A R A D I C A L A P P R O A C H T O T H E
D E S I G N O F T H E S A L E S F U N C T I O N
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“We doubled our top-line revenue in the year following our implementation
of The Machine and are applying these same concepts to an international
company we just acquired and seeing the same sort of gains in effectiveness.
Justin’s book is providing us with an even deeper understanding of the
principles that changed our company and continue to drive our sales.”
—Aubrey Meador, President of ARCA
“There’s no reason for the sales department to be the least predictable and
most chaotic part of a company. The Machine brings order by removing
non-sales work from salespeople and replacing it with centralized scheduling,
standardized workflows, specialized resources and formalized management.
The Machine offers a proven system for growing sales in an organized,
—Andrew Warner, Founder of Mixergy
“The pioneering work of Justin Roff-Marsh in the design and execution
of effective sales ‘machines’ is, in my view, world leading. Organizations
who ignore it in the connected, globally competitive twenty-first century
do so at their peril.”
—John Lyons, independent company director
and coauthor of Marketing without Money
“In his provocative book, The Machine, Justin Roff-Marsh has thoughtfully
and forcefully challenged the status quo as it pertains to the design of the
sales function. Some readers will be angry, some dismissive, and a select
few will be enlightened by this alternative approach. We fall in the latter
camp and have found Justin’s approach to be a true asset for growing sales
in today’s complex selling environment!”
—Mike Schleyhahn, President of Swagelok San Diego
“The Machine will challenge everything you know about the sales process!
It makes a lot of sense, passes all the logical tests, and in the end, might
just keep you awake at night. We worked hard to implement a number of
these concepts in our organization and I can attest that the ideas are valid
and the payoffs are real.”
—Jeff Stuart, President of Hydra-Power Systems Inc.
“Justin’s approach to addressing the tired structure of traditional sales envi-
ronments is nothing short of revolutionary. The Machine shows management
how to drive growth with a tightly synchronized machine, as an alternative
to herding individual salespeople. There’s no question that this book will
be a great investment for any executive that runs a sales team.”
—Paul O’Dwyer, author and business growth coach
“Justin’s book is a delight. Justin translates the idea that the whole is greater than
the sum of its parts to sales, demonstrating that there is a substantially better
way to sell compared to simply summing the sales of each salesperson in a team.”
—Humberto R. Baptista, CEO of Vectis-Solutions
and lecturer at TOC Schools
“As an operations guy, I’m driven by process, efficiency, and repeatability. The
notion that the sales function is an art immune from the rigors of process
has never sat well with me. The Machine shatters that myth. The Machine
is a must read for any business leader wanting to achieve predictable results
from their sales function.”
—Marc Allman, COO of AMS Controls
“Justin Roff-Marsh gets to the root causes of underperforming sales quickly
and succinctly. It is clear he knows sales inside and out and has thought
deeply about the profession’s problems. The book is both global in its
implications for sales and practical in its applications for selling.”
—Charles Coury, President of 9Wood
“We have worked with Justin and his team for the past seven months and I
am continually impressed with the team’s professionalism and knowledge.
I am certain by the end of this year we will have a full working model of
the sales machine in place, and it will be producing the same results as we
have seen already in our customer service department. I am convinced we
are moving in the right direction to improve sales within our company.”
—Jim O’Connell, President of Hotsy Pacific
“We look at business books every hour, every day. The Machine was a welcome
standout. Soundview votes by a large committee on which books we are
going to select as the 30 Best Business Books of the Year. The Machine got
a unanimous “Yes” vote. That rarely happens.”
Publisher of Soundview Executive Book Summaries
“Justin stands on the shoulders of a giant and uses the tools of Dr Goldratt’s
TOC to focus on the effective management of what will be the principal
constraint of all businesses sooner or later in the 21st Century. Justin inspires
the necessary cultural change within companies—not only entering into a
convincing discussion of what to change and why, but also what to change
to and how. The energy and stamina required to make such a change should
not be underestimated but, provided you have the courage, The Machine
provides the direction.”
—Andrew Jackson, Chief Executive at Triumph Furniture
A RADICAL APPROACH TO THE DESIGN OF THE SALES FUNCTION
Published by Greenleaf Book Group Press
The Machine: A Radical Approach to the Design of the Sales Function
Copyright ©2015 Justin Roff-Marsh
All rights reserved.
No part of this book may be reproduced, stored in a retrieval system, or transmitted
by any means, electronic, mechanical, photocopying, recording, or otherwise, without
written permission from the copyright holder.
Distributed by Greenleaf Book Group
For ordering information or special discounts for bulk purchases, please contact
Greenleaf Book Group at PO Box 91869, Austin, TX 78709, 512.891.6100.
Cover design by Greenleaf Book Group and Kimberly Lance
Typesetting by Ballistix and Ramesh Kumar Pitchai
Author’s photograph by SmartShoot.com and Eric Stracke
Publisher’s Cataloging Publication Data is available.
Part of the Tree Neutral® program, which offsets the number of trees consumed in
the production and printing of this book by taking proactive steps, such as planting
trees in direct proportion to the number of trees used: www.treeneutral.com
15 16 17 18 19 20 10 9 8 7 6 5 4 3 2
Warren and Sylvia Roff-Marsh
who instilled in me a love of reading
Bo Hye Roff-Marsh
who is always the first to read each page I write
Acknowledgments ............................................................................. vii
Introduction ..................................................................................... 1
Part 1: The Case for Change and a New Model ................................ 7
Chapter 1: After the Revolution ................................................. 9
Chapter 2: Four Key Principles .................................................. 15
Chapter 3: Reimagining the Sales Function ............................... 35
Chapter 4: The Death of Field Sales ........................................... 55
Chapter 5: The Machine within the Machine ............................ 69
Chapter 6: One Big Idea, Many Possible Applications ............... 85
Chapter 7: The End of Commissions, Bonuses,
and Other Artificial Management Stimulants ........... 107
Part 2: Putting It All Together .......................................................... 119
Chapter 8: Formulating a Plan ................................................... 121
Chapter 9: How to Convert Opportunities into Sales ................ 145
Chapter 10: How to Generate Sales Opportunities .................... 159
Chapter 11: Technology: Why CRM Sucks! .............................. 183
Chapter 12: Managing the Sales Function ................................. 203
Notes ................................................................................................ 231
About the Author ............................................................................. 235
I must first thank Ballistix’s clients who have had faith in me over the last 20
years (more than has been warranted, on occasion) and who have welcomed
my ongoing experiments on their businesses. These clients are among the
silent revolutionaries whose stories are told on the following pages.
I thank the team at Ballistix too for diligently taking my ideas and making
them work in practice—and for finding creative workarounds when reality
failed to yield to my will!
And a big thank you to the late Eliyahu Goldratt and to the entire TOC
community who have been early supporters and frequent contributors to
sales process engineering.
Note: The names of our silent revolutionaries’ organizations have been
changed. This enables me to share information about their experiences that
would otherwise be confidential.
The Titanic is sinking: All is not well in sales.
The sales environment in a typical organization—in most every organi-
zation, in fact—is seriously dysfunctional. But rather than focusing on the
obvious dysfunction, management is busy with incremental improvement
initiatives: sales training, sales force automation (technology of various
types), or bolt-on lead-generation activities (e.g., outsourced telemarketing,
social media activities). Because none of these initiatives address the root
cause of the dysfunction, they amount to nothing more than arranging
chairs on the deck of the sinking Titanic.
And make no mistake—the Titanic is sinking!
It’s not that sales is getting worse: The issue is that the rest of the orga-
nization is getting so much better while sales clings to the same structure,
the same management approach, and the same practices that have been in
place for the last fifty years.
In a small number of companies, across three continents, a silent revolution is
in progress. These companies (you’ll meet some of them in due course) have
challenged the most fundamental assumption about how the sales function
should be designed. Consequently, they have built sales environments that
barely resemble those in their competitors’ organizations.
And they’ve seen massive performance improvements! They’ve seen
improvements in the internal operation of sales:
• Field salespeople are spending 100 percent of their time in the field,
performing four business-development meetings a day, five days a week.
2 The Machine
• Skilled inside sales teams are generating high volumes of sales activity
at shockingly low costs.
• Customer commitments are consistently met, administrative work
is always done on time, and sales orders appear more frequently and
And they’ve also seen improvements in the relationship between sales
and the rest of the organization:
• Hand-off problems between sales and production have been eliminated.
• Marketing works closely with sales to ensure that salespeople are
maintained at full utilization—and marketing has recruited the
assistance of engineering (and senior management) to ensure that
offers are truly compelling.
As I mentioned above, these changes are the consequence of challenging
a single assumption about the design of the sales function: the assumption
that sales should be the sole responsibility of autonomous agents.
Are Things Really That Bad?
Before I reveal the new assumption embraced by these revolutionaries,
it’s worth exploring the claim that sales is dysfunctional. Are things really
Consider the goal of the sales function (its reason for existence). It’s
tempting to resolve that the goal of sales is to sell. But, in most organiza-
tions, this just doesn’t cut it. To pull its weight, the sales function has to
consistently sell all of the organization’s production capacity. This capacity may
consist of a traditional plant and equipment, or it may consist of teams of
Measured against this more meaningful goal, sales consistently fails in
most organizations. In recent history, the modern organization’s capacity
to produce has accelerated past its capacity to sell, and idle machines and
production personnel are costing shareholders dearly, month after month
and year after year.
Why, then, is sales underperforming? One reason is that salespeople aren’t
selling. A typical field salesperson performs just two business-development
meetings a week. You read it right. Less than 10 percent of a typical sales-
person’s capacity is allocated to selling. And that figure is pretty standard
across industries and across continents.1
The majority of a salesperson’s day is dedicated to customer service
and administrative activities, to solution design and proposal generation,
and to prospecting and fulfillment-related tasks.
Let’s turn our attention to management. Why has management not fixed
this problem? In many organizations, they have tried. Attempts to reallocate
salespeople’s work have resulted in problems with service quality (the right
hand doesn’t know what the left is doing). The other alternative is simply
to recruit more salespeople, and many firms have tried that too—with
Typically, when you add salespeople to an established team, costs go up
immediately (easy to predict, right?). But sales don’t. In fact, in most cases,
sales never increase to the level required to justify those additional costs.
The reason is that salespeople do not generate the majority of their sales
opportunities. Most sales opportunities spring into existence in spite of
(not because of ) salespeople’s prospecting activities. In most organizations,
existing customers are by far the greatest source of sales opportunities. When
management adds salespeople to an existing team, the same pool of sales
opportunities is simply distributed across a larger team of salespeople.
But management’s problems don’t stop here. Salespeople are incredibly
difficult to manage—particularly successful ones! You can’t direct your
salespeople as you can production or finance personnel; you can only coax
them. And successful salespeople are both a blessing and a curse. Sure, they
generate orders—but at a price. They run roughshod over production and
finance personnel, they ignore management directives, and they make frequent
references to “their” customers, implying that they can leave and take the
organization’s goodwill elsewhere—which, to some extent, they probably can.
In summary, then, when we examine sales, we see a critical organiza-
tional function that consistently underperforms, that cannot be scaled
4 The Machine
(economically), that is in regular conflict with other functions, and whose
key assets are, in fact, a contingent liability.
The claim that sales is dysfunctional is no exaggeration!
A New Assumption
It’s not hard to validate the claim that sales is typically the sole responsibility
of autonomous agents. When we employ salespeople, we advise them that
they will be held accountable for outcomes, not activities. We pay them
commissions (in part or in full) rather than fixed salaries. And we encourage
them, in most cases, to manage their territories, their accounts, and their
sales opportunities as if they were, well, their own.
It’s true that, increasingly, management is attempting to rein in sales-
people’s autonomy. We ask salespeople to report their activities in the
organization’s customer relationship management application (CRM).2 We
pay them a mix of salary and commissions. And we at least pay lip service
to the notion that these are company accounts.
But we forget that, where true opposites are concerned, no compromise
is possible. Salespeople can march either to their own drumbeat or to the
beat of a central drummer. When faced with the demand to do both, they
will always pick the least bad option.
When you consider that the entire organization—not just sales—is
engineered around the assumption of salesperson autonomy, it’s easy to
see that salespeople will always choose autonomy. If you doubt this casual
assertion, answer these three simple questions:
1. If an important sales opportunity is lost, who is ultimately responsible?
2. If an important customer is dissatisfied, who is ultimately responsible?
3. If an account falls into arrears on its payments, who is ultimately
The connection between dysfunction and salespeople’s autonomy is
also easy to spot. Salespeople spend so little time selling because they have
so many responsibilities competing for their limited time, because each
salesperson is a self-contained sales function.
Salespeople conflict with other functions because, in their world-view,
they see only their opportunities and their accounts. However, other func-
tions (production, engineering, finance) also have limited capacity and are
in receipt of competing demands from multiple salespeople.
Salespeople conflict with management because there is simply no place
for management in a typical sales function. If salespeople own their activities
and are held accountable only for outcomes (as is so often advertised),
there is literally nothing for management to do. Managing outcomes, after
all, continues to be an oxymoron, no matter how many times you say it!3
If the assumption that sales is the sole responsibility of autonomous agents
is the root cause of this dysfunction, it’s clearly time for a new assumption.
But what should that be?
The good news is that, if we approach this question with a clear head,
the answer is oh so obvious.
We discussed that, relative to other organizational functions, sales is
sinking fast. What, then, is causing the rapid ascent of these other functions?
In particular, what has caused both the productivity and the quality of man-
ufacturing to increase by many orders of magnitude over the last 100 years?
The answer is the division of labor. The division of labor enabled manu-
facturing to transition from a cottage industry to the modern manufacturing
plant. And the division of labor has had the same catalytic effect on project
environments (think construction, aerospace, finance, and even marketing).
The modern sales environment resembles manufacturing as it used to look
more than a century ago.
But that’s about to change! The silent revolutionaries have scrutinized
sales for evidence that this function is somehow unsuitable for the division
of labor. Their search has been fruitless. The new assumption, around which
their sales environments have been engineered and on which this book is
based, is as simple as it is powerful.
Sales is the responsibility of a centrally coordinated team.
This book shows how this innocent-looking assumption leads logically
to a radical new approach to the design and management of the sales
function. It will show you how to apply this approach to your organization
6 The Machine
(irrespective of the size of your firm or the complexity of what you sell), and
it will introduce you to a diverse range of organizations that have trodden
this path already (our silent revolutionaries).
This book likens the result of this new approach—quite unapologetically—to
This metaphor is apt because, under this new approach, sales becomes
the consequence of a number of interrelated processes—rather than the
output of a person. Salespeople become a component in a much larger
machine (albeit an important component!). And management assumes
total responsibility for the design and day-to-day performance of the sales
function (managers own sales targets, and they cannot delegate them away).
In this book, I’ll explain why sales must be viewed as a machine, rather
than as a person. I’ll detail how to create a smoothly functioning sales
machine—and how to integrate it with the rest of your organization. And
I’ll counsel you on the (often perilous) transition from your status quo to
THE CASE FOR CHANGE AND
A NEW MODEL
AFTER THE REVOLUTION
Jennifer retrieves her smart phone from her purse and brings it to life with
one authoritative swipe.
Moments later, she’s talking to David—her assistant back at head
office. “Good meeting,” she answers, “you can go ahead and schedule the
requirement-discovery meeting. Yep, you can keep talking to Debra. And
the opportunity’s actually a retrofit . . . let’s say 150 grand.”
“I’m all over it,” David reassures Jennifer as he updates fields in the
customer relationship management application (CRM). “So, you’d better
hot-tail it over to Tyson Engineering. Phillip left here half an hour ago, so
he should be ready for the presentation when you get there.”
❄ ❄ ❄ ❄
Jennifer, David, and Phillip all work for James Sanders Group (JSG), a
manufacturer of point-of-sale displays and internal fit-outs. JSG is one of
our silent revolutionaries.
JSG is an engineering-centric company. They became successful by solving
tough problems and building innovative custom installations.
JSG recently suffered a slow leakage in sales. The problem was not that
they were suffering at the hands of a large competitor—that’s a battle they
were well equipped to fight. What was happening was that numerous
small competitors (some of them recent market entrants, others offshore
manufacturers) were chipping away at their base: winning numerous small
jobs, often at crazy margins.
10 The Machine
JSG had recognized that this was not a trend they could reverse solely
with superior production performance. They knew they needed sales
activity—boots on the ground.
That was easier said than done, however. Each time JSG added a sales-
person, the new recruit would win a job or two and then become entangled
in account management. Before long, account management would become
so all-consuming that sales activity would grind to a halt. While this was
happening, JSG’s competitors were simply sidestepping those complex jobs
and focusing on winning the easy contracts.
Initially, JSG looked to account managers (as they had taken to calling
them) for a solution to the problem. Ultimately, it became clear that this
was a process problem, not a people problem.
The snippet of conversation above speaks volumes about the consequences
of JSG’s revolution. Jennifer is JSG’s business-development manager (BDM).
And that’s the first unusual thing. Although JSG services all of Australia
(an area roughly the size of the continental United States), JSG has just one
field salesperson. They need only one salesperson because Jennifer is ten
times more productive than any of JSG’s competitors’ salespeople. While
a competitor’s salesperson averages two sales meetings a week, Jennifer
consistently performs twenty.
Another reason JSG has only one field salesperson is the company
discovered that a surprising percentage of sales opportunities (particularly
repeat purchases) could be handled by a small (but highly efficient) inside
sales team. This team finds and pursues simple opportunities, and, from
time to time, it stumbles across opportunities that are significant enough
to be escalated to David and Jennifer.
David is the key to Jennifer’s efficiency. David and Jennifer talk at least
four times a day. Like an air traffic controller, David is Jennifer’s eyes and
ears. He carefully monitors the status of all sales opportunities—freeing
Jennifer to focus only on the sales meetings that appear—as if by magic—in
Jennifer’s smart phone.
David’s official title is business-development coordinator (BDC). His
responsibility is to manage JSG’s portfolio of high-value sales opportunities.
After The Revolution 11
He manages each opportunity like a project. He works tirelessly, trying to
schedule the next activity in sequence for each. In most (but certainly not all)
cases, the next activity is a meeting with Jennifer. And, of course, Jennifer’s
objective at each meeting will be to sell the next activity—generating still
more work for David.
David frees Jennifer of the requirement to do anything other than face-to-
face business-development meetings. In addition to appointment scheduling,
David performs all of the clerical tasks associated with the management
of sales opportunities: data entry, reporting, literature fulfillment, expense
tracking, and calendar management.
David routes nonadministrative tasks to other specialist resources within
JSG. Customer support issues and requests for quotes are routed to customer
service representatives. And requirement discovery and solution design
become the responsibility of project leaders.
As each task is handed off, David logs the date in the CRM and leaves
himself a prompt to follow up prior to the task’s expected completion date.
In many cases, these tasks are prerequisites for meetings he has already
scheduled for Jennifer. It’s critical, therefore, that he keep all the parts of
this machine working in unison.
Phillip also makes a significant contribution to Jennifer’s tremendous
efficiency as a project leader. His job is to manage the interface with
engineering and production. Prior to each sale, Phillip works closely with
Jennifer. She introduces him to clients early in each engagement to discover
their requirements and to conceptualize and design solutions.
Solution design is always a collaborative process. Clients have their say,
of course: They want Rolls Royce solutions on Toyota budgets. Phillip
represents both engineering and production: He must ensure that whatever
is specified can be delivered on time and within budget. And it’s Jennifer
who uses a mixture of hustle and artful diplomacy to close the gap between
the two parties.
After the sale, Phillip is responsible for managing the relationship between
production and the client. He’s on hand to negotiate change requests and
to fine-tune the production plan on those occasions when it becomes
12 The Machine
obvious there’s a gap developing between the client’s expectations and the
direction of the project.
There’s no question that Jennifer is busy. Twenty business-development
appointments a week is a lot of work. And then there’s the travel—a lot
But the interesting thing is that Jennifer loves working in this environ-
ment. There’s no stress. She doesn’t feel like a juggler with a hundred balls in
the air. The clients are happy too. They understand where her responsibilities
begin and end, and they always know exactly who to talk to if something
appears to be going wrong.
All Jennifer has to do is show up at meetings and talk to people—and
she’s really good at that. The selling looks after itself.
ManageMent by nuMbeRS
Matthew is one of James Sanders’ two sons. He’s in charge of operations
and sales. Sales wasn’t previously under his purview, but it is now. In spite
of the fact that the JSG sales function has more moving parts now, it’s
actually become simpler to manage.
Matthew chairs a weekly sales meeting. The meeting consists of a review
of a simple dashboard. The team’s primary concern is the size of four critical
queues of work. There’s a queue of forward-booked meetings in Jennifer’s
calendar, and there’s a queue of sales opportunities upstream from David
and from each of the two inside salespeople.
Matthew knows that the profitability of the firm requires a steady flow
of work to the plant. He also understands that the primary driver of this
flow is the volume of selling conversations performed by his sales team.
Any hiccups in sales activity will result in idle machines and workers in a
month or so.
Matthew keeps an eye on other indicators too. He scans run charts,
looking for unhealthy trends, and scrutinizes cycle times for critical activities
to ensure that protective capacities are being maintained.
After The Revolution 13
Matthew’s biggest sales challenge is maintaining the support capacity
required to keep up with the sales team’s unrelenting flow of orders.
Prior to the revolution, Jennifer was one of five account managers. Today,
two of those account managers have been converted into project leaders
(and one came inside to kick-start the inside sales team). To free project
leadership capacity, Matthew has been building a team of customer service
representatives, but this team is under the pump too. Every month, it seems
like there are a couple of new faces in there.
aRReSting the Decline
JSG is clearly a different organization today. Sales used to be the respon-
sibility of five overburdened account managers. Now, in place of those
account managers, there’s a team of specialists. A campaign coordinator
ensures that two inside salespeople can have thirty (mostly outbound) selling
conversations a day. A percentage of those sales opportunities are escalated
to David, who coordinates Jennifer and the team of project leaders. And
behind the scenes, a customer service team looks after the processing of
orders, the generation of quotations, and the resolution of customer issues.
Today, JSG’s sales function is a clearly a machine!
But the impact has not been just on sales. The revolution in sales has
benefited most of JSG’s other functions too. Sales and engineering work
closely together now—to the obvious benefit of both. A full order book has
simplified the lives of the production team—they are consistently busy, and
they like it that way! And even finance has benefited—the team-based approach
to sales eliminated the requirement for sales commissions and, consequently,
the requirement for finance to mediate constant disputes over compensation.
As you would expect, these changes have had a profound impact on JSG’s
profitability. At the beginning of the journey, small increases in operating
expense were easily compensated for by additional sales activity. But over
time, the gap between revenues and expenses has widened at an increasing
rate, thanks to economies of scale in both sales and production.
14 The Machine
theoRy into PRactice
This chapter has shown you the implications of sales process engineering
(SPE) for one business environment (an engineer-to-order manufacturer).
Chapters 2 and 3 will show you why SPE is so important in today’s
business environment, introduce you to SPE’s four fundamental principles,
and then explain how these simple principles lead logically to the end result
exemplified by JSG’s story.
Chapter 4 will introduce you to the inside-out model: the model most
commonly employed by our silent revolutionaries.
One message that will play over and over throughout this book is that
you cannot improve the performance of sales by focusing solely on the sales
function. This theme will be tackled head-on in chapter 5.
In chapter 6, you’ll learn how to apply SPE’s principles to create profound
improvements in the performance of a range of business environments
(including indirect sales and small businesses).
In part 1’s final chapter, chapter 7, we’ll explore the case for the elimi-
nation of salespeople’s commissions.
And then, part 2 is dedicated to the practical application of SPE in your
organization. It’s time to go to work!
FOUR KEY PRINCIPLES
Our first order of business is to address two questions that have the potential
to derail this discussion. The issue is not that these questions expose weak-
nesses in sales process engineering (SPE). The issue is that these questions
stand in the way of even being able to start our discussion.
Considering the radical nature of the change we’re contemplating, it’s
only natural to ask these questions: If the traditional sales model is so
dysfunctional, and if there’s a better method available, why haven’t more
companies adopted it already? And if the traditional model has withstood
the test of time, how can it be that this model is fundamentally flawed?
Why Do We PeRSiSt?
There are two (interrelated) reasons we persist with the traditional approach
to the design of the sales function. First, the traditional model conforms to
all our assumptions about how sales should be made. Second, it is impossible
to inch one’s way to the inside-out model; that requires a revolution.
Deeply Held Assumptions
If we are to evaluate the traditional model with reference to enduring
and deeply held assumptions about how to generate sales, the traditional
approach to the design of the sales function measures up well.
Ask yourself whether you agree with the following statements:
1. Sales of expensive products and services are highly dependent on
16 The Machine
2. A successful sales function is highly dependent on star performers.
3. Salespeople should be encouraged to operate autonomously—to view
their territory almost as if it’s their own business.
4. Sales is essentially an outside activity.
5. Customers require—and benefit from—a single point of contact with
6. Sales improvement is all about improving conversion (plugging the
Each of these statements sounds innocent enough, right? But, for most
salespeople—and their managers—these statements are more than true. They
are axioms; they are fundamental, self-evident, and unquestionable truths.
Attempts to challenge them will be met with injured feelings—or even hostility.
Consequently, any approach to sales improvement that is in alignment
with these axioms will feel right, but an approach that conflicts with one
or more will almost certainly be dismissed out of hand. As you’ll discover
in due course, SPE conflicts with every one of these statements—and with
numerous other commonly held beliefs about sales too.
Sadly, the serious consideration of SPE tends to require at least one of
the following conditions: The performance of the sales function must be so
bad as to shake management’s faith in the traditional model to its very core,
or senior executives with no prior exposure to sales (perhaps an engineering
or production specialist) must turn their attention to the sales function
and refuse to adopt the existing orthodoxy. Almost without exception, our
silent revolutionaries began their investigation of SPE only when both of
these conditions were in place!
Incremental Change Won’t Cut It
The other hurdle to the adoption of SPE is the magnitude of change required
for the successful transition. Consider just a few of the changes that have to
occur: A significant percentage of the activities associated with the acquisition
and maintenance of accounts must be moved inside. Salespeople must willingly
give up ownership of calendars, accounts, and even sales opportunities. Field
Four Key Principles 17
salespeople must be prepared to spend all of their time in the field (in practice,
this means a five- to tenfold increase in territory size and, consequently, a
lot more travel). Management must be prepared to add new team members
and—possibly—to see some existing team members exit the organization.
Management must be prepared to assume (and, ultimately, reassign) respon-
sibility for the origination of sales opportunities.
And then there’s the impact on the rest of the organization. In pretty
much every case, customer service needs to be reengineered to cope with the
additional load. Organizational functions must be tightly integrated with
one another. New product development must work closely with marketing,
and engineering must march in lockstep with both sales and production. If
production scheduling has devolved into brinkmanship to accommodate
the demands of competing salespeople, scheduling must be fixed, and the
master schedule must become sacrosanct.
When you consider the counterintuitive nature of SPE and the signifi-
cance of the transition from the traditional model, it’s no wonder that the
traditional model persists.
But it can persist for only so long!
hoW DiD We get heRe?
The traditional sales model hasn’t always been dysfunctional. For much of
the history of industry, this model has been the optimal one. (In fact, there
are situations today in which the traditional model is still quite appropriate.)
What has happened is that industry itself has undergone two sea changes,
and sales has remained much the same.
Sea Change 1: From Production-Focused to Sales-Focused
In the 1989 film Field of Dreams, Kevin Costner’s character plows under
his corn and builds a baseball field in response to the promise that “if you
build it, he will come.” Fortunately, Shoeless Joe Jackson and friends arrive
just in time to rescue the hapless farmer from bankruptcy.
18 The Machine
Today, the phase build it, and they will come is often used to reference the
unrealistic expectation that production is sufficient to create a market. However,
for most of the history of industry, production has, in fact, been sufficient.
Until recently, the salesperson’s job was to take a highly differentiated
product and demonstrate it to potential customers. Sure, there was a
requirement for some salesmanship, but for the most part, the sale was
really made in new product development and production.
Today, because the market is so much more competitive, it’s unusual for
a product to be highly differentiated. It’s common for customers to choose
product A over product B and reasonably expect to pay a similar price for
a product that performs almost identically. It’s true that we still have true
groundbreaking products, but these tend to be the exception rather than
Because production has been the primary success driver for most of our
recent history, this is where our capital and our brainpower have been
invested. And the return on this investment has been staggering. Over the
last hundred years, we’ve seen massive increases in productivity (measured
against any reasonable standard) and improvements of a similar magnitude
in quality as well.
We’ve seen at least three major revolutions in production. Frederick
Winslow Taylor introduced scientific management at the start of the last
century. Henry Ford’s approach to mass production drove costs down to
unprecedented levels. And, in the 1950s, W. Edwards Deming jump-started
the quality movement, contributing to the rise of Japan, and subsequently
revolutionizing operating procedures in production facilities the world over.
Of course, the rate of change we’ve seen in production cannot be sus-
tained forever. Increasingly, managers are recognizing that their advances
in production have exposed sales (including distribution4) as the weak link.
Today, sales is the new frontier. We’re already seeing the focus of senior
management shift to sales—and with focus comes capital and brainpower.
My prediction is that the next fifty years will bring revolutions in sales similar
in scope and consequence to those we’ve seen in production.
Let this book be the first shot across the bow of the good ship Orthodoxy !
Four Key Principles 19
Sea Change 2: From Make to Stock to Engineer to Order
As was mentioned previously, the fundamental assumption that sits at the
base of the traditional sales model is that sales is the sole responsibility of
an autonomous agent. If we consider how a typical organization has been
structured for most of the history of industry, this assumption is a perfectly
Figure 1. Make to stock.
Figure 1 shows a traditional value chain. The production facility produces
to maintain a stockpile of inventory, and the salesperson sells from this
In this environment, it makes perfect sense for the salesperson to operate
autonomously. The firm as a whole benefits when its salespeople sell as
much as possible. Because inventory is already sitting in a stockpile, orders
can be fulfilled as soon as they are received. And because of this stockpile,
minimal interaction is required between sales and production.
Figure 2. Make to order.
20 The Machine
Increasingly, this is not how value-chains are configured. We have seen
a recent and dramatic shift from make-to-stock to make-to-order envi-
ronments, as in figure 2. The latter reduces holdings costs and provides
customers with greater choice. In a make-to-order environment, it no
longer makes sense for the salesperson to simply sell as much as possible;
the salesperson needs to sell only what production has the capacity to
produce. Rather than operating autonomously, the salesperson must
subordinate to production.
This is complicated by a further twist in the value chain. Today, an
increasing number of products (as well as almost all services) are actually
designed (engineered) as they are being sold. In an engineer-to-order envi-
ronment, tight integration between sales, engineering, and production is
critical. The degree of integration determines both the likelihood of the
sale being won and the quality of the product delivered.
In such an environment, sales cannot possibly be the sole responsibility of an
autonomous agent. In fact, for this reason, the traditional model damages both
sales performance and product quality—and, therefore, customer satisfaction.
In summary, the traditional model always has and perhaps always will
make sense in make-to-stock environments—where it is possible for the sales
function to operate at arm’s length from production. Such environments
include most consumer goods (typically sold in retail environments),
consumer and small-business financial services (insurance and investment
products), and packaged software.
However, in make-to-order and particularly in engineer-to-order envi-
ronments, the requirement for tight integration between sales, engineering,
and production renders the traditional model dangerously inappropriate.
These environments include business services (consulting, legal, and finance),
design-and-construct building, and enterprise software.
Now that we understand why sales environments look the way they do
today—and why change is not necessarily an appealing proposition—let’s
return to the task at hand: redesigning the sales function.
Four Key Principles 21
DiRection of the Solution
Let’s consider how we might go about causing a dramatic increase in the
productivity of the sales function. What might be the direction of the solution?
We should immediately discount traditional sales-improvement initiatives
(e.g., sales training or adjustments to the comp plan). History suggests that
at best such initiatives produce only incremental results.
For inspiration, we might look to manufacturing. This makes sense
because we know that this is one part of the organization that has seen a
dramatic increase in productivity in recent times.
Do we know the cause of this dramatic change? As it happens, we do.
In 1776, in his magnum opus, An Inquiry into the Nature and Causes
of the Wealth of Nations, Adam Smith predicted that the division of labor
would drive a massive increase in productivity. He told the story of a
pin-manufacturing operation in which ten workers had divided the pro-
duction procedure into eighteen distinct steps and then distributed these
steps among themselves.
Individually, each worker could produce twenty pins a day. Collectively,
they were producing 48,000!
The benefits of the division of labor are not enjoyed only in manufac-
turing environments. If we take a stroll around a typical organization, we
discover the division of labor in all types of production environments, in
engineering, and even in finance. In fact, the only part of the organization
that has not embraced the division of labor is sales!
Assuming there is no reason to immediately disqualify the division of
labor, let’s assume that this is the direction of our solution.
Playing Devil’s Advocate
But, not so fast! If we were to commission an experienced salesperson to
defend the traditional model—to be the devil’s advocate, as it were—can
we imagine their objections to the concept of division of labor?
22 The Machine
These are likely to be their two primary objections:
1. Complexity. Sales is complex in most environments nowadays. You
have multiple influencers and decision makers. You have numerous
conversations with multiple parties spanning weeks or months. This
complexity does not lend itself to division of labor.
2. Personal relationships. People buy from people. No one likes to
transact with a machine. The division of labor will destroy the critical
personal relationship between the salesperson and the customer.
Before I directly address these objections, it’s interesting to observe
that these are similar in nature to the objections you might hear from a
craftsperson (an artisan) who is being encouraged to transition to a modern
manufacturing environment. This person is likely to suggest that if they
do not personally craft their product, any increases in efficiency will surely
be offset by a reduction in quality.
Of course, history suggests that the artisan’s concerns are unwarranted!
It just so happens that the changes we must make to a production process
to improve efficiency are the very same changes that are required to maxi-
mize quality. (In case you’re wondering, we improve efficiency, in part, by
reducing variability within a production process. And as variability reduces,
so does the defect rate.)
Our devil’s advocate is correct. A modern sales environment is certainly
likely to be complex—for all the reasons stated. But is complexity a reason
to avoid the division of labor?
If it is, we should see a decline in the division of labor as we examine pro-
duction environments of increasing complexity. Let’s consider two extremes
in a production context: the assembly of a hang-glider and the assembly of
a jet aircraft. The notion of a single person assembling even the simplest
of jet aircraft is laughable. The fact is, in truly complex environments, the
division of labor is not just possible; it’s essential.
Four Key Principles 23
Our devil’s advocate has hinted at a potential problem in the application
of the division of labor—one we’ll grapple with in due course—but he has
not dealt our proposed solution a lethal blow.
It’s true that people enjoy (for the most part) interacting with other people.5
It’s also true that many salespeople have good relationships with their
customers. However, it’s dangerous to assume (as salespeople frequently
infer) that these relationships cause sales.
To see why, we should inquire into the origin of a salesperson’s relation-
ships. Specifically, which comes first—the sale or the relationship? The reality
is, for the most part, that the salesperson’s relationships are the consequence
of sales, not their first cause!
Now, our devil’s advocate is unlikely to take this line of reasoning lying
down. His immediate objection will surely be that the distinction between
first and proximate cause is purely academic—and that if relationships and
sales are related, it matters little how they came to be that way.
It’s here that we must make a critical distinction—a distinction between
the initial transaction in a series of transactions and the rest of those transac-
tions. In most cases, the salesperson’s initial transaction signals the acquisition
of a new account. All of the subsequent transactions (assuming the same
product or service type) are repeat purchases. The first transaction—because
it signals the acquisition of an annuity—is many times more valuable than
any of the subsequent ones.
Because initial and subsequent transactions are materially different, it
doesn’t make sense to lump them together and refer to them all as sales, as
our devil’s advocate is doing.
So, for the balance of this book, I will use the word sale to refer only to
the acquisition of a new account (or the sale of a new product or service
line to an existing one). I will refer to repeat transactions as just transactions.
We must consider, now, the contribution that the salesperson’s relation-
ship makes to the retention of existing accounts. There’s no question that
24 The Machine
this relationship must factor into the retention equation, but what are the
As we’ll discuss in much more detail, every organization must have three
core functions to be viable in the long run: new product development, sales,
and production. It’s revealing to rank these three functions in the order in
which we believe they will affect account retention.
Although salespeople all over the world are allocated responsibility for
retention, it is extraordinarily rare to find a salesperson who will identify
sales as the primary influencer of retention. Almost without exception,
salespeople recognize that production performance is the primary influence.
In other words, the number-one thing an organization must do to retain
its customers is deliver on time, in full, without errors.
Salespeople will also willingly volunteer that the number-two thing
that an organization must do is ensure that its products are consistently
better than—and cheaper than—its competitors’, which is, of course, the
responsibility of new product development.
The shocking reality is that salespeople contribute little to retention,
relative to production and new product development—even though
retention is their responsibility.
If you are deficient in the areas of production or new product develop-
ment, it may be that your salespeople’s personal relationships cause accounts
to persist with your organization a little longer than they otherwise would.
However, to claim that personal relationships cause sales amounts to either
equivocation or outright denial (or a little of each).6
Putting the DiviSion of laboR to WoRk: fouR key
With those objections out of the way, we’ve bought ourselves a little bit of
time to piece together our solution. The division of labor is not the solution,
after all—just the direction of the solution. Our devil’s advocate intuitively
recognized this when he raised the objection about complexity.
Four Key Principles 25
The thing is, when we apply the division of labor to any environment,
the situation tends to get a lot worse before it gets better. The rewards
offered by the successful transition from the craft shop to the division of
labor are exciting (as was reported by Adam Smith all those years ago), but
the transition itself is difficult and extraordinarily perilous.
The fact that production has been the primary focus of industry for the
last hundred years is evidence of the difficulty of the transition. The good
news is that if we intend to lead our sales function down the path already
taken by production, this is indeed a well-trodden path.
The lessons from manufacturing can be generalized into four fundamental
1. Scheduling should be centralized.
2. Workflows should be standardized.
3. Resources should be specialized.
4. Management should be formalized.
We’ll dedicate the balance of this chapter to the exploration of these
principles—in their natural manufacturing context. And in the next chapter
we’ll figure out how to repurpose these principles for the sales environment.
First, however, we need to be sure we understand the nature of the problem
we are attempting to solve. To achieve that, we’ll turn our attention to a
The Primary Challenge
In fact, let’s consider two boat races—both of them time trials. In each
case, the oarsmen will attempt to maximize the speed of their vessels. (In
the first race, the oarsmens’ times will be averaged to determine the result.)
26 The Machine
Figure 3. Autonomous agents.
In the first race, each oarsman commandeers his own boat. Each is an auton-
omous agent. When the starter’s gun fires, each oarsman must do his level
best to maximize the speed of his vessel. And he does that, not surprisingly,
by rowing as fast as is humanly possible. This race is an allegory for the craft
shop environment in manufacturing and for the traditional sales model.
Figure 4. Division of labor.
In the second race, we make one subtle change. We put all the oarsmen
in one boat. The goal is the same: to reach the finish line in the shortest
amount of time. But each of the oarsmen must undergo a radical shift in
his approach to the goal. If each oarsman rows as fast as possible, the speed
of the vessel will definitely not be maximized.
If each oarsman maximizes his individual rate of work, the consequences
will be a lot of noise, clashing of oars, and, possibly, a capsized boat. In this
Four Key Principles 27
second race (an example, of course, of the division of labor), the speed of the
vessel is determined primarily by the synchronization of the oarsmen—not
by their individual rates of work.
Now, the shift of focus from individual effort to synchronization may
not seem significant, but it is—particularly when we consider environments
more complex than a rowboat. Learning to row in unison with others is
tricky, but this skill (in this context) is made easier by the fact that you are
operating in close proximity to your colleagues (you stroke in time with the
person in front of you), and the fact that you have immediate feedback (you
can see and feel the impact of your actions on the performance of the vessel).
This tends not to be the case in a typical work environment (few people,
today, work in rowboats).
In a reasonable-sized manufacturing plant, for example, it’s unlikely that
all of the workers contributing to a process are in visual contact with one
another. And, in a knowledge-work environment, such as—say—a sales
function, work in progress is invisible, and lead times are long—meaning
that there is no immediate feedback.
In such an environment, how do workers synchronize their rates of work?
The short answer is that, without special intervention, they simply don’t.
Here’s an interesting thought experiment:
Consider the changes we would need to make to our rowboat model
in order for this model to be representative of a standard knowledge-work
How about we replace each of the oarsmen with a rowing machine—a
powerful solenoid, operated by remote control? And let’s put each of our
oarsmen in a cubicle in an office complex, and equip each with a remote
control unit. On each remote control unit is a button that actuates the
solenoid back in the boat and causes that oarsman’s two oars to stroke.
If each oarsman is isolated from the boat—and from his colleagues—and
he is committed to winning that race, how will he determine when to press
Sadly, this scenario is not dissimilar to many modern work environments.
To complete the picture, all we need to do is add a manager who attempts
28 The Machine
to improve the performance of the boat by running from cubicle to cubicle
encouraging everyone to row harder—and then who periodically berates
team members for their lack of communication.
Principle 1: Scheduling Should Be Centralized
To claim that the division of labor causes workers to become disconnected
from the performance of their overall system is stating the obvious. After
all, as we’ll soon discuss, a narrowing of the worker’s focus is both a benefit
of and a necessary condition for the division of labor.
It’s inevitable, then, that the division of labor will result in synchroni-
zation problems.7 The solution is to centralize scheduling.
Any work you perform can be broken into two components. The first of
these are the critical activities that cause matter (or information) to change
the form, sequence, and timing of each of these activities.
The second component is what I’ll be referring to as scheduling. Of
course, scheduling is pretty easy when it’s just you doing the work. You
can learn the basics in a half-day time-management workshop. However,
as you add more workers to the work environment, scheduling rapidly
becomes more complex.
The key to avoiding synchronization problems when we apply the
division of labor is to first split the responsibility for these two components
of work. If we fail to do this, the local efficiency improvements that result
from workers focusing on a single task will quickly be eaten up by the
general chaos that spreads through the environment—like those clashing
oars in the rowboat.
There are many environments in which the centralization of scheduling
is a well-established practice: the manufacturing plant (in which scheduling
is the responsibility of the master scheduler); the project environment (in
which the project manager owns the schedule); the orchestra (in a string
quartet, the first violin sets the tempo, while in the case of a full orchestra,
a dedicated conductor is required); and the airport (consider the chaos if, in
the absence of an air-traffic controller, pilots had to decide among themselves
when to take off and land!). In each of these cases, scheduling is a specialty.
Four Key Principles 29
(The project manager doesn’t wear a tool belt, and an air-traffic controller
can be quite capable even if they have never flown a plane.)
Now, it’s true that even the most complex sales environments are less
complex than a busy airport, but it’s also true that almost every sales
environment is significantly more complex than a rowboat. Therefore,
if we are entertaining the idea of applying division of labor to sales, we
must first acknowledge that the very first activity for which the salesperson
relinquishes responsibility will be scheduling.
Until now, we have accepted that, in a simple environment—like a rowboat—
the division of labor doesn’t require the centralization of scheduling. However,
it’s interesting to consider what we might do if we were really serious about
winning the boat race we discussed earlier. If you look at most competitive
rowing teams, you’ll discover—you guessed it—centralized scheduling!
Figure 5. Centralized scheduling.
In a scull, for example, the coxswain sits in the stern of the boat, facing
the oarsmen, and sets the tempo to which the oarsmen row. If we consider
the racing scull for a moment, we can draw two interesting observations
that relate to scheduling in all environments.
First, the coxswain is a dead weight (he does not row), and his inclusion
increases the weight of the vessel by a significant amount. It’s reasonable
to assume, then, that the performance improvement resulting from the
30 The Machine
inclusion of the coxswain more than compensates for this weight increase.
And this is in a simple environment in which the centralization of scheduling
is not even critical.
Second, the coxswain maximizes the speed of the boat by causing all of
the oarsmen to row at the same speed as the slowest oarsman. Therefore,
to maximize the speed of the boat, all but one of the oarsmen must row
slower than their maximum capability.
Principle 2: Workflows Should Be Standardized
The need to standardize all workflows is regarded as self-evident by many
managers. Note the attention paid to standard operating procedures in the
modern workplace. But it’s worth acknowledging that standardization is only
a necessity in an environment in which the division of labor has been applied.
Interestingly, you can see evidence of this if you look at customer
relationship management (CRM) implementations in sales environments.
Almost every mid- to large-sized organization has invested tens (or, more
commonly, hundreds) of thousands of dollars in this technology in recent
years in anticipation of increased sales performance. Few, however, can
point to any performance improvement that can be attributed to the CRM.
If you examine business cases for typical CRM implementations, you’ll
discover that many promises hinge on an assumption that the standardization
of salespeople’s procedures will cause an increase in sales. Absent the division
of labor, this is not a surety. Capable salespeople neither need nor benefit
from the standardization of their operating procedures. Consequently, the
CRM adds overhead (the additional data entry associated with enforcing
standards) without generating any performance uplift.
But the division of labor changes things: Standardization suddenly
When the person who plans the work (the scheduler) is remote from
the people who do the work, the standardization of procedures (and
workflows) prevents the complexity of environments from multiplying to
Four Key Principles 31
In manufacturing environments, the workflow is referred to as the routing.
The routing is the path that work will follow through the plant, taking into
account both the activities that will be performed and the resources that will
perform them. The general rule in manufacturing is that for production of
the same product, the same routing should be followed.
If we apply the division of labor to the sales environment, we must
standardize our workflows for the same reason. For this environment to be
manageable and scalable, all opportunities of the same type (i.e., the same
objective) must be prosecuted using the same routing—from the origination
of those opportunities, through their management.
Principle 3: Resources Should Be Specialized
In discussing the centralization of scheduling, we’ve already broached the
subject of specialization. We know that when we apply the division of labor,
the scheduler is the very first specialist. Indeed, once we have centralized
scheduling and standardized workflows, specialization is relatively easy.
Specialization causes a significant increase in workers’ productivity
for two reasons: First, when a worker performs activities of just one type,
they become very good at performing those activities. Second, switching
between materially different activities imposes a significant overhead on
a worker. The elimination of this switching (multitasking) increases that
worker’s effective capacity.
Of course, specialization doesn’t relate just to people. In most environments
today, activities will be shared between people and machines (including com-
puters). However, we should note that automation has not been the root cause
of productivity improvement in the last hundred years. The primary cause is
the division of labor. After all, it’s the division of labor that has allowed us to
simplify activities to the point at which they can be performed by machines.
When it comes to dividing activities, it tends to make sense to make
divisions along three axes:
1. Location. You should split field and inside activities—meaning that
people work inside or outside but never a mix.
32 The Machine
2. Work type. You should split activities that are different enough to
impose a switching cost. For example, creative activities do not mix
well with more transactional ones.
3. Cadence. You should split long and short lead-time activities. For
example, in a technology environment, you should not mix true
development work with break-fix tasks.
Principle 4: Management Should Be Formalized
It’s interesting to note that the very first manager was a scheduler (as per our
coxswain example). However, as environments grow, so do the responsibilities
of management. Today, it’s more likely that the manager of a function delegates
scheduling to a technical specialist and focuses on the internal performance
of their function—as well as its integration with the rest of the organization.
This broader focus makes sense for two reasons: The division of labor
causes work environments to become inherently fragile, and because the
organization consists of a number of functions—each of which could be
characterized as an oarsman in a larger boat—someone must pay attention
to the synchronization of the organization as a whole.
Specialization is a two-edged sword. It causes a dramatic increase in the
productivity of each individual, but it also causes each worker to operate
in a vacuum—intently focused on their own work in progress (their task
list). To a great extent, the scheduler compensates for this narrow focus,
but the manager is still required to ensure compliance with the schedule,
to resolve problems as they occur, and to make decisions relating to the
design and resourcing of the overall environment.
Now, the word formalize in this fourth principle may seem redundant.
After all, in our production example, there was no need for management prior
to the division of labor. Why then do we need to formalize management—as
opposed to simply adding a manager?
This is one area in which the sales environment differs from our
production example. The modern sales function has grown large enough
that there is a requirement for a manager to attend to those second-order
Four Key Principles 33
This means that most sales functions have managers—in spite of the
fact that they are still essentially craft shop environments. These managers,
however, have no understanding of scheduling and no experience managing
the kind of environment that will exist after the transition to divided labor.
Accordingly, we will definitely need to convince our sales managers to
adopt a more formal approach to management.
REIMAGINING THE SALES FUNCTION
In this chapter, we’ll reason from first principles to the sales function we
discovered in chapter 1. Then in the following chapter, we’ll expand our
discussion to include environments where not all opportunities are major
ones—and introduce you to the critical inside sales function.
We commence with the direction of the solution (the division of labor)
and our four key principles.
Figure 6. Yesterday’s sales function. The business-development manager (BDM).
Yesterday, our sales function essentially consisted of a single salesperson.
Tomorrow, sales will be the responsibility of a tightly synchronized team.
36 The Machine
PRinciPle 1: ScheDuling ShoulD be centRalizeD
Our first principle dictates that, as we push toward the division of labor, our
very first specialist must be a scheduler. We’ll elect to call our scheduler a
business-development coordinator (BDC). We’ll also refer to our salesperson
as a business-development manager (BDM), to highlight their new focus.
Figure 7. Division of labor, step 1: The business-development coordinator (BDC).
It’s important to note that the BDC is not a sales assistant. The word assistant
would imply that it’s the BDM who allocates work. The opposite—as is
indicated by the direction of the arrow in figure 7—is the case. The BDC
pushes work to the BDM.
This means that the BDM must transfer any and all scheduling respon-
sibilities to the BDC. This may be a more significant undertaking than
it sounds when you consider that, in most cases, the BDM’s scheduling
responsibilities are not limited to the management of their own calendar.
In most cases, salespeople are interfacing with production and customer
service, coordinating the delivery of clients’ jobs.
At this point in the discussion, it’s premature to allocate specific activities
to resources, but it will do no harm to draw four very general conclusions:
Reimagining the Sales Function 37
1. Our BDC must perform all scheduling.
2. Our BDM will spend more time selling.
3. Our BDM should work in the field (not in an office).
4. Our BDC should work from the head office (ideally—not a regional
The first two conclusions are not at all contentious, but the importance
of the second two is less obvious.
BDMs Work in the Field, Not in an Office
Traditionally, salespeople split their time between the field and an office.
And this is unavoidable when you consider the diverse range of activities
for which they are responsible. If we have a choice, however (and we soon
will), it makes sense to have BDMs spend all of their time in the field, for
two reasons: First, if we are going to spend the (not insignificant amount
of ) money required to employ enterprise-class salespeople, it makes sense to
have them selling in the field, where—presumably—they’re more effective.
And second, a fundamentally different approach is required for scheduling
field- and office-based activities—meaning that it’s impractical to schedule
a combination of the two.
The BDC Works from the Head Office
It would be tempting to assume that the BDC should operate in close
proximity to the BDM—but the opposite is true. The BDC should operate
in close proximity to the business functions with which sales must integrate.
We’ve already discussed that the integration of sales, engineering, and
production is increasingly important for the modern organization. Well,
that integration is significantly easier to achieve if the individuals responsible
for scheduling each function operate in close proximity to one another.
In addition, if you consider the BDM’s perspective, the BDM will feel
less disconnected from the organization as a whole if their BDC is located
in the head office.
38 The Machine
The Relationship between the BDC and the BDM
Let’s consider the relationship between the BDC and the BDM by con-
trasting sales with another environment in which we have senior people
working closely with schedulers.
That environment is the executive suite. In the executive suite of a decent-
size firm, we will likely encounter at least one executive who works closely
with an executive assistant. Unlike a typical assistant, an executive assistant
assumes overall responsibility for the initiatives in which the executive is
involved—and also assumes responsibility for the executive’s calendar.
The executive assistant maintains an awareness of all the initiatives on
which the executive is working (and their relative importance) and plans
the executive’s time so as to maximize the yield on their limited capacity.
If we take the preceding sentence and substitute business-development
coordinator for executive assistant and business-development manager for
executive, we have a perfect functional description of the role of the BDC. And
if we reflect on the nature of the relationship between the executive assistant and
the executive, we will observe exactly the relationship that must exist between
the BDC and the BDM in order for the sales function to be productive.
This discussion also sheds light on the inevitable questions about, in
practice, whether BDMs will find it demeaning for someone else to plan
their calendars, and whether potential customers will find it disturbing if
BDMs fail to set their own appointments.
The answer to both questions is a firm no. Treating salespeople like
executives does not demean salespeople; if anything, it elevates their standing
in the eyes of potential customers.
The Economics of the BDM–BDC Relationship
At first glance, it would appear that we’re multiplying expenses by partnering
BDMs with BDCs. Nothing could be further from the truth. A traditional field
salesperson averages two face-to-face business-development meetings per week.
If you partner that same salesperson with a capable BDC, their effective capacity
increases to four meetings per day, or twenty a week. That’s a tenfold increase in
Reimagining the Sales Function 39
effective capacity. This means that two BDMs partnered with BDCs will do the
same volume of work that would otherwise require ten BDMs working alone.
In practice, this means that you can reduce the size of your team of
BDMs (retaining the most capable ones) and still perform the same volume
of face-to-face meetings. When you consider that BDCs cost roughly half
what BDMs do, the economic benefits are compelling.
PRinciPle 2: WoRkfloWS ShoulD be StanDaRDizeD
Our second principle dictates that we use a standard sequence of activities
to originate opportunities (i.e., to identify or generate sales opportunities)
and to prosecute opportunities (i.e., to pursue them to their ultimate
conclusion—either a win or a loss).
Although these two workflows are clearly part of the one value chain,
it makes sense to treat them separately, simply because opportunities can
be originated in batches; but they must be carried out, or prosecuted,
one at a time. Because opportunities can be originated in batches (e.g.,
via promotional campaigns), the idea of standardizing the first workflow
is not particularly contentious. However, the case for standardization is
not so clear where opportunity management is concerned. To frame this
consideration as a question, do our salespeople require unlimited degrees
of freedom in order to effectively win orders?
The Case for Standardization
To address this question, we should first acknowledge that whenever
we are selling, a potential customer is buying. Therefore, our opportu-
nity-management workflow is the flip side of our potential customer’s
procurement workflow. So we can reframe our question as the following:
Do our customers require unlimited degrees of freedom in order to make
an effective purchasing decision?
Viewed from this perspective, the answer is not necessarily. Increasingly,
organizations are standardizing their procurement procedures for those
40 The Machine
products or services they purchase regularly. What’s more, different
organizations’ procurement procedures for comparable products tend to
be remarkably similar.
If we consider major purchases, I suspect the greater variation we see in
procurement procedures is more a consequence of an absence of procedure
than it is evidence of the absence of a need for one. In other words, I’m sug-
gesting that there probably is an objective ideal procedure for making major
purchases of various types—it’s just that because organizations make major
purchases infrequently, they haven’t yet determined what that procedure is.
I’ve often asked groups of salespeople who sell major products (e.g.,
enterprise software) whether there’s a right way and a wrong way for orga-
nizations to purchase a product like theirs, and I’ve always been impressed
by how well reasoned (and unanimous) the salespeople’s responses are.
My suggestion, then, is that there is an ideal opportunity-prosecution
workflow for both minor and major purchases. Where minor purchases
are concerned, this is more likely to be determined in advance by your
customers, and enormous variation from customer to customer is unlikely.
Where major purchases are concerned, there is still an optimal procurement
procedure; it’s just that customers are unlikely to be aware of it, which
presents your salespeople with the opportunity to take the lead and help
the customer buy more effectively.
Making It Scalable
Practically, as was mentioned in the previous chapter, the benefits of
standardization (in and of itself ) are relatively limited. The real value of
standardization is that it enables hand-offs between stakeholders in both
the sales environment and the associated functions (e.g., engineering and
production). Of course, without hand-offs, there can be no division of labor.
Consider the communication between a BDM and a BDC. If an
opportunity is being prosecuted according to a preexisting workflow, after
each field activity, the BDM needs only to update their BDC with one of
four possible next steps. They will recommend:
Reimagining the Sales Function 41
1. abandoning the opportunity,
2. repeating the activity just performed,
3. scheduling the next activity in sequence, or
4. scheduling an activity further downstream in the workflow.
If the workflow is sensibly constructed, these four options provide
sufficient flexibility for both parties, and if more flexibility is required, the
design of the workflow should be revised.
The important point, though, is that this structure enables a lot of
information to be transferred in just a few words. In designing a workflow,
we’re not trying to map the existing complexity; rather, we’re engineering it
out of the sales environment (at least to the degree that it’s realistic to do so).
Typical Sales Workflows
From a high level, most sales workflows look something like figure 8.
Figure 8. A typical sales workflow.
Although all promotional activities are outbound to some extent, it is con-
venient to divide promotional campaigns into two categories: outbound, in
which you assume a requirement and deem there to be a sales opportunity,
42 The Machine
and inbound, in which you engage in advertising (and similar) activities,
with a view to generating (inbound) expressions of interest.
PRinciPle 3: ReSouRceS ShoulD be SPecializeD
If we return to our project analogy for a moment, we now have a project
plan (our standard workflow for originating and prosecuting sales oppor-
tunities), a project manager (our BDC), and a resource pool containing a
single resource (our BDM).
To exploit the benefits of the division of labor, it’s now necessary to add
some more people to our resource pool. An obvious starting point is to
list the activities performed by a typical salesperson (as in table 1) and to
determine which are critical for our BDM to perform and which can be
allocated to other resources.
Table 1. Activities typically performed by salespeople in the field.
Activity name Activity type
Appointment-setting calls Administrative
Calendaring and travel arrangements Administrative
Sales meetings Sales
Follow-up calls Administrative
Solution design Technical
Proposal generation Semitechnical
Production-related activities Technical
Postsale customer service Semitechnical
Processing (repeat) transactions Semitechnical
Data entry and reporting Administrative
Reimagining the Sales Function 43
Beside each activity in table 1 is a proposed activity type. Some of these
are obvious, and some are a little contentious, so let’s be sure to resolve the
contention, if we can, before we reallocate some of these activities:
1. promotion (i.e., the origination of sales opportunities),
2. administration (i.e., critical supporting activities),
3. sales (i.e., meaningful selling conversations),
4. technical (i.e., requirement discovery and solution design), and
5. semitechnical (i.e., quoting, order processing, and issue management).
It is possible for salespeople to originate their own sales opportunities, but
the fact that they can does not constitute an argument that they should (and
this statement applies to almost every other activity above too). The thing is,
the origination of sales opportunities is extremely resource intensive if they
are originated one at a time—and salespeople lack the resources required
to originate them in batches.
Typically, the batch origination of sales opportunities requires the ability
to procure and manipulate contact lists, the ability to produce hard-hitting
promotional campaigns, the resources to broadcast personalized email (or
snail mail), and perhaps even the ability to promote and coordinate events.
Salespeople lack these capabilities, so it makes sense—at least notionally—
to allocate responsibility for opportunity origination to the marketing
department. Within the marketing department, the origination of sales
opportunities is referred to as promotion (one of the four Ps of marketing).
I say that the origination of opportunities is notionally the responsibility
of marketing because, in practice, the requirement for tight integration
between promotion and sales is so strong that the responsibility for the
former cannot possibly be delegated (at least in full) to another department.
The practical solution is to add a campaign coordinator to sales. This
person must be physically located within the sales department because
they must be tuned in to the telephone conversations that are occurring as
a direct consequence of the campaigns they are coordinating.
44 The Machine
Figure 9. Division of labor, step 2: The campaign coordinator.
It’s helpful to think of the campaign coordinator as a member of the marketing
department who’s on permanent loan to sales. Your campaign coordinator
must understand promotional processes and must have good connections to
people in your marketing department. But their primary allegiance must be
to sales. As we’ll see in part 2, your organization’s sales activity will quickly
grind to a halt if your campaign coordinator loses focus for just a day or so.
The campaign coordinator’s reason for existence is very simple: to
maintain a queue with an optimal number of sales opportunities upstream
from the BDC. This ensures that the BDC always has someone to call when
an empty slot appears in the BDM’s calendar.
It should be easy to see why data entry, reporting, calendar management,
and travel arrangements have been categorized as administrative activities,
but what about appointment setting and follow-up calls? How can they
possibly be administrative activities?
Let’s start with follow-up calls.
Reimagining the Sales Function 45
As we have discussed already, at each meeting within the opportuni-
ty-prosecution workflow, it’s the BDM’s job to sell the next critical activity
in the workflow. If the BDM has done their job properly, the scheduling
of that activity is purely an administrative function.
On the occasion when a BDC discovers that further input from the
BDM is required before the next activity in the workflow can be scheduled,
the BDC should schedule either another meeting with the salesperson
or a conference call. In either case, this additional meeting does not
constitute a material change to the opportunity-prosecution workflow;
it’s just a repeat of the last performed activity.
If you think about it, the initial appointment-setting call is no different
from follow-up calls. If the initial meeting has already been sold, the call
is simply a scheduling exercise.
Consider this real-world example:
Nigel is the director of sales for a large recruitment firm (one of our
silent revolutionaries). Because he also happens to be the most capable
public speaker in the sales department, he’s now addressing a room full
of senior executives, introducing a controversial approach to headcount
At the close of his presentation, he will ask the delegates to complete a
feedback form and will encourage them to tick a box at the bottom of the
form to indicate they would like to schedule a best-practices briefing with
Rick, the firm’s local consultant (salesperson).
It’s Nigel’s expectation that a little more than 20 percent of the delegates
will tick that box, and that virtually all of those will meet with Rick. What’s
interesting is that Rick’s BDC is unlikely to call any of them. Setting those
appointments is such a simple undertaking that she will simply send each an
email, asking them to indicate their preference from a number of available
meeting slots in Rick’s calendar.
In this case, it’s clear that the initial appointment-setting call is purely
administrative in nature. Of course, this is in contrast to the status quo—in
which the initial appointment-setting call is most definitely a sales call.
46 The Machine
A major benefit of classifying the initial appointment-setting call as
administrative in nature is that it forces you to sell the meeting in advance
of the call. This is hugely beneficial, because it highlights the difficulties that
BDCs might have setting meetings and it forces management to create more
compelling offers and market propositions. In turn, the more compelling
offers (and market propositions) result in better-quality appointments, and
that benefits everyone.
Of course, the origination of sales opportunities is a challenging subject,
one we’ll return to in part 2 of the book.
Every engineer-to-order environment has the same problem. Salespeople
become entangled in the delivery of the solutions they sell—and this
entanglement cannibalizes their selling capacity (and generates a host of
other problems). This inevitable entanglement has a simple cause.
The thing is, above a certain level of product complexity, a perfect hand-
off from sales to production is impossible. It’s not just difficult; it’s impossible.
This means that beyond this complexity threshold, information will always
be lost when sales hands off a project to production. This information loss
cannot be eliminated with more detailed briefings, more documentation,
or management exhortations to communicate better.
Reimagining the Sales Function 47
Figure 10. This graphical depiction of the complexity threshold shows that hand-
off difficulty goes to infinity when complexity increases beyond a certain point. The
markers on the x-axis suggest the degree of complexity in three environments: (a)
make to stock (b) make to order and (c) engineer to order.
There are only two possible solutions to this problem: We can propose only
products that are simple enough to sit beneath the complexity threshold
(e.g., limit customization to a fixed menu of options), or we can eliminate
the requirement for a hand-off altogether.
Of course, in major-sales environments, the second option tends to be
the default approach. What happens is that the salesperson never fully hands
off to production; they remain on-call, after the sale, to answer questions
and to interface with the client.
There is, however, another approach, one that has a profound impact on
both the effectiveness of sales and service quality. The alternative approach
is to add a third party to the mix, a person we’ll call a project leader.
48 The Machine
Figure 11. In a major-sales environment there are two approaches to the avoidance
of hand-offs. In the default approach, the salesperson remains engaged through
delivery. This results in a reduction in the salesperson’s selling capacity and,
consequently, late engagement with potential clients. It also defers resolution of the
inevitable tension between sales and production until after the sale is won.
In this alternative approach, the project leader and the BDM work side by
side for most of the opportunity-prosecution workflow.
Here are the essential characteristics of this approach: Because the BDM
has no postsale responsibilities, they have more selling capacity. This enables
them to engage earlier with clients than they otherwise would—meaning
that initial contacts are conceptual in nature. At the point at which the
client wishes to discuss (in concrete terms) their requirements, the BDM
introduces the project leader. The project leader takes responsibility for
requirement discovery and for solution design (in many cases, these will occur
in the form of a formal solution-design workshop). From this point until the
point of sale, the BDM and the project leader work together. The project
leader is responsible for the technical component of the engagement, and
the salesperson tends to the commercial component. After the sale, the
project leader champions the project as it moves through production. This
means that the project leader replaces the BDM as the primary point of
contact for both production and the client.
Reimagining the Sales Function 49
The sole responsibility of the project leader is to manage the interface
between production and both the client and sales. When they do their job
well, the product presented to the client is both salable and deliverable
(taking into account, for example, features, price, delivery lead time), and
the product that is ultimately delivered to the client fulfills the client’s
requirements, without compromising the profitability of the organization
(understanding that the client’s requirements may well have changed—or
been reinterpreted—during delivery).
Because the project leader seeks to optimize the numerous trade-offs
though both the opportunity-management and delivery phases of the
engagement, it should be clear that their role is critical and their contribution
invaluable. For this reason, the project leader should always have protective
capacity; they should never be overburdened with work. Accordingly, it is not
a problem that the project leader works both in the office and in the field. If
we are deliberately maintaining the project leader at less than 100-percent
utilization, it is obviously not necessary to maximize their efficiency.
Figure 12. Division of labor, step 3: The project leader.
50 The Machine
Semitechnical activities include the generation of standard proposals, the
processing of repeat transactions, and the provision of after-sales support
(e.g., issue resolution). All these activities—as well as any others that are
semitechnical in nature—should be allocated to the customer service team.
Figure 13. Division of labor, step 4: Customer service representatives.
Although most organizations already have customer service teams, the
primary responsibility for customer service rests with the salesperson. The
result tends to be that the customer service representatives (CSRs) are
disillusioned and generally unprepared to take ownership of customer service
cases (I’ll use the word case to refer to a unit of customer service work).
This means that two changes must occur: The customer service team
must rapidly develop both the capability and the capacity to take full
ownership of the entire customer service caseload, and salespeople must
extricate themselves from customer service. In practice, the latter is not as
difficult as it sounds. With two simple initiatives, it can be accomplished
First, salespeople must avoid taking ownership of customer service cases
in the first instance. This is easier than it sounds. For example, if a customer
Reimagining the Sales Function 51
asks a question about an incorrect order, the salesperson might use their
cell phone to initiate a three-way conference call between the customer, a
CSR, and themselves.
Second, customer service representatives must assume ownership of
cases as soon as they encounter them. With this in mind, it is useful, in the
design of your customer service workflow, to stipulate that the CSR must
send the client an email when each case is opened and closed. Obviously,
the first email should make it clear that the CSR is the person responsible
for resolving the issue and is, consequently, the primary point of contact.
The customer service team must be close to production, ideally, in the
same building. If there’s a requirement to perform field visits in order to
resolve customer service cases (perhaps to inspect a problematic product),
the CSR should task the project leader to perform this visit and report back
with necessary information.
If we return to our project analogy—in which I compared a BDC with
a project manager—we can now see that our BDC has inherited a resource
pool consisting of three resources (salesperson, project leader, and CSR).
This means that in order to prosecute each sales opportunity, the BDC will
break the opportunity into a series of activities and allocate each activity
to one or more of these resources, in accordance with the routing specified
in the opportunity-prosecution workflow.
The Customer’s Perspective
It’s easy to see that this model is quite ordered and logical from the organiza-
tion’s perspective, but what about the customer? In asking our customers to
interface with multiple people, haven’t we just made their world more complex?
It’s true that in this model, customers will interface with four people
(BDC, salesperson, project leader, and CSR). It’s also true that, today, most
customers ask for—and most organizations strive to provide—a single point
of contact. However, reality is a little more complicated than this.
It’s a mistake to commence this discussion with an assumption that the
traditional model delivers good customer service. It simply doesn’t. It’s also
a mistake to take at face value customers’ claims that they’d rather have a
52 The Machine
single point of contact. In practice, customers can be quite aggressive in
seeking out relationships with other individuals if they sense that this is in
their best interest.
My experience is that the following statements are closer to the truth
(particularly in major-sales environments): What customers really want is
a single conversation. In other words, they will willingly speak with multiple
people within your firm, as long as they do not have to repeat themselves.
If customers have a choice between dealing with a single generalist and
multiple specialists, they would rather speak with specialists. Although we
talk about the customer as if this were a single entity, in most cases, there
are multiple people on the customer side involved in the purchase and
consumption of your products.
You will discover that this new model provides a vastly better quality
of service, provided you ensure that there is a clear delineation of the
responsibilities of the various parties with whom customers interact and
that BDCs (who plan all opportunity-management activities) and CSRs
(who tend to become customers’ primary points of contact between projects)
remain in close communication with one another.
PRinciPle 4: ManageMent ShoulD be foRMalizeD
As we discussed, the downside of the division of labor is that it causes
environments to become fragile. Although it’s the responsibility of the BDC
to synchronize the various team members, management oversight is critical
for a number of reasons. BDCs tend to be younger and less experienced than
both BDMs and project leaders. Accordingly, the BDC’s mandate is very
limited. If the sales environment is operating exactly as it should be, they
have total control over the schedule. However, a relatively small disturbance
in the operation of the environment can render them impotent. The sales
function must integrate effectively with other functions (production and
marketing, to name two). Because the BDC tends to be relatively inward
looking, it’s necessary for a more senior person to interface with those other
departments. In most sales environments, there are multiple BDCs (one
Reimagining the Sales Function 53
for each salesperson). This means that a more senior person must manage
any contention between BDCs (or BDMs).
In most environments, there’s actually a requirement for two managers.
You’ll need a supervisor to oversee the internal team and a more senior person
to manage the overall sales environment (including field operators). How
exactly to resource these two management requirements is a sensitive subject
(particularly in smaller businesses), so we’ll have to defer this discussion
until part 2 of the book.
❄ ❄ ❄ ❄
In chapter 1, we encountered James Sanders Group (JSG—one of our
silent revolutionaries). We discussed Jennifer’s enormous productivity and
the productive relationship she has with David (her BDC) and Phillip (a
project leader). We also discussed the critical role that customer service has
played in the remarkable transition that has occurred at JSG.
In this chapter, we have seen how the four key principles guide us logi-
cally to JSG’s sales model—or, at least, to the more intriguing elements of
JSG’s model. However, in the interests of simplicity, we have sidestepped a
discussion of what’s arguably the most important element of JSG’s model:
THE DEATH OF FIELD SALES
This discussion is worthy of its own chapter for a couple of reasons. First,
as you’re about to discover, the odds are pretty good that you need an inside
sales team. And, what’s more, the creation of this team should probably
take priority over whatever changes you plan to make to your outside sales
activities. And, second, our discussion of inside sales is going to bring us
face to face with a set of fundamental changes in the way most markets
function. And that’s not a bad place to start.
As I write this, “The Death of Field Sales” is my most popular lecture
topic. Most event organizers assume that I exaggerate in order to capture
the attention of busy executives. Well, it’s true that headlines often benefit
from a little hyperbole, but there’s less exaggeration here than you might
expect. In most markets, either field sales is dying or it’s already dead.
Of course, I’m not heralding the end of field salespeople. There is a
requirement for field salespeople in some (but definitely not all) markets
now—and there will always be circumstances in which face-to-face selling
is indispensable. On their way to extinction are environments in which sales
is essentially an outside activity. Even in engineer-to-order environments
today (think JSG), only a tiny percentage of the total volume of activities
required to originate and prosecute a sales opportunity are performed in
the field. And those important field activities would simply not occur if it
were not for the volume of work performed inside.
The fact is, sales today is an inside endeavor, supported, in some cases,
with discrete field activities.
If you want proof, follow one of your field salespeople around for a
week. What you’re likely to discover is that your field salesperson spends
less than 10 percent of their time in the field. The balance of their time
will be spent in an office of some kind (your head office, a branch office,
56 The Machine
a home office, or a makeshift office in the backseat of a rental car). If my
prediction is correct, you’ll probably conclude that your salesperson is not
really a field salesperson at all. They are an inside salesperson who performs
occasional field activities.
There are still some markets in which sales is essentially an outside
activity—trade tools, for example. Think of Snap-on, whose operators
pilot their white, red, and black trucks directly to workshops and building
sites and sell on the spot. But these markets are the exception, not the rule.
It’s rare today to find customers who are happy for salespeople to drop in
unannounced. Actually, in addition to making drop-ins impossible, most
organizations go to quite some effort to rebuff even those salespeople who
are polite enough to attempt to schedule a meeting in advance.
We have technology to blame for this disturbing state of affairs. Fifty
years ago, an organization’s (potential) customers were out there, in the
field. Relative to today, customers were isolated from their vendors. This
was before fax machines and private branch exchange (PBX) phone systems
became pervasive and certainly before email, websites, and instant messaging.
Salespeople bridged this geographic divide by visiting with customers in
the field—and by ferrying information back and forth between their head
offices and the customers’ locations.
Today, customers are no longer isolated from their vendors. Vendors’
organizations are as close as the nearest web browser. Private lines, email, and
instant messaging have made it easier for customers to communicate with
representatives in an organization’s head office than it is to communicate
with their field-based salespeople.
That’s right, where field salespeople historically served to reduce the
friction between vendors and their customers, today it’s more likely that
salespeople are contributing to that friction. Certainly it’s quite common
to hear customers complaining that they can get better information and
faster outcomes if they sidestep salespeople and communicate directly with
the customer service teams based in the vendor’s head office.
Salespeople have responded to this situation with a mixture of defiance
and pragmatism. As suggested earlier, most have retreated inside, where they
The Death Of Field Sales 57
can be more productive. If they’re not welcome in corporate offices, they
have built their own home offices. But these same salespeople (and their
managers) will vehemently defend the traditional model when challenged.
Even in environments in which most transactions are repeat purchases of
commodity products, salespeople will argue that sales is essentially a field
activity and that customers should be prepared to pay a premium for the
value that field salespeople add.
Rather than wading into that argument, let’s take a moment to view sales
from the customer’s perspective. Ask yourself the following: If you are making
a purchase (of an unspecified nature), is your default starting point to look
for a person who can come and visit with you in the field? I suspect not!
It’s more likely that your first instinct will be to turn to a medium that
enables you to purchase with no human contact whatsoever, if one exists. If
you need to communicate with a human in order to make your purchase,
you’d probably prefer a phone conversation rather than a face-to-face visit,
unless for some reason the latter is critical. And even if a face-to-face visit
is critical, there’s a good chance you’d rather visit the salesperson than have
one come to your home or place of work.
Now, you might argue that I’ve stacked the deck in my favor by failing
to specify the nature of the purchase. After all, isn’t there a difference
between purchasing a set of replacement razor blades and purchasing a
custom-engineered software application? Let’s explore that.
In the case of the replacement razor blades, it’s clear that there’s no value
in human contact. I think most people would rather make the purchase in
a single click on Amazon.
But, in the case of the custom-engineered software application, isn’t it
clear that you’d need to interact with a salesperson, face to face? Sure. But
it’s pretty unlikely that this is where your purchasing process would start.
It’s more likely that you’ll start with online research. Then, at your leisure,
you’ll have one or more conversations with telephone advisors. Although
it’s clear that, at some point, you’ll schedule one or more face-to-face
meetings, it’s likely that you will defer these meetings until you absolutely
need them—perhaps simply as a hands-on workshop.
58 The Machine
It’s easy to see how the JSG sales model described in the first two
chapters of this book is appropriate in engineer-to-order environments
(e.g., custom-engineered software). However, it’s important to recognize
that transactions of this nature are a small percentage of total transactions
for most organizations. Even in the case of an organization that sells only
custom software, there are likely to be transactions that are simple in nature
(e.g., the addition of small features to existing applications), and don’t
require in-person interactions.
It’s time now to envision the kind of sales function that will support
your (and most likely, your customers’) preferred approach to purchasing.
the inSiDe-out aPPRoach
This fundamental change in market dynamics requires that we make an
ideological shift. The salesperson’s pragmatism won’t cut it. We need to
embrace this change and recognize that, today, sales is essentially an inside
Where planning is concerned, what’s required is an inside-out approach.
Start with an inside sales function and then add field resources as they are
required—and only to the extent that they are required.
The inside-out approach starts with attention to the type of transactions
that make up the lion’s share of a typical organization’s revenue. These are
simple—and typically repetitive—transactions. For the purpose of this book,
I’m not treating these transactions as sales, but they’re critical nonetheless.
Customer service should handle these simple transactions, and should
generate quotations and handle customer issues. (A percentage of these
transactions should actually bypass customer service and go direct to
ecommerce, but that’s outside the scope of this book.)
The Death Of Field Sales 59
Figure 14. The inside-out approach: Customer service representatives (CSR).
Customer service should triage all inbound telephone traffic and inter-
cept all simple orders, requests for quotes, and issues (technical questions,
60 The Machine
delivery problems, and the like). Customer service should have sufficient
protective capacity to enable the team to handle peak loads and to ensure
that no one else in the organization need ever process an order, generate a
quote, or handle a customer issue.
Inside Sales and Campaign Coordination
Once customer service has control over simple transactions, most executives
assume that the next team to add is field sales. There are two problems with
jumping straight to field sales.
First, field sales is incredibly expensive relative to inside sales. An inside
salesperson can comfortably have thirty meaningful selling interactions
(including email) a day, whereas a field salesperson will work hard to average
Second, if you start with field sales, you will turn your back on a number
of potential selling interactions when you insist that each prospect accept
a field visit.
And this is a critical point! It’s easy for sales managers to argue (as they do)
that field meetings are more effective than phone conversations. However,
this argument ignores the fact that an insistence on field meetings results
in salespeople having fewer selling conversations overall.
The Death Of Field Sales 61
Figure 15. The inside-out approach: Inside sales and campaign coordinator.
Our inside sales team actually consists of two roles.
62 The Machine
We have the inside salespeople, who perform nothing other than what
we call meaningful selling interactions. These interactions include phone
conversations, email communication, and even instant messaging. Of course,
inside salespeople do not generate quotes or enter orders; these tasks are
routed to customer service.
We also have a campaign coordinator, who is responsible for generating all
of the outbound sales opportunities that keep the inside sales team members
so busy. The campaign coordinator ensures that inside salespeople always
have calls to perform and avoids inside salespeople’s searching for sales
opportunities within the customer relationship management application
Once you have an inside sales team, you should continue to resist the
temptation to add field salespeople for just a little while longer. When
you consider the incredible productivity differential, you should make
sure that you’ve fully exploited the potential of inside sales before you add
So let me unpack that somewhat-opaque advice for you. By exploit the
potential of inside sales, I mean that you should keep adding inside sales-
people until the contribution margin you expect your next salesperson to
generate approaches their total cost. With the phrase traditional salespeople,
I’m hinting that it might be possible to use a special breed of salesperson
to further exploit the capability of inside sales.
The Death Of Field Sales 63
Figure 16. The inside-out approach: Field specialist.
64 The Machine
A field specialist is a person who supports inside sales by performing discrete
field activities. These activities are likely to be technical or semitechnical in
nature. Their typical activities would include on-site requirement discovery
and product demonstrations. The field specialist can also perform field visits
that are requested of them by the customer service team.
Unlike a salesperson in an engineer-to-order environment (think Jennifer
at JSG), field specialists are not primarily responsible for critical selling
conversations; those are the responsibility of the inside sales team. Rather,
the field specialist is responsible for performing field activities that would
otherwise block the inside sales team from selling.
Once you have fully exploited the potential of inside sales, both by growing
the team and by supporting inside salespeople with field specialists, it’s now
time to consider traditional field salespeople. And, as you learned in the
previous chapter, field salespeople (business-development managers) are
tenfold more productive when we partner them with dedicated coordinators
and project leaders.
The Death Of Field Sales 65
Figure 17. The inside-out approach: Business development.
66 The Machine
We now have an outline of the entire inside-out sales function, at least at
a conceptual level. We also have an understanding about how, in practice,
it makes sense to go about building your sales function.
In short, start with customer service and add additional components
only when you are sure you have fully exploited the existing ones.
What iS the Potential of inSiDe SaleS?
Many executives are uncomfortable with this approach, because it’s based
on the assumption that inside salespeople are capable of making many of
the sales that are currently being made by field salespeople today. In my
experience, this assumption is absolutely valid.
There are situations in which face-to-face selling conversations are abso-
lutely critical. But there are many more situations in which they are simply
not. And, as we discussed earlier, an overestimation of the requirement for
face-to-face meetings tends to result in a much lower overall volume of
It’s helpful to consider the two situations in which face-to-face meetings
are genuinely required. They are critical when an activity that needs to be
performed cannot be done effectively from a remote location. An obvious
example would be a meeting between an architect and a landowner to
discuss ideas about how to exploit the features of a piece of land. Another
example would be a full-day strategic-planning workshop.
A face-to-face meeting can also be very beneficial when a potential
customer is contemplating a purchasing decision that involves high levels
of uncertainty. For example, if you are not a lawyer and you are considering
appointing a lawyer to represent you in a particularly important case, you
would feel compelled to meet your proposed counsel face to face. As a
nonlawyer, you lack the ability to make an objective assessment of the
individual’s professional capabilities, and you have little choice (for better
or worse) but to use your assessment of the person as a proxy for their
professional capabilities. Conversations that do not fall into one of these
The Death Of Field Sales 67
categories are better performed by telephone (or email) and, increasingly,
this is what potential customers prefer.
Furthermore, if you think about it, each of the face-to-face conversations
described in the two categories above will undoubtedly have been preceded
by quite a number of non-face-to-face conversations. In the inside-out model
described in this chapter, those preliminary conversations would have been
performed either by an inside salesperson or by a business-development
coordinator (or both), depending on the environment.
In summary, then, it’s likely that a good percentage of your sales oppor-
tunities do not require field visits at all. Furthermore, of the total field
visits required, it’s likely that a good number of them do not involve true
selling conversations (these are the visits that consist of on-site requirements
discovery or product demonstrations).
Where the staffing of your sales function is concerned, this has two
implications. The first is that you need very few field representatives; and
of the field representatives you do need, most will be field specialists.
This in turn means it will be easier to justify spending the bigger dollars
you will inevitably need to spend in order to attract the small number of
capable, enterprise-class salespeople needed in your few remaining business-
development manager positions. The other implication, of course, is that
you need a larger inside sales team. The good news is that this enables you
to exploit some economies of scale. A lively, fun inside sales environment
will be a lot more appealing to a broader range of candidates then a Rolodex
and a rental car. In addition, a larger team of (colocated) individuals will be
much easier to manage and, consequently, may even enable you to justify
the addition of a high-powered inside sales supervisor (which can have an
enormous impact on team performance).
Who aRe theSe inSiDe SaleSPeoPle?
Let me start by stressing who these inside salespeople are NOT. Your inside
sales team members are not telemarketers (in the traditional sense of the
68 The Machine
word). They are true salespeople—equivalent in every sense to the type of
person you would otherwise have in the field. They are knowledgeable,
ambitious, and engaging. And they are paid roughly what they would
expect to earn if they were field salespeople.
And, importantly, your inside sales team members are not second-class
salespeople relative to your field specialists. Your inside sales team, if your
organization is typical, is your primary sales team, and it’s vital that this is
reflected in your cultural norms.
As was hinted above, this shift in focus to inside salespeople will give
you more degrees of freedom when it comes to attracting talent. You can
attract capable people (perhaps from a technical background) who would
simply not be interested in operating in the field. What’s more, because
you have team members operating in close proximity to one another, it’s
easier for you to introduce less-experienced candidates—meaning that you
can employ younger team members or recruit people from outside your
❄ ❄ ❄ ❄
This chapter completes your understanding of what we call the inside-out
model. This model is a blend of customer service, inside sales (supported by
the campaign coordinator and field specialists), and business development
(supported by project leaders).
In chapter 6, we’ll talk about alternative models and gain insight into
how to apply the four key principles to design applications of sales process
engineering for different environments. But first, it’s time to reflect on the
integration between sales and the rest of the organization.
The Machine: A Radical Approach To The Design Of The Sales Function 69
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