Facing up to the challenge of change

Thomas Monahan, chairman and chief executive officer of the CEB says that while many organisations throughout the world have applied aspects of its Challenger sales model, true zealots of the process are still few and far between.

Speaking to SI, he said: “On a macro level we support 10,000 companies globally and the idea of Challenger is pretty broadly disseminated through them. As to full adoptions, the numbers are much smaller because it’s a pretty radical departure from how people used to work.

“So the number of people who would claim that they have fully adopted and embraced Challenger up and down their businesses is still quite small because, even true believers, say there is still quite a lot of work to be done.”

Monahan said the process cannot be applied effectively if sales is seen as a stand-alone department.

“This is because it’s not just about sales in many respects you need to march other parts of the business along as well,” Monahan added. “No matter how good a sales rep is, if his marketing department hasn’t armed him with compelling teaching points, if his collateral isn’t as sharp as his own message it becomes rather confusing for the customer – this really compelling person with uninspiring material being slid across the desk!

“For that reason while a lot of people who set off on the Challenger journey, sales directors in the main, the number of organisations who have fully understood what it means to constructively teach your customer about how your capabilities will benefit their business, number in the dozens at most because it’s not about just who you have in sales but how marketing interfaces with sales and the whole corporate positioning needs to adapt to support that.”

Monahan said there is a pressing need among industry professionals to help sales directors spread the message of applying sales process thinking right across the culture of an organisation. And he thinks the best way to achieve this is through highlighting the results that can be achieved.

He said: “All changes begin with success in the field because, as a sales director, you’re able to demonstrate methods that lead to wins and the world loves a winner!

“So organisations are pretty good at saying, ‘something is really good in this territory or individual, let’s figure it out and develop it’. This is particularly true with sales.”

Does it work? Well, the organisation claims the key statistics demonstrating the value of Challenger are that, across the global study 40% of sales professionals performing in the top 20% of their organisations were Challengers who increased to 54% in complex sales.

Monahan stressed the importance of the individual sales professional’s appreciation and acceptance of a sales process or methodology, saying: “It tends to be the case where an individual rep who follows Challenger methods enjoys a multiple of productivity versus non-Challenger reps. It’s not so much an investment at a corporate level it’s more about how many reps you can convert.

“The whole process began by looking at the reps who were doing well and we needed to find out what distinguishes these people, what makes them do what they do and how do we move the rest of the sales force to that standard of performance?”

Yet, while Challenger was born out of the global economic crisis post 2008, Monahan does not believe organisations can risk returning to traditional sales methods as, and hopefully when, the global economy sees a marked upturn.

He said: “It’s a broader story than the downturn. We have supported heads of procurement for many years and it would be no exaggeration to say the Challenger method, and the success of Challenger people, developed in direct response to the fact there has been a remarkable professionalization in corporate procurement over the last 10 years or so.

“Companies have become much more sophisticated buyers, now did that get accelerated in the downturn? The global financial crisis, absolutely, caused large companies to say, ‘lets put more energy into procurement and, effectively, wringing the pennies out of our suppliers’.

“This led to professionalization and templating of the RFP [request for proposal] process and how they measure performance. That put traditional sales methods at a real disadvantage because, if you’re letting your customers set the parameters all you can do is try to fit in – If you’re not, they are just going to squeeze you on price.

“I think that trend was underway for a decade, accelerated by the recession but I think the professionalization of procurement, the system of purchasing, is here to stay as a permanent feature of corporate life.

“It has resulted in the things that you can sell in that environment changed forever, this is not a cyclical story at all, it is sales catching up with procurement.”

Another feature that will have a bearing on the future of sales that Monahan sees is the way global markets seem to be developing with no guarantee of a return to high volume growth.

“Going forward, there is lot of different ways the trend to professionalism can continue,” he said. “Under any set of circumstances, most markets, most developing economies, will be low growth economies, at least by historical terms. So I would argue sales has become a strategic capability in a low growth market because sales, effectiveness of sales and the way you win share, means that if the market isn’t giving you growth you have to fight for it, you have to make it happen and sales is the mechanism by which most companies do that.

“Sales is both catching up with corporate purchasing and, at the same time, it is a rising importance to the executive suite where they will ask ‘how can I grow in an economy that doesn’t give me any growth? What tools do I have? Really effective sales management. In general, sales is rising up the list of tools a company has at its disposal to wring growth out of markets that are not giving it.”