In today’s complex and evolving global marketplace, too much pressure and emphasis is placed on sales professionals to define, understand, and sell to a customer or segment. It is exponentially harder if the sales professionals don’t have the skills and tools to understand the big picture, the business environment and business side of a deal.
Advantexe has created a sophisticated Strategic Business Selling™ simulation which we are launching with a lead client who sells major technology solutions to government and commercial customers. The engagement places sales people in the “middle” – between the needs of their customers and the needs of their company. By providing sales professionals with business acumen skills in the areas of understanding profitability, risk, investment, ROI, NPV, and IRR, and then giving them the opportunity to learn-by-doing in the simulation participants learn-by-doing and are able to immediately take these new skills and tools back to the job and the deals that are currently in the pipeline.

As a learning organization, Advantexe is working with the senior leadership team of our client and our metrics of success isn’t about how great the learning is; it’s about quantifiable metrics of revenues, margin and ROI. Our goal is to increase their ROI from 20% to 30% within 18 months of the learning engagement.

Welcome to Strategic Selling 2012!

Before I gave the answer, I needed a few more answers such as the audience, the specialty, the customers, and so on.
For the fourth time in the last 12 months, the need has been similar even though it’s shocking to me to hear the words. “Our reps don’t sell the way they used to…they need to be able to sell to an account.” Well it’s 2012 and this has been going on since 1995, but ok!

So after brainstorming and understanding the needs further, we came up with a solution! A “Walk a Mile in the Shoes of the Customer” business simulation so that the evolved pharma Account Manager (new name) can understand the business issues and dynamics of the account so that they can position the best value proposition and not just the clinical highlights.
The true evolution is that the new account manager is truly a business consultant and talks about the impact of their solutions on the bottom line performance of the customer. By “running” a customer’s business for five (5) simulated years, they have unique insights and ideas that give them is distinct competitive advantage.

The simulation is being delivered in a few weeks at the National Sales meeting and participants will be able to re-use it – as well as the Strategic Business Selling ™ content on a virtual basis as they fine-tune their skills and get better at managing their key accounts.

When we discuss the three value propositions in the United States, we ask for examples of successful companies and talk about what are the things these companies do to achieve success. The most common examples include Apple (Innovation), Nordstrom (Customer), and Wal Mart (Cost).

Over the last 12-18 months, the Advantexe consulting team has delivered many successful business acumen and business leadership engagements for clients around the world. During this time, we have observed an interesting trend of companies exploring a more innovative approach to their markets. As a result, we have re-oriented the learning, skills and tools to help create a culture of innovation and a business leadership approach to executing an innovation strategy.

One of the indices of successfully executing an innovation strategy is new patents. It is the core fuel to the innovation engine. Recently, the US Patent Office issues their 2011 list of the companies awarded the most patents. The data and analysis is quite revealing.

1. IBM – 6,180 patents
2. Samsung – 4,894 patents
3. Canon – 2,821 patents
4. Panasonic – 2,559
5. Toshiba – 2,483

Other notable organizations receiving patents in 2011 were Microsoft at #6 (2,311), and outside of the top 10 were H-P (1,308), Oracle (918), and EMC at (282) all of whom are IBM competitors.

For IBM, the 6,180 patents were the most patents ever awarded in a single year by the US patent office. IBM states that they have more than 8,000 R&D people – at an annual budget of $6 billion or 6% of revenues – working in 46 US states and 36 countries to accumulate such an impressive patent tally.

I often get questions from participants about what really drives shareholder value and the answer in reality is always a little fuzzy. However, it is very clear in this analysis that IBM leadership has created tremendous shareholder value by setting the strategy and providing the environment, skills, and tools to be successful. The current IBM market capitalization is at a 5 year high and has increased 82% during this time while the Dow Jones average has been slightly above flat at 1.5%. When integrated with a world class sales team, a world class implementation team, and a world class customer services team, it is easy to see why IBM is the best B-2-B example of an organization implementing an innovation strategy flawlessly.

This week will see a number of key technology organizations release their earnings reports and overall the expectations are kind of in the middle; not too bad…but not great either. I have started to look at a few key organizations as benchmarks or best practice companies when discussing business acumen skills when developing talent for our client organizations. The best practices companies that we analyze include IBM, Intel, Xilinx, Cisco, LinkedIn, and several others since they are leaders in their fields and since they are more closely associated with a B-2-B environment than a more consumer oriented company like Apple.

IBM has been trending down for the past 12 months in terms of market capitalization – a key indicator of future earnings and earnings potential. “The Street” indicates that while averaging about $25 billion a quarter in top line revenue and $3.5 billion in after tax income per quarter is healthy there are concerns about slowing growth.

Intel in the other hand looks to be in the opposite situation in terms of market capitalization. Their value has steadily increased over the past 12 months as revenues and profit has increased quarter over quarter and the trend looks to continue based on their current guidance. The only “negative” trend has been the diminishing operating margin which has been volatile and unfortunately unpredictable. This is based on raw material and labor costs plus impacts of weather related situations in Asia that have disrupted the supply chain.

KEY BUSINESS ACUMEN POINT: Supply Chain Management contingency planning a key part of strategic thinking! Significant impact on costs and earnings.

On July 15, 2011 LinkedIn had a share price of $110 per share. Today it is around $70. Financially, the data (revenues, costs, margins, etc.) are all over the place with the clear perspective that it’s going to be a struggle to actually generate sustainable (and meaningful) earnings. This will be one to watch because of the implications to social media networking companies and ideas and will be a stress test on the entire segment of the US GDP.

When you are making your value proposition, share it in terms of the drivers that your customers are concerned about…key issues such as:

• Decreasing the costs of goods sold (COGS)
• Increasing revenues
• Improving margins
• Increasing cash flow
• Increasing asset utilization
• Improving operational efficiencies

By speaking the language of business and not just talking about the features of your solution, you come across as a business person.  You are able to present the full value proposition and, more importantly, you should be able to command a premium and value-based price.

1. “Sunsetting” mature products – When is it time to eliminate a product from the portfolio?  What is the best practice process for doing this? How do you tell customers without upsetting them and losing other business?
2. Distribution Channels for Low Margin/Commoditized Products – How do organizations develop alternate distribution channels for products that no longer deliver acceptable margins? Do you continue to use expensive sales forces or do you go to a VAR model?
3. Creating a Horizontal Leadership Culture – Organizations doing business on a global scale are complex and challenging.  How do we create a culture that embraces the courage to take accountability and do what it takes to get the job done?
4. Value Pricing – How do we extract the optimal and correct value from our customers for the solutions that we deliver?  What’s the best practice and what tools should we use?
5. Acquisition and Integration – As we come out of the recession, many organizations are going to look to grow through acquisition.  What are the current best practices and processes of integration?

Last Monday was exhausting.  I was in Philadelphia, Atlanta, Chicago, Denver, Houston, San Francisco, Singapore, Tokyo, and then back to Philadelphia by the end of the day.  I set a personal record for the number of Webinars in a day – 6. (And in between, I was able to take a squash lesson with my ruthless new coach, Paul Frank, at the Fairmount Athletic Club).

From a Hospital Simulation to a Leadership session to a module on Selling Value, we touched more than 100 participants as part of a growing trend of online live learning.   After such a whirlwind day, I thought about things I noticed and created this list of critical points to remember going forward as we host more Webinars every week.

• Webinars are great for reinforcement
• A webinar can’t last more than 120 minutes…I like 90
• Simulations run great in a webinar
• Virtual tools for learning and interaction are getting better and better
• You need a producer to help behind the scenes
• I like voting
• Participants like to hear success stories
• Different cultures handle webinars differently; do not “call on” participants from Asia…it makes them uncomfortable and it’s a cultural no-no
• Don’t drink coffee after 6:00pm
• Don’t schedule an 8:00am meeting the next day

This list will be posted in my office from here on out.  With 15 Webinars to host next week, I’ll need all the reminders I can get!

So what is the hot financial metric right now?  I propose it is enterprise valuation of an organization through discounted cash flows (DCF).  Long-term shareholder value is created by positive cash flows that fuel capitalization, growth, and profit.  With the tools and data available to us now, it isn’t difficult to project 10-15 years into the future of a business.  Of course it’s a lot easier with a steady track record, and that steadiness will always be included in the Beta analysis of risk.

Recently, I had the pleasure of conducting a strategy and finance skill development program for a major financial institution.  The purpose of the session was to build competencies in the areas of financial management so that the bankers could sell their solutions better to their customers.  Over a week-long session, we had the bankers run a simulated $5 billion high-tech company for five (5) simulated years.  The conclusion of the session was an analysis of capital optimization using DCF.  The team that did the best presented its estimated DCF analysis and enterprise value based on actual performance and look-forward perspectives.  Interestingly enough, the team hit its target at 98.7% accuracy! And to add even more emphasis, the “customer” model in the simulation was based on a real customer.  After the fifth year of the simulation, the enterprise value was 97% of the actual 2009 enterprise value of the real customer.  What conclusion can we draw from this?  DCF works when it’s understood and used properly, and it’s a great tool and hot metric for the new decade.

In order to help organizations understand, assess and develop to their competencies, Advantexe Learning Solutions has developed a unique solution; a world-class high-potential leader simulation.  I’d love to share more and have your organization participate.  Please go to www.advantexe.com for more information or email me at robert.brodo@advantexe for a quick overview. 

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