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By Todd Snelgrove, founding partner, Experts in Value

For every individual SAM and SAM team, one of the most important goals is to be able to deliver value to the customer AND make sure you get paid for it. Once upon a time, “all” you had to do was convince the end user of your offering’s superiority to other options — and then let them do the internal selling for you. Today, you’re dealing with a highly educated Procurement function with a great deal of sway over what gets bought from whom.

Don’t despair: All hope is not lost. To thrive in today’s world, you just need to learn to think like – and sell to – both the economic buyer (i.e., Procurement) AND the technical/business/end user. In this post, I focus on eight areas your value program needs to master to get all your customer stakeholders the information they need to pull the trigger on your offering. These will be covered in much greater detail in a one-day workshop I will be delivering at SAMA Academy in San Diego on Tuesday, Oct. 16.

First things first, let’s look at a couple terms from the title of this blog, so we make sure we’re speaking in a common language.

Ability to pay (ATP). Simply put, this term refers to whether or not your customer has the money to pay for your offering. We’ve all had customers tell us our product is too expensive, that another, cheaper option is “just as good,” or that the supplier isn’t budgeted to spend what we’re asking. In my book, this is just evidence that our offering just isn’t resonating with the buyer — that it doesn’t sufficiently address our customer’s needs and strategic drivers. But I also think about what my former CEO used to tell me: “Todd, budgets can be changed. If you put a newer and better option in front of me that creates real economic value, it will get funded.”

Willingness to Pay (WTP). This refers more specifically to whether your customer is actually willing to pay for your option over its next best alternative, whether that means buying from a competitor or sticking to the status quo. It is critical to understand that WTP fluctuates as a company’s needs change. And so it’s critical for you to understand that Procurement’s needs differ from the end user’s needs, so they are going to value certain qualities — and hence their willingness to pay for them — less. While your end user may be willing to pay a premium for decreased downtime or better systems integration, Procurement won’t be unless you can quantify and document the value in business terms.

So how do you build your organization’s ability to succeed at selling value? Based on the work of myself and others, many companies have begun creating ROI/value quantification tools, but often these value initiatives aren’t leading to bottom-line results. Research shows that, all too often, suppliers focus only on helping marketing and sales sell value but not creating a simultaneous culture change that actually incentivizes and encourages them to *WANT* to sell value. Recent research from SAMA shows that, while pretty much every company in the world knows it needs to quantify customer value, only 30 percent actually have a disciplined process for doing so. And in my experience, of those 30 percent most could stand to do it much better.

Below, you can see a handy chart I created with James Anderson, the distinguished professor at Northwestern’s Kellogg School of Management (or, as I like to call him, The Value Guru), which shows the factors that influence a salesforce’s ability AND desire to sell value.

Let’s tackle these concepts one by one…

Value conceptualization. During your new product/service development process, are you thinking ahead about how much this new offering would be worth to your strategic customers? Are you building the formulas and test case examples in advance, so when you’re ready to launch you already have sample ROI calculations to share with customers?

Value-selling process. Do you have a process that pushes Sales and Marketing to interact earlier in the buying cycle so you can frame your customer conversations around value from the start, rather than reacting to an existing demand via RFP and trying to push value when it may already be too late?

Customized ROI tools. Have you created a tool for Sales to create customized ROI analyses for all your solutions, and is it easy to use, intuitive for the customer? Does it save and track cases as you build them, and can it track actual realized value for customers who have begun to adopt your solution?

SAM/sales team training on value selling. Have you given your teams the training they need to be able and comfortable selling on value? A one-off seminar isn’t enough. Training needs to be robust, ongoing and challenging, with exercises, role-playing and tests. Selling is a skill, and like any skill it requires training and ongoing fine-tuning.

Rewarding the right behavior. To give just one example, many companies still measure their SAMs/sales staff on sales versus target. But if I’m a SAM who is only being measured on the top line, what incentive do I have to push my customer to pay a price premium, even if I know the value is there to justify it? I’m much more likely to cave and offer a five percent discount and move on. But that five percent comes off the bottom line, and for most companies that’s 50 percent of net profit. One tell-tale sign you’re not rewarding the right behavior is that your SAMs and field sales are either continually pushing for discounts or complaining that you’re not priced competitively. This is a sure sign they don’t have the tools, knowledge and, most importantly, incentives to have the right kinds of conversations with your customers.

Value-based contracts. Have you created contracts that allow the customer to pay based on the actual, mutually agreed-upon and delivered value? If not, it’s a lot to ask of a Procurement expert to just “take your word for it.” Words and PowerPoint slides will not get you the traction you need to sell on value. While many companies have built processes around offering discounts, very few have ones that guarantee delivery of value.

Business Culture. What does your company stand for? Does your CEO talk about customer value? Is it part of your company’s annual report? Does it get discussed at your investor day? For true business culture change around value, you need a person working full time to drive the concept of value and its adoption at every level of the organization.

Customer Culture. Are you engaging customers earlier and, most importantly, differently? Are you discussing early in the sales process that, when they buy your offerings, that they need to consider value and not simply buy at the lowest that meets the minimum requirement? It takes a different sales and marketing approach to be seen as a thought leader in your industry and to drive a change in how your customers value value.

Tools to help quantify and demonstrate value are critical, but underlying those tools your company has to have a holistic value mindset that runs across and through the entire organization. For much more detail, see my book (co-authored and -edited by Andreas Hinterhuber), “Value First Then Price: Quantifying Value in Business-to-Business Markets” (Routledge, 2016). And of course, remember to register for my SAMA Academy workshop in San Diego on Oct. 16, 2018.

Todd C. Snelgrove is the former Global Vice President of Value at SKF, where he drove the creation, tools, processes and results of a 20-year value journey at the company.

 

 

By Mick Carroll, PhD

Brainstorming is easily the most common activity that an organization turns to when it needs to be creative.  First, let’s take a look at what brainstorming is and why it is so ineffective as most commonly practiced.

The origins of brainstorming can be traced to back to the 1940s and ’50s to an American advertising executive, Alex Osborne.  This process was based on the creative characteristics of:

Fluency, i.e., the ability to generate a multitude of ideas

Flexibility, i.e., the ability to change perspectives and thought patterns

Originality, i.e., the ability to express new concepts, relationships or ideas

Awareness, i.e., the ability to see beyond the given rules and principles

Drive, i.e., the motivation, energy and confidence to take chances and fail

The biggest problem with these creative characteristics is that they are not normal ways that the human brain functions. The brain is programmed to immediately search for solutions.  The brain has evolved to be a survival instrument always looking for the quickest ways to size up a situation or challenge it — and then quickly provide the best path to resolution.

Brainstorming requires the following rules, which make intuitive sense:

• No criticism. The atmosphere for brainstorming is supposed to be open; the purpose is to encourage ideas, not judge them prematurely.
• Freewheeling discussion and free expression are desired — more than carefully thought-out ideas.
• Quantity over quality of ideas is desired.
• Combining, improving and adding on to ideas are highly encouraged.

So why doesn’t brainstorming typically result in many creative and useful ideas?  It has to do with how the brain is wired and what people know.  The thought process is driven by neural connections that people make based on something called “knowledge clusters.”  This is a fancy way of saying that people have created ways of knowing and processing information, and this becomes deeply engrained, habitual and many times automatic.  Simply putting people in a room and telling them to be creative has no impact on their highly patterned ways of thinking.  Often, this is described as “stuck thinking.”  Unless tools and mental processes that make a person make new associations, relationships and thought patterns are introduced, very few new or creative associations and relationships will occur.

The main purpose of this post is to answer the question “How can you make brainstorming a highly creative and generative process?”  The main ingredient of creative thinking is to achieve new combinations, relationships and associations among the knowledge points or clusters that one has stored in his or her head.

Keep in mind that, for brainstorming to succeed, you have to change  the patterned ways in which your brain wants to think. Here are some steps that can be immediately taken to improve your next brainstorming session:

Two weeks before the planned session, send out a notice that there will be a brainstorming session. Include on the notice a clear statement of the issue/problem/opportunity the session will be addressing, e.g., “The purpose of the brainstorming session scheduled for two weeks from Friday will be to generate ideas around how we find more effective ways to process internal workflow to speed up our delivery to customers.”

Have participants rewrite this statement at least two different ways and send them  to you within two days. Depending on how many people will be attending, give individual or team pre-assignments.  Depending on the purpose of the brainstorming session, the following assignments should be given:

• Have participants research three companies in your industry and report back on how they handle your issue.
• Have several people go on small “field trips” to different places (e.g., museums, restaurants, sporting events) to see how these environments might have possible solutions/ideas about your issue.
• Similar to above, have several people search for analogous activities (e.g., an election, air traffic control, Library of Congress cataloging) that might be similar to how you handle your issue.
• Have participants draw a picture or pictures of the problem/issue that you will be addressing at the brainstorming session.

Here are a few guidelines for the actual session:

• Have each person or team report on their assignment.  Allow time for ideas to flow during each report.
• Periodically during the session, ask three questions and document the answers on a flip chart: (1) What is the purpose here? (2) What is happening here? (3) What is the value here?
• It is critical that someone in the meeting organizes, illustrates and displays the ideas for the group.  Pictures are key stimulators of ideas.  It is also extremely helpful that someone draws out the current process that you are trying to improve upon.  Seeing what you currently do can help the mind look for alternatives.
• When harvesting ideas, don’t throw any away — rather, drop them into different buckets, such as: ready-to-use, “seedlings” (i.e., the beginnings of a good idea) and “useful directions” (i.e., useful broad concepts), ones that aren’t ready at the moment but may have future value.

Alternate approach to classic brainstorming:

“Six Thinking Hats” Ideation Each hat color (see below) represents a persona, attitude or approach.  Have each participant pick a hat color/role that represents qualities that are out of their comfort zone. The idea is to change the way you normally think about things.  (Have fun with this; humor relaxes the mind and causes new connections.)

Another variation calls for everyone wearing the same color at the same time.  At a designated time,  everyone will change to the next color and assume the associated thinking approach or attitude.

White Hat:  Data and information. “What data is available?” “What data is needed?” “Let’s run some projections.” “How do we get the data?”

Red Hat:  Feelings, intuition, emotions, no data or evidence. “My gut tells me…” “I don’t like the feeling of this.” “This just feels right.”

Black Hat: Caution, risk averse, critical judgment. “This won’t work.” “We’ve tried this before.” “We don’t have the resources.”

Yellow Hat: Optimistic, positive, benefits, figure a way to make it work — opposite of Black Hat. “Let’s pretend money is no object.” “What do we need to do to make this work?” “Who needs to be involved?”

Green Hat:  Creative thinker, new ideas, variations, challenges conventional thinking, movement.  “What are the main concepts we are looking at?” “Let’s look at five great companies inside and outside of our industry.” “Let’s have weekly ideation sessions around this.”

Blue Hat:  Process, control, manages process, keeps process moving. “Let’s summarize.” “What are next steps?” “Let’s go back and review Red Hat’s points about _____.”

Could these tactics help prime the pump at your next brainstorming session? Or are they too zany to fly at your organization? Let me know what you think by connecting through LinkedIn. I’d love to hear from you!

Mick Carroll holds a PhD in educational philosophy and is the founder of BetterThink, a business consultancy specializing in using creative thinking to solve problems.

 

By Jessica Worny Janicki and Bo Golovan

Analysis vs. empathy

A SAM is a business manager and a true LEADER in managing strategic relationships, and this requires much higher and more complete interpersonal relationship skills and EI than the average sales rep: from technical expertise, analytical and strategic thinking to communication, management, leadership and negotiation skills. Successful SAMs understand how to integrate this complex mix of hard and soft skills.

The SAMA competency model articulates how technical and cognitive skills combine with social and emotional competencies to create high performance. For why this combination is so rare and difficult to achieve, we turn to the field of neuroscience. The brain contains what’s called the “Task Positive Network (TPN),” which is analytical and task-oriented, and the “Default Mode Network (DMN),” which is empathetic and social.

“In the business world right now, the emphasis is more on the task orientation of leaders rather than cultivating empathy,” says Anthony Jack, assistant professor of cognitive science at Case Western Reserve University. “That is partly because it’s easier to assess task-oriented leadership.”

But the long-term consequences of this cultural bias are damaging, Jack says. He and a group of researchers at Case Western suggest that business leaders should strive to cultivate both skill sets (analytical/task-oriented and empathetic/social) so they can learn to cycle fluidly between the two networks and better perceive when each mode of thinking is appropriate.
With its focus on social and emotional functioning, EI provides a perfect framework to develop the Default Mode Network. It offers a guide to how and when to deploy it to leverage performance.

What is EI?

EI is a set of social and emotional skills that influence the way we perceive and express ourselves, develop and maintain social relationships, cope with challenges and use emotional information in an effective and meaningful way.
Most SAMs have spent a lot of time learning and developing hard skills but much less time on soft skills, potentially resulting in an unbalanced skill set and a lack of agility between the TPN and DMN brain networks.  EI can be used as a tool to establish a more effective balance.

EI for professional development

To co-create value with customers, SAMs need to possess strong communication and influence skills, know how to listen beyond what is said, effectively articulate a value proposition, persuasively promote their ideas, get buy-in among key decision-makers and be comfortable addressing difficult situations or conflicts. To lead orchestrate an ecosystem of resources and stakeholders, they must demonstrate strong interpersonal skills to develop and maintain trustworthy relationships, develop a team vision, lead teams in implementation and execution, and demonstrate sensitivity, understanding and empathy for cultural differences in order to adapt and be effective in a global environment.

The EQi 2.0 model of emotional intelligence comprises fifteen competencies across five categories that form the building blocks of abilities such as communication, decision making, time management and resilience. The framework provides an effective structure to support and develop these competencies.

Interpersonal skills are at the heart of the competencies SAMs need to build and develop strong relationships, manage cross-functional teams, align stakeholders, influence and negotiate. But it is essential to understand that these skills also build on others, such as self-perception and self-expression.  Although the model’s competencies are separated into five distinct groups, they are all interrelated and mutually impact each other.

Self-perception is an essential building block, as it is about our internal world, which determines how we perceive ourselves, our mindset and our attitudes. Being self-confident, for example, helps SAMs overcome obstacles, while being motivated ensures they are driven by a desire to perform and excel.

Self-expression is the flip side: focused on the outside world, it describes how we choose to express ourselves and how we communicate. Sharing and expressing feelings in an open and transparent way helps SAMs establish rapport with stakeholders and build trustful relationships with cross-functional teams. Emotional expression, of course, happens in a context and is a matter of degree, which SAMs assess by being tuned in to others and having empathy. An effective SAM reads and understands these social cues and adjusts his or her behavior accordingly and in the moment. For example, a SAM is more open with a long-time customer than with a new one.

Decision making is highly relevant for SAMs, as they constantly face multiple and often complex decisions. To optimize their decision making, SAMs must integrate emotional information in an effective and meaningful way, along with analytical and strategic elements, data and facts. Understanding and managing emotional undercurrents to get buy-in or during negotiations, for example, can be the difference between success and failure.

Stress management is particularly important in the SAM environment, which is fast paced, competitive and high stress. Stress, especially if chronic, can be detrimental to performance, both cognitively and emotionally. Being aware of stress, assessing its impact and developing appropriate coping strategies reflects valuable stress-management practice and is key to effective functioning. Developing flexibility, resilience and remaining optimistic in the face of adversity allows SAMs to process stress more effectively and mitigate its damaging effects.

Each individual has a unique profile, with distinctive strengths and areas in need of further development. Results of an EQi assessment provide SAMs and sales leaders an individualized road map that can become a daily guide that empowers them to accelerate their professional development.

Here are two tools you can use to start developing your EI skills immediately.

Gauge your mood. Developed by the Yale Center for Emotional Intelligence, the Mood Meeter app is both fun to use and rich in content to expand users’ emotional self-awareness and emotional expression capabilities. The app enables users to quickly and easily track emotions througho. ut the day, expands emotional vocabulary, provides tips for moving one’s emotional state, and provides stats for further reflection and analysis.•

Reflective listening. Adapted from “The EQ Edge” by Steven J. Stein & Howard E, the following listening exercise strengthens users’ reality testing, empathy, interpersonal relationship and problem-solving skills.  Step 1: Ask someone you know well how he or she feels about a given topic.  Let the conversation roll for five minutes without sharing your own point of view.  After five minutes, describe to the person your version of what he or she thinks and feels.  Compare your version with the other person’s version and note any differences. Step 2: Review this video to learn about reflective statements. Repeat Step 1 with another person, this time using reflective statements with the speaker.  Compare the amount of information you collected in both conversations.

Jessica Worny Janicki is the owner of JWJ Consulting. Bo Golovan is the owner of Strategic Solutions Associates. 

They will deliver their highly rated “Emotional Intelligence for SAMs” workshop on Wednesday, July 25, at SAMA Academy Chicago. Click here to learn more and to register.