brockNext Wednesday, Oct 2, 2013, Funnelholic Media is hosting another highly-recommended half-way virtual event: Quota-Busting Sales Strategies from the World’s Top Sales Leaders. As usual, Craig Rosenberg has assembled a world-class lineup of presenters.

I have the honor of moderating Dave Brock‘s session, titled The Blueprint for a World Class Sales Organization.

As I prepped with Dave this week, we got into a very interesting conversation about what’s wrong with many sales organizations today, how to identify whether you’re one of them, and what to do about it. We also talked about sales tools, which can be both a blessing and a curse.

Here’s a summary of our conversation. Please join us next week for Dave’s presentation as well!

What are some of the common warning signs that a sales organization is in trouble?
Clearly, not making the numbers is a clear indicator there is a problem (though it may not be strictly a sales problem). The problem is these are all trailing indicators, so if these are your key indicators, you find out the organization is in trouble too late.

So you want to look at leading indicators that tell you things are headed in the wrong direction. Things like the pipeline health—flow/shape/vitality are key. You also want to look at other things: missed commitments (that’s why having things like CRM are critical, it’s easier to track), win/loss trends, and so on.

There are also a number of other things too: time available for selling is a critical area, that sometimes sneaks up on us unconsciously. Other indicators are a little bit more difficult to measure, but are clear signals: Constant shifts in priorities, continued “crisis” management, doing things the same way we’ve always done it—not changing and updating your sales/organizational/execution strategies.

I look at how managers spend their time. The amount of time in internal meetings, coaching people, and with customers. Too much time spent internally means they are blind to what’s happening with their people, customers, markets.

I look at the culture, do they have a culture of personal ownership and accountability, do they have a performance oriented mentality? Is there a lot of finger-pointing and excuse making? (You’d be surprised at how prevalent this is. I’m dealing with a major division of a Global 10 company where the organization is totally dysfunctional, the only solution is a clean sweep of top divisional management).

Other indicators are employee satisfaction, churn. I pay a huge amount of attention to voluntary attrition. I had one client that had 72% voluntary attrition of their sales people in the first 12 months on the job. It was a serious organizational performance problem, and they were blind to it. Bad employee sat, leads to bad customer sat, leads to bad performance. I’ll stop here.

It’s often very easy for an outsider to see this, but difficult for internal people to see it. We get caught up in the day to day momentum (inertia is often our enemy) and just stop paying attention.

What are some of the warning signs that your sales leadership needs a makeover?

When you start seeing “systemic” performance issues, or the same things happening over and over again, you suspect you have a leadership problem. We have to remember a “fish always rots from the head.”

Organizations will always have individual performance issues that managers must address. There will always be problems that management must address. When you start seeing the same issues recurring, constant problems, and so forth, you may have individual performance issues, but you are certain you have leadership issues.

What’s your take on the widening volume of sales tools available to sales organizations? What stands out in your opinion?
I really worry about the proliferation of sales tools from a number of points of view. Sometime ago, I wrote a post, CRM and Oysters. In the article, I said the reason I like oysters is they hold the sauce together. That is, I learned I liked the sauce more than the Oysters.

We are seeing the same thing with the core CRM tools. So much of the real value is with the “add on” applications to CRM, because the CRM system fails to address these issues adequately. So much of the value of CRM is “they hold the apps you really need together.”

Another way to think of this is many of these applications are the “remora’s” of the Sales 2.0 world. A remora is a fish that attaches itself to a much larger fish and feeds off its parasites (though I’d hardly call customers parasites—well most customers) (Also, these applications do bring huge value.)

So much of this is a failure of the CRM vendors which creates tremendous opportunity for clever entrepreneurs. Beyond that, you start seeing huge integration, data integrity, usability, systems management, and other issues.

Sales people have to learn how to use dozens of different applications, all with overlapping function, etc. It’s interesting, if you look at Gerhard’s data, you see organizations spending $4K-11K per sales person per year in software licensing/SaaS fees. It doesn’t take a rocket scientist to see the licensing fees for the core CRM system is a minority of the money spent. Every year I’ve seen those numbers they go up. So there is a huge proliferation of tools and it is getting worse.

So soon, we will see rather than helping improve sales effectiveness they will become a huge drain on sales effectiveness. Plus executives will start seeing the huge overhead they are carrying, not just in spending, but in support resources, integration resources, etc. They will start putting pressure on the Core CRM vendors and we will start seeing rapid consolidation of the “add on business.”