Innocents Among Wolves, and Other Deadly Sins
In life, there are seven deadly sins (pride, covetousness, lust, envy, gluttony, anger and sloth), but global account management (GAM) is a thing much tougher than life.
The 'Deadly Sins' of KAM and GAM
Silo mentality — managers as 'barons'
Multiple or competing supplier business units
o Whose key/global account is this anyway?
Failure to measure the impact
o Inadequate measures of account profitability
Resistance from the sales team…
o A preference for 'hunting'
Inappropriate people or skills
o A non-'streetwise' supporting team
Too many key/global accounts
No plan for freeing up the energy from non-key/global accounts
Top management short-termism
The Additional 'Deadly Sins' of GAM
Practising GAM with any but truly global customers (see Chapter 1).
Winning global deals that are in fact no more than global hunting licences (see Chapter 1).
Ignoring the imperatives of cultural diversity (see Chapter 15).
Winning global deals that work out fine in the 'home country' (for both parties) but backfire in the 'overseas' operations (see the case study below — 'But it worked in the home market…').
Agreeing 'apparent' global supplier requirements and activities that become an 'unnecessary' burden on the local 'cost to serve' (see the case study below — 'Just too big a cost to serve').
Being in denial of the need for GAM, often at a local level (see the case study in Chapter 2 concerning the Dutch multiple retailer).
Allowing politics (head office and local) to hamper GAM operations, and in particular the development and delivery of value propositions (see the case study below — 'Politics and the destruction of value').
The removal of support and resources for GAM, by local operations, when 'the going gets tough' on their own patch (see the case study below — 'Pulling the plug').
Global account managers, and their teams, becoming a separate or elitist body (see the case study below — 'Doing their own thing').
Being an innocent among wolves (see the case study below — 'Innocents among wolves').
The Critical Success Factors - Making It Happen
Here we will summarize the work ahead:
Getting the big picture (Chapter 5):
o To manage a global account successfully you must understand their market, their business, their drivers, and what I will call their 'moneymaking logic', and then act on that understanding to achieve some form of preferred, key or strategic supplier status. That you must also aim to understand all of this better than the customer understands it for themselves is part of GAM's Holy Grail. Is it possible? Ask yourself the following question: can your global team understand the customer's global ambitions and requirements better than any nationally based or functionally based entity in the customer? If the answer to that is 'yes', then you are well on the way to that strategic supplier status, and your chances of managing the account, as opposed to reacting to its demands, will be dramatically enhanced.
o We can see here one of those chicken-and-egg conundrums: which comes first, the strategic or the global supplier? We have already seen that being a strategic supplier in one location is no guarantee of the same success in others, yet how can you hope to become a global supplier without demonstrating your value and importance somewhere? And looking from the other side of the conundrum: it is only through an investment of time and effort on a global basis that a supplier can hope to understand the customer sufficiently to become a truly strategic supplier. I suggest that you don't worry over much about the conundrum — you will be starting where you start — but do recognize that the activities and the outcomes go hand in hand.
Understanding the global buyer (Chapter 6):
o The global buyer has a difficult task, and one in which they are not always helped by their own local operations (so mirroring exactly the challenge for the global seller). Take great care not to become an additional obstacle in their way. Suppliers might not always rush to help the global buyer, partly from fear, partly from misapprehension, but also because they are so often in collusion with those self-same local customer operations, trying hard to maintain their local business. Such attitudes have to go if you wish to become a genuine and valued global supplier. The more help in their task that the global buyer receives from the potential global supplier, the more likelihood there is of that supplier becoming an actual global supplier.
o To become one of the favoured few you must get fully underneath the skin of the customer's purchasing strategy, which almost certainly means getting beyond the smokescreen of pricing. Sure, pricing matters, but it is rarely the only concern of a global buyer, and if it is, then you must find those that do care about more…
Understanding the customer's decision-making process (Chapter 7):
o 'Penetrating the customer's snail' is a phrase with which you will become quite familiar. This is about recognizing that while the global buyer may be the point at which you negotiate the deal and receive the order, your chances of success and your likely level of reward were determined a long way further back, inside a snail-like decision-making process (the phrase refers to the spiral shape of the snail's shell, but sometimes it can be just as apposite to their speed). Properly understanding where your value impacts in the customer's operations, and how the people on the receiving end of your value influence the final decision to buy or not buy, is another part of GAM's Holy Grail.
Managing the global touch points (Chapter 8):
o Influencing the customer's decision-making process requires a careful management of contacts and relationships, but managing the global touch points goes further than influencing skills. One of my customers once described GAM as being: 'all the things that go on between the supplier and the customer when the sales folk are not around'. I like that, as it expresses well the task required: to manage every point of contact with the customer to ensure consistency of approach, consistency of quality, and consistency of outcome.
o To do this effectively will require a wide range of skills, and some vital disciplines and processes. We describe it as 'building diamond teams', a
concept well entrenched in the practice of KAM, but with GAM we are sometimes called on to build these diamond teams on a truly grand scale.
Getting the board on board (Chapter 9):
o Senior management must be fully engaged for GAM to happen. There are so many obstacles, and most of them internal, that the management team must take on board their responsibility to 'clear the way'. They must also champion the cause, develop the capabilities in the business, coach the participants, and take up their own role as members of global account teams. Not every business is blessed with a management team capable of taking on this responsibility; the ones that are, are the ones that will prosper.
The global account manager (Chapter 10):
o It is the responsibility of senior management to appoint the right people, and to provide them with the right skills and resources; but what does it take to be one of this rare breed? The global account manager must have a range of talents, but most important among them is what has been called 'political entrepreneurship'. [1] This is the ability to see and develop the commercial case, but also to manage the competing interests (and egos) encountered on the way. They must be confident leaders and skilled coaches, and their ability to plan, persuade and motivate will be tested to the full. They must demonstrate authority but should not expect to have that authority handed to them as a badge, recognizing that the best kind of authority is the kind that is earned.
They will have to manage diverse and virtual teams with the challenge of cultural diversity in particular ever at the forefront of their mind.
o They are indeed a rare breed, and from this description maybe a non-existent one, which brings me to another quality — their ability to extract from their GA Team the capabilities and the competencies required for the GAM task: they must not be loners.
Structure and the persuasive process (Chapter 11):
o Building an organizational structure that supports GAM, without creating a bureaucratic hierarchy, and without detriment to existing local
capabilities, is such an individual task for each business engaged in GAM that this will not be the place for templates. Perhaps the most important 'rule', as far as any rules apply, is that GAM structures should aim to merge with local structures, not replace them or supersede them.
o Successful GAM structures are not just diagrams or organigrams; they contain common sets of skills and processes that bind together the constituent parts, so ensuring the consistency of approach demanded by global customers.
o The wrong structure can kill GAM, but unfortunately you cannot rely on the right structure to guarantee success. There are limits to structural
solutions and more often than not it will be the ability of those involved to persuade and influence that really makes things happen, not the rewriting of those organigrams. A persuasive process (an example of political entrepreneurship) will rank high in the list of capabilities required to make GAM happen.
Performance and reward (Chapter 12):
o Without doubt this is one of the toughest of the CSFs, so let's at least start with a simple principle: the methods of measuring performance and rewarding that performance must match the globality of the challenge.
o So long as your customers are only just emerging from 'international' status, than locally set objectives and locally based reward schemes may still work, but their days are numbered. So long as they deal only with single business units in your company then unit-specific objectives and rewards will be fine….
o First and foremost will be the need for a global profit & loss account for each global customer. It is a sin (you will recall from Chapter 3) to
make such large investments as GAM will involve and not measure their impact.
o As well as the global measure, those involved in servicing the customer (whether business units, functions or local operations) will need to be aware of the value of their contribution, which will bring us on to the question of reward.
o None of this need replace what happens locally or in individual business units. Any individual country will still want to know how a particular customer contributed to their national picture, and the same will go for an individual business unit. There is no reason why either should not measure that in any way they choose. As time goes by, however, perhaps the fascination with the local or the business unit measure will diminish and a desire to be part of the global measure will become more important. The patience required to manage this kind of transition, and the ability to force the pace where necessary, will be another example of the political entrepreneurship already mentioned.
Getting IT right (Chapter 13):
o The complexity of the challenge demands that a number of robust processes and support systems will need to be in place. It is here that we will see the vital role to be played by the information technology (IT) department, another member of the global account teams. In particular there must be systems for data capture, for analysis, and for sharing of information. Communication tools will be vital (attempting GAM before the era of e-mail would have been a mighty task indeed!), but even more important than the tools must be the disciplines required to see them used — in the end this is not about software: it is about people.
The global account plan (Chapter 14):
o Could you believe that there are firms with individual global customers worth in excess of 10 million pounds sterling that have no written strategic global plans and rely on a consolidation of the many local plans already in existence? How about your own?
o I said in my introduction to this book that there were no rules of GAM, but here is an exception: there must be a single plan that identifies the
opportunity, sets the direction, and establishes the rules of engagement.
Harnessing the strengths of cultural diversity (Chapter 15):
o Cultural diversity is a factor that can make or break the whole GAM edifice. Handled badly (which usually means ignoring it and hoping it will go away), cultural diversity will be a source of frustration that can exhaust the most committed enthusiast. Handled well (which means being open-minded, observant, and discussing things openly), the diversity of your team can be harnessed as a source of competitive advantage.
o Perhaps the key is in setting the rules; which parts of the relationship are best left to local treatment and local norms, and which parts must
follow a uniform global approach? Don't forget that the customer has just the same anxieties as you over this matter, and a supplier that demonstrates its ability to work globally without setting off cultural 'bombs' at every turn will be welcomed. More than that, a supplier that manages its diverse team to ensure that its global and local resources are deployed in the best interests of the customer will very likely be viewed as a key supplier, a strategic supplier, and a truly global supplier.
The Global Account Plan
Purpose
First, decide the purpose of your GA plans. There are many things that they might be expected to achieve for the business, the GA team and the customer:
establishing goals, strategies and action plans;
ensuring the GA team has a common understanding and a unified approach;
winning support from senior management;
winning support from local operations and teams;
winning support from support functions or other business units;
getting things done to set standards and schedules;
turning strategy into action;
a performance review mechanism (possibly related to reward);
focusing internal functions and resources on to market and customer needs;
demonstrating commitment to the customer (and at the right stage of maturity, why not share your plans with the customer?).
Core Content
Regard the following list with care; it is certainly not meant to be prescriptive, and add and subtract as you see fit to design your own global account plan:
The global account team — core and full
An executive summary — one slide maximum
The profit plan — current profitability and future target (globally and by regions if appropriate)
Opportunities and objectives — driven by:
o the customer's ambitions, projects, problems and locations
o competitive activity
o the potential return on investment
The contact matrix and GROWs — (see Chapter 8)
The value proposition — products, services, and the measured impact of your proposition on the customer's business — and your planned reward
Projects — project teams and milestones
Resources required — actions required by management to commit resources
Implementation timetable — including review
Appendices — customer analysis (see Chapter 5), customer information, and historical data
For more Information
* Account Management Books. Customer Relationship Management. Public Relationship. Strategic Partnership, PR Practitioner's Desktop Guide *
In life, there are seven deadly sins (pride, covetousness, lust, envy, gluttony, anger and sloth), but global account management (GAM) is a thing much tougher than life.
The 'Deadly Sins' of KAM and GAM
Silo mentality — managers as 'barons'
Multiple or competing supplier business units
o Whose key/global account is this anyway?
Failure to measure the impact
o Inadequate measures of account profitability
Resistance from the sales team…
o A preference for 'hunting'
Inappropriate people or skills
o A non-'streetwise' supporting team
Too many key/global accounts
No plan for freeing up the energy from non-key/global accounts
Top management short-termism
The Additional 'Deadly Sins' of GAM
Practising GAM with any but truly global customers (see Chapter 1).
Winning global deals that are in fact no more than global hunting licences (see Chapter 1).
Ignoring the imperatives of cultural diversity (see Chapter 15).
Winning global deals that work out fine in the 'home country' (for both parties) but backfire in the 'overseas' operations (see the case study below — 'But it worked in the home market…').
Agreeing 'apparent' global supplier requirements and activities that become an 'unnecessary' burden on the local 'cost to serve' (see the case study below — 'Just too big a cost to serve').
Being in denial of the need for GAM, often at a local level (see the case study in Chapter 2 concerning the Dutch multiple retailer).
Allowing politics (head office and local) to hamper GAM operations, and in particular the development and delivery of value propositions (see the case study below — 'Politics and the destruction of value').
The removal of support and resources for GAM, by local operations, when 'the going gets tough' on their own patch (see the case study below — 'Pulling the plug').
Global account managers, and their teams, becoming a separate or elitist body (see the case study below — 'Doing their own thing').
Being an innocent among wolves (see the case study below — 'Innocents among wolves').
The Critical Success Factors - Making It Happen
Here we will summarize the work ahead:
Getting the big picture (Chapter 5):
o To manage a global account successfully you must understand their market, their business, their drivers, and what I will call their 'moneymaking logic', and then act on that understanding to achieve some form of preferred, key or strategic supplier status. That you must also aim to understand all of this better than the customer understands it for themselves is part of GAM's Holy Grail. Is it possible? Ask yourself the following question: can your global team understand the customer's global ambitions and requirements better than any nationally based or functionally based entity in the customer? If the answer to that is 'yes', then you are well on the way to that strategic supplier status, and your chances of managing the account, as opposed to reacting to its demands, will be dramatically enhanced.
o We can see here one of those chicken-and-egg conundrums: which comes first, the strategic or the global supplier? We have already seen that being a strategic supplier in one location is no guarantee of the same success in others, yet how can you hope to become a global supplier without demonstrating your value and importance somewhere? And looking from the other side of the conundrum: it is only through an investment of time and effort on a global basis that a supplier can hope to understand the customer sufficiently to become a truly strategic supplier. I suggest that you don't worry over much about the conundrum — you will be starting where you start — but do recognize that the activities and the outcomes go hand in hand.
Understanding the global buyer (Chapter 6):
o The global buyer has a difficult task, and one in which they are not always helped by their own local operations (so mirroring exactly the challenge for the global seller). Take great care not to become an additional obstacle in their way. Suppliers might not always rush to help the global buyer, partly from fear, partly from misapprehension, but also because they are so often in collusion with those self-same local customer operations, trying hard to maintain their local business. Such attitudes have to go if you wish to become a genuine and valued global supplier. The more help in their task that the global buyer receives from the potential global supplier, the more likelihood there is of that supplier becoming an actual global supplier.
o To become one of the favoured few you must get fully underneath the skin of the customer's purchasing strategy, which almost certainly means getting beyond the smokescreen of pricing. Sure, pricing matters, but it is rarely the only concern of a global buyer, and if it is, then you must find those that do care about more…
Understanding the customer's decision-making process (Chapter 7):
o 'Penetrating the customer's snail' is a phrase with which you will become quite familiar. This is about recognizing that while the global buyer may be the point at which you negotiate the deal and receive the order, your chances of success and your likely level of reward were determined a long way further back, inside a snail-like decision-making process (the phrase refers to the spiral shape of the snail's shell, but sometimes it can be just as apposite to their speed). Properly understanding where your value impacts in the customer's operations, and how the people on the receiving end of your value influence the final decision to buy or not buy, is another part of GAM's Holy Grail.
Managing the global touch points (Chapter 8):
o Influencing the customer's decision-making process requires a careful management of contacts and relationships, but managing the global touch points goes further than influencing skills. One of my customers once described GAM as being: 'all the things that go on between the supplier and the customer when the sales folk are not around'. I like that, as it expresses well the task required: to manage every point of contact with the customer to ensure consistency of approach, consistency of quality, and consistency of outcome.
o To do this effectively will require a wide range of skills, and some vital disciplines and processes. We describe it as 'building diamond teams', a
concept well entrenched in the practice of KAM, but with GAM we are sometimes called on to build these diamond teams on a truly grand scale.
Getting the board on board (Chapter 9):
o Senior management must be fully engaged for GAM to happen. There are so many obstacles, and most of them internal, that the management team must take on board their responsibility to 'clear the way'. They must also champion the cause, develop the capabilities in the business, coach the participants, and take up their own role as members of global account teams. Not every business is blessed with a management team capable of taking on this responsibility; the ones that are, are the ones that will prosper.
The global account manager (Chapter 10):
o It is the responsibility of senior management to appoint the right people, and to provide them with the right skills and resources; but what does it take to be one of this rare breed? The global account manager must have a range of talents, but most important among them is what has been called 'political entrepreneurship'. [1] This is the ability to see and develop the commercial case, but also to manage the competing interests (and egos) encountered on the way. They must be confident leaders and skilled coaches, and their ability to plan, persuade and motivate will be tested to the full. They must demonstrate authority but should not expect to have that authority handed to them as a badge, recognizing that the best kind of authority is the kind that is earned.
They will have to manage diverse and virtual teams with the challenge of cultural diversity in particular ever at the forefront of their mind.
o They are indeed a rare breed, and from this description maybe a non-existent one, which brings me to another quality — their ability to extract from their GA Team the capabilities and the competencies required for the GAM task: they must not be loners.
Structure and the persuasive process (Chapter 11):
o Building an organizational structure that supports GAM, without creating a bureaucratic hierarchy, and without detriment to existing local
capabilities, is such an individual task for each business engaged in GAM that this will not be the place for templates. Perhaps the most important 'rule', as far as any rules apply, is that GAM structures should aim to merge with local structures, not replace them or supersede them.
o Successful GAM structures are not just diagrams or organigrams; they contain common sets of skills and processes that bind together the constituent parts, so ensuring the consistency of approach demanded by global customers.
o The wrong structure can kill GAM, but unfortunately you cannot rely on the right structure to guarantee success. There are limits to structural
solutions and more often than not it will be the ability of those involved to persuade and influence that really makes things happen, not the rewriting of those organigrams. A persuasive process (an example of political entrepreneurship) will rank high in the list of capabilities required to make GAM happen.
Performance and reward (Chapter 12):
o Without doubt this is one of the toughest of the CSFs, so let's at least start with a simple principle: the methods of measuring performance and rewarding that performance must match the globality of the challenge.
o So long as your customers are only just emerging from 'international' status, than locally set objectives and locally based reward schemes may still work, but their days are numbered. So long as they deal only with single business units in your company then unit-specific objectives and rewards will be fine….
o First and foremost will be the need for a global profit & loss account for each global customer. It is a sin (you will recall from Chapter 3) to
make such large investments as GAM will involve and not measure their impact.
o As well as the global measure, those involved in servicing the customer (whether business units, functions or local operations) will need to be aware of the value of their contribution, which will bring us on to the question of reward.
o None of this need replace what happens locally or in individual business units. Any individual country will still want to know how a particular customer contributed to their national picture, and the same will go for an individual business unit. There is no reason why either should not measure that in any way they choose. As time goes by, however, perhaps the fascination with the local or the business unit measure will diminish and a desire to be part of the global measure will become more important. The patience required to manage this kind of transition, and the ability to force the pace where necessary, will be another example of the political entrepreneurship already mentioned.
Getting IT right (Chapter 13):
o The complexity of the challenge demands that a number of robust processes and support systems will need to be in place. It is here that we will see the vital role to be played by the information technology (IT) department, another member of the global account teams. In particular there must be systems for data capture, for analysis, and for sharing of information. Communication tools will be vital (attempting GAM before the era of e-mail would have been a mighty task indeed!), but even more important than the tools must be the disciplines required to see them used — in the end this is not about software: it is about people.
The global account plan (Chapter 14):
o Could you believe that there are firms with individual global customers worth in excess of 10 million pounds sterling that have no written strategic global plans and rely on a consolidation of the many local plans already in existence? How about your own?
o I said in my introduction to this book that there were no rules of GAM, but here is an exception: there must be a single plan that identifies the
opportunity, sets the direction, and establishes the rules of engagement.
Harnessing the strengths of cultural diversity (Chapter 15):
o Cultural diversity is a factor that can make or break the whole GAM edifice. Handled badly (which usually means ignoring it and hoping it will go away), cultural diversity will be a source of frustration that can exhaust the most committed enthusiast. Handled well (which means being open-minded, observant, and discussing things openly), the diversity of your team can be harnessed as a source of competitive advantage.
o Perhaps the key is in setting the rules; which parts of the relationship are best left to local treatment and local norms, and which parts must
follow a uniform global approach? Don't forget that the customer has just the same anxieties as you over this matter, and a supplier that demonstrates its ability to work globally without setting off cultural 'bombs' at every turn will be welcomed. More than that, a supplier that manages its diverse team to ensure that its global and local resources are deployed in the best interests of the customer will very likely be viewed as a key supplier, a strategic supplier, and a truly global supplier.
The Global Account Plan
Purpose
First, decide the purpose of your GA plans. There are many things that they might be expected to achieve for the business, the GA team and the customer:
establishing goals, strategies and action plans;
ensuring the GA team has a common understanding and a unified approach;
winning support from senior management;
winning support from local operations and teams;
winning support from support functions or other business units;
getting things done to set standards and schedules;
turning strategy into action;
a performance review mechanism (possibly related to reward);
focusing internal functions and resources on to market and customer needs;
demonstrating commitment to the customer (and at the right stage of maturity, why not share your plans with the customer?).
Core Content
Regard the following list with care; it is certainly not meant to be prescriptive, and add and subtract as you see fit to design your own global account plan:
The global account team — core and full
An executive summary — one slide maximum
The profit plan — current profitability and future target (globally and by regions if appropriate)
Opportunities and objectives — driven by:
o the customer's ambitions, projects, problems and locations
o competitive activity
o the potential return on investment
The contact matrix and GROWs — (see Chapter 8)
The value proposition — products, services, and the measured impact of your proposition on the customer's business — and your planned reward
Projects — project teams and milestones
Resources required — actions required by management to commit resources
Implementation timetable — including review
Appendices — customer analysis (see Chapter 5), customer information, and historical data
For more Information
* Account Management Books. Customer Relationship Management. Public Relationship. Strategic Partnership, PR Practitioner's Desktop Guide *
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