Manager's Journal How We Brought Teamwork to Marketing
May 08, 2011
The call came from our biggest customer, a major airline, so it got our attention. ``Who are all these sales people?'' the executive wanted to know. ``I just saw two other AlliedSignal guys yesterday. Why are more people here today? What's going on?'' We realized our new approach to covering customers--our biggest such push ever--was an embarrassing flop. As we searched for a better approach, we learned some valuable lessons about how to coordinate the marketing efforts of a big, complicated corporation. In our initial blitzkrieg, we clearly had more resources than organization. In the space of three days, five marketing and sales people were wandering around our biggest customer's offices independently, bumping into each other and calling on the same people two and three times. No wonder we seemed unfocused. Then we tried another approach, which didn't work any better. Wanting to show ``one face,'' we set up account teams for each major customer that included key people from each product division--such as engines, technical services and environmental controls--that did business with that customer. In theory, members of these teams reported to headquarters; in practice, their true loyalty remained with their divisions. They saw the teams as just another way we were trying to control the divisions; in classic marketing jargon, they complained that headquarters was keeping customers out of their ``line of sight,'' so the divisions couldn't monitor their own progress. After these false starts, however, we finally hit on a solution that worked--satisfying the divisions, headquarters and, most important, the customers. We created a new account-team structure built on three important principles: Set priorities for each division. If we had listened to the product divisions, each of which wanted its people assigned to every customer, we would have ended up where we started--with too many AlliedSignal Aerospace people milling about. Realizing that each customer is more important to some product divisions than to others, we set priorities--deciding which customers were truly integral to a particular division's long-term success, and which weren't. At first we took a back-of-the-envelope approach, matching up revenues with the number of people working with a particular customer. But it became clear that this ignored the future potential for each customer. When we redid the analysis with an eye toward changing markets, we came up with a radically different mix of customers. Based on this analysis, senior management designated 150 world-wide teams--each targeted at one major customer or group of smaller customers. When division managers designate a customer as less critical now but having the potential to evolve, we add ``virtual members'' to the teams--in effect, inside consultants from nonparticipating divisions who gather information and freely voice their opinions and concerns. Adopt flexible measures of success. We pay our marketing people on the basis of performance--hardly a revolutionary idea. But we found it's not enough for senior management to designate rigid performance measures based on simple revenue goals. Now we tie compensation to measures that we negotiate with the teams. Such a system allows us to balance the goals of the corporation, the divisions and the customers. We gauge team performance on milestones the division itself determines (25% of the total), revenue benchmarks (25%) and measures of customer satisfaction (50%). The teams themselves stress ``line of sight'' measures that let them know about their progress with a particular customer. These range from submitting a certain number and type of proposals to hitting a precise quality objective. In designing customer-satisfaction measures, the teams discuss the matter directly with customers, who provide suggestions about how to judge the team based on what's important to them--including things like delivery time, pricing or responsiveness to demands. Crucially, these measures change as often as once a month, as the customer's perceptions shift and the teams' strategies evolve. Give the divisions a common purpose. In the past, our divisions competed with one another--understandably enough, since managers were paid on the basis only of their own division's performance. The team approach gives them an incentive to work together, taking advantage of their varying positions in the marketplace to help one another. And sometimes the whole is greater than the sum of its parts: A unified team will often put together a deal for AlliedSignal that's larger than individual divisions would have been able to negotiate. Customers have a clear sense of their relationships with our company, and our senior management is better able to formulate an overall strategy. The revamped team-based approach has been in place for a year, and the results are clear. Better marketing has contributed to an 11% increase in our aerospace revenues. Most important, customers see a difference. Satisfaction ratings are higher, up by more than half in many cases. Our integrated team approach has helped us pull together all our marketing talent--to the benefit of both AlliedSignal and its customers. Mr. Godoy is a vice president of AlliedSignal Aerospace. Georgeanna Bao of Price Waterhouse, who helped design Allied's strategy, contributed to this article.
