Tim Clarke: Thank you for joining the Quotable Podcast. Today we’ll be discussing harnessing change with Geoffrey Moore. Geoffrey Moore is the author of Crossing the Chasm and Zone to Win. Welcome, Geoffrey, to the Quotable Podcast.
Geoffrey Moore: Well, thank you for having me, Tim, appreciate it.
Clarke: Thanks. And if there’s anyone out there that isn’t familiar with your work, and I’m sure there aren’t that many, perhaps you can give a bit of background on yourself and obviously on these two great books.
Moore: Thanks. So, I’ve been involved with the tech sector now for 30 or so years. And I was originally best known for, and I think probably still am, for a book called Crossing the Chasm. Sometimes people call me the chasm guy. And that had to do with how startups can take a disruptive innovation and bring it into the mainstream market. And that book’s still in print. It sold over a million copies, and for B2B businesses in particular, it’s been very successful.
This most recent book, Zone to Win, the one I’m spending time with people today, covers the same journey, but from the point of view of an established enterprise. And it turns out that’s the same journey, same landmarks, but a very different journey because of the conflicts of journey inside an established enterprise between their established business and getting into new businesses.
Clarke: Perfect, thank you. And I know you recently took part in one of our leading edge webcasts, Harness Change and Disruption. So, we thought who better to join me as cohost today other than your host you had there as well, which is Tiffani Bova, former VP and fellow at Gartner, and now Global Customer Growth and Innovation Evangelist with Salesforce. Welcome, Tiffani.
Tiffani Bova: Thanks for having me. Hello, Geoff, great to talk to you again.
Moore: It’s nice to talk with you as well, Tiffani.
Clarke: For those of you that aren’t familiar, I’m Tim Clarke, Product Marketing Director at Salesforce. And now it’s time to jump straight in. I really want to start at the beginning, focused on the brand new book, Zone to Win. Geoffrey, I’m really interested in, what was your inspiration for creating this book? Clearly, you must have seen there being some obvious market challenges around modern business.
Moore: Well, it was interesting. I think I can blame Marc Benioff for this, as well as for many things in my world. Marc asked me to spend some time with the company about three years ago, because, he said, I think we’re struggling with some issues. And what came out of that work was the work that went into Zone to Win. It was a model where we were sorting out the various conflicts within Salesforce that turned out to be very legitimate interests each pursuing very legitimate goals, but tying each other in knots in a way you don’t see in a startup.
And that’s what made me realize that actually, even though disruptive innovation is a single journey, it really does play out very differently depending on whether you’re in a startup or in an established enterprise.
Bova: What’s interesting is that you bring up Marc Benioff, our CEO, as one of the genesis of writing the book. But I think you also wrote the book in a bit of an unconventional way. You crowdsourced feedback on LinkedIn, which I thought was a fantastic idea, to get opinions from the people that have followed you and watched your work and maybe new people as well. Talk us through what you learned through that process, thinking maybe what you thought you were going to get back on those opinion, and then what you found out.
Moore: It was fabulous. I think I was able to acknowledge over 25 people in the front of the book who took the time on LinkedIn to weigh in. And by the way, LinkedIn is a terrific place to crowdsource a business manuscript, because that’s what people on LinkedIn really care about, including your prior colleague Hank Barnes at the Gartner Group, who gave some really great comments. I think the biggest one — I can’t remember if this was Hank or someone else who gave me this thing — when I was first working with disruptive innovation, I was looking at it solely from the point of view of being a disruptor, whether you were a startup or whether you were someone like Salesforce wanting to be a disruptor.
Interestingly, halfway through the work I also started working with Microsoft. And it was someone on LinkedIn who pointed out, Microsoft’s not being a disruptor, they’re applying your ideas to how not to be a disruptee. And so, that was an incredibly valuable thing, and it caused me actually to reframe a lot of the book around this idea of zone offense when you’re the disruptor, and zone defense when you’re being the disruptee, or wanting to avoid being the disruptee.
Bova: And I think that would also show a good contrast, a disruptor, a new business in the digital world versus a very traditional business that’s transforming between those two companies.
Moore: It really is, and what it made me realize is, we always celebrate the disruptor because they have this new, incredible capability nobody’s ever seen before that seems to work like magic. And it’s true, they have a huge advantage in the next-generation technology, but they don’t have any customers.
Conversely, the disruptee, or the incumbent, has built a beautiful customer base, really what the disruptor wants, but built it on top of the last generation’s technology, the last generation’s design rules, and so it’s vulnerable to get disrupted. And so, it’s not like either one of them is better than the other. Each has a totally legitimate set of interests, and that’s what led to this zone idea, because each of those two zones has a very different point of view.
Clarke: If I’d just pause quickly, clearly there are many books out there for sales professionals, and that’s obviously our audience listening right now. So, who do you recommend this book for? Is it for individual contributors, is it for sales managers, sales leaders? How would you sum it up?
Moore: You know, at the very high level, the book is oriented toward resource allocation during an annual budgeting process. That would be more for the sales high leaders, and how you take a sales and marketing budget, or even a professional services, discretionary professional services as well, and allocate it against your existing book of business versus an emerging book of business.
Because, you know, a lot of times there’s enough resources to go around, and it just takes judgment. But when you want to really catch the next wave — we say, when you want to catch the next S-curve, you have to go through a J-curve. And that requires you to allocate resources in a very asymmetrical way, and now there’s not enough resources to go around. And now you have to have a very clear and thoughtful and authentic conversation about, are we going to go through a J-curve and make this big bet at this point in our history, or do we have to modify the bet and make something less dramatic?
And that really relates to whether you’re going to go on zone offense or not. So, that’s a big deal. The other one is when your existing business is under attack, as Microsoft’s was and continues to be. And then the question is, how do we get through the attack, and do we have to go through a J-curve just to fend off the attack? Often, that is the case. Those are for the sales managers, that level.
We were talking before, there’s also for the sales practitioner, there’s a wonderful model that came out of this work which I’d love to share. This is a model that says, when you’re looking at disruptive innovation from the point of view of the customer or the vendor, the person selling the disruptive [or] buying the disruptive innovation.
There are three places you can apply it. You can apply it at the infrastructure model level, meaning you’re just going to take the new technology and essentially bring it into your infrastructure and make your infrastructure a lot more efficient, and we’ll talk more about that in a second.
You can bring it into your company and change your operating model, which typically means you’re going to reengineer the way you engage with the world in order to be more modern and contemporary, or you can actually use it to build a new business model, where you’re going to change the way you make money, change the value you give your customers, relocate it maybe, change the ecosystem.
And the reason this model has been so valuable to sales professionals is, different customers want to do different things with the same innovation. You think you may have a hammer and they’re a nail, but it turns out you have a hammer and a saw and a power drill, and the question is, depending on how they use it, it could be any one of those three tools.
So what’s important for a sales professional is to establish relatively early in the sales dialogue which of these three objectives is most important to the customer.
Bova: And I think what gets challenging is the talent, the skill, the capability, the processes, etcetera, that a salesperson has to have in order to handle talking across infrastructure, business, and operating models. Because those are, potentially if a customer is using it for different things, you need to have a different value proposition, different entry point, it may be a different buyer.
There’s all kinds of things that change in that. And so, how would you step our listeners through, how would they allocate those resources in sales specifically across those three domains of change?
Moore: That’s a great question. I think basically, it’s good, better, best, or maybe it’s more entry level, second level, third level. I think the first thing you would do if you were starting a new territory, or entry-level sales professional, or just breaking in a new account, you would go to the infrastructure level first.
Because the infrastructure level is the only level where there’s actually budget available to compete for immediately. There’s just the CIO/IT professional’s budget. There’s a lot of people who want that money, but the money has been allocated during the annual budgeting process to the IT function. They’re going to buy something, they’re going to buy it from somebody. And you can go in and you can pitch your product against their product, and it’s a mano-a-mano sales contest. And it tends to be somewhat transactional as opposed to a long-term relationship.
But it’s a great way to get into an account, because people are in motion, and you can qualify accounts and do all the things you’re taught in Sales 101. The only issue with that is there’s an enormous competition for that budget, and that budget’s probably 1%, maybe 2% of the total corporation’s budget. The other 98% is actually available to be redirected into IT, but only if you change their operating model. Of course, you can’t tell them to change their operating model; they have to want to change their operating model.
When do they normally want to do that? When their industry’s been disrupted, or their industry’s had new technology come in, and they have to modernize their business if they’re going to stay competitive. Maybe they want to get mobile computing, or maybe they want to interact with mobile banking if they’re a bank, or maybe they’re a transportation company trying to compete with Uber, or a hotel company trying to compete with Airbnb.
They’re still in the hotel business, they’re still in the cab business, they’re still in the banking business, but they want to do it in a more modern way. Now, the IT budget doesn’t yet have that money.
So, the sales motion now becomes more challenge, because you have to go into the operating executive, you have to have a conversation with somebody who’s not an IT professional, who might be running a salesforce or might be running a marketing force, or customer support or whatever it is, and say look, here’s how the world is changing in your industry, here’s what customers are expecting from you today. Are you prepared to reengineer your operating model? Are you interested in that? And you qualify them on that basis. And if the answer’s yes, of course you are, OK, here’s how Salesforce or here’s how whatever my company can do can help you achieve those objectives.
But now what you’re doing is, you’re dialoguing with the line of business owner. And then part of the dialogue is, you need to give more money to the IT side of the house, buy this stuff, as opposed to buying it yourself, because frankly, IT professionals ought to buy this stuff. So, that creates a more complex sales cycle. The payoff is, it’s a much bigger deal. It’s potentially an order of magnitude bigger deal, because this person’s going to want to do a lot of change going forward.
So, that’s the operating model. And then the third, which is the top of the pyramid, is when somebody says, my goodness, with all these new technologies, with artificial intelligence or cloud computing or mobile or machine learning or whatever this stuff is, we can actually get into a new business. We should actually make an investment in a big business. Now you’re talking about yet another order of magnitude or risk, reward, and frankly expenditure, and now you’re talking about raising capital to buy stuff as opposed to just diverting operating budget to buy stuff. And so frankly, it’s a conversation that normally can only be conducted at the executive level, executive-to-executive, but it’s something which if you find that opportunity in your account, it can be a huge game changer.
And so, if you’re a sales professional, I think what you want to figure out is, a lot of your time will be spent [on] just infrastructure model competition. I think the most productive amount of time, if you have discretionary time, is spent at that middle level, the operating model, because a lot of operating models are getting reengineered right now. But to do, to your point, Tiffani, you have to get yourself smart about their industry and their function so you understand how their operating model is changing, so that when you bring your technology to the table, you’re doing it in a productive way as opposed to just saying, what’s keeping you up at night, or something like that.
Clarke: And clearly within large enterprises, and you talked a little bit already about it, there are so many different stakeholders involved. Particularly, let’s say you’re a sales rep at Salesforce selling into this large enterprise, and you can see this different internal conflict. Do you have any recommendations in terms of whether to focus on just one stakeholder — for example, at the infrastructure model, the CIO — or actually starting to build consensus between multiple stakeholders in order to almost help them resolve conflict they’ve got internally?
Moore: It’s literally a budgeting exercise of your own time. If you went 100% only to the IT function, you’d certainly be leaving a lot of opportunity on the table. If you went 100% to the operating model approach, for example, you’d probably risk not getting to [club] more years than you’d like. So, I think you have to be thoughtful about how much am I going to do this?
Also, as you’re going up to the operating model, it’s really important that you be able to involve more resources from your company. Salesforce in particular has a very rich set of resources, but most companies have some resources. They’re more consultative, they’re typically more senior, they often have had industry experience or functional management experience that is at peer with the person that would be making the budgetary decisions. And as an account person, you don’t have to be the answer to all questions. You just have to be the orchestrator for the answers to all questions.
You have to pick the accounts where you think, is this a trustworthy customer, because frankly, this is going to be a relationship of trust. So, you don’t want to have a prospect who frankly is not a stand-up supporter. You want somebody that you think is going to stand up for what they need and want. But once you find that, and the company is a viable company, and they have this operating budget that could be redirected, then I think it’s really important that you take the time to actually develop that relationship, because that relationship, the year that delivers for you — and maybe it’s not your first deal, maybe it’s the second deal in that company, that will put a big smile not only on your face but on your spouse’s face as well when the commission check lands.
Bova: That’s always good, commission is always a good thing when you’re in sales, that’s for sure. But I have a question for you on those three operating models. I think the speed of this disruption that’s happening now, especially the push of digital and the role the CIO is playing in the business, and more importantly the role that other CXOs are playing, whether it be in marketing or it be these new chief customer officers or revenue officers, this new C-suite.
Do you think that has an impact on who sales will target in each of these models, because I feel like there’s a lot of the blurring of the lines. It maybe had been much more clear in the past, delineated between CIO-sponsored versus CXO-sponsored versus CEO-sponsored. And now, there’s kind of a team buy, if you will, and a lot of digital is pushing this collaboration between various groups and so as a sales rep who’s selling efficiency or selling effectiveness, or even trying to push to help a company be much more competitive in the market, you think the speed and digital and all this innovation is creating this blurriness that sales now has to deal with?
Moore: Yeah, that’s a good point. By the way, this comes in waves. I can remember we had a similar form of blurriness in the late ’90s when it was all around client server and the internet and we had the webmaster and the VP of digital, e-commerce, and all these titles appear. And then after a while you realize, you can have these substitute titles for a while, but eventually it does come back to the head of sales, the head of manufacturing, the head of marketing, the head of customer support.
The traditional functions I think eventually reassert themselves. But to your point, because these waves of innovation have been building on each other now for several decades — we had cloud computing, which in and of itself was a heck of a wave, then we had mobile right on its heels, we’ve had social, we’ve had machine learning, we’ve had big data, we’ve had artificial intelligence, we’re seeing augmented reality and virtual reality, we’re seeing internet of things, smart cities — these things are going boom-ba-boom-ba-boom-ba-boom.
And so, what you realize is that most incumbents are under attack most of the time, and they’re under attack from a digital disruption where the startup is playing with a set of design rules that gives them much more freedom than the incumbent ever had. And the incumbent can’t adopt them directly, because they’re so invested in the last generations of design rules. It’s very awkward to try to bridge that gap. And so, there’s a lot of attack. And so, in that situation, more and more traditional leaders from the traditional functions are turning to technology representatives and saying, can you help me?
And so, in order to do that, though, you can’t go in and just plug your product. These people don’t even understand your product, they don’t care about your product. What they care about is, can you help me deal with digital disruption? And so, that means it’s a consultative conversation. You have to listen before you speak. You probably should never give a presentation your first time you meet with these people. You should just be diagnostic with them. Diagnostic framework’s become incredibly valuable to salespeople because it structures the conversation in a way that can lead to good outcomes.
But it’s a very different play. And for those of us who may have learned selling like bang-bang, close-close, this is not about close-close, this is about open-open. It’s a different sales motion.
Bova: It’s almost like it’s not “Always Be Closing” anymore, it’s “Always Be Collaborating and Connecting and Opening that Door.”
Moore: It’s important, because — no, to be fair, if you’re just competing at the infrastructure model level for a budget that is going to be spent this year, then you should always be closing.
That principle isn’t obsolete, it’s just that in a time of great change, there’s so much money in play at the level above that, at the operating model level, which is why we’re giving this emphasis to it.
Clarke: Geoffrey, I want to touch on my own personal background a little bit. I spent a good amount of years in sales before moving into marketing, and I think this is another conversation that we’re hearing a lot right now in the industry even over the last few years, about how we get sales and marketing working together or building a closer relationship.
What do you see as the role here with regards to these different models when a sales rep [or] sales manager, is looking at the accounts, how they’re going to prospect into them, how they’re going to hopefully work with these organizations to disrupt? What is the role of marketing here, and what is the role of sales?
Moore: This is really important, because it really is very different depending on which of these three models you’re playing. The traditional role of marketing and the infrastructure was a high volume lead generation approach. You’d use websites, you’d use trade shows, you’d do whatever you could to get leads in. You’d try to qualify them as best they can.
And then the sales force frankly took it from there, and would very quickly try to find out, do you have budget, who’s the decision-maker, are you going to make a decision in the next 90 days, that stuff. All of that was the traditional sales and marketing relationship, which frankly was not a very happy relationship, because the leads were pretty crappy and the salespeople were not particularly anxious to follow up on them, and a lot of stuff frankly fell to the floor.
When you move up to the operating model, it’s more challenging, but it’s also more fun, and it’s also potentially a lot more synergistic between sales and marketing. What the operating model needs is thought-leadership marketing. You actually want to deliver something that’s closer to a relationship opportunity, more like a referral than a cold-call bingo-card lead. And it’s a referral to have a conversation, not a referral to sell something immediately.
And the marketing folks can do the background research on what’s happening on retail, what’s happening in education or public sector or finance, so that you, as a salesperson, you can get good briefings on what are likely the issues, particularly around digital disruption, and how does it apply — digital disruption — apply to this industry or that industry.
All that is marketing, and marketing can now come to the fore and bring a lot to the table. What sales now has to do is not be too overactive right at the beginning of the relationship. If the salesperson gets this rich set of opportunities for a conversation and tries to turn the first or second conversation into a closing sales discussion, even if they get a sale they’ll get a fraction of what was available to buy, and they’ll also kind of alienate the customer, who said, “I see, you just wanted to sell me whatever your widget was. You really didn’t care about what I was dealing with.”
So, I think what’s exciting about what I sometimes call sales motion or more of a relationship sale — it’s a higher art. It’s a lot of fun, but it definitely requires patience and discipline on the sales side, and then it requires creativity and diligence on the marketing side.
Bova: And I think you touch on something really important, Geoff, that this thought-leadership conversation is definitely top of mind for both sellers and marketers. And so, for those listening to podcasts like this and reading things like Quotable and watching our leadership series and all that kind of content, knowing all the things they’ve just heard, how can sales position themselves as thought leaders to have those looking longer-term conversations versus the “I’m here to sell and I’m here to leave and move on”?
Moore: Again, I would want them to qualify the opportunity. You never want to say to a salesperson, “It is not your job to qualify, sell, and move on.” In a transactional environment, that is your job. But I would submit that a transactional environment is more optimal for a situation where there’s relatively low disruption in your industry or your path, and there hasn’t been much going on for a while. I don’t think that’s the modern era. I think the modern era I much more weighted to the other kind of sales motion, and then I think the key thing is, ears before mouth.
In other words, you need to listen, you need to ask really good questions. The way in which a customer evaluates a salesperson on the first call if they’ve never met you before is not on what you present. They evaluate you on the questions you ask after the customer has said something. And it can’t be a preprogrammed question. What they’re really evaluating is, did you ask an intelligent, thoughtful, empathetic question based on something I said, and did you ask me something I didn’t think was obvious? In other words, I had to think before I answered you.
If you did that, all of the sudden you’re building this trusted advisor capital with that customer, and the customer’s going to end up making a buying decision with a trusted advisor, and you’re earning your way into that role. And that really is the key to that operating model success.
Clarke: Geoffrey, we’re coming up on time here on this Quotable Podcast. Any final thoughts you want to leave our listeners with?
Moore: Yeah, I think the main one is, if you’re a sales professional, you spend so much time mastering the basic presentation, mastering your own product, mastering …
And at the end of the day, what you have to realize is, all that is talking about yourself or your company, and frankly, nobody cares, not really. At some point, that knowledge is going to be important, but not at the beginning. What they really care about is what they’re going through. And so, the ability to invest in empathy and sympathy, and frankly the domain expertise to understand what they’re going through, not just theoretically but in more detail, I think that’s the most valuable thing your listeners can do.
Clarke: Perfect. Thank you, and I’m sure everyone has really appreciated your insights here. They can clearly learn more in purchasing and reading your book, Zone to Win. And as I referenced at the beginning, your great leading edge webcast with Tiffani, “Harness Change and Disruption.” So Geoffrey, thanks very much for joining us, we really appreciate it.
Moore: Thanks for having me. I appreciate being on the episode.
Clarke: And thanks to all of you, our listeners. And if you like what you hear, please take a minute to give us a five-star rating and feedback on the Quotable Podcast as you listen through and share it with your peers, customers, and prospects. Thank you.