Leading the modern sales organisation with ambidexterity

Consalia / 24 June 2014
Javier Marcos, Cranfield University
By Dr Javier Marcos-Cuevas,
Senior Lecturer in Sales Performance 
at Cranfield University

Over the last decade, we have witnessed unprecedented transformation of the sales function and the role of sales professionals. Buying behaviour, technology, globalization, 
competition, and extraordinary levels of external and internal pressures are forcing sales organizations to revisit sales strategies, structures and practices in a fundamental way. Amongst others, many world-class sales organisations are evolving from selling products to bundles of products and services. They are also less reliant on product knowledge and more in using advanced customer business insights to compete. Leading companies are fostering transparency and accountability rather than just compliance and adherence to regulation. Overall, the role of the B2B sales professional has evolved and become more complex which requires reconsidering the approaches adopted in leading the modern sales organisation.

Research conducted at Cranfield School of Management in collaboration with Consalia, revealed that organisations need to be more flexible in managing customer relationships and by implication sales forces. Our study showed that a profound polarisation between transactional and consultative selling is growing in the marketplace. How sales organisations can respond to potentially diverging forces, some pressing in the direction of reducing costs to serve and others in the direction of co-creating superior customer value? Our research did not identify a clear or tried and tested approach to create value for the supplier organization with the top end accounts and at the same time from lower end customers.

Studies in innovation have shown that, in order to compete in the long term, companies have to develop the ability for both 'exploring' new opportunities and also for 'exploiting' existing capabilities. Exploitative activities are characterised by routinised and mechanistic processes to raise productivity and to gain efficiencies. Conversely, explorative activities are associated with higher risks for failure, and also higher potential gains. Firms that can simultaneously manage exploration and exploitation are referred to as ambidextrous. Ambidextrous organizations combine contradictory coordination mechanisms that are characterised by decentralisation and formalisation. These organisations often separate those business units focused on exploration from those with an emphasis on exploitative activities, allowing them to have different processes and structures whilst at the same time maintaining tight links across the two, and high degrees of connectedness.

Ambidextrous organizations require managers who have the ability to understand and to be sensitive to the needs of very different kinds of businesses. Ambidextrous managers possess both systematic analysis as well as free-thinking abilities. Ambidextrous leaders break into new business territories and at the same time maintain and defend positions in traditional businesses. Similarly, the future sales organisation will require sales leaders who are willing to explore new ways of creating value, novel relationship models and innovative supplier-customer governing mechanisms. One such mechanism are contractual agreements that balance risk and gain-sharing mechanisms. For activities with high-end customers, traditional performance measures and monitoring systems need to be revisited.

The boundaries between supplier and customer are becoming blurred, and traditional rivalry between suppliers may give way to networks of suppliers, underpinned by co-opetition (as opposed to competition) tactics that are instilled and facilitated by the customer. Sales leaders in ambidextrous sales organisations will have to impose rigid control mechanisms to manage low-end customers sustainably and profitably. They will need to be abreast of latest technologies to automate transactional activities, ensuring seamless implementation of these technologies. Tight definition of processes and adherence to them need to be instigated across the sales organisation in order to minimize costs. Future sales leaders have to combine organisational separation with senior team integration.

Ambidexterity enables sales professionals to work with two seemingly opposing approaches such as performance versus learning orientation, working harder versus smarter, productivity versus quality, and efficiency versus effectiveness. Pursuing apparently contrasting competences may pose coping challenges for sales professionals that their organisations need to help them address. In the current times, sales leaders need to demonstrate ability to operate in more complex and potentially inconsistent environments.

Making compatible customer processes optimisation for transactional customers with engaged value co-creation approaches for strategic customers will trigger the need of higher degrees of marketing and sales alignment. This is to ensure that product and services are conceived, designed, communicated and delivered in an integrated way to deliver a superior customer experience. Moreover, it will require higher levels of cognitive complexity and ambidexterity in leaders to direct sales forces towards their renewal and transformation.

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