Wednesday, September 5, 2012

Sales Management 101- the HBE Way

HBE has 9 territories for healthcare sales. These “hospital sales” guys are well compensated for success. A top earner can pull down $500,000 in a single year. Unfortunately for most, the ability to prospect and successfully pull in business for HBE is a unique skill and balancing act. Wayne, who covered western territory was the top producer for several years running. He seemed untouchable. Jim had modest success and David has been marginal in his efforts. The fates of these three individuals only illustrate the unpredictable nature of FSK decision-making. Privately held companies tend to be reflections of the founders. HBE is no exception. Fred Kummer will periodically find himself heading the healthcare sales team of 9 because for whatever reason, he has dismissed yet another EVP of business development. In the three years between 1998 and 2001, I saw one on the way out, one kicked out and one hired and eventually kicked out of that top position. Fred has an old fashioned model for sales and business development. He believes that sales people need to hit the road and get in front of healthcare CEOs – when they have building projects in the works, regardless of what stage of development. He believes that, given the opportunity to review existing plans, it is highly likely that his company and his interdisciplinary team will be able to find a better solution. Better for the hospital. Better for the board and the community. Better for HBE, too. Sure, he’s demonstrated it time and time again. HBE knows what to look for and how to deliver the most cost efficient “no-frills” product there is – for many the very best VALUE. “So what are we selling?” was the challenge FSK put to the sales force in a series of high-stress meetings orchestrated by the “maestro” over a period of several months, while he was figuring out how to replace the EVP he fired suddenly.

As a marketing person, I am more than happy to oblige a sort of company self-analysis and brand audit. I know such academic exercises can be very helpful for organizations to fine-tune their messaging and understand the positioning of the company for which they work. But FSK is not good at leading this type of process. He is abrupt and judgmental in his words and body language. Instead of creating a forum for openness and honesty, he creates an atmosphere of fear and anxiety. So, as a result of FSK taking the helm on marketing direction for the company: Nine sales guys sit around listening and trying to avoid participation in the process. “What are we selling?” is not some sort of rhetorical question in the spirit of Theodore Leavitt’s famous Harvard Business Review piece on Marketing Myopia. Fred isn’t interested in the sort of epiphany that railroads are not in the “railroad business” but rather the “transportation” business.

Not at all. What Fred appears to want is a sort of monolithic force of drones – all singing the same tune. He wants the sales guys to find opportunities – and do it by reciting only the gospel according to Fred. This Might be okay, except Fred Kummer doesn’t speak in complete sentences. It seems that his mind is following several trains of thought at the same time. He often starts a sentence in one place and ends up in another place entirely. “Twenty years ago, yesterday, ya know we haven’t done a very good job identifying the benefits of our approach….” No kidding – that’s they way he talks! While it seems unfair to single out just three sales guys, they are dramatic illustrations of the function as is has been designed by FSK himself. He’s only looking for “opportunity finders” to kick the door open. He doesn’t want these guys to “build relationships” or do anything after the client has signed a simple one page letter of agreement to work exclusively with HBE on their particular healthcare design and construction problem. Wayne, David and Jim are just three of dozens of hospital sales guys (and they have been – with few exceptions - men) that have parked their briefcases at HBE’s 11330 Olive Boulevard headquarters – The “big house on Olive Boulevard” as I like to call it.

“Wayne, when was the last time you went to Utah?” Fred challenged Wayne in a meeting. Wayne had been more successful than any other salesman over the past three years. Now Fred, in this public flogging – in front of his peers, Wayne is asked to rope-a-dope with Fred about his travel itinerary and his focus. It just wasn’t a fair fight. Wayne did the best he could to defend his concentration on business outside the state of Utah but this confrontation with his top guy seemed to mask his “not so well hidden agenda” to root Wayne out and send a message to the remaining 8 hospital sales people. In one sales meeting, Fred summarized the recent actions of Jim and Dave: Jim presented an idea to a healthcare system involving HBE doing a master plan for a facility. He hadn’t cleared this notion with Fred and the maestro wanted no part of planning without a commitment to build a facility. Fred didn’t want to waste the company’s energy and resources. On the other hand, Dave had a client who was looking for information, for which Dave didn’t have an answer. In Fred’s judgment, Jim and Dave were both guilty of something and ripe for public humiliation. “Jim is dishonest and David is just stupid. I’ll take stupid over dishonest any day,” Fred reasoned aloud. What became of Jim and Dave? The scales of Fred Kummer justice resulted in the dismissal of Jim and the retention of Dave. (Eventually Dave left as well.) Rightly or wrongly – Fred determined that Dave was trainable and Jim was not worth any additional coaching. Today, in addition to its status as a leading design-builder of healthcare facilities HBE is also a major force in the design build of financial facilities (banks, credit unions, etc.) and the parent company of a chain 24 upscale hotels.

The company is still run by its fearless leader. The stories of Wayne, Jim and Dave are not atypical. Very few escape the long arm of the law at HBE. The town sheriff keeps order with his quick draw and the townspeople just assume the relative prosperity and safety is attributable to the sheriff. God help you if you are a Hospital Salesman, a Financial Facilities Salesman or a General Manager of an Adam’s Mark Hotel. High profile and high casualty rates in all cases. Those positions are always in the line of fire and no-one can reverse the outcome of a sheriff with an itchy trigger finger.

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