Why Selling Slows as a Company Grows
Every business goes through evolutionary cycles. Each new cycle brings on a new style of selling. In the entrepreneurial stages of a business, salespeople feel the passion that comes from the rush of customer acceptance in the marketplace.
The sales team is highly motivated because they are fully aware of the near-limitless potential for the new product or service. The customer is king, and the sales process follows the art of creative improvisation. There is no cap on sales commissions. The company adapts to market changes with lightning speed. Decisions are made on the fly. Gut instincts replace the need for market studies. When passion rules, the organization is as fluid and responsive as a basketball team. Offices are small, the furniture is used, and everyone works late.
As the company grows, the need for bureaucracy begins to emerge. Passion no longer comes from enthusiastic customers but from exciting incentive programs. Sales managers rationalize that consistent success demands formalized training. Salespeople must follow a standardized sales process, and a CRM system is installed. New competitors emerge, and cost cutting is necessary to finance the growing business. The company invests in market research. As more department heads are hired, decision-making slows down, and bureaucracy begins to get in the way of pursuing new growth initiatives. The sales office is stylish, but uniform, and all managers work long hours.
As growth continues, the company goes public. Stock options create employee excitement; but within a year, the stock loses its luster. The bureaucracy solidifies, and top executives are stressed from dividing their attention between satisfying customers and courting Wall Street. The sales organization is restructured, sales goals are set higher, commissions are capped and rigid budget and communication guidelines are imposed. Decision-making slows down, and the legal department gains more influence. The sales team is eager to set new records, but competitive price wars slow sales growth. Executives talk about the need for balance in their lives and more employees leave promptly at 5 p.m.
As the company reaches maturity, passion is replaced with rationality. After several rounds of competitive mergers, the company is no longer leading the market. Winning is measured by staying profitable year after year. A quiet fear of losing major clients has crept into the consciousness of the sales team. The energy of the organization is sapped from playing a defensive game imposed by new mergers and new, vertical competitors. More, rigid rules slow the pace, and strategic moves are often prescribed by outside consultants. Hiring new salespeople has become increasingly difficult.
The pain of growing can often divert the attention of an organization from the customer to internal trials, troubles, and trivia. Yet, there are a few consistently successful companies that continue to grow, adapt, and transform in sync with the market. Their leaders know that passion beats rationality every time. How do they keep the passion alive year after year? By keeping their goals squarely focused on what matters most - satisfying the customer.
– Gerhard Gschwandtner
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