Transformation

Adapt or Die: Business Transformation is Inevitable

Remember when you used to call something a ‘Kodak moment’? Once synonymous with taking a picture, Kodak dominated the photography industry. However, its failure to respond fast enough to the advent of digital photography saw the company file for bankruptcy in 2013 as camera film was rendered obsolete to all but diehard traditionalists. Business transformation is an umbrella term for making fundamental changes in how a business or organization runs. This includes personnel, processes, and technology. These transformations help organizations compete more effectively, become more efficient, or make a wholesale strategic pivot.

Action Plan for Change

Take a few minutes to think about a change you need to make in your own organization. You will need to develop an action plan for the implementation of this change. There is a high probability you have picked a change that involves others and could require a substantial shift from current practices or thinking. Most importantly, you should be assessing whether you have the experience to drive the necessary change. Ironically, one of the key reasons behind business failure in implementing transformation is ‘misconception’. The most common being an ‘over-focus’ on technology as the first step. This usually because technology (“the widget”) is the most tangible or understood element of the change, and as business leaders we have a tendency to over-rotate to the elements we do understand vs. assessing the unknowns that could derail success. Lack of experience in business transformation leads to basic mistakes, such as initially incorrectly set goals, lack of a clear strategy, risk management and adequate resources.

A Real World Transformation

To best help you think through the types of advisory services you may need for your own program, I will step through a real world transformation that I lead leveraging the the project documentation I created along the way. In this present-tense narrative you will see some of the transformation frameworks, taxonomy, and learnings I employed during the program.

Overview
Business transformation is an umbrella term for making fundamental changes in how a business or organization runs.
70% of business transformation efforts fail
53% of CEOs say business transformation is required to meet company performance goals.

“Yes, your transformation will be hard. Yes, you will feel frightened, messed up and knocked down. Yes, you’ll want to stop. But, it’s the best work you’ll ever do.”

A Real World Example: Transformation from Transaction to Solution Sales

Current State:

Our company primarily sells computer hardware but has expanded into solution-based offerings such as virtual desktop, connected classroom, and cloud-based capabilities such as platform as a service in recent years. That said, our sales teams are largely transactional-focused. This means that sales focus on finding prospects with a computer hardware need, building relationships with those prospects, and 

taking orders for specific products and related services at an agreed-upon price point. Too often, this model leaves us ignoring our broader capabilities and competing with a diminished value proposition against vendors that can offer similar equipment. Thus, price is a primary differentiator, increasingly over quality, features, and business outcomes. 

We have attempted to make this shift by simply branding ourselves as a “solution provider” in the past several years. However, in reality, our “solution sell” was typically a piece of hardware since the Customer created the final business outcome by using our technology in combination with other products and services. 

Desired State:

The current change we are exploring is a significant investment and shift toward true solution-based selling. In this model, we want our salespeople to add value throughout the sales process by developing a deeper understanding of the goals and challenges faced by the Customer and creating a vision of a potential solution. 

In this model, questioning and listening become more important than communicating speeds and feeds. Unlike a purchase order, the decision process is managed through the proposal, contract negotiation, and solution delivery. The size and price of each transaction will now be managed through understanding the scope of the challenges faced by the Customer and selling the value of overcoming these challenges.

Motivation & Benefits:

As a company, we have set bold goals regarding our solutions mix, which will require us to think and work differently. To drive a shift in revenue to increase profitability, we need to do something substantially different. 

We’ve bet heavily on IP to develop solutions that enable us to address a large pool of opportunities with our customers from an investment perspective. 

From the customer perspective, computer equipment is becoming commoditized, and our margins are becoming razor-thin. 

Additionally, customers increasingly view hardware manufactures as suppliers versus true solution partners. 

Because of this shift, many businesses manage supplier-related purchases through portals and online procurement bids, diminishing the need for salespeople to handle the transaction. Furthermore, as enterprise problems become more complex, there is a greater need to focus on individual challenges faced by individual businesses.  

In this transformation, we hope to create additional customer value, which leads to a measurable increase in account retentionprofit margin, and recurring revenue streams.  

The catalyst for change (Why Now?):  

Customer enterprise challenges are increasingly more complex. Because of that, there is a fundamental shift in expectations of IT technology providers. Increased access to information means that customers can easily solve more tactical issues such as procuring the best-priced IT hardware themselves. Customers are now asking for help with solutions that solve specific problems and drive faster paths to business outcomes.   

Because of this shift, we must transform our culture from filling orders for computer equipment to providing solutions and services to enterprises and small, medium, and large businesses. Core to this mission is transitioning our sales teams from selling products to selling solutions and filling the role of a “trusted advisor” to our customers. 

Overall awareness of this desire to transform into a solution provider is well established and messaged. 

And the company is making changes to develop and market solution-based offerings. However, this is not clearly articulated, specifically for the seller, delivery teams, and even our customers. Critical to this change will be examining the entire go-to-market value chain and understanding each role in the transformation. 

Awareness: It will be important to communicate specific goals for this change broadly, specifically lay out the role of the sale maker in this transformation, what positive benefits sale makers and customers can expect, and what training will be available to affect change. Additionally, it will be important to note that this transformation impacts sales and the entire go-to-market ecosystem supporting the sale maker.

Function Current (Transactional State) Shift to (Solution State)
Marketing
  • Commodity
  • Emphasis on Features
  • Value is defined by Product
  • Strategic
  • Emphasis on Value
  • Value is defined by Customer
Sales
  • Sale maker provides little value
  • Deep understanding of product
  • Customer knows what they want
  • Sale maker helps define value & benefit
  • Deep understanding of problem
  • Customer may not know there’s a problem
Delivery
  • Function based delivery
  • Deliver to SLA
  • Metric based
  • Engagement based delivery
  • Deliver to ROI
  • Outcome based
Support
  • Inside sales rep / Web Form
  • Spec sheet
  • Product Demo
  • Subject Matter Experts
  • White Paper
  • Solution Center

Plan for becoming more aware

It will be important to leverage backgroundinterviews, and committee strategies at various levels of the organization to drive additional awareness and collaboration for the program. 

Executive leadership is already unified and committed that such a sales transformation is required; however, it will be important to engage a bottoms approach to awareness, including customers, sale makers, and sales leaders.   

Specifically, the voice of the Customer could be a powerful tool for level-setting new expectations of the market we support.

Background:

 It will be important to understand the value our customers expect us to deliver and examine the current compensation and quota objective of the sale makers. Solution selling will significantly lengthen sales cycles, which could adversely impact quota attainment. It will be imperative to understand sale maker motivations before building specifics of the go-forward plan.

Interviews:

Interviews will be a key component driving awareness for the sales transformation program. 

Here’s where the voice of the Customer, industry experts, and leadership can galvanize messaging into a cohesive gain plan. Customer testimonials as to why we win and perhaps more significantly lose can impact change awareness.

Committee:

Another strategy to driving program awareness should be through committees. Becoming a solution sales team will require two key elements: new conversations with our customers and a new way of working internally. Because of the latter, driving awareness and collaboration through cross-function committees will be a key asset.

Building Interest for Change.

How will this change work?  

Our customers expect us to understand their business as well as have deep expertise in technology and services. To become a solutions selling specialists, we will need to grow our domain expertise internally while hiring external specialist. To facilitate this we will invest in a new level of Domain expertise and give sale makers broader access to Domain resources. To grow our expertise internally we will develop systems and processes to support success. Additionally, we will make significant investments in professional development.  

Professional Development for Sales Leaders:

Sales Transformation

Proposed track 1: Creating a coordinated customer team

• Explain what solution selling is, and why it matters
• Define new roles & responsibilities
• Review engagement plans
• Identify resources required to fill skill gaps

 

Proposed track 2: Activating our strategy

• Understanding outcomes that define success
• Identifying behaviors sellers need to start, stop, continue
• Commit to driving solution selling to your teams

Plan for Building Interest

Developing Professional Development programs and Workshops targeted for Sale Makers will be a critical strategy for implementing this change. The more details we can provide during interest building, the better, as unanswered questions will drive additional anxiety and slow adoption. It will also be important to communicate the benefits of becoming a solution seller.

Benefits:

• Advanced skills and training
• Enhanced career options within the company
• Greater earning potential as sales volumes grow
• Increased paths to quota attainment and commissions

Key Message:

These paths are examples but not the only way. The point is, sale makers, will now have lots of opportunities to grow into different roles, and greater responsibility, according to interest and motivation.

>Example Professional Development for Sellers:

Proposed track 1:

• Engaging in new conversations with customers, with the end in mind
• Leveraging eOrder platform to maintain transactional business and improve customer experience.
• Expanding sale makers portfolio of opportunities
• Building collaboration to identify opportunities and plan to approach them.
• Lead a new way of working to be “one company” to our customers.

Appraisal and Trail

Testing the Change

Before locking on specific professional development and overall change mode, we will need to develop a very basic transition program and test this on the specific strategic Customer, or targeted base. Since solution selling at its core is simply a new approach to building deeper relationships with customers, a pilot doesn’t require a specific packaged solution. But it will require a focused game plan on strategic customer needs and business outcome. We can validate more specific methodology, playbooks, and training later in the rollout.

For now, target account transformation should be narrowed to three basics steps:

1. Consult with target customer to develop a strategic perspective of their business needs.
2. Gain a deep understanding of existing IT systems and infrastructure
3. Create a position around which solutions will deliver value – as the Customer defines it – and solve core business issues.

Plan for the experiments and trials

The pilot approach should validate that we can position real customer solutions at every applicable opportunity. We are not providing specific domain training since a solution isn’t a particular product or package. Rather, we cement the notion that a solution is a strategic mix of capabilities that solves a business need. 

Therefore, we should limit or test to validating our ability to give sales the foundation required to understand that we are now a technology solutions provider and communicate this value to customers.

This way, we are not locked into a specific curriculum or documented approach but rather testing the basic core conversation pivot.

The preliminary plan is the train current sales resources, then augment by hiring domain experts going forward. Our ability to successfully pilot recent sales’ changing conversations may speed or slow that augmentation.  

Assessing New Solution Adopter Types.

Key Roles in this Change Effort: 

1. Regional Account Managers 2. Account Executives

3. Customer System Engineers

4. Domain Sales Specialists

5. Product Technologists

6. Customer Executives

7. Services Sales Executives

8. Services Account Executives

9. Solution Architects

10. Inside Account Managers

11. Inside Sales Representatives

12. Technical Sales Representative

Anticipated Allocation by Adopter Type:

Force Field Analysis:

Actions to increase forces for change

A vital key to increasing forces for change will be broader initial messaging for the program, put in to the context of our customers, investments, and values. Additionally, it will be important to build messaging specifically around the top forces of change employing liberal use of Executive Deployment, Interdepartmental Unit Meetings, and Workshop change strategies.

Forces of change key messaging:

1. Revenue and profitability

• Good progress on transformation; but we must deliver improvement in solution mix.
• A longer sales cycle, combined with bold goals means we have to get started today

2. Customer Expectations

• Our customers expect us to understand their business and have expertise to solve business challenges.
• We’ll never get there with the majority of conversations we’re having today.
• We need to change the conversation so we’re addressing customer business issues and outcomes.
• We want to be invited to the table as a trusted advisor to our customers.

3. Market demands

• The rise of e-commerce and the increasing complexity of businesses are key forces driving change.
• Shift of focus to individual challenges faced by individual businesses • Solution selling and great account planning are critical to our success.

4. Increased Competition

• Evaluation often limited to ability to provide supplies in a timely manner and at the lowest cost
• Increasingly difficult to complete solely on features and price.
• Lots of vendors, few trusted advisors.

5. Accelerate use of IP investments

• We need to leverage our new resources and become great at orchestrating teams instead of controlling accounts.

Actions for Decreasing Forces Against Change

All forces against change for this effort, will ultimately have the same root: a culture which is resistant to change.  Additional forces against changing such as our viability as solution provider, concerns over longer sales cycles, transformation costs, etc., while viable, can all be traced to a desire to maintain the status quo.

Build messaging around this force should be met head on. Managing through the status quo (culture) will be largest force against change.

 

Key Message:

The voice of the customer has driven our products, services, and measure of value since our inception.  And this new “change”, while bold, is nothing different than we’ve always done; listen to our customers, and responded. Yes, this change will require teams to think and work differently, however adapting to an ever changing technology and customer landscape has always been in our company culture.

Conclusions & Final Thoughts

Even the word change tends to drive negative connotations for many people. Particularly, change in the workplace. People resist change for a variety of reasons, but they can usually be categorized one way – fear and uncertainty. Additionally, everyone has their own speed and need for change.  I know have a better understanding of proven approaches for implementing changes using an effective sequence of change modes and strategies.

 

Addressing the Right Problem

Sometimes, even a successfully adopted change cannot make things better because it is simply the wrong step to take. Before implementing a change, it is important to be sure it is the right one. This sounds intuitive, however many change initiatives turn out to be solutions in search of a problem.  Like when my company embarked on an IT 2.0 initiative to save money consolidating IT functions into one organization. But did we really need to do that, at that particular time?  Although the change was implemented, it was never truly adopted, and its resistance had adverse impact to the business.  And in hindsight, we did not really have a cost-problem for this cost-solution to solve.

When change is thrust upon an organization with no business context, the process of dealing with it becomes that much more difficult – and potentially harmful to the business. That is why it is important to follow certain key steps when implementing change in the workplace.

 

Awareness

Introducing change involves more than the initial change decision. Planning for introducing change, communicating it to staff and managing issues should all be part of the process. No matter how obvious the reason for change may seem, the planning process should always involve input from the workforce on the best way to design and implement the change. Employing change strategies such as committees and interviews will help build a collaborative outcome. In the long run, the workforce will be far more committed to the change if they see that their perceptions, ideas, and concepts have been considered, and are more likely to adopt the change.

In this phase, understanding and considering background motivations that could drive anxiety around the change is perhaps the most critical step in building awareness. It is vital to consider the reaction of everyone in the company who will be affected. The leadership team of a company can set direction, however the success of a change will require the support of everyone affected. The more resistance is acknowledge and anticipated, and steps taken to minimize it, the more likely the change will be successful. .while building awareness and consensus. It is equally important to build as contextually relevant change plan as possible, and understanding cultural or historical perspectives are key to this outcome. >

 

Interest

A key learning is that preparing an organization for change should be viewed well beyond the announcement. Here change strategies such as newsletters, workshops, and department meetings can help employees to understand the “bigger picture”. There’s no point introducing the “What” or “How” if they don’t appreciate the “Why”.  At this phase it is important to candidly discuss how the change decision was arrived at and again invite input and feedback.

Each employees will react differently to change at different phases of the process.  Therefore, it is important to provide support and training (Executive Development) to facilitate the change. Open and honest communication is important throughout, and giving employees support along with avenues for feedback, will galvanize the team around the change.

 

Appraisal

Each employees will react differently to change at different phases of the process.  The appraisal strategies it is important to provide support and training to facilitate the change. Open communication is also important at every stage, and giving employees a timeline and expected outcomes will ensure everyone is pulling in the same direction.

 

Final Thoughts

Implementing change in the workplace can be intimidating, but it need not always be a difficult process. This exercise has expanded my awareness of potential issues a change can create, but has provided proactive steps of dealing with them effectively.  The net, is that change is essential for a business to adapt, grow and survive.  However, if the change is well planned and implemented, it can enhance the likelihood that it will be successful.  That being said, if the change status is aligned

How I can help:

I am Customer focused Fortune 100 executive with 30 years experience skilled at leading business transformation while immediate committed results are expected.

Over my diverse experience, I have become highly adept at operationalizing new business strategy, as well as identifying the real problems in legacy operations to be solved and selecting appropriate leadership styles and change modes to deliver targeted results.

Outcomes have ranged from driving measurable operations efficiencies to delivering over $1B in revenue across a broad range of profit centers.

Currently leading CX transformation of Cisco Systems $1.7B US Commercial Services business unit.

Contact

If you would like a download of this article, other case studies, or to discussion your current project, drop me a quick message. Your email will not be used for any other correspondence.