Noel Capon has spent 30 years looking at, thinking about, and analyzing sales organizations. His latest book, “Sales Eats First,” identifies six factors that underpin successful, and often extraordinary, sales organizations. Chazen Global Insights caught up with him recently for an insider’s view on the role of sales in these uncertain economic times.CGI: You’ve said recently that more companies have global account managers. Why?
Capon: Global customers are saying, “I can do a more efficient and effective job of procurement if I centralize my purchasing globally.” If your customer is saying that, you have to have a global account manager to respond.
CGI: Given what’s going on with the economy, I wouldn’t think that sales organizations would want to add another layer of oversight right now.
Capon: I don’t see it as a layer of oversight. Years ago, the conversation was “are you decentralized or are you centralized?” The issue today should be, “which parts of your company should be decentralized and which should be centralized?” There’s efficiency in centralization but there’s customer responsiveness in being decentralized. If your customer is centralizing its procurement, you’d better respond to that.
CGI: Domino’s Pizza has managers who make sure that the product in each country caters to local tastes. By instituting this global accounts structure, are you impinging on their ability to do that?
Capon: Not at all. For starters, Domino’s is in a B2C business, and global account managers are generally found in B2B where the customers are organizations. Having a global account manager in no way takes away from sensitivity to local cultural issues. No one is suggesting that.
But suppose you’re selling plastic chips in Argentina and you make minor modifications because the customer’s local subsidiary wanted that. You did the same in Australia, and all over the world. Often the customer is better off not having all those variations but instead getting better prices via standardization and centralized purchasing.
It’s a tradeoff. When a company makes the switch to global procurement it takes a very hard look at the products it’s buying around the world. The job of the global account manager is to lay the issue on the line and to say, “look, if you bought only these three types we’d be able to give you this price but you’re buying these 56 types, so the per-piece price is higher.” Then the customer can make the judgment.
CGI: So you’re not suggesting that we ram this diminished choice down the customer’s throat.
Capon: No. You’re helping the customer manage its global business and aiding their decision making.
CGI: Your new book is titled “Sales Eats First.” What does that mean?
Capon: GE wanted to take over Honeywell in the early 2000s. The US Justice Department said okay, but the European Union took about a year before it said no. By the end of that year, Honeywell Building Solutions, the unit that makes thermostats and other indoor controls, was in very bad shape. The executive charged with turning the business around formed a team comprising marketing. operations, and sales. He said, “sales eats first.” If you can’t improve revenues, you don’t have a business.
CGI: You interviewed a VP of sales at Whirlpool who said he doesn’t hire MBAs because they resist the company’s immersive learning methods. As a professor at Columbia Business School, how do you feel about that?
Capon: By the time someone gets to an MBA program, they have a pretty clear idea of where they want to go. Whereas if you’re coming out of an undergrad program, you don’t know that so well and you may be more valuable to a company trying to train you. I’m not saying one is right and one is wrong, but since Whirlpool is trying to build someone the Whirlpool way, that makes a lot of sense. In fact, they pay for further education later on in the employee’s career.
CGI: In your new book, you say the sales force has to be the moral compass for the firm. Isn’t that a challenge in a global sales organization? Standards for how deals get done, for example, may differ from country to country.
Capon: That’s true. In a lot of countries there are “facilitation payments” or whatever euphemism you want to use. But there are very severe penalties for companies that are caught engaging in bribery. In those cases the sales force has to be the moral compass or your employees end up in jail.
The way to combat this issue is to make sure your sales force has a sense a mission. They shouldn’t feel that their only job is to make money; there’s got to be something else. One executive we interviewed at Johnson & Johnson mentioned a salesperson who told his wife each morning, “I’m going to save some people’s lives today.” Few salespeople can say that, but they should have some notion of mission over and above pulling in a paycheck.