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The 8 Drivers of Executive Decision-Making
Improve sales by understanding how key
by Nicholas Read (April 19, 2010)
How does the board of directors or management team of a small or
mid-sized business think about reversing a
(Note: Nicholas Read is president of
consulting firm SalesLabs (www.saleslabs.com)
and co-author of Selling to the C-Suite (McGraw Hill, 2010).
He is the former executive director of Ernst and Young's revenue
growth and risk management practice and senior partner advisor at
KPMG, For more visit
Today’s executives expect you to have done your
homework before meeting them. They don’t want to educate you on
information that can be readily obtained from the Internet or a
subordinate. And they expect you to commit them to take action as a
result of your call. Prepare yourself for those career-defining
executive calls by studying your client’s internal or external
business drivers. This helps you put in context how your products
and services can make a contribution that’s better, faster, or
easier than the approach presently used. What do these drivers of
executive decision-making look like?
Every executive is under financial pressure to
perform. At the most basic level, executives must do one of two
things to produce a profit: increase revenue or reduce costs. For
salespeople to build business value for an executive pressured by
financial drivers, they must ultimately help them move the needle on
profit or cost, and to do so in a way that’s consistent with how
their industry measures success.
For example, in the airline industry, you’ll get on the executive’s
radar if you’re articulate about the drivers that are specific to
airlines such as load factor, a variable planning horizon, high
seasonality, fierce competition, excessive government intervention,
high fixed costs and low margins (while the airline industry
generates billions of dollars it has a cumulative profit margin of
less than 1 percent). Show how your solution impacts these financial
or industry drivers, and you’ll get their attention.
When selling to a bank, different drivers accumulate interest:
organic growth, maintaining customer loyalty, increasing customer
transactions, risk management, reducing fraud and bad debts,
consolidating and upgrading infrastructure, shifting from bricks
(branches) to clicks (online banking), industry reform and
regulation, merchant alliances, and so on.
Executives concern themselves trying to determine how to improve the
internal organization and affect the financial return based on that
improvement. At the most basic level, executives are concerned about
having the right strategy, and taking advantage of the latest
approaches, the right people, processes, and technologies to execute
One executive in our study looks to salespeople as gateways for
“expertise we don’t have, coupled with experience for producing this
type of capability.”
Look at how you can help executives do a better job of making,
quality controlling, selling, and delivering their business plan.
All will be impacted by the effectiveness (doing the right things)
and efficiencies (doing things right) in the operation.
If you are an executive on the buying side of
the supply chain, your concern is about reliability of supply,
quality, economies of scale, inventory turnover, shrinkage through
loss or theft, warehousing and distribution technologies, demand
forecasting, and many of the same issues that trouble executives on
the selling side of the supply chain. There’s very much a level of
interdependence between the buyer and seller, so approaches to
real-time data sharing, shared infrastructure, and shared-risk
management remain compelling to discuss, especially when a
salesperson can cogently present how any of their solutions in these
areas do the job faster, better or with less risk, than how the
executive does it today.
Business Partner drivers
Your customers may even now be evaluating their
business partner relationships in light of changing business
environments. This represents another opportunity to create value by
demonstrating an understanding of their pressures and offering
solutions by orchestrating relevant introductions to your company’s
network of people, partners, and affiliates who have value to add.
Solutions are sometimes about the relationships you help broker more
then the product or service you sell.
Maintaining and growing their existing customer
base, creating and enhancing loyalty, and delivering value are of
prime importance to most executives. But how do you target the right
customers? How do you anticipate their needs? How do you develop new
products that will be ready when the market starts to demand them?
As a salesperson, if you can demonstrate how your product or service
can add value in these areas, you will be seen as a resource who can
help create a competitive advantage, and executives will want to
talk to you if they recognize they have a problem in this area.
While executives immerse themselves in their
own company affairs, the fact that you sell to many companies places
you in a unique position to have something those executives always
look for: insight into marketplace trends. So share your ideas and
help them see beyond their silo walls to how other companies are
solving the same competitor drivers they face. One caveat: don’t
disclose specific competitor names – these may also be your
customers, and their activities with you should remain confidential
if you don't want to lose credibility. Instead, interpret the trends
you see across companies, and help your customers see the future.
Globalization impacts executives in a variety
of ways. As they face competition from cheaper labor and production
abroad, they risk losing market share. Consequently to remain
competitive they must drive cost from their domestic infrastructure,
or outsource production and services to low-cost offshore providers.
Either course of action creates risk as well as opportunity. How do
they find the right production and distribution partners? How do
they drive risk out of an extended supply chain and hedge for
multiple currencies? How do they recruit and keep the right people?
If globalization means closing domestic factories, how will they
manage labor laws, public relations, and finances? Do they have
products that appeal to multiple markets?
Helping executives anticipate and navigate these issues is a
tremendously valuable contribution, and to do so you need to have
studied the customer’s situation and weighed their options as
judiciously as though you were on their Board – it’s the value
they’re looking for.
In response to corporate scandals that have
plagued the headlines in the past decade, governments, industry
regulators, and shareholders are demanding greater accountability
and transparency from corporations. Companies must operate under new
regulations designed to maintain stability in financial markets that
are already under pressure, and to protect shareholder interests by
restoring investor confidence.
The regulatory drivers that keep executives awake at night include
financial accounting compliance, workplace safety, labor laws, equal
opportunity, environmental emissions and carbon credits, anti-money
laundering, and international tax.
If you have a solution that helps executives stay compliant with
regulations and out of jail, and if you can demonstrate how it will
work in the context of their business today, you’ll unlock the
C-suite every time.
You can generally be confident that after you study the drivers
affecting the executive’s world, connecting them to their
role-specific issues will give context to the discussion, and serve
as an additional framework for positioning why your products or
services are relevant to them.
(To read previous Business-wise columns, click
on the titles in the right-hand column.)