Tag Archives: HR

21st Century Leadership Challenges

The leadership world is divided in to mutually suspicious tribes – theoreticians versus practitioners, PR hogging gurus versus part time academics, supporters of the old command and control versus inspirational team builders, and finally leaders and managers themselves.

The business of running a business has always fallen prey to business school fads and consultant fraudsters, who suffer from a severe case of status anxiety. The very idea promoted by these so called experts that leadership is about anything other than people is preposterous, and has proven to be one of the great fallacies in the business world since Peter Drucker was accused of being a fantasist. The concept of re-engineering processes introduced by “experts”, in my opinion, focuses too much attention on efficiency as a goal – driven by lean, six sigma, or TQM processes- and not enough on efficiency as a means, driven by people.

In “The concept of the corporation”, published in 1946, you are struck by how similar today’s methods are to those of yesteryear. This is partly because, as technology and production methods evolve over time, what remains the same is the people, leading us to conclude that Leadership and Management is not a progressive science as some might want us to believe.

The 21st century has already spawned a sizable volcano of daunting new challenges. Deregulation, digitization, ecosystems, strategy life cycles, and competition present but a few, being tackled by leaders and managers alike. What remains unsettled is how to deal with employee issues as they change over time. Specifically worrisome are : a) broadening the scope of employee freedom, by managing less, without sacrificing focus, discipline, and order, b) creating an organization where the spirit of shared values and community dominate, not programs and policies, and c) providing for a mission that justifies extraordinary contribution.

The profile of the new century employee has certainly evolved over the years, more so in the last ten than in the fifty years prior. Traditional organizations and Human Resources Management programs taught us to look for diligence, intellect, and obedience as characters of the best employees. Today, and certainly in the future, obedience, diligence, and expertise can be bought for next to nothing; for we are living in an era where knowledge has become commoditized. The point is this: If you are to survive and successfully deal with these challenges, you need employees who are more than acquiescent, attentive, and astute – they must also be passionate, ardent, and enthusiastic. This clear shift in employee traits presents a conundrum for future leaders and managers. They are paid to oversee, control, and administer. Yet, as we move forward, the most valuable human capabilities are precisely those that are the least manageable. Current efficiency management tools cannot make employees more creative, committed, or zealous.   

Leaders of traditional organizations are very good at aggregating effort and coordinating activities based on shared competencies or objectives. They are not however good at mobilizing effort or inspiring employees to go the next step. They must face the challenge of turning bureaucracies in to communities where the work is less contractual, and more as a means of making a difference, or exercising a special talent. Employees must feel less as a factor of production, and more as a partner in a cause. They must get away from the web of rules and policies and into common values and partnerships.

Based on how effective organizations are in dealing with the above two points, employees will choose, to either give or withhold initiative, creativity, and passion. They are gifts that are passed on to organizations not by exhortation or rah-rah pep talks, but by managers and leaders asking themselves what kind of purpose would merit the best of everyone in the organization. To produce sustainable market gains, the next great innovation, or lasting financial benefits, organizations need a moral imperative that can’t be manufactured by smooth talking CEOs or hired consultants. Moral imperative must be the result of a vision, shared values, and it must be an end, not a means.

I cannot help but think of a quote I had come across a couple of years ago while working with a CEO, self proclaimed visionary who failed at leading miserably at every aspect of leading. It is from the Analects of Confucius ” The Master said, govern the people by regulations, keep order among them by chastisements, and they will flee from you, and lose all self respect. Govern them with moral force, keep order among them by ritual, and they will keep their self-respect and come to you of their own accord”

Rethinking Account Management Strategy, Part 2c

Today I tackle the third part of the Congruence model, that is the Human Resources piece. Thank you all for the kind words and flattery. I understand that some of you actually enjoyed the prior posts, while others actually went back and revisited, compared notes, and even used some of the methods I provided to further drive the effectiveness of their strategies.

Recruitment and Selection of Key Account Managers                              

As a leader, manager or owner, you must put in place appropriate procedures for recruitment, selection, and training to generate key account managers who can effectively carry out their several roles and responsibilities. You must also develop ways of retaining them. In particular, reward systems must be carefully thought out. Clearly, financial compensation is an important issue, but you must also consider several other types of reward mechanisms.

Candidates for this position could be recruited either internally or externally.

  1. Internal Candidates: Typically, sales consultants make the easy transition to key account managers. However, the capability profile of successful key account managers is quite different from that of successful seller-doers; not all successful salespeople are able to make the transition. Since relationship building is such a critical factor in key account management, your company’s needs for high-caliber managers in other positions must be carefully weighed against both the key account manager’s personal development goals, and the requirements of key account relationship.
  2. External Candidates: The second source of key account manager candidates is executives working for other organizations. Such candidates may have significant key account management experience and/or considerable knowledge, experience, and relationships at the key account, developed with a competitor, a noncompetitive company, or as an employee. Such candidates may lack intimate knowledge of the account, but balance this deficit with powerful key account credentials.

Training of Key Account Managers

The specific training required by newly appointed key account managers is in part a function of the major customer, its key accounts, and the nature of the desired relationships. It also depends on the knowledge, skills, abilities, and experience of those executives appointed to be key account managers. Some key account managers may require specific training in planning, others may benefit from better negotiating skills, proposal development, and time management. Of course, training should not be a one-time event, and periodic educational and training programs should be considered.

 

Retaining Key Account Managers

Well trained effective key account managers are an extremely valuable corporate resource. To executives in major account, if the relationship is successful, key account managers often will be the face of your company. If a key account manager leaves his or her job, the potential exists for any value residing in the relationship to disappear overnight.

Management must realize that in their plan to establish successful KAM, if  your compnay lags the market in rewarding key account managers, you will surely lose critical personnel. Certainly, you will have to maintain a database on the destination of departing employees to ascertain where noncompetitive situations exist.

In addition to financial compensation, you must consider the full range of available reward systems—promotions, other formal rewards, and intangible personal rewards— so as to preempt unexpected key account manager resignations. Management should also consider processes such as identifying role models and developing mentoring relationships, as well as assisting the key account manager in balancing personal and family life with work responsibilities. 2

Rewarding Key Account Managers

The starting point for developing a reward system is clarity on the requirements of the job. In particular, you must be clear about the appropriate performance metrics. Let’s discuss performance measurement before turning to reward systems.

Performance Measurement: Using the “balanced score card” approach, you will have to measure:

  • Financial performance– including sales revenues and profit contribution.      
  • Growth– including new applications developed and sales to previously unsold customer divisions.
  • Customer– including customer satisfaction
  • Internal– including the quality of internal firm relationships, inventory management, and team leadership.

In measuring key account manager performance, you should select metrics that meet four often-competing objectives:

  • Alignment with the vision, mission, strategy, and objectives at the key account
  • Controllable by the key account manager
  • Trackable by the firm’s reporting systems
  • Focused, meaning avoiding too many measures

Reward Structure: Should be highly motivating and should generate high levels of effort and performance. Some of the more popular and highly sought after rewards include financial rewards, promotions, recognition, and other intangible personal rewards.

Compensation should involve mainly three principal variables (base, commission. bonus). The greater the amount of revenue the key account manager can impact, the greater should be his or her financial compensation. The more importance given to current sales revenues as the key account manager’s objective versus long-run development, the greater should be cash compensation.