By Dominique Côté, Founder & CEO, Cosawi & Principal, The Summit Group
Disruption Leads to Innovation
Disruption, although most times unwelcome, gives way to innovation. This last year has certainly proven this saying. Could the mother of creativity and innovation, in fact, be disruption?
We have seen seismic shifts in industries like events and hospitality that have been devastated by the pandemic. However, many have pivoted and transformed themselves by, for example, providing office spaces for people in need of a quiet working environment. Customer-buying behaviors have also reshaped Amazon and other retailers in delivering everyday goods.
In general, engagement models have been shattered. Although we all look forward to interacting with humans again, we know that the end of the pandemic will not mean a return to normal. This past year has created a new normal, where virtual engagement will remain even as we re-introduce face to face into our lives. Organizations are already planning for this new- or next-normal hybrid model and have worked hard to elevate the needed skill sets of their commercial teams – especially strategic account managers.
An interview with Michael Thomas by Harvey Dunham, Managing Director of Business Development at SAMA
Michael Thomas is the founder of Magnetic Services. He also spent years as a managing consultant for Microsoft’s global consulting organization. This interview is based on a recent SAMA podcast.
Join us for a Next Practice Symposium on September 15 when Michael Thomas will be speaking more on this topic. Register here.
Becoming a Trusted Advisor
Harvey Dunham: We are asking the smartest customer-facing people in B2B how to become trusted advisors to customers they cannot afford to lose. How do you think SAMs can learn to sell expertise and not products and transform themselves into trusted advisors?
Michael Thomas: There are two ways to look at this. First, there is how SAMs communicate, articulate and exchange their expertise based on their sales and professional experience. Second, you can view a SAM as a broker or bridge to the expertise that lives within their organization. While the first topic is interesting, the second is more germane.
There are exceptions but generally SAMs are used to thinking of themselves as a bridge to products and solutions for their customers. This is historically the role they have played. SAMs however have a much more important role to play. When we talk about expertise, you could label it as knowledge-intensive business services or expertise-based services that don’t show up in a product catalog. These services are not documented like products, technologies or platforms that have solution sets customers can find online and have at their disposal. So, the SAM is critical to connecting the customer with the expertise inside the seller’s organization.
Service teams generally have that expertise but can’t scale as broadly as your SAM community. So, from the customer’s and service team’s perspective the SAM represents the expertise and can make things happen for those customers.
By Roshni Patel, Customer Success Manager, Royal Ambulance
Royal Ambulance is a California-based transportation company committed to connecting patients and providers in the healthcare continuum through transportation, technology and seamless experiences. We partnered with a medical insurance network in the San Francisco Bay Area focused on providing easier access to high-quality care with cost transparency. Roshni Patel and Royal Ambulance won the 2021 SAMA Excellence Awards in the category for “SAM as the Leader.”
Identifying Customer Roadblocks
When we first established our partnership with the insurance network, Royal was just one company among many servicing the network’s network of hospitals and doctors. Our customer sought a trusted transportation provider who could help them keep patients within their provider network, ensuring quality patient care at a lower cost to the health plan. Each hour a patient spends in a non-network hospital increases the cost to the insurance network significantly.
During the initial discovery phase with the customer, our team at Royal established a regular meeting cadence with the insurance network’s director of transitional care programs, with the goals of determining current barriers to keeping patients in-network and identifying and addressing inefficiencies in transportation ordering workflow.
Specifically, we collaborated with the insurance network to develop the following list of prioritized objectives:
Leverage transportation to ensure patients receive care within the provider network.
Reduce the overall financial costs to the health plan when a patient obtains care out-of-network.
Decrease the time case managers spend on scheduling patient transport.
Create a single transportation hub for medical and non-medical transportation needs to streamline and simplify transportation requests and provide the appropriate levels of transportation for patients’ needs.
Educate case managers on how to triage appropriately for level of transportation based on a patient’s medical condition, reducing costs to the health plan or to patients who may be responsible for paying directly for transportation services.
By Danielle Matteson, Vice President, Strategic Accounts Program, AVI-SPL
AVI-SPL is a digital enablement solutions provider that serves 86 percent of the Fortune 100. It designs, integrates, manages ad supports on-site and cloud-based communications and collaboration technologies for organizations around the globe. AVI-SPL was the recipient of the 2021 SAMA Excellence Award for “Outstanding Mature SAM Program.”
Establishing a Customer-Centric GAM Program
The [GAM] program’s core mission is to form and maintain a trusted partnership with our clients that produces mutual innovation and value resulting in measurable outcomes.
Here at AVI-SPL we established our GAM program to drive long-term value through strategic alignment with our most valued global clients. Our program is oriented around three core, client-focused pillars:
Culture: Create a customer-centric culture
Trusted Advisor: Serve as a strategically aligned, trusted advisor
Global Delivery: Optimize our client experience to consistently exceed expectations
Since the inception of our GAM program, we have seen more than 40 percent growthover projected revenue had we not created a strategic accounts program. We have exceeded industry benchmarks in revenue growth rates, wallet share expansion, customer satisfaction, and client engagement.
Dr. Fred Kiel, co-founder of KRW International, a global leadership consulting firm and Kelly Garramone, CEO of KRW and Executive Director of the KRW Research Institute, prove that character “isn’t kumbaya.” Kiel is often referred to as a sage in the field of character science. He and his team have a large practice working with C-suite leaders across the nation. In 1993, Fortune magazine did a feature story on Kiel using for the first time the “coach” metaphor that is frequently used in business literature today.
Character may sound like a soft topic but Kiel and Garramone’s research shows that character is a critical component of leadership that delivers bottom line results. We can also argue that character is essential for SAMs whose reputations define their brand and whose brands determine their career.
Tough Leadership ≠ Good Leadership
The dominant view held through the 20th century was that tough leadership generates results. Leaders believed that the “soft stuff” was nice but unimportant as it does not bring value to the bottom line. Only the hard driving person who tells the truth and is brutal delivers results.
This same belief rang true in the world of sales training. In the past, sales has done a disservice by being in the business of creating human doings not human beings. The philosophy existed that if you “do this and do that” you will create results.
Today, we see that who you are matters as much or more than what you do. We have seen too many examples of Harvard MBAs who are sitting in jail because of their misbehavior.
By Edmund Bradford, Managing Director, Market2Win Ltd.
We have passed the tipping point of interest in sustainability. Sustainability and other good behavior metrics now need to be reported, meaning your strategic accounts will no longer be satisfied with bland statements of intent from your company. Sustainable SAM will be a key differentiator in the near future.
I was recently interviewing the head of sustainability at a global hospitality company when she told me an incredible fact: “In the past 12 months, for the first time ever, more investor funds have gone into proven sustainable companies than into non-sustainable companies.” So, if you are working in a company that has not proved itself sustainable to investors, you are in the wrong half of where the investor money is going.
If you want to see an example of this transition, just consider Blackrock, one of the world’s largest investors, with $8.68 trillion in assets under management at the end of December 2020. In his 2021 letter to CEOs, Blackrock’s CEO, Larry Fink, wrote about the fact that the pandemic had accelerated the tectonic shift to sustainable investing with a near doubling of Blackrock’s investments in this area compared to 2019.
By Neil Tumber, Relationship Manager, Advanced Services Group
Just like data, automation, Industry 4.0 and the Internet of Things (IoT), servitization has become something of a buzzword – and for good reason. Servitization and advanced services offer the potential for organizations to significantly transform their business models to deliver even greater value to customers while also increasing their own profitability. But what do we mean by servitization, and what exactly are advanced services?
In this post, we will explain everything you need to know.
What is servitization?
Servitization is a term used to describe a journey of transformation, specifically: the innovation of an organization’s capabilities and processes to better create mutual value through a shift from selling products to selling product-service systems that deliver a desirable outcome for the customer. So, for example, instead of manufacturing and selling a machine tool and ending the transactional customer relationship there, a business instead might produce and sell the machine tool as part of delivering a contracted support and maintenance service.
Servitization: a practical example
An example of servitization is Koolmill, a business in the UK that works with the Advanced Services Group at Aston Business School. Like several manufacturers, Koolmill was originally set up to produce and sell machines – in Koolmill’s case, rice-milling machines. However, much of its customer base is in low-income regions of countries such as China and India, where the price associated with milling-machine ownership is considered prohibitively expensive. To overcome this challenge, the business transitioned to a servitized approach, offering rice-milling-as-a-service.
By Jacques Sciammas, President, Selling to Executives
In the age of convenience, where same-day deliveries have become the gold standard and news articles are now conveniently timed down to the second, our need for accurate and concise information has never been more pressing. So why on earth do we still bother with documents numbering hundreds of pages, sans picture and color? Truth be told, 99 percent of us don’t bother reading these documents at all. They make great paperweights, but if asked about specific details, most of us might offer an uneasy grin, knowing that we have companions-in-arms, equally guilty of shirking that responsibility to read altogether.
The 10-K report: Why bother?
You’re familiar with a company’s annual report, right? But very few bother with the 10-K. And for those of you who have heard of it, do you really understand its value? Unfortunately, due to its no-color, no-graphics (thereby implying “no fun”) standard format, a format mandated by the Securities and Exchange Commission, the 10-K is easily the most overlooked, undervalued and – shockingly – untouched research document.
In my personal experience as CFO for several large corporations, where I chaired the Capital Committee (i.e., the committee responsible for overseeing purchasing decisions), I met thousands of salespeople and strategic account managers through the years, and I would say that no more than 3 percent or so had bothered going through my company’s 10-K. Now, those familiar with the 10-K may be groaning out loud and thinking, “Who is going to actually read that monstrosity?!!” And it’s true. It would be similar to “indulging” in the U.S. tax code, a document filled to the brim with dense terminology and one-dimensional creativity.
“Stop Jacques! The 10-K is tedious. I’ d never get through it, despite my and your good intentions!”
Fair enough, but let me put forth the good news [Drumroll, please!]: One doesn’t need to go through the entire document to gather the most crucial nuggets of information. While it’s true that the top executives and their legal teams are involved in the creation of the 10-K, what makes this document vital to SAMs and GAMs are the highlights (and confessions) stealthily included – and typically ignored. These highlights can assist SAMs and GAMs enterprising enough to sleuth them out to establish strong credibility and relevance with the C-level and to truly differentiate themselves from their competitors.
By Arun Sharma, Professor, Marketing, Miami Herbert Business School, University of Miami
Arun Sharma willdeliver a keynote address at the 2021 SAMA Annual Conference (May 24-26). To learn more, or to register, visit the conference website.
Resilience is an organization’s ability to withstand a major disruption, recover quickly and adapt to the changing environment. During the COVID-19 pandemic, some firms have flourished while others in the same industry have floundered. To give a couple of examples: Among department stores, Nordstrom has demonstrated resilience by dramatically increasing online sales; as a result, they have excelled. Arch competitor Neiman Marcus, on the other hand, has declared bankruptcy. In telecommunications, while most firms have posted strong results, Digicel has declared bankruptcy. Researchers who have studied this topic have found that having flexible resources (monetary, assets-based and human), flexibility and adaptability increase organizational resilience.
To better understand why some organizations exhibit resilience while others do not, we conducted interviews with senior executives, analyzed industry and firm performance, and examined extant academic research on organizational structure, resilience and liquidity. Liquid organizations develop and execute strategies faster than their competitors, they change direction and accelerate rapidly, and they are ambidextrous – by which we mean they can simultaneously leverage their existing competencies (“exploitation”) while at the same time they discover and harness new opportunities (“exploration”).
The first thing we did was to classify the organizations, at which point four distinct organizational categories emerged:
Hierarchical. In hierarchical organizations, every employee reports to one and only one supervisor (except for the CEO). This is the classic, pyramid-shaped organizational hierarchy. Most government entities, and many corporations, follow this organizational form. It is typified by slow and deliberate decision making, a decision-making process that is rigorously codified and decision making authority that is rigidly prescribed.
Matrixed. Matrix organizations are designed to increase teamwork between internal-facing (e.g., marketing, R&D, finance) and external-facing departments (geographic and product market). Most employees have dual responsibilities: to the function to which they belong (e.g., marketing) and the market in which they operate (e.g., Latin America). A matrix organization is typically visualized as a rectangle with internal functions (horizontal lines) and markets (vertical lines) forming the structure. Most modern organizations follow a matrix structure. Unfortunately, the amount of teamwork expected in matrix structures has not materialized, and rather than focusing on making the best possible decisions, negotiated decision making is the norm.
Entrepreneurial. Entrepreneurial organizations are unstructured, where both functional roles and reporting structures are flexible and adaptable to the context. Employees typically perform multiple functional roles, and decision making is decentralized and team-based. Due to the lack of structure, these firms are typically small and have fewer employees. Decision making is quick, and the organization is adaptable. However, scale and growth require organized decision making, and most entrepreneurial organizations shift towards matrix or hierarchical organizations as they grow.
Liquid. Liquid organizations use team-based structures to increase the quality, speed and innovativeness of outcomes. They focus on skilling their employees in multiple functional areas and create organizational relationships to become more flexible and adaptable. Liquid organizations combine the speed and flexibility of entrepreneurial organizations with the scale of global organizations.
Resiliency of organizations
Our second project involved examining the context under which each organizational form would be most successful. In analyzing our data, we identified two dimensions that affected organizational success: the degree of disruption and resilience. Then we moved on to identify the context under which each type of organization would be most prone to success.
We found that hierarchical organizations are only successful when there is a limited need for resilience, and disruptions are limited and short term. That is because hierarchical firms are slow to recognize disruption and tend to be deliberate (i.e., slow) in making decisions.
By contrast, matrix organizations tend to be more resilient and able to make decisions more quickly – but only when disruption is limited. This is because the matrix organization’s complex structure makes rapid strategic and tactical decision making very difficult. For this reason, matrix organizations are best suited to times that require high degrees of resilience, but only if disruption is limited and short term. Extensive academic research shows that matrix organizations function favors stable environments but falter when conditions are prone to changing rapidly.
Entrepreneurial organizations are flexible, which equips them for addressing major and long-term disruption; but they struggle to exhibit resilience because they do not have the resources (monetary, assets-based and human) to sustain them during long-term disruptions.
Finally, our research found that liquid organizations are best suited to thrive when resilience and adaptability are most in demand. Liquid organizations are both resilient (thanks to their scale) and possess the ability to sustain and grow through major disruptions due to organizational speed, flexibility and adaptability. In our research on the impact of COVID-19, we find that the most successful and resilient firms have been those that are the most liquid.
Our Recommendations: Liquidity and you
To increase resilience, we recommend that leaders take steps to increase organizational liquidity.
Specifically, we recommend they take three steps:
Create and use teams to increase liquidity and quality of deliverables. We suggest that executives form teams by pairing people from different vertical markets or functional areas. (For more on creating teams within the strategic account management program, see “Addressing the New Normal: Creating Liquid Strategic Account Teams,” in the Fall 2020 issue of this magazine.)
Increase the multifunctional expertise of executives through training and assignment.
Reduce boundaries between the firm and suppliers by creating teams that include people from both firms.
In summary, our results suggest that leaders need to focus on increasing resilience by increasing liquidity. While the emergence of multiple highly effective vaccines portends an end to this global recession, it surely won’t be the last time organizations face conditions requiring high resilience levels.
Arun Sharma is a marketing professor at the University of Miami’s Herbert School of Business, has published extensively on strategic accounts, and is ranked in the top 1% of all marketing professors. Find him online at https://www.theliquidorganization.com/.
Jonathan Hughes, Partner, Vantage Partners, and David Chapnick, Partner, Vantage Partners
Just when customer account teams and salespeople were beginning to grow accustomed to virtual-only sales and account management, a return to (some) face-to-face interactions is on the horizon. Customer-facing teams need to continue to up their virtual game, even as they learn how to optimize a balance of virtual and in-person engagement.
COVID-19 has accelerated a trend already underway toward increased virtual interactions between customers and their suppliers. As vaccines are distributed and we move beyond the most acute phase of the pandemic, most salespeople believe virtual selling is here to stay. According to research we conducted during the second half of 2020 (involving salespeople and sales executives at more than 100 B2B companies), just 31 percent of respondents said they expect to return to pre-pandemic levels of in-person sales activities (Figure1). A strong plurality expects to transition to a hybrid model that optimizes both in-person and virtual selling, while more than one in four expects virtual to become their primary means of interacting with customers.