What’s the Right Sales Structure: Centralized or Decentralized?

Six years ago when Carly Fiorina took over as CEO of Hewlett Packard, she centralized the sales force, some 10,000 in number, into a single unit. It has been reported that prior to the centralized structure, it wasn’t uncommon for more than one HP sales person to be cultivating the same account without shared knowledge or coordination. One veteran HP account executive quipped that each time he called on a client and saw a similar Ford Taurus in the parking lot, he feared meeting another HP sales person…for the first time.

Now, with Fiorina out, one of the many changes new CEO Mark Hurd is making is decentralizing HP’s sales force by sending them back to business units, whether it be IT Services, Education, Small Business or Home Office. The hope is that the decentralized structure will result in faster decision making and better control of costs by the managers of the business units.

It is a question with which many of our clients wrestle: centralize or decentralize the sales force? If you were anointed CEO of HP today, which structure would you put in place?

Send us your votes for centralized or decentralized sales organization and we’ll post the results. We will also reply with our views…this time for FREE.

Type Watching

The same Business Week (September12, 2005) article that reported on Hurd’s plans to decentralize the sales force described him this way:

“What animates him is talking about the facts and figures of HP. He rattles off numbers from all corners of its businesses having seemingly memorized nearly every spreadsheet the company produces.”

“Hurd is a straight- talking, number-crunching operations wonk.”

“He wants to bear down on numbers, spreadsheets and execution.”

If you were calling on Kevin Hurd, what type hypothesis would you have? How would you prepare?

The best reply will get a FREE copy of either SST^® : Successful Selling to Type or Seth Godin’s All Marketers Are Liars: The Power of Telling Authentic Stories a Low Trust World that is reviewed below.

All Marketers Are Liars

Seth Godin is a paradigm buster. His 1999 Permission Marketing broke the long held (and in some circles, still believed) paradigm that the key to increasing sales was simply making more calls. That simple formula (more calls = more sales) no longer works because people are now supersaturated with telemarketing, pop-up ads and spam; each interrupting us from whatever we are doing. As an alternative to old fashioned “interruption marketing”, Godin proposed a new paradigm in 1999, one where prospects first provide permission to engage them in an ongoing educational dialogue.

But, pardon the pun, Permission Marketing is another story. In his new work, with the purposely provocative title: “All Marketers Are Liars: The Power of Telling Authentic Stories in a Low Trust World, Godin again breaks a popular paradigm. This time he takes on the fundamental business relationships among invention, production and marketing and literally turns them upside down as illustrated below.

Time

Time

In the old business paradigm, illustrated on the left, the greatest value was provided by production. The essential elements for business success were inventing a good product and then manufacturing it with quality and efficiency. The key players in the old production centered approach to business were people with titles like plant managers and quality control experts.

Sales and marketing added the least business value because the prevailing view was that a better mouse trap would sell itself. In many organizations, the sales force was considered a necessary evil, assigned second class status behind those in operations, manufacturing or production.

In the new paradigm, leverage shifts from the left side of the curve to the right. Accordingly, marketing, no longer production, is the most important business function.

Again, Godin is a purposely provocative guy. He is not contending that quality products don’t matter anymore than effective marketing didn’t matter in the old paradigm. He is simply asserting that in today’s economy quality is usually a given and will not alone result in business success.

Notably, the word “story” replaces “marketing” in the new paradigm. This is because his new formula is a simple:

Marketing = Story Telling

Godin reinforces his point that authentic stories (ones the story teller and buyer both believe) with- no surprise- many stories. For example, he writes about $20 Reidel wine glasses whose makers fervently proclaim make wine taste better. Experts in wine tasting support Reidel’s story by writing in Wine Spectator magazine that, “The effect of these glasses on fine wine is profound.”

Here’s the catch: double blind taste tests (ones where the taste testers don’t know which glass is a $20 Reidel and one that’s priced at just $1) cannot discern any difference in taste.

What’s important, Godin contends, is not the science of double blind taste tests, rather that both the people at Reidel and their fans believe the Reidel story. And, in today’s low trust world it is the authentic story that sells.

While we are big fans of Godin and have helped many clients incorporate a Permission Marketing approach into their prospecting, he isn’t perfect. His anecdotes are all retail in character whether it be expensive wine glasses, Starbuck’s coffee or the $80,000 Porsche Cayenne which he claims is fundamentally the same car as the $36,000 VW Tourareg.

Further, some of his assertions, whether purposely hyperbolic or not, are just wrong. For example, not all buying decisions are made instantaneously as he asserts on page 69. I know that because there are buying decisions I have made that were quite analytical and even a bit protracted

But, take the hyperbole with a grain of salt, and Godin is always worth a read. If, like most readers of this newsletter, you are in sales, we recommend that you buy two copies of All Marketers Are Liars. Read one yourself and give the other to the highest ranking executive in your organizations so she knows that there’s a new business paradigm out there and sales has never been more important. Step two, is to make sure your value proposition is more than a fact dump and that you can deliver it as a compelling story. After all, stories are what sells.