Welcome to Construction Genius. Today’s guest is Frank Cespedes, a Harvard Business School professor and former managing partner at a Professional Services firm. With extensive experience in go-to-market strategy globally, he’s also contributed to prestigious publications like Harvard Business Review and the Wall Street Journal. Frank joins the show to discuss his book, “Aligning Strategy and Sales,” emphasizing the crucial link between strategy clarity and effective sales direction. The conversation delves into the unique challenges of selling in construction, highlighting the technical nature of the industry and the importance of tailored sales training and incentives. Regardless of a company’s size, Frank underscores the president’s essential role in business development, particularly for mid to large-sized enterprises where leadership can become detached from sales activities. Tune in for practical insights that will enhance your sales strategies and team development. Thank you for joining Construction Genius today!
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Sales Management That Works: How to Sell in a World that Never Stops Changing
My guest in this episode is Frank Cespedes. He teaches at Harvard Business School and, for 12 years, was a Managing Partner at a professional services firm. He’s worked with many companies around the world on go-to-market and strategy issues and has been a Board member at consumer goods, industrial products, services, PE, and VC firms.
He’s written for numerous publications, including Harvard Business Review, European Business Review, Organization Science, and the Wall Street Journal. Why is Frank on the show in this episode? He has a book called Aligning Strategy and Sales, and we are going to talk about how to align your strategy with sales and why it’s so important to get clear on your strategy so that you can then direct your business development people in the right direction.
We talk about the challenges of selling in construction because it is an extremely technical sale and a sale that requires deep knowledge if you’re going to be successful. We talk about how to incentivize people to sell in construction and how to develop people in construction. What training works for salespeople in construction, and what training doesn’t work?
We also hit on the vital importance of you, as the president of your company, being deeply involved in business development regardless of the size of your company, and this is particularly true if your company is 20, 30, 40, 100 million dollars in revenue and above and you get separated from the sales activities of your organization.
You’re going to enjoy this conversation with Frank. It’s very straightforward. It’s right to the point. It’s going to help you with your sales and the development of your salespeople. Thank you for tuning in to the show. Thomas Edison said that genius is 1% inspiration and 99% perspiration. If you’re a construction leader, you know all about the perspiration, and this show is all about the 1% inspiration that you can add to your hard work to help you to improve your leadership.
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Frank, welcome to the show.
Eric, thank you very much for inviting me. A pleasure to be here.
I’m happy to have you on the show. You recently published a book, Sales Management That Works. You have an extensive experience working with a variety of different companies. What caused you to want to focus specifically on that topic of sales management?
I think it’s a fair question. If you go to Amazon and you go to the book section and in the keywords, put in sales, sales management, out will come over 80,000 stock keeping units. As far as I can tell, the only management topic that gets more SKUs in Amazon is, “leadership,” gets about 90,000. Sales is a close second. Now, you may be familiar with the old aphorism, no single drop of rain ever feels responsible for the flood.
Again, why did you contribute to the tsunami? Two motivations. The one is primarily a professional motivation. Sales is by far the most context-dependent activity in business. Selling software is different than selling consumer durables, different than selling project management and construction. It also varies depending upon the product and to whom you are selling.
Selling in North America is different than selling in South America, the Middle East, and so forth. For some reason, sales is that area of business where people feel most comfortable making these huge generalizations, usually unsupported by any data whatsoever, except what, in academia, we would call N equals 1. When I sold for Oracle, which, by the way, was 15 years ago, here’s what worked for me. I’m sure it’ll work for you.
I wanted to write a book that says, look, after doing research on this topic for decades, here’s what research does and doesn’t tell you about this core activity. My second motivation is I think it’s a particularly good time for a book like that because there is no doubt whatsoever that digital online technologies are affecting buying and selling. Again, my reading of what people say about this is that they’re just out of touch with the managerial and business reality. Again, fair question. That’s my story, and I’m sticking to it, Eric.
Hiring The Right Salespeople
It’s interesting. As I think about the audience of our show here, we have folks who are the presidents of their construction company, and they’re not necessarily by trade salespeople, but they have people who are reporting to them who are salespeople. When someone is looking for a salesperson for their particular company, what are some things that they should be focused on in terms of hiring salespeople into the organization?
Again, excellent question. If I can, I’m going to suggest there are two questions there. One which we might get to later is the danger of being a leader and saying, “I don’t do this. I’m just going to delegate this activity to others.” We can get back to that because there is a growing gap around that. Your second question, I think, is very relevant.
The beginning of wisdom here is to understand that there have always been challenges in hiring and sales that just don’t exist to the same extent in any other business function. For example, if you want to hire an engineer, you can go to a school, and it’s a little bit like walking into a food court. What engineer are you interested in? Civil engineering, chemical engineering, electrical engineering?
The same is true if you want to hire someone in construction for finance or accounting. You can find people who majored in those subjects. By the way, despite all the hype, the same is true in computer programming. The last time I looked, which was about four years ago when I started writing this book, of the more than 4,000 colleges and universities in America, less than 300 even offered a sales course, let alone a sales program.
This is an area of business where the vast majority of people start knowing very little about what they’re going to get paid for. Ultimately, you’ve got to grow your own. Development here is important, and it’s important that they’re not only good at some of the basic characteristics in selling, listening to customers, understanding the product, what’s our value proposition versus contractor down the street.
They also need to know the company strategy and align with that. That’s number one. Number two, my other advice would be what to avoid. Hiring managers in general, but especially in sales, because so many other decisions in any company depend on sales forecasts and the ability to meet those forecasts, other hiring decisions, capacity decisions, and so forth.
Sales is usually under short-term metric pressure. As a result, hiring people tend to vastly overestimate their ability to hire salespeople based on 1, 2, 3 unstructured interviews. The research about this is as close to a fact as anything you will ever hear from a management professor. The correlation between the evaluations people get in their interviews and their actual subsequent on-the-job behavior tends to vary from 0.2 to 0.4. In other words, even in the best of circumstances, it’s less than the 50-50 odds of tossing a coin. By the way, it tends to be closer to 0.2 in complex combination material service sales, which is generally what construction is all about.
Let me ask you a question about that. Why is it that hiring is a 50-50-coin flip there, particularly when it comes to hiring a salesperson for a complex type of sale?
It’s less than a 50-50-coin flip. By the way, we know the reasons for this. One is what they call cloning bias. In other words, most people, when they interview at the end of the day, they’re trying to say to themselves almost unconsciously, who looks like me when I was that age or when I was starting out? Secondly, the overwhelming power of first impressions.
This has been demonstrated again and again. When someone comes in for an interview, if they make a good first impression, the interviewer then basically processes all other information positive. They did their homework, so and so. If they have a bad first impression, it’s the opposite. If you ask yourself, as a leader, as a businessperson, what have I learned from that first impression? The answer is almost nothing.
The key in sales is behavior. It’s not dressing for success, not simply attitude. Sales is about what people do and don’t do. There, the gold standard is on the job. The other advice, I think, for hiring is not to forget interviews. I have colleagues in academia who are very well acquainted with this research, and their advice to managers is don’t interview. I personally think only someone who’s never run a business can seriously say that. Of course, people hire people, and people have to work with people, but you can’t just rely on interviews. You’ve got to rely on job-specific behaviors, internship, and hiring scenarios.
Consistent Sales Behaviors
Let’s just dive into that a little bit. Are there specific behaviors in sales that transcend industries and are seen consistently and keep it in the context of Western culture, American culture?
I think some of the basics are true in most categories. It is a good idea to listen to customers. That’s important. By the way, this is an area where training can help. Most people, not just salespeople, when you say listen to customers, they’re never going to disagree with you. Basically, what they mean by listening is waiting to talk. No, in sales, it’s active listening. That’s important.
May I ask you about that, Frank? What do you mean by active listening?
It gets to the next point: knowing something about the customer you’re calling. By the third decade of the 21st century, there’s less and less excuse for this. You can go online and get a lot of information, not only about that company, that project, that real estate developer, you can get information about them via LinkedIn and so forth. That’s part of active listening.
The third area, which is very underrated. Once I say this, some of our readers are going to go, “This guy teaches at Harvard.” What I’ve learned in the course of my career is never be afraid to talk about the basics. Product knowledge helps in sales. It helps to know what you’re talking about. In construction, that’s often not a simple issue because it’s not like if you’ve seen one building, you’ve seen them all. Those would be the areas I would cite.
That’s, I think, one of the deep challenges that construction companies have because what you just said about understanding the product, which is interesting because that directly links back to active listening because how can I actively listen or even know what I’m supposed to be listening for if I don’t understand the product in the first place?
That’s exactly right. What the product means for the customer? In real estate, let’s use a specific example. Look, for about 15 years, we lived in America through a period of, in effect, negative interest rates in real terms. Good news if you’re in real estate or construction. The bad news is those days are gone. One of the issues which is true in many categories, but especially in real estate, time is money.
Do our business development people, first of all, understand that financial literacy is usually not their strong point? B.) Are they able to demonstrate this? C.) Do they understand what it means for whoever in that very complex buying unit that tends to characterize construction for whom these matters? That’s part of product knowledge. It’s about the outcome. It’s the old phrase people don’t buy 2-inch drill bits. They buy 2-inch holes. That’s especially true in construction. I’m not buying the blueprints. I’m buying the outcome.
It’s interesting when we dive into this, the product knowledge or the knowledge of what it is you’re selling is not only vital to being able to articulate that in front of the client, but it’s also vital in terms of being able to put together an effective strategy in order to go after these opportunities because if I don’t know what I’m selling, how can I then strategize on how to sell it in the first place?
I agree with that. This will touch on the earlier point, Eric, about why I think it’s dangerous for leaders to say I’m a leader, so I don’t have to get my hands dirty in whatever we want to call sales, business development. I don’t much care. I think we know what we’re talking about, customer acquisition and retention. Construction is a good example.
If you think about what we are talking about in this show about product knowledge, it is a cross-functional outcome. It’s not something that sales on its own can do. They have to have good linkages with the estimators, with the subs, and with everyone else. In my limited experience, working with companies in that industry, construction is a business where you’re only as good as your last mistake.
Operations counts. As a result, operating procedures don’t tend to be the most flexible thing in the world. The only industry I know that’s less flexible is higher education. That’s part of the sales task. They’ve got to cross those boundaries. That’s a leadership responsibility. The old phrase culture eats strategy for breakfast is not true. It eats strategy for breakfast, lunch, and dinner. That’s where leaders do or don’t help that knowledge acquisition and communication.
I think that’s interesting because, particularly when it comes to construction, one of the ways to maximize the overall sales effectiveness of the company is to make sure that you’re involving everyone in the company in the sales effort. What I mean by that is if I’m going to be able to sell based on the product knowledge that we have, that is rooted in my estimators. It’s rooted in the folks who run the operations. As a leader and the president of the company, I need to make sure that I’m soliciting their help in any sales effort that I’m doing because that’ll maximize the opportunity of me landing the work that I’m looking for.
I agree, and I think I couldn’t have said it better. I think that’s exactly right.
Sales Training
Let me ask you about training programs specifically because I think one of the big mistakes that a lot of leaders make is they throw money at training, and they think that they’ve done their job if they write a check and send their people away for a couple of days, and then they get disappointed when they don’t get an ROI on that training. What is the best way for me to approach training as a leader of a company, whether it be in a sales training role or any other training I might be putting out there?
First of all, you’re right, and you’re right industry-wide. If you look at the data, companies spend 20% more per capita per person on training and sales than they do for any other business function. As you point out, the ROI there is notoriously disappointing, and there are some systemic reasons for that. It’s not politically correct to say this these days, but it just happens to be true. It links to the topic we were just discussing.
The reality is that it is difficult to train and develop somebody who’s a poor fit for the job in the first place. When you get better at hiring, you’re going to get better at training and development. That’s number one. Number two is you’ve got to understand the way adults learn and develop. This is especially true in sales.
Salespeople, like most adults on the job, are not studying for the final exam in my course or the training seminar. What we know is they tend to pay attention to information when they need it and where they need it, not weeks later or earlier in a training seminar. What the L&D people call the forgetting curve is very steep after training seminars.
They pay attention to information when they need it, and that’s usually on their way to make an important sales call or in the actual sales conversation. This, by the way, is an area where technology supported by an understanding of learning can help. You can now get this information to people on their phones their iPads. It can be visual as well as narrative. Some people learn better one way or the other. Companies that aren’t using this technology are just lazy, in my opinion.
The third thing is to understand how development in sales works over time, above and beyond training. It’s a classic example of what the learning people call modeling behavior. What I mean by that, salespeople learn the most by watching the best of their peers in action. I watch you talk to the customer, and I say, “Eric, the way you dealt with that objection, that was smart. I’m going to use the way you frame the price.”
Now, what does this mean? It gets us right back full circle. Your best salespeople are not only the best because they’re generating usually an inordinate amount of revenue, but they also have a knock-on effect on learning in the rest of the sales force. Again, technology can help. Technology helps to disseminate that best practice learning. Those, I think, are the key areas around training and development.
That’s interesting because you think about it from a technology perspective in that framework of people pay attention when they need it and where they need it. When it comes to sales training, if you can communicate your business development people, here’s how we want you to go into a discussion with someone about a project opportunity. They have that on their phone in some way where they’re sitting in their car before they go into the discussion, and they can review that in a meaningful way. They can then use that. They can be top of mind as they’re going into that discussion.
I think that’s right. By the way, you’ve got to also recognize the reality in sales. Again, construction is a very good example of this. You’re not just selling widgets. Each customer is different. During the course of a week, sometimes a day, the salesperson is dealing with different buyers with different criteria. Yes, methodologies and best practices are helpful, but at the end of the day, the most important thing about selling is buying in the buyer. It’s allowing them to pick and choose from this buffet of things we know seem to have resonance with our customers today, not yesterday.
I think another thing that’s challenging about selling construction is that, in many cases, the people that you’re selling to are not technical experts about what they’re buying. As a result of that, they obviously don’t know what they don’t know. It’s a type of sale where they’re putting an incredible amount of trust in you. If you’re buying a hundred-million-dollar project and contracting with the general contractor, you’re putting a tremendous amount of trust in this person’s ability to deliver on what they’ve promised in an area where you, in many cases, have no technical competency at all.
I’d make two comments about that. The first one may sound a little disrespectful, but what the heck? This is what’s nice about tenure. What you just said is probably one of the most common things I have heard throughout my career from every damn industry I’ve always worked with. In every industry, we’re unique. Our buyers don’t know this.
What can I say? I always quote the old gangster movies. “You chose this life.” I don’t think in this respect, construction is that exceptional. My advice there is get over it and start to get real about business development. The second thing is what are you describing. You’re describing a situation. Another way to think about sales is customer education. That’s why the knowledge is important.
The ability to show these options and so forth. It’s true in most B2B sales categories that the buyer person with who can write the chat is not necessarily the technical person. Think about tech sales. That’s not unique. The ability to articulate the link between what we do and the business outcomes that that buyer is interested in. That for me, that’s one of the core activities in sales in most categories. Again, I don’t think it’s just construction.
That’s interesting. When you said that, I remember when I first got started in sales in the early 90s, listening to Zig Ziglar and Tom Hopkins and all those classic trainers, and they made a big emphasis on you’re not selling the features, you’re selling the benefits. That is what we’re looking to be able to do in our customer education to make sure that they understand how what we do gives them what they want.
People don’t buy 2-inch drill bits. They buy 2-inch holes. That’s right.
Modeling Behavior
Let me go back a little bit to this idea of modeling behavior. I think one of the biggest challenges that someone who is successful in sales has. Let’s say I’ve started my construction company, and I’ve built it from nothing to a hundred-million-dollar company. I’ve been doing this for years. A lot of what I do well when it comes to interacting with people and winning work, I do unconsciously.
Someone may be observing me in a sales call, and they may not even be knowing what it is that I’m doing that is building those relationships and causing people to want to work with me. When it comes to modeling behavior, how can someone who is an expert in sales articulate clearly to someone who’s learning what it is that they’re doing that might be unconscious? How can they discover that and articulate it clearly to someone?
I think you’re making a very good and important point. Selling is about behavior, and a lot of behavior is not cognitive. It’s what people do in the moment at the point of sale where value is created or destroyed, which is in the market. A couple of things about this. I think this gets me to another important point here. Where you don’t go to find out that information, Eric is where most leaders now go.
That is their CRM system, the customer relationship management system, the noisiest data in most companies, not because of the software. Software is fine, but as usual, because of the human inputs. You say a lead is somebody who has a budget for the project. I say a lead is anybody I happen to bump into in Times Square. All the CRM system does is aggregate that.
That information and those behaviors are typically locked up here in the minds of our best reps. They only become visible, they only become articulable, if that’s a word, through something like a performance evaluation. This, in my experience, is probably the most undervalued lever in most companies, especially operationally sensitive companies like construction companies, the most undervalued lever for affecting behavior in most organizations.
It’s a shame because it’s a very trainable skill. I ran a business for 11 years. I waited four years before bringing in this wonderful woman, a retired HR executive, who trained us in doing performance evaluations and unlocking that information. I waited four years too long. It’s very trainable. It’s not like most talk in leadership, which tends to be metaphysical. This is very actionable. That would be my single biggest recommendation for getting what you’re getting.
What makes a good performance evaluation? What are some of those core elements of it that I must have?
I would cite a couple of things. The first is you need to approach the evaluation. What I would argue is two priors. One is you need a cadence. You also have to understand the difference between a performance evaluation aimed at development as opposed to what most companies do. Most companies, what they call their performance appraisal is an up or down announcement about compensation. That’s separate. Keep that separate.
The same thing, I think, is, again, it gets us back to behaviors. There’s a big difference between saying to somebody I don’t think you’re a good communicator in sales, as opposed to saying you didn’t cite this data, or you talk too much, and the customer wasn’t listening. It’s about behaviors and notice the implication of that. If you’re going to focus on behaviors, you can’t do what most executives do.
That is, I know I got to sit down with Eric next week. I better start paying attention. No, you have to be paying attention throughout the year if you’re going to make this behaviorally helpful. I think the third thing I would say, I find a lot of leaders forget this. Instead, they practice what I would call a parody of empathy. At the end of the session, there should be some so what, now what, what are the next steps? That closure is the responsibility of the leader. It is not the responsibility of the person on the receiving end of the performance appraisal. Those would be the areas that I would start with. None of this is rocket science. That doesn’t mean it’s not damned important.
When you say about paying attention, are you referring specifically to not just having the performance evaluation, but then paying attention throughout the period between one performance evaluation and the next?
Yeah. In sales, that’s why we do what used to be called ride-along. If I see you in front of whatever it is, 10, 20, or 30 customers, if I’m paying attention, I’m going to learn something about your strengths and weaknesses. That’s the thing we need to focus on.
Learning And Development
From a learning and development perspective, and it’s perfectly fine if we’re going basics here because I think it’s important for people to hear this because, again, a lot of folks in construction don’t necessarily have this mindset of selling. When you’re referring to a ride-along process, when it comes to learning and development, how should that process go over time?
Again, I’ll get back to what I said about training and how people learn. Adult learning is, in effect on the on-the-job learning. The research, again, about this is pretty darn definitive. Most people learn how to get better at what they do by doing. That’s important. That’s the single most important thing. How am I deploying my resources?
Secondly, am I doing that in such a way that it’s relevant for the way the market operates today? Not yesterday. In construction and any other business, nobody ever made that much money, just singing about the good old days. Nostalgia doesn’t have that much value in business. These decisions are always about today and tomorrow, not yesterday.
I think the third thing about learning is a calendar issue. You’ve got to create spaces for this. You’ve got to create forums where people can interact with this. Again, I’ll get back to the leadership issue here. This is built into most careers over time. If somebody ascends the hierarchy in their business or if they’re a founder and at a certain point, God bless, they built a hundred-million-dollar business. I now have others doing that.
There are some systematic reasons why they lose touch with the marketplace. I found this was true in the business I ran for 11 years. Many other people in the organization with the best of intentions feel that it’s their job to protect the leader from the customer. Don’t let them do that. Again, that’s why it’s important that you stay in touch with this, and you’ve got to stay in touch with it above and beyond some spreadsheet.
You need some existential knowledge about what is happening at the company customer interface. I always like to quote this comment in a John le Carre novel. One of his characters says something I think should be tattooed on a prominent body part of senior executives. A desk is a dangerous place from which to watch the world, especially the sales.
It’s interesting. You could almost picture the president of a company if they want to get on the front line, going out with one of their business development people and getting into those conversations with people, but then also making a commitment from a strategic perspective to maintain those key relationships across their spectrum of contacts because people buy obviously from people. We know that. You have to be out there talking to those key customers and developing those key relationships because those are fundamental to the success of any construction company.
I think customer visits are very important. What I don’t think is a good idea. I think if you talk to salespeople in construction, as in most industries, they’ll agree with this. They will say that bringing my CEO with me is a two-edged sword because sometimes he or she promises things that they should not be promising. That doesn’t mean that the leader can run a good business in the absence of current real-time customer information. Again, they got lots of other responsibilities. It’s a calendar issue. You’ve got to build that in without micromanaging your salespeople. That’s usually not a good idea.
I would say to any CEO or president reading this that high-level business development is one of your responsibilities, just as much as strategic planning and watching the financials. That has to be one of the key fundamental focuses of your calendar on a weekly and a monthly basis.
I think, by the way, it’s especially important in this industry because you see this. I do a lot of work with VC firms and startups. You see this again and again in entrepreneurial ventures. “What you said, I’m now betting whatever it is, X hundred million dollars on this. We’re going to do this. We’re going to do that. Time is money in terms of when you finish, and we rent. I am a priority for your firm, am I not?” It is hard to establish that trust with customers at the sales rep level. That takes somebody with real resource allocation of power. In construction, that’s often somebody right near the top.
Sales Compensation
What are your thoughts on setting and developing the right pay and incentive structure for a sales force?
I think that’s important. Again, I have colleagues who will say that compensation is overrated. To use the current jargon, it’s about purpose or intrinsic rewards. All I can say is that’s not the planet I’ve lived on. I think this is important in sales. You’ve got to think about compensation as a necessary but not sufficient cause of getting the behaviors you want.
What I mean by that, Eric, look, if our strategy is about certain kinds of projects and our comp system provides incentives that go in the opposite direction, I can predict pretty confidently what you will not get. Even when we think through appropriately the incentives to link with our strategy, there’s a lot more than the way people are paid that affects their ability to execute that strategy.
You can pay people any way you want. If, at the end of the day, when they’re in front of a customer, they lack that product knowledge or knowledge of the business outcomes that that buyer is interested in, it doesn’t much matter how we pay them. That’s number one. Number two, I do think there is a theory in sales. I’m going to use this old terminology. They talk about hunters, farmers, and people.
There is a theory that, eventually, most salespeople start as hunters but wind up as farmers. That’s where I think incentives have the most impact, making sure that at the end of the day, especially in a project-driven business-like construction, they’re looking at the next thing and the next thing and the next once you’ve got to think through where the salesperson makes a difference in the buying process and where they don’t, as opposed to others in the firm.
What comp needs to do is focus on that difference. The problem. I used to teach a case. It just happened to be about sales in a construction company. It could have been about anything else. There’s a wonderful interview with the CEO, and he’s asked, “What do you want your comp system to do?” When you listen to what this guy is saying, it’s basically a list that just falls short of solving world hunger. No, comp systems need to focus on a few things, not a checklist.
Now, a couple of things here. I think it’s important. I just want to recap what we just said. It’s important that your strategy is clear and your compensation is logically tied to that strategy. In other words, we’re going after these types of projects in these areas with these types of clients. If you get these projects, you’ll get compensated for that.
Not only that, but we’re going to provide you with the necessary training that you need in order to maximize your opportunity to succeed in those selling situations. You made this point afterwards about most salespeople start off as hunters and then they end up as farmers. That’s the theory. Let’s talk about that theory. Is that theory tied to when we’re young, full of energy, and going to go out there, and we’re dumb? We’re just going to keep asking and asking until we get a deal, and then we will grow and experience over time. Is that what that’s rooted in?
It’s not tied to that because this is the glory of capitalism. There’s no evidence that as people get older, they want to make less money. They always want to make more and more and more. I think it’s not that. That’s a fallacy. Construction may be different because construction is very often a discrete project business. We do the project, it ends, and we better find the next one. In many businesses, the comp system is tied to the ongoing revenues from that account. Over time, the rep finds it easier to do that as opposed to bringing in the new. That’s the dynamic at the heart of that.
It’s easier to sell to someone that you’ve already sold before. Yeah, that’s interesting because that then makes it incumbent upon the leadership to always be evaluating their strategy and make sure that the reps are clear on the strategy because if the strategy shifts from the person that you’re comfortable with to a new area that we haven’t gotten into before, then they need to understand that so that they can shift their attention and their activity.
The jargon for that, that you’ll see a lot of business schools use, that’s called the scope of the strategy. Scope refers to decisions that companies make, either explicitly or implicitly, about who is and who is not our customer. Where in the industry do we and don’t we play? This is a leadership issue. The reality is that whether it knows it or not, every company is always making it easier for certain customers to do business with them and harder for others. That’s what a strategy does. We communicate that at the end of the day.
That’s interesting because that’s like the best marketing. The best strategy makes it easier for some people to do business with you and harder for others, just like the best marketing attracts the right client and repels the wrong client.
That’s right. Addition by subtraction is alive and well in business.
Just to make the point, as far as your strategy is concerned and your marketing, you’re not going to go out of business because of the projects you don’t take on. It’s the bad projects that you do take on that are going to kill you in the long term.
There’s a venture capitalist I know, and he’s got a saying and I’ve learned over the years. It took me a while to understand the wisdom of his saying. He says, “Most startups don’t starve. They drown.” His point is they don’t starve. They’re usually pretty good at identifying a big opportunity, but they drown by trying to do too many disparate things at once and fragment the value proposition.
This is a fascinating conversation. Frank, tell us a little bit more about yourself, your work, and how people can get in touch with you.
About me, I’m not particularly exotic. I got my doctorate, started teaching at Harvard’s Business School, made my way up the hierarchy, and left with some others. We started a business professional services firm. I ran that for a decade and got lucky. Eric, I can spin this a different way when necessary. It was dumb luck. We sold at the right time. I went back to teach again. How do you get in touch with me? The usual suspects. The book you mentioned, publish by Harvard Business Review Press, or you can go to Amazon. There’s LinkedIn. I do have a website, but if I’m honest, I haven’t even been to my website in probably two years. All of those are the various ways.
That’s great. It’s interesting when you said about selling at the right time. I remember vividly a conversation that I had. It was in 2008 with a guy that I used to work with. He had started his business, and they signed their paperwork to sell their business the day before the market crashed in 2008.
We were just a few months earlier. When I say lucky, that’s exactly what I am talking about. I often say thank you.
That’s great. That’s terrific. Frank, I appreciate you taking the time to talk with us in this episode and joining us here on the show.
Eric, my pleasure. Thank you very much.
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This is Eric. Thank you for reading my conversation with Frank. Do me a favor. Give the show a rating and a review wherever you get your podcasts. That would be tremendously helpful to me. Make sure that you go to the show notes and click on the link that goes out to Frank’s book on Amazon. Sales Management That Works: How to Sell in a World that Never Stops Changing.
Thanks for reading. Feel free to share the show with other people who you think would benefit from reading this episode. Actually, it’s cool if you’re still here. I’m going to tell you a little story. I was chatting with one of my clients the day before, and he’s been impacted positively by the show. What he does is when there’s a particular episode that resonates with him, and he thinks it’ll resonate with the people in his organization, he makes sure to share that episode.
Recently, earlier in the year, we had a great episode on safety. What he did is he shared it with his safety professionals in his organization. That’s one of the great things about Construction Genius. For instance, think about this particular episode about sales. Hopefully, if you’re the president of the company, it’s had an impact upon you.
What you should do is now share this episode with every single salesperson in your organization. If you’re taking the next step, you’ll understand that everyone in your company is in sales. What I would do is share this episode specifically with the leadership in your organization. Anyway, thanks for reading. We appreciate you very much, and we’ll catch you on the next episode.
IMPORTANT LINKS
- Frank Cespedes
- Harvard Business Review
- European Business Review
- Organization Science
- Wall Street Journal
- Aligning Strategy and Sales
- Sales Management That Works
- Oracle
ABOUT THE GUEST
Frank Cespedes teaches at Harvard Business School and for 12 years was Managing Partner at a professional services firm. He has worked with many companies around the world on go-to-market and strategy issues, and has been a Board member at consumer goods, industrial products, services, PE and VC firms. He has written for numerous publications, including Harvard Business Review, European Business Review, Organization Science, California Management Review, and The Wall Street Journal, among others. He is also the author of six books including Aligning Strategy and Sales which was cited as “the best sales book of the year” (Strategy & Business), “a must read” (Gartner), and “perhaps the best sales book ever” (Forbes). His newest book is Sales Management That Works: How to Sell in a World That Never Stops Changing (Harvard Business Review Press).
