Sales as a signal receiver
In 2000, when Bill Gates appointed Steve Balmer to succeed him as CEO, Microsoft owned more than 95% of computer operating systems worldwide. Fifteen years later, after some two billion smartphones had been shipped, the company owned less than 1% of the mobile OS market. A global powerhouse had been caught flat-footed as five technologies rapidly took off: search (overtaken by Google), smartphones (overtaken by Apple), mobile OS (overtaken by Google/Apple), media (overtaken by Apple/Netflix), and cloud (overtaken by Amazon).
To some extent this was simply a case of what economist Joseph Schumpeter once described as “the perennial gale of creative destruction,” whereby the old and outdated is constantly being swept away by the new and more desirable. But it was also a case of downplaying market signals because institutional incentives couldn't justify the investment in speculative, and seemingly peripheral, technologies. It was a classic case of what Clayton Christensen called The Innovator's Dilemma.
For many great companies, a constant challenge is to anticipate and adjust to inflection points. LinkedIn COO, Dan Shapero, was once asked how much of his time he spends following early warning signs in our competitive landscape, and he said it’s about half his job. Satya Nadella, the current CEO of Microsoft, has staked his legacy on leading indicators, saying in a 2015 interview, “We no longer talk about the lagging indicators of success, like revenue and profit. What are the leading indicators of success? Customer love.”
But it has to be more than the C-suite’s responsibility to assume the burden of closely inspecting the horizon. It has to be an organizational discipline, with distributed sensing-making and recurring managerial focus. To that end, the sales function has a uniquely important role to play.
This is because sales is what’s known as a “boundary position,” one that negotiates the overlapping, and often conflicting, interests of the company and its customers. By design, salespeople have to advance their company’s agenda, but they must also understand and prioritize the customer’s perspective. More so than in other functions, sellers are primed to notice emerging threats and opportunities because they live in two realities. What eventually surprises management has often been common knowledge among sellers for a while.
Sellers are privy to the raw emotional consequences of company decisions. They witness the rewards of a productive partnership, observing the primary sources of customer value. But they also contend with frustrations that stem from feeling hostage to price increases, product limitations, or suboptimal service.
There is much to learn from these emotional extremes, and much of it indicative of how the market may evolve. That which drives most of customer value might be different from what the product team believes. That which rankles customers might reveal the most obvious attack vector for new competitors.
This kind of institutional intelligence is often harvested in a haphazard way. However, as change expert John Kotter observed in Our Iceberg is Melting, “in a world that is changing faster and faster, the number of people who have to get involved to deal with all of the big changes and at a speed that matches what’s needed, is going up. Not by increments, but by factors.”
Sellers are some of the most important signal receivers for an adaptive organization.