Chief sales officers, like fighter pilots, understand the strategic importance of navigating the OODA (observe, orient, decide, and act) loop; they also know all too well that it is becoming increasingly difficult to do so.
The notion of OODA is based on the idea that success as a fighter pilot depends on gaining strategic clarity and competitive context. The OODA loop is a military concept developed by United States Air Force Colonel John Boyd, a leading 20th Century air-to-air combat specialist. But it also applies to business, particularly to decision-making in highly competitive, fast-moving cycles. Every sales professional understands the need to observe, orient, decide, and act faster and better than competitors. Sales functions that respond quicker and smarter to changing market conditions tend to generate higher sales (at a lower cost) than competitors whose OODA loops operate less efficiently.
However, few sales functions operate like agile fighter jets today; many lumber along like transport vehicles, hampered by an array of lower-level mechanical issues. CSOs spend too little time piloting their functions toward the achievement of strategic objectives and too much time addressing much more tactical needs required to keep the engine humming.
While all of these added responsibilities are providing a sales organization increased visibility into the funnel, successfully managing each of these components requires a lot more tactical work. Herein lies the challenge: To capture the attention of a more sophisticated audience, sales organizations need to be more relevant and strategic, however, managing the data and processes necessary to deliver that relevant and strategic insight requires time and resources that sales just doesn’t have right now. They’re often stalled by a number of external and internal factors, including: sales and marketing misalignment, competing information technology priorities, data and decision-making silos, Pressure to produce ROI, fragmented markets, and hyper-informed buyers.
When a Partner Can Deliver Better Results
Despite the number and magnitude of the challenges sales functions face, they have to make their numbers. Increase sales while lowering the cost of sales. And, in order to win the sale, they need to be more relevant and informed about their customers’ needs than their competitors are.
But, many CSOs are stuck in a difficult place. Revenue generation is critical to the organization, so how can the organization relinquish control of the cycle? A better way to frame the question perhaps is to consider how much time and how many resources the tactical components of revenue generation are consuming.
Put another way: How much is the current level of internal control costing the organization, and is this cost worth the return as measured by revenue growth, as well as the cost of acquiring and retaining customers?
By addressing the question in this way, many CSOs determine that the level of control that they currently maintain over the cycle is insufficient or ineffective. This becomes clear when sales executives scrutinize all the components of revenue generation (including the number of names in databases, the costs of reaching those names, current conversion rates and more). Very few, if any, sales functions manage the operational enablers of their strategic work in a truly world-class manner. What makes a sales function best-in-class is not its ability to install or manage software, but its strategic selling. And, fully harnessing this capability often requires outside help from a partner who can manage enabling activities more effectively than the sales function can (or should).
If operating a sales function were a core competency, the management of analytics engines, databases, demand generation, data cleansing, and so many other tactical activities would qualify as strategic endeavors. But they do not; instead, these activities are enablers. The truly strategic facet of sales is what too few sales functions devote sufficient time and resources to because the tactical requirements of keeping the engine running have grown increasingly complex and time consuming.
What if all of the disconnected external relationships could be replaced by one strategic partnership? Similar trends have occurred in the advertising and legal fields. Advertising represents a core enabler of a company’s brand, yet most companies enlist outside experts to handle all, or most, of their advertising because these partners can perform the activity much more effectively. Similarly, most organizations rely on outside counsel to handle some or all of their legal issues and needs. These partnerships are not based on cost efficiency, at least not primarily; effectiveness and expertise are much more important given the brand risks involved in relying on an advertising firm or the liability risks associated with the legal issues outside counsel handles. That said, these models also thrive because the outside partners also can manage these crucial enabling activities in a relatively cost-efficient way.
To be sure, tactical sales activities are extremely important enablers. The problem is that their growing complexity and scope takes too much time away from the strategic activities—forging deeper relationships with much smarter customers that result in higher revenue and a reduced cost per sale—that CSOs and their leaner staffs need to devote the bulk of their time to executing.
CSOs and OODA
A best-in-class sales function is measured by outcomes not the ability to manage software. Of all the activities within Boyd’s OODA loop, the first step—observe— is perhaps the most important.
If pilots cannot get a clear picture of what’s ahead, they can’t orient themselves and there is a good chance that any subsequent decisions and actions will miss their mark. In battle, the fallout of an ineffective or nonexistent OODA loop ranges from painful to deadly: Pilots can be forced to eject or be shot down by more agile enemy opponents.
Business is more forgiving, but there is a parallel. CSOs who cannot carve out the time and space necessary to observe, orient, decide, and act at the strategic level risk losing key accounts to competitors. When too many customers drop off the radar, the entire company’s existence may be threatened.