Are you driving change in your revenue engine? This is how to think in systems and avoid failure.

A mentor said to me many years ago, “If you repeatedly go up against the culture of a company, they will spit you out”. The full extent of this wisdom was lost on me at the time. Grasping the causes and implications underlying the truth of the principle came at a price, one every change agent eventually pays. For every executive or consultant wishing to unlock improved performance in the revenue engine, or any leader wishing to initiate change in any function for that matter, there are 8 principles you would do well to follow. As the title suggests, they are eventually learned, most often though expensive mistakes and regrettable errors in judgment.

Introduction

The discipline of sales, together with its many innovators and leaders, are fixated on prediction and control. This is true of business in general. Every marketing or sales enablement technology I have either used or trialed strives for a kind of controlled precision. Every marketing or sales leader I have served in my role as a consultant has espoused the need for reliable predictability of business outcomes. As a sales manager, I too, placed great value on having a reliable view of what is coming down the pike; I still do. Yet, I will tell you that the sole pursuit of prediction and control, while understandable and even inevitable, is a fool’s errand. It is understandable because we, as human beings, are governed by a cluster of core needs. Certainty is one of them, along with her bedfellows, safety and security. That’s not going to change. It is inevitable because our mental operating system in the industrial world assumes that there is a key to prediction and control.

Sales revenue engines are sub-systems within the larger organisational system. They are always cross-functional and consist of all the roles, systems and processes supporting the sales opportunities. They are complex, evolving, nonlinear feedback systems that are inherently unpredictable. Donella Meadows, one of the leading experts in the field of systems science had this to say in her seminal work about complex systems: “They are not controllable. They are understandable only in the most general way. The goal of foreseeing the future exactly and preparing for it perfectly is unrealizable. The idea of making a complex system do just what you want it to do can be achieved only temporarily, at best. We can never fully understand our world, not in the way our reductionistic science has led us to expect. Our science itself, from quantum theory to the mathematics of chaos, leads us into irreducible uncertainty.”

For sales managers and executives leading revenue efforts, who stake their identity on the role of a trustworthy captain navigating a ship in treacherous seas, the uncertainty exposed by systems science is tough to accept. If they can’t predict and control, and they can’t offer the Board and shareholders the certainty they crave, surely their value is questionable and their position untenable?

I have studied systems (with sales revenue engines being one) for going on two decades; they are dynamic, complex, and open to outside influences through permeable boundaries. Because they are characterised by enigmatic human actors operating within networks of roles and relationships, they exhibit emergent properties that simply cannot ever be predicted with certainty. These systems compel us to abandon the notion of predictability and control and to substitute attempts at force with genuine power. We had better expect their surprises and learn from them or pay a steep price. When we try and impose our will on a system, we use force, and the impact we create is rarely sustainable. When we listen to what the system tells us and we understand why it does what it does, only then we can optimise design and shape the conditions for highest and best performance. We need to take some risks, make decisions, remain alert and present, participate fully, and respond to feedback, much the same way as anyone learning to ride a bicycle or a horse. Living successfully in a world of systems requires significantly more of us than our ability to calculate. It requires we hone all our faculties and use them — head and heart, intellect and intuition.

The 8 principles below apply to the world of systems change, and to recapitulate what was said above, they are eventually learned the hard way by any sales leader striving to optimise any part of the sales engine to lift performance. But they apply equally to any change agent aiming to improve any part of a company’s operations.  

1.     Listen and learn before you act.

The leader or consultant that pays too little attention, decides too quickly, and acts too hastily will most certainly make many, expensive errors in judgement. Before you go about making changes to the sales engine (or any function) you must first watch how it behaves. You must learn its history, listen to its stories, and observe its daily rhythms in order to identify dynamic patterns. Before you charge in to make things better, identify why the system does what it does, and the value of what’s already there. Identify the intelligence underlying the behaviour. This focus on the behaviour of the system forces you to focus on facts, and not on your opinions, beliefs or misconceptions, or those of others. Starting in this way also protects you from the impulses to define a problem not by the system’s actual behaviour, but by the lack of the latest fad in the form of a tool or solution. It is important to validate the self-sustaining structures that help the system operate. What you must avoid at all costs is the ‘bull in a China shop’ approach that can easily destroy the system’s own self-maintenance capacities.

2.     Decipher the logic in the system.

Systems create their own behaviour. Or one can say that systems behave the way they do as a consequence of that they have become over time. It is from the configuration of the networks of roles and relationships, the communication pathways, the interdependencies between functions and people, and mental models like assumptions and beliefs that give rise to the systems behaviour.  When you are analysing a system, whether it be a team or company, try and notice the triggering events and the outside influences that bring forth one kind of behaviour rather than another. Those outside events can sometimes be controlled (as in reducing the number of interdepartmental meetings sales must attend in order to reduce shortfalls in essential prospecting activity), at other times not, and in the case of the latter predicament, they can and should be managed for.

3. Expose your assumptions, perceptions, and conclusions to the light of day.

Revealing your assumptions, perceptions and conclusions to others and inviting scrutiny (and debate) is one of the most vital ways that you can mitigate against risks and prevent ultimate disaster. Invite others to challenge your thinking and your assumptions and add their own into the mix. Collect as many possible viewpoints and hypotheses before settling on any one. Keep an open mind and don’t rule anything out until the data strongly supports doing so. The more input you solicit from others, the clearer your thinking will become and the quicker you will rectify mistakes. This kind of mental exertion is vital and does not appeal to the lazy chaser of a quick fix. It builds mental agility. It will help you pressure test your conclusions and raise the probability that your recommendations are on the money. Always wear a learner’s hat, listen to your intuition, and welcome surprises - they are inevitable.

4. Aim for a flexible, integrated approach and steer clear of rigidity.

Experimentation is key to learning. In the world of start-ups, the accepted wisdom is to embrace mistakes and fail fast; to test, learn, adapt and iterate. Rigidity, or holding too tightly onto opinions, models, structures or processes can only hurt your efforts. To be unyielding, undeviating, and to stay the course ‘no matter what’ is exceptionally foolhardy and perilous. The approach of admitting mistakes and moving on fast takes enormous courage and mental fortitude.

I have had it happen to me that I implemented change into an organisational system and the results were like organ transplant failure; complete rejection of the new part by the whole. I dug deeply into the reasons for the failure and adapted quickly with a new and improved solution. It was rejected again. I faced a choice of being persistent and sticking to my guns or acknowledging there was something in the system that I could not see that was literally spitting out my fix. I faced a choice over whether to move on to something completely different, or to persist. I chose the former. Any architect of change will eventually face a similar predicament. You need to know when to quit. Rigidity will eventually be a cause of professional death if not corrected.

5. Don’t marginalise what is important, for what is quantifiable.

Companies are obsessed with numbers and metrics, and leaders fall in the trap of believing that what can be measured is more important than what cannot be measured. And yet, in every sales transformation I have ever worked in, the most consequential factors were always unmeasurable. It is like that with what we value most as human beings. No one can precisely define or measure leadership, fulfillment, justice, security, joy, or truth. No one can precisely define or measure any value. Who will deny their importance? As an agent of change, you simply must defend them. Insist that they live in the conversations. If something is unacceptable or ugly, say so. If it is inferior, tacky, inappropriate, out of proportion, or unsustainable, call it out. Don’t let it pass. Don’t be swayed by the “if you can’t define it and measure it, you don’t have to pay attention to it” ruse.

6. Keep your eyes firmly fixed on the ‘whole’ as you optimise the parts.

It is a disconcerting aspect of systems that it is entirely possible to optimise one part of it only to have those changes negatively affect the performance of other parts, and hence the whole. And yet I have seen sales leaders and consultants make this mistake many times over the years. Take for example the change in the compensation structure designed to change seller behaviour in a complex solutions environment, that ends up having a negative impact on collaboration, and eventually the culture of the company as a whole. Or like the aforementioned logistics company’s transformation program we undertook where the restructuring of the sales organisation took firm hold in only one of the two sectors, causing a temporary dip in overall revenue in the, and was reflexively reversed.

The cast-iron imperative then, is to not attempt to optimise parts of a system or subsystem while ignoring the whole. Always consider the impact of an intervention on the properties of the entire system. Moves like, implementing a new technology, replacing a sales leader, or shuffling sales territories can have direct impact on hard-to-measurable areas like such as culture, innovation, stability, creativity, diversity, resilience, and sustainability. Invest time and intellectual energy looking at the system from the vantage point that lets you see in its entirety. And, remember, that your pursuit of quick wins, and their attainment, can have negative consequences in places you might not have envisaged. Conversely, short term changes for the good of the whole, may sometimes be counter to the interests of a part of the system. Manage for that impact. Remember that the parts of a system cannot survive on their own. They need the whole, and they need it to thrive. The long-term interests of your sales hunters require the long-term health of your entire sales engine, which in turn depends of the health of the company and its brand. 

7. Think across multiple time horizons.

Sales organisations are typically locked in to the current quarter and the next quarter as they manage their funnels, pipelines and forecasts. They spend considerably less time thinking about what will occur beyond the payback period of current investments or what might happen in the years to come because of changes made today. And yet I have seen examples where actions taken in one year have immediate effects, and others that radiate out for year to come. The firing of a beloved sales leader who is experiencing a performance dip, exacerbated by personal troubles not of their own doing, is one example that I have seen echo painfully over several years. No event or change exists in isolation of other events. We experience now the consequences of actions set in motion yesterday, and years or even decades ago. My sport is cycling. I would not be alive for long if I ride the perilous, curving, surprising, and obstacle-strewn paths with my head down looking just over my wheel at the road before me. It would be equally catastrophic to be fixated on the distance ahead, failing to notice what’s immediately under my wheel. And so, with sales leaders and business people - they need to be watching both the short and the long term, the whole system in its entirety, over multiple time-frames.

8. Resist the urge to simplify everything. Embrace complexity.

Let’s face it, like life, business is messy, often turbulent and chaotic. Companies are dynamic, always in transition from one place to another place. While we crave perfect stability and consistent growth, that is unattainable given the systemic nature of business. This inherent diversity of strategies, structures, processes and teams within the commercial world makes it anything but fixed or uniform. While this may cause unease in us, it is what makes the commercial world so stimulating and ultimately, what makes it work.

Finally, as you embark on transforming your sales engine, know you will need to manage a certain tension. You will seek precision, certainty, uniformity, predictability on the one hand. But you should also not lose sight of the fact that human beings are complex and dynamic systems and that nature designs with an inscrutable geometry and in microscopic detail that leaves any keen observer in awe. That power has given us the symphonies, the great cathedrals, and the great books of the world that dazzle us with their beauty.

Conclusion

Having worked in the disciplines of sales and business transformation throughout my career, I have seen my fair share of successes and failures. Some basic research into the business of organisational change, beginning with the consulting firms at the pinnacle of this service, will lead to a confrontation with some disturbing and damning statistics. Most change programs, all of which aim at improvements of some sort, are judged as costly failures down the line. I know that they don’t fail (for the most part) because of weak intent, poor planning, poor project management, or one of the many other common scapegoats. They fail because the properties of the system were not adequately understood. It is then that force, like internal resistance, tactical rigidity, political pressures and surprising external factors that wreak havoc. 

Mark Ward is a Consulting Partner at Mentor Group UK leading a Sales Transformation Practice. To contact him please call the Mentor Offices on +44 (0)1442 849999