Randy Illig Interviews Shawn Donovan on Building an Effective Sales Organization: Part 1
Shawn Donovan is maybe the most successful sales expert I know. He was the chief sales officer at Neustar, Fiserv, and Acxiom, and president of sales at EDS, pushing each to record highs in sales. He retired, for now, in December, after 30 years at the top of these sales empires and didn’t miss an annual sales goal very often! In this exclusive Q&A, the respected sales guru shares his secrets about what it takes for chief sales officers to whip a place into shape. He’s a friend and a client, and it is a privilege to spend a little time with him on this subject.
Randy Illig: You've done sales transformations at least four times, and I thought it might be good to start by describing the situations you faced.
Shawn Donovan: I've essentially built my reputation through three primary situations. One: transforming or turning around existing sales organizations. EDS is the best example. The second situation is building a centralized global sales organization from the ground up. The best example of this situation is Acxiom. And the third situation is to transform or turn around a recently centralized sales growth organization. And that's really what I encountered at Fiserv and Neustar. So those are the three primary situations that I've faced over a 25-year period.
Q: How do you begin such a daunting task? How much due diligence should you do before you land on the ground?
A: I begin by being thoughtful. Due diligence is key. And before we begin, let me state that these are my opinions and approaches. My process has led to success in my situations. All leaders and situations are different. I focus on what's going on in the company and my organization. The approach: Listen, learn, and assess. If you're going to fix something or if you're going to turn something into a high-growth, top-performing function, you need to understand what’s going on. You do the company and the people a disservice if you come in assuming you know what needs to be done. Not to mention it creates a credibility issue. I spend time listening and learning from senior leaders and their leaders, as well as with my leaders and people within my organization.
After “listen, learn, and assess,” I separate what I found into priorities within our direct control, organizationally…and then what's within our influence across the company.
Next it’s about having a playbook to map against what you learned during the due-diligence process. Then refine the playbook based on the situation. I very much believe in developing and having a strategic plan, which I refer to as a playbook.
And then it's all about getting after it. Executing. I like to say, "Transformations or turnarounds are like having kids. If you wait until you're ready, you'll never have them." And if you wait until you're ready to start a transformation, you won't start it. You're never going to be 100% ready.
Q: I’ve talked with many executives, and there's an equal number who come to a new opportunity with a plan—"I've already figured it out. Here's what we're going to do"—as there are those that come to it with an open mind. Personally, I favor the open-mind approach. You?
A: I favor coming into an opportunity with an open mind, which is why I take a “listen, learn, assess” approach. However, as we discussed, I have a process I follow. The process starts by evaluating corporate and sales performance, which is a combination of profitable revenue on the corporate side and either total contract value (TCV) or annual contract value (ACV) and/or in-year revenue on the sales side. I analyze the last three to five years of performance. Profitable revenue growth is obviously important. Are the sales turning into profitable revenue? Is a company delivering on behalf of its clients, or not? Next, I analyze lost revenue. Companies refer to lost revenue differently, such as revenue runoff or revenue churn. Generally, figuring out why a company is losing revenue is the quickest path to growth. A leaky revenue bucket negatively affects the impact of new sales.
It’s also important to analyze a company’s client-satisfaction scores. What does client retention look like? Is there a similar trend to lost revenue? The performance trends begin to tell the story of what's wrong where, what needs to be fixed, and what the priorities should be.
Q: What kinds of things do you get brought in to solve?
A: Generally, it’s been, “We're growing but we need to be growing more.” Or, put differently, “We’re selling, but we need to sell more. Can you tell us what we need to do to improve our performance?”
Also, leadership is an important part of the early conversations. Companies want stability in their executive sales-leadership positions. They want someone with experience, who has been successful, and is a strong cultural fit. Obviously, knowing what needs to be done and how to do it is essential. However, leadership is the glue that holds it all together and will determine long-term success. Companies have to get executive sales leadership right, or they’ll pay for it in the end.
Q: That's great. You're saying people suspect that they're underperforming. They know they don't have a growth culture, and they want to try to retrofit or build that.
A: That's right. However, they’re generally not sure why they’re underperforming or they’re misinformed. Having one growth culture is priority #1 in my playbook. And this is why I evaluate the full corporate performance, not just the sales organization's performance. Many companies say, “We're not selling as much as we should be.” Well, there are usually many reasons why sales organizations are either underperforming or underwhelming or both.
In my playbook, I have something that I call a growth-life cycle. It represents a holistic view of the roles played by product, sales, delivery, and client functions. The product organization must understand the market opportunity and innovate/build the right products. The sales organization must responsibly sell the value of the products. The delivery organization must deliver the products sold. And finally, the client function must keep the client satisfied. This is normally an account-management or relationship-management function. The client function is key, because lost revenue is such a big issue for most companies. If a company doesn’t have a strong account-management organization to retain the revenue and the clients, then they're not going to be a growth company long term.
So I look at growth more holistically in terms of the roles played by product, sales, delivery, and the management of the client. This approach enables me to assess what's really wrong and where. As I said, generally companies want to assess just sales, and I explain it's always a much bigger problem than just sales. Companies need to appreciate and understand that dynamic in order for me to commit to them.
Q: Let's talk about the plan. Tell us about your playbook.
A: We’ve touched on elements of the playbook throughout our discussion. There’s a lot to tell and not a lot of time. My playbook begins with the “listen, learn, assess” approach and organizes how to solve either directly or through influence what we’ve learned. I accomplish this through work streams and initiatives. The companies I’ve had the pleasure to work for experienced similar issues, but were also in very different industries, markets, and situations. I adapt the playbook to specific situations; however, there are some common elements.
For instance, I find creating one growth culture is always a priority and therefore work stream #1. The initiatives within “culture” focus on many elements, such as organizational structure, role and responsibility clarity, selling system, management operating rhythm, talent, and “pay and recognize for performance” philosophies. This work is all foundational to building a world-class growth organization.
The selling system is critical, if not the most important element. A selling system provides one selling approach to include common mindsets, skillsets, toolsets, and approach to becoming a better growth professional.
Strategy is a work stream as well. It's critical that companies understand the market opportunity, both addressable and attainable. More importantly, they must know how to organize in order to capture their fair share. Too many companies don’t know the definition of what’s “good” performance, never mind “great” performance.
The traditional sales-operations function is important to strategy, so it tends to be a work stream as well. I create more of an action function; therefore I refer to it as “sales enablement.” Ideally it focuses on enabling the performance of the growth channels. It’s important to put sales processes and disciplines in place to include reporting, forecasting, deal reviews, and advancement sessions.
Process gets a bad rap. Without process, I don’t know how you set and execute a strategy.
The playbook tends to have eight or so work streams with numerous initiatives, but those I just mentioned tend to be the core work streams. I can’t give away all my secrets! My process and playbook help to set expectations for an organization, which is really important so that they know what I'm going to hold them accountable for.
Q: It’s that important to success?
A: Yes. Without an approach to include a selling system, it becomes very difficult to build the type of credibility you need to be successful across the company. It’s also essential to monitor organizational engagement, commitment, and practice. I have to demonstrate the value of what I’m installing to get buy-in. I just can’t tell an organization or person to do something and expect they’re going to do it without understanding how this will make them better. It’s about building relationships through trust.
Selling is a profession. I tend to use sports as prime examples to make my points. So if Nick Saban didn't have a playbook, which he calls “the process,” and work to ensure each player understood their roles and responsibilities in the success of the University of Alabama football team’s season, do you think Alabama would consistently be in the college football playoffs each year? The answer is no. If he didn't have a plan to work with his players to improve their skills, their competencies, would they continue to improve under his coaching? No, they wouldn't. The selling profession, the growth profession is no different. Once you establish your selling system, practice it.
Q: I love this concept. What kinds of things should sales teams practice?
A: This is where competent, capable leadership is critical. Leaders need to be able to coach and mentor their people. To make them better. My selling system is built on FranklinCovey’s Helping Clients Succeed. There is a common toolset that includes an opportunity worksheet, qualifying checklist, call plan, and decision grid. Leaders should be practicing the completion of and execution of those tools with their people. Role-playing is essential to being ready to engage with clients. Understanding situations one could be put in or questions that could be asked before you’re in the situation is extremely valuable. The mindsets associated with the selling system can also be practiced in role-playing scenarios. This is core to how growth professionals get better. Practice.
Q: What else is in your playbook?
A: Let’s summarize what we’ve discussed so far. There’s an initial “listen, learn, assess” piece. I then establish priorities. Those priorities get translated into work streams and initiatives. Core work streams I always include are culture, strategy, and sales enablement.
There are other work streams that are important to the cause, such as communication and corporate business partners. Communication is probably pretty straightforward; the corporate business partners work stream may be less so. I have found having competent finance, human resources, and legal business partners assigned to me to be invaluable in getting the data I need and just in getting things done.
The remaining work streams tend to focus on the enablement of growth channels. CEOs and boards like to ask, "If we give you more budget, how many more sales professionals would you need in order to be more effective?" And I say, “I don't know if more feet on the street is the answer.” I tend to believe that enabling growth channels is the answer. And what do I mean by that? Make sure when you’re analyzing and creating your organizational structure that you contemplate more than just the field sales team. Other growth channels to contemplate are an inside sales and sales development team. Think about how to leverage a social-selling strategy. Look at what you're doing around demand generation, which is the design and execution of sales campaigns. And think about how best to incorporate the role of marketing. Too often now, marketing organizations are focused on communications and colors, logo, etc., as it relates to the brand, but not what you stand for as a company. So it’s important to think about lead and demand generation: how do we involve our clients in our product innovation and in making us a better, more effective company?
When the playbook has been executed on and the foundation and frameworks are in place, then the focus turns to execution. The focus is primarily on coaching and mentoring what we’ve established in order to drive the desired results. Of course, I’m never satisfied with where we are, so I’m constantly tweaking what we put in place to get better.
Q: There are a lot of well-written plans, but what it really comes down to is how well you execute. What would you say are the key tenets of your execution philosophy?
A: Keep it simple. Be transparent with the company and your organization. Focus on the few things that are going to make the difference. Another part of my selling system is a second piece from FranklinCovey: The 4 Disciplines of Execution or 4DX. 4DX is a simple, repeatable, and proven formula for executing on your most important strategic priorities in the midst of the whirlwind, or said differently your daily, weekly, and quarterly responsibilities. It’s essential to set expectations and goals, so everyone understands the standards you are holding them to, and then keep score and hold them accountable. Without that understanding, any organization or individual is going to struggle. Sales leaders, any leaders, should view themselves as coaches. In order to execute well, there are three areas to focus on:
- One is strategy: establish a "playbook" and have a "selling system" as your journey has to be mapped out. Build one culture.
- Second is talent: develop the skills and competencies of your people; coach and mentor rather than tell; set expectations and hold accountable.
- Third is results: which will come if you execute on the first part of my answer and create a winnable game for your organization, team, and people.
Q: One more question about execution. Many organizations are prone to fractured focus, moving on to the next new shiny object. How have you kept the team focused on what needs to be done to execute the plan?
A: It comes down to discipline. What’s most important. You can't distract from the primary objective of the organization, which is to sell. Once you establish everything that we've talked about, then it comes down to execution. It’s important to focus on leading measures then evaluate whether the lagging indicators are improving. I measure progress through the sales processes and disciplines we put in place. When you study the trends in the reports and forecasts, it becomes apparent whether you're making progress or not. Tweak your approaches when necessary. The leaders that I've seen move on to the next bright shiny object are usually deflecting from their performance. I embrace performance. Performance is the indicator of whether the company's investment in me as the leader and the team is worth it or not. I stay focused on the results and not making excuses.
Q: Based on your experience, when do the first results begin to show up that indicate you're actually on the right trail?
A: If you're disciplined, you're going to see real results within the first year. How you define results is, obviously, really important.
At the end of the day, you want to be getting better. You want to get better at planning for your sales calls. Executing your sales calls. Closing. You want to get better at building a pipeline. Eventually all this will lead to better execution in overall selling results. You're looking for the small wins within the first 12 months that indicate you're on the right path and you can communicate those wins to the organization. People start to rally around progress. My last company was probably the quickest. I was able to execute my playbook in 14 months. I can generally finish a full transformation inside of three years.
Q: One of the things that I hear you saying to the CEO or board audience is if you're trying to restart or establish a growth engine, it requires patience. Think about it in the context of a three-year horizon, not a couple of quarters.
A: Correct. I talk a lot about courageous leadership. I think it's critically important to have an open and honest dialogue with the CEO and the board. You have to have that dialogue early, and you have to have it often. And then as I like to say, lather, rinse and repeat. I have the conversation during the interview process, when I'm assessing whether I want to join a firm, and every time I’m in front of the CEO and board. Consistent communication. The quote I like to use to reinforce my point is from Braveheart, where William Wallace says to Robert the Bruce, "Men don't follow titles. They follow courage." I firmly believe that. If your people see you taking on the tough problems and challenges on their behalf, on the organization's behalf, on the company's behalf, then they'll follow you through almost anything.
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