Organizational Damnation 55: Sales

You may have thought we reached the pinnacle of organizational damnations when we discussed damnation 54: Marketing, and while Marketing can be bad when they stretch the truth, promise products months before they can be developed even if everything were to go absolutely perfect (which it won’t), and create a hype that the organization may never be able to live up to, but it’s nothing compared to sales. It’s one thing to sell an expectation, especially when one can always weasel one’s way out with an “it’s all a misinterpretation” argument, but it’s another to sign a contract knowing that there is no way the organization can possibly deliver. That’s why the Sales damnation often trumps the Marketing damnation (even though the two are often intertwined).

Why is Sales so bad?

They often live by the mantra that the customer gets what the customer wants.

Regardless of reality, sanity, or the huge loss that could ensue when the product is not delivered, a penalty clause kicks in, and a large lawsuit is filed for incidental damages when the customer finds out that the organization(‘s salesperson) made a promise with the full understanding that it could not keep the promise (because the salesperson wanted to make a quota to get a year-end bonus).

Moreover, the customer gets what they want when they want it.

Sometimes sales will actually limit themselves to selling a product or service the organization actually has today, but promise unrealistic delivery times. For example, Sales might promise 100,000 units of the new motherboard next Monday, when they haven’t even been produced yet by the Factory in China which can only produce 10,000 a day working double shifts and requires 72 hours to air-freight a rush order when you add in packaging, customs clearance, and ground-transportation time.

Even if what the customer asks for is not what they really need.

Not satisfied selling deep freezes to Eskimos, or heat lamps to Colombians, some salesmen have to one-up their peers and sell complex products and services they don’t need to gullible CXO’s who, after seeing the success their peer organization’s supposedly achieved with the same service, acquire a “me-too” mentality. For example, BPO for invoice and payment processing when the organization is a staff augmentation operation and needs deep insight into it’s T&E cost in order to accurately bill and price it’s resources under different cost models. Or lean workshops when all the organization does is joint product design with strategic suppliers and the bottleneck is not the design process, but the suppliers with inefficient plant floor setups. Or customized web-based order entry screens for the sales-team to input orders when in fact the real bottleneck is inventory visibility and availability – not the time to enter an order. Or, even worse, a new ERP to support that new Procurement platform when, in fact, the current ERP is just fine and the data migration effort is monumental.

And more horror stories than you care to count. As long as compensation is immediate on signed deals, instead of long term based on customer retention (for example, instead of 30% of deal value, 10% of annual revenue for as long as the organization is a customer, even if the sales person leaves the organization or retires), Sales will do whatever it takes to line their pockets, even if it means promising the impossible (which will, in the end, come back to bite Procurement in the rear end when they have to source additional product or service support that just may not exist). So keep an eye on Sales, and be prepared to step over their head if need be before deals are signed that Procurement cannot possibly deliver on.