could address this later.

He walked back to the office to get things underway. Suzanne took him through his in-box.

“Here is a travel request from Ray Rongley. He and his wife Kathie are going to travel with the President of Wolfinger and his wife to tour our Tampa plant. They plan to make a three day stop together at Disney World and Ray wants you to know they plan to golf “the Big Blue One” which will run $500 including carts, greens fees, balls and drinks. Also, Ray is asking for approval to hand deliver the Wolfinger proposal, but this is a bit of a pro forma, he left for L.A. last night at 8. He got this to you at 7:15 PM but you had already left. He said he would just have to risk it and go. Ray said he would be going to the hockey game tonight with his buddy in Wolfinger’s purchasing and then would be golfing Wednesday with the Wolfinger operations manager and their plant manager. Ray said he may just hang around their offices Thursday and see what might come up.”

Rick could not believe how calmly Suzanne was reporting all this.

“Oh, here’s a request from Jack Brown. He wants to head out to the Taylor account tomorrow and see if he can save the deal. He needs to meet confidentially with the V. P. of Purchasing and they were planning to go up to Jack’s condo in Vail for a couple of days of skiing. He wrote on the bottom in red, “Let’s save this deal, I can do it. Let me go. It’s $50M in sales this quarter, I could turn this around.” Rick’s temper slowly started to rise again, Jack just did not know when to give up!

Chapter 4: The importance of relationship development in the industrial sales process

Stop the socializing and get down to work.

Setting the Stage: Stop the socializing and get down to work.

36

Setting the Stage: Stop the socializing and get down to work.

There were six more letters to customers for him to approve. All were poorly written and some did not even refer to “The Company” correctly. He wondered if anybody had approved any of the commercial adjustments. There were another half a dozen bids to review and approve. Rick was beginning to measure the work in inches. These bids were about 7 inches total, three inches more than the stack last night, and it was not yet noon.

Rick did not want to approve any of the travel – it seemed frivolous and a waste of company money. He decided to give himself some time to think about it. He closed his door and started to review the bids.

Without the Request for Quote (RFQ) he was lost. He could not figure out what was being offered. There was no summary. He could not figure out the critical offer points. In some cases boiler plate language had been used and the wrong customer name was in the boiler plate. He could work on these bids for a week and they would not be ready. He did notice that each of them had a nice, brief one page cover letter from one of his salesmen. It was called a letter of transmittal and each looked like it had been written by a computer.

Suddenly, the whole group up the hall broke into loud laughing and then the office went quiet. After half an hour Rick got a little curious. Suzanne told him that the entire staff had gone out to lunch together and would be back by 2.

Rick lost his temper for the second time in 24 hours.

At 2:30 they had an all hands meeting with the west coast team members included by conference call. Rick made it clear in no uncertain terms that he wanted all this socializing to stop and wanted people to get to work. Travel with wives would occur only on an extremely exceptional basis. Work hours were 8 to 5 with one half hour for lunch, people were expected to be in the office and golf was something to be done outside of work hours. He emphasized that this was not a country club, they had an obligation to The Company to produce, and their product was sales. “We are paid for results, not activity and definitely not for socializing. We have a serious problem, volume is down and you all do not seem to be taking it seriously. Now let’s get serious and focus.”

The team left the meeting with a new somber mood. Rick finally felt like he had started to get through to them. Maybe he could have a positive impact.

And maybe Rick was right. But let’s step back and look at this. As we have seen, Rick failed to appreciate the role of relationship development in industrial sales and in human interactions. And his team, like many sales groups, misunderstood relationship development to mean socializing. They knew they needed to do

Cook’s Third AxiomYou don’t lose until you give up.

Customers will tell your team they lost and why. What the customer is really telling you are yet more unknown and unfulfilled needs. If you move fast and fill them, you can still win. They don’t tell you that you lost, unless they care about you. And if they care about you, then they still will let you win. I have seen it happen again and again. BUT THERE IS NO TIME TO WASTE!

Relationship development

- How do we develop relationships?- Are personal relationships important in

selling?- Who do you relate well with?- How did that relationship develop?- Was it a result of business interactions?- Why would someone want to develop a

relationship with you?- What is important to achieve as a result of

relationship development?

37

Setting the Stage: Stop the socializing and get down to work.

something in this area, but because of their lack of training they were not too sure what they should do. So they tried various forms of socializing and it seemed to work better than nothing at all. But because they really did not understand the critical role of the relationship development step in industrial selling, they could not help Rick to understand the impact of what he was doing. So the sales team had a process that was out of control, the relationship development process, and Rick - by eliminating what struggling activities they were undertaking, was inadvertently killing what limited good they had achieved. As a result this well intentioned team of good people marched forward to the inevitable.

38

Chapter 5: Metrics of end results without process step metrics will not improve the outcome

Where are your reports?Things had calmed down a lot. The salesmen were spending more time in the office and the paper flow was more orderly. There were fewer unexpected calls and the frantic nature of the interactions had come down a lot. Rick was cautiously optimistic that he was getting the situation settled down and beginning to be effective. He had run through about six red pens marking up correspondence and bids. The quality of the correspondence was up and somehow the volume was coming down to a manageable level. He was still confused by all the things going on, there seemed to be no logic to it. He was used to an orderly plan and forecast like they had in manufacturing and systematic reports like he had in the Controllers group. Plus it seemed things had to happen so fast, and this mystified him. In Engineering projects frequently took months to start and years to finish. These salesmen seemed to think multi-million dollar decisions could be made overnight.

It was about 10AM when RJ, the President, called.

“Hey Rick, I’ve got to meet with the Board tomorrow and they will want to know our sales forecast as well as orders to-date and major closings underway. Can you get those slides up to me by noon so I can review them? And I’ll want some detail on the big ones.”

Rick’s heart stopped. The Board? He had never done anything for the Board before and never this fast. The Board? This was a shock.

“Ah, RJ, I wonder if I could have a couple of days…”

“Absolutely not. Look Rick, we put you in there to get things done and turn things around. We can hire engineers, we can sub-contract the manufacturing. Controllers are a dime a dozen. But there is one thing that only we can do, that is the heart of business, that without which we have no business, and that is SALES. Sales are the food that feed The Company. Sales mean shipments — shipments mean payments—payments mean profit. You are it buddy! Our most critical business issue is sales volume and

The revenue line (top line) is critical to an industrial business. As the new Sales and Marketing Vice President you will be expected to provide a plan or forecast of revenues based upon projected closed orders. Then despite the vagaries of the market, you will be expected to live up to that projection.

Setting the Stage: Where are your reports?

39

Setting the Stage: Where are your reports?

Disconnects of a sales effort with no process metrics

- Lack of standard reports- Lack of definition on: • order size • probability of success • accountable lead • process status- Lack of long-range forecast- No way to identify and correct volume gaps • in aggregate • by product line

it is dropping. The Board insists on that report. They insisted that I change out my classmate and personal friend, Bob Doyle! Got the message!!”

Rick just got a big hint that it was not really RJ who had promoted him. In fact Rick had just stepped into the world of big time corporate politics. But he did not see it. If Rick succeeded, fine. If Rick failed, RJ could get rid of him. And it would just prove to the board that RJ was right, that it was not Bob Doyle that caused the problem. Even an ace like Rick could not save the day. It was something else that was affecting the sales volume. But being a lifetime “inside man” Rick had never before been exposed to the real forces at work in running a major business. Without a top line there is no bottom line.

“And, oh by the way, the report needs to include those two big elephants: that $50M Taylor deal and the $10M Wolfinger deal, they should be closing soon. I’ve been really impressed with Jack Brown; he seems to be churning up volume where it seems nothing existed before.”

Rick’s heart sank. “The Wolfinger deal was a $10M deal! Expected to close?” Rick thought to himself. “Well time to roll up your sleeves and get to work. Jack Brown! Churning volume? I was about to can him.”

Rick called his three Directors; Tom, Jim and Jack and asked them each to give him a report on their active sales, their year end forecast and their volume to-date. He told them he needed it by 11:30. He got Jack on a plane; he had a pager and had responded to it. Tom was driving to a client and had answered his mobile. Jack had been at a presentation with a client. They all pleaded how impossible this would be, but given Rick’s insistence and his description of the situation they said they would try.

What came over the fax at 11:50 was spotty. The reports were all handwritten and imprecise. Jack had not even included the Taylor deal on his list. The orders year-to-date were about $90M. The active bids were about $20M and the forecast was for another $10M. If everything went as planned it would be a $120M year, far below Bob Doyle’s forecast of $185. If they pulled off the Taylor and Wolfinger deals, it could have been $180M. Still short of Bob’s last forecast.

Rick searched frantically for any standard reporting form. There was none. It seemed no one had really cared before as long as sales had been about $200M.

He drafted something up and sent it on to RJ. The return call was almost instantaneous.

“Rick, this is unacceptable.”Pe

rfor

man

ce In

dica

tor

Time

40

Setting the Stage: Where are your reports?

“I know, but the condition of this place is phenomenal.”

RJ paused. “Okay. I’ll do the dance and cover for you, but next month we better be in a lot better shape. I want reports, detailed reports, status, probabilities, and actions. We need to show that we know what we are doing and where we are headed. Next month don’t make me ask where your reports are.”

Rick got the message.

So what happened here? Rick was beginning to see for the first time in his career, the extreme political sensitivity associated with the Sales and Marketing Department. Everyone realizes the company’s success is at stake and so is its image. At the same time Rick was searching for some sort of predictor of future performance, closed orders. Eyeball estimates by the team fail to take note as to whether orderly sales process steps are being followed. With out a metric on the process steps, the outcome is at best a straight gamble. And Rick was forced to put bad deals into his forecast in a hope to try to make the year, or even come close. So he was making committing decisions as to what orders to include and bet the future upon, with bad data. And closed order forecasts without sales process step metrics are meaningless.

41

Setting the Stage: Where are your reports?

The table Rick sent to RJ

Orders Received YTD Business Areas

By Customers in Millions IO IO Lite HO The Big O Parts Service Total

Axiom $3M $3M $6M

Boston Corp. $1M $1M $2M

FIDECo $5M $3M $1M $9M

CalPal (Terminated on perf.) $10M $10M

Main Line $5M $1M $2M $8M

Los Nevada $10M $10M

Pac IDaho $5M $5M $2M $2M $14M

Taylor $3M $2M $5M

Wolfinger $15M $15M

Other $13M

Total $92M

Active Bids by CustomerBoston Corp. $5M $5M $10M S. Grains

Chicago Central (Lost) $10M $10MT. West

Taylor* $50M $50MD. Hoffman

Wolfinger* $10M $10MS. Grains

Total $80M

Additional Order Forecast to End of Year by CustomerMisc. Parts $5M $5M(Based Upon Normal Volume)

Misc. Service & Engineering $5M $5MSupport (Based Upon Normal Volume)

Total $10M

GRAND TOTAL $182M

*At the last minute Rick included the Taylor and Wolfinger sales. Despite his original misgivings Rick’s numbers looked far too low and he needed something to make it look reasonable.

42

It had taken Rick almost four months to get there, but things were finally under control. The department was humming smoothly. Nobody traveled without his explicit permission and he made sure they had an active RFQ before they were on the road. Inappropriate social trips were down to zero. In fact, social trips were not occurring at all. There were no more panics in the office and they had an excellent handle on the sales underway. Rick required his Directors to submit to him every week a report of all the sales under way and the probability that they would be won. These were tracked down to the $1000 dollar level.

He had Eric Black working full time developing an automated data base to track the potential orders by ac-count, product line, probability, expected award date, and assigned salesman. Training was being sched-uled so that the salesmen and directors could enter and modify data in this file automatically.

The Directors and Rick had a weekly, Monday morning two hour “production” meeting, just like he had in manufacturing, to review events and progress. This meeting was used to handle the continuous flow of administrative issues (health plan update, budget forecasts, performance against expense budgets, new expense reporting rules, plans for the picnic, etc.). Rick liked to use an informal participative format: he covered the major topics of interest for about one and one half hour and then went around the table and asked each Director for his comments. Initially this second part of the meeting had run on much too long as the Directors repeatedly addressed issues related to account development and customer coverage. Rick had made it clear that they needed to focus on their key product, “closed sales.” Over time their side bar dialogue had dropped off and the team seemed to be in good agreement as to the direction as the Directors had almost no comments in their portion of the meeting.

Rick produced a monthly report about ten pages long for RJ on the sales forecast. It was basically a print-out of Eric Black’s matrix.

Chapter 6: Controlling the environment without an understanding of the criti-cal process steps and whether they are under control is not effec-tive in improving the outcome

Finally, under control.

Setting the Stage: Finally, under control.

43

Rick had met with each of his Directors and discussed objectives for the year. He knew they had to get the volume up. With still only $90M in house and a need for $200M, he had set a stretch goal of $120M for the balance of the year. He had split this evenly between the three Directors and given them a “com-mitment” of $40M apiece. Rick had emphasized that this was a commitment, and had gotten them each to sign on to it in writing. This was similar to the way he had managed his engineering group, he had each manager commit to meeting his project milestones and budget. Once he had those commitments manage-ment was easy. The guys knew what their job was, what was at stake and that it was their job to do it.

Interestingly the number of bids issued per month was rising steadily. Now that travel was based upon an active RFQ, and booking forecasts were based upon bids issued multiplied by the probability of success, the guys were finally taking the bids seriously. They were now issuing in excess of 200 bids per month ranging from $500 parts orders to major $50M contracts. It seemed to Rick that in some cases they were bidding the same job three or four times to three or four different customers who were all bidding the same single government job. But he was not sure.

The pricing and word processing groups were working 70 to 80 hours a week. Rick was pleased. Things were really humming. The salesmen were writing Rick detailed reports on each customer visit and phone call. Rick had graduated to six complete filing cabinets to hold the reports and copies of the active bids.

And Rick’s job was going much more smoothly. There were no more panicked interruptions to close a sale, no more concern about where the orders were going to come from, he had it all on the spreadsheet. They would easily make the year. He was bothered that nothing had closed over the last 100 days, but it was clear from the statistics that everything would turn around. Rick was working a calm 8 to 5 day with an hour off at lunch to go jogging.

He really was doing what RJ had hoped for. The way Bob Doyle had run things the department was a shambles. Now it was under control and was going to produce.

Setting the Stage:: Finally, under control.

Symptoms of a goal and task orientation versus a process orientation

Strong control of selected tasks with no • control or consciousness of othersExtremely detailed reports on end result • measuresNo measures or understanding of progress • on intermediate stepsMinimal interaction in work teams• Non value added activities• Lack of strategy resulting from an • un-managed approach of accommodating a very broad, unfocused range of inputs