To be fair to my readers, this is a rant, if you aren’t prepared for my whining, you may want to forego this post.

It seems everything these days has to be a “collaboration.”  Rather selling our customers something, we look to collaborate or partner.  When we want something from someone else, it’s a collaboration.  In establishing a new relationship, we immediately want to collaborate.

I must field at least a dozen emails or phone calls, each week, with someone or some organization that wants to collaborate with my company.  When I respond to the call, I come to learn collaboration generally means:

• You are in a business that can really help me, it looks like your clients would be great for us, can you please give me leads and introductions to your clients.
• As you are out talking to people, would you please look for opportunities for us, and where appropriate give us an introduction.
• I have a great product I want that I think you will want to buy!

Not long ago, out of curiosity, I invested 30 minutes in a call with someone who saw great opportunity in a collaboration.  I looked at the website, I saw absolutely no connection between our organizations–what we did, what they did, our target markets–however, I decided to take the call.  (To be honest, I’d been mulling this post for some time, this call appeared to provide great fodder for the post).

Here’s some analysis of the call:

• The call lasted 28 minutes.
• During the call, I spoke a total of just less than 2 minutes.
• I was able to make 1 statement at the beginning of the call and able to ask 2 questions through the call, and make one observation 3/4 of the way through the call.
• During the remaining 26 minutes, the caller didn’t ask a single question.
• The caller spent time talking about what they did, wandered about key issues facing their prospects and why their services were important, and discussed what I could do to help his company (I guess this was the collaboration part).

At the end of the call, I politely thanked the person for the call, wished him luck and hung up.  You can guess what might happen in the “collaboration.”  Not only was this a terrible discussion for collaboration, it was one of the worst sales calls I have experienced.

I wish this call was the exception, unfortunately it isn’t.  Every collaboration email or phone call goes exactly like this.  (The calls don’t last longer than 90 seconds, I guess I had a bit of a sadistic motive in listening to this call for 30 minutes.)

Collaboration is something very different.  Collaboration involves deep alignment of goals, values, priorities and outcomes.  Successful collaboration requires Shared Vision, Shared Values, Shared Risks, Shared Resources, and Shared Rewards.  Each partner must be aligned across these dimensions for collaboration to  succeed.

Collaboration is tough.  Morten Hansen writes of internal collaborations, stating “bad collaboration is worse than no collaboration.”  He goes on to discuss the high failure rate of internal collaborations because the initiatives were not collaboration worthy.  In our research (and others) on external collaborations (partnering), we find 72% fail!

Collaboration can be very powerful, but it has to be right and purposeful to be successful.

If you want to collaborate (at least if you want to collaborate with my company):

• Make sure it is the BEST way for each of us to achieve our objectives.  Oh by the way, to make this assessment, it’s useful to know what my objectives are.  You have to ask me, you have to explore them with me, you have to develop a relationship with me.  Likewise, I have to do the same with you.
• Make sure we are aligned in our vision of what we are trying to achieve and our value system.  The former is obvious, the latter is critical because it reflects directly on the customer experience we want to create.  To do this, we have to invest time in each other, we have to develop a relationship, we have to understand each other’s vision, dreams, goals, and value systems.
• Be clear that we both have to invest and we both have to get a return.  Explore that explicitly; what are you going to invest, what do you expect me to invest–both in resources, people, funding, etc.  Make sure we are aligned in these investments.  Explore what each of us will get as a result of this collaboration.  Does the return meet my objectives?  Does it meet yours?  We don’t know unless we talk about it.
• Be clear about the risks, are they acceptable to each of us?  Do we understand them?  Do we have a process to manage them?
• Be clear about what might derail the relationship, talk about these explicitly, talk about the show stoppers, talk about how we will handle conflict, disagreement.
• Make sure we have a well defined process for managing the collaboration, keeping focused and on target.
• Make sure it’s important to each of us.  If it’s not important to me, I won’t invest in making it successful–not because I’m a bad guy, but because I focus on what’s important to me.  Likewise, I expect you to behave in a similar way.

If you want to sell me, then sell me.  Don’t mask your intentions in the collaboration cloak.  I know what your job is, I respect it, if it’s something that I think we may be interested in, something that creates value for me, then I welcome your efforts to sell me.  And, if you are successful, I may buy.  If you want to sell me, it’s always useful to know a little about me, what I want to do, what my problems are, so that you can position your solution in a context that means something to me.  You won’t sell me by not asking me a question.  You won’t sell me by not understanding what I do–or presuming you understand what we do without having asked.  You won’t sell me by pitching me.

I’m open to collaboration.  I’m open to being sold.  Make sure you know what you are trying to achieve if you want to engage me.  Be clear about this when you try to engage me.

Consider this—this approach not only works for me, it works for most other people and organizations, as well.  Try the same thing with them.  It might improve results.

Thanks for your patience with my rant.

I just read the IBM 2011 Global CMO Marketing Study.  It’s a fascinating report, based on in-depth interviews with more than 1700 CMO’s worldwide.  It’s a must read for any sales and marketing professional.

As I devoured the 72 page report, something struck me—where’s sales?  In a discussion of critical issues facing CMO’s there was no discussion of the Sales Function or how Sales and Marketing need to work together.  I wondered if I missed something, so I searched on the words “sales, sale.”  Those words occurred 23 times in the 72 page report.  Two times in the title of someone quoted, one time referring to campaigns, two times referring to data, sixteen times indicating revenue, and two times referring to the sales organization.

The CMO’s stated their four biggest challenges are:  Explosion of Data, Social Media, Proliferation of Channels and Devices, and Shifting Consumer Demographics.

Where is Sales?  Where do CMO’s talk about the Sales Function or the importance of Sales and Marketing aligning to maximize their impact on revenue generation?

I reread the report three times, thinking I had to miss something.  I didn’t.  Apparently the sales function and organization is not on the radar screens of these 1700 CMO’s.

For some time, I’ve been evangelizing the concept of sales and marketing integration.  As we look at the new world of buying, we find that sales and marketing processes must be tightly integrated and aligned to maximize impact on customers.  As we look at Challenger Sales, the new customer engagement, the importance of social selling, rich content, and so many other things; sales and marketing are becoming inseparable.

Yet this doesn’t come up at all in the concerns of CMO’s from around the world.  How can any CMO ignore the role of sales in impacting their own effectiveness? 

As bad a picture as it paints, at least we start understanding the magnitude of the disconnect between sales and marketing.  For each of us to be focused on maximizing our impact in our markets, for each of us to be seeking to engage our customers in meaningful ways, for each of us to contribute to the revenue and share growth of our organizations, we must depend on the other.  We are wasting money, resources, and customer equity by working separately or, at worst, with conflicting objectives.

The new buyer is changing all the rules.  The new buyer is telling us, sales and marketing, that they want something different from us–in how we educate and inform them, how we engage them, and how we help them achieve their goals.  They are demanding value, but how can we maximize our value if the right hand (marketing) and the left hand (sales) aren’t working in lock step.

It seems that before our organizations can maximize our impact on customers, we must first learn how to work together, knocking down the walls between organizations, aligning ourselves, our goals, our programs, presenting a single face to the customers.  What is unstated in the survey, but implied by it’s absence is the single biggest problem for sales and marketing executives is their inability to work with each other.  Until, we focus on this problem, until marketing and sales become inseparable, until our processes are so intertwined, until we can complete each other’s sentences, we will never maximize our impact on our markets and customers.

I’m looking forward to IBM’s 2012 survey of CMO’s.  I hope this comes up as an issue in that report.  If it doesn’t, then perhaps the 73% of CEO’s who are dissatisfied with the performance of their CMO’s may take action.

“What are you talking about Dave?  Qualifying is the job of sales, why are you talking about customers qualifying opportunities?”  It’s absolutely correct, one of the most critical success factors in sales is qualification.  Sales people need to viciously disqualify opportunities that aren’t in their sweet spot.  It may be a real deal, but it’s not your deal–so don’t waste time on it.

But I think sales people need to go further–I think sales people need to hold the customer accountable for qualifying the opportunity—is it real for them?

If we’re doing our jobs as sales people, we’re identifying lots of opportunities to improve their business, to help them grow.  Customers may want to do a lot of things.  They may be interested in engaging us on to discuss solutions.  But wanting to do something is different than having the ability to do something.  Customers need to qualify themselves—sales people need to help them.  Do they really have the ability to drive the change.

There lots of things that could cause a customer to disqualify themselves.  It may be something they want to do, but they have higher priorities.  Their organizations may not have the ability to do it–they need to focus on their readiness first.  It may be critical to them and their function, but it’s not important enough to the organization overall–they may have other priorities or strategic initiatives that take precedence.  They may not have the risk profile necessary to successfully manage the change.  The reasons can go on.

As sales people we can’t answer these issues for the customer and qualify them.  They have to challenge themselves on these issues.  Customers may not know how to do this, they may not even know they must do this.  After all, they may not buy these solutions that frequently, so while they may have the desire to change, the interest in doing something; they may not have the ability to do it.

It’s important to guide the customer through these discussions.  We don’t want to waste our time in  pursuing something that won’t happen–regardless of how compelling our case is.  We don’t want the customer’s expectations to be raised inappropriately–then dashed because they discover they can’t go forward.

Qualification is not just something sales people do.  It’s a shared responsibility, customers have to qualify the opportunity–their ability to do something (more than their willingness), and their desire to work with us in assessing the opportunity.

Are you helping your customer do the right job of qualification?

We constantly get it wrong, as sales people we focus on our products and what we are selling.  As “sophisticated” sales people, we wrap some nice language around it and focus on the solution we sell, hiding the fact that we are focused on selling a product. 

The real problem is we are focused on selling.  Our customers should be focused on buying, but they really aren’t, they’re focused on solving problems or addressing opportunities.  Most of our customers’ difficulty in solving problems or addressing opportunities has nothing to do with the solution.   But, again, that’s what we focus on.

Here’s what our customers are struggling with:

• Recognizing there’s a problem or opportunity.  There’s a lot of talk about Challenger Selling.  This is where Challengers shine, helping customers recognize there is a problem or opportunity, helping them explore things they may have never considered.
• Understanding the magnitude/impact of the problem or opportunity.  There is are consequence to everything.  Money being lost, deals being lost, customers being lost, operational inefficiencies, new revenue opportunities, new growth opportunities, new markets.  All of these have some sort of value or impact to the organization.  Something that impacts the top or bottom line.  Customers may recognize they have a problem or opportunity, but may not know–or may lose site of the impact.  Sometimes they are blind, sometimes, like the frog in a pot of hot water, they have become so accustomed to something, they forget there’s something better to do.  Great sales people help customers discover this—and keep customers focused on addressing this through the sales cycle.  Customers forget, they get caught up in the act of buying, forgetting what they were trying to achieve.  Without sales constantly mainting this focus, deals get off track.  They slow down, they drag on.
• Deciding they want to do something about it.  Everyday, we live with problems, somehow they’re not important enough for us to do something about them.  Likewise, we forego opportunities, perhaps because we have too much on our plates.  The reality is there are too many problems and too many opportunities for our customers to address, some they live with, some they forego.  Even though the customer recognizes these and their impact, nothing happens until the situation becomes intolerable.  Individuals and organizations don’t have the capacity to solve more than a few things or address a few opportunities at a time.  Deciding to do something and getting it to the top of their priorities is critical.  It can’t be something the customer wants to do, it must be something the customer must do.  Our job as sales people is to get the customer to decide they want to do something and get it to the top of their hit parade.
• Socializing the issues within the organization, gaining support for taking action.  It’s very seldom our customer acts on their own–even at the very top of the organization.  Other people need to be involved in the decision and the implementation.  Identifying everyone that needs to be involved, engaging them in the process, getting alignment around the definition of the problem or opportunity, getting everyone to have ownership and a sense of urgency around taking action is critical.
• Gaining the support of executive management to invest in solving the problem or address the opportunity.  There’s no such thing as a free lunch–actually nothing’s free.  Solving problems addressing opportunities require investment on the part of the customer.  It’s not just money—though that is often a big part of it, but it’s time, resources.  It involves choices, of all the investments that can be made, which will the executives choose and which will they fore go or defer.  Unless we are dealing at the very top of the organization, many of our customer don’t recognize this must be done or don’t know how to do it.  They invest a lot of their time and our time, take the request forward, only to have it rejected.  Often they’re fearful of going to executive management, they don’t want to look bad, they don’t want to fail.  Here’s where the sales person can really help, making the customer recognize the importance of executive support, building it from the beginning and maintaining it through the whole process.  Helping them develop their arguments and become comfortable in presenting to senior management, helping them to persuade and “sell” their idea are areas where sales people create great value—after all, that’s what we are supposed to be really good at.  Even at the executive level, helping them understand the investments in addressing these problems or opportunities is critical–that funding and resources must be made available.
• Choosing among alternative solutions.  This can be very tough, there are lots of great alternatives.  It’s difficult to differentiate between many solutions, or any could be equally good.  Which enables the customer to achieve their goals most quickly, at the lowest risk, maximizing the return on their total investment (not the price of the product they are buying).  This is our sweet spot, this is where we focus, this is what we have been trained to do. 
• Making it work, achieving the results.  The easy part is the buying—and that’s complicated enough.  The customer still has all the hard work of producing the results, of making things work.  By now, the sales person has accepted the PO, collected their commission and walked away.  The sales person’s job does not stop with the PO.  It only stops when the customer has achieved their goals.  This doesn’t mean the sales person does the work, but the sales person must be accountable for assuring the customer achieves success.  Without this, they will never be a reference, they will never buy again.

As sales people, we focus tend to focus on the smallest and easiest part of what the customer is trying to do—choosing among alternative solutions.  If we really want to make things happen, if we really want to maximize our ability to win, our value to the customer, and our differentiation, the job is much bigger.

Are you stepping up to it?  Are you doing your real job?  Or are you just providing data so they can make a selection?

I’ve been involved in a number of discussions about independent sales reps recently.  They are a terribly misunderstood and under-appreciated sales channel.  Independent sales reps can be a solution to coverage and market access challenges, but only if we leverage them in a way that makes sense.

I see too many organizations making too many mistakes in thinking about this channel.  They do just about everything wrong, then complain about the independent rep, without understanding the channel was predestined to failure.

The biggest error I see organizations make is transferring our cost and risk problem to the rep.  Many organizations, particularly smaller businesses can’t afford to hire sales people to cover all the territories needed.  They figure, “We can get an independent sales agent, paying that person only when a sale has been made.”  Others mistakenly think, “Sales can be free until it produces results.” They seek to find an independent sales person, seek exclusivity in their time, that is, the sales person sells for the company full time, but is independent.  This is doomed for failure.  Independent sales reps are not different than the rest of us, they need to feed their families, they need pay their mortgages and bills.  How will they survive if income is deferred months to years. 

 Think of a complex B2B sales process.  It may be six months or longer (even longer if you consider the time to prospect and find qualified opportunities.).  It may even be a few months more until they get paid.  How do they live during that time?  The company that tries to do this is setting themselves and the rep up for failure.  The rep that signs up for this is a fool (so you probably don’t want to hire this kind of person).

If you want a “full time, dedicated sales force,” you’ve got to pay for it in some way.  Deferring payment until something is sold is not a solution–it just results in deferring revenue, possibly forever.  There are lots of solutions to this, either some sort of draw or retainer providing some level of cash flow to the individual, or manufacturers representatives, having complementary lines and services, allocating their time across the lines.

A related problem is the small  business ownerr who simply doesn’t want to sell.  They try to outsource this “annoyance” to someone else.  I may be somewhat limited in my perspective, but I haven’t run across any business that survives without revenue.  To get revenue, we need to generate orders, to get orders we need sales.  Outsourcing sales because it is an annoyance, it’s something you don’t want to do, it’s distracting; means that you are outsourcing your company’s destiny and future success.  

Business owners need to invest in the development and execution of their revenue generation strategies.  This investment is both time, resources, and money.  While they can outsource some of the selling function, they have to be actively engaged in this outsourced channel.  They have to make sure the people are executing disciplined sales processes, that they are doing the right things in building and maintaining a funnel.  They have to make sure the sales person has the tools, processes, materials, support, and coaching needed to be successful.  They have to get engaged in selected selling opportunities.

Making independent sales representatives successful requires investments.  Too many organizatoins (large and small) make the mistake of  “signing them and forgetting them.”  Just like our “own sales people” we need to invest in our independent sales people.  We need to train them, provide tools, processes, support, materials.  We need to manage, lead, and coach them.  We need to manage their performance.  We know our own sales people won’t be effective if we don’t make these investments, the independent sales organization is no different.

Some of the very best sales people I have ever met are independent sales people.  They can be a terrific channel.  They can provide coverage, access to markets, expertise that could be difficult to acquire otherwise.  They can provide a more cost effective alternative coverage model than your own direct organization.  They can help in cash flow issues (but with some cautions).

Every sales organization should consider independents and manufacturer’s representatives as a great alternative.  But for those who are doing it purely from the point of view of not investing in sales or deferring all investments until the sales person gets an order, it’s probably a doomed strategy.

More than ever before, collaboration and partnering are critical to business success and sales.  Internal collaboration–marketing, sales, customer service — all working together to grow the business; external collaborations–working with channel and business partners in reaching customers; collaborative relationships with customer–becoming a trusted advisor in facilitating their buying processes.

Yet the data on collaboration and partnering is very bleak.  Many internal efforts at collaboration fail, projects start but never finish or fail to achieve their objectives.  Often internal collaborations leave organizations worse off than if they never collaborated at all.  Data on external collaborations and partnering is even more dismal with as many as 70% of partnerships failing to achieve their objectives.

If collaboration and partnering are so important, why are we so bad at it?  There are lots of reasons–the wrong project, the wrong partner, lists can go on.  One of the key reasons partnerships and collaborations fail is because of lack of alignment between the organizations–for example a marketing/sales collaboration fails because marketing’s goals and objectives are different from sales’ goals and objectives.  External partnerships are no different.  Aligning the various constituencies around the same goals, priorities, expectations, and many other things is critical to success.

At it’s core, I believe we can express this alignment in terms of the following equation (leave it to a trained physicist to try to reduce things to equations):

 Translated this means, for a collaboration or partnership to be successful, there must be:

• Shared Risk
• Shared Resources
• Shared Rewards
• Shared Vision
• Shared Values

Any imbalances across the relationship will put the likely success of the relationship at risk.  For example, when one partner believes there is an imbalance in risk/reward–they will be unhappy in the relationship.  Or if the collaborating organizations don’t share a common vision, there will be constant struggles and fighting.

To learn more about creating successful collaborations and partnerships, on Friday, July 29, 2011, at 11:00 PDT,  join Francine Allaire, Daniel Stevenson, and me as we drill into Partnering For Growth, Innovation, And Profits.  It will be a fantastic Free Webcast.

For a free Whitepaper on Creating Effective Strategic Partnerships, email me with your full name and email address, I’ll be glad to send you a copy.  Just send the request to:  dabrock@excellenc.com, ask for Creating Effective Strategic Partnerships

Partnering has been in vogue for the past few years.  It seems as though every sales person wants to “partner” with their customers.  Marketers talk about partnering, consultants want to be everyone’s partner.

Whatever happened to valued vendor-customer relationships?  Whatever happened to “I want to provide you a quality solution, that fulfills all your requirements, at a fair price, with great customer service.”

What about the customer who just wants a dependable supplier that meets their commitments?

Somehow just selling to a customer who is buying is no longer sufficient.  We have to talk about a much deeper form of relationship.  We now want to become everyone’s partner.

Partnering is much different than being a reliable, customer focused supplier.  Partnering mandates a much higher level of relationship between each party.  Implicit in the relationship is a higher degree of interdependence.  Partnering relationships require great alignment in vision and values between partners.  Partnering requires sharing resources, risks, and rewards between each party.  Partnering usually involves many relationships across organizations — from executives sponsoring the relationship and driving governance, down through deep relationships between people working together on a day to day basis.  Partnering requires an investment of people, resources, and money by each party.  Partnering usually has project plans, commitments, milestones, and all sorts of things the parties have to execute over time.  Partnering is rarely about a transaction, but about attaining shared goals and results over a longer period of time.

Partnerships are tough.  Over 70% of them fail to achieve their objectives.  However successful partnerships can be very powerful for each party, enabling them to accomplish things they could not do separately.

Because of the level of resources, investments, time and commitment it takes, no company can afford to partner with all of their customers or suppliers.  In reality organizations can only afford to partner with a very small number.  Companies can’t afford to, and don’t want to partner with all their vendors and suppliers.  They may not care to partner with any of them–but they do want dependable and quality suppliers.

Partnering involves a lot from each party, which is why I always challenge sales people embarking on a “partnership” sales strategy.  Too often, when I ask the sales person suggesting partnering, “Why do you want to partner with your customer,”  the response is, “I want to use it to help get an order!”

I usually respond, “Does your customer want a partnership or a good supplier?”  Usually I get one of two responses, most often it’s a sales person looking at me cross-eyed, “You just don’t get it.  It’s what we always offer!”  The other variant is, “No they just want to buy a product, but we are going to say we have a partnership to differentiate ourselves.”  (This strategy confuse3s me because the competitor is also offering a partnership……)

Usually, I just give up there, but sometimes a morbid curiosity causes me to pursue my line of questioning, I may ask, “What will you be doing differently with the customer who you offer a partnership to?”  The response is, “We’ll treat them like a valued customer!”

Most sales people really don’t understand partnerships and partnering.  Use of the partnering strategy seems to be no more than another closing technique.  I guess if neither the assumptive or puppy dog closes work, the sales person might consider the “partnering” close.

There’s a problem with the “partnering” close—most buyers I’ve spoken to realize it is nothing more than a closing technique.  They understand what partnering is (at least to a better degree than the sales person does.).  Most know when they are looking for a partnering relationship–and their partnering process is different from their buying process.  Too many customers just want a reliable supplier, not a partnership.

In the end most customers I interview think the partnering close is a hollow commitment.  It’s just another set of fancy words sales people use, with little understanding of the implications of partnering.

I wonder what would happen if we just closed on , “We want to demonstrate that we can be your highest performing supplier, will you give us that opportunity?”

We embrace our strategic accounts—they are our most important customers.  They may be our largest customers, perhaps they represent the thought leaders in the industry – helping us acquire more share within an industry.

We pay a lot of attention to our strategic account plans.  We have our annual strategic account planning sessions.  We look at what we are going to do with the account, how we are expanding our relationships, how we will grow the account, what resources we will commit, how we will develop new customer relationships.

In many organizations, our strategic accounts represent the majority of our revenue–they are the 20% that generate the 80%

Strategic accounts are important to us.

There’s one thing though, while the account may be strategic to us, are we a strategic supplier for our customer?

It seems we need to look at the other side of the coin—look at things from our customers’ perspectives.  Are we strategic suppliers to our customers?

What do we know about our customers supply chain strategies?  What do we know about what’s important to them — what they look for in a supplier, what they need in terms of long term and close relationships?  Do they even need long term relationships?  What important are we to the customer?  What would be the cost of switching vendors?  What would be the impact if we weren’t around?  If the switching cost is low, if the impact is small, then as much as we want them as a strategic account, we are unlikely to be a strategic supplier.

We care about the account, but does the account really care about us?

For an account to be strategic, importance — interdependency should be aligned.  We should be important to the customer and they should be important to us.

Are we also missing an opportunity?  Are there customers for whom we are strategic–but we may not be treating as strategic?  Are we selling to them, but missing the opportunity to ratchet up the relationship?

Strategic supplier relationships always trump strategic account relationships.

What do you know about your customers’ supplier management strategies?

How important are suppliers in their overall business strategies?

Who is important to them?  Why?

How do you become important – strategic – to your customer?

Maybe it’s time to rethink your strategic accounts.  Maybe it’s time to be focusing on being a strategic supplier?

(Thanks to Rick Pulito for the reminder on this concept.)

There is a fascinating conversation on the topic of “Should sales and marketing have SLA’s between the two organizations?”   Visit Focus.com for some terrific ideas on this topic.

I have to admit being torn about this concept.  Taken from one perspective, SLA’s are very powerful.  The process of establishing and aligning around goals and objectives between organizations and functions is very powerful and critical.  Great SLA’s establish clear goals and priorities, define roles and responsibilities, establish common metrics, establish project management approaches, problem management approaches, and rewards.  The process of developing SLA’s is great to align the different parties involved in the SLA and to make sure there are no misunderstandings, expectations are clearly set and understood.

The power of the SLA is less in the document itself but in the process of establishing the document.  It’s kind of like strategic planning–the power of the strategic plan is not the document sitting in some executive’s credenza, but the process the organization goes through in establishing and executing the strategic plan.

The structure of a SLA provides a powerful base for aligning the various functions within the organization (or across organizations).

However, too often, the SLA (or the need to establish one), comes from a different orientation.  It is established in an environment of mistrust, where there is no clear alignment, or differences in objectives.  The SLA becomes the “Sword of Damocles”  It’s intent is less to assure alignment and clear goals, but rather implemented as a threat.  “If you don’t live up to your responsibilities, here are the consequences of that failure.”  The SLA is really put in place as a threat.

With or without SLA’s, contracts, project plans, metrics, it seems as though much of what we do within organizations or across organizations is put in place with the wrong intent.  Rather than using these tools and instruments as powerful means to align goals and objectives, or to enable us to work together more effectively; they are put in place as threats–focusing on the consequences of non-compliance.

It’s troubling to me that so much energy, within our organizations, with our customers, our suppliers, and others, focus on the consequences to the other party of something going wrong.  We seem to have a proclivity to work really hard to establish mechanisms for assigning blame, rather than working equally hard to find bases for trust.  It seems we use these “agreements” as a surrogate to establishing trust rather than working on developing trusting relationships themselves.

I think SLA’s are very powerful–but only when they are established on a base of mutual respect and trust.  In this light, they become powerful mechanisms for maximizing the success and results in implementing a plan.

What do you think?

Too many sales and marketing people struggle with value propositions.  For some–the value proposition is still internally focused, basically an advanced form of Features – Advantages – Benefits.  Others think of the value proposition – the elevator pitch that, when stated in a compelling manner, the customer will melt and immediately issue a purchase order.

Others recognize that value is in the eyes of the beholder, they work to understand what customers value, then present their solutions in the context of what each customer values.  They recognize, they need to do this for each person involved in the decision.  They understand that value is dynamic–that what customers value may change over time and these sales professionals respond to those changes.

Even in its best execution, the problem with value propositions is they are rooted in what we sell.  We base value propositions on our products and our solutions.  It’s increasingly difficult to differentiate our products and solutions—more importantly, that’s not what’s important to the customer.

Please don’t misunderstand me, Value Propositions are critical.  We still have to understand what customers value, define, communicate and deliver differentiated value, but customer needs are moving far beyond this.  We need to focus on Value Creation.

Value Creation is different from your value proposition.   Value creation includes a number of elements:

• The customer experience—whether it’s the customer buying experience, their experience in using your products/services, the experience of working with your company, or how they engage you in the social world.
• It’s about how we engage our customers through the life of our relationship with them–each touch, each interaction, creates value—not solving world hunger, but in every interchange having them think it has been a good investment of their time.
• It’s about how we help them think about their businesses differently.  How we help them identify new opportunities to grow, how we help them expand into new markets, how we help them better understand and respond to their customers, how we help them operate more efficiently and effectively (this is where value creation comes close to value propositions).
• It’s about how we help facilitate our customer’s buying processes.
• It’s about helping the customer understand and manage change.  Sales is all about change, we create value in helping our customers embrace and manage it.
• It’s about collaboration and innovation–working jointly with our customers, building capability and capacity within both our organizations.
• Value creation is about higher levels of relationships and trust–running both ways.

Value Creation is less about products and solutions, and more about customer centricity, customer experience, people, and relationships.

Value Creation is not about a specific business case — our value propositions may focus on a specific decision and business case for our solutions.  Value Creation is about how we sustain value over the life-cycle of our relationship with the customer.

Value Creation is not about a transaction—but about 100′s and 1000′s of interactions that create meaning for our customers—as enterprises and individuals.

Value Creation can never be reduced to price—but it’s about the importance–or value–we bring in a long term relationship.  It becomes inconceivable to all parties not to have this relationship—the costs are too high.

We need to master Value Propositions, it’s the starting point for Value Creation.  But in the new world of buying, our most sustainable form of differentiation is becoming how we create and maintain value with our customers, suppliers, stakeholders, partners and employees.