Value analysis and opportunity insight Archives - Strategic Account Management Association blog

Case study, Strategic account management program organization

Quantifying and monetizing customer value: A case study from AVI-SPL

By Danielle Matteson, Director, Global Accounts, AVI-SPL

Editors note: The following case story earned AVI-SPL a 2019 SAMA Excellence Award for “Implementation of a disciplined process to quantify and monetize specific customer value solutions.” Author Danielle Matteson is also a recent graduate of SAMA’s Certified Strategic Account Manager (CSAM) program.

Founded in 1979, AVI-SPL is the leading digital workplace services provider for organizations, with more than 2,500 employees worldwide. For more than 10 years, we’ve partnered with a prominent financial institution for audio-visual system integration and post-implementation production support services. Before the AVI-SPL global accounts management program launched in 2018, the global team at this financial institution relied on a combination of several different technology partners, including AVI-SPL, to deploy and support their infrastructure, meeting space technologies and user communities.

The infrastructure and meeting space technology investments of this financial institution are focused in two spend categories: real estate project implementation and support services. While AVI-SPL had delivered significant proven value in support services, the relationship and engagement had been limited to North America. This institution’s support services in both the Europe, Middle East and Africa (EMEA) and Asia-Pacific (APAC) regions had been consistently delivered through smaller, in-region providers.

The challenge

At the time, AVI-SPL had suffered implementation challenges in North America with this customer, resulting in inconsistent performance vis-à-vis the customer’s internal KPIs, namely on-time delivery, meeting budget requirements, and global end-user experience and adoption. These challenges may have been preventing AVI-SPL from pursuing global growth opportunities, possibly inhibiting the opportunity for account penetration with line-of-business expansion and, most importantly, threatening to undermine the proven value achieved elsewhere.

With this, we needed to organize properly around local, regional, national and global project implementation performance. While we achieved successes in some regional markets, our global delivery process for this client lagged. We needed to take action to correct course.

At the time, this financial institution was challenged with global scalability, efficiencies and overall standards governance of its technology environments. As it deployed collaboration and meeting space applications to a broader community of users in several regions of the world, it increasingly struggled with establishing a sustainable and economical end-user support model. Additionally, its diverse list of global vendors yielded unmanageable variances in design, pricing, quality, serviceability, user experience and technology standards.

For example, one vendor in APAC would deploy a series of meeting spaces with technology and workflows specific to that APAC vendor. Meanwhile, another vendor in EMEA would deploy a completely different design and application in the EMEA meeting spaces. The net result was that when users traveled or moved from one region to another, they were completely unfamiliar with the technology in each room, resulting in poor user experience, lost productivity and a higher volume of support cases opened.

This left the customer’s support team unable to support the environment and user by quickly resolving issues, thanks to their unfamiliarity with the technology in a given room. Without a consistent global standard or playbook from which to work, the business would be operating inefficiently. These challenges resulted in low user adoption — one of the customer’s most critical KPIs. These variances and resulting challenges ultimately translated into intolerable risks for the lead customer stakeholders, as well as the entire end-user community, i.e., the financial institution’s employee base of more than 200,000 people. We knew that the key to success would be to find a way to increase the efficiency and scalability of our end-user support model, which we hoped would simultaneously reduce the customer’s global vendor-related risks while scaling spend for services overall.

In short, the root of our business challenge was two-fold:

How do we bolster a prominent customer’s confidence in our project implementation business and deliver the outcomes they expect consistently on a global basis, and…

How do we leverage our past proven value with our support service performance to deliver economies of scale for the customer’s operating budget while benefiting from expanded wallet share?

This customer candidly shared its desire for a more consistent approach from a single audiovisual and unified communications provider that could achieve better employee collaboration outcomes at an accelerated pace. With this knowledge, as well as an overall awareness of the client’s global enterprise customers’ needs, we designated the client as a launch client in our global accounts management program in January 2018.

Strategizing

Our first step to solving this client’s business challenges was to organize and facilitate a series of disciplined strategy sessions with the key customer stakeholders, which included executive support, the global technology services organization, internal owners of meeting space technologies and the customer’s global operations. In order to demonstrate our commitment to increasing this client’s confidence, we assembled cross-functional teams of AVI-SPL resources to participate in these sessions.

Our first goal here was to tackle the challenge of project implementation consistency. We worked together with our client to uncover how we could enhance performance, understand the impact of past shortcomings on their business and KPIs, and articulate what success would look like for them with respect to their quantified KPI goals. We also facilitated structured discussions to explore the customer’s macroeconomic and industry drivers, how they affect its user-experience objectives and, ultimately, how those objectives are measured. Our findings from these sessions helped us identify and prioritize a mutually beneficial partnership roadmap.

In order to monetize the value of improving our project implementation performance, we organized a programmatic approach to consolidating their spend and services, which provided scale and efficiencies. This, along with incentives for growing global spend, was established as part of the overall (and exclusive) benefit to this customer as part of the GAM program.

The overall result, we hoped, would be growth and share-of-project implementation business coming our way while simultaneously allowing the customer to scale its overall OPEX spend though global service consolidation. The end result would save the client on capital and operating costs while improving global end-user experience. Meanwhile, we would see an increased share of the client spend, both for implementation and production support around the world.

The plan

Next, we co-created a plan to realize efficiencies through vendor consolidation, automation and service operations enhancements. For example, we identified the customer’s largest support service cost as full-time support employees, who came from several vendors around the world and many of whom were underutilized through disparate processes.

Next, we reviewed the options for automating several key support functions, including proactive monitoring, issue identification and resolution, which would require less full-time equivalent support. We were able to quantify the resulting productivity increase and then show the resulting impact on the company’s bottom line. With the implementation of automation and supplier consolidation, the customer reduced its OPEX spend by approximately five percent in 2018, with a projected annualized reduction moving forward of more than seven percent.

By combining these two initiatives, we enabled the client to realize the maximum benefit by consolidating its spend with a single global partner, allowing them to realize a controlled, scalable cost-structure, with clear accountability to performance and measurable outcomes.

In summary, we worked directly with the customer to value engineer a two-pronged strategic approach:

Consolidate all the financial institution’s OPEX (support services) spend, which would yield cost savings as well as increase the value delivered by AVI-SPL due to improved efficiencies, automation, scalability, serviceability and, ultimately, an overall lower total cost of ownership for technology and infrastructure

Increase CAPEX (project implementation) spend with AVI-SPL through standards and global accountability and pricing consistency.

The results

This engagement transformation project has yielded quantified results for both the client and AVI-SPL, namely:

For the customer, the program has resulted in project implementation cost savings of approximately 15 percent for 2018 as compared to the previous year. Moving forward, the annual CAPEX cost savings for the customer is projected to be 22 percent. With the implementation of automation and supplier consolidation, the customer realized approximately 5 percent cost reduction in associated OPEX in 2018, with a projected go-forward annualized reduction of approximately 7 percent.

For us, the most significant outcome has been the shift in our relationship with this critical customer, moving from a vendor/solutions provider to a trusted advisor and strategic business partner. After implementation, we became the first ever global single-source supplier in the audio visual/collaboration space in this customer’s history, with the customer labeling us as an “IBM-like partner” moving forward.

We have been able to quantify the net relationship change through our strategic account benchmarking methodology, which scores an account in five categories: (1) account attractiveness, (2) value, (3) alignment, (4) relationships and (5) growth. Each category has three statements that are then scored on a scale of one to five, with one representing “very unfavorable position” and five representing “very favorable position.”

The customer’s post-implementation assessment increased the overall benchmarking score by a dramatic 10 percent, with the highest net increases coming in the following areas:

Alignment: AVI-SPL’s competitive position with the customer (i.e., “mindshare”)

Relationships: Trust-based relationships have been established with the customer

Growth: New opportunities for account expansion

Value: The customer views AVI-SPL as strategic to its business

As a result of our strengthened relationship, AVI-SPL also realized significant financial growth with this customer. In 2018, through Q3 (September 30^th), our year-to-date top-line bookings with this client jumped 346 percent year-over-year. We also engaged Forrester Research to help us quantify the total economic impact of our digital workspace solutions for the inaugural 12 customers in our GAM program. The result, from Forrester: a total cost of ownership savings of $5.5 million and a monetized productivity increase of $11.9 million.

In our GAM program’s inaugural year, we have seen significant growth in spend across all customers, and we attribute the success and progress so far to our commitment to a disciplined program methodology. The program offers strategic and tactical benefits, ensuring that the latest technology and industry best practices are adopted.

Overall, the GAM program has exceeded our expectations by positioning the business to deliver an accountable and consistent global approach for planning and project implementation. By strategically aligning with our client for planning and roadmap design and enabling the “client-way” team communication and planning, we have definitively enhanced customer experience, improved business outcomes and created additional value for our clients and ourselves.

SAMA training and certification, Strategic account manager skills and competencies, Technology, Uncategorized

SAM2Win: An interview with the creator of the online game that teaches strategic and key account management

At SAMA we strive to be innovative in how we deliver value to our customers, and that means experimenting with different formats and media for learning, training and networking. That’s why we have partnered with Edmund Bradford, a former global account manager who is now an author, educator and game designer. He is the managing director of Market2Win and developer of SAM2Win, the world’s first online game that teaches strategic account management.

SAMA Assistant Director of Knowledge & Training Dave Schweizer recently sat down with Edmund to discuss the SAM2Win training/simulation, which SAMA will offer beginning in November. Their interview has been lightly edited and condensed. You can listen to the entire interview here:

Go here to register for the SAM2Win course.

Dave Schweizer: Thank you for joining us, Ed. So what exactly is the SAM2Win program?

Edmund Bradford: As far as I know, it’s the only game in the world that actually teaches strategic account management, rather than selling. I think the best way to think about it is it’s kind of like a flight simulator for account managers and teams based on over 30 years of research and experience from myself and my colleagues, both practitioners and academics. In the simulation, we have five global companies all competing for the business of one complex global account. Each company typically has about one to five players, who act as the account manager or act as an account team if they’re playing as a team. And the participants or the teams play against each other — not against the computer — with all the fun and irrational behavior that generates from that. And simply, the winner is the company that makes the most profit at the end.

DS: In the simulation, participants can make certain decisions. What kind of decisions can they make, and how do they enter those?

EB: We pose three big questions to the participants. The first big question is “Where should we compete in the account?” In other words, which sales opportunities are the best for the future? We want them to be future-oriented in this. So, “Where should we compete in the account?” Sales opportunities, in other words.

Second question is “How do we beat the competition?” Which, in other words, really means, “How do we craft superior value propositions that fit current and future needs of customers and that will also beat any other competitor offers out there?”

And finally, the third question that they need to think about is, “When do we want to see the results?” So do we have lots of time in front of us, or do we need some results here in this particular period that will affect the kind of decisions the account makes? So it’s sales opportunities within this account, how to invest to generate the best customer value, share of wallet and profit (both for now and for the future) and how to invest to outsmart the competition.

We also look at the decisions, and analyze those decisions and provide feedback on how they’re making those decisions. So we give course correction guidance as we go through the simulation.

DS: How are the outcomes of each decision calculated?

EB: We typically run about five decision rounds in the simulation. When each decision round closes, our software engine compares all the decisions made by the different companies, and the companies that grow the fastest are those that invested most effectively in creating the best value propositions and the best sales opportunities.

So it’s all about getting your strategy right, getting the tactics right for how you are generating value and making sure that your decisions and your thinking are better than the competition. It looks at all the decisions from all the teams and says, “Who’s making the best decisions from the customer point of view and, therefore, from a customer point of view, where would you place your business?”

DS: Sounds like a very complicated thing to develop.

EB: I would say probably 10 years of real experience of creating and supporting account programs in companies went into it. Even before we put the software together, there was a lot of research and experience that went into it because we really wanted to get it right.

DS: That’s very impressive. So what knowledge can the participants expect to gain from the simulation?

EB: Well, there’s a huge amount, both in terms of knowledge and skills. First, they learn how to apply a good needs-based segmentation to the account. One of the first real wins is for them to go back to their account plans, get back to their strategic account analysis and say to themselves, “How should we divide up this account? Maybe there are cross-division, cross-country needs, which are similar. We just need to find that ‘golden vein’ of needs that run across the whole account.”

Second, we teach some great tools about how to pick the best sales opportunities for the future. So “Where should we focus our spend effort to generate the best long-term relationship with the account for the future?”

Third, it’s about developing superior value propositions — understanding what value actually means, crafting value propositions that are superior to anything the competitors are providing and making sure that we communicate that to customers.

Fourth, I think it’s about just getting better strategic customer analysis. For example, in the simulation, there’s a big procurement piece. With our good mutual friend David Atkinson, we’ve put a lot of good thoughts into the simulation around understanding procurement and how to align our account strategy with the procurement strategy — seeing how we’re positioned in the eyes of Procurement, both as a supplier and also in terms of our category of spend.

Those are the big knowledge areas, but I would also say: learning the art of strategic focus. So many account plans have this idea that we’re going to compete everywhere, against all competitors, in all sales opportunities, equally all of the time. And every time there’s an RFP coming up, we’re going to leap on it with all our resources. And the trouble is there’s not enough time to understand what the genuine needs are, and so that leads to shallow value propositions, very poor co-development of value and then stressed, unhappy and dissatisfied customers.

DS: Fantastic. How much time per week should participants expect to allocate for this program?

EB: You’re talking really about two days of effort over 16 weeks, and that equates to roughly about one-and-a-half hours per week. So it’s not nothing, but neither is it going to take over your life.

DS: How else do participants benefit from the simulation?

EB: Well, I’m glad you asked, Dave. First, it’s about account leadership skills, particularly around strategic thinking and execution. Participants become good at sort of rising above the details to understand the future, to not get buried in all the data. They become basically good at sort of, you know, seeing the companies play, understanding their future, recognizing their company’s place in that future and learning how to get there. So they are proactively aiming their company at a good place in the future rather than being dragged into bad places by the customer or by the competition.

Second, I think the benefit is that players are free to fail. The simulation allows an opportunity to experiment and take risks in a safe environment. And the nice thing is that no one gets sacked from playing the simulation. You learn from the mistakes and think about how you can apply the lessons learned to real life.

Third, players become very good at thinking about the issues and putting account plans together.

An unexpected result that I’ve seen: When we get people from different functional backgrounds, we see better alignment because – whether they’re coming from Finance or Logistics or Marketing – playing the simulation, they get a better understanding of what account management is all about. People end up sharing a common language. Some of the best games I’ve seen have been from cross-functional teams from the same organization.

DS: Do you have any tips on how to win?

EB: Do you watch “The Great British Bake Off”? Well, if so, you know Paul Hollywood. He’s asked, “Any final tips before the competitors go out there and bake their cakes?” I’m a little like Paul: I don’t want to give too much away. But I’ll say two things. Number one: Do your homework. Number two: If you’re losing, it’s probably because you’ve misdiagnosed the real problem. I’ll just leave it at that.

Ready to play? Click here to register.

Strategic account management process

Six actionable steps toward preparing financially quantified value propositions for strategic accounts (Part 2)

By Malcolm McDonald

In part 1 of this series, we talked about the benefits of creating financially quantified value propositions, shared a self-assessment to determine your organization’s maturity in this critical realm, defined the concept of “added value” and briefly shared a six-step process for creating financially quantified value propositions. This installment spells out how to translate your strategic account analysis into a financially quantified value proposition.

At the end of the previous post, we introduced a six-step value propositions process. Here it is again, in case you missed it.

Provided you have done all the work of steps one through three (“Define target market,” “Identify buyers” and “Added value analysis”), you are now ready to financially quantify your value proposition. Now we are glad to offer you our unique proprietary summary of all the foregoing.

The following table summarizes all the analysis referred to above except Porter’s Value Chain, and it represents a major part of step four (i.e., “Financial quantification”) above.

Financially quantified value propositions analysis summary, part 1

Next, we bring you the single most important figure in this post, because it summarizes everything we have said about how to develop financially quantified value propositions for strategic accounts as a result of Porter’s Value Chain analysis. This also plays a major part of step four of the process outlined above.

Financially quantified value propositions analysis summary, part 2

The following graphic shows what a summary might look like as a result of going through the process outlined above:

The penultimate step

Before presenting your financially-quantified value proposition to your customer, there is, however, one further piece of work to be done: You will need to classify it according to the structure below. This corresponds to step five (“Categorize”) in the six-step value proposition process above.

The reason for this is that not all financially quantified value propositions have the same immediate value, and so if you are able to categorize and present them like this, you will stand a much better chance of being listened to and, more importantly, understood. All that remains now is step six (“Communication to target customers/markets”), which will be the topic of a future blog post.

The final piece

This is not the place to go into lengthy and complex explanations of return on investment (ROI), internal rate of return (IRR), net present value (NPV) and payback, but particularly for more sophisticated customers it is necessary to calculate the financial return on what are frequently substantial sums invested in purchasing goods and services

Some customers are interested only in payback over a 12-month period. Others are looking at return on investment over a longer timeframe. Each method attempts to summarize a set of cash flows from a project into a single indicator. Each has its intended purpose, and each has its strengths and weaknesses — so it is prudent to be prepared to present your case taking into account the particular interests of the customer. Incidentally, we offer tailored software to make such calculations easier.

As we said earlier, there is obviously a lot more detail involved in going through the six-step process shown in the first figure in this post, and it requires substantial effort and skills on the part of the supplier — which leads us to one final point:

Strategic account managers and senior salespeople today need business acumen to demonstrate the value they can bring to the customer and the financial literacy to support it.

To do this, they need not just product knowledge but insights gleaned from industry knowledge and from a deep understanding of the customer’s business.

SAMA training and certification, Strategic account management process

Creating joint solutions: Drive execution and communicate value (Part 3)

By Phil Styrlund and James Robertson

In the first two posts of this series, we discussed how larger business forces are pushing companies to rethink how they work with their customers, and how the most advanced companies are responding by systematically plumbing their customers for insights they can use to jointly create new sources of business value. In this post, we move on to the fun part: creating joint solutions, driving execution and communicating the value.

Create joint solutions

In this crucial phase, the company and customer:

Agree on and apply an approach to creating joint solutions that leverage the enterprise resources, capabilities, enablers and strengths of each organization
Collaboratively engage in structured ideation and brainstorming to identify “beyond-the-product/-service” enablers and generate potential solutions
Screen solutions and enablers for inclusion, exclusion or further development considering their relevance, impact and feasibility
Align, engage, and commit relevant resources to develop the prioritized solution(s)
Value engineer to optimize the solution for impact and differentiation considering solution components and enablers that can be added, eliminated, elevated or reduced
Prototype and test the solution with emphasis on agile development — testing early and failing fast, at the lowest cost

At the outcome of this phase, both organizations have co-created a joint solution relevant to the prioritized opportunity and have agreed to move ahead to build and validate the business case, communicate compelling value and to pilot and then implement the solution, joint initiative or new business model.

Our proposed approach for creating joint solutions starts with a prioritized customer “CareAbout,” aligns relevant products and services, and integrates enterprise capabilities beyond the core product/service that impact what the customer and/or end-user cares about most.

A structured approach for creating joint solutions

Central to successfully creating joint solutions is the ability of each organization to leverage its enterprise-wide capabilities. Value enablers are defined as any asset, capability, company strength or resource beyond the core product or service offering. While the idea of drawing on relevant cross-business, enterprise resources to co-create solutions with strategic customers sounds logical, fundamental and simple, in our experience it’s not always easy — and not common practice.

For many co-creation initiatives, this is where the “rubber meets the road”: when the joint solutions team engages and requests relevant resources, beyond the product, from across the business. To facilitate access to solution enablers and support their integration into new, “beyond-the-product” offerings, we suggest the following:

Ensure executive-level support and communication of the “grander why,” i.e., why creating value with strategic. customers is central to your company’s strategy and success
Engage and align the “critical crowd,” i.e., relevant internal stakeholders — early in the process — well before you make a specific request to invest their time and resources.
Build a comprehensive list and categorize enabling capabilities around core value themes such as reducing cost, improving efficiencies, growing revenue and elevating the customer experience.
Identify customer and company gaps in capabilities, i.e., value enablers, that are missing yet critical to co-creating value. Determine if these are capabilities you can build, buy or source from elsewhere.
Identify and engage “owners” of key value enablers using the customer’s voice to articulate why these capabilities/resources are important, the impact on the customer’s business, the value to the company, the cost of inaction, the joint solutions roadmap and “what matters next.”
Leverage relevant enablers to co-create solutions using structured brainstorming and creative design thinking to generate concepts and potential solutions.
Move forward to prototype, test and refine your solution.

Communicate value and drive execution

In this phase, the company and customer:

Develop their business case and compelling customer value proposition
Establish and execute their plan to deploy the joint solution/initiative
Agree on a governance framework, project plan, scorecard and review cadence to drive joint initiatives forward, faster
Reflect to capture lessons learned, build on what’s working, and assess opportunities to adjust strategy and scale solutions

Quantifying and communicating compelling, differentiating value to key stakeholders within the customer’s organization, and to the customer’s customer, is fundamental and essential to the practice of co-creating value.

Ultimately, if the value of your solution is not recognized, believed in and accounted for, your company will not be able to capture and realize the value co-created in the joint solutions process.

Value propositions are a well-established, yet often poorly practiced, concept in sales and marketing. Through research we’ve established that fewer than 10 percent of customers see their suppliers “creating real value, and being worthy of a long-term strategic relationship.” As one customer commented on their supplier’s value proposition, “This sounds like brochure-speak.”

We need to ask ourselves the question, “Why do value propositions seldom resonate?” Based on our research and work with clients, we’ve established that when compelling value propositions DO resonate, it is because they:

Focus on what matters most to the customer
Clearly articulate the differentiating value of your solution compared to the best alternative
Are quantified in the customer’s currency
Provide evidence of impact and proof of your company’s ability to deliver

A compelling value proposition will include these characteristics.

We suggest a simple value creation framework to collaboratively develop your compelling, relevant, quantified and differentiating value propositions. The framework provides a non-prescriptive structure for communicating thought and enables authentic articulation of your joint solution’s impact on the customer’s top “CareAbouts.” This framework, structured around four words — them, us, fit and proof — assures relevance and resonance by aligning what you bring (i.e., your solution) with the customer’s major needs and priorities.

Them: What do they care about? We need to truly understand what our customers care about. What keeps them up at night? What are their key issues and concerns? What is important to them? How are they measured, paid, and rewarded?

Us: What do we have? Here’s where you articulate relevant products, services, and value enablers. What pertinent capabilities and assets can you bring, beyond and/or wrapped around core products and services?

Fit: How does what you have impact what’s important to the customer and customer’s customer? Quantify and describe the impact of your solution on the key issues, concerns and value drivers of your customer and customer’s customer. Articulate your solution’s difference compared to the next best alternative.

Proof: Prove it! Provide the examples and evidence of the value you will bring and demonstrate proof that you can deliver and execute.

Applying this framework guides us to create, articulate and quantify customer-centric value propositions that resonate and enable the company and customer to realize value created through the joint solutions process.

Like what you’ve just read and want learn more? The Summit Group facilitates SAMA Academy’s CORE 2 workshop, “Co-creation and quantification of value.” Click here to learn more about SAMA Academy, to see a list of upcoming workshops and to register.

This is the final installment of a three-part series. Read parts one and two.

Customer buy-side perspective, Strategic account management process

Six actionable steps toward preparing financially quantified value propositions for strategic accounts (Part 1)

By Malcolm McDonald

This is the first post of a series exploring why financially quantified value propositions are critical for success with strategic and key accounts.

The crucial importance of money to customers

Even a cursory glance at the SKF pricing example shown below illustrates the dramatic impact that is possible as a result of preparing financially quantified value propositions. (SKF is the global engineering group that specializes in ball bearings and assemblies.)

Our definition of a value proposition is “the translation of the supplier’s offers into monetary terms that demonstrate their contribution to the customer’s profitability.” The key phrase here is “customer profitability,” because if you can prove that dealing with you will make your customer richer, they will buy from you.

Continue reading →

SAMA Research, Strategic account manager skills and competencies

From strategic account management to strategic ecosystem leadership

By Kaj Storbacka and Elisabeth Cornell

Digitalization is both a source of disruption and an enormous opportunity. We argue for the latter. Never has there been a better opening for SAM programs and strategic account managers to take on a bigger role in securing the future of their organizations.

The implications of digitalization are forcing SAM programs — and the SAMs who drive them — to redefine themselves on multiple dimensions. While many traditional SAM traits will remain, the overarching trajectory will see SAMs having to become even more strategic than they are currently.

The practical manifestations of becoming more strategic will take three distinct shapes:

SAMs will take alignment to the next level by becoming drivers of strategic development cross-functionally and inter-organizationally.
Strategic account management will be liberated from the shackles of the seller-buyer dynamic by transforming from account management to ecosystem or stakeholder management.
SAMs will develop new processes and skill sets that will make the future one of leadership, rather than of management.

The role and responsibility of the SAM are transforming from advanced, consultative, insight-based selling focusing on one customer relationship towards orchestration of mutual value creation in a larger ecosystem of organizations. To simplify, one could argue that strategic account management is becoming strategic ecosystem leadership — no longer SAM but SEL.

The elevated SAM’s new and important roles are summarized in diagram below.

From aligning to driving: strategizing

Traditionally, SAM has been viewed as a set of management practices that aim at inter- and intra-organizational alignment: Inter-organizational alignment to jointly (with the customer) develop a value proposition and a process for the delivery of the value proposition…and intra-organizational alignment to create a collaborative, flexible and committed customer-centric culture that enables value creation for the customer and value capture for the firm.

The goal of aligning functions and processes between selling and buying organizations is not disappearing, but the new digital reality means that it is no longer enough. Increasingly, SAMs will need to assume the role of “change champions” who drive change and strategy development.

Being a change champion can take several forms, but key to them all is to not fall into a trap of becoming an administrative and commercial coordinator – someone who spends her/his time on aligning, without having a development trajectory aiming for new value creation. A change champion may drive development in three different ways:

Driving strategy for the selling firm. The strategic account manager needs to be involved not only in executing strategy but also, increasingly, in driving strategic initiatives within his or her own organization. The SAM program should be a vehicle for top management to identify new business and renewal opportunities and to shape the firm’s strategy by providing deep understanding of strategic customers and the overall market.
Driving strategy for the customer. The strategic account manager needs to focus on helping the customer create value in new ways. Sometimes this takes the form of challenging various influencers in the customer organization and suggesting modifications to its present ways of running things. This implies new types of processes and skill sets, where strategic account managers are tasked with becoming “value innovators and transformation agents” by helping customer organizations to strategize.
Driving market development. As markets become more dynamic and malleable, and strategies are less market-driven and more market-driving, the SAM becomes a key market shaper and can, for instance, push the market boundaries by finding customers who are early innovators and then engaging them as lead customers in a process of collective learning. Additionally, facilitating dialogue with customers and other actors in the ecosystem can challenge dominating assumptions about the market, reexamine existing market boundaries and expand market boundaries.

Becoming a driver of strategic development has two consequences. First, it will heighten the importance of value quantification and verification. To drive customers’ strategy or how the market develops, the SAM will need to tap into available data to show the potential for reconfiguring resources in the ecosystem to enable value creation relevant to influencers inside the ecosystem. Using data analytics will be the basis for credibility creation – a necessary foundation on which to build the case for change.

Second, SAM practices will need to be modified to better fit with the idea of driving change. Account planning will need to look beyond the buyer-seller dynamic to become increasingly collaborative. Value propositions will need to be made based on deep insight into influencer and stakeholder situations, and new tools will need to be applied to engage influencers and stakeholders in a collaborative process of co-creation. Digitalization provides tools and techniques for these modifications.

From account to ecosystem: orchestrating

A dramatic development that supports the elevation of SAM is the expansion of the “unit of analysis” – moving focus from the seller-buyer dynamic of strategic accounts to the larger ecosystem. If global accounts that involve hundreds of individuals are viewed as complex, then widening the perspective to include entire ecosystems makes them exponentially more so.

Increasingly, companies face situations where no single firm possesses all the resources or capabilities required to deliver the value required by strategic accounts. As solutions become more complex and components of the solutions become more digital, they are increasingly created and delivered by a “competency system,” or ecosystem — a combination of collaborating industry players.

The consequence is that strategic account management needs to be emancipated from the shackles of the seller-buyer paradigm so that it can focus on generating a better understanding of how resources in the broader ecosystem can be reconfigured to increase resource density for the strategic account. To put it succinctly: SAMs need to become industry players, ecosystem architects and ecosystem orchestrators – all roles that require a new set of skills and new tools.

In an ecosystems view, success is less dependent on the resources that a firm controls than on the resources to which the firm can connect. This flips traditional strategic account management on its head. Rather than start with what the firm controls and look for ways to leverage it, tomorrow’s SAMs will need to begin with the opportunity and then assemble the required resources in its wake. Key will be the ability to orchestrate actors and resources in the larger system to allow the firm to assemble and flexibly reconfigure resources so that value can be created for the entire ecosystem.

To seize opportunities that lie outside the grasp of any one firm, SAMs need to assemble partners, create alliances and enter into joint development efforts in which influencers and stakeholders are guided towards a common vision.

From management to leadership: facilitating

The key to being successful in driving strategic development in a customer organization or in an ecosystem of stakeholders is a simple realization: Change will never happen unless you can engage other individuals in the process. It requires leadership that facilitates others – customers, suppliers, other business partners and sometimes even regulators – to engage in a common change journey.

Moving from a firm-centric view to an ecosystems view implies an acceptance of complexity and uncertainty – and a corresponding loss of control. A successful strategic account manager encourages novelty and innovation not by directing but by allowing; not by stabilizing but by disrupting stifling patterns. In fact, in order to become a driver of change, one must decouple leadership from the individual and distinguish between “leadership”and “leaders.” SAM leadership should be seen as an emergent, interactive and distributed process of learning, influenced and enabled by the SAM process and strategic account managers.

Hence, we are not arguing that strategic account managers need to become better leaders, but rather that they will need to engage in processes of leadership that are characterized by facilitation and rotating leadership:

From self-centric to allocentric innovation. Orchestration of resources and activities in the ecosystem will require strategic account managers to switch from a self-centric, firm-based view to an allocentric (“other-centered”) view in which value is created for the whole market system by integrating resources from an ecosystem of organizations. To seize opportunities outside the firm’s grasp, the SAM will have to facilitate processes that help to assemble partners, create alliances and enter into joint development efforts.
Learn from jazz (i.e., rotating leadership): Part of orchestration relates to improvisation and allowing others to play their solos. Even if a jazz band has a leader, his/her roles are very different from the traditional orchestral conductor. The latter stands alone, high on the podium, and controls the performance with his baton, based on a score. By contrast, in jazz the leader is one of the players. And leadership rotates during solos, as everybody else builds a platform enabling the soloist to shine. Research has shown that rotating leadership — where organizations take turns leading the inter-organizational collaboration in distinct phases — and consensus leadership — where organizations work together, agree to common objectives and follow shared decision making — are associated with higher innovation outcomes than collaborations dominated by a single actor.

Strategic account management traditionally has been a set of primarily managerial practices: to make account-specific plans, execute them and follow up. Simultaneously, the more advanced programs have engaged in activities geared towards impact without authority, acknowledging that SAM programs on the one hand have an element of conflict management in them, but also that strategic account managers can exercise considerable power if they play the game well.

The managerial part of SAM is not going to disappear, but the leadership part will need to be elevated. This does not mean that strategic account managers will need to become more “leaders” than they are today, but rather that the SAM process will need to be designed in such a way that it enables distributed leadership in a collaborative process. Digitalization provides tools for this. Cloud-based collaboration also can, at its best, enable work to be organized more in projects and less in functions, and can enable the formation of flatter organizations. This would facilitate more people to be engaged in leadership.

An exciting time

To reap the benefits of digitalization, we need to ensure that digitalization is not used to engage in more administrative work or building more elaborate account plans. The name of the game is increasingly about added value, co-created between many stakeholders in the ecosystem. And this co-creation puts demands on strategic account managers’ abilities to navigate inside their own company as well as inside the customer’s and other stakeholders’ organizations.

For those who are ready for this new role, these are exciting times! Want to go deeper? Read the entire SAMA research report on which this post is based here.

Kaj Storbacka is professor of Markets and Strategy at the University of Auckland Business School’s Graduate School of Management. Elisabeth Cornell recently retired after nearly two decades at SAMA, most recently as senior knowledge content developer.