In addition to being a top contributor to SalesPOP!, Andy Rudin has been writing about sales and selling for over ten years. For him, writing is actually an educational experience.
“I write so that I can learn,” Andy explains. “For me, finding an edgy or innovative biz-dev idea is like finding a diamond in the rough. I delve into the assumptions and learn what others say, then I layer on my own ideas. Writing makes it possible to move a provocative idea or topic into daylight.”
The writing process is demanding. “Good writing demands rigor and attention to detail,” Andy says. “During the writing process, ideas can break apart or crumble. Conclusions that appear glaringly obvious can become nuanced, and subject to caveats. Others that appear patently ridiculous can prove useful. What I will discover is never certain, and diving into the process is highly energizing.”
There are certain topics which Andy finds ripe for discussion. “When searching for biz-dev topics, anything that contains the words rules, laws, and immutable truths are always red meat for debunking,” he asserts. “These pronouncements do a disservice to salespeople because right off the bat, they are closed-minded – which crushes curiosity , and numbs a salesperson’s desire to innovate and adapt. Besides, I have never met a top producer who told me that his or her success comes from conformity. I especially like to tackle topics that I believe are underrepresented in the sales blogosphere. That’s why I have gravitated to writing about risk, uncertainty, governance, and ethics.”
The reason Andy has remained in sales throughout his career is the joy he gets from it. “The adrenaline rush you get when a prospect becomes a customer is what has kept me at the sales game,” he says. “Nothing I’ve done in business is more fun or fulfilling.”
Accounting for Risk
Much of Andy’s work involves accounting for risk in sales, and learning how companies deal with it.
“It’s impossible for managers to take all risks into account,” Andy explains. “In sales, there are always unknowns, and many of them can scuttle deals: The pending merger you didn’t know about. The key executive sponsor who was suddenly fired. The catastrophic product failure at a major account that just went viral. If you tried to document all your selling risks, you’d get overwhelmed quickly.”
Hence, Andy advises avoiding that exercise. “Instead, it’s important for salespeople to be risk aware. Unfortunately, many sales organizations have a pervasive no-excuses sales culture, and that keeps the rep’s head in the sand. They are discouraged from discussing selling impediments. Any attempt to highlight challenges and difficulties to management are perfunctorily dismissed as whining. And by restricting those conversations, managers become similarly oblivious.
“Risk awareness means perceiving potentially negative events or forces that surround you. Situational awareness is similar, but it involves having a broader perspective to recognize positive conditions, as well. For salespeople, what’s more important than taking all possible risk into account is to be situationally aware. You don’t need to know everything – just the right things.” That takes practice.
Andy explains situational awareness, using an everyday example. “We understand implicitly how situational awareness works when driving a car,” he says. “To reach your destination safely, you must sense and assimilate rapidly changing information. You should know how fast you’re moving, what’s in front, behind, and around your vehicle. You need to know the surface condition of the road ahead, whether to maneuver around potholes or road debris, and how quickly.
“You must also understand the mechanical properties and physics of your vehicle, including how fast it accelerates and decelerates, and how it handles. To perform these assessments, you use familiar tools like mirrors, windshields, steering wheels, headlights, gauges, etcetera. Getting where you want to go requires knowing the most meaningful risks, but it doesn’t require knowing all of them. If it did, most of us wouldn’t leave home because we’d never get done figuring them out.
“Here’s why I make the comparison: only a fool drives a car while blindfolded. Yet, salespeople do the equivalent every day when working with customers. Some salespeople lack basic awareness of their competitive situations. Then, as sales engagements progress, they get lulled into thinking everything’s hunky dory, when . . . wham! The account goes radio silent, or out of nowhere, they inform the rep that they plan to buy – or bought – from a competitor.”
For these reasons Andy teaches situational awareness. “Customer decisions don’t always have to seem like a jolt out of nowhere.,” he says. “Many risks are perceptible long before catastrophe hits. But reps aren’t conditioned to listen for them. Lack of situational awareness is a major reason salespeople lose deals. Situational awareness is an acquired skill that requires constant observation and reflection. It also helps to have a solid framework for analysis, and active internal knowledge sharing. Lots of it.”
Improved Confidence in Goals
A deeper understanding of risk improves a salesperson’s confidence in sales goals. Andy explains why this is.
‘Reduce volatility, improve confidence,” he says. “Proper risk assessment starts with identifying the negative forces or events that have the greatest likelihood and the greatest impact or consequence on sales results. From there, it’s possible to develop a range of possible outcomes for any sales objective – whether it’s revenue, customer satisfaction, new account capture, quota attainment, or account churn – or something else.
“When engaging in risk analysis, many companies develop best case, worst case, and most likely values for each major goal. It’s important to remember that most likely is not necessarily the average between the other two. In fact, it rarely is. A key activity in risk evaluation is figuring out how to reduce the delta between the best and worst cases, ideally by identifying and mitigating the risks influencing the worst-case value. Performance volatility is what keeps planners awake at night, so reducing the range – or volatility – in sales results is key to improving confidence.”
Assess Your Own Risk
Finally, we asked Andy how a company can begin to accurately assess their own risk.
“The first step is to concentrate on risk intelligence rather than risk accuracy,” he answers. “In my experience, pursuing a goal of accuracy – whether in forecasting or risk analysis – always ends in disappointment. For sales operations, risk intelligence is the more beneficial approach.
“Risk intelligence means identifying the risks that have the greatest consequence for sales results, and assessing their likelihoods. Risk intelligence involves determining which variables the business should accept, and which ones to invest in controlling. This is an iterative project, never one-and-done. New risk conditions surface every day. There are new technologies, new social patterns, and new economic and political developments. Variables that weren’t meaningful one quarter, such as currency fluctuations, might be major issues the next quarter.”
It’s certainly not one-size-fits-all. “Risks are not the same for every company, even ones competing in the same industry,” Andy continues. “Not all risks are bad. In fact, in order to sustain operations, every company must have capacity for risk. Difficult problems can occur not when companies absorb risk, but when they absorb more risk than they can handle. Or, when they absorb the wrong risks, and find that cash flow and profits tank when those risks come home to roost. (A good case study for this problem is the startup Blue Apron.)
“Here’s a risk assessment example I encounter almost daily: Many companies believe their inbound lead flow insufficient to achieve revenue objectives. So, they invest in projects to drive more leads into the pipeline. They establish a target lead volume based on their past performance and flawed assumptions about the future. Then, they pour money on solving the problem until lead flow reaches target.
“For a time, everyone is happy, until they realize they are still not improving their overall revenue, or that their profit margins are suffering. Many times, those executives don’t realize that revenue volatility will be better mitigated by improved prospect targeting, rather than by the knee-jerk response of increasing lead flow.”
“If they used risk analysis, they could discover they can improve revenue results while decreasing lead flow, along with the marketing costs to generate them,” Andy concludes.
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