Getting to the Root of Why Channel Problems Happen
To find out the ‘real’ reasons behind our indirect-sales woes, we need to embrace the inquisitiveness of our inner child and repeatedly ask why.
By Larry Walsh
Channel executives and strategists need to stop throwing money at partners and expecting to get substantial and sustained returns. The industry repeatedly changes partner compensation schemes to stimulate indirect sales and growth. But vendors rarely ask why partners are underperforming in the first place.
We, as individuals and an industry, need to ask that question: why – and not once, but at least five times.
I’ve become a big fan of the “5 Whys” methodology of understanding problems. Note the use of the word “understanding” rather than “solving.” Too often, we settle for a quick solution – changing compensation, for instance – before reaching the root cause of the problem.
Sakichi Toyoda, the founder of Toyota Motors, pioneered the 5 Whys as a means for quality control. Rather than just fixing a broken part, Toyoda used the 5 Whys to find the root cause of the problem to resolve systemic issues rather than just point problems.
Here’s an example of the 5 Whys in action, taken directly from the Toyota Website.
1. “Why did the robot stop?” The circuit has overloaded, causing a fuse to blow.
2. “Why is the circuit overloaded?” There was insufficient lubrication on the bearings, so they locked up.
3. “Why was there insufficient lubrication on the bearings?” The oil pump on the robot is not circulating sufficient oil.
4. “Why is the pump not circulating sufficient oil?” The pump intake is clogged with metal shavings.
5. “Why is the intake clogged with metal shavings?” Because there is no filter on the pump.
The underlying idea of 5 Whys is getting people to step through problems rather than reach for the simplest solution, such as resetting the circuit. It’s the reason versions of the 5 Whys are incorporated into such methodologies as Six Sigma, a data-driven approach to eliminating defects from processes, and lean manufacturing, a systematic method of eliminating waste specifically from the manufacturing process.
The 5 Whys methodology is relevant to the channel because we’re too often looking for silver bullets to multidimensional problems. Rather than just throw more money at partners, hoping they’ll reciprocate with more sales and revenue, we need to walk through the problem and ask why channel partners fall short, just meet, or exceed expectations.
1. Why is channel revenue flat? Partners didn’t meet sales expectations.
2. Why didn’t partners meet sales expectations? Partners lack formal sales plans and organizations, and many don’t set sales goals.
3. Why didn’t we establish sales plans with partners? Our channel account managers (CAMs) aren’t equipped to do sales planning with large numbers of partners.
4. Why aren’t our CAMs trained in sales planning? They have competing priorities and don’t have enough time to reach all of the partners in their territory.
5. Why haven’t we invested more in sales training and resources? The cost of sales training for CAMs and investment in resources is seen as competitive to product initiatives.
What you find by following the 5 Whys process in this hypothetical scenario is that the lack of compensation isn’t the root cause of the problem (flat channel revenue); rather, the root cause is a lack of training, planning, and resources. (Fact: According to research by The 2112 Group, as much as 60 percent of partners do not set annual sales goals or measure sales performance.)
Of course, we could delve deeper into the issue by continuing to ask more questions, but asking just five of them demonstrates sufficiently how walking through the problem can lead us to devise more systemic solutions. In this case, the person posing the “Whys” would restart the process around competing priorities.
The 5 Whys methodology is applicable to any number of channel scenarios.
- Why don’t more partners adopt and sell my products?
- Why don’t partners invest in sales capacity?
- Why don’t partners make use of channel support resources?
- Why don’t partners develop and execute strategic plans?
Through the 5 Whys, we can find factors that hinder channel performance, including strategic planning, product gaps, quality control issues, technology interoperability challenges, program structures and operations, channel conflict issues, and enablement shortcomings.
So before throwing more money at partners and expecting them to just do better, take a little time to walk through the problem and ask why, why, why, why, and why. You may find there’s a different problem to solve than you first thought – with a different solution.
Here at 2112, we specialize in problem-solving, taking an unbiased, objective approach to our channel program assessments and strategy development. To learn more about 2112’s assessment and strategy services, contact us at [email protected].