The Next Structural Breakthrough in Sales Isn't More Automation

Recently a writer for a major sales and marketing magazine called to ask my opinion about figure he said was taken from a Gartner Group study. "Fifty percent of sales automation projects fail," he stated, asking, "Do you agree with that figure?"

My first reply was that a fact-based number like that deserved more than my personal opinion in response. (Digging through my files, I found that back in 1986, the New York based research group Conference Board  found that 45% of sales and marketing automation projects delivered payback in 24 months or less. I'm in sales: the glass looks half full, to me!) My second comment was that, even if a survey like that existed, the numbers were not especially relevant. Each sales process improvement effort either stands or falls on its own merits. How everyone else is doing is secondary. Some pioneers are successful. Others, regrettably, do not make it to the promised land.

Sales automation and process improvement can be tremendously rewarding, as trail-blazing companies such as Yellow-Freight, Ascom-Timeplex, Nalco Chemical, and many others have shown. Ask the head of AT&T Universal Master Card's automation effort whether they're satisfied or not. Can you imagine travel agents and airline companies going back to a manual reservation system? I don't think we want to turn back the clock on this one.

So the question, "Do 50% of sales automation projects fail?" may be fair in one context, but I don't think it's direct enough. What is an attention-getting figure like that supposed to lead to, anyway? I can hear it now. "Hey, Jane. Our competitor's sales automation project failed! I'm scared. Maybe we better cancel our improvement project before it's too late." Like a magician's diversion, the question shifts attention from what should be our real concerns.

Unsuccessful attempts at flight didn't stop the Wright Brothers. Let's recall a bit of history. In 1903, the Wright Brothers' flight covered about 850 feet at Kitty Hawk. In 1969, just 66 short years later, Apollo 11 traveled through space a distance of 239,000 miles to land on the moon.

Aside from the inspirational value, the history of flight is also instructive in two other important ways.

First, recall that many of the early flops in flight were based on the paradigm of how birds fly. Our built-for-land bodies just can't flap a pair of home-built wings fast enough to get that model off the ground. Ouch! When we stopped trying to recreate a metaphor, and focused more on the aerodynamics of airfoils and the propulsion offered by engine-driven propellers, progress was made in a hurry. (If DaVinci had the internal combustion engine, the helicopter might have flown 400 years earlier.) Maybe unsuccessful efforts in sales automation need a paradigm shift, too.

Second, aside from the physics and mechanics involved, let's remember another reason Neil Armstrong holds the distinction for being the first human being on the moon. Without the shock Sputnik caused in 1957 and the first manned space flight by Yuri Gagarin in 1961, our national policy and the necessary leadership to meet this goal would not have been galvanized.  Establishment of one of the world's greatest systematic R&D efforts, aimed at achieving one highly specific and measurable goal, followed.

Back to sales automation. The more important pragmatic issue is, what is it about sales automation projects that increases their chance of success? The answer to this question cannot lie solely in how well the software and hardware works, per se. Electronic mail, electronic sales presentations, and contact management software all work, physically. If you select electronic mail as the solution for a process problem that only an electronic sales presentation can solve, what will happen?  Automation is not the problem here; the quality of execution is paramount.

For a quality effort, well trained people need to understand the sales, marketing and customer service process, modern technology, and the economics of what makes for positive cash flow. The team needs to have the time and resources available to do the job. User training is critical. Many factors have to work well together, as with any major innovation to succeed. A peer-reviewed guideline such as the Sales Automation Association's Sales Automation Audit Standards and Excellence Program contains a more complete checklist of best practices than can be relayed here.

In the space remaining will address both sides of the issue, offering specific reasons for failure and success. The ultimate conclusion will be a bit startling, however. Why? Just as models for aircraft needed to get beyond designs asking people to flap wings like crazy, real progress in sales, marketing and customer service needs to get past the notion that successful automation means giving reps a laptop, and asking them to type like crazy.

First: why do projects fail? I've seen first-hand many, many sales automation efforts. I've also talked at length with many highly respect consultants and with the leaders of hundreds of automation/improvement teams. It turns out that six problems seem to characterize efforts that turn out less than satisfactory.

1) Firms simply don't know how to create a tangible link between sales and marketing automation, and concrete business
goals.

2) Project teams are asked to develop and implement incredibly complex systems within "quick fix" cultures not conducive to systematic, patient thinking and planning.

3) Companies have not been keeping necessary analytic baseline data about cost, quality, quantity, and cycle time regarding their sales process.

4) Project sponsors seem to expect purchase of software and hardware alone to solve their problems.

5) Training and support are viewed as unnecessary or expendable, or they focus too much on "key-pressing" versus using a tool to accomplish a job.

6) Controls essential to determine whether automation is providing satisfactory results are superficial or absent.

Your list may be different from mine.

What common elements characterize successful sales process improvement efforts? Companies who succeed avoid the six pitfalls I've listed above in a proactive fashion.

1) Successful firms map out a causal link between sales and marketing automation, and concrete business goals.

2) Successful project teams are more careful to implement in manageable stages, systematically planning the steps and thinking things through.

3) Successful companies use baseline data about cost, quality, quantity, and cycle time regarding their sales process to prioritize their greatest needs for improvement, and they focus on those first.

4) Successful project sponsors acquire or build software and hardware of sufficient operational capability to directly address their business problems.

5) Training and support is viewed as absolutely essential, and focused on teaching how to accomplish a job through the use of a tool, versus "here's what the Tab key does."

6) Controls essential to determine whether automation is providing satisfactory results are based on the initial business goals, monitored, and actively used to stay on track and further improve. You can add your own ideas to the list.

Maybe these elements appear somewhat basic. But if sound practices are so obvious to those who have mastered sales automation "101," the next question is, why do the same problems keep appearing? Answer: because there's a deeper problem involved. Sales process engineers can solve symptoms, but they should try to arrive at systemic solutions whenever possible. Let's dig deeper.

The first and most obvious reason these six problems surface so often is that companies embarking on their first efforts have, almost by definition, little experience with how automation can cost-effectively support sales, marketing, and customer service. The whole subject of sales and marketing automation linked to systematic sales process improvement is quite new.  Integrated circuits only arrived in the '70's. Let's face it -- at this stage, true experts are naturally few and far between. It has taken years just to clearly identify the opportunities to improve in the first place. The SAA's professional courses on the subject have only been offered for two or three years. We've come a long way, but it's safe to say our knowledge base is not yet mature.

Second, just look at the world in which sales, marketing, and customer service providers live. Ironically, our very strength -- bringing home the bacon to feed the rest of our company -- is our weakness. As a sales person, I can personally attest that the adrenaline that flows when closing a sale is incompatible with calm thought. We're trained to be doers: sellers, marketers, influencers, movers and shakers, speedy problem solvers. When we think, it had better be on our feet. When we're asked a question, we better have an answer. Fast. That's our world, and it's how we're paid. We are rewarded well for being successful this month, this quarter, this year. That's how our environment is structured.

That's not all. We've been right-sized and empowered to the point where only the essentials to get through the day stay on the table. The rest falls off. Many of our markets are not just competitive: they are hyper-competitive. Even if we wanted to change, the structure of contemporary sales and marketing does not support the necessary contemplative analysis and lab work to study the new technology and its impact. So regarding automation, we all too often buy the process solutions and automation we're sold, which may not be the same as what we need.

To sum up this second point, the very way we think and the way we're structured tends to keep us in an orbit centered on the current way things are done. Without some sort of booster to propel us out of our groove, the orbit may be inescapable.

Quality expert W. Edwards Deming pointed out long ago that personal action, such as the tactics we teach our salespeople to perform, controls only about 20% of process outcomes. The remaining 80% of an outcome is controlled by process structure. To escape our current orbit requires a structural change.

Sales, marketing, and customer service now has the internal combustion engine Leonardo lacked when he drew his novel "air screw" in 1488. We now have portable, mobile computing and communications devices, and huge storage units capable of gathering and holding terrabytes of data. We still lack something else.

Hint 1. The next quantum breakthrough in sales is not more automation. We've got plenty of good automation. Many of us have already experienced that structural breakthrough.

Hint 2. The next revolution in sales has more to do with correcting the lop-sided nature of the brain-trust found in many of our
companies. Clues as to what that defect is and how to fix it stare us in the face.

From 1961 to 1977, W. Germany and Japan increased their R&D spending, as compared to their GNP, by some 46% while US R&D dropped by more than 20%! What happened in the following decade is a matter of record. Do you own a US made camera? How about a US made VCR? TV? Camcorder?

Another clue. In modern times no other product has come so far, so fast, as the computer. In recent years (biotech aside),
computer companies dominated Business Week's list of top R&D spenders, ranked by spending per employee. Any "aha's," yet?

Investments in R&D pay off, or US companies wouldn't spend, on the average, almost 4% of their total sales volume on product R&D. Two questions, then my conclusion. What percent of sales does your sales, marketing, and customer service process R&D budget occupy? If you have something you can call such an effort, is it staffed by R&D trained personnel -- by real engineers?

After thinking about this for a good while, I've concluded that the lack of a genuine sales process R&D effort is the structural cause of failure in the majority of unsuccessful sales automation and improvement efforts. The biggest breakthroughs in sales will come when we organize and fund a true R&D function aimed at improving sales, marketing, and customer service processes in a carefully thought out sequence. Companies spend plenty, and they hire and train lots of talented engineers to do just that on the manufacturing and product development side of the business. Now it's time for sales and marketing to benefit in a similar way from the income they themselves bring in to a company in the first place.

The solution put on the table will strike some as being too "new," "radical," and "unconventional." The novelty and the size of the investments we're making in our process changes require new approaches. Keep in mind, this is a solution that's already working in manufacturing and product development. Propose a different solution in your own company if you like.  Until you do, are you gambling on a 50-50 throw of the dice?

A top executive should be able to determine how much, if anything, is being spent on improving the part of the firm that brings in 100% of the business and consumes between 15% and 35% of its operating expenses. With the proper structure in place to design truly capable processes, I predict huge gains, with paybacks of two to one the rule rather than engaging in a crap shoot.

You wouldn't expect most sailors to be naval architects. Our staffs are currently crewed with fine men and women. But most are trained and paid to be doers, not process engineers. Who leads your sales process improvement effort: sailor or architect?

Continuing the analogy, I'll wrap up with a story about sailing. In the mid-1800's a sailor named Matthew Maury spent five years tediously plotting the wind and currents of the high seas, drawing data from thousands of logbooks. Maury's work was scoffed at by traditional sailors as untested theory. Then, in 1848 a ship using Maury's charts docked in Baltimore 35 days ahead of schedule, loaded with Brazilian coffee. The news electrified the waterfront; sailing the seas would never be the same. Maury's systematic analysis paid off for generations to come. Companies that follow his example will be first home to their markets.

Automation, per se, is a structural breakthrough we've already experienced. The next breakthrough is predicated on establishing a long term sales process research and development function in our companies. Only a policy decision by an executive who understands the critical  importance of being systematic can bring this about. If the results in manufacturing and product R&D are any indication, taking this step will dramatically increase the chances for sales automation success in the near term, and for sustained improvement in our sales, marketing, and customer service processes in the years to come.

It's time to stop tinkering and get on with it.