This episode of the Inside the Strategy Room podcast, with Simon Mulcahy, is part of the Committed Innovator series, which includes interviews with leading innovators around the world. Past interviews include Beth Comstock, former GE vice chair, Kevin O’Leary, investor and entrepreneur, and Nigel Hughes, head of R&D and innovation at Kellogg Company.
Mulcahy spoke with McKinsey senior partner Erik Roth, who leads the Firm’s innovation work globally. This is an edited transcript of the discussion. You can listen to the episode on
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Erik Roth: One of the questions that executives ask frequently given the pandemic is, what does the sales force of the future really look like? We’re all in our homes “Zoom-ing” all around the world digitally and sales are happening, but mostly virtually.
Simon Mulcahy: In the world of B2B, COVID-19 has really impacted travel, so now every engagement is digital. It’s kind of all inside sales, frankly. You can make a fairly strong argument that field sales is dead. A big part of it is that now you can bring the “A-team” to every call, whereas before you couldn’t because they were all traveling and their time was limited.
Erik Roth: So in a world where you can have the best sales call every single time, how are companies thinking about innovating their sales force?
Simon Mulcahy: It’s almost like everybody’s now in sales, and we all need to do better at it, which, in a digital world, means you need better technology at everybody’s fingertips. Salespeople need to be much better at orchestrating the full power of the organization to where it needs to be—better questioning skills, listening skills, even just that first interaction needs to be fundamentally better. You need to get the basics right, and it needs to be a live account plan across the company, but ultimately, you still need that steward who’s going to orchestrate the full power of the company toward that account.
Every organization is going to leverage digital, so that alone is not enough. You need information faster; you need to be able to service your customers in a way that you’ve never been able to.
Erik Roth: If I’m a CEO and I’m realizing that the things I thought were important in sales—being there in person—are no longer happening because my sales teams are basically all digital, how should I think about reconceptualizing or innovating my sales teams to think about what the future should look like?
Simon Mulcahy: It’s not like the future suddenly appeared in our laps as a result of COVID-19. I think a lot of organizations were already proving out best practices that are significantly more digital already. The most effective sales organizations that are doing incredibly well now see their salespeople not as people who do the selling, but rather one important high-touch orchestrator of the full power of the company toward the customer. The salesperson is kind of like the quarterback in that sense. And they need to be augmented like never before, with the full support of the marketing organization, the service organization, and the product organization; and they need to be able to effectively invoke the best efforts from those organizations to support their customers’ needs as they go through the sales cycle.
Erik Roth: Can companies reinvent themselves from the sales force back?
Simon Mulcahy: Absolutely. It starts first with just making sure that every person in the company, not just the salesperson, has the right tools. Can everybody see a single view of the customer? And then, how do you enable the salesperson to be able to wave a flag saying, “Hey, I need help over here now,” that results immediately in the right people flowing toward them? And then over and above that, there’s a lot of culture and collaboration that you need to instill in your whole organization. Salespeople themselves are developing new skills on that front.
Erik Roth: What does the new salesperson look like? I can imagine, given all the collaboration with digital tools you’re describing, that the ability to synthesize information and activate it could be a really, really important skill set that may not be resident in every salesperson today.
Simon Mulcahy: That is such a great point. The killer salesperson of today and certainly tomorrow asks really powerful questions, and is a really great listener, first and foremost. And then after that, they’re a great storyteller. The reason for this is that what’s being sold is also changing. If you go back even before COVID-19, there was a trend of industries getting closer and closer to the customer. For example, banking has been moving toward AI-enhanced automated financial coaches, and healthcare has been moving toward helping you solve your long-term health issues, and car companies have been moving toward mobility services. This is not just selling widgets anymore.
Erik Roth: So it’s almost like the augmented salesperson is the salesperson with these new skills that we have to really look for?
Simon Mulcahy: Yes, absolutely. If you’re just thinking about it as a salesperson, you’re missing half the picture. The point is, how does your whole organization create amazing buying experiences? In the past, you’d look at the world through the lens of, “I’ve got this great product.” Now, I need to create an amazing distribution engine to sell it. Today we need to flip the binoculars around and ask, “How do I create amazing buying experiences?” You need amazing salespeople to do that, and then they need to be augmented. But you also need to be able to channel the full power of your whole organization to those selling moments as well.
Erik Roth: Often when we’re doing innovation work, the innovation processes are really at the front end of the funnel—ideate, select the concept, test and learn, develop it, then throw it over the over the fence to marketing. But given what you just said, how do we flip that model on its head so that the customer shapes the innovation process, the value propositions, and the buying experiences?
Simon Mulcahy: One of the challenges is that people think that innovation is limited to product development. It actually starts much earlier, almost going right upstream to the customer’s need. Do you understand who the customer is? Have you segmented the customer to really understand who they are, what their needs are, and how you as a company can solve them with your products? But also, have you created a buying experience that makes it as easy as possible for them to get their job done? That might include your products, but it might also include your services and even the relationships that you have with other ecosystem players. So then you start to redesign everything from that point of view. Your product is just one part of the whole system that you’re innovating.
Erik Roth: Maybe everyone just needs to do a digital transformation. Is that what you’re seeing from your vantage point?
Simon Mulcahy: Well, yes. But too often people think of digital transformation in terms of, “Let’s put some really powerful technology over this and it’ll suddenly be much stronger.” That’s not how it works. Just digitizing an analogue that was conceived decades ago is not transformation—without going back to how you can serve the customer’s need better, you haven’t transformed anything.
Just digitizing an analogue that was conceived decades ago is not transformation—without going back to how you can serve the customer’s need better, you haven’t transformed anything.
Erik Roth: How do you reframe the problem, though, to really understand the job to be done and valuable problems to solve, especially when you’re doing it through technology?
Simon Mulcahy: At Salesforce, we have four core disciplines that help establish our frame of reference. The first discipline is your customer-centric business processes—how do you create an incredibly amazing buying experience? That needs design thinking, and going back to deeply understand the customer’s need, and then thinking about how you can design a system to deliver the full power of your organization to solve that problem. The second discipline is how you get one team aligned around the customer—whatever system you’ve just designed, whatever experience, it’s likely to require more than one team to collaborate. How do you make it easy for those teams? The third discipline is how you leverage technology, using the leanest possible technology stack, to really drive the first two disciplines. There’s a lot that needs to change to get to the point of creating incredible experiences and activating your full organization to deliver on them. When you get all that going, for a second you might hear angels singing, but then the market changes … and that brings us to the fourth discipline, which is your mechanism for sensing and responding to changing customer needs so that you’re constantly evolving at the pace of change of the market.
Erik Roth: And how does Salesforce actually ensure that these happen at scale throughout the organization? Do you keep innovation in just one part of an organization?
Simon Mulcahy: Innovation is one of our core values, along with trust, customer success, and equality, so everybody in the company focuses on innovation. The customer is the primary source of innovation for us. Every single touch point needs to be constantly thinking, “What can I do better?” This has to happen not just individually, but as a system, together.
Every single [customer] touch point needs to be constantly thinking, ‘What can I do better?’ This has to happen not just individually, but as a system, together.
Erik Roth: What mechanisms or processes do you have to ensure the best ideas get resourced?
Simon Mulcahy: There is an enormous amount of experimentation going on, and it would be a disaster if we didn’t have very careful prioritization and the ability to align everybody in the company to a clear, universally understood true north. We have a powerful mechanism for that. We call it “V2MOM,” which stands for vision, values, methods, obstacles, and measures. It’s a cascading model that starts with the CEO and goes on down, so that everyone is thinking in terms of “What’s our vision? What are our values? What are we really looking to achieve? How are we going to do it? What are the obstacles? How will we know when we’ve achieved it?” Everybody in the company has a V2MOM, and they’re all aligned to the CEO’s V2MOM.
Erik Roth: So it’s a tree-like structure of nested objectives and goals throughout all of Salesforce to ensure alignment, and that the right resources are allocated against the right priorities?
Simon Mulcahy: Exactly. If something’s on the V2MOM, it gets funded. If something’s not on the V2MOM, it doesn’t get funded. It’s as simple as that.
Erik Roth: From the perspective of the dynamic changes that the COVID-19 pandemic is bringing to end markets for almost every company, what advice do you have for the innovation and agendas?
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Simon Mulcahy: The first thing we saw when COVID-19 happened was everybody went into this state of shock almost, with organizations looking just to stabilize, make sure employees were safe, and then get back in touch with customers to creating some degree of normalcy. After that, we expected the universe to slow down. But instead, the reaction to the pandemic has been to open people’s minds to change. We’re seeing that CEOs are being really ambitious about putting together plans to not just ride out the storm, but actually look at how they’re going to emerge from this stronger, better, more competitive. It’s not so much a new paradigm as it is an acceleration of trends that were already happening. And of course, the first question in all of that is, are you able to engage with your customers in the way that they want to, which is digital?
Erik Roth: Would you say that every company has to be digital, or they’re just going to be out of the game?
Simon Mulcahy: Yes, I do. We’re even dealing with farming companies that are fundamentally digitizing, and even putting trackers on their cows. But the whole point is that every organization is going to leverage digital, so that alone is not enough. You need information faster; you need to be able to service your customers in a way that you’ve never been able to.
Erik Roth: In this world of constrained capital and operating budgets, how does the executive team lean forward to recognize that now is the time for some of the things you’re talking about?
Simon Mulcahy: I think it starts with actually acknowledging the important fact that many executives are not digitally savvy. They haven’t focused on it. They have been focused on understanding their core business, of which they’re now masters. But in order for them to really lead their organizations through this, they’ve got to almost go back to school. We’re seeing CEOs who are appointing millennials, kind of as “antiboards,” or digital boards, to advise the less digitally conversant board members. We’re seeing whole organizations take digital education much more seriously. Until everybody on the board understands what an API is, there’s a lot more work to be done.
Erik Roth: One of the questions we get all the time is, “Should I carve out a part of my organization and let them focus on the future?” with the idea that one day that group can take over the legacy organization. Is that advice you would give to companies you talk to?
Simon Mulcahy: I love this question. We certainly see a lot of CEOs who think there are just two levers to pull: renovate their existing organization to drive cost out and make the core they’ve been building over decades run cheaper, faster, and better, all with the idea that this will free up time and resources that they can then use to build the future alongside their existing business. I think that’s a really bad model because it’s hard to port your employees, your culture, and your systems over to a new organization with a new way of thinking, while at the same time beating everybody up day by day to go cheaper, faster, better. What we really advise our customers to do is evolve. Move from being product-centric to being customer-centric. Bring your whole organization along. Get everybody aligned on a single goal. That is evolution from the past to the future. And that’s much easier to achieve. Then you can focus on your business processes and think about how your team collaborates. Then think about the technology you need to serve that. And finally, think about how you’re constantly listening, and sensing, and responding.
Erik Roth: In addition to the pandemic, a number of social issues have come to the fore in recent months as well. What do you see as being the role of business in society?
Simon Mulcahy: We really believe that business is the greatest platform for change. It’s encouraging to see how many leaders have brought their energy to this conversation of what they can do to serve society. We feel very, very strongly about this. The whole workforce needs to be mobilized, and for us, that meant our product organization pivoted to focus on building products that were serving society—in some cases providing them for free. But it goes beyond that to how you demonstrate empathy for your community. For each Salesforce office in each region where we operate, how can that team identify and serve local needs, invest in in the community, and give back locally? And that could be through volunteerism, though that’s a bit complex during COVID-19, but certainly grants and donations. It’s also important to not lose sight of the fact that we are really struggling as a world. When you look at the sustainable development goals required to make our planet habitable in the future, we are losing that battle right now. We’re slipping, actually.
Erik Roth: Technology offers tremendous opportunities for overcoming social injustice, but it comes with some potential real dangers, whether it be hidden biases creeping into algorithms, or uneven accessibility. How are you thinking about these things? These are also questions of innovation—how do you make sure that the products, services, and experiences that you create adhere to the broader mission or purpose that your company is trying to aspire to?
Simon Mulcahy: Certainly, equality is one of our core values, so that’s pervasive in how we think about this. A good example is AI, which is a very important component of our road map, and is already infused into many experiences that we deliver today. A key challenge is that AI resides in data, but that data has been pulled from a society that’s not necessarily equal, and so it reflects inequality. If you apply AI onto bad data that reflects inequality, you’re going to get more inequality coming out of it. So a large part of our focus is on being very, very conscious of that and working to fix it. That is probably the biggest challenge area.
Erik Roth: It sounds like you’re saying organizations almost have a mandate to rethink and reframe how they want to work going forward in order to make sure they’re correcting for some of these inequalities and injustices.
Simon Mulcahy: Exactly. It starts with redesigning—not just reinforcing existing inequalities—but redesigning for a world that is fairer, more equal. And that’s what needs to be done first. The technology will reinforce, help reframe, but it’s the redesign that needs to happen before you start throwing the technology around.
Erik Roth: So it’s almost like the technology is not the solution, but rather changing mindsets and behaviors needs to happen first, in order for the technology to reflect them.
Simon Mulcahy: Absolutely. It’s just not a revolution of purely digitizing our universe. This is an opportunity for all of us to pause and really think through what it is we’re trying to do, who we are trying to serve, and how we can design the best system that can achieve that? That should solve for the job to be done for the end customer, and it should also solve for a society that should be fairer and more equal, and also a planet that desperately needs us to change what we do and how we do it.
You can access the full podcast transcript here.