WHY DO YOU HAVE TO MANAGE EXPECTATIONS FROM YOUR CORPORATE STAKEHOLDERS? – Part II
Having successfully sold into the Federal Government for over twenty-five years, I’ve found the single most critical factor for success is obtaining buy-in and managing the expectations of the key stakeholders.
In my last Blog article, I discussed developing and managing high-level expectations of the stakeholders known as VITOs (Very Important Top Officers) and how, despite their successes, they stay away from the very lucrative Federal market to focus on their comfort zone.
In this article, I will continue our discussion about managing expectations. I’ll explore the questions: How, Who, What & When.
How – How to manage expectations.
Who – Whose expectations do I need to manage? Who are the key stakeholders?
What – What expectations should you set? What will it take to enter the market?
When -When should the key stakeholder expect those expectations to be realized? When can they expect a return on investment?
Part I of this series briefly discussed my experience interviewing with a young company that wanted to build a new Federal sales organization. During my multiple interviews, I intentionally began to manage the expectations of my new team. To successfully enter this new market for the company, I really had to know the mindset of the key stakeholders to set expectations appropriately. I focused on their tactical plans and reactions to my questions and thoughtfully listened to their responses. At the end of the day, when the CEO and I spoke, we also discussed changes in the sales approach for the Federal market and detailed, measurable benefits while generating revenue. I was managing his expectations. I also told him that I would produce an actionable business plan detailing how I would execute, who I would need to be successful, specifically what it would take to enter the Federal market, and when the company could expect a return on investment—again, managing his expectations. So, let’s move on to discuss the next question:
HOW TO manage expectations?
How you manage expectations at the highest level is very important. Communicating, organizing, leading, and directing conversations with key stakeholders with their responsibilities and timeframes and completing required tasks is critical to building this market vertical. Questions you may want to address during the process:
- Are the key stakeholders listening, and do they understand what you are communicating to them?
- Are your expectations grounded in fact?
- Have you provided reasonable timeframes?
- Have you effectively communicated the requirements to the key stakeholders?
- Have you aligned their expectations with the requirements?
- Do you have any gaps from expectations created and how they will be met?
- Do you have a plan to bridge those gaps?
- Do the stakeholders have preconceived expectations that need to be addressed?
- Have you assumed all stakeholders understand your endgame expectations?
WHOSE expectations do I need to manage?
Each one of the stakeholders has a critical function to perform.
Just like a well-oiled machine, each part needs to be functioning properly. Should one of the parts of the machine fail, the entire project fails. Everyone needs to do their best to keep to their commitments. But please understand as you go through the process, things may change, or you may need to implement a course correction to keep the process moving forward properly.
Who are the key stakeholders? What are some of their expectations?
|Venture Capitalist||Will this market increase the valuation of my asset (the company)? By how much?|
|Board of Directors||What will this cost the company?|
|CEO||What will be the return on investment in this market?|
|CMO||Do I have the right resources to create a successful marketing campaign?|
|CTO||Do I need to make changes to the product to enter this market?|
|VP Engineering||Can we demonstrate our capabilities with our existing technical resources?|
|Channel Manager||Do we have the right partners for this market?|
|VP Sales||Do I have the right sales people to close revenue? Sales cycle?|
|Sales Person||I have never done Federal sales before, but I am willing to try.|
These are not all the stakeholders, nor all of the questions they will ask. I wanted to provide insight into some of the areas of concern for a framework for discussing expectations.
You may or may not have to deal with each of these stakeholders, or in some smaller companies, people wear dual or even triple hats. Regardless, each of these positions must have direct input and engage in the process to succeed.
WHAT expectations should you set?
Answering this very serious question requires discussing the same four resources we discussed in the “WHY” article: money, people, process, and technology. This is just a brief overview of a few of the resources.
If a company is unwilling to invest in this new market with significant funding, it may not be ready to reap the rewards. The front-end expenses to enter the Federal market can be overwhelming, and you MUST set this expectation. Some of these efforts can be made on the cheap initially, such as brochures, changes to the website, and some aspects of a federally focused channel strategy. Other items, such as travel, certifications, and technology roadmaps, require a commitment and significant funding. The Federal market has some idiosyncrasies that may require specific products to be certified to be added to a customer’s network. Funding may be required to obtain these certifications. These certifications can be expensive, and obtaining them can be time-consuming. But if you forgo these certifications, your company may not be able to sell your technology to those customers. (NOTE: Certifications will be discussed in a future article). Travel is required because the Federal customer is not confined to Washington, DC. It is worldwide. So, where you want to sell is just as important as who you want to sell to. Roadmap is sometimes the most difficult hurdle to communicate and overcome for companies. The Federal government is a huge customer, and they expect certain features and capabilities. If your company is unwilling to include the Federal Government’s required features and capabilities, you will not be considered.
There also must be a commitment from all key stakeholders to achieve success in this vertical. As previously mentioned, each stakeholder must know exactly what is expected of them to execute their requirements. This way, you can effectively manage the entire process.
I have also found this to be a very frustrating piece of the puzzle. When the company has allocated funding to bring a product through the certification process, but engineering hasn’t allocated personnel or time to assist in the process, the system fails, and companies lose critical time, directly affecting revenue. It’s important that you proactively communicate and set expectations with everyone in the chain so people understand that they are critical to the success of the business.
The Federal Government has many processes which must be followed for a company to sell products and services to prospective Federal customers. For one, buying cycles and processes can completely differ from commercial sales cycles. This will directly affect the revenue pipeline and a salesperson’s ability to close opportunities. Another factor is the Federal Acquisition and Regulations System (FARS) which dictates how the Federal customer can procure products and services. Many other processes can complicate selling technology or services to the Federal vertical. These processes can be overwhelming if you don’t know how to use them to your advantage. Companies that understand leveraging these complexities can succeed and be extremely profitable.
WHEN should the Key Stakeholder SEE those expectations be realized (i.e. REVENUE)?
“Show me the money”
A famous quote and key to setting and managing expectations.
Most commercial sales organizations set revenue expectations from the pipelines forecast by their sales activity. This is based upon using the company’s resources: sales, marketing, engineering, and C-level personnel in a meeting with enterprise customers to forecast revenue projections. This well-developed sales activity is easily understood and quantifiable. When dealing with a commercial entity, a company can easily understand the requirements and the sequence of events, customer organizations, and paths for money to follow to document when revenue should close at a specific time and budget. The Federal market can be forecasted similarly but with a different pipeline cycle. You must know the customer and their decision matrix.
For example: At one company, the Vice President of Sales joined me for a meeting with a potential customer. The meeting was with a government Program Manager and his technical personnel. During our conversation, we spoke about the budget, the timing (June timeframe), and the technology. This happened to be my third meeting with the customer. After the meeting, my VP looked at me in the parking lot and said, “There is no sale there.” I was quite perplexed by this statement. I asked why he thought that there was no opportunity there. He said there were no key personnel (C-level) in attendance, and from his perspective, no commitment. I tried to explain that the Program Manager was THE KEY PERSON. The VP’s expectations weren’t met, so in his thought process, there was no deal. I thought about this momentarily and asked him for a bonus if the deal would close within six weeks. He was happy to make that proposal. Needless to say, six weeks later, I was happy to collect my bonus and my commission check. The Federal Government is a process-driven organization, so if you know who is responsible for what actions and approvals, you will understand the timing of an opportunity and the likelihood of a sale.
While I was happy to spend the money I received from the company, the truth is that I failed to manage his expectations properly:
- I should have explained to him before the meeting how the buying and decision process works for this particular customer.
- I should have explained that the Fiscal Year End for Federal was imminent, and the customer had to commit those funds.
- I should have told him the key stakeholders from a government perspective and whom we needed to sell to.
As you’ve read, there is a lot to do to correctly manage expectations for the entire company to move forward and successfully build a Federal strategy for closing business in the Federal market. Each stakeholder wants their expectations met or exceeded. Though it may seem to be a lot to do, keep this in mind:
Leadership, planning and knowledge are the keys to ensure you’re successful in building this market vertical.
In the next blog, I’ll be directing my attention to Federal Speak. I hope you’ll join me.
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BLOG Article 4: Let’s Talk Federal: The Twisted Federal Speak