The Best of November 2013
November 8, 2013 Editor 0
“Wanted: experienced sales professionals looking to maximize earning potential in a fast-paced, competitive sales organization.” This is a description of the salesperson of the past—the one who follows a carefully honed sales process designed to close the highest volume of sales before the quarter ends from people already ready to buy. But nowadays if you wait until customers have all the information they need to buy, the only way you’re going to get their business is to compete on price. Far more lucrative are the sales organizations that create demand, rather than just respond to it. Salespeople in these companies demonstrate creative solutions to needs customers don’t already know they have, sometimes with funds they don’t yet realize they might access.This is good news for creative thinkers—but bad news for most sales reps today. In their extensive research, the authors found only 17% of existing sales employees score high on the skills needed for this new kind of selling.
The more time it takes financial analysts to evaluate your company’s strategy (either because it’s unique or because it spans several industries), the more likely it is that they won’t bother. And if they don’t understand your strategy, they won’t value your firm as highly. That’s what the author found when he and colleagues at Olin Business School examined all 7,630 companies publicly traded in U.S. capital markets between 1985 and 2007. Sometimes, they just come right out and admit it, as PaineWebber did in confronting Monsanto’s strategy to gain R&D synergies by constructing a portfolio of businesses spanning the chemicals, biotech, and agribusiness sectors. Because it was so hard for analysts with differing expertise to even schedule a time to meet, PaineWebber actually suggested that the only way Monsanto would get a proper valuation is if it unbundled itself. So what’s a creative company to do? Zenger argues that companies seeking a fairer hearing have only two options—make their strategic information more accessible or find investors who will take the long view. Monsanto’s experience would suggest those investors might be well rewarded: After a series of complex strategic moves, and 11 years after being judged by analysts as essentially worthless, Monsanto’s market cap reached $57.5 billion.
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