09 Abr Entrevista con Allan Lam, Fairchild Industries
Entrevista con Allan Lam, Fairchild Industries
Allan Lam was appointed Executive Vice President, Worldwide Sales and Marketing, in 2007. He leads Fairchild Semiconductor’s sales and marketing organization worldwide. Allan has more than 30 years of experience in the industry. Prior to his current position he was Senior Vice President of Fairchild’s Standard Products Group (SPG), which represented one quarter of the company’s business. Allan has held a number of high-level positions such as Vice President of Sales for Vishay Intertechnology Asia and Vice President of their Standard Products unit. He has also held positions in management, quality, marketing, sales and engineering with Temic, BBS Electronics, CiNERGi, SGS-Thomson Microelectronics and National Semiconductor. Allan holds a BA in business administration from the Royal Melbourne Institute of Technology in Melbourne, Australia. He also holds diplomas in both management studies from the Singapore Institute of Management and electronics engineering from Hong Kong Polytechnic. Allan is a fluent speaker of Cantonese, Mandarin, and English.
The key to sales transformation success is management buy-in. The reason I say this is that I have always believed that a Class A plan with a Class B execution will lose out to a Class B plan with a Class A execution. Without the sales management’s commitment, a sales transformation initiative like the one we took on at Fairchild could fail in no time.
When Mark Thompson came on board as CEO, revenue and gross margin at Fairchild Semiconductor had been stagnant for several years, and we could not seem to break away. Mark’s objective from the beginning was to transform the company. To support that vision, he brought in a few new executives, including myself.
When we first came on board we had a sales force that was, in the words of Mark, “trying to sell something to everybody.” To replace this all things to all people mentality, Mark’s initial objectives was to move the product portfolio to a higher position in the value chain. But in order for that to be effective in the marketplace, you need a sales force that can effectively deliver that value proposition.
When we looked at the sales organization at that point in time, what they were essentially doing was selling based on price and availability. With that type of positioning your margins are always capped because of the constant price pressure from your customers. Based on that, it is very difficult to know what tomorrow will look like,
because you don’t have strategic relationships with your customers and therefore there is not a compelling reason for them to do business with you.
When I was asked to take over sales, my charter was to move to a value-based sales approach. We needed to implement a customer-centric sales process that moved beyond price and availability, and showed our customers that we could help solve key challenges they were facing. Through deeper relationships we would gain insights that would help us predict our business better, and by delivering better value we could justify higher margins. We believed that there was great customer value in the quality of our supply chain, and in our ability to partner with our customers to deliver technology they needed to meet their challenges. We knew what we wanted to do, the question was, how?
The sales organization was badly beaten down at the time, so my first goal became to restore the self-esteem of the sales force. To get to where we wanted to be, sales needed to be the elite force that connected the company to the outside world. We needed to create an environment where they walked tall down the hallway, as opposed
to with their heads hung down.
I gave a lot of thought to where we were and what needed to change. Over a several month period, I started to conceptualize where transformation would lead us. I wanted to make sure things were very clear in my mind before asking people to get on board with a new way of selling solutions versus price. As soon as the vision was established in my mind, I started to share it with my management team. I wanted to take them through the thought process, step-by-step. I didn’t try to do this in one session. It was done over the course of several staff meetings so the team had time to digest the ideas.
It was critical to me that everyone had to be on board with the changes we were considering. During the initial sessions, as we discussed where we needed to go and to explore how to get there, we started surfacing roadblocks that could be in our way. Early in the discussions, we actually identified 36 barriers to success—32 of which, in the
team’s opinion, were unsolvable.
It ended up taking six months to arrive at the point where we all agreed to go ahead with a new sales methodology. But the process of getting to that point was very valuable. When we reviewed the list again, we still had the 36 barriers, but now the team’s opinion was that 33 of those issues were very solvable, and the last three were hard, but also solvable. At that point in time, I went around the room, one by one, to make sure each person on my team understood what we were going to accomplish, how we were going to do it, and saw this as achievable. There was no blood on paper, but I did ask for a personal commitment from each individual for what they were signing up to.
What I was asking my team to do was be ambassadors for our transformation efforts. Inside of the sales organization they needed to help train, reinforce the concepts, enforce compliance, review their people, share success stories, etc. They also needed to interact with the other functional units in the company to explain and promote what we were doing. I didn’t want them watching it happen, I wanted them to be part of making it happen.
In this regard, I asked each individual to actually draw up their own adoption plan and agree to be measured by that. Part of the senior sales management’s compensation package is a variable pay component tied directly to specific MBOs. So for a period of time, I included the adoption plan as part of the management objectives. This meant that a significant portion of their variable pay was linked to this initiative.
With the senior team on board, we partnered with a sales process firm: Sales Performance Academy out of Singapore. They worked with us to develop the new sales process, selling tools, and coaching and mentoring methodology. Building those items was one thing; we then needed to get everyone effective at, and committed to, using them.
We conducted a three-day training class for all the sales people and sales managers so that everyone had the same fundamentals regarding our new focus on selling solutions. In addition to that, we then did a two-day course for all sales managers where they were given training on new tools for coaching, reviewing their sales people, measuring the strength of sales, etc.
At the beginning of this initiative, in terms of looking at how we were selling from a sales relation and sales process perspective, we saw us as being a Level 1.6 Sales Performance organization (see Figure 1). Our original goal was to get to Level 3. We put the new programs into action, and over the next twelve months we tracked our progress. In assessing our evolution, we were more like 2.5.
We had the form, we had the shape, but we still lacked some of the substance. We still needed to do more to change the behavior of the sales people when they are in front of a customer. We started asking questions. Do our managers consistently review and coach our sales people? Do they know how to do it? Our conclusion was that this was not being sufficiently done.
One of the areas we looked at was the profile of sales managers and how we promote people into those positions. Many of them were good salespeople, who generated solid sales revenues, and because of their achievements we promoted them into management. When you looked at the training we provided them, it was always how to sell, and how to sell well. We realized if we were going to get to a Level 3 performance, what we needed to do was get them to effectively manage the troops on the ground.
It became clear that this was the missing link. We realized if we improved the performance of our sales managers, we could, in turn, improve the performance of the five or six people that reported to them. To support this, we organized our first ever sales management convention. We brought in all of the managers from around the world for a three-day session. Prior to that conference, each manager had to go through a training course on process, coaching, and mentoring. That was a requirement to attend. We needed everyone to come to the session with the same set of skills; otherwise the things we covered would not make any sense to them.
The investment we made in the sales conference again reinforced our commitment to the sales transformation efforts. It was also a chance for us to get each manager’s commitment to the efforts, which we did from my direct reports down to each of the first line sales managers.
We also used this as an opportunity to celebrate the success we had already made. In moving from a Level 1.6 to 2.5, we had already made a difference in performance. We had improved our gross margins by seven points. I won’t claim the full credit for that, but a major portion of that achievement was due to the changes we made in how we sold and how we added value to the customer. We had changed behavior, we had a different mindset. Because of our new focus on solving customers’ problems, we could justify a higher price. These were things to celebrate at the sales convention in addition to setting the path to get to where we ultimately wanted to be. We left that meeting with the confidence that we were going to get there.
Advice to Peers
Sales Leader’s Commitment
In thinking back about the lessons we have learned from our sales transformation efforts, there are many things I could share, but let me focus on three. First and foremost is the necessity of the sales leader’s personal commitment to make change happen. When you start this process, you need to understand that it will be a long journey, and more often than not, you will find times when you are all alone on that journey.
Sales transformation by definition means making major changes. Once you start this initiative, it is all up hill, especially at the very beginning of the project. You need to rally support—both from inside your own sales organization as well as from your peers on the executive team. You need to find and justify the funding. You need to deal with the resistance to change that will undoubtedly arise. You need to be able to deal with much of the uncertainty, because business will still have to carry on. No one can tell you how long this process will take. Real sales transformation could take three years, it could take five.
Based on all of this, the most important question a sales executive has to ask him or herself is, “Do I have the capacity to persevere, do I have the stomach to face failure?” Let’s be really frank. If you embark on a journey like this and two years down the road the efforts are not showing any results, you can lose your job. But I also believe that if you don’t do anything, you are going to get fired anyway. So you might as well take the chance and go for it. Just realize that this is going to mean transformation on a very large scale; not just for sales but the whole company. That is the challenging part, but at the same time the fun part.
The Right Team
The second thing I would like to share is only second in terms of the sequence of conversation. To me, it is just as important as your own personal commitment. You need to build a strong team before you even think about making a commitment to this type of initiative. Without an effective team I can almost guarantee failure.
By strong, I do not mean pulling together a group of very strong individuals. On the contrary, we do not need each member to be the most brilliant or the smartest. Each key member of the team will have their own strengths and weaknesses, including us as the leader. That’s fine as long as the team has sufficient variety in their skill sets and personalities so that one person’s strengths can cover another’s weaknesses, and vice versa. There must be willingness to help each other. That is an absolute requirement if you are going through a journey like this.
It is not necessary for everyone on the team to agree with each other. But they must be able to communicate with each other straight and square. You can’t allow any passive aggressiveness. It someone doesn’t agree with certain things, they must say it now or never. We need to have people express different points of view before decisions are made. But once you have a final decision—not a final agreement, a final decision—I expect everyone to support that whole heartedly.
As a leader you must be willing and able to make changes along the way, including changes in the team. As leaders, we make judgment calls, and one of those is picking who is on the team. In some cases those decisions could be wrong. When that happens, we need to watch the team dynamics and plan changes very carefully. But the full commitment of the team has to be there. By full commitment, I don’t mean having everyone say, “Hey boss, I support whatever you want to do.” Rather, I want them to sign up to fully support what we are doing and to execute to perfection.
My third piece of advice is to over-communicate. Right from the beginning, make sure that those who will be counted on to make change happen understand fully the details of the initiative. That includes being open about the barriers. The easiest way to deal with the barriers to your path to success is to face them directly.
When the program is getting ready to launch, you then need to over-communicate to the entire audience that will be impacted by the changes you are making. It’s very much like election campaigns. We need to let people know where we are going, what needs to change, what the benefits and intended results are, and again, we need to be open about the difficulties that can arise. It is also useful to explain the consequences of not doing anything.
To make this happen at Fairchild, I ran a series of internal webcasts to introduce to the entire sales force the ideas behind the initiative before we officially embarked on the journey. Then, over the following five months, while we were doing a lot of preparation and the groundwork, I did a few more webcasts to update them on the progress that was being made, to keep them informed. So by the time we rolled the changes out, people understood them and felt more comfortable.
To sum all this up let me say one last thing: be consistent. There will be many people out there waiting for things not to work right, including your own people. Not everything will work perfectly the first time. Expect that, and when it happens be persistent. Don’t let go, or at least don’t let go easily. We ran into some challenges, and we were able in each case to work through them, and you need to do that because the reward when you succeed is very large.
Customers now see us as problem solvers. And this is not just throwing new technologies at problems. We are also coming up with innovative ways of applying existing technologies to deal with issues that have been irritating customers for a long time. That, in turn, inspires them to continue to work with us. In the past, many customers only brought us into the discussion when they got to the RFP stage in their development process. Now a number of very innovative customers are bringing us into conversations looking far out on their strategic planning roadmaps.
Based on that, we are able to work to envision solutions together, and those deeper relationships will help us for years to come. As external customers are respecting us more, we are also finding that internal customers, mainly the product divisions, are also seeing us in a different light. They respect what we are doing, and that is making them more willing to listen to what we and our customers have to say.
One last observation: when you think about sales transformation, it should not be from the angle of “how well can my sales reps sell?” Rather, it should be about how much we can improve the lives of our reps altogether. If we enrich their careers, we make reps not just more efficient but more effective. They will do a better job of serving their customers, and, in return, the customers will reward you with deeper relationships.
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