Is Your Sales Organization Becoming Obsolete?


CHANGE / SALES EXCELLENCE / by Inna Hüessmanns

11. November, 2020

Changes in the marketplace can render sales organizations obsolete and make their resources and capabilities less valuable for customers.

Today, businesses operate in a global competitive environment where customers demand more value for less money, and where value propositions are short lived. The recent pace of technological innovations and disruptions increase market pressures on companies. In this environment, organizations’ ability to respond to market changes fast and effectively is crucial.

Since environmental change is continuous, companies must regularly examine their markets and their sales organizations and develop new skills and competencies. Changes in the marketplace can render sales organizations obsolete and make their valuable resources and capabilities less valuable for customers.

This obsolescence requires change. Companies’ task is to understand the root causes of obsolescence and to manage change successfully.

In addition to the market driven necessity to change, in each phase of the organizational growth companies need different sales capabilities, strategies and structures.

Like products, companies have different life cycles. What works in the start-up stages of the business may not work in the mature stages of big companies. As companies and their sales organizations grow and evolve, they must develop new capabilities and structures. In the start-up phase, many companies focus on new business development. As a result of this focus, other competencies are often ignored and the seeds for future problems can be planted.

As companies grow, their sales increase. During these success stages, companies can be blind sighted by their success. Signs of obsolescence can be neglected and no attention can be given to long-term growth strategies or internationalization strategies. In many cases, short-term planning and thinking dominate and new future problems can be born. The international expansion stages will require new sales structures and the set-up of international sales organizations. This also requires change. To cope with all these challenges, companies and their sales organizations must become agile and adaptive to change in every stage of their life cycle.

However, experience indicates that many change initiatives fail.

Companies’ ability to continuously evaluate their business from the customers’ perspective, realign resources and build new capabilities is crucial for any sales management change program. But sales change management  involves more than a customer and a market orientation. Any change initiative begins with the company’s culture. Companies must involve their frontline sales employees in their change management programs und communicate to their salespeople why change is necessary.

Change programs can have a negative impact on salespeople job satisfaction and job performance. When organizations involve their salespeople in their change initiatives at the beginning, they encourage salespeople to contribute and adjust their work approaches during the change initiatives. Sales employees should understand why change is necessary and be trained accordingly to cope with change.

During the change programs, salespeople operate in stress environments. They must understand how change will increase the effectiveness of the sales organization and lead to job security. On the other hand, if the salespeople learn that markets and customer requirements are changing but their organizations remain bureaucratic and don’t implement any change or adjust their processes and strategies accordingly, then the salespeople can become dissatisfied and less committed to their organizations.

Additionally, to be successful with change initiatives, sales organizations must not only redesign their structures, incentives, and sales strategies. Companies need to develop a learning sales organization.

A market orientation is the fundament of the agile and learning sales organization. Sales change management programs must systematically realign sales resources, competencies, and capabilities to serve customers effectively. Customer satisfaction is one of the key outcomes of a learning sales organization.

Sales organizations who are able to utilize the market information and continuously learn and adapt to change faster than their competitors will develop significant competitive advantages.

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