There’s power knowing the difference between “what do we do?” and “what business are we really in?” and doing something about it.
Competitive clout is no longer defined by the size of a company or the size of its sales force.
Competitive clout is now defined by clever thinking that results in a new business perspective. Importantly, this thinking not only takes place in the company’s boardroom but also by its sales managers and sales people.
Want proof?
Here are 3 every-day examples of clever thinking:
the world’s largest taxi company, Uber, owns no vehicles.
the world’s largest accommodation provider, Airbnb, owns no real estate.
the world’s most popular media owner, Facebook, creates no content.
Notice that in all 3 descriptors above there’s a word that describes what they do AND it’s an activity that existed long before each new company started.
For Uber it’s “taxi.” For Airbnb it’s “accommodation.” For Facebook it’s “media content.
This “what do we do?” part is not the clever thinking part.
What is clever is that each company has redefined the “what business are we in?” perspective.
Here’s the thing.
This technique was famously formalised in “Marketing Myopia, “a 1960 HBR article by Ted Levitt, a Harvard Business School professor, who was often called “the founder of modern marketing.”
I’ve seen this technique used in traditional business, in franchises, and in small business… in fact, I’ve applied this technique to my own business.
Ted says that success in business is determined by analysing the answer to two simple questions;
“What do we do?” & “What business are we in?”
It’s easy to see the distinction with an example.
If we ask those 2 questions about McDonalds then we’d get something like “what we do is sell fast food.” No surprizes there.
But when we ask, “what business are we in?” we get answers like “we are in the convenience, consistency, predictable, family-oriented business.”
All of those words have a feeling/ emotion inherent in them. They describe the experience, not the logic/ facts associated with their products.
Here in Australia McDonalds have added salads and café coffees to their original offering of burgers, fries and other fast food. To do this they would FIRST have ensured that delivering the newer foods would still be “convenient, consistent, and predictable.”
So, in summary:
The answer(s) to the first question taps into the logic/ facts of the physical things that they do.
The second question taps into the emotional connection with customers.
You would expect that McDonalds would have easily changed the answer to the first question by adding salads and café coffee. But what would’ve happened to their business if customers found the experience in-convenient, in-consistent, and un-predictable?
Let’s apply this technique to you and ask these 2 questions.
What you do, as a sales manager, is systematise the routine of regularly occurring matters into processes that are described in black and white, logical, and linear steps.
Typically they are “do this, then (logically) you can expect that.” I mean, just look at all your policies and procedures, and the steps in your selling skills and coaching models.
What should also be of no surprise is that this is not enough to professionally develop a team of high performing sales people.
You will never get lasting change and results by simply providing your sales representatives with good logical reasons to do so.
Just like McDonalds you need an emotional connection with your sales representatives (ie your customers).
So, what business are you in?
If what you do, as a sales manager, is systematise the routine then I’d suggest that “what business are you in?” is likely to involve humanising the application of these processes (or even the exceptions you come across).
Clever sales managers understand the interplay, and the required balance, between an adequate ability with the “what do you do?” systems and routines, AND a fantastic ability to humanise the application to each person.
Clever sales managers (like clever successful businesses) also understand the priority the one-size-fits-one application (dealing with an individual) has over the one-size-fits-all systems and routines.
More than that, they both understand that the business they are in involves an emotional connection of engagement and buy-in with customers. Real change in behaviour occurs when we nail “what business are we in?”
The Bottom Line: Ultimately the answer to “what do you do?” deals with treating your sales representatives as valued employees.
The real magic of clever sales management success occurs when you grasp that “what business are you in?” is treating each of your sales representatives as valued humans; and you effectively tailor your management and coaching to their internal motivation drivers, their emotional feelings, their beliefs and attitudes and their aspirations.
