DemandCon 2011 San Francisco Keynote

Good Morning everyone.

I’m going to talk about the Clash of the Titans.    Not the movie — though I bet there could be many movies made – comedies and tragedies – about Sales and Marketing trying  – or not – to work together.

Let’s dissect the Clash of the Titans by talking about the six archetypes of sales and marketing. From there we’ll talk about the 3 stages of alignment and determine what stage your company is in.  Then we’ll talk about the human element of alignment and some ideas how to make it sticky in your organization.

There is a myth about misalignment – that it only hurts sales. Misalignment hurts the whole company.  It lowers revenue, drives up expenses which makes profitability harder, hurts customer relationships and can turn the company culture into a toxic situation. It’s a multi-billion dollar problem — all because two people – the CMO and Head of Sales – can’t get along. Or so it seems.

There are 3 things I learned while aligning sales and marketing in several companies:

- Reorganizing marketing or sales does not produce alignment; a cultural and structural change does

- The same is true for automation; people and process first then institutionalize it with automation.

- Don’t underestimate the need for emotional commitment and tenacity on the part of sales and marketing

Let’s begin with a formal definition of sales and marketing alignment, just so we’re all on the same page.

“sales and marketing collaboratively working toward the common goal of profitably increasing revenue and customer lifetime experiences through shared processes, resources, service level agreements and metrics.”

What does the definition say? Alignment is more than leads. The heart of it is two teams working toward the same goal with a common understanding of resources.  The operative words are “same goal” and “common understanding of resources”.  The ‘how’ is through shared processes, service level agreements and metrics.

How do companies realize this definition? How do they put it into practice?

The place to start is by understanding the players.  I’m going to use Carl Jung’s archetype model to describe the 6 types of sales and marketing leaders. Let’s start with Marketing.

There are three major archetypes in Marketing: Egoist, Strategist and Tactician.

The Egoist is all about branding and shaping mindshare. They believe that the more a market knows about the company and its value proposition, the greater the interest in the company.  A master storyteller, the Egoist has the unique ability to make the story relevant to just anyone they meet. Charismatic, well spoken, persuasive and often visionary they excel at communicating the vision orally and visually.

But this person is often not very detailed or process oriented.  They delegate a lot and don’t have much interest in the minute details of demand generation, marketing operations and sales enablement. They will leave that to their team members.  In the right environment, an Egoist can galvanize a company to achieve amazing things like creating a new market category.

The Tactician is the opposite of the Egoist.  This leader is adept at detailed direction, implementation and control of plans to achieve specific milestone. Their focus is on building the ‘marketing engine’ and making sure the parts work the way they are suppose to, in terms of process, timing and results.  Armed with an amazing capacity to know all the details and status, this archetype unfortunately lacks the ability to ‘see the bigger picture’ and ‘read the tea leaves of change’ and proactively adjust the marketing plan.

The last marketing archetype is the Strategist. This person’s natural ability is to see the ‘bigger picture’ and understand the market dynamics at play and how the company can capitalize on them.  They are adept at crafting company and market strategy, and then actualizing the strategy across the company.  To these leaders, marketing is more than managing perception or driving leads; but about influencing external market factors and positioning the company to aggressively capitalize on its unique opportunity. In order to maintain their bigger picture perspective, they often delegate program execution and rely on an array of metrics to keep them apprised if things are on track.

Can you identify which archetype your CMO or VP of marketing is?  Are they a Strategist, Tactician, or Egoist? Which archetype are you?

Just as there are in Marketing there are 3 sales archetypes: Thinker, Blamer, Junkie

The Thinker is a reflective person focused as much on how and why as on achieving results. They want to understand the process, target results and what their sales team needs to.

Blamers on the other hand believe their teams are doing the best they can already with the available resources. They tend to not be process oriented but they are definitely results oriented.  They will protect and champion their team and often do whatever it takes to make a deal happen. However, if something goes wrong, Blamers point to others, most often marketing, and socialize the ‘blame’ at any opportunity.

For the Junkie, it’s all in the thrill of the hunt. Anything that slows down the hunt or the deal frustrates them.  They expect their team to be out closing business all the time; the more deals or the more competitive a deal becomes which requires creativity on their part – the happier they are.  - If the deals close.  They often believe that Marketing doesn’t understand that any activity – like PR – that doesn’t produce ready-to-close leads is a waste of their time and precious resources.

Now can you identify which archetype your head of sales is? if you’re in sales, which archetype are you.

The next step in alignment is recognizing where you are. For sales and marketing to be aligned, several things need to happen, namely companies need to develop the right perspectives, compensation drivers, cooperative work methods and integrated processes. Companies achieve alignment by going through a three stage journey.

As I talk about the stages, I want you to think about which stage best describes your company, and write it down.  Because if you don’t know where you are in the journey, it’s hard to figure out what the right next steps are.

Three stages of the journey are: Ambiguous, Collaborative and Aligned.

Ambiguous is the most conflict-ridden and unaligned stage.  Sales and marketing focus on their tasks and are, intentionally or unintentionally, unaware of what the other team is doing or trying to achieve. If there is any collaboration at all, it is ad hoc and crisis oriented.  Things get tossed over the wall. Budget battles are typically zero-sum games. While the leaders might ‘get along’, neither they or the CEO see the lost revenue opportunity as a result of the situation.

To move to the Collaborative stage, both teams need to understand and accept that their relationship is not a zero-sum game.  The roles of sales and marketing are defined and documented along with specific rules of engagement and hand-off points that guide how the teams work together.  The definition of commonly used terms like “lead” are jointly defined and documented. The teams are still separate but share one or two common goals, typically a revenue number. The budget might still have undertones of zero-sum game but the discussion mostly centers on what both groups need to do in order to achieve A company goal.

The third stage is Aligned.  In this stage, sales and marketing’s boundaries are blurred. They begin to function as one team and increasingly you’ll find both teams report to a Chief Revenue Officer.  The communication is frequent and organic along clearly defined process points. The shared company objectives have cascaded down and reflected in everyone’s compensation plan – sales AND marketing.  There are joint team assignments and liaison roles along with job rotation between sales and marketing.

What differentiates the Aligned stage is that both groups operate with significant transparency with one another AND with the rest of the organization.  Sales and marketing jointly define go-to-market plans, revenue targets, budgets and investment tradeoffs.

The clearest evidence of alignment is the nature of the conversation between sales and marketing.  In aligned companies the conversation centers around what is happening in the market, what worked and what needs to change without laying blame.  There is no blame game because everyone is focused, and compensated, on meeting clearly defined, shared company objectives vs individual department goals.

So in which stage is your company?  Is it in the Ambiguous, collaborative or aligned stage.

You’ve just now make a big step forward toward alignment. You’re cognizant of where you are relative to where the company needs to be and you understand the personalities of the titans. Now let’s talk about the role of the CEO.

CEOs play a very critical role in whether alignment becomes sticky.  In my research I found what I call the smoking gun of alignment.  Aligned companies, regardless of size, had one thing in common that differentiated them from unaligned companies. It was the background of CEOs.

Aligned CEOs have careers in both marketing and sales, coming up through the ranks in large companies before taking leadership positions.  They learned the discipline of strategic planning at a large company like IBM, McKesson or at a consulting firm along with the value of being very disciplined in their roles.  From aligned CEOs I found a consistent pattern in how they kept alignment in place – a clear company strategy, open collaboration and a company-wide implemented (and honored) accountability process.   Interestingly, for them alignment wasn’t just about sales and marketing, it was about aligning all the corners of the business into one cohesive fabric.

Alignment needs champions across the company. If your CEO fits the description of aligned companies then you will have a natural champion.  However, even if your CEO doesn’t fit that description you can still start the process with your peers and colleagues.   There are four human element factors that need to be proactively managed throughout the journey.

1. Alignment is change management, pure and simple.  That means the journey shouldn’t be an impulsive act or something that gets done after 5pm.  Managing change begins with understanding each of the individual involved and coaching them through the change.  People like the status quo because it is comfortable; change is not – so plan on spending a good amount of time helping people embrace this.
2. Tie the alignment process to achieving a big key company objective or strategy. The strength of the linkage is important because to say ‘let’s align to make our revenue numbers’ will get a positive but tepid response.  However, to say let’s align so that we can bring that new product a quarter earlier and start building a high quality pipeline ahead of the GA date, that will perk up the ears of all the key stakeholders – sales, marketing, CEO and CFO.
3. Lead by example.  Don’t expect the ‘other guy’ to change first.  It’s just not going to happen.  So. fix your own house first. If you know you have inefficiencies or stuff that is not really impacting the business – fix it.  Being humble and acknowledging that your team has weaknesses and then demonstrably fixing them will give you a big credibility boost.
4. Socialize, socialize, socialize the concept. Talk with your CMO, talk to your CFO – who by the way – has a vested interest in these things. Talk with your co-workers, talk with sales guys.  Find out who will support the initiative and who will fight it…and why.  Talk to your industry peers, understand what metrics they used to measure progress, lessons they learned.

Let’s imagine you’re progressing on the journey and people start to see that alignment makes their job more productive and rewarding.

How do you keep alignment sticky?

1. Change compensation plans to motivate the right behavior. For marketing, instead of MBOs tied to qualitative programs or accomplishments, tie them to company revenue.  For instance, 75% of product marketing’s MBO should be based on achieving revenue and profitability targets for their products.  For demand generation and marketing programs, 75% of their MBO should be tied to marketing-generated sales qualified pipeline.  And the MBO should be an either / or pay-out.  Either you made the number or you didn’t. Paying a percentage scale of achieving the MBO, will not drive the desired behavior.

1. Be Transparent. This is a scary place that gives most marketing and sales people the heebeejeebees.   Develop a dashboard that is shared with the whole company, monthly and quarterly.  This is where automation can really help.  Hold quarterly All-Hands with the company and copresent with Sales and talk about the business goals, the results, lessons learned by the teams, and what’s to come in the next quarter.  Being transparent builds confidence and wide spread support for alignment.

1. Continually reinforce. Make sure every new hire understands the rules of engagement and follows them. Reinforce the benefits of alignment and coach new folks. This will be a new concept for a majority of people. And if you catch bad behavior, coach the person on the spot. Don’t let it linger.

1. Build trust at the personal level because in the aligned stage, it’s personal.  Find ways to do team building with marketing and sales. That will take work but having trust will shorten the journey to alignment and make it more successful and sticky.  Involve HR or your organizational department; they know how to do this.

1. Publicly recognize people that give you support and embrace alignment.  Everyone likes to be acknowledged before their peers.  Call out the sales folks by name at KickOff or during a company event. Sales, recognize the marketing people that positively helped you close a deal or fill your pipeline.  That will encourage others to get on the bandwagon and goes a long way to building trust.

1. Build cross-functional champions – support, services, finance, etc. Their public endorsement and continual discussion about alignment sends a powerful message that this is a company commitment. Their support is critical to convincing nay-sayers to participate and to encouraging everyone to stick with it when a few rough spots are encountered.

We’re covered a lot of ground this morning.  We talked about the 6 archetypes and you identified the archetypes for sales and marketing.  We reviewed the 3 stages of alignment – Ambiguous, Collaborative, Aligned – and you identified where your company in the journey. Lastly we talked about some key “people” considerations

You’re now a have solid footing to quell the clash of the titans.  And make a significant difference in your company and career. Being able to demonstrate you’ve implemented alignment will differentiate you from your peers.

Thank you again and enjoy the rest of the conference.