Business Irish

Sunday 22 January 2017

If you make company decisions be sure and look at the big picture

Paul Lanigan

Published 27/01/2011 | 05:00

IF you think that decision making is a straight process in an unstraight world, you'll fail more often than you'll succeed.

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Many years ago I sold into a well-known manufacturer of mobile phones, pagers and walkie-talkies.

One of the major projects I remember my customer undertaking was the outsourcing of their entire logistics function to a third-party vendor.

Late one evening I was chatting to Philip, their head of supply chain and logistics, who confided in me that he had chosen a vendor to outsource his logistics.

The particular vendor wasn't well known in this part of the world, but was the market leader in the Far East.

As I was going to have to work with this vendor to supply my products, Philip spent some time assuring me why this vendor was the best for his company and mine.

Before parting he asked me to keep the information confidential as they were still in negotiations with several vendors.

The fact that he had made his decision before the official decision had been made wasn't lost on me. But what happened next astounded me.

A few days later I received a call from Philip telling me that there was a change of plan and they were no longer going with the Far Eastern company. Instead they were going to work with FedEx.

When I enquired what was behind the change of heart, Philip confided that when he told his managing director of his decision, his MD asked him if he wasn't making a career limiting decision.

"What do you mean? Philip asked his MD.

"Well", responded his MD, "when something goes wrong and some important product that we need goes missing, as it inevitably will, and emotions are running high, someone will ask "who lost it?", "who the hell are they?", "what the hell are we doing using a company no one has ever heard of ... Are they reputable ... why were they chosen?"

"Why didn't you select a vendor we know?' and the next question will be "who the hell selected them anyway?"

So, Philip informed me, we're going with FedEx. Everybody knows who FedEx is. I won't have to justify them to the organisation. Nobody can tell me that FedEx isn't a professional outfit. "But," I protested, "I thought the 'Far Eastern' company was the best fit for your particular needs?"

"Life's not that simple," Philip retorted. "I'm not going to take the hit to make someone else's life easier."

"Wow," I thought to myself as I walked to the car park. "So much of selling has nothing to do with products or solutions."

Fast forward to the present where government departments and quangos are announcing almost every week that they have picked

accountants, lawyers and management consultants from the world's most famous companies.

Given the choice between the familiar and the unfamiliar most people will favour familiar. This is obvious, when you think about it.

It's the devil you know is better than the devil you don't know syndrome. We all gravitate towards certainty. Familiarity is just a signpost on the road to certainty.

Smaller operators are naive to think that they stand a chance if they cannot tackle significant concerns not addressed by the multinational service providers.

In a previous article I said that if you can't even speak about money, don't expect to see any in the sales process.

I made the point that sales effectiveness is not just about your ability to ask questions or make great presentations, similarly, your ability to read the political and decision making landscape is also critically important to your success. There are a few lessons from all this:



Lesson 1:

If you expect the decision-making of any organisation to be fair, straight or logical then you're going to lose more than you win. To expect otherwise is naive.

Lesson 2:

The sales process almost always favours the incumbent. This is especially true when selling to an organisation that is risk averse.

Lesson 3:

Given the choice between a lower price (especially when the money is not their own personal funds) and a perceived lower risk, risk averse people will always go for lower risk.

To many people, a cheaper price may be even interpreted as an additional risk factor.

As for Philip, FedEx, and the logistics company in the Far East? Philip's company pulled out of Ireland several years ago.

Philip is now head of another multinational corporation. Both FedEx and the firm from the Far East are all doing just fine.

Paul Lanigan is the head of the Sandler Sales Institute in Dublin. www.ie.sandler.com

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