Monday, August 8, 2011

The Real Challenge

There have been many examples over the last decade of great and innovative ideas and products (the Apple revolution with the iPhone and iPAD springs immediately to mind). There have also been many examples of established ways of doing things being cast aside in the name of progress when the reality was that the established way of operating were perceived by some as being too restrictive or simply too hard.

For instance the fundamental rules of business were ignored during the dot com revolution. Fundamentals such as comprehensive business plans were replaced by fancy PowerPoint decks. Focusing on a path to profitability was frowned upon as being so old economy in the new era where businesses were driven by concepts and ideas rather than spreadsheets.

Well we all know what happened. It turned out that those boring old profit and loss statements did matter and once common sense returned to the stock market and true valuations reasserted themselves, the so-called new economy bubble, overinflated with all that vaporware spectacularly burst. And yes the fundamentals of solid business practices returned and those dot com survivors who were able to adapt to them (or who had paid attention to them all along) went on to become big winners.

The dot com revolution was matched and even surpassed by the runaway housing market. This was a market that had operated for decades with solid, fundamental underwriting standards that minimized the risk for both the lender and the borrower. Once these standards were modified or even abandoned and new and innovative loan products quickly invented we suddenly witnessed a global property bubble of historic proportions. Again the abandonment of proven fundamental standards had catastrophic effects that this time went way beyond simply wiping out share prices to the point of almost collapsing the global economy beyond repair. There were of course some financial institutions that held firm to more traditional underwriting standards even as others were boosting earnings by going the other way. Such institutions have not just survived but have emerged stronger and in some cases have actually acquired their erstwhile more aggressive counterparts.

And so the dot com implosion and the housing market collapse have been followed by the collapse and near collapse of national economies across the globe from my own homeland of Ireland to Greece not to mention the now almost forgotten Iceland while here in the US we continue to struggle with at best an anemic economy. The problems faced by many of these governments are rooted firmly in the lack of fiscal discipline and just like proper business plans and tight underwriting standard, fiscal discipline on a national (or even state or local) level takes hard work and needs to be reinforced and monitored at all times.

There are many parallels when it comes to the fundamentals of selling. As Neil Rackham always reminds me in our conversations the fundamentals of good selling don’t change. As simple as that sounds the reality is that adopting and maintaining fundamentally good selling skills takes practice, patience and perseverance – three Ps sadly lacking in the examples above. When Neil and Huthwaite conducted its groundbreaking behavioral research and codified their findings into what became SPIN Selling, they created much needed consultative selling fundamentals. These fundamentals have helped organizations across the globe to reach greater levels of sales success and build exemplary buyer-focused selling cultures. Over the years SPIN Selling has evolved and adapted to multiple market phases and multiple segments while always staying true to the fundamentals established through its scientifically-based research. There have been and continue to be “new” techniques and methodologies introduced (some of which are clearly derivative in nature but again as Neil Rackham says one way of judging the quality of your product is the number of people who copy it!) but none that can point to an empirical research base on the level of Huthwaite or a track record of success to accompany it. Whether these new models are presented as being more “challenging” or built for the “new selling reality” of the new millennium, they cannot argue with the ongoing track record of success enjoyed by organizations who truly adopt the fundamental selling skills that SPIN Selling represents.

Such organizations are the ones who have the commitment to be patient, to persevere and to continually reinforce these fundamental skills and who are rewarded with sales organizations that grow and excel as these skills become a pervasive way of operating. Like those dot coms who adopted solid business practices when others were offering easier ways of starting up or the financial institutions who stayed with loan quality over loan quantity, the organizations that have adopted and committed to SPIN Selling are among those who have successfully weathered the recent recession and indeed some have even flourished.

Thankfully just like the flight to quality we always see when investors move their capital away from riskier investments to the safest possible investment vehicles during market upheavals, we have seen a similar phenomenon in our own business. More and more organizations across the globe are looking to Huthwaite to help them grow their way out of the recession and establish the solid foundations of proven selling skills. This has translated into record years for Huthwaite and put us on track for our greatest year ever in 2011 by any measure you want to use (top line, bottom line etc.).

It goes to prove what I quoted Neil Rackham on early in this piece that the fundamentals of good selling don’t change. We will certainly see innovation and evolution in our segment and indeed Huthwaite has been at the forefront of this and will continue to be (look out for a major new initiative in late 2011 that has been created in partnership with some of our top customers and validated through research conducted with thousands of professionals across the globe). We will also see “new” models emerge, some that seek to repudiate the fundamentals and established models such as SPIN Selling (and we know how that usually works out), some ironically will be sold and marketed aggressively using high pressure techniques more associated with the transactional end of the spectrum and a few will actually complement the fundamentals and be truly additive.

The real challenge will be to have the patience, and perseverance to continually practice the fundamentals of good selling and be able to separate what actually enhances that from new glitzy short-term solutions because as we have seen such choices can have serious ramifications in the longer term.

1 comment:

  1. Nice post - we need to always be aware of fundamentals that hold true and not get distracted by shiny new objects or people who simply have opinions but nothing to back them up with.