The hard sell Featured

8:00pm EDT March 26, 2007

Mike Cox calls it the “cowboy mentality”: Salespeople who view accounts as their own and not the company’s, and don’t want anybody treading on their territory; employees who, in many ways, are more loyal to their clients than to the company that signs their paychecks.

That’s the corporate atmosphere Cox stepped into upon becoming president and CEO of Bloomfield Hills-based Logicalis Inc. in 2003. An “every-man-for-himself” mentality was evident among the company’s sales force. It might have been good for the individual accounts of each sales representative, but Cox knew it would eventually kill the company, which was bleeding money and required layoffs shortly after he took over.

Cox says a companywide culture shift was needed. He had to find a way to refocus a work force of 500 on a single mission statement and get his sales force to buy in to the idea that teamwork was going to make both them and the company financially healthier in the long run. “My goal was to make this a place where people could feel safe and build a career at, and in turn, release a little of their control over the customer,” he says.

What ensued was less about a grand corporate vision and more about shaking hands, logging air miles and using the art of persuasion.

Communicating the culture
Soon after the layoffs, Cox and his management team conducted a tour of all of Logicalis’ major offices around the country. The format was different from what the company leaders had used before. It was centered more on two-way interaction than management speaking and employees listening.

With the $490 million IT services provider in the throes of cutbacks and with a culture shift imminent, Cox says it was important for employees to have a platform on which they could voice their questions and concerns and, at the same time, a means for company leaders to gain employee input on rebuilding the culture.

The tour was such a hit that Cox followed it up with a second 11-city tour and quarterly companywide audio conferences.

“Our conferences have evolved from too much of us talking and very little time for question-and-answer to us just answering questions that have been submitted a month prior,” he says. The employees “are not afraid to submit some very good questions, then we have confidential, interactive follow-up during the audio conferences.”

Cox says getting employees to buy in to a more company-centric culture has been a three-step process: communication, dialogue and more communication.

“Communication has to be bidirectional, and that would apply to whatever size company you are leading,” he says. “It was that way at (Hewlett-Packard) when I had 7,000 employees, it was that way at Logicalis when we had 180 employees and it’s that way now with 500 employees. You have to listen and act on the good ideas you hear.”

Regardless of the message, Cox says communication from top management needs to be forthright, honest, frequent and formalized. Cox relies on some of the more traditional and buttoned-down forms of communication like speeches and audio conferences, but he says formal communication and casual interaction aren’t mutually exclusive.

“Every time we go to a company office, we are supposed to offer in advance to buy a pizza lunch or do a coffee talk,” Cox says. “Our employees seem to enjoy that, plus it gives you a chance to see them all and talk with them. Those things are the most important in communicating.”

Employees won’t respond if a message is communicated several times and then left among the weeds while management goes off and does something else. As he proceeded to sell his staff on his revamped culture, Cox said he learned quickly that in addition to honesty and formalized methods, communication must also be consistent with your actions.

“People are smart, so they see right through the talking head or people telling them what they want to hear,” he says.

Cox started his cultural shift by narrowly focusing the entire company down to one mission statement and hammering it home to his team.

“We understand exactly what the customer wants, we sell them exactly what they need, then we deliver exactly what they bought,” he says. “That’s our recipe for success with customers, and that really says a lot to our employees that we want them to be one Logicalis to our customers.”

Cox says having a powerful mission statement is an important ingredient in getting your entire work force on the same page. It has to explain in a few short, effective sentences what your company is all about and what everyone in the company should be working toward. “I really like our mission statement,” he says. “It’s powerful. I think employees can relate to it.”

Getting sales back in line
One aspect of Cox’s new culture caused more hand-wringing among the sales staff than all others: He wanted his salespeople to start giving independent advice to customers.

Cox says many Logicalis sales staffers viewed themselves as the company’s authority on a given vendor. If a customer needed help with Hewlett-Packard, it went to Salesperson A, if a customer needed help with IBM, it went to Salesperson B.

Cox wanted the sales staff to begin giving unbiased advice. If an IBM-connected salesperson could better solve a customer’s problem with HP products, or vice versa, Cox wanted that salesperson to be able and willing to do so.

Cox says independent salespeople can develop the cowboy mentality he abhors. They want to ride alone, protect their own interests and, above all, sell the products they want to sell.

“The whole idea of giving independent advice probably caused our employees the most discomfort,” Cox says. “It’s hard for a salesperson that only sold IBM, who has relationships with IBM reps and managers, to even think about offering a product competitive with IBM, but that’s the direction we were headed.”

Cox says if you are asking employees to step out of their comfort zone, don’t expect it to be an easy transition. Expect some people to need a lot of coaxing and anticipate that some may outright refuse to make the leap.

“We have many people that do (offer independent advice) now for our company,” he says. “But others haven’t been able to leap that chasm and offer our whole portfolio for fear of alienating their vendor friend.”

Cox says it is a fine line to walk. While you want your sales force to be willing and able to offer your entire product line, you also have to realize that the salespeople who have longstanding relationships with certain vendors bring you an insider’s knowledge of products that other companies might not have.

Cox says he doesn’t want to quash the vendor relationships that some salespeople have spent years building; he just wants them to broaden their perspectives and offer other products to customers.

The most effective way to get salespeople to relinquish some control over their vendors is to add value to their sales efforts. He says it’s a matter of taking the strong motivation for personal success that drives your sales staff to be territorial in the first place and use it to motivate them in the company’s direction.

Cox says to start by appealing to their most basic motivation by showing them how stepping back from their prized vendor will make them, and the company, more money.

“Initially, it’s about being able to offer them some value that will increase their business and make them more money, and gets you and other members of the company into their accounts,” he says. “Then once they see that you can help them, you and other members of the company will be invited back in.”

Cox also hired a sales management team charged with overseeing the performance of the sales staff.

“Over time, you start to require certain things from them, like a forecast,” he says. “That’s something we didn’t do four years ago, and now we’re very good at it. Four years ago, our reps wouldn’t submit that data. That’s something our front-line sales managers have required that, over time, all our employees participate in.”

Cutting ties
Even the best-laid plans for assimilating an employee into a new culture will sometimes fall flat. Cox says that some people simply won’t be able to reconcile the changes you are asking them to make.

Be prepared to let some of them go, but if they are good and you parted on good terms, never completely shut the door.

“Eventually, there comes a time where if you can’t get with the program, you have to leave,” Cox says. “Some won’t follow the code of conduct, some won’t follow the new processes. That’s happened. But we give everyone every chance. We’ve had some reps come to us and say that they just can’t do it this way.”

If a philosophical difference is creating the rift, Cox says those are the employees for whom you’ll want to keep the door propped open. Code of conduct issues, such as behavior, are one thing, but there is always a chance that differences in philosophy can be bridged at a later time.

“One of the things that is always a rule of mine is that anyone who leaves on their own terms, anyone we didn’t ask to leave for a conduct issue, I always personally tell them that they can come back,” he says. “That’s not a guarantee, but in a competitive environment like ours, we know that if someone good leaves, the best thing we can do is try to bring them back.

“If they go to another VAR [value-added reseller], they can come back to us and tell our employees, ‘Man, you don’t know how good you have it here.’”

Refocusing the company culture might seem like a pretty basic thing on paper, but Cox, who is now the company chairman, says putting it into practice can be a drawn-out and sometimes messy process because you are asking every employee in your company to think about his or her job differently.

“Some of them, this was their first sales job,” he says. “Some of the legacy companies we have go back as far as 22 years, and some of the people have been with that company for that long. (For) many, this is their first sales job, they’ve only done it one way, and if you’ve ever been asked to do it another way, it’s hard to get people to realize they have to change.”

With that in mind, he says the ones that can make the change and adapt to your new culture should be rewarded. Logicalis has a number of reward programs for high-achieving employees, including a President’s Club, in which the top performers in each department are rewarded with a yearly vacation.

“It’s more for salespeople than nonsales, but we are able to get one or two people from each function of the company and take them someplace nice,” he says.

“They get the same acrylic award every year they are in the President’s Club, and they are listed on a plaque. I think it sends a really powerful message. I love walking into one of our offices and seeing five President’s Club plaques on the wall. Now, President’s Club is something everybody strives for. Those that get there are the ones that changed the way we do business. It’s really helped to develop our culture.”

HOW TO REACH: Logicalis Inc., www.logicalis.com