This article is an excerpt from the Shortform summary of "The Challenger Sale" by Matthew Dixon and Brent Adamson. Shortform has the world's best summaries of books you should be reading.
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What is sales innovation? Why does it matter for sales managers?
Sales innovation is a highly important sales manager skill in The Challenger Sale model. Managers need to be able to think outside the box and apply sales innovation to their strategies in order to truly manager Challenger Sales Reps. Here’s how sales innovation works, and how managers can gain this skill.
What is Sales Innovation?
Sales innovation is the manager attribute that matters most. Here’s a look at what managers need to do in order to innovate. There are three key sales innovation activities: investigate, create, and share.
1) Investigate: Determine what’s getting in the way of advancing a sale—who’s involved, what kind of financial concerns do they have, what factors are they weighing. The manager works with the rep to understand the customer’s decision-making process and identify where a deal is bogged down and how to get it moving.
Key steps:
- Identify obstacles that get in the way of a new sale
- Gather feedback in terms of what’s working and what isn’t
- Identify how to resolve customer pain
Action steps: the rep gathers information; the manager enforces
2) Create: Innovative managers also create solutions (innovate at the deal level)—for instance, shifting risk from the customer to supplier in exchange for a longer-term contract. Most managers just monitor reps’ progress on deals, however, innovation involves co-creation, or collaborating to find better ways to advance a deal. Managers should focus their innovation efforts on deals where the payoff is greatest.
Key steps:
- Innovate around new ways to position the offer
- Identify the ideal business outcome
- Outline and explore new sales offers and solutions
Action steps: The manager develops solutions; the rep provides input
3) Share: Finally, innovative managers share best practices and pass on new ideas and solutions to the rest of the team.
Key steps:
- Share tactics and best practices with the team
- Develop and sustain cross functional relationships
- Filter news and information downward
Action steps: The manager shares insights; the organization facilitates
Efficiency versus Effectiveness
In the sales manager’s world, the roles of resource allocation and sales innovation can conflict.
Resource allocation is efficiently managing limited resources through better territory management, deal qualification, and sales process compliance. While resource allocation focuses on efficiency, sales innovation focuses on effectiveness.
A manager focus on effectiveness has almost twice the impact of an efficiency approach.
Efficiency involves improving at what you’re already doing as a matter of routine. This works in an environment of traditional, straightforward product selling, where most deals are the same and customers behave predictably. Effectiveness involves innovating and collaborating to address the unexpected in a sales environment where there are many unknowns. Effectiveness takes precedence over efficiency.
However, in a recent survey of frontline managers, most managers said their current environment is dominated by an emphasis on efficient execution. Almost none agreed that “leadership empowers managers to set their own course.” But they cited empowerment or freedom to make decisions as the most important factors for them to be successful.
It takes time to change, but there are immediate things companies can do to equip sales managers to be more innovative at the deal level.
Helping Managers Innovate
The way managers think every day is one of the biggest obstacles to innovation. They apply “narrowing thinking,” which involves looking at a complex problem, considering existing options, and producing a solution. Using sales innovation instead, they can work toward solutions that benefit everyone.
Narrow thinking works for tough, fast decisions about managing resources. But narrowing thinking restricts managers’ ability to develop creative sale solutions because it works by eliminating existing options rather than generating new ones for consideration.
The alternative is “opening” or expansive thinking—generating and considering as many different options or alternatives as possible.
To build innovative managers, companies need to equip them with tools and frameworks to think expansively. The first thing to do is raise their awareness of what’s hindering expansive thinking. Research has identified a number of human biases that often get in the way of sales innovation. The most common are:
- Practicality bias: the tendency to reject ideas that seem impractical
- Confirmation bias: the tendency to ignore inexplicable customer behaviors and focus on ones they understand well
- Exportability bias: the belief that it won’t work elsewhere because it didn’t work here
- Legacy bias: the belief that the way we’ve always done it is best
- First conclusion bias: the belief that the first explanation is the best
- Personal bias: the belief that if I wouldn’t buy it, the customer won’t either
These biases help us sort large amounts of information and make decisions quickly. However, they keep our perspective narrow. For instance, they might keep a sales manager from uncovering an innovative solution to a stuck deal because he looks at it with these biases instead of putting himself in the customer’s shoes.
To help managers overcome these biases:
- Raise awareness of them.
- Train managers to raise specific questions to prompt thinking from other perspectives.
Sales innovation is more than just a strategy, it’s an essential skill for sales managers. In the Challenger Sale model, sales innovation is a necessary part of selling well.
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