Point of View – Sales Interface I like bowties, always have. There is something quirky about them. They are festive most times, and for those other times the wearers are easily made fun of; be it the research director in the multinational, the nutty quiet college professor, or that odd sales guy with the plead jacket. The shape of those two triangles meeting in the middle (making a bowtie) also reminds me time and again of how we model company-­‐company interfaces. In many industrial sales situations it is the salesperson who is the point-­‐person for the organization. On the other side, in the customer’s organization, we find primary representation by that single purchasing person. Just like in a boxing match, right before the interaction, it is “gentlemen to your corners please”. And then the fight starts. Sales training 5.0 against purchasing education 5.2; it should be an even match. Only a couple of differences can be detected to the real fight: no blood (only bruises – mainly egos), no spectators. Kidding aside, this bowtie face-­‐off should concern senior management. It needs reflection for several reasons. First, the commercial person is the person who represents all you stand for: the product, the quality, the innovation, the pricing, the payment terms, the execution. Simply put, that one individual sales person symbolizes all that your employees create together, your brand. From the other side it is as precarious; one person to understand all the needs from your organization: product quality, design features, inventory implications, investment, innovation, . . . But today, the bowtie epitomizes that lovely interaction point between the seller and buyer -­‐ where we expect something magical to happen. It is built for fireworks as the opposing parties have at least two things in common; (1) they want to create an exchange of a product/service, and (2) they are both notorious liars (hardly trustworthy). Shocking? When the sales representative tells you that you have ‘the rock bottom price’, ‘the best in industry’, and that ‘there is no other company out there with a better deal’, you don’t really believe him, do you? And from the sales side; when the purchaser tells you competition is ‘double digit cheaper’ (not to name specific figures), that they promise better lead times and that they have payment terms the Greeks would sign up for with German banks, there is at least a little doubt, right? -­‐confidential-­‐ The fact is that large industrial consumable organizations 1 often rely solely on professional purchasing and/or sales organizations (each trained in the art of negotiation) while underestimating the value of the relationship beyond the transaction. Sophisticated supplier ratings, reverse internet-­‐auctions and other tools are dumbbells making the purchasing teams stronger. Some even use steroids (tricks to deceive and mislead); gimmicks like ‘by accident’ leaving a competitors offer on the table, promoting statements like ‘all your competitors have accepted these payment terms already’. The typical solution for tricky negotiations in the industrial consumable market is to pull the managers -­‐or even directors-­‐ in. Nothing new, we are just stacking bowties now; bowties with more experience. So we have Sales 5.1 against Purchasing 5.3. At times this is effective; the big shots can slug it out, bend rules of ‘standard’ engagement and everyone goes home semi-­‐happy (it has to be a win-­‐win after all). But in an industrial consumable market this misses capturing the potential value at best, and can even backfire. We’re not buying white A4 (or Legal) paper for the photocopier; the approach falls short of what we really need. Senior executives need to implement the paradigm they intuitively know makes sense: to step away from the fragile pointy escalation interface with all the “you know, that I know, that you know”. It is simply no longer of this day and age. Professional organizations in industrial markets should have the more sophisticated approach; one of the inverse bowtie. One with many touch-­‐points and contacts. The key challenge for the senior leadership is help the organization work towards this model with key suppliers. Not easy, as the internal (mainly short-­‐term) objectives will fight this multi-­‐contact set-­‐up. Their role is to ensure resources are dedicated to the important longer-­‐term objectives; innovation, quality-­‐improvements, and risk mitigation and perhaps even joint investments (forcing the issue, voting with dollars-­‐ or their equivalents). s are addressed As always the leadership challenge is to create a better solution; in this case executives should work on improving the Partnering Quotient (PQ) of the organization: 1) Help establish multi-­‐level touch points with key suppliers; meaning more transparency and therefore acceptance of risk. 2) Demonstrate to the team that there is a long–game. Yes, good price conditions are needed, but not at the cost of stalling innovation and good partnership. 3) Creation of an environment of Trust (capital T) and a change from the short-­‐term remuneration indicators to longer term lead indicators balancing risk and benefit. 1 By this I mean intermediate products like industrial gasses, flour, sugar, inks, liners, paper, foils, etc. -­‐confidential-­‐